Open Joint Stock Company Gazprom

OAO GAZPROMNOTES TO THE IAS CONSOLIDATED FINANCIAL STATEMENTS-(Continued)(In millions of Russian Roubles in terms of the equivalent purchasing power of the Rouble at31 December 2001, except as noted)15 LONG-TERM BORROWINGS (continued)Interest rates on the borrowings are variable and linked, mainly, to LIBOR, except for interest onthe Italian borrowing, which is fixed at 5.7%. The annual interest rates on US dollar denominatedborrowings range from 5.7% to 10.7% per annum at 31 December 2000 and from 5.7% to 10.5% perannum at 31 December 1999. The annual interest rates on Euro denominated borrowings range from3.8% to 6.1% per annum at 31 December 2000. The annual interest rates on DM denominatedborrowings range from 4.8% to 8.4% per annum at 31 December 2000 and from 3.2% to 8.0% perannum at 31 December 1999. Substantially all borrowings are secured by contractual obligations to sellgas in Western Europe and the associated cash flows (see Note 6). The amount payable to aninternational banking consortium is also secured by certain assets of ZGG-ZarubezhgazErdgashandels GmbH, a wholly owned subsidiary.The fair value of the fixed rate Italian loan is RR 33,688 and RR 40,566 at 31 December 2000and 1999, respectively. The carrying amounts of variable rate loans approximate fair value.The Group has no subordinated debt and no debt which may be converted into an equity interestin the Group.Long-term borrowings include RR 3,213 and RR 3,689 at 31 December 2000 and 1999,respectively, of coupon non-documentary bearer bonds issued by OAO Gazprom in 1999. The issueamounted to 3.0 million bonds, each with a nominal value of RR 1,000 and a due date of 15 April 2003.During the year 2000, the Group repurchased 481,187 bonds. The total amount recorded for the bondsexcludes the discount related to future periods.At 31 December 2000 long-term borrowings also include RR 7,351 of promissory notes with duedates beyond 2001.The US dollar to RR exchange rates were 28.16 and 27.00 at 31 December 2000 and 1999,respectively. The Euro to RR exchange rates were 26.14 and 27.32 at 31 December 2000 and 1999,respectively. The DM to RR exchange rates were 13.37 and 13.92 at 31 December 2000 and 1999,respectively.16 PROFIT TAXProfit tax expense in the consolidated statement of operations is stated net of RR 974 and RR149 of tax attributable to gains arising on treasury share transactions for the year ended 31 December2000 and 1999, respectively (see Note 4).F-24