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)16 PROFIT TAX (continued)At 31 December 1999 the Group recognised a deferred tax liability of RR 124,353, mainly as thetax base was lower than the financial reporting base for property, plant and equipment. The differencewas due to the fact that a significant portion of the tax basis is based upon independent appraisal whichwas last recognised at 1 January 1998. At 31 December 2000 the Group has recognised a deferred taxasset of RR 274,756; this asset arises due to the temporary differences resulting from a revaluation ofthe carrying value of property, plant and equipment recognised In the Russian financial statements at 1January 2001. The result of the revaluation is allowable for profit tax purposes under Russian statutorytaxation regulations, effectively increasing the taxable base of property, plant and equipment.The temporary differences associated with undistributed earnings of subsidiaries amount to RR43,577 and RR 17,469 at 31 December 2000 and 31 December 1999, respectively. A deferred taxliability on these temporary differences was not recognised because management controls the timingof the reversal of the temporary differences and believes that they will not reverse in the foreseeablefuture.17 PROVISIONS FOR LIABILITIES AND CHARGES31 DecemberNotes 2000 199926 Provision for losses on derivatives 13,730 19,78125 Provision for guarantees 10,352 19,470Provision for environmental liabilities 5,311 5,090Other 10,588 8,08239,981 52,423Less: current portion of provisions for liabilities and charges (10,352) (8,035)18 SHAREHOLDERS' EQUITYShare capital29,629 44,388Share capital authorised, issued and paid in totaled RR 282,483 at 31 December 2000 and 31December 1999 and consists of 23.7 billion ordinary shares, each with a nominal value of RR 5.Treasury sharesAt 31 December 2000 and 31 December 1999, subsidiaries of OAO Gazprom held 2,684 millionand 2,614 million, respectively, of the ordinary shares of OAO Gazprom.Retained earnings and other reservesIncluded in retained earnings and other reserves are the effects of the cumulative restatement tothe equivalent purchasing power of the Rouble at 31 December 2000, and cumulative translationdifferences of RR 17,891 and RR 17,146 arising on the retranslating of the net assets of foreignsubsidiaries and associated undertakings at 31 December 2000 and 1999, respectively.F-26