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)25 COMMITMENTS AND CONTINGENT LIABILITIES (continued)Social commitmentsThe Group significantly contributes to the maintenance and upkeep of the local infrastructure andthe welfare of its employees in the areas of its production, including contributions toward theconstruction, development and maintenance of housing, hospitals, transport services, recreation andother social needs in the geographical areas in which it operates.Financial guaranteesThe Group had outstanding issued guarantees to third parties in the amount of RR 59,351 andRR 56,755 (including guarantees denominated in USD of USD 1,659 million and USD 1,700 million) at31 December 2000 and 1999, respectively.Management believes that the Group will be required to settle certain of the obligations resultingfrom the guarantees. A provision of RR 10,352 and RR 19,470 has been recorded within provisions forliabilities and charges in respect of the guarantees issued at 31 December 2000 and 1999, respectively.It is anticipated that the majority of the provision will be used during 2001.31 DecemberNotes 2000 1999Guarantees issued on behalf of:Interconnector (UK) Limited 33,460 38,53911 ZAO Media-Most 8,749 18,232Itera Group companies 5,617 3,746AK Sibur 5,397 -Other 6,128 5,23859,351 65,75517 Less: provisions for guarantees (10,352) (19,470)48,999 46,285The guarantee issued on behalf of Interconnector (UK) Limited, in which the Group has a 10 %interest, was provided to a third party financing company in connection with lease obligations ofInterconnector (UK) Limited.Capital commitmentsIn the normal course of business, the Group has entered into contracts for the purchase ofproperty, plant and equipment. The Board has approved a capital expenditure budget for 2001 of RR115,362, including RR 51,292 in respect of capital expenditures related to the Yamal project (thatincludes, in particular, construction of the Yamal-Europe pipeline).Supply commitmentsThe Group has entered into long-term supply contracts for periods ranging from 5 to 20 yearswith various companies operating in Europe. The volumes and prices in these contracts are subject tochange due to various contractually defined factors. At 31 December 2000, no loss is expected to resultfrom these long-term commitments.F-35