Open Joint Stock Company Gazprom

OAO GAZPROMNOTES TO THE IAS CONSOLIDATED FINANCIAL STATEMENTS(In millions of Russian Roubles in terms of the equivalent purchasing power of the Rouble asof 31 December 2001)For the year ended 31 December 2001, disposals include RR 13,615 related to the disposal ofOAO Lebedinsky GOK (see Note 25).Included in additions above is capitalized interest of RR 16,380 and RR 18,699 for the yearsended 31 December 2001 and 2000, respectively. Capitalization rates of 7.3% and 8.2% were usedrepresenting the weighted average actual borrowing cost of the relevant loans for the years ended 31December 2001 and 2000, respectively.Included in the property, plant and equipment above are fully depreciated assets which are stillin service of RR 512,019 and RR 275,788 as of 31 December 2001 and 2000, respectively. Alsoincluded in additions above are non-cash additions of RR 42,680 and RR 56,564 for the years ended31 December 2001 and 2000, respectively.Depreciation disclosed above includes RR 571 and RR 905 for the years ended 31 December2001 and 2000, respectively, which is considered a cost of self-constructed assets and thus capitalizedrather than expensed in the consolidated statement of operations. Similarly, RR 12,814 and RR 11,035of depreciation for the years ended 31 December 2001 and 2000, respectively, is capitalized as acomponent of gas inventories and expensed in the consolidated statement of operations when the gasis sold.Included in the property, plant and equipment are social assets (such as rest houses, housing,schools and medical facilities) vested to the Group at privatisation of RR 38,644 and RR 43,300 as of31 December 2001 and 2000, respectively. The Group intends to continue the transfers of social assetsto governmental authority as stipulated in original privatisation arrangements.The Group's gas fields are operated under licenses granted by federal and local authorities.These licenses to develop and extract hydrocarbons expire between 2013 and 2019, however they maybe extended. Management intends to extend the existing licenses on properties expected to producehydrocarbons subsequent to their current expiration dates.11 INVESTMENTS IN ASSOCIATED UNDERTAKINGS31 DecemberNotes 2001 200026 EuRoPol GAZ S.A. 38,009 42,65426 WINGAS GmbH 16,986 20,45226 Armrosgazprom 3,369 –27 Blue Stream Pipeline Company (BSPC) 2,101 –Other (net of provision for impairment of RR 7,406 and RR 7,143as of 31 December 2001 and 2000, respectively) 17,788 11,86578,253 74,971F-61