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)The weighted average effective interest rates at the balance sheet date were as follows:31 December2001 2000Fixed rate long-term borrowings 8.86% 7.64%Variable rate long-term borrowings 6.33% 7.38%Substantially all long-term borrowings received from international banking consortiums aresecured by contractual obligations to sell gas in Europe.The Group has no subordinated debt and no debt that may be converted into an equity interestin the Group.Other long-term borrowings include RR 2,786 and RR 3,182 as of 31 December 2001 and 31December 2000, respectively, of coupon non-documentary bearer bonds issued by OAO Gazprom in1999. The issue amounted to 3.0 million bonds, each with a nominal value of 1,000 roubles each and adue date of 15 April 2003.During the years 2000 and 2001, the Group repurchased 577 thousand bonds. The total liabilityrecorded in respect of the bonds excludes the unamortized discount related to future periods.The Group's long-term promissory notes payable had average interest rates ranging from 22.0%to 26.5% and 21.5% to 51.0% for the years ended 31 December 2001 and 2000, respectively.Included within the current portion of long-term borrowings as of 31 December 2001 is an interestfree loan provided by RAO UES with a fair value of RR 8,754 and nominal value of RR 10,140. The loanwas received on 27 December 2001. The purpose of the loan is to finance settlements of current taxliabilities of the Group's subsidiaries. The loan is to be settled by the delivery of gas from January 2002to December 2002.F-66