FY 2012 - Investor Relations - NIS

Notes to Stand Alone Financial Statements1. GENERAL INFORMATIONNIS a.d. – Naftna Industrija Srbije, Novi Sad (hereinafter “the Company”) is a vertically integrated oil company operatingpredominantly in Serbia. The Company’s principal activities include:• Exploration, production and development of crude oil and gas,• Production of refined petroleum products,• Petroleum products and gas trading.The Company was established in accordance with the Decision of the Government of the Republic of Serbia on 7 July2005 as a successor of five state owned companies of Javno Preduzece Naftna Industrija Srbije. On 2 February 2009,OAO Gazprom Neft (’’Gazprom Neft’’) acquired a 51% of the share capital of NIS a.d. which became a subsidiary ofGazprom Neft. In March 2011, under the Company’s Share Sale and Purchase Agreement, Gazprom Neft acquiredadditional 5.15% of shares, thereby increasing its percentage of ownership to 56.15%.The Company is an open joint stock company listed on the Belgrade Stock Exchange, Listing A (Prime Market). Theaddress of the Company’s registered office is in Novi Sad, 12 Narodnog fronta Street.These financial statements have been approved and authorized for issue by CEO and will be presented to shareholderson the General meeting for approval.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATESThe principal accounting policies and significant accounting estimates are consistent to the ones applied in the financialstatements for the year ended 31 December 2011.2.1. Basis of preparation and presentation of financial statementsThese financial statements for the year ended 31 December 2012 were prepared in accordance with the Law onAccounting and Auditing of the Republic of Serbia published in the Official Gazette of the Republic of Serbia (Nos.46/2006 and 111/2009), which requires full scope of International Financial Reporting Standards (IFRS) to be applied,and the regulations issued by the Ministry of Finance of the Republic of Serbia. Due to the difference between these tworegulations, these financial statements differ from IFRS in the following respects:• The financial statements are prepared in format prescribed by the Ministry of Finance of the Republic of Serbia,which does not comply with IAS 1 – “Presentation of Financial Statements” requirements.• “Off-balance sheet assets and liabilities” are recorded on the face of the balance sheet. Such items do not meetthe definition of either an asset or a liability under IFRS.• Property, plant and equipment were measured at market value by independent appraisal and any revaluationreserves for the excess of fair value against historical value were cancelled against share capital as at 1 January2006.• The Company has not consolidated the financial statements of its subsidiaries as in accordance with the Law ofAccounting and Auditing of the Republic of Serbia the consolidated financial statements for the current year arerequired to be filed up to the end of April the following year. Under International Financial Reporting Standards,stand-alone financial statements of a Company which has subsidiaries are only allowed if consolidated financialstatements are also prepared and issued at the same time.Annual report for 2012FINANCIAL STATEMENTS • 163