OJSC Oil Company Rosneft Consolidated Financial Statements

OJSC Oil Company Rosneft
Notes to Consolidated Financial Statements (continued)
6. Short-Term Investments (continued)
Promissory notes held-to-maturity include an interest-free promissory note issued by a major stateowned
Russian bank maturing on or after July 31, 2009. The nominal value of this promissory note is
RUB 16.5 billion (US$ 560.5 million at the CBR official exchange rate as of December 31, 2008). At
December 31, 2008, the amortized cost of the promissory note was RUB 15.3 billion (US$ 529.8 million
at the CBR official exchange rate as of December 31, 2008).
Other RUB-denominated short-term promissory notes which are held to maturity bear an interest of 8.0%.
The fair value of held to maturity securities approximates their carrying value recognized in the financial
statements.
State bonds primarily represent federal loan bonds issued by the Ministry of Finance of the Russian
Federation with maturities ranging from March 2009 to February 2036 and nominal interest rates
ranging from 6.1% p.a. to 11.0% p.a.
Corporate bonds represent bonds issued by large Russian corporations and bonds issued by the CBR
with maturities ranging from March 2009 to July 2016 and interest rates ranging from 7.7% to 16.5%.
7. Accounts Receivable, Net
Accounts receivable as of December 31 comprise the following:
26
2008 2007
Trade receivables 1,785 3,812
Value-added tax receivable 1,907 4,029
Other taxes 1,349 499
Banking loans to customers 1,007 996
Acquired receivables 74 140
Other 311 381
Less: allowance for doubtful accounts (134) (72)
Total accounts receivable, net 6,299 9,785
The Company’s trade accounts receivable are denominated primarily in US dollars. Credit risk is
managed through the use of letters of credit. Credit risk in domestic sales of petrochemicals is
managed through the use of bank guarantees for receivables repayment.
In 2008, the value-added tax (VAT) and excise receivables were settled through cash payments and a
legal offset against current tax liabilities (see Note 18). The total amount of VAT and excise recovered
was RUB 63.3 billion (US$ 2.55 billion at the average annual exchange rate), including US$ 1.3
billion of income tax offsets.
8. Inventories
Inventories as of December 31 comprise the following:
2008 2007
Materials and supplies 478 503
Crude oil and gas 252 516
Petroleum products 697 907
Total inventories 1,427 1,926
Materials and supplies mostly include spare parts. Petroleum products also include those designated
for sale as well as for own use.