P R O S P E C T U S of the Issuer DRUŠTVO ZA ISTRAŽIVANJE

P R O S P E C T U S

of the Issuer

DRUŠTVO ZA ISTRAŽIVANJE, PROIZVODNJU, PRERADU, DISTRIBUCIJU I PROMET NAFTE I NAFTNIH DERIVATA I ISTRAŽIVANJE I PROIZVODNJU PRIRODNOG GASA NAFTNA INDUSTRIJA SRBIJE A.D. NOVI SAD

Novi Sad, December 2011

А) PROSPECTUS INTRODUCTION

The Securities Commission shall neither be liable for accuracy and completeness of data stated in the Prospectus neither for issuing securities, nor for the ability of the securities issuer to fulfill the obligations arising from the securities it issues.

1. ISSUER

1.1. Name, Registered office, Company ID number, Tax ID number DRUŠTVO ZA ISTRAŽIVANJE, PROIZVODNJU, PRERADU, DISTRIBUCIJU I PROMET NAFTE I NAFTNIH DERIVATA I ISTRAŽIVANJE I PROIZVODNJU PRIRODNOG GASA NAFTNA INDUSTRIJA SRBIJE A.D. NOVI SAD, NARODNOG FRONTA 12 COMPANY ID NUMBER. 20084693 TAX ID NUMBER. 104052135

1.2. Main activity 0610 – Extraction of crude petroleum

1.3. Amount of share capital presented in the last financial statement on 30 Septembеr 2011 RSD 87,128,024,000 REMARK: Basic capital in the amount of RSD 87,128,024,000.00 is comprised of the share and the other capital. The value of the registered share capital in the amount of RSD 81,530,220,000 registered with the Business Registeres Agency is based on the assessment of the value of in kind contribution on 31 May 2005, that was made for the purpose of preparation of division balance and establishment of NIS a.d. Novi Sad by decision of the Government of the Republic of Serbia. Auditor of the financial statements for 2005 has determined that in the accountancy records of NIS a.d. Novi Sad the value of the share capital is higher for the amount of RSD 5,597,804,000 when compared to the amount registered with the Business Registers Agency. Upon order of the auditor this difference is presented as the other capital. In 2009, the amount of RSD 20,000 is moved to the position Other capital in order to bring into line position between the value of the share capital registered with the Central Registry (RSD 81,530,200,000) and the value in the business records (RSD 81,530,220,000) which is shown in the statement for 2009 as the changes in the capital.

2. SHARES TO BE ISSUED

2.1. Type, class, issue number, CFI code and ISIN number of securities

3. VOLUME OF SHARE ISSUE

3.1. State the total par value of all securities to be issued in RSD

4. NUMBER OF SHARES AND THEIR PAR VALUE

4.1. Total number of securities to be issued

4.2. Par value of a security

5. SALE PRICE OF SHARES

5.1. State the price the securities will be offered at

5.2. Method of payment for securities

6. RIGHTS AND OBLIGATIONS DERIVING FROM THE SHARES

6.1. State all rights and obligations deriving from the shares

6.2. Pre-emption rights 6.2.1. Persons with pre-emption rights, right to subscribe and acquire shares and grounds of such rights (holders of ordinary shares, warrant holders, holders of convertible bonds and convertible preference bonds)

6.2.2. Total number of securities based on which the pre-emption right if subscription is exercised

6.2.3. Number of newly issued shares with respect to which pre-emption rights of subscription can be exercised

6.3. Tax liabilities of share holders 6.3.1. Property tax, Sales tax, Profit tax, Tax relief, Tax incentives

6.4. Manner of settling potential disputes between the issuer and the holder of securities and the name of the competent court

7. TIME, PLACE AND DEADLINE FOR SUBSCRIPTION OF SHARES

7.1. State the business name, registered office, address and working hours of BDC/bank and a period of time for subscription of shares (particularly state the deadline for subscription based on the pre-emption rights of subscription)

8. PLACE AND TERMS OF PAYMENT OF SHARES

8.1. State the business name, registered office, address, deadline for payment of the shares and the business hours of the bank with which the payment can be made

8.2. State the manner of distribution of excess subscribed and paid up securities to the persons that subscribed and paid the securities.

8.3. Consequences of non-payment or failure to meet payment deadline

8.4. Number of securities to be subscribed and paid up for the sale to be considered successful (success threshold)

8.5. Manner and deadline of repayment of paid up amounts in case of sale failure, including the interest rate and the manner of its calculation to the paid up amounts

8.6. Name and the registered office of the person in charge for the register keeping and clearing and settling obligations deriving from the securities to be issued (Central Registry)

9. SECURITIES TRADING MARKET

9.1. Name and registered office of the organized market, date of admission of the same type of share to the organized market, transaction volume with that type of securities on the organized market in the past six months, stating the highest and the lowest price realized

10. BRIEF OVERVIEW OF THE SHARES ISSUER

10.1. Date of passing the decision on securities issuance and the name of the competent body passing of the issuer of such decision

10.2. Designation of proceeds collected from securities issuance; state the purpose of use of proceeds (for performing issuer’s activities or purchase of assets not intended for regular issuer’s activities, e.g. securities of other issuers)

10.3. State main data on issuer’s conduct of business and development plans

11. BROKER DEALER COMPANY AND/OR AUTHORIZED BANK PARTICIPATING IN ORGANIZATION OF THE PUBLIC OFFER

11.1. State the business name and registered office of the agent, i.e. issue underwriter who participates in organization of securities issuing

11.2. State the business name and registered office of the main organizer of issuing, if more parties participate in organization of issuing

11.3. State the type of the contract on organization of issuing and the type of agent’s obligation, i.e. underwriter’s obligation

11.4. State the amount of fee charged to the issuer by the agent, i.e. underwriter, for services related to issue organization, i.e. state the price difference between the price at which the underwriter buys securities from the issuer and the price at which it sells those in the issue procedure

11.5. State whether the agent’s obligation, i.e. issue underwriter’s obligation, relates to all or any particular portion of securities to be issued

B) BASIC PROSPECTUS

1) “Prospectus for issuing securities with supporting data, contains all necessary information enabling investors to make objective assessment of the financial and legal status of the securities issuer and assessment of rights and obligations related to such securities.” 2) “Prospectus for issuing securities does not contain data that can make investors have misconception about the issuer of the securities, securities to be issued and issuer’s securities already issued.”

1. DATA ON SHARES ISSUER

1.1. Main data 1.1.1. Name, registered office, address, company ID number and tax ID number: DRUŠTVO ZA ISTRAŢIVANJE, PROIZVODNJU, PRERADU, DISTRIBUCIJU I PROMET NAFTE I NAFTNIH DERIVATA I ISTRAŢIVANJE I PROIZVODNJU PRIRODNOG GASA NAFTNA INDUSTRIJA SRBIJE A.D. NOVI SAD, NARODNOG FRONTA 12 COMPANY ID NUMBER. 20084693 TAX ID NUMBER. 104052135

1.1.2. Number and date of registration with the Business Registers Agency: BD 92142 as of 29 September 2005

1.1.3. Date of incorporation: NIS a.d. Novi Sad predecessor company was the Company for Crude Oil Exploration and Production, incorporated in 1949 by the Resolution of the Government of the Federal People's Republic of Yugoslavia, which in 1953 was named Naftagas. Naftagas was later transformed into the company incorporating refineries in Pancevo and Novi Sad, as well as Pancevo Azotara, a fertilizer plant. By the end of 1973 Naftagas integrated the retail companies Jugopetrol – Belgrade and Jugopetrol - Novi Sad (current NAP). Naftna industrija Srbije was established in 1991 as a public company for the exploration, production, refining and trade in crude oil, oil products and natural gas. At that time it was integrating the following companies: Naftagas, Gas, Energogas, Jugopetrol, Naftagas promet and Inzinjering as well as the production companies Pancevo Oil Refinery, Novi Said Oil Refinery, Belgrade Oil Refinery and Krusevac Lubricant Factory. In 2005, public company Naftna industrija Srbije ceased to exist and was deleted from the business entity register, and Javno preduzece Srbijagas Novi Sad, Javno preduzece Transnafta Belgrade, and Društvo za istraţivanje, proizvodnju, preradu, distribuciju i promet nafte i naftnih derivata i istraţivanje i proizvodnju prirodnog gasa Naftna industrija Srbije a.d. Novi Sad were registered as legal successors. On 1 October 2005 NIS a.d. Novi Sad is established in the form of closed joint stock company, while its business activities remained in the sphere of exploitation of oil and gas, refining of oil and sales of oil products, as well as production and sales of liquid oil gas. The Shareholders Assembly of NIS a.d. Novi Sad has on 21 June 2010 issued the decision on transformation on NIS into open joint stock company.

1.1.4. Position of the issuer within the group 1.1.4.1. Relation with other companies on 30 June 2011: NIS a.d. Novi Sad is a subsidiary company of Gazprom Neft (Gazprom Neft owns 56.15% of ownership interest in NIS a.d. Novi Sad share capital) NIS a.d. Novi Sad is the parent/controlling company of the following companies: - O Zone a.d. Belgrade, ownership interest in share capital 100% - OOO “NIS Oversiz” Moscow, ownership interest in share capital 100% - NIS Petrol EOOD, Sofia, Bulgaria ownership interest in share capital 100% - NIS Petrol S.R.L., Bucharest, Romania, ownership interest in share capital 100% - NIS Petrol d.o.o., Laktasi, Bosnia and Herzegovina, ownership interest in share capital 100% - Pannon Naftagas Kft, Budapest, Hungary, ownership interest in share capital 100%* - „Jadran – Naftagas“ limited liability company Banja Luka, ownership interest in share

capital 66% - NIS – Svetlost d.o.o. Bujanovac, ownership interest in share capital 51.32% - JUBOS d.o.o. Bor, ownership interest in share capital 51.00% - OOO “SP Ranis”, Moscow area, Cernogolovka, Russian Federation, ownership interest in share capital 51.00% NIS a.d. Novi Sad has significant ownership interest in the following companies: - Eurol International (Bermuda) ltd, ownership interest in share capital 50.00% - MACO NAFTA d.o.o. Skopje, ownership interest in share capital 49.00% - PINKI-ZEMUN a.d. Beograd – Zemun, ownership interest in share capital 48.70% - Prokons d.o.o. Subotica, ownership interest in share capital 20.15%.

1.1.4.2. Relationship between the issuer and other legal entities: NIS a.d. Novi Sad is affiliated with the other legal entities through the ownership relations.

1.1.4.3. Grounds for issuer’s engagement in managing other legal entities, i.e. grounds for other entities’ engagement in managing legal entity of the issuer: NIS a.d. Novi Sad is engaged in management of other legal entities on the basis of the ownership interest in the share capital, while other legal entities are engaged in the management of the NIS a.d. Novi Sad depending on the number of the shares they hold.

1.1.5. Issuer’s bylaws, with reference to the location and time for insight issuer’s Incorporation Act or Statute as well as other by-laws, along with latest amendments and supplements: The insight into the Incorporation Act, the Statute and the other bylaws can be made at the registered office of NIS a.d. Novi Sad, Narodnog fronta str. 12, from 8 a.m. until 4 p.m. each business day from Monday to Friday, in the minority shareholders office and on the web page of NIS a.d. Novi Sad www.nis.rs.

1.2. ISSUER’S CAPITAL 1.2.1. Share capital on 30 September 2011 (thousand RSD) DESCRIPTION Share capital 81,530,200 Other capital 5,597,824 Subscribed Capital, Unpaid - Share premium - Reserves 889,424 Revaluation reserves 12 Unrealized gains from securities 39,102 Unrealized loss from securities 62,709 Retained earnings 43,626,770 Loss up to amount of equity 57,482,335 Purchased own shares and stakes - Total capital 74,138,288 Loss exceeding equity -

1.2.2. Issued shares 1.2.2.1. Number of ordinary shares issued, CFI code and ISIN number: Number of ordinary shares issued: 163,060,400 CFI code: ESVUFR ISIN number: RSNISHE79420

1.2.2.2. Number of preference shares issued by classes, CFI code and ISIN number: /

1.2.2.3. Rights derived from shares by type and class: Each ordinary share of NIS a.d. Novi Sad gives to its holder the same rights, in accordance with the Companies Law, that include in particular: - the right to access legal and other documents and information of the company; - the right to participate in the shareholders assembly; - the right to vote at the shareholders assembly based on the principle that one share gives the right to one vote; - the right to dividends payment, after full payment of dividends payable on preferential shares; - the right to receive a distribution on liquidation surplus deriving from liquidation of the company, after the claims of creditors and holders of any preferred shares have been satisfied; - pre-emptive rights to acquire newly-issued shares and convertible bonds; - the right to dispose of all types of shares in accordance with the Law.

1.2.2.4. Manner of shares issuing: On the basis of the Resolution of the Government of the Republic of Serbia on establishment of the joint stock company for exploration, production, refining, distribution and trade in crude oil, oil products and exploration and production of natural gas as of 7 July 2005, 8,153,020 of shares with par value amounting to RSD 10,000 per share has been issued. On 17 August 2009, the Shareholders Assembly of NIS a.d. Novi Sad has issued the Decision on issuance of the second issue of the ordinary shares for the purpose of replacing existing shares due to their split, whereby 163,060,400 shares has been issued, with the par value of RSD 500.00 per share that had replaced the existing 8,153,020 shares with the par value of RSD 10,000.00 per share.

1.2.3. Changes in capital/equity 1.2.3.1. State the provisions of the issuer’s general regulation related to changes in capital In accordance with the article 9 of the Incorporation Act of NIS a.d. Novi Sad, increase and decrease of the share capital is within the competence of the Shareholders Assembly. As long as the Republic of Serbia is the holder of at least 10% of the ownership interest in the share capital of NIS a.d. Novi Sad, affirmative vote of the Republic of Serbia is necessary for rendering Shareholders Assembly decisions on increase or decrease of the share capital.

1.2.3.2. Description of changes in share capital, revaluated and other reserves, subscribed and unpaid capital, purchased own shares, issue premium, own shares, total capital (data to be provided for the previous three years): Share capital (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance 81,530,220 81,530,220 81,530,200 81,530,200 Correction of material errors in the - - - - current year Restated opening balance 81,530,220 81,530,220 81,530,200 81,530,200 Total increase in the current year - - - - Total decrease in the current year - 20 - - Closing balance 81,530,220 81,530,200 81,530,200 81,530,200

Other capital (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance 5,597,804 5,597,804 5,597,824 5,597,824 Correction of material errors in the - - - - current year Restated opening balance 5,597,804 5,597,804 5,597,824 5,597,824 Total increase in the current year - 20 - - Total decrease in the current year - - - Closing balance 5,597,804 5,597,824 5,597,824 5,597,824

Subscribed capital, Unpaid (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance - - - - Correction of material errors in the - - - - current year Restated opening balance - - - - Total increase in the current year - - - - Total decrease in the current year - - - - Closing balance - - - -

Share premium (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance - - - - Correction of material errors in the - - - - current year Restated opening balance - - - - Total increase in the current year - - - - Total decrease in the current year - - - - Closing balance - - - -

Reserves (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance 484,601 889,424 889,424 889,424 Correction of material errors in the - - - - current year Restated opening balance 484,601 889,424 889,424 889,424 Total increase in the current year 404,823 - - - Total decrease in the current year - - - - Closing balance 889,424 889,424 889,424 889,424

Revaluation reserves (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance 275,984 60,783 39 39 Correction of material errors in the - - - - current year Restated opening balance 275,984 60,783 39 39 Total increase in the current year 178,585 - - - Total decrease in the current year 393,786 60,744 - 27 Closing balance 60,783 39 39 12

Unrealized gains from securities (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance - 136,760 130,243 48,417 Correction of material errors in the - - - - current year Restated opening balance - 136,760 130,243 48,417 Total increase in the current year 195,816 - - Total decrease in the current year 59,056 6,517 81,826 9,315 Closing balance 136,760 130,234 48,417 39,102

Unrealized loss from securities (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance - 33,169 28,172 49,236 Correction of material errors in the - - - - current year Restated opening balance - 33,169 28,172 49,236 Total increase in the current year 33,169 - 21,064 13,473 Total decrease in the current year - 4,997 - - Closing balance 33,169 28,172 49,236 62,709

Retained earnings (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance 3,205,707 - - 16,484,381 Correction of material errors in the - - - - current year Restated opening balance 3,205,707 - - 16,484,381 Total increase in the current year 2,083,654 - 16,484,381 27,142,389 Total decrease in the current year 5,289,361 - - - Closing balance - - 16,484,381 43,626,770

Loss up to amount of equity (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance 9,926,271 18,200,280 55,836,391 57,482,335 Correction of material errors in the - - - - current year Restated opening balance 9,926,271 18,200,280 55,836,391 57,482,335 Total increase in the current year 10,121,645 37,636,111 1,645,944 - Total decrease in the current year 1,847,636 - - - Closing balance 18,200,280 55,836,391 57,482,335 57,482,335

Purchased own shares and stakes (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance - - - - Correction of material errors in the - - - - current year Restated opening balance - - - - Total increase in the current year - - - - Total decrease in the current year - - - - Closing balance - - - -

Total capital (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance 81,168,045 69,981,542 32,283,167 47,018,714 Correction of material errors in the - - - - current year Restated opening balance 81,168,045 69,981,542 32,283,167 47,018,714 Total increase in the current year 14,817,373 27,128,916 Total decrease in the current year 11,186,503 37,698,375 81,826 9,342 Closing balance 69,981,542 32,283,167 47,018,714 74,138,288

Loss exceeding equity (thousand RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Opening balance - - - - Correction of material errors in the - - - - current year Restated opening balance - - - - Total increase in the current year - - - - Total decrease in the current year - - - - Closing balance - - - -

1.2.3.3. Key elements of the issuer’s Incorporation Act related to the authorized capital, date of decision and the amount of capital increase. Incorporation Act does not contain provisions on the approved capital.

1.2.3.4. Key elements of the issuer’s Incorporation Act, date of decision on contingent capital increase, number and type of issued shares, with detailed description of requirements for share issue Incorporation Act does not contain provisions on contingent capital increase.

1.2.4. Own shares 1.2.4.1. Number and percentage of own shares by class NIS a.d. Novi Sad does not hold own shares.

1.2.4.2. Time and reason of share acquisition /

1.2.4.3. Data on portfolio of own shares /

1.3. Shares book value and trade with issuer’s securities 1.3.1. Book value of shares 1.3.1.1. State the last book value of shares calculated by class and date of computation, and if the last book value was computed on the basis of non-audited data, then state book value of shares based on adjusted data; provide a brief description of the method used for computation of shares book value Shares book value is determined in the following manner: the amount of total assets is decreased with the amount of loss exceeding the equity and the amount of long term reserves and obligations, as well as the amount of deferred tax (if such amount is not contained in the amount of the long term reserves and obligations), and then divided with the total number of shares. On 30 September 2011 the book value of NIS a.d. Novi Sad shares amounts to RSD 454.67.

1.3.2. Trade in issuer’s securities 1.3.2.1. Organized market on which issuer’s shares are traded Belgrade Stock Exchange a.d. Belgrade Omladinskih brigada str. 1 Novi Beograd

1.3.2.2. Time period set for trading in such shares Shares of the NIS a.d. Novi Sad are traded on the stock exchange market – listing A - Prime Market, by continuous trading method, each business day from 10 a.m. until 1 p.m.

1.3.2.3. Graphic presentation of daily price and volume trade fluctuations in the past six months, where the x-axis presents the date, while y-axis presents the price, i.e. trade volume. Belgrade Stock Exchange a.d. Belgrade has, on the basis of the Resolution issued by Listing and Quotation Committee, admitted NIS a.d, Novi Sad shares to listing А – Prime Market, wherein as the first trading day it has determined 30 August 2010.

Until 30 September 2011 in total 12,362,811 shares are traded, or 7.58% of the total number of issued shares, while the total value of turnover amounted to RSD 6,615,407,180.00.

The price has ranged from RSD 442 (14 September 2010) to RSD 865 (3 August 2011) per share.

500.000 900

450.000 850

400.000 800

350.000 750

300.000 700

250.000 650

200.000 600

150.000 550

100.000 500

50.000 450

0 400

30.08.2010. 09.09.2010. 21.09.2010. 01.10.2010. 13.10.2010. 25.10.2010. 04.11.2010. 16.11.2010. 26.11.2010. 08.12.2010. 20.12.2010. 30.12.2010. 13.01.2011. 25.01.2011. 04.02.2011. 17.02.2011. 01.03.2011. 11.03.2011. 23.03.2011. 04.04.2011. 14.04.2011. 28.04.2011. 12.05.2011. 24.05.2011. 03.06.2011. 15.06.2011. 27.06.2011. 07.07.2011. 19.07.2011. 29.07.2011. 10.08.2011. 22.08.2011. 01.09.2011. 13.09.2011. 23.09.2011.

1.4. Shareholders Name/Business name of the Number and % of the Number and % of voting shares shareholder preference shares

GAZPROM NEFT 91,565,887 shares, i.e. 56.15458% /

THE REPUBLIC OF SERBIA 48,714,029 shares, i.e. 29.87484% / ERSTE BANK A.D. NOVI SAD 644,541 shares, i.e. 0.39528% / CASTODY ACCOUNT UNICREDIT BANK SRBIJA AD 605,634 shares, i.e. 0.37142% / CASTODY ACCOUNT THE ROYAL BANK OF 156,978 shares, i.e. 0.09627% / SCOTLAND N.V UNICREDIT BANK SRBIJA AD 152,750 shares, i.e. 0.09368% / CASTODY ACCOUNT JULIUS BAER 133,686 shares, i.e. 0.08199% / MULTIPARTNER-BALKA UNICREDIT BANK SRBIJA AD 100,000 shares, i.e. 0.06133% / CASTODY ACCOUNT ВОЈВОЂАНСКА БАНКА АД НОВИ 80,247 shares, i.e. 0.04921% / САД CASTODY ACCOUNT HYPO ALPE-ADRIA BANK AD 68,173 shares, i.e. 0.04181% / BEOGRAD CASTODY ACCOUNT OTHER SHAREHOLDERS 20,838,475 shares, i.e. 12.77960% / Central Securities Depository and Clearing house data as of 30 Semptember 2011. On 30 September 2011 NIS a.d. Novi Sad has 2,747,307 shareholders.

The above table shows data about entities with more than 5% of voting shares or ten major shareholders with voting rights. Below the table is the date of receiving data from the Central Securities Depository and Clearing House.

Share capital structure on 30 September 2011

minority shareholders 13,98%

Republic of Gazprom Neft Serbia 56,15% 29,87%

2. ISSUER’S CONDUCT OF BUSINESS, ASSETS AND LIABILITIES

2.1. Issuer’s business activity In addition to the data on the issuer, if the issuer is a parent company, the same data are to be provided about the subsidiaries (in which the issuer has 25% or more ownership interest in the share capital), as well as the business name, registered office, subsidiary ID number and percentage of the ownership interest in the share capital and decision-making of the subsidiary held by the parent company.

2.1.1. Core business activity 2.1.1.1. Name and code of the core business activity 0610 – Extraction of crude petroleum

2.1.2. Income from business activity 2.1.2.1. State the value of income from business activity based on which issuer generated its largest income in the past three years (thousand RSD) DESCRIPTION 2008 2009 2010 01.01.-30.09.2011 Sales 168,458,472 118,375,584 161,148,850 132,958,057

2.1.3. Market position 2.1.3.1. Estimate of issuer’s percentage in market share at the goods and services market for each issuer’s activity; major competitors on such market and estimation of their market share 2010 Under the conditions of slow commercial activities and increase of inflation, there was a drop in real earnings and decrease of the share of the transportation costs in the structure of the total consumption of the households. Total consumption of oil derivates in 2010 has dropped, from 3,448 thousands of tons in 2009 to 3,400 thousands of tons in 2010. Share of NIS a.d. Novi Sad at domestic market in 2010 has increased to 66.5% when compared to 2009 in which it was 65.2%, unlike other participants at domestic market, whose share has decreased. After the drop in consumption of oil products in the beginning of 2010, consumption of oil derivatives in Serbia in second half of 2010 has been increased, even though it did not reach last year level.

-1% 3,448 3,400

-1.3% 34.80% 33.50%

+1.3%

62.20% 66.50%

2009 2010

NIS Other market participants in Republic of Serbia

Share structure of Serbian market (in thousands of tons)

First nine months of 2011 Increase in oil prices on world markets between January and April caused a significant increase in prices of petroleum products. Although in May and June there was a drop in oil prices, this did not cause a significant influence on the price of petroleum products, since in the same time, there was an increase in the eur/rsd and usd/rsd exchange rate, and in June there was a rise in the excise amount for BMB 95 and D2. During the period July-September 2011 oil prices are slightly changed (the price in September compared to June increased by 0.8%). Inflation was in the range from 11.2% in January to 14.7% in April. After this period there was a calm and the decline in inflation. In June, the yoy inflation rate was 12.7%, while in September it fell to 9.3%. In June and July there was monthly deflation of -0.3% and -0.5%. In August monthly inflation was 0% and in September it was +0.2%, but this movement is not a reflection of price stability, but a realistic reflection of food price seasonal decrease. In the first quarter of 2011 negative macroeconomic trends have influenced the reduction in purchasing power, reducing fuel consumption and thus the reduction of the budget revenues from excise and VAT. In the last quarter of 2010 extremely large imports of diesel and LPG as well as and the stockpiling of importers and traders of oil derivatives, influenced the reduction in consumption of motor fuels in the first quarter of 2011 of 4.0% compared to the same period of 2010.

At gasoline stations of some companies, there was a new derivative, Evro BMB 98. Notwithstanding the rather high price, the consumption of this fuel is growing slowly.

In the second quarter of 2011 there was an increase in industrial production (in May as much as 6.8%, seasonally adjusted growth of 3.5%, and in June, slightly lower, 3.3%), and late agricultural activities in autumn, contributed that the decline in consumption of motor fuel from the first quarter is almost annulled, so that the consumption of motor fuels at approximately at the same level as in the first half of last year (only -0.1%). Growth of 3.8% was noted for diesel fuel (euro diesel even 7.3%, while the D2 had a dop of 2%), a decline in motor gasoline consumption is less than the decline in the first quarter (3.3% compared to 4.6 %). It should be noted that the drop in gasoline consumption in the first six months of this year is much smaller than the drop in the same period last year, when the drop was 11.3%.

In the third quarter of 2011 there was a drop in consumption of motor fuels of 4% compared to the same period last year. According to the Statistical Office of the Republic of Serbia, in the period

January-September 2011 there was an industrial production growth of 3% compared to the same period of last year. At the same time, in the structure of household consumption, decline in funds available for transportation was recorded транспорт (8.9% in Q2 compared to 9.1% in Q1). This situation is reflected in the consumption of motor fuels, where in the first nine months of the 2011 the decline in the consumption of fuels that are primarily intended for individual consumptionwas recorded: motor gasoline (-5.6%) and LPG (-7.0%, thereby reducing the consumption of autogas -5.8%). At the same time the consumption of diesel fuel is rising, with the trend of substitution of consumption D2 with heating oil EL, which intensivly imported since May. Middle distillates consumption growth is 2.0% compared to the same period last year. Heating oil EL has disrupted even the trends within diesel fuels, and after a few years, a higher growth of consumption of D2 was recorded compared to the growht of consumption of eurodiesel (3.7% and 0.8% respectively).

The apperance of "Low cost" companies on Belgrade airport, lead to increased sales of jet fuel. Intensification of infrastructure works resulted in a significant increase in the consumption of bitumen. Since in the same refineries increased production of bitumen, the share of imported bitumen in total consumption is reduced to only 4%. In the period January-September 2011 the consumption of petroleum products in Serbia decreased by 1.7% compared to the same period last year. НИС- 1.7%

2,420 2,378

9М '10 9М '11

Serbian market volume (in thousand tonnes)

Oil and gas production

2010 In 2010 NIS a.d. Novi Sad has achieved the highest production of oil and gas in the past 10 years. In 2010, 864.9 thousands of tons of domestic oil has been produced (gas condensate excluded), which is 31% more than in 2009. The production of natural gas in 2010 has been for 41% higher than in 2009. The significant increase in production of oil and gas has been affected by introduction of new modern methods for exploitation as well as use of modern equipment for oil production. The significantly increased production of domestic oil in gas has in 2010 amounted to 1,229.40 thousands of conditional tons*, which is for 33% higher than when compared to the same period last year. In addition, resources base is increased in 2010 when compared to 2009. The activities that have led to better results are: - instalation of ESP

- undertaking hydraulic fracturing - gas bearing at Velebit field has been put into exploitation - the well at the gas bearing Mokrin-zapad has been overhauled - re-activation gas well in Srednji Banat - re-activation of significant number of wells that were out of production

First nine months of 2011 The improvement in production of oil and gas is continued in the first nine months of 2011. In this period NIS a.d. Novi Sad has produced 748 thousands of tons of domestic oil (gas condensate excluded), which is 20% more than in the same period of 2010. Production of natural gas in the period January – September 2011 has been for 40% higher than in 2010. Production of domestic oil and gas in the period January – September 2011 has amounted to 1,109 thousands of conditional tons*, which is for 26% higher when compared to the same period of the previous year. Also, resources base has a tendency of growth. *1 conditional ton of oil = 1.256 m3 of gas

+ 2% + 4% + 3% + 9% 372 378 + 11% 349 358 + 8% 321 290 270

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Domestic oil and gas production (in thousands of conditional tons)

The position of the market of oil refining

2010 Total amounts of refined oil in 2010 (third parties included) are at the refining level achieved in 2009. Share of the refining of domestic oil is increased in the structure of the total amounts that are refined. Total amounts of the refined oil of NIS a.d. Novi Sad (third parties excluded) is increased for 9% when compared to 2009, i.e. from 2,621 thousands of tons to 2,850 thousands of tons. During 2010, euro diesel production capacities are increased for 25%. In addition, the production of motor fuels, primary petrol, and jet fuel is increased, while there was decrease in production of diesel fuel and oil fuel. Production of lead fuels is discontinued, and production of the petrol of EURO 5 quality is commenced. Total refining in Pancevo Refinery (third parties included), when compared to 2009, has increased for 1.1%, while in Novi Sad refinery the refining in 2010 has decreased for 11% when compared to 2009. During 2010 the refinery Novi Sad has started its production. It has processed 245 thousand tons of oil type “Velebit” and has produced 35 thousand tons of eurodiesel. After completion of the refining of crude oil under the previous year agreement, as of February 2010

there was no refining of crude oil in refineries of NIS a.d. Novi Sad for third parties needs.

First nine months of 2011 In the period January – September 2011 oil refining in refineries has decreased for 20% when compared to the same period in 2010. Decrease of the refining volumes has been affected by regular planned repairs of the Pancevo Refinery, when the refinery operated with minimal capacity.

- 20% 2,202 7 -100% 1,754 636 +14% 0 725

1,559 - 34% 1,029

9M '10 9M '11 Refinig of imported oil Refinig of proper oil Refining service for third parties

+ 16% - 20% 822 + 6% - 22% - 14% 0 709 + 30% 671 655 667 0 202 7 0 0 574 216 513 218 0 253 0 301 218 206 620 446 493 401 366 307 356

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Refinig of imported oil Refinig of proper oil Refining service for third parties

Crude oil refining (in thousands of tons)

In the period January - September 2011 Refinery Novi Sad has processed 242 tons of domestic oil, by which the share of the Novi Sad refinery in processing increased by 6% over the same period last year (due to increased production of raffinate).

88% 86% 85,5% 87,5% 92% 90% 95%

12% 14% 14,5% 12,5% 8% 10% 5% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Refinery Novi Sad Refinery Pancevo

-6%

92% 86%

8% +6% 14%

9M 2010 9M 2011

Refinery Novi Sad Refinery Pancevo

Crude oil refining per refinery

Trade with oil products

2010 Trade of NIS a.d. Novi Sad at domestic market in 2010 is at the level of trade with oil derivates in 2009 (2,248 thousands of tons) and has amounted to 2,261 thousands of tons. Due to drop of total consumption at the market, the sales volume of lead petrol MB-95 is decreased, while the sales of lead free petrol BMB-95 and euro diesel is increased. In January 2009, due to «gas crisis» extremely large sales of oil derivatives are achieved (larger when compared to 2010), while the sales of oil derivatives have been larger in 2010 than in 2009 if the period between February and December is observed.

Wholesale in 2010 was at the level of 2009, and direct deliveries from refineries increased for about 18% (in 2010 Agreement on supply of primary petrol with HIP Petrohemija was signed ).

Exports have increased from 323 thousand tons in 2009 to 353 thousand tons in 2010. First nine months of 2011 Total turnover of NIS a.d. Novi Sad, following the reduction in the first quarter of 2011 of 7% compared to the same period of the previous year, reached nearly the same level as in April - June 2010 (-0.2%) in the second quarter. Considering the period January - June 2011, total turnover has decreased by

3%, while turnover on the domestic market of oil products rose by 1% compared to the same period of the previous year. In the period January-September 2011 there was a fall of total turnover by 8% over the same period last year. The impact of the crisis reflected in the decline in sales in the domestic market of 3% compared to the same period of the last year.

- 8%

1,949 1,798 408 -33% 389

1,227 -2% 1,200

314 - 5% 209

9M '10 9M '11 Export Wholesaale Retail sale

+ 23% - 14% - 22% 770 + 6% + 13% + 21% 158 663 660 627 625 553 153 137 143 515 136 108 117 499 358 396 466 369 472 338

126 113 92 76 38 60 57 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Export Wholesaale Retail sale

Turnover (in thousands of tons)

In the period January - March 2011 retail sales (including lubricants) has risen by 7%, while wholesale and export recorded a decrease (by 8% and 21% respectively). In the second quarter of 2011 wholesale rose by 11%, while retail sales (-5%) and exports (-30%) declined compared to the same period of the previous year. Considering the period January - June 2011 wholesale increased slightly (for 1%), and retail sale rose for 1%, while exports declined by 24% compared to the same period of the previous year.

In the third quarter of 2011 the total turnover was down 14% over the same period last year. In the period January-September of this year, compared to the last year, retail sales decreased by 5%. Some of the reasons for this reduction are: - Farmers' strike in May and June and roadblocks that have prevented the delivery of petroleum products from refineries, - Reducing the purchasing power of general population and farmers, because of the economic crisis and rising prices of oil derivatives, - Lower sales volume of motor gasoline, due to changes in the structure of the fleet and the increasing orientation of consumers for purchasing of eurodiesel and autogas, and because of the imports of motor gasoline by other oil companies.

Wholesale trade fell by 2%, mainly due to: - Reduction in sales volume of eurodiesel, propane-butane mixture at the beginning of the year, while the growth was recorded in the second and third quarter, - Reduction in demand of mazut as a result of gasification and extremely hot weather in the third quarter. Exports decreased by 33% in order to optimize the structure of production Pancevo refinery.

In the structure of the sales per oil derivative the increase of the share of white derivatives in the total sales is evident. промету.

770

664 660 627 625 553 515 499 425 439 466 419 360 328

271 235 193 188 198 187 206

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011

Black and other derivatived White derivatives

Sales structure per oil products (in thousand of tons)

2.1.4. Activities performed outside of the registered seat 2.1.4.1. Name of the location, other than the issuer’s head office, on which issuer carries out its activity - organizational units and representative offices: Organizational unit / Business unit / Name of location Representative office

Branch office of NIS a.d. – NIS – Naftasgas in Turkmenistan represents and protects the interests of NIS a.d. Novi Sad in Turkmenistan. The branch office is engaged in negotiations, undertakes drilling works on oil and gas Balkanbath, Turkmenistan reservoirs, provides lab services and is engaged in exploration works. It also undertakes analysis of the raw materials and fluids. It is engaged in construction and servicing of the oil and gas facilities, and it is also engaged in activity and provision of services in the oil and gas industry.

Branch office of NIS a.d. Novi Sad in Nojabrsk, the Russian Federation – established for the purpose of protection and representation of interests of the company in the relations with the Russian Federation authorities and the authorities Noyabrsk, Russian Federation of Nojabrsk city and Yamalo-Nenets Autonomous Region, local authorities, companies, organizations, institutions, other legal and physical persons, as well as conducting other special activities of the company.

The representative office of NIS a.d. Novi Sad, Moscow, Russian Federation represents and protects the interests of NIS a.d. Novi Sad and undertakes their realization in the procedure establishment, maintenance and development of the contacts with the companies and their association on the territory of the Russian Federation, that are engaged in exploration, production, refining and distribution of the crude oil and the natural gas and their final products, and is also intermediary between the said organizations and associations and NIS a.d. Novi Moscow, Russian Federation Sad. The activity of the representative office is also establishment, maintenance, and development of the contacts with science-technical institutes and academies in the field of exploration, production and refining of oil and gas on the territory of the Russian Federation and making the relation between such entities and NIS a.d. Novi Sad. Branch office also makes contacts with Ministries other state bodies of the Russian Federation that are of relevance for oil and gas industry and science.

The representative office NIS a.d. Novi Sad – NIS - NAFTAGAS in Luanda, Angola is established for the purpose of undertaking the Luanda, Angola activity on the block Angola as well as representation and protection of interests of NIS a.d. Novi Sad.

The representative office NIS a.d. Novi Sad, Brussels, The Kingdom of Belgium is established for the purpose of undertaking following activities: 1. represents and protects the interests of NIS a.d. Novi Sad through the process of establishing, maintaining and developing of contacts with EU institutions; 2. establishing and developing contacts with institutions dealing with research and innovation in the field of exploitation and processing of oil and petroleum products; 3. regular monitoring of the acquisition and Brussels, The Kingdom of Belgium systematization of the entire European Union regulatiions - regulations, directives, recommendations, technical bulletins in the field of energy, ecology and infrastructure; 4. timely and permanent notification of NIS a.d. Novi Sad on all changes in EU regulations that would be relevant to the operations of NIS a.d. Novi Sad; 5. contribution to the general recognition of NIS a.d. Novi Sad in the European Union, thereby strengthening the positive image of NIS a.d. Novi Sad, through the activity of representative office.

The representative office NIS a.d. Novi Sad, Sofia, Republic of Bulgaria is established for the purpose of undertaking following activities: 1. represents and protects the interests of NIS a.d. Novi Sad through the process of establishing, maintaining and developing of contacts with institutions of Republic of Bulgaria; 2. establishing and developing contacts with Sofia, Bulgaria institutions dealing with research and innovation in the field of exploitation and processing of oil and petroleum products; 3. regular monitoring of the acquisition and systematization of the regulations of Republic of Bulgaria - regulations, directives, recommendations, technical bulletins in the field of energy, ecology and infrastructure; 4. timely and permanent notification of NIS a.d. Novi Sad on all changes in regulations of Republic of Bulgaria that would be relevant to

the operations of NIS a.d. Novi Sad; 5. contribution to the general recognition of NIS a.d. Novi Sad in Bulgaria, thereby strengthening the positive image of NIS a.d. Novi Sad, as well as realizing the first phase of the regional positioning through the activity of representative office. 6. exploring possible forms of business cooperation in the Republic of Bulgaria; 7. establishment of business contacts necessary for the evaluation and development projects related to the sale of petroleum products, and potentially for other related areas of interest to NIS a.d. Novi Sad.

The representative office NIS a.d. Novi Sad, Bucharest, Republic of Romania is established for the purpose of undertaking following activities: 1. represents and protects the interests of NIS a.d. Novi Sad through the process of establishing, maintaining and developing of contacts with institutions of Republic of Romania; 2. establishing and developing contacts with institutions dealing with research and innovation in the field of exploitation and processing of oil and petroleum products; 3. regular monitoring of the acquisition and systematization of the regulations of Republic of Romania - regulations, directives, recommendations, technical bulletins in the Bucharest, Romania field of energy, ecology and infrastructure; 4. timely and permanent notification of NIS a.d. Novi Sad on all changes in regulations of Republic of Romania that would be relevant to the operations of NIS a.d. Novi Sad; 5. contribution to the general recognition of NIS a.d. Novi Sad in Romania, thereby strengthening the positive image of NIS a.d. Novi Sad, as well as realizing the first phase of the regional positioning through the activity of representative office. 6. exploring possible forms of business cooperation in the Republic of Romania; 7. establishment of business contacts necessary for the evaluation and development projects related to the sale of petroleum products, and potentially for other related areas of interest to NIS a.d. Novi Sad.

*REMARK: By the Decision of Serbian Business Registers Agency as of 1 September 2011 the following branches of NIS a.d. Novi Sad were deleted from the registry: - Branch office NIS - NAFTAGAS ZA ISTRAŢIVANJE I PROIZVODNJU NAFTE I PRIRODNOG GASA, PODZEMNIH VODA I GEOTERMALNE ENERGIJE, INŢENJERING U OBLASTI NAFTNE INDUSTRIJE (Novi Sad, Serbia); - Branch office NIS - PETROL ZA PRERADU I PROMET NAFTE I DERIVATA NAFTE (Belgrade, Serbia); - Branch office NIS – TNG ZA PROIZVODNJU I PROMET TEČNOG NAFTNOG GASA (Elemir, Serbia).

NIS A.D.

Corporate Rep. offices Headquarters - Functions abroad

Block Block Block Block Block Upstream Oilfield Services Refining Sales & Distribution Energetics**

Production of oil and Planning and raw Oil services Reatail gas material processing

infrastructure and Energy supply Technical services Wholesale operations support management

Transport of Technical Oil and gas reserves machinery and maintenance and Logistic management manpower repair of equipment

Oil and gas fields Sales, marketing Storage and delivery development and development of of raw materials and Marketing management oil services finished products

Strategy and Harmonizing Foreign trade complex projects Assessment

Scientific and Efficiency and Tecnical processes Oils and lubes Development control center

Strategy and Capital Projects of the Bunkering* Block "Refinig"

Sales development

REMARK: * The organizational unit formally exist, but as of 30.09.2011 has not yet begun to perform its activities. ** In the process of constitution.

Business activities of NIS a.d. Novi Sad are organized within four blocks, partially decentralized functions/directions, and centralized functions.

Block Upstream covers the field of exploration and production of oil and gas, including production, infrastructure and operational support, oil and gas reserves management, oil and gas fields’ development management, major projects in the field of exploration and production as well as scientific and technical centre processes control. NIS has three signed contracts for share of the Angola crude oil (PSA, Production Sharing Agreement): PSA, Block 3/05 PSA, Block 3/05А PSA, Block 3/91 The Block includes the Elemir natural gas refinery, designed for production of approximately 60.000 tons of liquid gas (propane, butane) and gasoline. Block Oilfield Services provides main support in exploration and production in all oil and gas upstream activities, from geophysical services, through drilling and overhaul of wells, to the transportation of the machinery and manpower, machinery maintenance as well as construction and maintenance of oil and gas systems and facilities. Block Refining deals with oil derivatives production at two separate locations in Pancevo and Novi Sad. They produce a whole range of oil derivatives – motor fuels, feedstock for petrochemical industry, motor oil, and other crude oil products. Average annual refining volume in the last several years was about 3 million tons of crude oil, while the maximum capacity of the refinery units in these two refineries is approximately 7 million tons of crude oil annually. Block Sales and Distribution covers foreign and domestic trade, wholesale of all oil derivatives, and the retail which includes the finished derivatives, liquid petroleum gas and accessory merchandise. NIS has 509 operating retail facilities (petrol stations, loading stations for LPG, LPG bottles sales points), 7 utility facilities, 31 storage facilities all over across the territory of Serbia and 6 tank farms. Block Energetics was formed in accordance with the development strategy of the company that identifies several key activities: positioning NIS a.d. as a major energy company in Serbia and the region, increased use of renewable energy sources (solar, wind and geothermal energy) and production of energy (cogeneration of gas and production of electric energy by realizing a project of construction of thermal power plant).

2.1.5. Special circumstances 2.1.5.1. State other important facts and circumstances related to issuer’s operation that can affect data on issuer’s conduct of business In February 2009, within Serbian-Russian international arrangement in the area of oil and gas industry, 51% of the shares of NIS a.d. Nis Sad were transferred in the ownership of the company Gazprom Neft, while the Republic of Serbia remained the owner of the remaining 49% of the shares. In accordance with the criteria that are defined in the Law on Right on Distribution of Free Shares and Monetary Compensation Exercised by Citizens in the Privatization Process (Official Gazette of RS, nos. 123/07 and 30/10) and the conducted procedure for collecting the applications for registration in the registry of right holders by the Privatization Agency of the Republic of Serbia, on the basis of the Decision of the Government of the Republic of Serbia, 19.08% of share capital of NIS a.d. Novi Sad was transferred to the citizens of the Republic of Serbia, as well as on NIS employees and ex- employees in NIS a.d. Novi Sad. After the issuance of the said Decision, the Republic of Serbia has successively transferred shares from its ownership account to the citizens, employees and ex- employees upon whose application there was no final decision on granting of the right to free shares and to whom on the basis of the respective Decision the shares have not been initially transferred, depending on the content of the final decision upon application. Gazprom Neft has, in accordance with the Agreement for Sale and Purchase of shares of NIS a.d. Novi Sad, on 31 January 2011 announced Takeover bid for NIS a.d. Novi Sad shares held by minority shareholders, i.e. 31,180,256 ordinary shares which in total amounts to 19,12% of the total number of ordinary shares. The bid was valid for 45 days, i.e. until 16 March 2011 And 8,405,087 shares is acquired, i.e. 5.15% of the total number of ordinary shares from the price of RSD 506.48 per share which is counter value of EUR 4.80996 per share on 13 January 2011. After the bid completion Gazprom Neft holds 91,565,887 ordinary shares, i.e. 56.15% share capital of NIS a.d. Novi Sad, while minority shareholders own 22,775,169 ordinary shares, i.e. 13.97% share capital of NIS a.d. Novi Sad, and the number of shares held by the Republic of Serbia remained unchanged.

In accordance with the Agreement for Sale and Purchase of shares of NIS a.d. Novi Sad, Gazprom Neft has the commitment to provide to NIS a.d. the amount of EUR 500,000,000 by way of special purpose loans for purpose of implementing the program for reconstruction and modernization of the technological complex of NIS a.d. Novi Sad on the following terms: Obligation to provide EUR 500,000,000 as the principle amount of the loan shall be fully performed in the period between the day the transfer closing and 31 December 2012; The interest accruing the principal of the loan provided to the NIS shall accrue quarterly and for each quarter shall equal to 12 month EUR LIBOR + 2% (no further charges or commissions shall ); The term of the loan shall be 14 years as of the first disbursement date; The grace period shall be the later of 31 December 2012 or the competition of the actual performance by Gazprom Neft of its obligation; There shall be no collateral. The report on sustainable development was made for 2010, according to the standards and quality in corporate reporting prescribed by the international organization Global Reporting Initiative and AccontAbility, and a review of the report was conducted by an independent auditing firm KPMG. In July 2011 representative offices in Romania and Bulgaria were established. In September 2011 following subsidiaries were founded: - NIS PETROL EOOD, Sofia, Bulgaria (equity 100%), - NIS PETROL SRL, Bucharest, Romania (equity 100%), - NIS PETROL doo, Laktasi, Bosnia and Herzegovina (equity 100%), while on 3 October 2011 the registration process for subsidiary company Pannon Naftagas Kft, Budapest, Hungary (equity 100%) ended.

2.1.6. Interruption of business operations 2.1.6.1. State interruptions in issuer’s business operation in the past three years and reasons of interruption There has been no interruption in business activities in the past three years.

SUBSIDIARIES Joint stock company for hotels and tourism O ZONE ad Beograd Head office Marsala Birjuzova 3-5, Belgrade, Serbia ID number 20094630 % ownership interest in capital of the controlling 100% company in the subsidiary % portion indecision making of the controlling company in 100% the subsidiary Name and the code of the 5510 – Hotels and similar accommodation main activity Income from the business 2008 2009 2010 01.01.-30.09.2011 activity (income from the sales in thousand RSD) 381,641 263,915 254,475 196,455 Branch offices: Activities conducted outside - FOLLOW ME Belgrade the registered seat – - *LCC FOLLOW ME Novi Sad organizational and business - *LCC FOLLOW ME Nis units and the representative *On the basis of agreement on franchising these have become parts of offices the unique multinational network of the tourist agencies that conduct business under the name Lufthansa City Centar.

OOO “NIS OVERSIZ” Moscow, Russian Federation Head office Baljsoj golovin perulok 12, Moscow, RF ID number (ORGN – basic national registration number 5067746792306) % ownership interest in capital of the controlling 100% company in the subsidiary % portion indecision making of the controlling company in 100% the subsidiary Name and the code of the Crude oil and oil gas extraction main activity Income from the business 2008 2009 2010 01.01.-30.09.2011 activity (income from the sales in thousand RSD) - - - -

NIS Petrol EOOD, Sofia, Bulgaria* Head office Oboriste Street No. 10, Oboriste district, Sofia, Bulgaria ID number 201703950 % ownership interest in capital of the controlling 100% company in the subsidiary % portion indecision making of the controlling company in 100% the subsidiary Name and the code of the trade in oil, liquefied petroleum gas (LPG) and Petroleum Products main activity (wholesale and retail), import-export operations Income from the business 01.01.-30.09.2011 activity (income from the sales in thousand RSD) - *REMARK: The company was founded on 13 September 2011.

NIS PETROL S.R.L., Bucharest, Romania* Daniel Street Danielopolu Street No. 4-6, 3rd Floor, District 1, Head office Bucharest, Romania ID number 29111546 % ownership interest in capital of the controlling 100% company in the subsidiary % portion indecision making of the controlling company in 100% the subsidiary Name and the code of the 4730 - retail sale of motor fuel in specialized stores main activity Income from the business 01.01.-30.09.2011 activity (income from the sales in thousand RSD) - *REMARK: The company was founded on 16 September 2011.

NIS PETROL d.o.o. Laktasi, Bosnia and Herzegovina* Head office Prijedorska Street BB, Laktasi, Bosnia and Herzegovina ID number 11081932 % ownership interest in capital of the controlling 100% company in the subsidiary % portion indecision making of the controlling company in 100% the subsidiary Name and the code of the 46.71 - Wholesale of solid, liquid and gaseous fuels and related main activity products Income from the business 01.01.-30.09.2011 activity (income from the sales in thousand RSD) - *REMARK: The company was founded on 13 September 2011.

Pannon Naftagas Kft, Budapest, Hungary* Head office 1093 Budapest, Hungary, Kozraktar u., 30-32 ID number 01-09-969323 % ownership interest in capital of the controlling 100% company in the subsidiary % portion indecision making of the controlling company in 100% the subsidiary Name and the code of the 0610'08 Extraction of crude petroleum main activity Income from the business 01.01.-30.09.2011 activity (income from the sales in thousand RSD) - * REMARK: On 30.September 2011 the Company was in the process of registration and was registered on 03. October 2011.

“Jadran – Naftagas” Limited liability Company Banja Luka* Head office Ivana Franje Jukica street no.7, Banja Luka, Republika Srpska ID number MBS: 57-01-0312-10 % ownership interest in capital of the controlling 66% company in the subsidiary

% portion indecision making of the controlling company in 66% the subsidiary

Exploration and production of oil and gas 11.101 crude oil extraction; 11.102 natural gas extraction; 11.200 servicing activities for oil and gas extraction, except exploration works; Name and the code of the 45.110 demolition of objects; land works; main activity 45.120 field exploration by drilling and sounding; 70.200 rent of real estate, for own account; 73.101 exploration and experimental development in natural sciences; 73.102 exploration and experimental development in technical and technological sciences;

73.140 business management and consulting. Income from the business 01.01.-30.09.2011 activity (income from the sales in thousand RSD) - *REMARK: The company was founded on 23 December 2010

Limited liability company NIS-SVETLOST BUJANOVAC Head office Industrijska zona bb, Bujanovac, Srbija ID number 20125535 % ownership interest in capital of the controlling 51.32% company in the subsidiary % portion indecision making of the controlling company in 51.32% the subsidiary Name and the code of the 4671 – Wholesale trade with solid, liquid and gas fuels and similar main activity products Income from the business 2008 2009 2010 01.01.-30.09.2011 activity (income from the sales in thousand RSD) 208,738 296,595 572,557 547,105

Company for digging, transport and refining of melting slag and copper production JUBOS d.o.o. Bor Head office Djordja Vajferta 29, Bor, Srbija ID number 20133597 % ownership interest in capital of the controlling 51% company in the subsidiary % portion indecision making of the controlling company in 51% the subsidiary Name and the code of the 2444 – Copper production main activity Income from the business 2008 2009 2010 01.01.-30.09.2011 activity (income from the sales in thousand RSD) - - - -

OOO "Sovmestnoe predprijatie RANIS" Moscow area, Cernogolovka Russian Federation Head office Cernogolovka, Moskovskaja oblast, RF ID number (basic national registration number 1045006116198) % ownership interest in capital of the controlling 51% company in the subsidiary % portion indecision making of the controlling company in 51% the subsidiary Name and the code of the Scientific explorations and elaboration in the area of the natural and main activity technical sciences Income from the business 2008 2009 2010 01.01.-30.09.2011 activity (income from the sales in thousand RSD) - - - -

Eurol International (Bermuda) ltd Head office Clarendon House, Church Street West, Hamilton HM 11, Bermuda ID number (registration number ЕC-22435) % ownership interest in capital of the controlling 50% company in the subsidiary % portion indecision making of the controlling company in 50% the subsidiary Oil trading activities encompassing the import and export of oil products, including but not limited to LPG, naphtha, gasoline, Name and the code of the kerosene, jet, gasoil and fuel oil, and crude oil trading opportunities main activity arising from Republic of Serbia / Jugopetrol interests in countries other than Yugoslavia Income from the business 2008. 2009. 2010. 01.01. – 30.09.2011 activity (income from the - - - - sales in thousand RSD)

MACO NAFTA D.O.O. Skopje Head office 15 korpus br.3, Skopje, Macedonia ID number (EMBS – unique statistical number 04438701) % ownership interest in capital of the controlling 49% company in the subsidiary % portion indecision making of the controlling company in 49% the subsidiary Name and the code of the Wholesale trade with solid, liquid and gas fuels and similar products main activity Income from the business 2008. 2009. 2010. 01.01. – 30.09.2011 activity (income from the - - - - sales in thousand RSD)

Joint stock company cultural-sports centre PINKI – ZEMUN, Zemun Head office Gradski park 2, Belgrade-Zemun, Serbia ID number 07026781 % ownership interest in capital of the controlling 48.7% company in the subsidiary % portion indecision making of the controlling company in 48.7% the subsidiary Name and the code of the 9319 – Other sports activities main activity Income from the business 2008 2009 2010 01.01.-30.09.2011 activity (income from the sales in thousand RSD) 22,757 19,143 18,398 42,506

2.2. Issuer’s assets and liabilities on 30 September 2011 (thousand RSD) NON CUREENT ASSETS Property, plant, equipment and biological assets 116,519,826 Property, plant, equipment 115,049,889 Investment properties 1,469,937 Intangible assets 4,671,296 Long-term investments 3,935,428 TOTAL FIXED ASSESTS 125,126,550 CURRENT ASSESTS Inventories 35,862,166 Non current assets intended for sale and discontinued operations - Short-term receivables, investments and cash 38,264,709 Receivables 20,525,673 Prepaid income tax - Short-term financial investments 2,503,915 Cash and cash equivalents 11,318,274 VAT and accrued income 3,916,847 TOTAL CURRENT ASSETS 74,126,875 Deferred tax 4,804,904 TOTAL ASSETS 204,058,329

In addition to data on the issuer, if the issuer is controlling company, the same data are provided for subsidiaries in which controlling company holds 25% and more of ownership interest in share capital

Assets of subsidiaries on 30 September 2011 (thousand RSD) НИС PETROL NIS PETROL NIS PETROL Pannon O ZONE NIS OVERSIZ EOOD S.R.L. d.o.o. Naftagas Kft Bulgaria* Romania* BH* Hungary NON- CURRENT ASSETS Subscribed ------capital unpaid Property, plant 3,295,336 - - - - - equipment Investment 1,405,897 - - - - - properties Intangible 3,967 - - - - - assets Long-term 1,491 - - - - - investments Total fixed 4,706,691 - - - - - assets CURRENT

ASSETS Inventories 4,454 - - - - - Fixed assets intended for sale and assets ------from discontinuing operations

Short-term receivables, 230,525 5,515 2,632 997 1,035 172 investments and cash Accounts 43,650 2,720 - - - - receivable Receivables for overpaid ------income tax Short-term 8,426 - - - - - investments Cash and cash 177,740 2,603 2,632 997 1,035 172 equivalents Value added tax and deferred 709 192 - - - - expenses and prepayments Deferred tax ------Total current 234,979 5,515 2,632 997 1,035 172 assets TOTAL ASSETS 4,941,670 5,515 2,632 997 1,035 172

Jadran naftagas NIS Svetlost JUBOS SP Ranis Pinki Zemun BH Bujanovac Bor NON- CURRENT ASSETS Subscribed - 7,396 - - - capital unpaid Property, plant - 33,751 - - 137,955 equipment Investment - - - - 72,706 properties Intangible 105,425 - - - - assets Long-term - - - - - investments Total fixed 105,425 41,147 - - 210,661 assets CURRENT

ASSETS Inventories - 5,170 - - 901 Fixed assets intended for sale and assets - - - - - from discontinuing operations Short-term receivables, 55,390 88,078 1,744 842 22,709 investments and cash Accounts - 29,535 - - 13,353 receivable Receivables for overpaid - 569 - - 10 income tax Short-term - 2 - - 8,433 investments Cash and cash 55,195 42,469 1,744 21 913 equivalents

Value added tax and deferred 195 15,503 - 821 - expenses and prepayments Deferred tax - - - - - Total current 55,390 93,248 1,744 842 23,610 assets TOTAL 160,815 134,395 1,744 842 234,271 ASSETS *REMARK: The company NIS PETROL EOOD, Sofia, Bulgaria was registered on 13 September 2011, the company NIS PETROL SRL, Bucharest, Romania was registered on 16 September 2011, the company NIS PETROL d.o.o.,Laktasi, Bosnia and Herzegovina was registered on 13 September 2011, while on 30 September 2011 Pannon Naftagas Kft, Budapest, Hungary was in the process of registration and was registered on 3 October 2011.

2.2.1. Real estate, plants and equipment 2.2.1.1. Data on real estate, type, location, surface area, value, including rented or leased property on 30 September 2011 Location On the Outside the Type of object Quantity territory of territory of Basis for use* the Republic the Republic of Serbia of Serbia NIS ownership 588 NIS right of usage – ownership 1,981 Land (constructed, non- of the Republic of Serbia 2,760 2,759 1 constructed) NIS possession 15 Third parties’ rights 162 Not registered right 14 NIS ownership 228 NIS right of usage – ownership of the Republic of Serbia 124 Petrol stations 536 511 25 NIS possession 22 Third parties’ rights 43 Not registered right 119 NIS ownership 21 NIS right of usage – ownership 28 Warehouses, Storage of the Republic of Serbia 69 63 6 houses, depository NIS possession 7 Third parties’ rights 4 Not registered right 9 Buildings, business NIS ownership 376 premises NIS right of usage – ownership (administrative of the Republic of Serbia 34 buildings, production 654 647 7 NIS possession 37 buildings, garages, Third parties’ rights 22 buildings, parts of the buildings, stores, Not registered right 185 premises) NIS ownership 282 Reservoirs NIS right of usage – ownership 2 (-up to 150m ; of the Republic of Serbia 21 2 - from 150m up to 360 360 - NIS possession 19 1000m2; 2 Third parties’ rights 6 - over 1000m ) Not registered right 32

NIS ownership 48 Roads NIS right of usage – ownership 1 (internal roads, external of the Republic of Serbia 420 420 - roads, railway, parking, NIS possession 0 PP roads) Third parties’ rights 1 Not registered right 370 Supply leads NIS ownership 99 (gas pipelines, oil NIS right of usage – ownership 0 pipelines, leads and of the Republic of Serbia 1,191 1,191 - drainage, drilling NIS possession 4 pipelines, other Third parties’ rights 1 pipelines) Not registered right 1,087 NIS ownership 83 NIS right of usage – ownership Complexes of the Republic of Serbia 0 (geophysics institute, 84 84 - NIS possession 0 computation stations) Third parties’ rights 0 Not registered right 1 NIS ownership 581 NIS right of usage – ownership of the Republic of Serbia 5 Wells 1,303 1,303 - NIS possession 21 Third parties’ rights 0 Not registered right 696 NIS ownership 68 Energetic objects NIS right of usage – ownership 5 (trafo stations, of the Republic of Serbia 217 217 - transmission lines, NIS possession 16 aggregate stations) Third parties’ rights 0 Not registered right 128 NIS ownership 415 Other objects NIS right of usage – ownership 115 (petrol stations, of the Republic of Serbia 794 794 - awnings, cornerstones NIS possession 37 etc.) Third parties’ rights 22 Not registered right 205 NIS ownership 2,789 NIS right of usage – ownership of the Republic 2,314 of Serbia IN TOTAL 8,388 8,349 39 NIS possession 178 Third parties’ rights 261 Not registered right 2,846 *REMARKS: - All the objects on which rights of usage of NIS a.d. Novi Sad is registered are the ownership of the Republic of Serbia; - The procedure of registration of the ownership rights of NIS a.d. Novi Sad on the real property is ongoing, according to dynamics determined by the Government of the Republic of Serbia and its competent bodies, which is the reason why registration of the ownership rights in favor of NIS a.d. Novi Sad is not completed; - The objects on which the third parties have the rights are the objects on which ownership relations are not regulated in relation to the land (e.g. objects built on the public surface with the temporary license, objects built on third parties’ land for which no legal basis for purchase has been made i.e. the land itself has not been paid); - Objects on which NIS a.d. Novi Sad has the possession rights are the objects for which e.g. no construction permit has been obtained, but that are recorded and inserted into the cadastral plans and public records on the real property. In the

case of such objects, real property cadastres usually register the possession rights and in encumbrances sheet mark that these are the objects build without permit; - Objects on which no right is registered are mostly objects for which legal issues related to the land are not solved, objects for which there is no usage permit and geodetic shot, objects undergoing legalization procedures, mining objects constructed in accordance with the mining law, pipelines etc.

The Value and the Surface of the Real Estate Book value on 30 September 2011 Surface Type of the object 2 - thousand RSD- - m - Land 10,534,591 64,269,488 Objects 39,451,741 2,141,729 IN TOTAL 49,986,331 66,411,217

Rented real estate Type of the object Quantity Land 6 Buildings, Business premises 77 Gasoline Stations 55 Warehouses, Storage houses, depository 2 Garages 6 IN TOTAL 146

PROPERTY OF SUSIDIARIES Joint stock company for hotel and tourism O ZONE Belgrade Location On the Outside of Object type Quantity territory of territory of Basis for use the Republic the Republic of Serbia of Serbia NIS ownership 3 NIS right of usage – ownership of the Republic of Serbia 3 Land 10 7 3 NIS possession - Third parties’ rights 4 Not registered right - NIS ownership 6 NIS right of usage – ownership - Buildings, business of the Republic of Serbia 10 7 3 premises NIS possession 1 Third parties’ rights 3 Not registered right - NIS ownership 9 NIS right of usage – ownership of the Republic 3 of Serbia IN TOTAL 20 14 6 NIS possession 1 Third parties’ rights 7 Not registered right -

Value and the surface Book value on 30. 09. 2011 Surface Type of the object 2 - thousand RSD- - m - Land 321,321 87,086 Objects (property, investment property, 4,361,864 79,750 property in preparation) IN TOTAL 4,683,185 166,836

Limited liability company NIS-SVETLOST Bujanovac

Object type Quantity Basis for use

NIS ownership (mixed ownership) 1

NIS right of usage – ownership of the Republic of Serbia - Land 1 NIS possession - Third parties’ rights -

Not registered right -

NIS ownership (mixed ownership) 9

NIS right of usage – ownership of the Republic of Serbia - Buildings, business 9 NIS possession - premises Third parties’ rights -

Not registered right -

NIS ownership (mixed ownership) 10 NIS right of usage – ownership of the Republic of - Serbia IN TOTAL 10 NIS possession -

Third parties’ rights -

Not registered right -

Value and the surface Book value on 30. 09. 2011 Surface Type of the object 2 -thousand RSD- - m - Land - 13,696 Objects 32,573 1,279 IN TOTAL 32,573 14,975

Joint stock company cultural-sports centre PINKI – ZEMUN, Zemun

Object type Quantity Basis for use

NIS ownership - NIS right of usage – ownership of the Republic of Serbia - Land 1 NIS possession -

Third parties’ rights 1 Not registered right -

NIS ownership - NIS right of usage – ownership of the Republic of Serbia - Buildings, business 1 NIS possession - premises Third parties’ rights - NIS ownership 1 NIS right of usage – ownership of the Republic of Serbia - NIS possession - IN TOTAL 2 Third parties’ rights - Not registered right 1 NIS ownership 1 *Remark: According to the confirmation from the Republic Direction for Property of the Republic of Serbia, 04 no: 46-732/2009 as of 14 December 2009, on the basis of the available documents, i.e. resolution of the Fourth Municipality Court in Belgrade, (business no. dl. I 3765/02 as of 22 September 2003), it is determined that the building KSC „Pinki-Zemun“ a.d. on the cadastral lot no.1153 Cadastral Municipality Zemun, is the ownership of the Republic of Serbia, with the right of usage in favor of Zemun Municipality. (taken from the Audit Report of Financial Statements of the company Pinki Zemun a.d. for 2009) The basis for use of the respective object is subject to ongoing legal dispute. The said object is registered in joint stock company Pinki Zemun accounting records.

Value and the surface Book value on 30. 09. 2011 Surface Type of the object 2 - thousand RSD- - m - Land - - Objects 210,661 12,000 (construction objects) IN TOTAL 210,661 12,000

2.2.1.2. Value of the plants and the equipment thousand RSD Book value of the plants and equipment on 30 September 2011 amounts to RSD 23,783,068.

2.2.2. Participation in the share capital of other legal entities on 30 September 2011 Participation of Ownership the investment in interest of the Voting right of the Name and head office of the the assets of the issuer in the issuer in the legal legal entity issuer on share capital of entity % 30.09.2011 the legal entity -in thousand RSD- O ZONE a.d. Beograd 3,457,576 100% 100% OOO "NIS OVERSIZ" Moscow, 9,856 100% 100% Russian Federation NIS PETROL EOOD, Sofia, 997 100% 100% Bulgaria** NIS PETROL SRL, Bucharest, 2,632 100% 100% Romania** NIS PETROL d.o.o., Laktasi, 1,030 100% 100% Bosnia and Herzegovina** Pannon Naftagas Kft, Budapest, 184 100% 100% Hungary ** „Jadran-Naftagas“ limited liability 71 66% 66% company Banja Luka NIS-Svetlost d.о.о. Bujanovac 17,045 51.32% 51.32% JUBOS d.о.о. Bor 904 51% 51%

OOO "Sovmestnoe predprijatie RANIS" Moscow area, 522 51% 51% Cernogolovka, Russian Federation Eurol International Bermuda ltd 2,999 50% 50% Maco nafta d.o.o. Skopje 4,269 49% 49% PINKI-ZEMUN a.d. Beograd - 61,703 48.7% 48.7% Zemun Prokons d.o.o. Subotica 174 20.15% 20.15% Linde Gas Srbija a.d. Becej 112,376 12.44% 12.44% RTV Politika d.o.o. Beograd in 23,685 13.07% 13.07% bankruptcy proceedings* HIP-PETROHEMIJA a.d. Pancevo 1,682,522 12.72% 12.72% – in restructuring * REMARK: According to data published on the web page of Business Registers Agency, ownership interest of NIS a.d. Novi Sad in share capital of RTV Politika doo Beograd in bankruptcy proceedings amounts to 10.03%. According to the confirmation received in 2008 from RTV Politika doo Beograd in bankruptcy proceedings, ownership interest of NIS a.d. Novi Sad in share capital of RTV Politika doo Beograd in bankruptcy proceedings amounts to RSD 23,685,000, i.e. 13.07%, and according to the confirmation from 2009 the amount of the ownership interest in the share capital is RSD 23,685,000. NIS a.d. Novi Sad does not possess data that the ownership interest of NIS a.d. Novi Sad in RTV Politika doo Beograd in bankruptcy proceedings has been decreased. ** REMARK: The company NIS PETROL EOOD, Sofia, Bulgaria was registered on 13 September 2011, the company NIS PETROL SRL, Bucharest, Romania was registered on 16 September 2011, the company NIS PETROL d.o.o.,Laktasi, Bosnia and Herzegovina was registered on 13 September 2011, while on 30 September 2011 Pannon Naftagas Kft, Budapest, Hungary was in the process of registration and was registered on 3 October 2011.

The upper table shows data on issuer’s investments that involve ownership interest in the share capital of the other legal entities in the amount higher than 10%. If the issuer’s has the position of the controlling company, the table should also contain the following data for subsidiaries.

Joint stock company for hotels and tourism O ZONE ad Beograd Business activity 5510 – Hotels and similar accommodation Kirill Kravchenko, Chairman of BD Members of the Dmitry Fomenko, member of BD Management Sergey Fominykh, member of BD 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss (123,633) (915,084) (150,262) (151,506) Total share capital 2,974,270 2,226,692 2,271,521 2,120,015 Total assets 5,709,045 5,094,492 5,072,036 4,941,670

OOO "NIS OVERSIZ" Moscow, Russian Federation Business activity Crude oil and oil gas extraction Members of the Dmitry Fomenko, director Management 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss 4,768 64 - 3,571 Total share capital 1,503 1,572 1,748 (1,940) Total assets 2,548 2,399 2,783 5,515

NIS Petrol EOOD, Sofia, Bulgaria* trade in oil, liquefied petroleum gas (LPG) and Petroleum Products Business Activity (wholesale and retail), import-export operations Members of the Srdjan Bosnjakovic, General Manager Management 01.01.- 2008 / 2009 / 2010 / 30.09.2011 / 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss - - - - Total share capital - - - 2,632 Total assets - - - 2,632 *REMARK: The company was founded on 13 September 2011.

NIS PETROL S.R.L., Bucharest, Romania* Business Activity 4730 - retail sale of motor fuel in specialized stores Members of the Alexey Korobov, General Manager Management 01.01.- 2008 / 2009 / 2010 / 30.09.2011 / 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss - - - - Total share capital - - - 997 Total assets - - - 997 *REMARK: The company was founded on 16 September 2011.

NIS PETROL d.o.o., Laktasi, Bosnia and Herzegovina* Business Activity 46.71 - Wholesale of solid, liquid and gaseous fuels and related products Members of the Nikola Knezevic, Director Management 01.01.- 2008 / 2009 / 2010 / 30.09.2011 / 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss - - - - Total share capital - - - 1,035 Total assets - - - 1,035 *REMARK: The company was founded on 13 September 2011.

Pannon Naftagas Kft, Budapest, Hungary* Business Activity 0610'08 Extraction of crude petroleum Members of the Slavko Pecanac, Director Management 01.01.- 2008 / 2009 / 2010 / 30.09.2011 / 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss - - - - Total share capital - - - 172 Total assets - - - 172 *On 30 September 2011 the company was in the process of registration and was registered on 03 October 2011.

Jadran – Naftagas limited liability company Banja Luka* Business Activity Exploration and production of oil and gas Members of the Predrag Radanovic, director Management 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss - - - (12.634) Total share capital - - 108 196 Total assets - - 108 160.815 *REMARK: The company was founded on 23 December 2010.

Limited liability company NIS-SVETLOST Bujanovac Business activity 4671 – Wholesale trade with solid, liquid and gas fuels and similar products Members of the Dragan Stojanovic, director Management 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss 4,768 10,611 974 5,629 Total share capital i 42,941 53,552 54,526 54,526 Total assets 68,429 80,886 82,707 134,395

Company for digging, transport and refining of melting slag and copper production JUBOS d.o.o. Bor Business activity 2444 – Copper production Snezana Djukic, Chairman of BD Katarina Vukmirovic, member of BD Members of the Olivera Basta, member of BD Management Dragan Bojovic, member of BD Borivoje Stojadinovic, member of BD 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss - - - - Total share capital 1,744 1,744 1,744 1,744 Total assets 1,744 1,744 1,744 1,744

OOO "Sovmestnoe predprijatie RANIS", Moscow area, Cernogolovka, Russian Federation Scientific explorations and elaboration in the area of the natural and technical Business activity sciences Members of the Bozidar Djukic, director Management 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss (49) - - (29,805) Total share capital 3,531 3,701 4,297 3,829 Total assets 28,268 29,621 34,395 842

Eurol International Bermuda ltd Oil trading activities encompassing the import and export of oil products, including but not limited to LPG, naphtha, gasoline, kerosene, jet, gasoil and Business activity fuel oil, and crude oil trading opportunities arising from Republic of Serbia / Jugopetrol interests in countries other than Yugoslavia “A” Directors: Members of the Robert P. Finch Management David P. Fransen Barbara E. West 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss - - - - Total share capital - - - - Total assets - - - -

MACO NAFTA D.O.O. Skopje Business activity Wholesale trade with compact, liquid and gas fuels and similar products Members of the Elena Lazarevska, director Management 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss - - - - Total share capital - - - - Total assets - - - -

Joint stock company cultural-sports centre PINKI – ZEMUN, Zemun Business activity 9319 – Other sports activities Dmitry Fomenko, Chairman of BD Predrag Curcic, member of BD Vesna Ziric, member of BD Olivera Vujnovic, member of BD Petar Djukic, member of BD Members of the Aleksandar Bozovic, member of BD Management Vladimir Gavric, member of BD Dragan Jovic, member of BD Eduard Skofenko, member of BD Miroslav Despotovic, member of BD Sandra Barjaktarevic, member of BD 2008 / 2009 / 2010 / 01.01.-30.09.2011 /

31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net profits/loss (543) 337 629 (2,677) Total share capital 191,803 192,140 192,769 192,769 Total assets 221,991 228,315 234,943 234,271

2.2.3. Patents, concessions, special permits 2.2.3.1. State briefly conditions and expected duration of approved concessions, patents, important commercial contracts, and franchise agreements, special permits for import or export of goods or performing business activates, etc.

LICENCES NIS A.D. NOVI SAD FOR UNDERTAKING ENERGY ACTIVITIES RESOLUTION ISSUED BY: Energy Agency of the Republic of Serbia № NAME OF THE LICENCE RESOLUTION № LICENCE № VALID AS OF VALIDITY TERM

License for conducting energy 10 years 1 activity: oil products 311.02-335/2006-L-1 005/06-LN-11 21.07.2006 (21.07.2016) production License for conducting energy 10 years 2 activity: 311.01-340/2006-L-1 005/06-LG-24 18.08.2006 (18.08.2016) supply of natural gas License for conducting energy 10 years 3 activity: storage of petroleum, 311.01.336/2006-L-1 119/07-LN-14 20.04.2007 (24.04.2017) petroleum products and fuels License for conducting energy activity: trade in petroleum, 10 years 4 311.01.-337/2006-L-1 120/07-LN-15 20.04.2007 petroleum products, biofuels (20.04.2017) and compressed natural gas License for conducting energy activity: 10 years 5 trade in motor and other fuels 311.02.-338/2006-L-1 571/09-LN-15a 03.02.2009 (03.02.2019.) at stations for supplying vehicles

LICENCES NIS A.D. NOVI SAD FOR EXPLORATION OF THE MINERALS OIL AND GAS VALID AS VALIDITY № EXPLORATION AREA RESOLUTION № ISSUED BY OF TERM Istraţni prostor 1915- The Republic of Serbia, „Teritorija republike 1 310-02-059/2010-06 Ministry for Mining and 01.04.2010 31.12.2019 Srbije juţno od Save i Energy Dunava“ The Republic of Serbia, AP Istraţni prostor 5070- 2 115-310-00206/2004-02 Vojvodina, Regional Office 29.10.2004 31.12.2015 „Juţni Banat“ for Energy and Minerals The Republic of Serbia, AP Istraţni prostor 5072- 3 115-310-00205/2004-02 Vojvodina, Regional Office 29.10.2004 31.12.2015 „Srednji Banat“ for Energy and Minerals The Republic of Serbia, AP Istraţni prostor 5071- 4 115-310-00204/2004-02 Vojvodina, Regional Office 29.10.2004 31.12.2015. „Severni Banat“ for Energy and Minerals The Republic of Serbia, AP Istraţni prostor 5073- 5 115-310-00202/2004-02 Vojvodina, Regional Office 29.10.2004 31.12.2015 „Srem“ for Energy and Minerals The Republic of Serbia, AP Istraţni prostor 5074- 6 115-310-00207/2004-02 Vojvodina, Regional Office 29.10.2004 31.12.2015 „Juţna Bačka“ for Energy and Minerals The Republic of Serbia, AP Istraţni prostor 5069- 7 115-310-00203/2004-02 Vojvodina, Regional Office 29.10.2004 31.12.2015 „Severna Bačka“ for Energy and Minerals

LICENCES NIS A.D. NOVI SAD FOR OIL AND GAS EXPLOITATION (Issued for indefinite term, except Resolution no. 18 – Melenci duboko) SREDNJI BANAT DATE OF № EXPLOITATION APPROVAL RESOLUTION № ISSUED BY RESOLUTION ISSUANCE SFRJ, The Republic of Serbia, AP Gasno polje natural 1 Vojvodina, Regional Office for 24.01.1978 „Banatski dvor“ gas III-310-6/78 Economy SFRJ, The Republic of Serbia, AP Gasno polje Vojvodina, Regional Office for 2 gas 310-15/85 06.03.1985 „Banatski dvor-zapad“ Industry, Construction, and Tertiary Activities

SFRJ, The Republic of Serbia, AP Naftno polje Vojvodina, Regional Office for 3 „Banatsko oil III-310-3/80 05.02.1980 Industry, Construction, and Tertiary KaraĎorĎevo“ Activities SFRJ, The Republic of Serbia, AP Gasno nalazište 4 gas 310-85/2-70 Vojvodina, Regional Office for 11.03.1970 „Begejci“ Economy SFRJ, The Republic of Serbia, AP Gasno polje „Begejci- Vojvodina, Regional Office for 5 gas 310-32/87 23.04.1987 Novi“ Industry, Construction, and Tertiary Activities oil and FNRJ, The Republic of Serbia, 6 Naftno polje „Boka“ natural 04-2319/61 Executive Committee Office for 28.01.1961 gas Industry oil and FNRJ, The Republic of Serbia, 7 Naftno polje „Elemir“ natural 04-2319 Executive Committee Office for 30.01.1961 gas Industry SFRJ, The Republic of Serbia, AP Vojvodina, Regional Office for 8 Gasno polje „Itebej“ land gas 310-42/82 06.10.1982 Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, AP natural 9 Gasno polje „MeĎa“ 310-448/71 Vojvodina, Regional Office for 22.11.1971 gas Economy SFRJ, The Republic of Serbia, AP Vojvodina, Regional Office for 10 Polje „Melenci“ gas 310-266/81 05.03.1981 Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, AP Naftno polje 11 oil III-310-97/91 Vojvodina, Regional Office for 18.07.1991 „Mihajlovo“ Economy SFRJ, The Republic of Serbia, AP Naftno polje 12 oil III-310-4/90 Vojvodina, Regional Office for 20.02.1990 „Rusanda“ Economy SFRJ, The Republic of Serbia, AP Gasno polje „Srpska 13 land gas 310-8/77 Vojvodina, Regional Office for 02.03.1977 Crnja“ Economy SFRJ, The Republic of Serbia, AP Naftno polje 14 oil III-310-3/90 Vojvodina, Regional Office for 05.02.1990 „Vojvoda Stepa“ Economy SFRJ, The Republic of Serbia, AP Gasno nalazište Vojvodina, Regional Office for 15 gas III-310-10/89 23.03.1989 „Ţitište“ Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, AP Naftno nalazište Vojvodina, Regional Office for 16 oil III-310-44/87 23.06.1987 „Zrenjanin“ Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, AP Naftno polje 17 oil III-310-56/91 Vojvodina, Regional Office for 17.07.1991 „Zrenjanin sever“ Economy The Republic of Serbia, AP 15.12.2008 g. Nalazište 115-310- 18 oil Vojvodina, Regional Office for (duration 10,5 „Melenci duboko“ 00267/2008-02 Energy and Minerals years)

BACKA DATE OF № EXPLOITATION APPROVAL RESOLUTION № ISSUED BY RESOLUTION ISSUANCE SFRJ, The Republic of Serbia, AP Gasno polje 19 land gas 310-8/77 Vojvodina, Regional Office for 02.03.1977 „Ada“ Economy SFRJ, The Republic of Serbia, AP Gasno polje natural Vojvodina, Regional Office for 20 III-310-111/79 16.08.1979 „Bačka Topola“ gas Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, AP Gasno nalazište Vojvodina, Regional Office for 21 gas (CO2) 310-25/83 25.03.1983 „Bečej“ Industry, Construction, and Tertiary Activities

SFRJ, The Republic of Serbia, AP 22 Gasno polje „Čantavir“ land gas 310-42/2-76 Vojvodina, Regional Office for 01.06.1976 Economy SFRJ, The Republic of Serbia, AP Gasno polje 23 land gas 310-43/76 Vojvodina, Regional Office for 01.06.1976 „Gornji breg“ Economy SFRJ, The Republic of Serbia, AP Gasno nalazište 24 gas 18969 Vojvodina, Regional Office for 25.11.1968 „GospoĎinci“ Economy SFRJ, The Republic of Serbia, AP Gasno nalazište 25 oil 310-448/3/71 Vojvodina, Regional Office for 22.11.1971 „Kelebija“ Economy SFRJ, The Republic of Serbia, AP Gasno polje Vojvodina, Regional Office for 26 gas 310-1/86 13.02.1986 „Martonoš“ Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, AP Gasno polje Vojvodina, Regional Office for 27 gas 310-32/85 21.05.1985 „Novi Kneţevac“ Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, AP Naftno nalazište 28 oil 310-39/76 Vojvodina, Regional Office for 27.05.1976 „Palić“ Economy SFRJ, The Republic of Serbia, AP Gasno polje Vojvodina, Regional Office for 29 gas 310-35/85 20.06.1985 „Ruski Krstur“ Industry, Construction, and Tertiary Activities Gasno polje SFRJ, The Republic of Serbia, 30 gas 18967 25.11.1968 „Srbobran“ Republic Office for Economy Naftno polje SFRJ, The Republic of Serbia, 31 oil 18968 25.11.1968. „Velebit“ Republic Office for Economy SFRJ, The Republic of Serbia, AP Gasno nalazište Vojvodina, Regional Office for 32 gas III-310-69/89 27.11.1989 „Velebit-Jug I“ Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, AP Naftno polje 33 oil III-310-72/91 Vojvodina, Regional Office for 23.07.1991 „Turija – sever“ Economy

JUZNI BANAT DATE OF № EXPLOITATION APPROVAL RESOLUTION № ISSUED BY RESOLUTION ISSUANCE SFRJ, The Republic of Serbia, Gasno polje natural AP Vojvodina, Regional Office 34 III-310-117/78 06.09.1978 „Banatsko Novo Selo“ gas for Industry, Construction, and Tertiary Activities Gasno polje SFRJ, The Republic of Serbia, 35 „Banatsko Novo Selo gas III-310-26/92 AP Vojvodina, Regional Office 05.11.1992 Jug“ for Economy SFRJ, The Republic of Serbia, Gasno nalazište 36 gas 5370 AP Vojvodina, Regional Office 27.03.1968 „Banatsko Plandište “ for Economy SFRJ, The Republic of Serbia, Naftno polje 37 oil 5369/1 AP Vojvodina, Regional Office 27.03.1968 „Janošik „ for Economy SFRJ, The Republic of Serbia, Naftno polje 38 oil III-310-5/90 AP Vojvodina, Regional Office 20.02.1990 „Janošik-zapad „ for Economy FNRJ, The Republic of Serbia, Naftno polje oil and 39 04-2319 Executive Committee Office for 28.01.1961 „Jermenovci „ gas Industry FNRJ, The Republic of Serbia, Naftno polje oil and 40 04-2319 Executive Committee Office for 28.01.1961 „Lokve„ gas Industry SFRJ, The Republic of Serbia, Gasno nalazište 41 gas 310-85/3-70 AP Vojvodina, Regional Office 11.03.1970 „Mramorak“ for Economy 42 Gasno polje natural 310-116/78 SFRJ, The Republic of Serbia, 06.09.1978

„Mramorak selo“ gas AP Vojvodina, Regional Office for Industry, Construction, and Tertiary Activities SFRJ, The Republic of Serbia, Gasno nalazište natural 43 310-448/2/71 AP Vojvodina, Regional Office 22.11.1971 „Nikolinci“ gas for Economy SFRJ, The Republic of Serbia, Gasno nalazište 44 gas 310-85/1/70 AP Vojvodina, Regional Office 11.03.1970 „Tilva“ for Economy FNRJ, The Republic of Serbia, Gasno polje 45 land gas 04-2319 Executive Committee Office for 30.01.1961 „Velika Greda“ Industry SFRJ, The Republic of Serbia, Naftno polje oil and AP Vojvodina, Regional Office 46 310-17/85 25.03.1985 „Velika Greda-Jug“ gas for Industry, Construction, and Tertiary Activities

SEVERNI BANAT DATE OF № EXPLOITATION APPROVAL RESOLUTION № ISSUED BY RESOLUTION ISSUANCE SFRJ, The Republic of Serbia, 18.11.1977 Gasno polje natural 47 III-310-56/77 AP Vojvodina, Regional Office „Banatsko Miloševo“ gas for Economy SFRJ, The Republic of Serbia, 02.03.1977 Naftno i gasno polje oil and 48 310-8/77 AP Vojvodina, Regional Office „Čoka“ gas for Economy SFRJ, The Republic of Serbia, 03.11.1981 Gasokondenzatno AP Vojvodina, Regional Office 49 polje land gas 310-44/81 for Industry, Construction, and „Kikinda B“ Tertiary Activities Polje oil and SFRJ, The Republic of Serbia, 28.03.1968. 50 5371/1 „Kikinda F2, F, D, E3 gas Republic Office for Economy Polje SFRJ, The Republic of Serbia, 28.03.1968 51 oil 5367/1-68 „Kikinda Varoš“ Republic Office for Economy SFRJ, The Republic of Serbia, 01.03.1990 Naftno polje 52 oil III-310-16/90 AP Vojvodina, Regional Office „Kikinda Varoš - jug“ for Economy SFRJ, The Republic of Serbia, 22.12.1989 Naftno polje AP Vojvodina, Regional Office 53 „Kikinda Varoš - oil III-310-74/89 for Industry, Construction, and sever“ Tertiary Activities SFRJ, The Republic of Serbia, 01.11.1985 Naftno polje AP Vojvodina, Regional Office 54 oil 310-61/85 „Majdan“ for Industry, Construction, and Tertiary Activities Polja SFRJ, The Republic of Serbia, 28.03.1968 oil and 55 „Mokrin Škriljci i 5368/1 Republic Office for Economy gas Mokrin I, II“ Gasokondenzatno SFRJ, The Republic of Serbia, 27.10.1992 56 polje gas III-310-24/92 Republic Office for Economy „Nakovo“ SFRJ, The Republic of Serbia, 29.01.1985 AP Vojvodina, Regional Office 57 „Mokrin-jug“ oil 310-11/85 for Industry, Construction, and Tertiary Activities

PODUNAVLJE DATE OF № EXPLOITATION APPROVAL RESOLUTION № ISSUED BY RESOLUTION ISSUANCE 58 Naftno i gasno polje oil and 310-392/89 SFRJ, The Republic of Serbia, 11.11.1989 „Sirakovo“ gas Republic Office for Economy

LICENCE NIS A.D. NOVI SAD FOR EXPLOTATION OF THE DRINKING AND TERMOMINERAL WATER (Issued for indefinite term) DATE OF № EXPLOITATION APPROVAL RESOLUTION № ISSUED BY RESOLUTION ISSUANCE „Jazak-Jazački“ 310-02- The Republic of Serbia, Ministry 1 drinking water 22.05.2002 Prnjavor 00091/2002-04 for Mining and Energy Banja Kanjiţa The Republic of Serbia, AP termo-mineral 115-310- 2 Kţ-1/H Vojvodina, Regional Office for 26.05.2005. water 00089/2005-02 Kţ-3/H Energy and Minerals The Republic of Serbia, AP Banja Junaković termo-mineral 115-310- 3 Vojvodina, Regional Office for 19.01.2005. Pb-1/H water 00182/2004-02 Energy and Minerals SFRJ, Republic of Serbia, AP Palic jezero termo-mineral Vojvodina, Regional Office for 22.02.1983. 4 Pj-1/Н 310-18/83 water industry, construction and tercial 01.02.1988. Pj-2/H1/Н activities SFRJ, Republic of Serbia, AP termo-mineral Vojvodina, Regional Office for 5 Вc-2/Н Becej III-310-19/88 26.05.1988. water industry, construction and tercial activities SFRJ, Republic of Serbia, AP Bački Petrovac termo-mineral Vojvodina, Regional Office for 6 310-37/86 12.05.1986. BP-2/H water industry, construction and tercial activities SFRJ, Republic of Serbia, AP Kula termo-mineral Vojvodina, Regional Office for 7 310-19/83 23.02.1983. Kl-2/H water industry, construction and tercial activities SFRJ, Republic of Serbia, AP Temerin termo-mineral Vojvodina, Regional Office for 8 III-310-7/87 09.02.1987. Te-1/H water industry, construction and tercial activities

PARTICIPATION OF NIS A.D. NOVI SAD IN AGREEMENTS FOR PRODUCTION ALLOCATION IN ANGOLA AGREEMENT ON PRODUCTION ALLOCATION

BLOCK BLOCK 3 BLOCK 3/05 BLOCK 3/05А SIGNED 11 July 1980 4 October 2005 4 October 2005 ENTERING INTO FORCE 1 August 1980 1 July 2005 1 November 2005 OF THE AGREEMENT NIS PARTICIPATION 5% 4% 4% OPERATOR Sonangol P&P, Angola Sonangol P&P, Angola Sonangol P&P, Angola Exploration and PHASE production production development Contractual relation in Contractual relation in the the form of the Oil exploration and form of the agreement on agreement on production allocation in production allocation production allocation shore areas of Angola between the parties, between the parties, PURPOSE OF THE between the parties, Sonangol on one side, Sonangol on one side, AGREEMENT Sonangol on one side, and other contracting and other contracting and other contracting group of the other side group of the other side group of the other side (Operator) with the (Operator) with the (Operator) purpose of performing oil purpose of performing operations oil operations LICENCE TERMINATION 11 December 2012 30 June 2025 2030

2.2.4. Major capital investments 2.2.4.1.Description of major investments and withdrawal of funds invested in the above mentioned properties in the previous three years and description of method of financing each of such investments; description of other important investments and withdrawal of invested funds and method of financing such investments.

MAJOR CAPITAL INVESTMENTS IN 2008 NIS a.d. Novi Sad has invested RSD 8.0 billion in total for investment activities in 2008. When compared to total planed development and investment activity for 2008 (RSD 22.1 billion) realization of 36.3% has been fulfilled, that was larger for 17% when compared to realization in 2007. The amount of the funds spent in the respective period per branch office and fractions of the branch offices is presented in the following order In RSD million Branch offices and Realized fractions of the Plan for Realized investments Ind Ind investments in branch offices NIS 2008 in 2008 4:2 4:3 2007 a.d. Novi Sad 1 2 3 4 5 6 NIS-Naftagas 1,150.6 4,637.9 1,378.6 119.8 29.7 NIS-Petrol RNP 2,256.2 9,120.0 2,038.1 90.3 22.3 NIS-Petrol RNS 492.2 2,544.0 351.9 71.5 13.8 NIS-Petrol 790,7 2,528,0 892.9 112.9 35.3 Jugopetrol NIS-Petrol NAP 101.3 832.0 356.1 351.5 42.8 NIS-Petrol Professional 32.0 2.9 9.1 services NIS-TNG 326.3 680.0 160.8 49.3 23.7 NIS-Professional 1,741.1 1,689.8 2,846.9 163.5 168.5 services IN TOTAL: 6,858.4 22,063.7 8,027.6 117.0 36.4

Total realized investments NIS a.d. Novi Sad in the respective period are funded from the own funds (amortization and profits). Branch office NIS-Naftagas has realized total investments in the amount of RSD 1.4 billion, whereas for the investment of domestic needs RSD 0.7 billion has been spent (50% of the funds spent), and the foreign investments (Angola) RSD 707.9 million (50% of the funds spent). Realized investments present only 29.7% of the funds planned in 2008. Branch office NIS-Petrol has invested in total RSD 3.6 billion, which is 24.2% of the funds planned. Different levels of preparedness of the investment-technical documentation, as well as complex procedure for making investment decisions have affected the level of investments realization. In refineries it has been invested RSD 2.4 billion (66% of the total investments), in most part in ecological projects for environment protection and investment maintenance. In trade fraction was invested RSD 1.2 billion (34%) in the largest part for construction of the petrol stations (NIS-NAP), for reconstruction and revitalization of the petrol stations, realization of the project for environment protection on the petrol stations in Belgrade and reconstruction of the reservoirs. Branch office NIS-TNG, within the plan of the investment activities, has envisaged the funds in the amount of RSD 680 million that are dedicated for partial overcome of the problem of obsolete equipment and technology. From the moment of establishment of the branch office there have been efforts to replace obsolete equipment and in 2008 total investment were RSD 160.8 million, which is only 23.6% of the funds planned. Professional services of NIS a.d. Novi Sad invested in 2008 funds in the amount of RSD 1.69 billion. These investment are related to introduction of the information system SAP (license and implementation) and other intangible investments (Enhancement of Business Program Shell GS).

MAJOR CAPITAL INVESTMENTS IN 2009 Originally adopted plan of capital investments for 2009 amounted EUR 423 million i.e. RSD 34.3 billion at the exchange rate of RSD 80 effective at that time. After change in ownership structure, the plan for 2009 was reviewed and in April a new investment plan was defined, in the amount of EUR 91.2 million i.e. RSD 9.1 billion at the planned exchange rate at the time. Larger volume of project realization with economic effect when compared to 2008 is caused by the partial advanced payment for the projects MHC/DHT+H2, the most significant NIS planned investment in the following three years. It is also worth mentioning that the agreements in the value over EUR 160 million were signed for MHC/DHT+H2. In addition to the above-mentioned project, it should be noted that the works on the following facilities in the trade area were completed: Reconstruction of three petrol stations (Sabac, Pozarevac, Adasevci Sever) Construction of one new petrol station (Krusevac 5) Fitting and installations for LPG at 8 petrol station. Significant investments were also made in NIS-Naftagas on projects for increase in oil and gas production: Fracturing ESP pumps (electric submersible pumps); New drillings in the area of Kikinda municipality; Angola. The most significant capital investments related to ecology were made in Pancevo Refinery, where RSD 0.8 billion was invested with the key projects such as: Reconstruction of jetty FCC (fluid catalytic cracking) Reconstruction of tank truck loading facility Paid Projects Financed - In billion RSD-

MHC+H2 4.69 GPN Ecology 1.06 GPN Processing 0.42 OCF Trade 0.50 OCF NGS 1.28 OCF STS 1.12 OCF IN TOTAL 9.06 OCF Payments for capital investments in 2009

The budget structure of capital investments was improved - RSD 6 billion of total investments are investments with economic effect (positive net present value).

Budget structure of capital investments in RSD billion Project with economy effect Ecology PPOF/support to business Consultancy services 9.06

8.03 0.92 -68% 1.05 2.84 1.05 -13%

1.20 -54%

2.30 6.04

257% 1.69

Paid in 2008. Paid in 2009.

Investments in information technologies: SAP (payments in the amount of RSD 0.64 billion) - Successful completion of the system and the existing modules upgrading - organizational preparations and training for introduction of the Bulk logistics were conducted. IT equipment (realization 0.2 billion) - Purchase of computer equipment and software (workstations, servers for connecting of petrol stations, new licenses for upgrading work platforms with Windows XP and Office 2003 on Windows 7 and MS Office 2007).

Sources of financing

Company's funds 36.6% Gazprom Neft 63.4%

Sources of financing in 2009 Financing from Gazprom Neft funds RSD 5.75 billion Financing from company’s funds RSD 3.32 billion

MAJOR CAPITAL INVESTMENTS IN 2010 On the Investment Committee meeting a medium-term investment program has been adopted (further on ICM), where an investment plan for CAPEX was foreseen for the period of 2010 – 2012. According to ICM main investments in 2010 were addressed to the realization of the following groups of the project - MHC/DHT+H2, ecological projects, processing projects, sales, oil and gas production, and a number of projects implemented in the services of the corporate headquarter. In 2010 RSD 16,96 billion were spent for investments. At the same time, investments were increased to 87% in comparison with the previous year. The increase of investments per investment projects is as follows: - MHC/DHT project – more of investments into MHC/DHT project in 2010 due to the on-site work execution commence and further purchase of the equipment (in accordance with the project realization trend), in contrast to 2009, when only advance payments for the equipment and design expenditures were made. - Ecology – larger investments in 2010 mainly due to the start of investing into construction of a new unit for the regeneration of spent sulfur acid, and larger investments into such projects as FCC, reconstruction and modernization of the jetty on the Danube river at Pancevo Oil Refinery, reconstruction of railway loading/unloading facilities and reconstruction of HPV unit - Angola – investments in 2010 are larger than it was planned - Projects with direct economic effect – larger investments in 2010 were caused by a large number of the approved, commenced and finished projects in Oil and Gas Production and Sales - Projects without direct economic effect – in 2010 a slight decline in contrast to 2009 was recorded.

The most significant investments in the oil and gas production in 2010 were for the following projects: drilling of the development wells Hydraulic fracturing Installation of ESP pumps (electric submersible pumps) Geological research works Angola The most significant capital investment concerning ecology issues was implemented in Pancevo Oil Refinery through the following projects: FCC unit reconstruction construction of a new unit for the regeneration of spent sulfur acid Reconstruction and modernization of jetty at Pancevo Oil Refinery at the Danube River Reconstruction of railway loading/unloading facilities Reconstruction of HPV unit – sludge treatment unit

Paid Projects Financed - In billion RSD-

MHC+H2 10.29 GPN Ecology 1.57 GPN

MHC+H2 0.04 OCF Ecology 0.04 OCF Angola 0.64 OCF Projects with direct economic effect 2.44 OCF Projects without direct economic effect 1.56 OCF Other 0.39 OCF Total 16.96 OCF Sources of investment financing in 2010

The structure of the capital investments budget is improved – RSD 13.40 billion of total investments are investments with the economic effect.

CAPEX from Gazprom neft loan and CAPEX from OCF in bilion RSD (VAT excluded)

11.86

5.10

CAPEX from Gazprom neft loan CAPEX from OCF

Structure of capital investments in RSD billion (VAT excluded) 16.96 0.39 1.56

+10% 2.44 -4% 0.64 x4 9.06 1.61 -28% 0.36 +53% 1.62 0.46 +120% 0.89 1.06 10.33

4.69

2009 2010

MHC/DHT Ecology Angola Project with direct economy effect Project without direct economy effect Other

Besides the investments in operating capacities in 2010, NIS made significant investments in developing and upgrading of the information system. The largest investments amounting to RSD 0.49 billion were made in SAP software, which included the upgrading of the system and the existing modules and implementation of new logistic modules „Bulk” and „DAS”. RSD 0.14 billion Investment was made for the purchase of computer equipment and software (workstations, upgrading of server infrastructure, new licenses for upgrading work platforms with Windows XP and Office 2003 on Windows 7 and MS Office 2007). Retail station Krnjaca was purchased for RSD 0,225 billion.

Sources of financing

Company's funds 30%

Gazprom Neft 70%

Sources of financing in 2010 Financing from Gazprom Neft funds RSD 11.86 billion Financing from company’s funds RSD 5.10 billion

MAJOR CAPITAL INVESTMENTS IN THE FIRST NINE MONTHS OF 2011 In the first nine months of 2011, amount of RSD 16.32 billion of investments has been realized, which is 103% more compared to the same period of 2010. The most significant investments in the production of oil and gas in the first half of 2011 were at the following projects: Geological exploration on the territory of Vojvodina; Angola; Projects of automatization and reconstruction of the infrastructure on the oil and gas fields; Hydraulic fracturing; Reconstruction of system BOKA; Installation of ESP pumps (electric submersible pumps); Extracting of СО2 from natural gas; Drilling development wells The most significant capital investments in the first nine months 2011 concerning ecology issues were implemented in Pancevo Oil Refinery through the following projects: Construction of a new unit for the regeneration of spent sulphur acid; Reconstruction and modernization of jetty at Pancevo Oil Refinery at the Danube River; Reconstruction of FCC - the reduction of emission of solid particles in the atmosphere

Sources of finances for investments 9M '10 9M'11

CAPEX from GPN loan (letter of credit excluded) 5.09 11.79 Ecology 1.06 1.43 MHC/DHT 4.03 10.35

CAPEX from OCF (NIS funds) 2.95 4.53 MHC/DHT 0.00 0.07 Ecology 0.00 0.02 Angola 0.45 0.17 Projects with direct economic effect 1.17 2.69 Projects without direct economic effect 1.33 1.58 TOTAL: 8.04 16.32 *In RSD bn VAT excluded Graphical representation of the realized investments from GPN loan and OCF (in RSD bn, letter of credit and VAT excluded)

103% 16.32 1,58

2,69

0,17 19% 1,50

129% 8.04 -62% 1,33 42% 1,17 0,45 10,38 1,06

157% 4,03

9M ʼ10 9M ʼ11

MHC/DHT Ecology Angola Projects without direct economic effect Projects without direct economic effect

Investments in human resources NIS a.d. Novi Sad is committed to continuous professional development of employees, as one of the Company’s most important resource. During 2010, NIS a.d. Novi Sad rationalized the existing professional development programs and earmarked about RSD 81.2 million for these purposes.

Costs of employees’ training in RSD million Training costs 2008. 2009. 2010. The costs of professional education 130.1 44.6 71.8 Cost of consulting 34.8 4.5 8.8 Cost of membership of business associations 1.1 1.0 0.6 Total 166 50.1 81.2

in RSD million Training costs 01.01.-30.09.2011. Non-technical training (soft skills) 18.5 Development Programme 'personnel reserve' 6.6 Learning foreign languages 3.0 Team-buildings and consulting services 15.8 Technical training 9.9 Training at the request of governmental bodies, Professional Exams, 1.1 Licenses, Fees Working with educational institutions 4.7 Total 59.6 Costs of employees training

2% 8%

31% 17%

11% 26% 5%

Non-technical training (soft skills) Development Programme 'personnel reserve' Learning foreign languages Team-buildings and consulting services Technical training Training at the request of governmental bodies, Professional Exams, Licenses, Fees Working with educational institutions

2.2.5. Liens 2.2.5.1. Main data on issuer’s assets pledged as collateral: type of lien, value of pledged asset and liability, validity of lien, business name of the lien creditor Value of pledged Name of the lien Type of lien assets and the Validity of lien creditor secured claim Lien on real estate (lots 11178/1 Value of pledged assets Srbobran and 11179/1 in real estate sheet RSD 461,635.02 Municipality, 539 Cadastral Municipality Not defined secured claim RSD Srbobran, Srbobran - Amar) no. 323/70 as 1,500.00 Trg slobode 2 of 8 April 1970

2.2.6. Litigations and other proceedings 2.2.6.1. Data are provided only for the key proceedings before the court or administrative body: number of proceedings with the issuer as a defendant and the total value of all disputes; number of proceedings with the issuer as a plaintiff and the total value of all disputes; proceedings related to industrial property rights and abuse of monopoly position should be stated separately Analysis of the court disputes shows the tendency in growth of the court disputes in the period of the past few years of the business activity of NIS a.d. Novi Sad. On 30 September 2011, 2,510 court disputes were registered, whereof NIS a.d. Novi Sad is a plaintiff in 1,552 disputes, while it is a defendant in 958 disputes. Subject of the most disputes is debt collection, damage compensation and the labor disputes. NIS a.d. Novi Sad makes regular analysis of the possibility of the negative outcome and the amount of certain or reasonable dispute expenses.

NIS defendant 958

NIS plaintiff 1,552

Disputes structure on 30 September 2011

High value disputes

PLAINTIFF DEFENDANT VALUE

Uni Credit bank, Copechim Trading HypoAlpeAdria Bank, Trizon, EUR 6,300,000 NIS a.d. Novi Sad Unipress NIS a.d. Novi Sad EUR 3,000,000**

IBA UNITED NIS a.d. Novi Sad USD 25,000,000***

Stambena zadruga NIS a.d. Novi Sad EUR 630,000,000* Refinery Energoprojekt NIS a.d. Novi Sad, O Zone a.d. EUR 8,500,000 Visokogradnja Belgrade * REMARK: The dispute upon the legal suit of the Stambena zadruga Rafinerija vs. NIS a.d. Novi Sad, Javno preduzece Srbijagas, Javno preduzece Transnafta and the Republic of Serbia The cause of the dispute is non-performance of the obligation of NIS a.d. Novi Sad on the basis of the 11 agreements on assumption of debt, entered between JP NIS (new debtor) and the Ministry of the Internal Affairs (initial debtor). The debt is based on the agreement on franchising in apartments construction that were entered between MUP RS and Stambena zadruga Rafinerija. In 2005 The Commercial Court in Novi Sad has issued judgment whereby JP NIS was obliged to pay to the plaintiff the amount of RSD 2,954,000,000 with the daily interest of 0.2% as of 1 March 2005 until the payment. By application of this interest rate NIS a.d. Novi Sad would be obliged to pay approximately EUR 630,000,000. Higher Commercial Court has repealed the judgment and returned the dispute for new trial. In the repeated procedure the Commercial court in Belgrade has on 29 April 2010 issued first instance judgment no. 7.P. 4996/2010 wherewith it has rejected in total the claim of Stambena zadruga against NIS a.d. Novi Sad, JP Srbijagas and JP Transnafta The Commercial Court of Appeal has confirmed the decision no.7.P. 4996/2010. The decision is under judicial review. ** Dispute upon legal suit of Unipress vs. NIS a.d. Novi Sad is terminated by means of final court decision no.4407/10 as of 03 December 2010 in favor of NIS a.d. Novi Sad. Revision proceedings are ongoing. *** IBA UNITED Commercial Appellation Court has by means of the decision no Pz. 4427/10 as of 16 December 2010 issued Resolution whereby it has annulled first degree judgment that denied the legal suit of IBA UNITED, and has returned the case for repeated proceedings.

As of the date of taking over the controlling package of shares by the company Gazprom Neft, one of the main goals of the management of NIS a.d. Novi Sad is decrease in number of the court disputes, and establishment of control and risk management.

2.2.7 Total amount of issuer’s liabilities not mature on the application day (on the day of 30 September 2011) 2.2.7.1. Amount of issuer’s liabilities for bank loans (thousand RSD) Long-term 26,343,464 Short-term 11,483,072 IN TOTAL 37,826,536

2.2.7.2. Amount of issuer’s liabilities for issued debentures /

2.2.7.3. Оther issuer’s liabilities (on 30 September 2011) (thousand RSD) Liabilities to suppliers and other liabilities from business operations 22,341,375 Other long term liabilities – liabilities to parent company 32,667,266

2.2.8. Total amount of issuer’s liabilities not settled within the maturity period by the application date (on the day of 30 September 2011) 2.2.8.1. Amount of issuer’s liabilities for bank loans /

2.2.8.2. Amount of issuer’s liabilities for issued debentures /

2.2.8.3. Other issuer’s liabilities (thousand RSD) Obligations towards suppliers and other business operation obligationson on 30 September 2011 amount to RSD 1,043,739.

2.2.9. Employees 2.2.9.1. Total number of employees employed with the issuer, their qualification level and the average number of employees in the previous three years: Qualification level 2008 2009 2010 01.01-30.09.2011 Phd 18 14 12 14 Master 106 109 126 137 VSS 2,042 1,992 2,054 2,089 VS 886 765 710 687 SS 4,826 4,322 3,990 3,782 VK 1,298 1,217 1,110 1,066 KV 2,460 2,244 1,881 1,721 NS 526 431 158 129 In total* 12,162 11,094 10,041 9,625 Average number of employees 11,099 REMARK: Employees engaged through agencies not included. On the basis of the Agreement for Sale and Purchase of shares of NIS a.d. Novi Sad and the social program, NIS a.d. Novi Sad can make a proposal for termination of employment, provided that the employee is paid one-off redundancy in the amount of EUR 750 for each completed year of the employment engagement as well as four average salaries at the employer. Realization of the program for voluntary leave is undertaken by strictly obeying obligations of NIS a.d. Novi Sad after arrival of new majority shareholder. Decision of employee to leave in accordance with the program can be made only on the basis of the mutual decision of the employee and the company. Total number of employees who left the company by stimulative programs in the first nine months of 2011 is: - on the basis of programme “750” - 384 employees left the company, - on the basis of the programme for retirees 88 employees left the company.

2.2.9.2. Total amount owed to employees: (thousand RSD) Total amount of obligations towards the employees on 30 September 2011 is 1,179,744.

2.3. Financial data 2.3.1. Data from issuer’s non-consolidated financial statements for the previous three years 2.3.1.1. Balance sheet (thousand RSD) 2009 ASSETS AND LIABILITIES 2008 2010 30.09.2011 (adjusted)

TOTAL ASSETS 160,606,975 144,051,315 177,127.001 204,058,329 Non-current assets 112,752,770 95,734,160 108,326,343 125,126,550 Subscribed capital, unpaid - - - - Goodwill - - - - Intangible assets 5,453,480 4,792,744 4,835,761 4,671,296 Property, plant, equipment, and 96,938,045 84,632,483 99,407,561 116,519,826 natural assets Long-term financial investments 10,361,245 6,308,933 4,083,021 3,935,428 - Equity investments 4,063,090 2,918,864 2,578,753 2,554,148 - Other long-term financial 6,298,155 3,390,069 1,504,268 1,381,280 investments

Current assets 47,854,205 48,317,155 63,995,754 74,126,875 Inventories 24,525,882 23,056,296 33,999,967 35,862,166 Non-current assets held for sale and - 135.649 - - discontinued operations Short-term receivables, investments 23,328,323 25,125,210 29,995,787 38,264,709 and cash Deferred tax assets - - 4,804,904 4,804,904 Operating assets 160,606,975 144,051,315 177,127,001 204,058,329 Loss over capital - - - - Off-balance sheet assets 106,528,611 151,211,899 88,793,346 78,684,286 TOTAL LIABILITIES 160,606,975 144,051,315 177,127,001 204,058,329 Equity 69,981,542 32,283,167 47,018,714 74,138,288 Capital* 87,128,024 87,128,024 87,128,024 87,128,024 Subscribed capital, unpaid - - - - Reserves 889,424 889,424 889,424 889,424 Revaluation reserves 60,783 39 39 12 Unrealized gains on securities 136,760 130,243 48,417 39,102 Unrealized losses on securities 33,169 28,172 49,236 62,709 Retained earnings - - 16,484,381 27,142,390 Loss 18,200,280 55,836,391 57,482,335 40,997,955 Purchased own shares - - - - Long-term provisions and 86,810,052 109,836,132 128,649,752 128,137,853 liabilities Long-term provisions 7,846,215 16,040,464 18,501,540 18,366,664 Long-term liabilities 12,340,006 40,653,678 48,927,154 59,071,137 -Long-term loans 12,248,861 34,733,451 26,645,540 26,343,464 -Other long-term liabilities 91,145 5,920,227 22,281,614 32,727,673 Short-term liabilities 66,623,831 53,141,990 61,221,058 50,700,052 -Short-term financial liabilities 47,407,595 18,566,832 21,805,638 11,483,072 - Liabilities regarding assets held - - - - for sale and discontinued operations - Liabilities from business 11,655,148 23,367,446 24,944,688 24,857,580 operations - Other short-term liabilities 4,031,732 3,884,567 6,394,456 6,422,155 - Liabilities for VAT and other 3,369,927 7,323,145 7,456,869 7,212,635 taxes and deffered income - Liabilities for income tax 159,429 - 619,407 724,610 - Deferred tax liabilities 3,815,381 1,932,016 1,458,535 1,782,188 Off-balance sheet liabilities 106,528,611 151,211,899 88,793,346 78,684,286 *REMARK: Basic capital in the amount of RSD 87,128,024,000.00 is comprised of the share and the other capital. The value of the registered share capital in the amount of RSD 81,530,220,000 registered with the Business Registeres Agency is based on the assessment of the value of in kind contribution on 31 May 2005, that was made for the purpose of preparation of division balance and establishment of NIS a.d. Novi Sad by decision of the Government of the Republic of Serbia. Auditor of the financial statements for 2005 has determined that in the accountancy records of NIS a.d. Novi Sad the value of the share capital is higher for the amount of RSD 5,597,804,000 when compared to the amount registered with the Business Registers Agency. Upon order of the auditor, this difference is presented as the other capital. In 2009, the amount of RSD 20,000 is moved to the position Other capital in order to bring into line position between the value of the share capital registered with the Central Registry (RSD 81,530,200,000) and the value in the business records (RSD 81,530,220,000) which is shown in the statement for 2009 as the changes in the capital.

2.3.1.2. Income statement (thousand RSD) 01.01. - INCOME AND EXPENSES 2008 2009 2010 30.09.2011 Operating income 169,223,773 118,275,185 169,539,523 138,091,064 Sales 168,458,472 118,375,584 161,148,850 132,958,057 Revenue from activation of own 694,168 724,015 2,906,606 2,795,279 products and goods Increase in value of finished - - 5,357,982 2,116,242 goods and work-in-progress Decrease in value of finished 225,751 1.195.209 - - goods and work-in-progress Other operating revenues 296,884 370,795 126,085 221,486 Financial income 8,524,544 11,121,612 6,311,641 6,510,855 Other income 8,525,742 5,858,173 5,204,757 2,858,015 Operating expenses 164,244,154 120,375,891 143,349,664 111,189,342 Cost of goods sold 39,400,747 6,008,675 5,384,481 9,774,609 Cost of materials 93,188,785 68,609,999 95,345,034 70,111,785 Salaries and other employee 14,087,407 19,834,025 21,269,895 15,979,952 benefits Depreciation and provision expenses 6,914,861 13,951,527 8,383,146 5,657,504 Other operating expenses 10,652,354 11,971,665 12,967,108 9,665,492 Financial expenses 18,927,262 15,878,008 19,112,780 3,063,141 Other expenses 11,013,671 38,520,547 6,555,506 4,274,245 PROFIT(LOSS) from business (7,911,028) (39,519,476) 12,037,971 28,933,206 operations before tax Net income(loss) from discontinued - - - - operations PROFIT (LOSS) before tax (7,911,028) (39,519,476) 12,037,971 28,933,206 Income tax - - - - Income tax for the period (111,587) - (831,975) 1,467,163 Deferred tax expenses for the period - - - 323,654 Deferred tax income for the period - 1,883,365 5,278,385 - Personal income paid to employer - - - - NET PROFIT (LOSS) (8,022,615) (37,636,111) 16,484,381 27,142,389 Net profit belonging to minority - - - - shareholders Earnings per share - - - - Basic earnings per share - - 0.1 0.17 Diluted earnings per share - - - -

2.3.1.3. Cash flow statement: (thousand RSD) 01.01.- CASH FLOWS 2008 2009 2010 30.09.2011 Cash inflow from operating activities 175,316,997 185,017,980 254,607,167 203,304,374 Cash inflow from investing activities 1,104,131 6,953 45,850 285,598 Cash inflow from financing activities 26,102,453 82,002,205 27,471,347 26,414,497 CASH OUTFLOWS Cash outflows from operating 187,097,944 167,399,487 236,816,567 185,912,298 activities Cash outflow from investing activities 11,548,881 9,469,672 17,913,248 20,069,724 Cash outflows from financing 858,918 85,522,238 25,529,860 22,747,972 activities TOTAL CASH INFLOWS 202,523,581 267,027,138 282,124,364 230,004,469 TOTAL CASH OUTFLOWS 199,505,743 262,391,397 280,259,675 228,729,994 NET CASH INFLOW 3,017,838 4,635,741 1,864,689 1,274,475 NET CASH OUTFLOW - - - - Cash at the beginning of the 1,784,304 3,989,794 8,671,501 10,595,830 accounting period Positive foreign exchange 1,173,780 143,915 880,359 636,849 differences on cash Negative foreign exchange 1,986,128 97,949 820,719 1,188,880 differences on cash Cash at the end of accounting period 3,989,794 8,671,501 10,595,830 11,318,274

2.3.1.4. Statement of changes in equity: (thousand RSD) DESCRIPTION 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Share capital 81,530,220 81,530,200 81,530,200 81,530,200 Other capital 5,597,804 5,597,824 5,597,824 5,597,824 Subscribed capital unpaid - - Share premium - - - - Reserves 889,424 889,424 889,424 889,424 Revaluation reserves 60,783 39 39 12 Unrealized gains from Securities 136,760 130,243 48,417 39,102 Unrealized losses from Securities 33,169 28,172 49,236. 62,709 Retained earnings - - 16,484,381 43,626,770 Loss to over of equity 18,200,280 55,836,391 57,482,335 57,482,335 Purchased own shares and stakes - - - - Total 69,981,542 32,283,167 47,018,714 74,138,288

2.3.1.5. Important explanations of specific items from financial statements contained in notes to financial statements In compliance with International Accounting Standards - notes to financial statements for the period ending on 30 September 2011 contain all significant disclosures.

2.3.1.6. Final auditor’s opinion (last three years) Auditor's opinion for 2010 – the Company for Auditing, Accountancy, Financial and Consulting Services PricewaterhouseCoopers d.o.o. Belgrade To the Shareholders and Board of Directors of Naftna industrija Srbije a.d. Novi Sad

We have audited the accompanying financial statements of Naftna industrija Srbije a.d., Novi Sad (the „Company“) which comprise the balance sheet as of 31 December 2010 and the income statement, statement of changes in shareholder's equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes. The statistical annex is an integral part of these financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the requirements of the Law on Accounting and Auditing of the Republic of Serbia. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the as of 31 December 2010, and of its financial performance and its cash flows, in accordance with the Law on Accounting and Auditing of the Republic of Serbia. *REMARK: Auditors opinion is acknowledged by Board of Directors of NIS a.d. Novi Sad and it is subject to approval at the annual NIS a.d. Novi Sad Shareholders Assembly meeting.

Auditor's opinion for 2009 – the Company for Auditing, Accountancy, Financial and Consulting Services PricewaterhouseCoopers d.o.o. Belgrade To the Shareholders and Board of Directors of Naftna industrija Srbije a.d. Novi Sad We have audited the accompanying financial statements of Naftna industrija Srbije a.d., Novi Sad (the „Company“) which comprise the balance sheet as of 31 December 2009 and the income statement, statement of changes in shareholder's equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes. The statistical annex is an integral part of these financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the requirements of the Law on Accounting and Auditing of the Republic of Serbia. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of 31 December 2009, and of its financial performance and its cash flows for the year then ended in accordance with the Law on Accounting and Auditing of the Republic of Serbia and disclosures in the Note 2 to the financial statements. Emphasis of Matter Without qualifying our opinion, we draw attention to the following matters: (a) The Company incurred a net loss of RSD 37,636,111 thousand during the year ended 31 December 2009 (31 December 2008 – RSD 8,022,615 thousand) and, as of that date the Company’s net assets are RSD 32,283,167 thousand (net assets as of 31 December 2008 – RSD 69,981,542) and the share capital amounts to RSD 87,128,024 thousand (31 December 2008 – RSD 87,128,024 thousand). In accordance with the Company Law of the Republic of Serbia, if the Company has incurred losses higher than 50% of its registered share capital, shareholders of the Company must be informed of this event in order to take the actions mandated by law. Furthermore, if the net asset value of the Company is below the minimum share capital required by the Company Law for that form of company, and remains in that manner for a period of six months from the moment it becomes first apparent, adverse consequence may follow. The ultimate outcome of this matter cannot presently be determined and, consequently, the financial statements do not include adjustments or disclosures to reflect these issues. b) In accordance with the Agreement of Sale and Purchase of Share of Naftna Industrija Srbije a.d., Republic of Serbia, as a Seller, is obliged to give written official consent for Naftna industrija Srbije a.d. to register its title or right of use to all immovable properties recorded in Fixed Assets Register as at 31 December 2007. Until 31 December 2009, such a written consent was not issued and transfer of ownership of properties on the Company’s name is still in progress. c) In accordance with Agreement of Sale and Purchase of Share of Naftna Industrija Srbije a.d., Republic of Serbia, as a Seller, is obliged to ensure that if operations of the Company’s equipment that existed at the date of the Agreement result in violations of environmental requirements due to obsolescence or physical wear, no sanctions are applied against Naftna industrija Srbije a.d. with respect to such non-compliance until such equipment is modernized or replaced. The Company has engaged independent consultant to assess exposure of the Company to environmental requirements of Republic of Serbia as of the date of the Agreement. The consultant’s report is pending and as such the total environmental exposure of the Company is still under evaluation.

Auditor's opinion for 2008 (on adjusted financial statements) – KPMG d.o.o. Belgrade: Report on the Adjusted Financial Statements We have audited the accompanying separate adjusted financial statements of NIS a.d. - Naftna Industrija Srbije, Novi Sad (hereinafter: “the Company”) which comprise the separate adjusted balance sheet as at 31 December 2008 and the related separate adjusted statement of income, separate adjusted cash flow statement and separate adjusted changes in shareholders equity for the year then ended. Audit of the Company’s financial statements for 2007 was performed by another auditor who expressed a qualified opinion in his report dated 9 May 2008 in respect of recording of effects of error adjustments, non-compliance with IAS 19 – Employee Benefits, intangible assets, nature and measurement of inventories of investment materials, long-term investments, obsolete inventories and slow moving inventories, provisions for re-cultivation of environmental degradation, unreconciled receivables and payables, calculation and presentation of taxes in accordance with IAS 12 and cash flow statement. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Law on Accounting and Auditing of the Republic of Serbia (as published in the “Official Gazette of the Republic of Serbia” no. 46/2006). This responsibility includes: designing,

implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with the Law on Accounting and Auditing of the Republic of Serbia (as published in the “Official Gazette of the Republic of Serbia” no. 46/2006) and International Standards on Auditing as issued by the International Federation of Accountants. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the separate adjusted financial statements give a true and fair view of the financial position of the Company as at 31 December 2008, and the results of its operations and cash flows for the year then ended, in accordance with the Law on Accounting and Auditing of the Republic of Serbia (as published in the „Official Gazette of the Republic of Serbia“ no. 46/2006). Emphasis of Matter Without qualifying our opinion, we draw attention to the following issues: As at 18 April 2008 the Shareholders’ Assembly of the Company adopted the Decision on profit distribution for 2007, whereby a liability was created toward its founder at the time in the amount of RSD 4,048,227 thousand. Out of this amount RSD 2,347,514 thousand was settled through compensation with JP Srbijagas and JP Ţeleznice Srbije, while the amount of RSD 263,582 thousand was returned to the Company, whereby the Company’s liability to its founder at the time as at 31 December 2008 amounts to RSD 2,126,363 thousand. Given that the Company’s Share Purchase Agreement includes a statement and guarantee from the seller that after 25 January 2008 no dividends have been paid, we are unable to confirm the validity of the Decision on distribution of dividends for 2007 and related postings. Also, the Decision dated 29 January 2009 on covering losses from earlier years and distribution of retained earnings from previous years to the founder, liability toward the founder has been established for the remainder of profits after covering of losses in the amount of RSD 7,171,908 thousand. This Decision by the Shareholders’ Assembly was not carried out in the Company’s accounting records. In March 2009 the Board of Directors initiated court proceedings to cancel the decision on profit distribution. In accordance with information received from the Company’s management, the validity of both decisions on profit distribution will be the subject of negotiation of interested parties. The Company reported an equity investment in HIP Petrohemija a.d. Pancevo in the net amount of RSD 487,986 thousand, as well as long-term financial investments and current receivables from HIP Petrohemija a.d. Pančevo as at 31 December 2008 in the amount of RSD 6.576.116 thousand (2007 – RSD 2,107,655 thousand). In view of the weak financial position of HIP Petrohemija a.d. Pančevo and its reported losses, Company management is considering ways to collect and the amount of potential impairment of investment and receivables from HIP Petrohemija. The Company does not have complete documentation as proof of ownership or right of use over all of its assets and property, nor has it made full separation with respect to former members of NIS. Company management believes that issues of ownership over property, separation with respect to former members of NIS and settling of relations with state authorities will be concluded successfully, and that there will not be any significant difficulties in defining ownership. The Company currently lacks documentation on ownership (detailed property list) for all of its properties, but relies on the obligation of the Government of the Republic of Serbia, arising from the Sale Purchase Agreement, to provide

the appropriate documents. Due to the existence of aged equipment and the fact that particular production processes in the Company are outdated, it is possible that the Company might have breached and will be in breach of environmental laws of the Republic of Serbia, As a result, the Company is a potential environmental pollutant and it is reasonable to expect environmental claims and litigation against the Company in future. The Company did not make provisions for the costs of rectifying the consequences of environmental pollution that occurred prior to and after the preparation of the financial statements for 2008, given that management is relying on obligation of the Government of the Republic of Serbia to indemnify the Company from any such claims and litigation expect for industrial disasters until such time when the Programme for Reconstruction and Modernization of assets of the Company is completed in accordance with the Sale Purchase Agreement. Calculation of deferred tax liabilities was made based on the tax values of fixed assets and intangible assets that are assessed by the Tax Authorities, and which are the subject of an administrative dispute. Upon conclusion of this administrative dispute, with its ultimate outcome being difficult to estimate at this time, the value of deferred tax liabilities could be adjusted. * REMARK: All the quoted opinions of the auditor (original) can be downloaded on NIS a.d. Novi Sad web site www.nis.rs

2.3.2. Data from issuer’s consolidated financial statements from the past three years 2.3.2.1. Legal entities included in the consolidated statement Business name % participation in share capital O Zone a.d. Belgrade 100.00 NIS PETROL d.o.o., Laktasi, BH* 100.00 NIS PETROL EOOD, Sofia, Bulgaria* 100.00 NIS PETROL SRL, Bucharest, Romania* 100.00 Pannon naftagas Kft, Budapest, Hungary* 100.00 NIS Overseas, Moscow, Russian Federation 100.00 Jadran-Naftagas d.o.o. Banja Luka 66,00 Svetlost d.o.o., Bujanovac 51.32 Ranis, Moscow area, Cernogolovka, Russian 51.00 Federation Jubos d.o.o., Bor 51.00 *REMARK: The company NIS PETROL EOOD, Sofia, Bulgaria was registered on 13 September 2011, the company NIS PETROL SRL, Bucharest, Romania was registered on 16 September 2011, the company NIS PETROL d.o.o.,Laktasi, Bosnia and Herzegovina was registered on 13 September 2011, while on 30 September 2011 Pannon Naftagas Kft, Budapest, Hungary was in the process of registration and was registered on 3 October 2011.

2.3.2.2. Consolidated balance sheet (in thousands RSD) АSSETS AND 31.12.2009 31.12.2008 31.12.2010 30.09.2011 LIABILITIES (corrected)

TOTAL ASSETS 161,193,607 144,701,351 178,107,989 204.971.608 Non-current assets 113,524,879 96,356,741 108,928,259 125,735,411 Subscribed capital, - - - - unpaid Goodwill - - - - Intangible assets 5,462,308 4,800,245 4,841,418 4,780,903 Property, plant, equipment and biological 100,884,366 87,798,991 102,317,854 119,404,094 assets Long-term financial 7,178,205 3,757,505 1,768,987 1,550,414 investments Investment in capital 880,049 366,114 263,229 236,498 Other long-term 6,298,156 3,391,391 1,505,758 1,313,916

financial investments Current assets 47.668.452 48.344.610 64.374.826 74,431,251 Inventories 24,423,527 23,031,345 34,016,869 35,873,441 Non-current assets held for sale and assets - 135,649 262,431 16,238 from discontinuing operations Short-term receivables, investment 23,244,925 25,177,616 30,095,526 38,541,572 and cash Deferred tax assets 276 - 4,804,904 4,804,946 Operating assets 161,193,607 144,701,351 178,107,989 204,971,608 Loss exceeding equity - - - - Off-balance sheet assets 106,528,611 151,211,899 88,793,346 78,684,286 TOTAL LIABILITIES 161,193,607 144,701,351 178,107,989 204,971,608 Equity 69,633,845 32,019,877 47,032,740 73,996,470 Basic capital 87,151,650 87,148,593 87,148,630 87,148,630 Subscribed capital, - - - - unpaid Reserves 889,211 889,171 889,672 889,135 Revaluation reserves 61.362 - - - Unrealized gains on 136,760 130,243 48,417 39,102 securities Unrealized losses on 33,169 28,172 49,236 62,709 securities Retained earnings - - 16,735,903 27,252,529 Loss 18,571,969 56,119,958 57,740,646 41,270,217 - Purchased own shares - - - Long-term provisions 87,677,795 110,749,419 129,616,714 129,192,906 and liabilities Long-term provisions 7,878,920 16,111,675 18,574,652 18,438,905 Long-term liabilities 13,127,820 41,369,977 49,642,245 59,824,959 Long-term loans 12,245,150 34,733,451 26,645,540 26,343,464 Other long-term 882,670 6,636,526 22,996,705 33,481,495 liabilities Short-term liabilities 66,671,055 53,267,767 61,399,817 50,929,042 Short-term financial 47,409,746 18,567,835 21,805,638 11,483,506 liabilities Liabilities in respect of assets held for sale and - - - - assets from discontinuing operations Trade and other 11,508,677 23,336,687 24,964,034 24,915,597 payables Other short-term 4,217,632 4,047,008 6,552,062 6,595,212 liabilities Liabilities for VAT and 3,374,049 7,314,806 7,457,457 7,209,467 other public income Liabilities for income 160,951 1,431 620,626 725,260 tax

Deferred tax liabilities 3,881,967 1,932,055 1,458,535 1,782,232 Off-balance sheet 106,528,611 151,211,899 88,793,346 78,684,286 liabilities *REMARK: The consolidated financial statements as of 30 September 2011 is presented in the Prospectus in accordance with the Law on Auditing of Serbia (Official Gazette of the Republic of Serbia, No. 46/2006 and 111/2009), which requires that the consolidated financial statements are prepared in accordance with IFRS and all regulations of the Ministry of Finance Republic of Serbia. Given the differences between these two regulations, financial statements in the Prospectus are made in the format prescribed by the Ministry of Finance of the Republic of Serbia, which does not comply with the requirements MRS1- Presentation of Financial Statements. On the other hand, Interim condensed consolidated financial statements as of 30 September 2011 and 31 December 2010, and for a period of nine months that ended on 30 September 2011 and 2010 (unaudited) published by NIS a.d. Novi Sad is made in accordance with IFRS and IAS, and is different from the presentation given in the Prospectus.

2.3.2.3. Consolidated income statement (in thousands RSD) 2009 INCOME AND EXPENSES 2008 2010 30.09.2011 (corrected) Operating income 169,607,132 118,701,874 169,778,652 138,283,417 Sales revenue 168,903,199 118,578,202 161,379,929 133,145,852 Revenue from consumption 697.090 724,653 2,908,291 2,818,749 of own products Increase in inventories - - 5,357,982 2,115,635 Decrease in inventories 225,751 981,362 - - Other operating revenues 232,594 380,381 132,450 203,181 Financial income 8,505,247 11,124,507 6,320,537 6,512,455 Other income 8,552,811 5,880,260 5,177,533 2,916,150 Operating expenses 164,812,386 121,009,774 143,752,598 111,555,329 Cost of goods sold 39,582,455 6,186,024 5,384,484 9,783,676 Cost of materials 93,033,146 68,676,064 95,394,332 70,148,348 Cost of salaries, salaries compensations and other 14,170,110 19,983,605 21,346,120 16,107,497 employee benefits Depreciation and provisions 6,975,591 13,996,119 8,414,138 5,674,063 Other operating expenses 11,051,084 12,167,962 13,213,524 9,841,745 Financial expenses 18,907,824 15,884,833 19,116,265 3,066,401 Other expenses 11.021.776 38,527,706 6,117,785 4,298,382 PROFIT(LOSS) from regular (8,076,796) (39,715,672) 12,290,074 28,791,910 operations before taxation Net gains(loss) from - - - - discontinued operation PROFIT (LOSS) before (8,076,796) (39,715,672) 12,290,074 28,791,910 taxation Income tax - - - - Current income tax (111,629) (212) (832,556) (1,467,249) Deferred tax expense for the (2,065) - - (323,654) period Deferred tax income for the - 1,949,912 5,278,385 - period Personal earnings/salaries - - - paid to employer NET PROFIT (LOSS) (8,190,490) (37,765,972) 16,735,903 27,001,007 Net profit belonging to minority - - 268 (16,160) shareholders Net profit belonging to parent - - 16,735,635 27,017,167

company Earnings per share - - - - Basic earnings per share - - - 0.17 Diluted earnings per share - - -

2.3.2.4. Consolidated cash flow statement (in thousands RSD) CASH FLOWS 2008 2009 2010 30.09.2011 Cash inflow from operating 174,873,512 185,401,228 254,422,420 203,325,276 activities Cash inflow from investing 1,029,606 8,911 45,850 599,442 activities Cash inflow from financing 26,102,453 82,002,205 27,471,384 26,414,497 activities CASH OUTFLOWS Cash outflows from operating 186,979,539 167,901,422 236,816,567 186,104,881 activities Cash outflows from investing 11,579,840 9,371,622 17,739,476 19,967,700 activities Cash outflows from financing 435,703 85,522,238 25,529,860 22,747,972 activities TOTAL CASH INFLOWS 202,005,571 267,412,344 281,939,654 230,339,215 TOTAL CASH OUTFLOWS 198,995,082 262,795,282 280,085,903 228,820,553 NET CASH INFLOW 3.010,489 4,617,062 1,853,751 1,518,662 NET CASH OUTFLOW - - - - Cash at the beginning of the 1,862,109 4,060,250 8,723,278 10,636,669 accounting period Foreign currency gains on 1,173,780 143,915 880,359 636,850 translation of cash Foreign currency losses on 1,986,128 97,949 820,719 1,188,880 translation of cash Cash at the end of accounting 4,060,250 8,723,278 10,636,669 11,603,301 period

2.3.2.5. Consolidated statement of changes in equity (in thousands RSD) 31.12.2009 31.12.2008 31.12.2010 30.09.2011 (corrected) Share capital 81,530,220 81,550,720 81,550,757 81,550,757 Other capital 5,621,430 5,597,873 5,597,873 5,597,873 Subscribed capital, - - - Unpaid Share premium - - - Reserve 889,211 889,171 889,672 889,135 Revaluation reserves 61,362 - - - Unrealized gains on 136,760 130,243 48,417 39,102 securities Unrealized losses on 33,169 28,172 49,236 62,709 securities Retained earnings - - 16,735,903 27,252,529 Loss to amount of equity 18,571,969 56,119,958 57,740,646 41,270,217 Purchased own shares - - - -

and stakes Total 69,633,845 32,019,877 47,032,740 73,996,470 Loss above the equity - - - *REMARK: The consolidated financial statements as of 30 September 2011 is presented in the Prospectus in accordance with the Law on Auditing of Serbia (Official Gazette of the Republic of Serbia, No. 46/2006 and 111/2009), which requires that the consolidated financial statements are prepared in accordance with IFRS and all regulations of the Ministry of Finance Republic of Serbia. Given the differences between these two regulations, financial statements in the Prospectus are made in the format prescribed by the Ministry of Finance of the Republic of Serbia, which does not comply with the requirements MRS1- Presentation of Financial Statements. On the other hand, Interim condensed consolidated financial statements as of 30 September 2011 and 31 December 2010, and for a period of nine months that ended on 30 September 2011 and 2010 (unaudited) published by NIS a.d. Novi Sad is made in accordance with IFRS and IAS, and is different from the presentation given in the Prospectus.

2.3.2.6. Important explanations on certain items in the financial statements contained in notes to financial statements In the notes to the consolidated financial statements for the period ending on 30 September 2011, all relevant disclosures in accordance with International Accounting Standards are stated.

2.3.2.7. Final auditor’s opinion (previous three years) Auditor's opinion for 2010. – the Company for Auditing, Accountancy, Financial and Consulting Services PricewaterhouseCoopers d.o.o. Belgrade

To the Shareholders and Board of Directors of Naftna industrija Srbije a.d. Novi Sad We have audited the accompanying consolidated financial statements of Naftna Industrija Srbije a.d., Novi Sad (the „Parent“) and its subsidiaries (the „Group“) which comprise the consolidated balance sheet as of 31 December 2010 and the consolidated income statement, consolidated statement of changes in shareholder’s equity and consolidated cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes. The statistical annex is an integral part of these consolidated financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the requirements of the Law on Accounting and Auditing of the Republic of Serbia. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of 31 December 2010, and of its financial performance and its cash flows for the year then ended in accordance with the Law on Accounting and Auditing of the Republic of Serbia. *REMARK: Auditors opinion is acknowledged by Board of Directors of NIS a.d. Novi Sad and it is subject to approval at the annual NIS a.d. Novi Sad Shareholders Assembly meeting.

Auditor's opinion for 2009. – the Company for Auditing, Accountancy, Financial and Consulting Services PricewaterhouseCoopers d.o.o. Belgrade

Auditor's Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of 31 December 2009, and of its financial performance and its cash flows for the year then ended in accordance with the Law on Accounting and Auditing of the Republic of Serbia and disclosures in the Note 2 to the consolidated financial statements. Emphasis of Matter Without qualifying our opinion, we draw attention to the following matters: a) The Parent incurred a net loss of RSD 37,636,111 thousand during the year ended 31 December 2009 (31 December 2008 – RSD 8,022,615 thousand) and, as of that date the Parent’s net assets are RSD 32,283,167 thousand (net assets as of 31 December 2008 – RSD 69,981,542) and the share capital amounts to RSD 87,128,024 thousand (31 December 2008 – RSD 87,128,024 thousand). Subsidiary O Zone a.d. has also incurred losses in excess of 50% of its share capital. In accordance with the Company Law of the Republic of Serbia, if the company has incurred losses higher than 50% of its registered share capital, shareholders must be informed of this event in order to take the actions mandated by law. Furthermore, if the net asset value of the company is below the minimum share capital required by the Company Law for that form of company, and remains in that manner for a period of six months from the moment it becomes first apparent, adverse consequence may follow. The ultimate outcome of this matter cannot presently be determined and, consequently, the financial statements do not include adjustments or disclosures to reflect these issues. b) In accordance with the Agreement of Sale and Purchase of Share of Parent, Republic of Serbia, as a Seller, is obliged to give written official consent for Parent to register its title or right of use to all immovable properties recorded in Fixed Assets Register as at 31 December 2007. Until 31 December

2009, such a written consent was not issued and transfer of ownership of properties on the Parent's name is still in progress. c) In accordance with the Agreement of Sale and Purchase of Share of Parent, Republic of Serbia, as a Seller, is obliged to ensure that if operations of the Parent's equipment that existed at the date of the Agreement result in violations of environmental requirements due to obsolescence or physical wear, no sanctions are applied against Parent with respect to such non-compliance until such equipment is modernized or replaced. The Parent has engaged independent consultant to assess exposure of the Parent to environmental requirements of Republic of Serbia as of the date of the Agreement. The consultant's report is pending and as such the total environmental exposure of the Parent is still under evaluation.

Auditor's opinion for 2008 (on the adjusted consolidated financial statements) – KPMG d.o.o. Belgrade

Report on the Adjusted Consolidated Financial Statements We have audited the accompanying adjusted consolidated financial statements of NIS a.d. - Naftna industrija Srbije, Novi Sad (hereinafter: “the Company”) which comprise the adjusted consolidated balance sheet as at 31 December 2008 and the related adjusted consolidated statement of income, adjusted consolidated cash flow statement and adjusted consolidated changes in shareholders equity for the year then ended. Audit of the Company’s consolidated financial statements for 2007 was performed by another auditor who expressed a qualified opinion in his report dated 9 May 2008 in respect of recording of effects of error adjustments, non-compliance with IAS 19 – Employee Benefits, intangible assets, nature and measurement of inventories of investment materials, long-term investments, obsolete inventories, slow moving inventories and inventories with internal profits, provisions for re-cultivation of environmental degradation, unreconciled receivables and payables, calculation and presentation of taxes in accordance with IAS 12 and cash flow statement. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these adjusted consolidated financial statements in accordance with the Law on Accounting and Auditing of the Republic of Serbia (as published in the “Official Gazette of the Republic of Serbia“ no. 46/2006). This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of adjusted consolidated financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility Our responsibility is to express an opinion on these adjusted consolidated financial statements based on our audit. We have conducted our audit in accordance with the Law on Accounting and Auditing of the Republic of Serbia (as published in the “Official Gazette of the Republic of Serbia” no. 46/2006) and International Standards on Auditing as issued by the International Federation of Accountants. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the adjusted consolidated financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the adjusted consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the adjusted consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the adjusted consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the adjusted consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, the adjusted consolidated financial statements give a true and fair view of the consolidated financial position of the Company as at 31 December 2008, and the consolidated results

of its operations and consolidated cash flows for the year then ended, in accordance with the Law on Accounting and Auditing of the Republic of Serbia (as published in the “Official Gazette of the Republic of Serbia” 46/2006). Emphasis of Matter Without qualifying our opinion, we draw attention to the following issues: As at 18 April 2008 the Shareholders' Assembly of the Company adopted the Decision on profit distribution for 2007 reported in the separate financial statements, whereby a liability was created toward its founder at the time in the amount of RSD 4,048,227 thousand. Out of this amount RSD 2,347,514 thousand was settled through compensation with JP Srbijagas and JP Ţeleznice Srbije, while the amount of RSD 263,582 thousand was returned to the Company, whereby the Company’s liability to its founder at that time as at 31 December 2008 amounts to RSD 2,126,363 thousand. Given that the Company’s Share Purchase Agreement includes a statement and guarantee from the seller that after 25 January 2008 no dividends have been paid, we are unable to confirm the validity of the Decision on distribution of dividends for 2007 and related postings. Also, the Decision dated 29 January 2009 on covering losses from earlier years and distribution of retained earnings from previous years to the founder, liability toward the founder has been established for the remainder of profits after covering of losses in the amount of RSD 7,171,908 thousand. This Decision by the Shareholders’ Assembly was not carried out in the Company’s accounting records. In March 2009 the Board of Directors initiated court proceedings to cancel the decision on profit distribution. In accordance with information received from the Company’s management, the validity of both decisions on profit distribution will be the subject of negotiation of interested parties. The Company reported an equity investment in HIP Petrohemija a.d. Pančevo in the net amount of RSD 487,986 thousand, as well as long-term financial investments and current receivables from HIP Petrohemija a.d. Pančevo as at 31 December 2008 in the amount of RSD 6,576,116 thousand (2007 – RSD 2,107,655 thousand). In view of the weak financial position of HIP Petrohemija a.d. Pančevo and its reported losses, Company management is considering ways to collect and the amount of potential impairment of investment and receivables from HIP Petrohemija. The Company does not have complete documentation as proof of ownership or right of use over all of its assets and property, nor has it made full separation with respect to former members of NIS. Company management believes that issues of ownership over property, separation with respect to former members of NIS and settling of relations with state authorities will be concluded successfully, and that there will not be any significant difficulties in defining ownership. The Company currently lacks documentation on ownership (detailed property list) for all of its properties, but relies on obligation of the Government of the Republic of Serbia, arising from the Sale Purchase Agreement, to provide the appropriate documents. Due to existence of aged equipment and the fact that particular production processes in the Company are outdated, it is possible that the Company might have breached and will be in breach of environmental laws of the Republic of Serbia. As a result, the Company is a potential environmental pollutant and it is reasonable to expect environmental claims and litigation against the Company in future. The Company did not make provisions for the costs of rectifying the consequences of environmental pollution that occurred prior to and after the preparation of the financial statements for 2008, given that management is relying on obligation of the Government of the Republic of Serbia to indemnify the Company from any such claims and litigation except for industrial disasters until such time when the Programme for Reconstruction and Modernization of assets of the Company is completed in accordance with the Sale Purchase Agreement. Calculation of deferred tax liabilities was made based on the tax values of fixed assets and intangible assets that are assessed by the Tax Authorities, and which are the subject of an administrative dispute. Upon conclusion of this administrative dispute, with its ultimate outcome being difficult to estimate at this time, the value of deferred tax liabilities could be adjusted. Within investments under construction, the Company reported investments in the Crni Vrh hotel complex in the amount of RSD 2,850,035 thousand as at 31 December 2008. Following the last appraisal performed on 1 January 2007 no new investments were made in this hotel complex. Management did not reach a decision on future status of this investment in the hotel complex. *All the quoted Audit Reports (original) can be downloaded on NIS a.d. Novi Sad web site www.nis.rs

2.3.3. Key performance and success indicators 2.3.3.1. State key performance indicators including indicators of liquidity, solvency, net working capital, profitability and other indicators, relevant to the issuer’s core activity 01.01.- DESCRIPTION 2008 2009 2010 30.09.2011 Liquidity of 1st degree (cash and cash equivalents) 6.0% 16.3% 17% 22% Liquidity of 2nd degree (current assets- 35% 48% 57% 75% inventory/current liabilities) Net working capital ratio( current assets- current -39% -10% 11% 32% liabilities/current assets) Indicator of financial stability (own capital/operating 48% 34% 49% 43% liabilities) Indebtedness ratio (current liabilities long-term 49% 65% 62% 54% liabilities/operating liabilities) Debt-to-equity ratio ( current liabilities + long-term 101% 194% 126% 126% liabilities/ equity) Profitability (net profit/average operating liabilities) -3% -16% 10% 14% Profitability (net profit/average shareholders’ equity) -7% -37% 19% 31%

2.3.4. Salary costs 2.3.4.1. State costs of salaries for the previous three months separately, both gross and net (thousand RSD) Costs of salaries Gross Net July 2011 1,872,084 1,106,271 August 2011 1,426,106 867,140 September 2011 1,486,705 906,855

2.3.5. Gain/loss per share 2.3.5.1. State previous three business years: (RSD) 31.12.2008 31.12.2009 31.12.2010 30.09.2011 Net gain or loss per share according to the non-consolidated (984.01) (230.81) 101.09 166.46 financial statements Net gain or loss per share according to the consolidated (1,004.60) (231.61) 102.60 165.69 financial statements Number of shares 8,153,020 163,060,400 163,060,400 163,060,400 (If the number of shares has changed in the past three years, provide the new data that reflect such changes and method applied for replaced share valuation.)

2.3.6. Dividends paid 2.3.6.1. State the following: - date of dividends payment, for the previous three years; - the amount of dividends paid per share, separately for each class; - ex-dividend day – certain date before the dividend payment date on which the persons that are registered as the share holders are entitled to receive the dividend, regardless of the fact that on the dividend payment date the holder of the share can be other person The company has conducted business with losses in the amount of RSD 2008: 8,022,615,000. The company has conducted business with losses in the amount of RSD 2009: 37,636,111,000. 2010: The company has conducted business with profit of RSD 16,484,381,000.* *REMARK: Board of Directors has adopted the Decision on allocation of profit for 2010, according to which the profit is allocated to cover losses carried forward from previous years.

2.3.7. Off-balance items 2.3.7.1. Provide description on key off-balance items Off balance sheet assets and liabilities. 31.12.2008 31.12.2009 31.12.2010 30.09.2011

Issued warranties and bills of 91,582,736 131,982,082 66,564,991 53,664,743 exchange Received warranties and bills of 1,233,001 5,684,192 7,304,718 9,972,191 exchange Properties (in ex-republics) 5,421,435 5,421,435 5,463,024 5,463,077 Claims (from companies from 3,861,809 4,096,875 4,867,507 4,584,925 ex-republics) Third party merchandise and 3,910,925 3,436,067 4,035,255 4,742,005 other third party goods Assets for oil fields liquidation in 518,705 591,248 557,851 257,345 Angola TOTAL 106,528,611 151,211,899 88,793,346 78,684,286

2.4. Other important facts 2.4.1. Other important facts that may be significant for investor’s decision on business operations, activities and financial position of the issuer Gazprom Neft has, in accordance with the Agreement for Sale and Purchase of shares of NIS a.d. Novi Sad, on 31 January 2011 announced Takeover bid for NIS a.d. Novi Sad shares held by minority shareholders, i.e. 31,180,256 ordinary shares which in total amounts to 19,12% of the total number of ordinary shares. The bid was valid for 45 days, i.e. until 16 March 2011 And 8,405,087 shares is acquired, i.e. 5.15% of the total number of ordinary shares from the price of RSD 506.48 per share which is counter value of EUR 4.80996 per share on 13 January 2011. After the bid completion Gazprom Neft holds 91,565,887 ordinary shares, i.e. 56.15% share capital of NIS a.d. Novi Sad, while minority shareholders own 22,775,169 ordinary shares, i.e. 13.97% share capital of NIS a.d. Novi Sad, and the number of shares held by the Republic of Serbia remained unchanged. In accordance with the Agreement for Sale and Purchase of shares of NIS a.d. Novi Sad, Gazprom Neft has the commitment to provide to NIS a.d. the amount of EUR 500,000,000 by way of special purpose loans for purpose of implementing the program for reconstruction and modernization of the technological complex of NIS a.d. Novi Sad on the following terms: Obligation to provide EUR 500,000,000 as the principle amount of the loan shall be fully performed in the period between the day the transfer closing and 31 December 2012; The interest accruing the principal of the loan provided to the NIS shall accrue quarterly and for each quarter shall equal to 12 month EUR LIBOR + 2% (no further charges or commissions shall); The term of the loan shall be 14 years as of the first disbursement date; The grace period shall be the later of 31 December 2012 or the competition of the actual performance by Gazprom Neft of its obligation; There shall be no collateral. The report on sustainable development was made for 2010, according to the standards and quality in corporate reporting prescribed by the international organization Global Reporting Initiative and AccontAbility, and a review of the report was conducted by an independent auditing firm KPMG In July 2011 representative offices in Romania and Bulgaria were established. In September 2011 following subsidiaries were founded: NIS PETROL EOOD, Sofia, Bulgaria (equity 100%), NIS PETROL SRL, Bucharest, Romania (equity 100%), NIS PETROL doo, Laktasi, Bosnia and Herzegovina (equity 100%), while the on 3 October 2011 the registration process for subsidiary company Pannon Naftagas Kft, Budapest, Hungary (equity 100%) ended.

3. ISSUER’S DEVELOPMENT POLICY 3.1. Planned issuer’s development activities 3.1.1. Planned capital increase 3.1.1.1. Specify issuer’s capital increase plans and methods, as well as planned time line for such plan implementation /

3.1.2. Planned expansion of business activities 3.1.2.1. Introduction of new types of activities, higher scope of business operations within the existing activities The strategic goal of NIS a.d. Novi Sad is to become the most effective fast-growing company in the field of energy, oil, gas, petroleum products and petrochemicals production in the Balkan region, to keep the leading position in the Serbian market, and to be ranked among top three companies in South East Europe. Responsible use of natural resources and modern technology provide the resources for further development.

Long-term directions of development are for NIS to become:

Vertically integrated oil company - Development of a vertically integrated, balanced value chain - Focus on the added value of each of the main segments - Growth in volume and intensive development of existing lines of business abroad - Development of partnerships and long-term relationship with suppliers and customers - Development of regional sales network - Joint development of logistics infrastructure - Potential development of supply vessels ("bunckering"), oil storage and aeroservices

Energy company - Horizontal integration of power generation assets in the existing business segments - The development of gas production and gas supply - Realization of projects of renewable and alternative energy sources - Expanding market share on the energy market of Serbia and the EU as an energy company - Focus on innovation and development of complex projects in energy - Increase of participation in the energy sector both in Serbia and abroad

Development of synergies in the neighboring areas - Development of the production of base oils - Development of long-term cooperation with Petrohemija

NIS has defined the main tasks and development directions of the company along three horizons of the goals for the period 2011-2013-2020: • Short-term outlook for the current 2011: vertically integrated company • Mid-term prospects for 2013: growing player in the Balkan market • Long-term prospects for 2020: leader in efficiency in the Balkans

Development Strategy of NIS includes the realization of "five fives" which implies that:

First: NIS produces 5 million tons of oil and gas! The coefficient of resource utilization at least 10 Key player in the Pannonian basin Broad portfolio of assets outside of Serbia The strongest scientific and technological base in the development of conventional and unconventional resources sale of gas to the end user

Second: NIS processes 5 million tons of crude oil! One of the five most efficient refineries of Southeast Europe Less than two percent of the heavy residue after processing Production of base and industrial oils Close integration with Petrohemija Modernization and optimization of infrastructure for the delivery of raw materials and products

Third: NIS sells 5 million tons of petroleum products! Leader in Serbia and surrounding countries by the quality of services and fuel 800-1000 gas stations of mass and premium brands in Serbia and Europe. Unquestionably the leader on the Serbian market by sales volume One of the three largest vertically integrated companies in the region in volume of retail One of the leaders in the region in the production of oil and kerosene, bunckering and petrochemistry A pioneer in the use of new technologies and manufacturing products

Forth: NIS has a Euro-5 standard processes and results! European standard of Products and services A leader in the region in the field of international HSE standards The introduction of the best European practices in managing of public companies A culture of high achievement and the best employer in the region International standards of corporate social reporting

Fifth: The high value of NIS shares! The leader by economic efficiency in Eastern Europe Gross profit that provides the highest returns to shareholders on equity Public company with the best corporate governance A balanced vertically integrated oil company that develops its business activity in the field of energy and petrochemistry Expanding the geographical territory of business activity - competitive participant in the European energy market

Implementation of the NIS strategy over three years period will allow the company to overcome the gap between its competition by key indicators of efficiency and an increase in EBITDA to 58.5 billion RSD in 2013. Also, the implementation of the strategy in the period from 2011 to 2013 includes investments in key business trends in the amount of 90 billion RSD.

NIS a.d. Novi Sad plans to become vertically integrated company with the fastest development in the area of production of oil and gas and production and sales of oil products. By investing in development and enhancement of the activities, long-term development and rise of the business operations of the regional range will be achieved. Until 2014 NIS a.d. Novi Sad should achieve the rise of the value, increase its efficiency and financial stability, decrease of the amount of debt in comparison to operational income up to the level of the best models of the European practice. Per business segments, NIS a.d. Novi Sad plant to achieve until 2014 the following:

In Block Services (OFS) - Structural transformation and establishment of the controlled subsidiaries - Increase of the level of the capacities usage - Increase of the efficiency and quality of the services - Modernization of the equipment - Strategic partnership with the companies that are well ranked

In Block Exploration and Production (UPS) - 40% increase of exploitation volume and increase in volume of oil and gas reserves for 20% - The lowest expenses of the production in the region and high level of work productivity - Application of the modern technologies and methods for production of oil and gas - Dominant role in production of oil and gas and widening of the concession activities to the

level of at least 30% of total production - Increase of the investment efficiency and resources base

In Block Refining (REF) - Realization of the reconstruction and modernization of the refineries and in that manner increase of the refining volumes for over 50% - Decrease of the technical losses and own consumption - Increase of refining margin - Improvement of the products quality (larger percent of the white derivatives, larger level of refining) - Operational enhancement

In Block Sales (PRO) - Development of the petrol stations network in accordance capital construction and regional development and increase in the volume of motor fuels retail - Increase of the share in sales of derivatives, as well as achievement of stable and significant participation on the market of the Republic of Serbia - Development of the privileged sales - Diversification of the offer and increase of the income for ancillary assortment - Economic efficiency and development of the competition advantages, with the essential enhancement of the sales organization - Development of the powerful brand(s) - Increase of the export volume - Widening in the target markets – the Republic of Serbia and the Balkans.

The total volume of the capital investments projected for the period as of 2011 until 2013 will amount to RSD 90 billion. Almost half of this sum will be spent on realization of the modernization project of the refining capacities, as well as on ecological projects.

The realization of the NIS a.d. Novi Sad strategy requires the increase of the export potentials, since the future refining capacities of NIS a.d. Novi Sad are higher than demand on the Serbian market.

3.1.3. Planned investments 3.1.3.1. Planned capital investments, as well as expected effects with regard to property and other legal entities, planned amount of funds for such investments and manner of their financing In 2010, The Medium-term investment plan (MIP) for the period 2011-2013 was accepted by the Investment Committee on the meeting held on 8 November 2010. The following investments objectives are determined in the plan (per area): ECOLOGY - Reduction in the solid particles emissions into the atmosphere - Construction of the spent sulphuric acid regeneration unit - Jetty reconstruction in the Pancevo Oil Refinery - Reconstruction of the road tanks loading/unloading facilities - Remedy of the historical pollution PRODUCTION - Geological exploration for finding new oil and gas deposits - Activating of oil-wells that are temporarily out of production - Drilling of new oil-wells REFINING - Construction of the new hydrogen generation unit - Construction of MHC/DHT complex with supporting units TRADE - Construction of the new gasoline stations on the strategic locations - Reconstruction of the existing gasoline stations - Sales of LPG on the gasoline filling stations

Investments plan in the period as of 2011 until 2013 in RSD billion MIDTERM INVESMENT PLAN

Project 2011 2012 2013

MHC + H2 30.6 9.5 0.0 Ecology 3.6 0.5 0.5 Refining 1.5 1.4 0.7 Trade 3.8 4.7 3.9 Block for production of 5.1 7.4 10.5 oil and gas Oil services 0.4 0.3 0.3 Professional services 1.2 0.0 0.0 Investment reserves 0.9 0.0 0.0 In total 47.1 23.8 15.9

Mid-term Investment Programme 47.1

23.8

15.9

2011 2012 2013

Capital investment plan in the period as of 2011 until 2013

3.1.4. Business trends 3.1.4.1. Issuer’s expectations with regard to business expansion, service and /or goods price trend Within investments in exploitation of crude oil and gas deposits and with the purpose of growth in the volume of production and usage coefficient of the oil and gas deposits of NIS a.d. Novi Sad in Serbia, the drilling of five new holes in the Kikindska Varos field is commenced. Total estimated value of this project exceeds five million Euros. During the next 15 years, the projected production in the Kikindska Varos field is 260 thousand mt of crude oil and 34 milion m3 of natural gas. In 2009 construction of the MHC/DHT Complex (facility for increase of production of the light oil products and decrease of the sulfur level) has commenced, which will enable that all the quantities of the motor fuels produced are in accordance with the European standards of quality. The finalization is planned for last quarter of 2012. The Complex shall include five new production facilities. In addition, within the project of the construction of the Complex, 19 more objects of the industrial infrastructure shall be reconstructed, modernized, and constructed 19, which are necessary for operation of new facilities. The purpose of the project is to make NIS a.d. Novi Sad competitive on the liberalized Serbian market of crude oil products and insure maximum compliance with the domestic and EU environmental

standards. New ways of energy supply of the refinery facilities will have effects on lowering of the prices of the oil products (thanks to the reduced consumption of electric energy), and on the environment in the operation of the refineries owing to the installation of the additional treatment devices which will contribute significantly to the decrease in the air pollution in Pancevo and its surrounding area. Besides, the project envisaged establishment of the industrial waste system, which will reduce air, ground and surface water, and soil pollution to minimal levels. Business trends: – increasing production and low oil production costs - efficiency increase in oil production, refining and trade with oil products at the Balkans.

3.1.5. Position of the company in the sector 3.1.5.1. Issuer’s assessment of its position within its sector NIS a.d. Novi Sad is the largest oil company in the Southeastern Europe and the only company in Serbia that has integrated and balanced system of exploitation, refining and sales of oil and oil products and exploitation of natural gas, and that plays important role in maintenance of the energy stability and the stability of the country.

4. MANAGEMENT AND SUPERVISORY BOARD MEMEBERS DATA 4.1. Management and Supervisory Board members 4.1.1. Specify the following: - name of the General Manager: Kirill Kravchenko

- name and position of the member of the Board of Directors Name of the Board of Director Members Position of the Board of Director Members Vadim Yakovljev Chairman Kirill Kravchenko Member Alexandar Krilov Member Vladislav Barisnjikov Member Аnatoly Cherner Member Igor Antonov Member Slobodan Milosavljevic Member Nikola Martinovic Member Danica Draskovic Independent member Stanislav Seksnja Independent member

- name and position of the member of the Supervisory Board Name of the Supervisory Members Position of the Supervisory Board Members Milivoje Cvetanovic Chairman Bozo Stanisic Member Maxim Shahov Member

4.2. Fees and other benefits paid by the issuer 4.2.1. Fees paid to members of the management (provide data for the previous three years separately, net amounts, for the General Manager and members of the Board of Directors): - total amount of salaries and other benefits to members of the management in RSD 2008 2009 2010 01.01.-30.09.2011 General Manager 11,110,030.41 3,505,139.56 11,179,883.56 10,358,892.46 Board of Directors 34,944,057.77 14,415,357.96 9,955,684.15 11,966,737.38

- total amount of borrowings or loans granted to members of the management in RSD 2008 2009 2010 01.01.-30.09.2011 General Manager 68,130.00 - - - Board of Directors 339,621.00 - -

- total amount of other granting made to members of management in RSD 2008 2009 2010 01.01.-30.09.2011 - - - -

4.2.2. Fees paid to members of the Supervisory board (provide data for the previous three years separately, net amount):

- Total amount of fees to Supervisory Board members in RSD 2008 2009 2010 01.01.-30.09.2011 - 1,121,900.00 7,403,110.40 5,506,943.60

- Total amount of other granting made to Supervisory Board members in RSD 2008 2009 2010 01.01.-30.09.2011 - - - -

4.2.3. Special rights and benefits exercised by the management and Supervisory Board members State other cash earnings, other benefits or other rights granted by issuer to the management and Supervisory Board members: /

4.2.4. Business transactions between the issuer and management and Supervisory Board members State significant business transactions between the issuer and management and Supervisory Board members or the issuer and persons affiliated to management and Supervisory Board members in the past year /

4.3. Management and employees’ ownership interest in the issuer’s share capital 4.3.1. State the following: - management and Supervisory Board members ownership interest in the share capital Position of member of Name Number of shares % interest BoD/SB Board of Directors Nikola Martinovic 224 0.0001 member Supervisory Board Bozo Stanisic 149 0.0001 member

- other issuer’s employees ownership interest in issuer’s share capital In accordance with the Decision of the Government of the Republic of Serbia on transfer of shares without consideration to citizens – holders of the rights and employees and ex-employees of Naftna industrija Srbije a.d. Novi Sad, the right to transfer of shares without consideration had 21,737 employees and ex-employees in NIS a.d. Novi Sad, to which 7,076,821 of shares has been transferred, which represents 4.34% of the share capital.

- issuer’s policy regarding employees interest in issuer’s core capital They have the same rights as the other shareholders on the basis of the ownership over shares.

5. RESPONSIBLE PERSONS

5.1. Name of the person responsible for this prospectus content

______Sergey Fominykh, Deputy CEO, Director of Function for Legal and Corporate Affairs

______Aleksej Urusov, Deputy CEO, Head of Function for Economics, Finance and Accounting

5.2. Person responsible for prospectus content signs the following statement: “I hereby declare that this Prospectus includes true, correct, complete and the entire important data on the issuer and securities relevant for investors’ decision making”.

In Novi Sad, 12 December 2011 ______Kirill Kravchenko, the General Manager

Prospectus shall be signed and certified by the person representing the issuer. Prospectus may be additionally signed by persons participating in the prospectus preparation.

6. COMMISSION’S DECISION 6.1. Number and date of Commission’s Decision on approval of Prospectus for share issuing.