Naftna Industrija Srbije : Annual report for 2020

NIS Group

Annual

Report

2020

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NIS Group

Annual Report 2020

The Annual Report for 2020 presents a factual overview of activities, development and performance of NIS Group in 2020. The Report covers and presents data for NIS Group, comprising NIS j.s.c. Novi Sad and its subsidiary. If the

data pertain only to specific individual subsidiaries or only NIS j.s.c. Novi Sad,

it is so noted in the Report. The terms: 'NIS j.s.c. Novi Sad' and 'The Company' denote the parent company NIS j.s.c. Novi Sad, whereas the terms 'NIS' and 'NIS Group' pertain to NIS j.s.c. Novi Sad with its subsidiaries.

The Annual Report provides a concise and integrated overview of the financial and non-financial achievements of NIS Group in 2020 and shows how the

Group's strategic goals, corporate governance, achieved results and realised potential, in conjunction with the external environment, lead to generating the value in the short, medium and long term.

The Annual Report is compiled in Serbian, English and Russian language. In case of any discrepancy, the Serbian version shall prevail.

The Annual Report for 2020 is also available online on the corporate website. For any additional information on NIS Group, you may visit the corporate website www.nis.eu.

The Annual Report contains information explained in more detail in other sections of this Report, other reports or on the corporate web pages. There is also a glossary at the end of the Report with explanations of the abbreviations and acronyms used.

Referral to another	Referral to the
part of this Report	corporate website
or to other reports	www.nis.eu
of NIS Group.

Contents		Financial Statements	209
		Stand-Alone Financial Statements	210
		Independent Auditor's report
		on Stand-Alone Financial Statements	212
		Balance Sheet	218
		Income Statement	222
		Statement of other comprehensive income	225
		Statement of cash flows	226
		Statement of changes in equity	228
		Notes to the Stand-Alone
Contents	3	Financial Statements	230
NIS Group in 2020	4	Consolidated Financial Statements	318
Letter to shareholders	12	Independent Auditor's report
		on Consolidated Financial Statements	320
Business Report	18	Consolidated balance sheet	328
		Consolidated income statement	332
Independent Auditor's Report		Consolidated statement of other
on the Compliance of the Business Report		comprehensive income	335
with Financial Statements	18	Consolidated statement of cash flows	336
Highlights	22	Consolidated statement of changes in equity 338
NIS Group	28	Notes to the Consolidated
Strategy	44	Financial Statements	340
Risk Management	46
Business Environment	58	Report on Payments to
Performance Analysis	64	Governmental Authorities	436
OMS Еtalon	100
Securities	110	Statement of Individuals
Corporate Governance	118 Responsible for the Preparation
Human Resources	164	of Financial Statements	443
Environmental Protection, Industrial
and Occupational Safety	180	Appendices	447
Corporate Social Responsibility	194
Communication	200 General Information about NIS j.s.c. Novi Sad	448
Research and Development	204	Glossary	449
Further Development	206	Contact Details	455

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NIS Group

NIS Group in 2020

A total of

1,259

thousand t.o.e. of oil and gas equivalent were produced

Awards

and recognitions

Realized EBITDA of RSD

15.8

billion

In 2020, RSD

25.3

billion was invested

Retail network development

reconstrucion of 8 PSs

in Serbia

5 PSs were leased in B&H

one PS Otopeni was put into operation in Romania

Drilled wells in 2020:

1

According to results of "TalentX" research

carried out by the specialized portal

Poslovi.infostud.com, NIS was declared

Serbia's Most Attractive Employer

Award of the Serbian Chamber of Commerce "The Best Business Leader" was given

to Vladimir Gagić, director of the Refining Block at NIS

Special award of the Ministry of Defense

A total of	In 2020 sales volume of
3,613	3,538
thousand tonnes of crude oil and	thousand tonnes.
semi-finished products were processed

38 development wells	1 development
3 exploration wells	well in
in Serbia	Romania

of the Republic of Serbia was given to Gazprom neft, majority shareholder

of NIS, for its contribution to the defence system

in the fight against Covid-19

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NIS Group

Realization of key projects

Annual Report 2020

BOTTOM-OF-THE-BARREL PROJECT

The Bottom-of-the-Barrel Project with delayed coking technology is a capital investment of the second phase of the Pančevo Oil Refinery modernization, with a planned investment over EUR 300 million. The plant was ceremoniously put into operation on No-

vember 18, 2020.

The optimal utilisation of the refinery's capacity and the increased efficiency of oil refining in NIS is thus provided by the newly built DCU unit, increasing capacity from the current 86 to 99.2 percent. The op-

eration of the new plant has enabled increased pro-

duction of high-quality gasoline and diesel, as well as the production of coke, which has, until now, been imported. The realisation of the project also solved the problem of placing fuel oil with a high sulphur content, because instead of high-sulphur fuel oil, additional quantities of light products and coke are now produced. Also, the realised Bottom-of-the-Barrel project ensured that Serbia fulfils its international obligations to reduce the sulphur content in certain liquid fuels.

ТЕ-ТО PANČEVO

TE-TO Pančevo (hereinafter Pančevo Combined-Cy-

cle Power Plant) is a gas-steam combined cycle power

plant with an average power of up to 200 MW. Projected annual output is roughly 1,400 GWh. Construction of TE-TO Pančevo is part of the joint project by NIS j.s.c. and Gazprom Energoholding via Gazprom En- ergoholding Serbia LLC, where NIS j.s.c. holds a 49% share, while Centroholding holds a 51% share.

The total estimated value of the project is approxi-

mately EUR 180 million.

The start of operation of TE-TO Pancevo is expected during 2021.

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