Full Year Results and Notice of AGM

4 June 2013

Matra Petroleum plc

("Matra" or the "Company")

Full Year Results and Notice of AGM

Highlights

Operational

·; 2D & 3D Seismic survey conducted on the Sokolovskoe field

·; Management Prove and Probable (2P) estimate of 13.5 mmbbl

·; Production commenced from the A-13 well on the Sokolovskoe field, current average daily rate of 70bopd

Financial

·; Cash or cash equivalents of $4 million at year end

·; No debt

·; Loss per share 0.28 cents (2011: 0.90 cents)

Outlook

·; Management reviewing options to maximise the value of the Sokolovskoye field

·; Focused on identifying prospects to achieve objective of creating a mid-sized E&P of size and scale

Maxim Barskiy, Chief Executive of Matra, commented

"I am very positive about Matra's outlook as we have significantly advanced our evaluation of the best options to maximise the value of the Sokolovskoye field following the successful seismic programme, and begin to execute our strategy of creating growth through value accretive acquisitions.

We have made significant progress this year in evaluating potential acquisition opportunities, undertaking due-diligence on more than a dozen E&P businesses."

Notice of Annual General Meeting

The Company's Annual General Meeting will be held at the offices of BDO LLP at 55 Baker Street, London, W1U 7EU on 28 June 2013 at 11 a.m. The Notice of Annual General Meeting circular has been posted to shareholders and can be found at the Company's website, www.matrapetroleum.com 

For further information, please contact:

Matra Petroleum plc c/o Pelham Bell Pottinger

Henry Lerwill 020 7861 3169

Canaccord Genuity Limited

Henry Fitzgerald-O'Connor 0207 523 8000

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2012

CHAIRMAN'S STATEMENT

Dear Shareholder,

2012 has been a year of renewal for Matra Petroleum. In May we welcomed Maxim Barskiy as a cornerstone investor and CEO of the Company. Maxim is vastly experienced in the industry through his roles at TNK-BP and perhaps more relevantly to Matra, his time with West Siberian Resources when this company saw exceptional growth culminating in a merger with Alliance Oil.

Further to Maxim's appointment, we have broadened the operational and corporate team to support our portfolio management and business development strategy with Vladimir Lenski joining as Managing Director and Ekaterina Sapozhnikova as Chief Financial Officer, both with significant experience in the sector. In addition, we were delighted to welcome Matthias Brandl onto the board as a Non-executive Director. Matthias brings extensive corporate finance and business development experience within the natural resources sector.

The change of management provided a catalyst for a major review of the Company's strategy. The revised two-pronged strategy, which the Company has since articulated, was focussed firstly on reducing the technical uncertainties associated with the Company's Sokolovskoye Field interest, optimising near term cash flow from the field and assessing options for further risk reduction and for securing the maximum financial return from the asset.

The second element of Matra's revised strategy is to expand the Company's upstream portfolio, reducing the inherent exposure associated with a single asset company and developing the necessary "critical mass" to enable the Company to utilise fully the specific expertise and competitive edge of its management team. This strategy will see Matra expanding its Emerging Market focus to include Latin America, Central Asia, and Special Tax Regime Regions of Russia where the Company has already recognised a number of asset, portfolio and corporate opportunities. In many cases these opportunities are a reflection of, and have arisen as a direct result of, the tough financial market conditions within which the junior upstream oil and gas sector is presently operating.

The Company has focussed primarily on onshore properties underpinned by proven hydrocarbon Reserves and/or Contingent Resources. The Company has restricted its search to properties where there is clearly defined upside exploration or appraisal potential and where the Company believes it can bring to bear its particular technical and operational expertise to rationalise costs, achieve early incremental cash flow and deliver long term value accretion.

Over the last year we have carried out a detailed assessment of a wide variety of assets in several regions. We are encouraged by the quality of the assets potentially available within our target market; although macro-economic factors and the value being attributed by industry to certain assets, particularly in Russia, has held us back from concluding any acquisitions. We continue to look for suitable opportunities which reflect the aims of our clearly stated strategy, and which we are well placed to capitalise on fully.

With regard to our strategy for the Sokolovskoe Field, we have carried out a number of production enhancement activities and have acquired an important 2D and 3D seismic survey to better understand the geological structure of, and potential reservoir distribution within, the field. Integrating the seismic data with all other available geologic data has enabled the Company to carry out, internally, a full probabilistic re-evaluation of the Resources of the field and prepare a conceptual field development plan. This has, in turn, enabled the Company to consider a variety of strategic options for this asset going forward.

Another important event for the Company was the successful equity placing in April 2012, which raised £4.6 million, and ensured that the Company's cash position remains strong and Matra continues to operate without any debt.

We were deeply saddened to have to report in April of this year that Sir Michael Jenkins, Matra's Chairman from 2007, had passed away. Sir Michael's diplomatic and City career was one of great distinction, and we were extremely fortunate to receive the benefit of his wisdom, experience and leadership while he served as our Chairman. He will be sorely missed.

In summary, I am pleased to report that we have strengthened considerably the Matra Management team, and are now furnished with the expertise to drive the Company in an exciting new direction. We have established an acquisition led strategy with the stated aim of building Matra into a significant mid-cap oil and gas company, whilst continuing to asses and develop options for our current asset. I would like to conclude by thanking everyone in the Company for their continued hard work, and look forward to a successful year ahead for Matra Petroleum.

 James William Guest

Chairman

04 June 2013

DIRECTORS' REVIEW

Production

Operational activity in 2012 was focussed on increasing production and proving the economic viability of the Sokolovskoe field.

In April 2012, having completed the purchase and implementation of the necessary equipment, production started at the well A-13 on Sokolovskoe field, with an average daily rate of 26 bopd. This production rate was further increased in May 2012, when an electric submersible pump ("ESP") was installed, increasing the rate to 70 bopd.

Total production in 2012 was 11,925 bbl of oil (2011: 15,753 bbl of oil).

3D Seismic

In the second half of 2012 a seismic survey was conducted on Sokolovskoe oil field. The survey included 100 kilometers of 2D seismic and 60 square kilometers of 3D seismic.

The seismic results determined the complexity of the field configuration compared to what was previously mapped as one structure. The seismic data interpretation identified that the Aphoninsky reservoir splits into four separate domes within the boundaries of the license area from south-west to north-east.

Domes one and two (wells A-12 and A-13), are controlled by regional faults in the west. Dome two is limited by a downfold and local faults system in the east. Domes three and four, that may be classified as prospective resources and are controlled by downfolds and the wells from the nearby Olshanskoye field, encountered the Aphonensky reservoir below anticipated oil water contact. We believe that further exploration potential exists in these two structures in the northeast segment of the license area.

Processing and interpretation of seismic data was executed to the highest technical and professional standard. The quality of the completed works on Sokolovskoye field has fully met the objectives set by the Company and further proved the value of the field.

Internal Reserves Estimate

In light of the new seismic data and the results from wells A-12 and A-13 the Company completed a Field Development Plan and associated economic forecast for Sokolovskoe field and prepared an internal Reserves estimate for Sokolovskoe oil field.

The table below outlines Management's Reserves estimate for the sections of the Aphoninsky reservoir drilled by wells A-12 and A-13:

The Company is satisfied that these estimated Reserves subject to the Company receiving the necessary regulatory approvals, would result in an independent Competent Person's Report confirming these as Recoverable Reserves.

The identification of the potential reserves was an important milestone for Matra and demonstrated the significant potential of the Sokolovskoe oil field.

The Company is actively reviewing its options for maximising the value of the Sokolovskoe oil field. These include progressing with early development of the field, proceeding with further appraisal activities targeting the upside potential of the field, which the Company estimates includes further P50 Prospective Resources of 5 mmbbls of recoverable oil, or considering existing options for monetising part or all of the asset. Depending on the next course of action the Company may commission an independent Competent Persons Report over the Sokolovskoe field.

M&A activity and outlook

As the Company reviews its options to maximise the value of the Sokolovskoe oil field, we continue to access new opportunities as part of our acquisition led strategy. We have made significant progress over the past year in identifying prospects: the Company has reviewed over 20 potential acquisition opportunities in most oil prolific provinces in Russia including Volga-Urals, Timano-Pechora, West Siberia, East Siberia, Sakhalin as well as in CIS, Latin America, USA and other regions. We remain focused on achieving our objective of creating an E&P Company of size and scale.

I am confident of further success in 2013 as we look to maximize the value for shareholders.

Maxim Barskiy

Chief Executive Officer

04 June 2013

REVIEW OF OPERATIONS AND FINANCE

During the year the Company placed 575 million new ordinary shares with Mr Maxim Barskiy and issued 6.2 million new ordinary shares following the exercise of the options held by the Directors.

Test production of oil at the well A-13 commenced in the second half of 2011 and continued throughout 2012 reaching total production for the year of 11,925 bbl (2011: 15,753 bbl). In 2012 revenue from test production reduced by US$108,000 to US$ 503,000 (2011: US$611,000) due to the fact that only Well A-13 was producing oil.

The Group's total administrative expenditure in the year was US$ 4,855,000 (2011: US$10,128,000). The US$ 5,273,000 decrease was largely due to an impairment of US$ 7,400,000 recognised in 2011 in respect of Well A-12 and a decrease in share based payment charge from US$ 725,000 in 2011 to US$ 599,000 in 2012. The Group's general overheads increased by US$2,056,000 largely due to costs related to analysis of potential acquisition targets and termination payment of US$ 322,717 made to Mr P Hind who left the Company in May 2012 (note 6).

During the year Russian VAT refunds of US$53,000 (2011: US$389,000 and 2010: US$748,000) were received.

The Group capitalised exploration and evaluation expenditure in the year was US$1,954,000 (2011: US$ 2,266,000) relating primarily to the 2D and 3D seismic survey and the appraisal of well A-13.

At year end the Group had cash and cash equivalents totalling US$4,000,000 (2011: US$2,333,000 and 2010: US$2,959,000) (note 20). The Directors are confident in the Company's ability to secure the funding when it is required for future capital programme.

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2012

.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

The financial statements were approved and authorised for issue by the Board on 4 June 2013 and were signed on its behalf by:

Maxim Barskiy

Chief Executive Officer

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

The financial statements were approved and authorised for issue by the Board on 4 June 2013 and were signed on its behalf by:

Maxim Barskiy

Chief Executive Officer

CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2012

1. Accounting policies

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) issued by International Accounting Standards Board (IASB) as adopted by European Union.

These financial statements are presented in US Dollars and rounded to the nearest thousand (US $'000) .

The principal accounting policies adopted in the preparation of these financial statements are set out below. The policies have been applied consistently to all the years presented, unless otherwise stated.

Restatement - Change in presentation currency

The Directors have elected to present for the first time the Group's and Company's financial statements in US Dollars in order to make them comparable with the financial statements of its peers. This is a change from prior years when the financial statements were presented in Euros. The change represents a change in accounting policy and has been applied retrospectively.

Going concern

The Group's operations are cash generative and the current cash position is sufficient to cover the Group's administrative costs for the next 12 months.

As part of the licence commitments the Group is required to complete construction of no less than 1 exploration well before the end of 2013. In light of the technical re-interpretation arising from the 3D seismic survey, the technical team are in the process of considering the location of the commitment well. Following this a detailed plan will need to be agreed with the licensing authorities. For this reason it is not expected that the commitment well will be drilled within next 12 months. The relevant licensing authorities are aware of this and it is common practice to obtain extensions. The estimated cost of the well is approximately US$5 million. In the event of funding being required for the well costs the Directors have received assurance from the major shareholder that the funds will be available in the form of debt should the Company be obliged to start drilling within next 12 months.

(i) New standards, amendments and interpretations effective in 2012:

The following new standards and amendments to standards are mandatory for the first time for the Group for financial year beginning 1 January 2012. Except as noted, the implementation of these standards is not expected to have a material effect on the Group. 

(ii) Standards, amendments and interpretations that are not yet effective and have not been adopted early:

* Not yet endorsed by the European Union

The Group is evaluating the impact of the above pronouncements but they are not expected to have a material impact on the Group's earnings or shareholders' funds.

Basis of consolidation

Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the Board.

Business combinations

The consolidated financial statements incorporate the results of business combinations using acquisition accounting. In the consolidated statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained.

Foreign currency translation

Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate (their "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the consolidated income statement.

On consolidation, the results of overseas operations are translated into US Dollars (the presentational currency) at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Differences arising on retranslating the opening net assets and the results of operations are recognised directly in equity (the "foreign currency translation reserve").

Exchange differences recognised in the income statement of Group entities' separate financial statements on the translation of long-term monetary items forming part of the Group's net investment in the overseas operation concerned are reclassified to the foreign currency translation reserve on consolidation.

On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign currency translation reserve relating to that operation up to the date of disposal are transferred to the consolidated income statement as part of the profit or loss on disposal.

The following rates were used to translate these financial statements:

Revenue

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for oil and gas products provided in the normal course of business, net of discounts, VAT and other sales related taxes to third party customers. Revenues are recognised when the risks and rewards of ownership together with effective control are transferred to the customer and the amount of the revenue and associated costs incurred in respect of the relevant transaction can be reliably measured. Revenue is not recognised unless it is probable that the economic benefits associated with the sales transaction will flow to the Group. Revenue recognised in 2012 relates to oil sales from test production.

Cost of sales

During test production cost of sales cannot be reliably estimated and therefore a cost of sales equal to revenue is recognised and credited to the intangible exploration assets.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation is provided at rates calculated to write off the cost of assets, less their estimated residual value, over their expected useful economic lives on the following basis:

Property, plant and equipment - 25% per annum straight line.

The useful lives and residual values of Property, plant and equipment are re-assessed annually and any revisions taken to the income statement in the current period.

Intangible non-current exploration assets

The Group applies the successful efforts method of accounting for exploration and appraisal costs. Under the successful efforts method of accounting, all licence acquisition, exploration and appraisal costs are initially capitalised in well, field or specific exploration well cost centres as appropriate, pending determination. Costs are capitalised until commercial reserves are established or the exploration site is deemed to have no commercial value. Costs incurred on areas of interest where exploration is completed without success are impaired to the income statement.  

Pre-licence costs: costs incurred prior to having obtained the legal rights to explore an area are expensed directly to the income statement as they are incurred.

Exploration and appraisal costs are initially capitalised as an intangible asset. Intangible assets are not amortised prior to the conclusion of appraisal activities and determination of commercial reserves.

Impairment

All intangible assets are reviewed regularly for indications of impairment and costs are written off where circumstances indicate that the carrying value might not be recoverable. Any impairment is immediately written off to the income statement. The Group applies the successful efforts method of accounting where costs are capitalised in different cost centres for each well and the impairment review is carried out separately on each cost centre. There is one cash generating unit which is the licence area.

Investments

In its separate financial statements the Company recognises its investments in subsidiaries and associates at cost less allowances for impairments in value.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs included in bringing the inventories to their present location and condition.

Financial instruments

Financial assets and financial liabilities are recognised when the Group and the Company becomes party to the contractual provisions of the instrument. Financial assets are de-recognised when the contractual right to the cash flow expires or when substantially all the risk and rewards of ownership are transferred. Financial liabilities are de-recognised when the obligations specified in the contract are either discharged or cancelled.

Financial assets

The Group classifies its financial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Group does not have any held to maturity, available for sale or fair value through profit and loss assets.

Loans and receivables

Trade and other receivables are stated initially at fair value and subsequently at amortised cost (unless the effect of the time value of money is immaterial) less allowance for impairment in value.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short term highly liquid investments with an original maturity of 90 days or less.

Financial liabilities

The Group's financial liabilities consist of trade and other payables which are initially stated at fair value and subsequently at amortised cost. There are no liabilities recognised at fair value through profit or loss.

Tax

Income tax on the profit or loss from ordinary activities includes current and deferred tax.

Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowed and is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Income tax is charged or credited to profit or loss, except where the tax relates to items credited or charged to other comprehensive income in which case the tax is also dealt with in other comprehensive income, or when the tax relates to items credited or charged directly to equity, in which case the tax is also dealt with in equity.

Deferred taxation

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets and current tax losses have not been recognised since it is uncertain that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either the same taxable Group company or different Group Entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

Share capital

Issued and paid up share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

Share Based Payments

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated income statement over the remaining vesting period.

Where equity instruments are granted to persons other than employees, the consolidated income statement is charged with the fair value of goods and services received.

The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Exploration and evaluation costs

The exploration and evaluation costs are capitalised as intangible assets and are assessed for impairment when circumstances suggest that the carrying amount may exceed the recoverable value thereof. This assessment involves judgement as to the likely future commerciality of the asset and when such commerciality should be determined as well as future revenues and costs pertaining to the utilisation of the exploration and production rights to which such capitalised costs relate and the discount rate to be applied to such future revenues and costs in order to determine a recoverable value.

Share based payments

The Company makes equity-settled share-based payments to certain Group employees and advisers. Equity-settled share-based payments are measured at fair value using a Black-Scholes valuation model at the date of grant based on certain assumptions. Those assumptions are described in the note 17 to these financial statements and include, among others, expected volatility, expected life of the options and number of options expected to vest. More details including carrying values are disclosed in the note to the accounts.

3. Loss per share

Loss per share of 0.28 cents (2011: 0.9 cents) is calculated by dividing the loss attributable to equity shareholders for the year US$4,816,000 (2011: US$10,132,000) by the weighted average number of ordinary shares outstanding during the year of 1,717,649,244 (2011: 1,129,808,508).

The effect of all potential ordinary shares arising from the exercise of options going forward is considered to be anti-dilutive and therefore diluted earnings per share has not been calculated. At the reporting date there were 53,672,907 (2011: 59,650,000) potentially dilutive ordinary shares.

4. Parent Company's income statement

The Company has taken advantage of section 408 of the Companies Act 2006 and has not included its own income statement in these financial statements. The Company loss for the year after taxation was US$10,267,000 (2011: US$10,642,000).

5. Loss from operations

Staff costs do not include salaries and salary related taxes of technical personnel 2012: US$45,000 (2011: US$29,000) which have been capitalised to intangible assets.

6. Staff costs

Total staff costs (including Directors) comprise:

Directors' emoluments

Key management personnel include all parent company Directors and senior management in the UK, Russia and Cyprus. The highest paid director in 2012 was Maxim Barskiy who received $177,413.

The compensation for loss of office payment to Mr P Hind, who resigned on 18 May 2012, consists of a cash payment. The discretionary elements of this compensation were approved by the remuneration committee and were paid in respect of his past service to the Company.

7. Taxation

Below is a reconciliation of the theoretical income tax rate to the actual effective tax rate in the Group's income statement:

No deferred tax asset has been recognised on accumulated tax losses as the recoverability of such asset is uncertain at this stage.

8. Segmental reporting

The Group has two reportable segments:

·; Arkhangelovskoe: this segment is involved in the exploration of oil within the Arkhangelovskoe licence area in Russia; and

·; Head Office Operations: this segment is the head office of the Group.

The operating results of each of these segments are regularly reviewed by the Group's chief operating decision makers in order to make decisions about the allocation of resources and assess their performance.

The accounting policies of these segments are in line with those described in note 1.

The finance income, finance costs and taxation have been analysed above in line with the way the Group's business is structured.

All material non-current assets other than financial instruments are owned by the Russian subsidiary and are located in Russia.

Share based payments of US$599,000 (2011: US$725,000) relate solely to the Head Office.

All material capital expenditure in the current and previous years relate to the Arkhangelovskoe segment.

9. Finance income

10. Finance expense

11. Property, plant and equipment

Property, plant and equipment is comprised of office and computer equipment and transport vehicles.

12. Intangible assets

13. Investment in subsidiaries

14. Inventories

15. Receivables

The fair value of receivables is not significantly different from the carrying value.

During the year the terms of the inter-company loans have been revised with the repayment period extended to 2020 and annual interest reduced to 0.65% (2011 and 2010: 2% above the Russian Central Bank interest rate). Consequently the inter-company loans have been re-classified as a non-current investment.

Additionally, the previously recognised impairment of intercompany loans of US$13,695,000 has been reversed following the Directors' reassessment of the loan's recoverability and the Directors are confident that the full amount of the inter-company loans together with accrued interest will be repaid by 31 December 2020.

16. Trade and other payables

17. Share based payments