2022 Annual General Meeting

Rusneftegaz held our 2022 Annual General Meeting on 8 April at an event in Moscow, with delegates attending in-person for the first time since 2019. Whilst the notion of hosting a teleconference option was deliberated with key stakeholders in private discussions, the suggestion was unanimously rejected. The assembly was convened following the publication of our 2021 consolidated financial statements in the preceding days which, in conjunction with conversations regarding broader business strategy, were the primary focus of discussions held throughout the main session. These results were prepared in accordance with International Financial Reporting Standards, otherwise known as IFRS, and have been audited accordingly. It was also resolved to also approve our annual report, which provides a comprehensive discussion and analysis of the undertakings of last year, in conjunction with the other aforementioned documents. All tabled motions also passed without any issues arising, including a proposition to re-elect all members of the current board of directors. Nevertheless, it was agreed that the audit committee, whose composition is unaltered from last year, be bestowed with the power to nominate an alternative auditor if necessary. This is despite the fact that a proposition to reappoint our current independent auditor was unanimously approved, although we are yet to receive a commitment that this firm will be able to complete this process in 2024. If this were to occur, our delegates will be called to an Extraordinary General Meeting to vote on an amendment to this policy at the appropriate time. During the same session, these attendees chose to forego any type of dividend payment for a further twelve months, with management citing the need to reinvest earned funds into expanding many areas of our operations. Consequently, there was broad consensus amongst participants at this gathering that the prospects of our company were excellent, and that all of those affiliated with our organization have a valid reason to be optimistic about the future.

Overall, Rusneftegaz staged a remarkable recovery in financial performance in 2021, recording a net profit of $201,8 million from revenues of $655,8 million, despite the enduring coronavirus pandemic and its immediate consequences. Ultimately, the results realized in this economic data are so acute that the revenues and profits disclosed surpass previous records to become the most lucrative year in our history. In a period when our organization faced significant disruption following repeated office closures and aborted plans to reopen, our economic success over the past twelve months can mostly be attributed to the considerable rises in commodity prices that occurred following the historic lows in 2020. Consequently, turnover grew 33,6% from the $491,0 million announced in the prior year, with post-tax profits more than doubling by 132,1% from the $87,0 million announced in the last financial statements. This includes an excellent escalation in business in our oil and gas division, which announced earnings of $54,2 million from revenues of $242,8 million, marking a major improvement on the loss of $40,0 million accumulated from the paltry turnover of $141,3 million recorded for last year. There was a similar narrative in our energy generation sector, which in 2020 reported a decreased turnover of $345,8 million in conjunction with a marginally enhanced profit of $165,0 million. This improved conclusively in 2021, for which we can disclose a 19,4% improvement in income to $413,0 million and a 35,9% rise in profits to a total of $224,2 million. However, whilst these results are unashamedly positive for us, the deterioration of the geopolitical situation in Europe that has unfolded in the months prior to the publication of these statements may ultimately have an impact on both our short and long-term prospects. Whilst management believes it is too early to assess the impact of any potential consequences and ramifications for our organization, it is worth noting that we have placed significant resources, both monetary and time, into developing a global petroleum trading network in recent times. If punitive measures were to be enforced that restricted the trade of hydrocarbons originating from our primary area of work, this new area of interest may be forced to undertake extensive and potentially expensive changes to its business model to adapt to any necessary changes. Nevertheless, we have accumulated a large cash reserve over the course of the pandemic, which, which in addition with amassed knowledge and expertise of our company, should ensure the integrity of our organization in the near and distant future, regardless of the scale of the challenges faced. 

Be that as it may, it is vital to illustrate the extent of the monetary position aggregated by Rusneftegaz and our subsidiaries in recent times. On the 31 December 2021, we held total cash balances worth $403,2 million, a corporate record. This is a momentous 71,2% gain on the $235,5 million possessed by our organization at the cessation of 2020, which in itself was a 38,9% hike on the balance of $169,5 million under our control at the end of 2019. Although the greatest factor behind these astronomical gains is our continued and ongoing commercial success, it is also attributable to the suspension of our investment program throughout the majority of the coronavirus pandemic. Thus, it can only be ruled that these totals are artificially inflated figures, as in the weeks before this announcement it was resolved by our board of directors that now is an appropriate time to resume such expenditures. Furthermore, not only should such spending be restarted, the monies saved in these times should also be utilized to expedite the completion of the previously planned projects, so they can be concluded at the same time, or as close to, their original end date. In spite of such facts, we still managed to expend a meaningful sum of $54,4 million on new assets last year, albeit the total is a 63,8% decline on the $150,1 million spent in the twelve months before. Although, it remains conspicuous that the value of our property, plant, and equipment fell by 0,6% in these financial statements for the first time on record from $1,48 billion to $1,47 billion, primarily due to the investments made did not match the scale of the negative other factors that weigh on the appraisal of our assets. Therefore, it can be disclosed that we suffered depreciation, depletion, and amortization losses greater than that of our investments at a total of $62,0 million, albeit this figure is 10,9% down on the $69,5 million reported for last year. Similarly, our pool of property, plant, and equipment was also hindered by a charge of $1,7 million arising due to currency conversion differences, and a further $0,2 million reduction resulting from impairment losses, of which 89,1% is associated with our energy generation program. Whilst the latter represented a 99,2% decline on the $20,6 million contraction announced last year because of pandemic-related markdowns, nevertheless, there was a nominal gain of $1,2 million occurring due to the revaluing of existing assets, although this was itself a contraction of 75,6% on the $5,0 million gain the year prior. 

In spite of these changes, property, plant and equipment still compose the greatest percentage of our total assets, which at the end of 2021 were worth in excess of $1,96 billion. Whilst this total is considerable, it also illustrates a 10,5% year-on-year gain, when the value of our group was reported to be $1,78 billion. The figure for the most recent period consists of current assets, of which we expect to realize the worth of in the immediate future, tabulated at 24,9% of the $1,96 billion or $488,9 million, in addition to our holdings of non-current assets. Indubitably, these aforementioned resources correspond to the remaining 75,1% of the total, or $1,47 billion, but are considered by Rusneftegaz to be illiquid, or difficult to readily convert to cash. In addition to the equipment and property previously mentioned, these also consist of intangible assets worth $0,2 million, a figure unchanged from last year, plus both deferred tax assets also valued at $0,2 million and derivative financial instruments classified at $41,7 million. The latter saw a gain of $0,4 million registered in the statement of profit and loss as a source of other income, contributing to a 29,1% hike on the $1,3 million reported in 2020. The rise in value for the other non-current assets was not as preeminent, however, with deferred tax assets increasing marginally by 4,1%. On the other hand, there was monumental growth in the worth of our current assets, with a 59,9% rise in our receivables, ultimately appraised at $44,6 million, plus a 35,5% expansion in our inventories, accounted for at $35,0 million. This particular sum mostly consists of unrefined crude oil either in transportation or storage before processing, totaling $23,7 million, a value which more than doubled by 108,3% from the $11,4 million reported in 2020. Although this was primarily due to oil price rises that coincided with the end of the reporting period, there were similar gains in the values of refined petroleum products, which increased 36,5% from $1,3 million to $1,7 million, and other spare part and materials, which grew in worth by 6,4% from $1,0 million to $1,1 million. Howbeit, one of the few negative impacts of the fluctuations in commodities for our organization was the fact it made coal, necessary for the function of our power plants, more expensive to acquire. Therefore, our reserves of fuel declined from $12,2 million by 30,2% to $8,4 million, although this may expand next year should it become cheaper to accumulate a contingency supply once more. 

Moreover, the remaining $6,1 million of current assets consists of property held for sale, a figure that has been unaltered now for four years. These distinct goods serve as our de facto reserves, consisting of gold and silver bullion, and management did not feel it necessary to relinquish these contingencies despite the challenges faced during the coronavirus pandemic. Following an amelioration in the health situation, Rusneftegaz can announce a considerable reduction in our liabilities of 13,8%, with the largest contingent being those that are expected to be settled in the longer term, otherwise known as non-current liabilities. Whereas in 2020 the aforementioned borrowings comprise 32,2% of this type of obligation, at the end of the latest reporting period our commitments included $26,6 million of deferred tax liabilities and $27,3 million of provisions. Whilst the values of both sums increased last year by 3,4% and 1,6% respectively from their previous totals of $25,7 million and $26,9 million, the latter only elevated in its amount due to currency fluctuations. Such minimal changes occurred by virtue of a lack of a new assessment regarding the projected decommissioning costs of our current oil production sites upon the expiry of their corresponding licenses, or the cessation of petroleum extraction in an area. Whilst these outlays are anticipated to occur in the decades ahead, our more immediate concern is managing our short-term obligations, which are expected to be resolved imminently. At the end of the financial year, the total value of these debts and commitments was $42,0 million, a figure that rose by 25,0% from the previously disclosed sum of $33,6 million. Both these amounts include accounts payable, which constitute the greatest percentage of our current liabilities, which on 31 December 2021 composed 43,8% of all obligations and were registered as increasing by 16,0% from $25,9 million to $30,1 million. In comparison, the remaining 66,2% of our commitments, which are set to be settled in more than twelve months' time, is $53,9 million, with our non-current liabilities falling by 30,5% from $77,6 million. 

Therefore, we can disclose that at the end of the year $95,9 million of liabilities were held by our organization, a decline of 13,8% from $111,2 million, with the smallest component of these obligations being taxes payable reported at $11,9 million. One of the unintended consequences of our recent success has been significant and noticeable escalations in our taxes paid, with the aforementioned balance surging by 55,3% year-on-year from the considerably lower sum of $7,7 million. As a result, Rusneftegaz undertakes utilizes legitimate methods to reduce the burden of levies and taxation on our business, and can consequently acknowledge that we are liable for $53,5 million in corporate taxes arising from our activities in 2021. This charge is greater than double the $23,1 million paid last year, amounting to a total inflation of 131,7%. Likewise, there was also a similar escalation in taxes except income tax that we are liable for, but not any of the aforementioned charges, which rose by a similarly astronomical 25,9% from $6,5 million to $8,1 million. However, whilst such sums are sizable, management continues to see such expenses as a largely immitigable element of our enterprise. The costliest duty that we paid, moreover, is the mineral extraction tax, a levy due by producers of oil in the Russian Federation on the quantity of petroleum extracted. In the last period, this particular expense totaled $98,7 million, an ascension from $47,9 million, equaling a rise of 106,3% overall. The catastrophic rise in this particular charge can be solely attributed to recent and ongoing amendments to national taxation legislation mandating that the weight is reduced on hydrocarbon exporters to the detriment of producers. Whilst our managers are continuing to assess the role that these changes will have on our operations in the near and distant future, our preliminary judgement regarding these adjustments is not positive. Howbeit, there was a corresponding 32,1% reduction in the amount of export duties we paid, resulting in a fall from $31,9 million to $21,7 million arising as a result of said revisions, despite increases in international sales. One of the most evident features demonstrated in our latest financial statement is the growing importance of global trading for the continued success of our business. Of our disclosed revenue of $655,8 million, a figure of $124,6 million was earned outside the Russian Federation, the second-largest total in our corporate history. In 2021, 81,0% of our turnover was earned in our home nation, equating to $531,1 million. However, a meaningful 18,4% was accumulated in continental Europe, with the remaining 0,6% obtained in North America. Proportionately, this equates to $120,8 million and $3,8 million respectively, but also marks notable increases from the twelve months prior when revenue was significantly diminished. Similarly, a lower 77,9% of all turnover in 2020 was obtained in Russia, aggregated at $382,5 million, with $106,7 million and $1,8 million earned in Europe and the United States of America correspondingly. Whilst the latter two figures represent percentages 21,7% and 0,4% of revenues when compared to the contemporary totals recorded last year, these sums collectively demonstrate the progress our organization is making to vary our revenue streams from other regions. 

Although taxation constitutes a sizable proportion of our current expenses, it is only one of the components that comprise our costs of goods sold, which last year was recorded at $359,2 million. As per 2020 when this total amounted to $292,8 million, computing to a rise of 22,7%, the cost of fuel utilized in our energy generation operations continues to be our largest single outgoing each year. For this particular expenditure there was a colossal 42,5% rise in outlays, expanding from $84,1 million to $119,9 million. Although we have largely benefited in the rises in commodity prices that occurred over the past twelve months, the purchase of coal continues to be a necessity to continue to generate electricity, and our organization is therefore beholden to fluctuations in the values of such resources. However, we continue to maintain effective hedging policies that ultimately ensure that our company pays less than the spot price each month of the year. Despite such costs being mollified to a certain extent, after depreciation, depletion and amortization, our third-largest annual charge was wages, salaries and all other labor expenditures, calculated at $53,0 million. This epitomizes a year-on-year elevation of 7,9% from the $49,1 million paid in 2020, but these totals can be categorized further. Of the sums listed above, $45,6 million of the total is attributable to the personnel costs borne for our production operations, including all wages, benefits, and taxes associated with Rusneftegaz. This is equitable to a rise of 6,8% from the $42,7 million of compensation apportioned in 2020, and accounts for 86,0% of all remuneration. The remaining 14,0% encompasses administrative pay to those who work away from the field in offices, including our senior managers and directors. Overall, the total of these salaries was calculated at $7,4 million, inclusive of $2,9 million in compensation for the five members of our board of directors. The greater figure increased by 15,3% from the $6,4 million previously disclosed one year ago, and is associated with higher numbers of clerical staff working in our offices around the world following a moratorium on new administrative hires through the first phases of the pandemic. Additionally, there were also adjustments in other costs incurred on a group scale, with the value of our rents paid contracting by 13,1% from $11,1 million to $9,6 million. Whilst this includes leases for buildings and certain pieces of equipment used in our production operations, the majority of remaining expenses incurred over the past twelve months are attributable mostly to one aspect of our business. 

For example, our electricity generation sector was responsible for water supply charges worth $2,1 million, a value that rose by 12,7% from the $1,9 million reported in 2020. Although Rusneftegaz is currently undertaking steps to reduce our consumption and usage of water in all areas of our operations, we remain dependent on the local municipal water supply when our boreholes are unable to accommodate our requirements for that particular time. Likewise, the same division of our organization accounted for $2,1 million in both thermal and electric transmission costs, a value which rose 30,9% from the $1,6 million paid in 2020. Of the fees settled for last year, $2,0 million is associated with the former and a mere $0,1 million the latter, equating to inflation of 32,4% and 12,1% irrespectively when the expenses amounted to $1,5 million and a near-identical total of $0,1 million. Conversely, although the costs affiliated with the energy aspect of our business are substantial, they are equally comparable to those incurred whilst extracting petroleum. For instance, the charges levied by Transneft, the national oil transportation monopoly, for trucking crude oil to its designated loading point hiked by 13,1% from $4,9 million to $5,5 million. Moreover, despite maintaining rigorous polices to reduce such reparations, we paid fines and penalties worth $0,2 million in the last financial year, admittedly this is still a monumental 26,0% reduction from the $0,3 million sequestered in 2020. It should be noted, nonetheless, that our organization does not record all these fees solely as components of our costs of goods sold. Instead, these elements are recognized as both operating costs, totaling $29,4 million, and administrative expenses, in our consolidated statement of profit and loss and other comprehensive income. Whilst said number represents a 23,7% decline on the $38,5 million disclosed in the prior period, the aforementioned bureaucratic costs faced calculate to $15,1 million, a greater fall of 38,7% year-year from $24,7 million. These recessions can be solely referenced to reductions in pandemic related costs, whereas in the first year of the coronavirus pandemic Rusneftegaz was expending a material amount of monies on protection equipment, including masks and screens, by 2021 there were no further provisions required. The majority of our employees utilized their own facial coverings, and there have been adequate distancing measures enforced for some time. Consequently, the other costs recorded as a part of our administrative expenses collapsed by 72,5% from $14,9 million to $4,1 million. Howbeit, the preponderance of constituents recorded as elements of our organizational expenses enlarged in value last year, with legal and professional fees paid inflating by 7,3% from $2,3 million to $2,5 million. With this compensation being essential for adequate due diligence on the contracts Rusneftegaz enters into, similarly as vital remain the stringent insurance policies that our company and subsidiaries obtain on an annual basis. Last year, the quotes to continue our coverage increased by 6,8% to $1,1 million, ultimately ensuring that our business and the environment shall continue to be protected long into the future. 

Moreover, the outlays associated with maintaining all our existing assets and conducting repairs are both reported as the costs of doing business in addition to administrative expenses, depending on where the upkeep charges are incurred. The overheads associated with our offices continue to be nominal, reducing by $31,6% to remain decidedly less than $0,1 million. On the other hand, the budget for conserving our production and extraction plant and equipment burgeoned by 54,8% from $8,3 million to $12,8 million. Although in normal circumstances large increases in such expenses would normally be cause for alarm, management believes that such rises are affiliated with a reduction in non-essential maintenance that occurred during the points in the pandemic when restrictions were at their most severe. Thus, there is a likelihood that these costs may continue to stay the same, both in this period and into the immediate future. The overwhelming majority of our repairs were conducted on our petroleum assets, which are exposed to the elements and all inclement weather conditions, which at the end of the last financial year were valued at $761,2 million. Despite the fact that this represents a rise of 4,5% from the $728,7 million of properties held in 2020, such numbers are mediocre when compared to the $1,17 billion value of all our energy generation holdings. Whilst these saw a greater 15,9% improvement in worth from the 1,07 billion owned last year, all the aforementioned rises can be attributed to numerous factors. Firstly, of the $54,4 million invested in the twelve months covered by this report, $34,7 million is associated with new oil properties, in addition to the $19,6 million expended on electricity production equipment. Both these totals are down markedly year-on-year, with the former receding by 144,5% from $78,1 million, and the latter also contracting 127,2% from the previously reported value of $72,0 million. However, these gains were ultimately offset by losses caused by asset degradation and exhaustion, which continues to weigh as one of the greatest burdens upon our business. In this case, of the $62,0 million of such costs reported in 2021, $46,1 million was depreciated via our electricity production activities, whilst $14,6 million was depleted from our petroleum reserves. It is worth noting that the extent of the declines fell 12,1% and 7,7% from the decreases of $52,4 million and $15,9 million reported for the year before. Likewise, there was additionally an abatement of $1,2 million arising on our administrative assets, a 0,2% growth, which themselves totaled $34,4 million, including less than $0,1 million of new additions and representing no change from the year before. Contrarily, notwithstanding the fact that each of our divisions retained significant holdings of capital, each also held corresponding liabilities that were proportionally reduced from the values recorded in 2020. Of the $95,9 million in obligations held by Rusneftegaz and our subsidiaries, $53,9 million is associated with our oil and gas production business, falling 12,9% from $61,9 million. Similarly, the $46,6 million owed by our energy generation segment lessened by 15,2% to $39,5 million, and liabilities linked to neither sector also decreased by 8,7% from $2,7 million to $2,5 million. 

Nevertheless, the commitments accounted for in these financial statements shall ultimately be reduced via current and ongoing business success in the months, years, and decades ahead. This shall be achieved by continuing our efforts to vary our sources of revenue, not merely from different areas of operation, but from different nations and regions across the globe. Whereas, by the last reporting period 81,0% of our turnover was accumulated in the Russian Federation, totaling $531,1 million, with a further 18,4% earned in Europe and the remaining 0,6% from the Americas. With these latter percentages illustrating figures of $120,8 million and $3,8 million respectively, it should be considered that all the individual sales data indicates that revenue increased in every region that Rusneftegaz participated in. Turnover from Russia rose by 38,9% from $382,5 million, accounting for 77,9% of all business, and receipts from the countries west of Moscow heightened 13,2% from $106,7 million, computing to 21,7% of proceeds. Yet, the greatest expansion occurred in the United States, where revenues more than doubled from $1,8 million, equaling an overall enlargement of earnings by 113,8%. It also resulted in trade from the country increasing as a percentage of all turnover from 0,4% to 0,6%, a small yet pivotal rise. However, these receipts are exiguous upon the revelation that the largest contract we fulfilled in the twelve months of this financial data was worth $413,0 million, or 63,0% of all revenue. Whilst this solely embodies our earnings from our arrangement to generate electricity, we amassed additional sums of $102,9 million plus $82,4 million from petroleum supply deals. Whilst these contracts represent 15,7% and 12,6% of our annual turnover respectively, our organization collected more significant percentages of revenue from contracts in 2020. To summarize, our power production contract for that year amounted to 70,4% of all turnover, or $345,8 million, and the largest oil contract aggregated as 19,5% of the total, or $95,6 million. Moreover, the trading that resulted in these deals ultimately yielded material volumes of funds, with Rusneftegaz announcing $273,7 million in cash flows from operating activities, a 49,1% ascension on the $183,6 million accrued in 2020. This also includes a net financial income of $0,8 million, almost of all of which in interest accrued on monies held in savings accounts at banks, with a nominal sum mitigating these gains through the use of an overdraft facility at one of our subsidiaries. The net profit from our holdings represents a 10,3% advance year-on-year, when the amount collected was only $0,7 million. In spite of the return from these assets, there was, however, a net $25,0 million loss arising from financing cash flows following the repayment of all outstanding loans during December 2021. 

The settlement of these debts marked the end of an eventful year for Rusneftegaz, which continued to operate successfully despite an ongoing pandemic. The first quarter began with our organization functioning under severe health restrictions, including distancing measures and mandatory facemasks. Whilst the majority of our administrative staff worked remotely, the board of directors devised a plan that was published at the end of March to significantly revise our original five-year investment strategy. This was primarily to accommodate the diminished cash flows, in addition to the delays that have occurred since the advent of the decade. For instance, in 2019 our company maintained $158,4 million in works not yet completed and a further $17,0 million in contracts yet to be started. However, by last year these figures had diminished substantially by 92,4% and 94,9% respectively to total $12,1 million and $0,9 million, and in the past twelve months this decline has been exaggerated further with accompanying falls of 10,2% and 17,5%. As a result, in 2021 our organization held $10,8 million in assets not yet in service in conjunction with a supplementary $0,7 million in contracted works to be commenced imminently. Whilst this marked the nadir of the three-month period, the results announced for the quarter represented a vast improvement from the end of 2019. Overall, Rusneftegaz reported a pre-tax profit of $41,5 million, a monumental rise from the prior period but a year-on-year decline of 33,5%. This was established from revenues totaling $130,4 million, which is a similar rise of 31,4% from the quarter ended December 2020, but a fall from twelve months before by 14,7%. Thereafter, our organization continually recorded escalating turnover and profits for the remainder of the year, with the former accounting for $153,0 million in the second quarter, $180,0 million in the third and $192,4 million in the final period, a company record. These figures are equal to rises of 17,3%, 17,6% and 6,9% respectively from the three months before the quarter, in addition to year-on-year gains of 21,0%, 60,1% and 93,9% correspondingly. Likewise, we reported net profits rose 15,6% from the first three months of the year to $48,0 million, and were then ascended a further 5,3% in the third quarter to $50,5 million. Whilst these sums are respective escalations of 51,2% and 225,8% on the year before, the three months to the end of September was also the time that announced that our remote working policies would be retained for the foreseeable future, anticipating a further outbreak of coronavirus cases in the months ahead. This forecast was to prove correct, with our offices throughout Russia being forced to close between the end of October and the beginning of November. In spite of this, we were able to disclose a quarterly profit of $45,2 million, an ascension of 22,2% from the three months prior and a remarkable recovery from the same time in 2020 when a paltry sum of $0,3 million was announced. Our record-breaking year was also concluded with our annual awards ceremony, which gave management an opportunity to celebrate the achievements of our staff, with Oleg Patrushev and Eduard Kopeykin being selected to receive employee and young employee of the year respectively.  

However, it is the resolute belief of our board of directors that all our personnel should receive acclaim for their work in 2021 through challenging and unprecedented circumstances. This is demonstrated through a yield of 5,60 million barrels of oil and 9,44 TWh of electricity that were produced in the past twelve months. Whilst petroleum extraction fell year-on-year by 7,7% from 6,06 million barrels, energy generation increased by 10,4% from 8,55 TWh. As usual, this peaked in the last quarter of 2021 at 3,60 TWh when demand was at its apex, a 14,9% annual rise and a gain of 92,5% from the third quarter when 1,87 TWh of electricity was created. The July through September period marked the nadir of generation for the year, a reduction of 8,3% from the three months prior and a fall of 3,6% from 2021 levels of productivity. Similar totals of 1,93 TWh and 2,04 TWh were the result of the first and second quarters, equal to year-on-year increases of 9,7% and 20,0% respectively, but with the former figure representing a quarter-on-quarter decline of 38,7% and a growth of 9,7% in the latter. Conversely, oil extraction data was far more stable, fluctuating between the pinnacle of production in the third period totaling 1,43 million barrels and the lowest point in the second amounting to 1,37 million barrels. Likewise, the first and final quarters recorded extraction levels within this range, comprising 1,38 million barrels and 1,41 million barrels respectively. Most of these figures depict declines on a year-on-year basis, with a fall of 10,8% in the first period, 16,6% in the second, and then 1,6% and technically 0,0% in the third and fourth. Similarly, the volatility in production rates resulted in a 1,9% rise from the fourth quarter of 2020 to the first three months of last year, but then 3,0% fall in the next quarter, succeeded by a rise of 4,8% in the third and a decline of 3,5% to end 2021. However, it should be noted that such quarter-on-quarter changes were anticipated by our management, and are not cause for alarm, but instead should be acclaimed. Fundamentally, the ultimate consequence of this success throughout the year was the ascension in value of the Rusneftegaz as an entity by 10,5%, from $1,78 billion to $1,96 billion. In terms of equity, this rise is almost exclusively affiliated with changes in our retained earnings, which grew similarly by 10,7% from $1,89 billion to $2,10 billion. Whilst there was a nominal change of 2,7% to our asset revaluation reserve, which also rose from $45,4 million to $6,6 million, none of these advancements occurred as a result of new external investment despite the challenges faced during the pandemic. Our share premium remained stationary at $500,0 million, although one component of equity that changed in value, in addition to those previously mentioned, was our foreign currency translation reserve. This particular element degraded by 0,3%, falling further from $774,5 million to $776,5 million, and is solely accountable to the volatility in currency conversions that arose throughout 2021. The translation differences in the values of international monetary units also had a wider impact on our financial reporting, with the reduction of $2,01 million arising from our foreign currency translation reserve being accounted for as a component of other comprehensive income in our consolidated results.

​Despite this, we also acknowledged a small gain from foreign exchanges in the same profit and loss statement of $1,9 million, a momentous reversal from 2019 when a loss of $25,8 million was recorded in its place. Whilst the former represents an exceptional turnaround, the latter sum is closer to the $26,7 million diminishment of our current cash position that occurred in the past twelve months as a result of currency translation differences, as disclosed in our cash flow reports. In comparison, we announced a gain of $7,5 million for this area of our finances at this time in 2020. Whilst the majority of these totals may appear unfavorable at this time, our forecasts for our results next year are undoubtedly more pessimistic. The deterioration in geopolitical relations that has arisen in the months prior to the release of this financial report is anticipated to not only affect us in the immediate future, but also in the years ahead. Since the beginning of 2021 there has been a material deflation in the value of the Russian ruble, and while it has still recovered from its nadir in early March, the de facto purchasing power of the currency continues to be substantially reduced. Although in recent years our organization has undertaken actions to mitigate the effects of such volatility on our business, including through increasing international trading to create receipts deriving from other currencies, these efforts may have been in vain. Although our management maintains comprehensive contingency plans should controls on products of Russian origin take effect on the global markets, this is likely to be at the cost of heightened expenses for transactions and lowered potential revenues from sales. This period may be an opportunity for Rusneftegaz to enter new markets in different corners of the globe, but it is likely to occur to the detriment of relationships with long-standing partners and customers. The major caveat is that since the advent of the New Year, commodity prices have also remained unquestionably higher than their existing values for most of the past two decades, which is likely to offset any negative factors weighing on our enterprise. Moreover, it is unlikely that these prices will recede for some time, those jurisdictions that implement embargoes on Russian petroleum and refined products will almost certainly be unable to replace these goods with ease. In fact, it is reasonable to predict that arbitrary prohibition will have a wider economic impact on any such nation, to such an extent that these measures may be withdrawn sooner than otherwise anticipated. Consequently, next year our organization will continue to execute our international expansion plans with renewed haste and vigor, and will find means to guarantee our business succeeds in new countries and territories. The unceasing fulfillment of both our short and long-term strategic goals is paramount to the steadfast development of not only our entity, but our personnel also. Ultimately, we intend to be vigilant towards any potential changes that may afflict our organization in the times ahead, but our management is adamant that we retain the financial and intellectual resources to not only face these difficulties, but surmount them in a sublime manner.