OPEN JOINT STOCK COMPANY “BARQI TOJIK” Consolidated financial statements for the year ended December 31, 2023 and independent auditors’ report OSHC “BARQI TOJIK” TABLE OF CONTENTS Page STATEMENT OF MANAGEMENT’S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 2 INDEPENDENT AUDITOR’ REPORT 3-6 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023: Consolidated statement of financial position 7-8 Consolidated statement of profit or loss and other comprehensive income 9 Consolidated statement of changes in equity 10 Consolidated statement of cash flows 11-12 Notes to the consolidated financial statements 13-63 65 Stefan cel Mare şi Sfânt Blvd 7th Floor, Office 715 2001 Chisinau Moldova T: +373 22 233003 F: +373 22 234044 info@bakertilly.md www.bakertilly.md INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF OPEN JOINT STOCK COMPANY “BARQI TOJIK” Qualified opinion We have audited the accompanying consolidated financial statements of OPEN JOINT STOCK COMPANY “BARQI TOJIK” (the “Group”), which comprise the statement of financial position as at December 31, 2023, and the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at December 31, 2023, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as issued by the IASB. Basis for qualified opinion Property, plant and equipment As at December 31, 2023, the carrying amount of property, plant and equipment accounted for by the Group in the consolidated statement of financial position was 17,595,850 thousand TJS (December 31, 2022: TJS 16,887,673 thousand). The Group's property, plant and equipment were last time valued as at 31 December 2019 by independent qualified valuators. Subsequent assessment of significant changes in the fair values of items of property, plant and equipment from their carrying values and further revaluation of property, plant and equipment by the Group were not carried out. The Group has incurred significant losses in recent years, and the accumulated loss of the Group as at December 31, 2023 amounted to TJS 31,498,875 thousand indicating a possible impairment of the Group's property, plant and equipment. The Group did not formally estimate the recoverable amount of its property, plant and equipment as at 31 December 2023 in accordance with the requirements of IAS 36 Impairment of Assets, which requires an entity to estimate the recoverable amount of its assets if there is an indication that the assets may be impaired. During our audit procedures we inquired and did not obtain sufficient and appropriate audit evidence regarding the valuation of property, plant and equipment, and we were unable to perform any alternative procedures to satisfy ourselves whether any adjustment to this value was necessary at the reporting date on the Group's consolidated financial statements. Trade and other payables and Advances paid Confirmation letters As at 31 December 2023, the carrying amount of trade and other accounts payable was 9,009,839 thousand TJS (December 31, 2022: 9,936,216 thousand TJS) and long-term advances paid was 369,935 thousand TJS (December 31, 2022: 1,791,849 thousand TJS) and current advances paid 167,080 thousand TJS (December 31, 2022: 32,159 thousand TJS). The Group did not provide confirmation letters with counterparties for trade and other accounts payable, totaling 354,161 thousand TJS (Branch "Dushanbe Thermal Power Plant"- 307,366 thousand TJS and State Institution "Project Management Center for the Electric Power Sector"-46,795 thousand TJS), and long-term advances paid and advances paid totaling 444,870 thousand TJS (State Institution "Project Management Center for the Electric Power Sector"-444,870 thousand TJS). In the absence of these confirmation letters, we were unable to 3 perform any alternative audit procedures to obtain adequate and sufficient audit evidence regarding the completeness and accuracy of the amounts reported for trade and other accounts payable and long-term advances paid as of December 31, 2023 as well their classification and disclosure in the consolidated financial statements. Sangtuda-2 hydroelectric power station Since 2012, the Group has been receiving electricity from the Sangtuda-2 hydroelectric power station, which resulted in accrual penalties on overdue accounts payable in the amount of 3,069,493 thousand TJS as at December 31, 2023 (December 31, 2022: TJS 2,297,057 thousand). The accrued penalties were not recognized by the Group's management, as it expects to cancel the accrued penalties and is in the process of negotiations. We were unable to assess the likelihood of the accrued penalties being cancelled. If the penalties are not waived, trade and other payables as of December 31, 2023 will increase by 3,069,493 thousand TJS, accumulated loss will increase by 2,297,057 thousand TJS and net comprehensive income for the year ended December 31, 2023 will decrease by 772,436 thousand TJS. Share capital According to the consolidated statement of financial position as at December 31, 2023, the Group's share capital amounted to 10,947,763 thousand TJS (December 31, 2022: 10,952,745 thousand TJS). However, according to the statement from the State Register of Legal Entities, the share capital of OJSC "Barki Tojik" amounted to 14,527,904 thousand TJS, of which 8,828,499 thousand TJS were recognised as unpaid and 5,699,405 thousand TJS were recognized as paid. As a result, the Group's share capital as at December 31, 2023 in the consolidated financial statements was understated by 3,580,141 thousand TJS. Due to the fact that the Group's Management did not provide us with sufficient audit evidence on the accuracy of the balance of the share capital as presented in financial statements, we are unable to perform any alternative audit procedures to satisfy ourselves whether any adjustment to this value was necessary at the reporting date on the Group's consolidated financial statements. We performed our audit in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are described in the Auditor's Responsibilities for the Audit of the Annual Consolidated Financial Statements section of this report. We are independent of the audited entity in accordance with the Rules on Independence of Auditors and Audit Organisations and the Code of Professional Ethics for Auditors, consistent with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Professional Accountants, and we have fulfilled our other responsibilities in accordance with those professional ethics requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter Audit approach Going concern As presented in Note 3, We analyzed the management's assessment of the business continuity the financial statements hypothesis: have been prepared on a a) We requested and obtained a letter of financial support on behalf of the going concern basis. The shareholder signed by Ministry of Energy and Water Resources of the Republic key judgments that led to of Tajikistan dated on June 24, 2024 stated that sufficient financial support will this conclusion are set out be granted to the Group to continue operating under going concern and meet its in that note obligations as they become due. 4 Emphasis of matters Without further qualifying our opinion we draw attention to the following matters: The consolidated financial statements for the year ended December 31, 2022 were audited by another auditor, who expressed an unmodified opinion. As part of our audit of the consolidated financial statements for the year ended December 31, 2023, we made adjustments to the comparative figures for the year ended December 31, 2022 as shown in Note 6 to the financial statements. In our opinion, these adjustments are appropriate and properly implemented. We have not performed an audit, review, or any other procedure with respect to the financial statements of the Group for the year ended December 31, 2022, except for the adjustments set out in Note 6, and accordingly, we do not express an opinion or any other form of assurance regarding financial statements for the year ended December 31, 2022 as a whole. Our opinion is not modified in respect of these matters. Other matter This report, including the opinion, has been prepared for and only for the Group’s members as a body. To the fullest extent, permitted by the Law, our audit work has been undertaken so that we might report those matters that we are required to report in an Auditor’s Report and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purposes or to any other person to whose knowledge this report may come to. Responsibilities of management and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process. Auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit 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 Group’s internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 5 • conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Baker Tilly Klitou and Partners SRL July 31, 2024 6 OJSC “BARQI TOJIK” CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2023 (in thousands Tajik somoni) Notes December 31, December 31, 2023 2022 (restated) ASSETS: NON-CURRENT ASSETS: Property, plant and equipment 7 17,595,850 16,887,673 Intangible assets 1,056 963 Long-term advances paid 8 369,935 1,791,849 Long-term investments 9 182,400 182,400 TOTAL NON-CURRENT ASSETS 18,149,241 18,862,885 CURRENT ASSETS: Inventories 10 961,644 610,155 Trade and other accounts receivable 11 451,147 604,732 Advances paid 12 167,080 32,159 Taxes paid in advance 13 98,696 68,004 Cash and cash equivalents 14 91,980 43,042 TOTAL CURRENT ASSETS 1,770,547 1,358,092 TOTAL ASSETS 19,919,788 20,220,977 EQUITY AND LIABILITIES: EQUITY: Share capital 15 10,947,763 10,952,745 Revaluation reserve on property, plant and equipment 4,851,705 5,101,272 Reserve capital 24,302 24,302 Accumulated deficit (31,498,875) (28,033,304) TOTAL EQUITY (15,675,105) (11,954,985) NON-CURRENT LIABILITIES: Long-term borrowed funds 16 10,102,086 9,511,557 Long-term portion of deferred income 17 3,329,361 2,342,932 Deferred tax liability 22 724,967 762,214 TOTAL NON-CURRENT LIABILITIES 14,156,414 12,616,703 7 OJSC "BARQI TOJIK" CONSOL IDATED STATEMENT OF FINANCIAL POSITION �S AT DECEMBER 31, 2023 (CONTINUED) (m thousands Tajik somoni) Note December 31, December 31, s 2023 2022 (restated CURRENT LIABILITIES: Short-term borrowed funds 16 9,564,213 8,220,557 Trade and other accounts payable 18 9,009,839 9,936,216 Advances received 19 44,720 1,147 Taxes payable 20 35,168 136,503 Other payables and accrued expenses 21 2 784 539 1,264,836 TOTAL CURRENT LIABILITIES 21,438,479 19,559,259 TOTAL LIABILITIES 35,594,893 32,175,962 TOTAL EQUITY AND LIABILITIES 19 919 788 20 220 977 Dustmukhamedov Chief Accountant JJ J July 31, 2024 Dushanbe, Dushanbe, Republic of Tajikistan Republic of Tajikistan The notes on pages 13-6 3 form an integral part of the consolidated financial statements. The Independent Auditors' Report is on pages 3-6. 8 OJSC "BARQI TOJIK" CONS OLIDATEDSTATEMENT OF PROFIT ORLOSS AND OTHER COMPREHENSIVE INCOME FORTHEYE AR ENDEDDECEMBER31 2023 (in thousands Tajik somoni) Notes Year ended Year ended December 31, 2023 December 31, 2022 (restated) Revenue 23 3,694,540 3,302,795 Cost of sales 24 (3,779,533) (3,477,338) Gross (Loss) (84,993) (174,543) Selling expenses 25 (64,450) (200,366) General and administrative expenses 26 (90,497) (230,534) Net (loss)/gain on foreign exchange operations (1,653,547) 2,819,538 Financial expenses 27 (2,016,610) (2,449,996) Other non-operating income, net 28 167,357 154,740 LOSS BEFORE INCOME TAX (3,742,740) (81,161) Income tax benefits 22 - 142,512 NET OPERATING (LOSS)/INCOME (3,742,740) 61,351 Other comprehensive income TOTAL COMPREHENSIVE (LOSS)/INCOME (3,742,740) 61,351 A Dustmukhamedov A� G Chief Accountant July July 31, 2024 Dushanbe, Dushanbe, Republic of Tajikistan Republic of Tajikistan The notes on pages 13-63 form an integral part of the consolidated financial statements. The Independent Auditors' Report is on pages .3-6 9 OJSC "BARQI TOJIK" CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousands Tajik somoni) Notes Share Reserve capital Revaluation Accumulated Total capital reserve on deficit equity property, plant and equipment Balance at Janua ry 1, 2022 (restated) 15 2,124 246 24 302 5,363,682 12 a1419134al 120,901111si Increase of charter capital 8,828,499 8,828,499 Depreciation of revaluation of property, plant and equipment (324,693) 324,693 Deferred ta xes from revaluation of prope;ty,plant and equipment 62,283 62,283 Income for the year 61,351 61,351 Balance at December 31, 2022 (restated) 15 10,952,745 24,302 5,101,272 {28,033,304l p1,954,985l Disposal of subsidiary company (4,982) (6,750) 5,137 (6,595} Dividends (8,032) (8,032) Depreciation of revaluation of property, plant and equipment (280,064) 280,064 Deferred taxes from revaluation of property.plant and equipment 37,247 37,247 Loss for the year (3,742,740) (3,742,740) Balance at December 31, 2023 15 10,947 763 24,302 4,851,705 p1,498,875l {15,675,105l nt of the Group: Asoz Dustmukhamedov A. Gen Chief Accountant July 3 July 31, 2024 Dusha _ 1kistan Dushanbe, Republic of Tajikistan The notes on pages 1 :,.53 form an integral part of the oonsolidated financial statements. The Independent Auditors' Report is on pages .:.-6 10 OJSC “BARQI TOJIK” CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousands Tajik somoni) Notes Year ended Year ended December 31, December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Proceeds from energy sales 3,688,183 3,359,945 Other income from operations 2,481 2,634 Total cash inflow from operating activity 3,690,664 3,362,579 Inventory purchase (1,187,028) (1,255,275) Payment for services (448,871) (368,202) Electricity purchase (1,008,456) (364,260) Interest payment (618,541) (361,053) Other taxes payment (337,896) (319,904) Payroll and social tax (250,937) (202,973) Income tax payment - (13,513) Other operating payments (28,745) (44,047) Total cash outflow from operating activity (3,880,474) (2,929,227) Net cash (outflow)/inflow from operating activities (189,810) 433,352 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (70,397) (194,114) Other income from investment - 69 Net cash outflow from investing activities (70,397) (194,045) CASH FLOWS FROM FINANCING ACTIVITIES: Grants received 635,252 216,060 Proceeds from borrowings 239,981 573 Principal payments of loans received (563,793) (465,426) Net cash inflow/(outflow) from financing activities 311,440 (248,793) 11 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 1. GENERAL INFORMATION (continued) Open Joint Stock Company "Barqi Tojik" (hereinafter – the "Group") was registered with the Ministry of Justice of the Republic of Tajikistan on June 3, 1999. The Group and its subsidiaries (hereinafter collectively referred to as the "Group") carry out their activities on the territory of the Republic of Tajikistan. The Group is a joint-stock Group and was established in accordance with the legislation of the Republic of Tajikistan. The Group’s principal activity is generation and sale of electricity and thermal energy in the Republic of Tajikistan. The Group also exports electricity to neighboring countries. Electricity is generated on five hydro and two thermal power stations, which are the structural units of the Group. Operating activity of the Group is regulated by the Law of the Republic of Tajikistan “On natural monopolies” (the “Law”), as the Group has a dominant position in generation and supply of electricity in the Republic of Tajikistan. In accordance with the Law, tariffs of the Group shall be coordinated and agreed with the State Agency for Antimonopoly Policy and Business Support under the Government of the Republic of Tajikistan (hereinafter referred to as the “Agency”). The key customers of electricity is OJSC “Shabakahoi taqsimoti bark” and the customer of thermal energy of the State Unitary Enterprise City Heating Networks of Dushanbe. The Group's head office is located at 64 I. Somoni Ave., Dushanbe, Republic of Tajikistan. As at December 31, 2023 and 2022, the sole shareholder of the Group was the Government of the Republic of Tajikistan. Ultimate control of the Group’s activity is carried out by the Government of the Republic of Tajikistan. The Group has the following branches and representative offices: 2023 2022 Branch Nurek HPP Nurek HPP Branch Baipaza HPP Baipaza HPP Branch Cascade of Vakhsh HPPs Cascade of Vakhsh HPPs Branch Cascade of Varzob HPPs Cascade of Varzob HPPs Branch Kairakkum HPP Kairakkum HPP Branch Branch "Dushanbe Thermal Power - Plant -2" Branch Branch "Transport base and coal - supply" Branch Branch "Dushanbe Thermal Power OJSC "Dushanbe Thermal Power Plant" Plant" Branch Branch "Javanskaya CHPP" OJSC "Javanskaya CHPP" Branch DPMTO "Tajikenergosnab" DPMTO "Tajikenergosnab" Branch - Nursery-kindergarten 22 Under the management of "Barqi - “Remontno-Mekhanicheskiy Zavod” Tojik" OJSC Subsidiary - LLC Bark-Service The main activity of the subsidiary is related to the repair of electrical equipment. The share of OJSC "Barqi Tojik" in the authorized capital of the Group is 100%. The Group implements certain projects financed by its own and attracted by the Government of the Republic of Tajikistan credits and grants from the international financial institutions. These projects are coordinated and managed by the State Institution "Project Management Center for the Electric Power Sector", an independent, specialized structure operating under the Government of the Republic of Tajikistan. The total number of Group employees as at December 31, 2023 and 2022 was 4,408 and 4,382 employees, respectively. 13 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 2. OPERATING ENVIRONMENT AND DEVELOPMENT OF THE ENERGY INDUSTRY Operating environment Emerging country economies, such as the Republic of Tajikistan, are exposed to various risks, including economic, political and social, and legal and legislative risks. Past experience shows that potential and actual financial constraints, along with an increased level of perceived risks associated with investing in emerging economies, can adversely impact the national economy as a whole and its investment climate in particular. Laws and regulations affecting businesses in the Republic of Tajikistan continue to evolve. Tax, currency and customs legislation within the country are subject to varying interpretations, and other legal and fiscal difficulties leading to the challenges faced by the Group operating in the Republic of Tajikistan. The future economic direction of the Republic of Tajikistan is largely dependent on economic, fiscal and monetary measures undertaken by the government, together with legal, regulatory developments. These consolidated financial statements do not include any adjustments that would have been required due resolution of the uncertainty in the future. Possible adjustments may be made to the consolidated statements in that period in which necessity of their reflection will become evident, and it will be possible to estimate their numerical values. Developments in the energy sector Industry sector as well as other sectors of the Republic of Tajikistan are experiencing significant restructuring and reform (the process of transformation of the country with a planned economy into a state with a market economy), and future directions and results of reforms can be reviewed and modified as necessary. Potential reforms in tariff policy, repayment of debt by state enterprises, reorganization of the market of gross sale and implementation of measures to promote competition in gross sale market, can have a significant impact on sector entities. 3. PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS Compliance statement These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (the “IFRS”) issued by the International Accounting Standards Board (the “IASB”) and Interpretations issued by the International Financial Reporting Interpretations Committee (the “IFRIC”). Use of estimates and assumptions The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Due to the inherent uncertainty in making those estimates, actual results reported in future periods could differ from such estimates. Basis of presentation These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”), which collective term includes all International Accounting Standards and related interpretations, promulgated by the International Accounting Standards Board (“IASB”). Due to the transition methods chosen by the Group in applying these standards, comparative information throughout these consolidated financial statements has not been restated to reflect the requirements of the new standards. A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2023 and earlier application is permitted; however, the Group has not early adopted the following new or amended standards in preparing these consolidated financial statements. 14 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 3. PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued) Going concern These consolidated financial statements have been prepared on the assumption that the Group is a going concern and will continue its operation for the foreseeable future. At December 31, 2023 The Group accumulated losses in the amount of 31,498,875 thousand somoni (31 December 2022: 28,033,304 thousand somoni). These factors indicate the existence of a material uncertainty, which may cast significant doubt about the Group’s ability to continue as a going concern. The financial deficit is mainly covered by financing provided by the Government in the form of loans (Note 16). The Government of the Republic of Tajikistan owns a Group that generates, distributes and sells the bulk of the electricity consumed in the Republic of Tajikistan. The electricity generated by the Group remains a key element for the country's economy, as well as fundamental for the implementation of the social and economic goals of the Government. According to the Decree of the Government of the Republic of Tajikistan dated October 28, 2020 No. 571 On State financial support of the closed joint-stock holding company “Barqi Tojik”, the Ministry of Finance of the Republic of Tajikistan, the State Committee for Investment and State Property Management of the Republic of Tajikistan jointly with the OJSC "Barqi Tojik" until December 31, 2021, shall: • Bring into compliance the terms of loan agreements between the Republic of Tajikistan and development partners, in view of no more than 1 percent rate. • Determine and submit, in accordance with Appendix 2, the difference between the initial and adjusted rates, as well as accrued fines under the terms of sub-loan agreements, to the authorized capital of OJSC "Barqi Tojik" on the date of liabilities renewal. Management has reasonable expectation that the Group will continue to receive financial support from the sole shareholder of the Group - the Government of the Republic of Tajikistan and based on that consideration, the Group management expects that the Group will continue its ordinary operations in the foreseeable future in accordance with the principle of going concern. Functional and presentation currency The functional currency of each of the Group’s consolidated entities is the currency of the primary economic environment in which the entity operates. The functional currency of the Group and the Group’s presentation currency is national currency of the Republic of Tajikistan Tajik somoni (the “somoni”). Basis of consolidation The consolidated financial statements incorporate the consolidated financial statements of the Group and entities controlled by the Group (its subsidiaries), which are recorded as branches for the purpose of the consolidated financial statements as at December 31, 2023 and 2022. The subsidiary is consolidated from the date of acquisition, which is the date when control is obtained over the subsidiary, and discontinued from consolidation when the control is lost. The consolidated financial statements of the subsidiaries are prepared for the same period as for the Group, based on consistently applied accounting policy for all branches of the Group. Changes in ownership of subsidiaries without loss of control are treated as transactions equity. If the Group loses control over the subsidiary the following is reflected: • discontinues recognition of assets and liabilities of the subsidiary; • records the fair value of proceeds received in exchange; • records fair value of outstanding portion of the investment; 15 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 3. PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS (continued) • records gains or losses in statement of comprehensive income; • reclassifies interest of the Group in subsidiaries, recognised in other comprehensive income before to statement of comprehensive income or retained earnings in accordance with particular requirements. The consolidated financial statements of the subsidiaries are prepared for the same period as the Group, based on consistently applied accounting policy for all branches of the Group. All intra-Group transactions, balances, income and expenses are eliminated in full on consolidation. 4. SIGNIFICANT ACCOUNTING POLICIES Electricity sales Revenue from sale of electricity is recognised when customers on post-paid metering are billed for the power consumed. The billing is done for each monthly billing cycle based on the units consumed as read on the customers’ electricity meters and the approved customer tariffs. Revenue from sale of electricity is recognised in the consolidated financial statements net of valued added tax (VAT). Foreign currency transactions The functional currency of the Group and the Group’s presentation currency is national currency of the Republic of Tajikistan Tajik somoni (the “somoni”). The Group applies direct method of consolidation, and upon disposal of foreign investment performs the reclassification of gains and losses from translation differences to the statement of profit or loss and other comprehensive income. December 31, December 31, 2023 2022 Somoni / USD 10.9571 10.2024 Somoni / EUR 12.0944 10.8911 Somoni / Russian rouble 0.1217 0.1445 Somoni / XDR 14.7008 13.5778 Transactions in foreign currency are initially recognised by the companies of the Group in functional currency at exchange rate at the date of transaction. Monetary assets and liabilities denominated in foreign currency are revalued at spot rate of functional currency effective at the reporting date. All foreign currency differences are transferred to the statement of profit or loss and other comprehensive income. Non-monetary lines at historical cost in foreign currency are recognised at exchange rate effective at the date of initial transaction. Non-monetary lines at revalued method in foreign currency are recognised at the exchange rate effective at the date of consideration of fair value. Gains and losses arising from non-monetary items are treated same as gains and losses from foreign currency transactions. Assets and liabilities in foreign investments are translated to somoni at the exchange rate effective at the reporting date, and statement of comprehensive income of such subsidiaries, are recorded at the rate effective on the date of transaction. Translation differences arising from such treatment are recorded in 16 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) other comprehensive income. Upon disposal of foreign investment the component of other comprehensive income, related to this foreign investment are transferred to the statement of profit or loss and other comprehensive income. Revenue recognition Revenue is recognized only if inflow of economic benefits to the Group is probable, and if revenue can be reliably measured, despite of the timing of cash proceeds. The revenue is measured at fair value of the consideration received or receivable, in accordance with contractual terms of payments. Interest income Interest income and expense on financial instruments held at amortised cost, and interest bearing financial assets, classified as held-for-sale are recognised based on effective interest rate method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition. The interest income is added to finance income in the statement of profit or loss and other comprehensive income. Taxes Current income tax Current tax assets and liabilities for the current period as measured at recoverable from or payable to taxation authorities. The tax rates and tax legislation applied for calculations are the rates and legislation accepted or factually adopted as at reporting date in the countries, where the Group performs its activities and has taxable income. Deferred taxes Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences, except for cases when: • Deferred tax liabilities arising at initial recording of goodwill, asset or liability as a result of transaction other than business combination, and at transaction date does not impact accounting profit nor taxable profit or loss; • Taxable temporary differences in respect of investments in subsidiaries, associates, as well as interest in joint ventures, and if possible to control distribution by periods related to recoverability of temporary differences, and there is high probability of recovery of temporary difference in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences, unused tax incentives and unused tax losses, to the extent of highly probable upcoming profits, against which the recovery of deductible temporary differences, unused tax incentives and unused tax losses will take place, except for: • Deferred tax asset, related to temporary difference as a result of initial recognition of asset or liability arising from business combinations, which at the date of transaction does not impact accounting nor tax profit or losses; • Deductible temporary differences as a result of investments in subsidiaries, associated companies, as well as interest in joint venture where the deferred tax assets are recognised to the extend of highly probable upcoming profits, against which the recovery of deductible temporary differences, unused tax incentives and unused tax losses will take place. 17 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) The book value of deferred tax assets is reviewed at each reporting date and decreased to the extent of sufficient profits, which will allow to use all or part of the deferred tax assets, are assessed as unlikely. Deferred tax assets not recognised in the statements are reviewed at each reporting date and are recognised to the extent, when there is high probability of upcoming profits, allowing to recover such tax assets. Deferred tax assets and liabilities are valued at tax rates, which are expected to be applied in the period, when such asset will be recovered or liability settled at tax rates (tax regulation), which were accepted or factually adopted at the reporting date. Deferred tax, related to the components other than statement of comprehensive income, as also not recorded in statement of comprehensive income. The deferred taxes are recognised in accordance with underlying transactions or in as a component of other comprehensive income, or directly on equity. Deferred tax assets and liabilities are offset only if there are legal right for offset of current income tax assets and liabilities, and deferred taxes are related to the same Group and tax authority. Property, plant and equipment After initial recognition as an asset, property, plant and equipment are carried at revalued cost, being the fair value of the object on the date of revaluation less any subsequent accumulated depreciation and impairment losses. The equipment is held at revalued amount less accumulated depreciation and/or accumulated loss from impairment, if any. This cost includes cost of replaced spare parts, as well as borrowing costs, in case of non-current construction projects, when certain criteria are met. When there is a need for significant component replacement within defined period the Group disposes the replaced component and recognizes new components in accordance with useful life and depreciation. Expenses related to major technical check are included to the cost of the asset, as replaced equipment, when related criteria are met. All other expenses for maintenance are included in the statement of profit or loss and other comprehensive income as incurred. The buildings are held at revalued amount less accumulated depreciation and impairment losses. Depreciation is charged on the carrying value of property, plant and equipment to write off assets over their useful life. Depreciation is charged at straight line method at the following rates: Property, plant and equipment Group Useful life (years) 1. Buildings 3-98 2. Constructions - Transmission equipment 2-90 3. Machinery and equipment - Hydro turbines 5-50 - Electronic equipment 4-50 - Production equipment 3-75 4. Other fixed assets - Vehicles 3-25 - Office equipment 3-20 - Furniture and appliances 3-50 - Leasehold improvements 6-55 - Land improvements 6-50 An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss, and presented in the statement of comprehensive income for the period, when derecognition took place. 18 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) The useful life term and depreciation method are annually reassessed, and adjusted if needed. Intangible assets Intangible assets with finite useful lives that are acquired separately are carried at cost. Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date. Subsequent to initial recognition, intangible assets acquired are recorded at cost less accumulated amortisation and accumulated impairment losses (if any). Internally generated intangible assets, except for development costs included to the cost of an asset are not capitalized, and related expenses included in the statement of comprehensive income in the period, when incurred. The useful life of intangible assets can be definite or indefinite. Intangible assets with definite useful life are amortised during the period of this period and subject for impairment assessment if such indicators exist. The period and amortisation method for all intangible asset with definite useful life are reassessed at least at each reporting date. Changes in estimated useful life or structure of inflow of future benefits inherent to the asset are added to the consolidated financial statements as changes in period and method of amortisation, depending on situation, and disclosed as changes in estimates. The amortisation expenses for intangible assets with definite useful life recognised in the statement of comprehensive income in the category, which relates to the function of the intangible asset. Intangible assets with indefinite useful life are not amortised, rather tested separately for impairment on an annual basis. The useful life term of intangible assets with indefinite useful life is reviewed on an annual basis in order to determine whether it is reasonable to continue classify the asset as intangible asset with indefinite useful life. If it is not acceptable, the change in useful life of an asset is prospectively changed from indefinite to definite. Gains and losses from disposal of intangible assets are measured as difference from proceeds and book value of the asset and recognised in the statement of comprehensive income at the date of disposal of use asset. Patents and licenses Patents are issued for the period of 10 years by the relevant state body with a right to prolong. License on right for intellectual property issued from 5-10 years, depending on type of license. Licenses can be prolonged in the end of the term, if the Group will comply with preset conditions. Prolongation can be made for notional fee or free of charge. Therefore the useful life of these licenses is treated as indefinite. Impairment of tangible and intangible assets At the end of each reporting period, the Group assesses whether there is any indication that fixed and intangible assets may be impaired. If any such indication exists evaluation is carried out for a possible reduction in the recoverable amount of assets (if any). If it is impossible to estimate the recoverable amount of an individual asset, the Group determines the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately as an expense, except where the relevant asset (land, buildings, or equipment) carried at a revalued amount. In this case the impairment loss is recognized as a reduction of revaluation of the respective fund. 19 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) If an impairment loss subsequently reverses, the carrying amount of an asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined if the asset was not recognized an impairment loss (cash-generating unit) in prior years. Reversal of an impairment loss is recognized immediately in the statement of profit or loss and other comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. During write-off of a revalued property, plant and equipment, the amounts included in the revaluation reserve are transferred to retained earnings. Government grants Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognized as expenses, in the period when such expenses incurred. Borrowing costs include the payment for interest and other expenses, incurred by the Group in respect of borrowings. Financial instruments – initial recognition and subsequent measurement (а) Financial assets and liabilities recognition A financial asset is any asset that is: (a) cash; (b) an equity instrument of another entity; (c) a contractual right: (i) to receive cash or another financial asset from another entity; or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; or (d) a contract that will or may be settled in the entity’s own equity instruments and is: (i) a non‑derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments; or 20 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) (ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose the entity’s own equity instruments do not include puttable financial instruments classified as equity instruments hat impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation and are classified as equity instruments, or instruments that are contracts for the future receipt or delivery of the entity’s own equity instruments. A financial liability is any liability that is: (a) a contractual obligation: (i) to deliver cash or another financial asset to another entity; or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or (b) a contract that will or may be settled in the entity’s own equity instruments and is: (i) a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments; or (ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entity’s own equity instruments for a fixe amount of any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. Also, for these purposes the entity’s own equity instruments do not include puttable financial instruments that are classified as equity instruments, instruments that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation and are classified as equity instruments, or instruments that are contracts for the future receipt or delivery of the entity’s own equity instruments. Initial recognition and measurement Group measure a financial asset or financial liability at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability except trade receivables. However, if the fair value of the financial asset or financial liability at initial recognition differs from the transaction price (except trade receivables), an entity shall apply fair value at initial recognition when equals the transaction price, an entity shall consider factors specific to the transaction and to the asset or liability. Despite the requirements above witch except trade receivables, at initial recognition, the Group measure trade receivables at their transaction price (as defined in IFRS 15) if the trade receivables do not contain a significant financing component in accordance with IFRS 15 (or when the entity applies the practical expedient in accordance with IFRS 15). Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. Financial assets of the Group includes the cash and current deposits, trade and other receivables, loans and other amounts receivables and unquoted financial instruments. Subsequent measurement of financial assets After initial recognition, Group measure a financial asset at: (a) amortised cost; (b) fair value through other comprehensive income; or (c) fair value through profit or loss. Subsequent measurement of financial liabilities After initial recognition, the Group measure financial liability in accordance with its classification: The Group classify all financial liabilities as subsequently measured at amortised cost, except for: 21 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) (a) financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value. (b) financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies. (c) financial guarantee contracts. After initial recognition, an issuer of such a contract shall (unless paragraph (a) or (b) applies) subsequently measure it at the higher of: (i) the amount of the loss allowance determined in accordance with Impairment criteria’s and (ii) the amount initially recognised (financial assets except trade receivables) less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15. (d) commitments to provide a loan at a below‑market interest rate. An issuer of such a commitment shall (unless paragraph (a) applies) subsequently measure it at the higher of: (i) the amount of the loss allowance determined in accordance with Impairment criterias of IFRS 9 and (ii) the amount initially recognised (financial assets except trade receivables) less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15. (e) contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies. Such contingent consideration shall subsequently be measured at fair value with changes recognised in profit or loss. Option to designate a financial liability at fair value through profit or loss: The Group, at initial recognition, irrevocably designate a financial liability as measured at fair value through profit or loss when permitted by IFRS 9, or when doing so results in more relevant information, because either: (a) it eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as ‘an accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases; or (b) a Group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the Group is provided internally on that basis to the entity’s key management personnel, for example, the entity’s board of directors and chief executive officer. Derecognition of financial assets Group derecognise a financial asset when, and only when: (a) the contractual rights to the cash flows from the financial asset expire, or (b) it transfers the financial asset and the transfer qualifies for derecognition; Group transfers a financial asset if, and only if, it either: (a) transfers the contractual rights to receive the cash flows of the financial asset, or (b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement that meets the conditions disclosed bellow. Group retains the contractual rights to receive the cash flows of a financial asset (the ‘original asset’), but assumes a contractual obligation to pay those cash flows to one or more entities (the ‘eventual recipients’), the entity treats the transaction as a transfer of a financial asset if, and only if, all of the following three conditions are met: (a) The entity has no obligation to pay amounts to the eventual recipients unless it collects equivalent amounts from the original asset. Short‑term advances by the entity with the right of full recovery of the amount lent plus accrued interest at market rates do not violate this condition. (b) The entity is prohibited by the terms of the transfer contract from selling or pledging the original asset other than as security to the eventual recipients for the obligation to pay them cash flows. (c) The entity has an obligation to remit any cash flows it collects on behalf of the eventual recipients without material delay. In addition, the entity is not entitled to reinvest such cash flows, except for 22 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) investments in cash or cash equivalents (as defined in IAS 7 Statement of Cash Flows) during the short settlement period from the collection date to the date of required remittance to the eventual recipients, and interest earned on such investments is passed to the eventual recipients. When the Group transfers a financial asset, it evalutes the extent to which it retains the risks and rewards of ownership of the financial asset. In this case: (a) if the Group transfers substantially all the risks and rewards of ownership of the financial asset, the Group derecognise the financial asset and recognise separately as assets or liabilities any rights and obligations created or retained in the transfer. (b) if the Group retains substantially all the risks and rewards of ownership of the financial asset, the Group continue to recognise the financial asset. (c) if the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, the Group determine whether it has retained control of the financial asset. In this case: (i) if the Group has not retained control, it derecognise the financial asset and recognise separately as assets or liabilities any rights and obligations created or retained in the transfer. (ii) if the Group has retained control, it continue to recognise the financial asset to the extent of its continuing involvement in the financial asset. The transfer of risks and rewards is evaluated by comparing the Group’s exposure, before and after the transfer, with the variability in the amounts and timing of the net cash flows of the transferred asset. The Group has retained substantially all the risks and rewards of ownership of a financial asset if its exposure to the variability in the present value of the future net cash flows from the financial asset does not change significantly as a result of the transfer (eg because the Group has sold a financial asset subject to an agreement to buy it back at a fixed price or the sale price plus a lender’s return). An Group has transferred substantially all the risks and rewards of ownership of a financial asset if its exposure to such variability is no longer significant in relation to the total variability in the present value of the future net cash flows associated with the financial asset (eg because the entity has sold a financial asset subject only to an option to buy it back at its fair value at the time of repurchase or has transferred a fully proportionate share of the cash flows from a larger financial asset in an arrangement, such as a loan sub‑participation, that meets the conditions in paragraph set above). Often it will be obvious whether the Group has transferred or retained substantially all risks and rewards of ownership and there will be no need to perform any computations. In other cases, it will be necessary to compute and compare the Group’s exposure to the variability in the present value of the future net cash flows before and after the transfer. The computation and comparison are made using as the discount rate an appropriate current market interest rate. All reasonably possible variability in net cash flows is considered, with greater weight being given to those outcomes that are more likely to occur. Whether the Group has retained control of the transferred asset depends on the transferee’s ability to sell the asset. If the transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer, the Group has not retained control. In all other cases, the Group has retained control. Derecognition of financial liabilities The Group remove a financial liability (or a part of a financial liability) from its statement of financial position when, and only when, it is extinguished—ie when the obligation specified in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. 23 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non ‑cash assets transferred or liabilities assumed, is recognised in profit or loss. If Group repurchases a part of a financial liability, the entity shall allocate the previous carrying amount of the financial liability between the part that continues to be recognised and the part that is derecognized based on the relative fair values of those parts on the date of the repurchase. The difference between (a) the carrying amount allocated to the part derecognised and (b) the consideration paid, including any non‑cash assets transferred or liabilities assumed, for the part derecognised is recognised in profit or loss. Impairment of financial assets At each reporting date the Group performs the assessment of indicators of impairment of financial asset or Group of financial assets. Financial asset or Group of financial assets can be impaired if, and only if, when there is a reliable evidence of impairment as a result of one of number of events taking place subsequent to initial recognition (the “event resulting the loss”), which resulted the impact, which c an be reliably measured, on expected future cash flows of the financial asset or Group of financial assets. The indicators of impairment can include the fact that debtor or Group of debtors are experiencing insolvency issues, and cannot repay the debt or has delays is repayment of interest or principal amount of debt, as well as probability of insolvency and upcoming liquidation process or financial restructuring. Moreover, such indicators include observable evidence, indicating existence of reliably measured decrease in expected cash flows of the financial instrument, in particular, the changes in overdue debts or economic environment, which has certain dependencies with defaults in repayments of debt. The Group recognise a loss allowance for expected credit losses on a financial asset that is measured for a contract asset or a loan commitment and a financial guarantee contract to which the impairment requirements apply. The objective of the impairment is to recognise lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition — whether assessed on an individual or collective basis — considering all reasonable and supportable information, including that which is forward-looking. The Group always measure the loss allowance at an amount equal to lifetime expected credit losses for: (a) trade receivables or contract assets that result from transactions that are within the scope of IFRS 15, and that: (i) do not contain a significant financing component in accordance with IFRS 15 (or when the Group applies the practical expedient of IFRS 15); or (ii) contain a significant financing component in accordance with IFRS 15, if the Group chooses as its accounting policy to measure the loss allowance at an amount equal to lifetime expected credit losses. That accounting policy shall be applied to all such trade receivables or contract assets but may be applied separately to trade receivables and contract assets. (b) lease receivables that result from transactions that are within the scope of IFRS 16. Financial assets recorded at amortized cost The Group performs the assessment of indicators of impairment financial assets recorded at amortised cost if individually significant or if individually insignificant, than by Groups. If the Group identifies the reliable evidence of absence of impairment, despite of the significance, such asset is included in the Group of financial assets with similar characteristic of credit risk, and subsequently reviews this Group for impairment indicators in aggregate. Assets, individually assessed as impaired are not included in aggregate assessment of the Group for impairment. 24 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) When there is reliable evidence of incurred losses from impairment, the amount of loss is recognised as a difference of book value and discounted expected future cash flows (without expected future credit losses not yet incurred). Present value of expected future cash flows are discounted at initial effective interest rate of the financial asset. If the interest rate of borrowing is a floating rate, the discount rate for impairment loss calculation is current effective interest rate. The book value of the asset decreases through reserve account, and amount of loss added to the statement of comprehensive income. Accrual of interest income on decreased book value continued based on rate, used for discounting future cash flows for the purpose of assessing losses from impairment. Interest income is included in financial income in the statement of profit or loss and other comprehensive income. Loans along with related provisions are not included in the statement of financial position if there is no evidence of recoverability of such and all available security was sold or transferred to the Group. If during the subsequent period the amount of calculated losses from impairment increases or decreases as a result of an event taking place after recognition of impairment, the amount of losses recognised increase or decrease by means of reserve account adjustment. If the subsequently the write-off of value of financial asset recovers, the amount of recovery recognised as decrease of finance costs in the statement of profit or loss and other comprehensive income. Financial investments The Group performs the annual assessment for impairment indicators for the investments. If the investments in equity instruments, the reliable evidence of impairment would be significant and continuous decrease in fair value of the investment below its initial acquisition cost. The significance is measured in comparison to initial acquisition cost, continuous means the comparison to the period, when decrease below initial acquisition cost took place. When reliable evidence of impairment is identified the amount of comprehensive loss, calculated as difference of book value and current fair value, less an other impairment loss recognised in the statement of comprehensive income, the loss is reclassified from other comprehensive income to the statement of comprehensive income. The promissory notes are subject of same impairment criteria applied to financial assets recorded at amortised cost. However, the amount of impairment loss recognised is the difference of amortised cost and current fair value, less accumulated impairment loss for this investment, recognised previously in the statement of comprehensive income. Accrual of interest income on decreased book value continued based on rate, used for discounting future cash flows for the purpose of assessing losses from impairment. Interest income is included in financial income in the statement of comprehensive income. If during the subsequent period the fair value of the promissory note will increase and this increase can be reliably tied with event taking place after initial loss recognition in the statement of comprehensive income, the impairment losses are recovered in profit and loss. Inventories Inventories are stated at the lower of cost or net realizable value. Cost of inventories is determined using the FIFO method. Impairment of non-financial assets The Group performs the assessment of impairment indicators of the assets at each reporting date. If such indicators exist or if there is a requirement to perform impairment test, than Group perform the assessment of recoverability of asset. The recoverable amount of the asset or component, generating cash flows (the “CGCF”) is higher of fair value of the asset less cost to sell and value in use of the asset. Recoverable amount is determined for separate asset, except for cases, when such asset does not generate cash flows, 25 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) which dependent on cash flows generated by other assets or Group of assets. If the book value of the asset or CGCF exceeds its recoverable amount, the asset is impaired and written off to recoverable amount. When estimated value in use future cash flows are discounted at the discount rate before taxation, which reflects the current market estimate of time value of money and risks related to the asset. When determining fair value of the asset less cost to sell recent market deals (if any) are taken into account. If no such information is available, appropriate valuation model is used. These calculations are supported by valuation coefficients, market prices of freely convertible shares of the subsidiaries or other available indicators of the fair value. If the book value of the asset or CGCF exceeds its recoverable amount, the asset is considered as impaired and written down to recoverable amount. Under assessment of value in use the future cash flows are discounted at the rate net of tax, which reflects the present market value of cash flows and risks inherent to the asset. Under assessment of the fair value less cost to sell, the recent market transactions (if were existent) are taken into consideration. If no such transaction took place the relevant valuation model is applied. These computations are supported by estimated coefficients, active market quotes of subsidiaries shares and other available indicators of fair value. Impairment losses from ongoing activities (including inventory impairment) are included in the statement of comprehensive income as a component of those expenses, which are related to the function of the asset, except for previously revalued real estate if revaluation was recognised in other comprehensive income. In such cases the impairment loss is deducted from other comprehensive income to the extent the revaluation gain was recognised. The Group performs assessment of indicators whether indicators of impairment loss still exist or decreased on each reporting dates. If such indicator exists the Group assesses the recoverable amount of the asset or cash generating component. Previously recorded impairment losses recovered only if the changes in applied estimate of the recoverability of the asset, since most recent impairment loss recorded. The recovery is limited to the book have not exceeding its recoverable amount, as well as not exceeding book value less depreciation, which would be charged if such impairment loss would not be recorded. This recovery of loss is included in the statement of profit or loss and other comprehensive income. Cash Cash in the statement of financial position include the cash in banks and cash on hands. Provisions Provision are recorded if the Group has current liabilities (legal or constructive), as a result of the past events, with a probable outflow economic benefits required to settle liability, and such liability can be reliably measured. If the Group expects to recover all or part of the provisions, e.g. under insurance contracts, the recovery is recorded as a separate asset, but only when such recovery inflow is not doubted. Expenses, related to the provision, are added to the statement of comprehensive income less recovery. Pensions and another employee benefits post-employment benefits The Group performs payments to social fund in accordance with pension scheme of the Republic of Tajikistan. The payments to social fund are fixed. The Group will not have any further legal or constructive liabilities to the Fund in relation to the retirement benefits if Fund will not have sufficient resources to perform payments to employees for services performed in current and previous years. The Group performs fixed payments to the State social fund amounting to 25% of salaries of the employees and recorded in the period as incurred. The Group does not have any other pension or other schemes or liabilities to perform pension payments to its employees. 26 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) Application of new and revised international financial reporting standards The Group has adopted the following new or revised standards and interpretations issued by International Accounting Standards Board and the International Financial Reporting Interpretations Committee (the “IFRIC”) which became effective for the Group’s financial statement for the year ended December 31, 2023: • Amendments to IAS 16 Property, plant and equipment - proceeds before intended use. The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss. Annual reporting periods beginning on or after 1 January 2022. • Amendments to IAS 37 Provisions, contingent liabilities and contingent assets onerous contracts - cost of fulfilling a contract. The amendments specify that the cost of fulfilling a contract comprises the costs that relate directly to the contract. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). Annual reporting periods beginning on or after 1 January 2022. • The amendment to IFRS 9 Financial instruments – clarifies which fees an entity includes when it applies the 10 per cent test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognise a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf. Annual reporting periods beginning on or after 1 January 2022. • IFRS 17 Insurance contracts requires insurance liabilities to be measured at a current fulfilment value and provides a more uniform measurement and presentation approach for all insurance contracts. These requirements are designed to achieve the goal of a consistent, principle-based accounting for insurance contracts. Applicable to annual reporting periods beginning on or after January 1, 2023. • Amendments to IAS 1 Presentation of consolidated financial statements classification of liabilities as current or non-current. The amendments aim to promote consistency in applying the requirements by helping entities determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. Annual reporting periods beginning on or after January 1, 2023. • Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) require that an entity discloses its material accounting policies, instead of its significant accounting policies. Further amendments explain how an entity can identify a material accounting policy. To support the amendment, the Board has also developed guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in IFRS Practice Statement 2. Annual reporting periods beginning on or after 1 January 2023. • Definition of Accounting Estimates (Amendments to IAS 8) replaces the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in consolidated financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in consolidated financial statements to be measured in a way that involves measurement uncertainty. The amendments clarify that a change in accounting estimate that results from new information or new developments is not the correction of an error. Annual reporting periods beginning on or after 1 January 2023. • Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) clarifies that the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. Annual reporting periods beginning on or after 1 January 2023. 27 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 4. SIGNIFICANT ACCOUNTING POLICIES (continued) New and revised IFRSs in issue but not yet effective A number of new standards, additions to standards and interpretations have not yet entered into force as of December 31, 2023 and have not been applied in the preparation of these consolidated financial statements. Of these innovations, the following standards and amendments have the potential to have an impact on the financial and business operations of the Group. At the date of authorization of this financial information, the following new standards and interpretations were in issue, but not mandatorily yet effective, and which the Group has not early adopted: • Amendments to IAS 7 “Statement of cash flows” and IFRS 7 “Financial instruments: Disclosures” which will introduce targeted disclosure requirements that will enhance transparency of supplier finance arrangements and their effects on Group’s liabilities and cash flows. • Amendments to IAS 1 “Presentation of Consolidated financial statements” requires to classify liabilities as current or noncurrent based on Group’s rights to defer settlement for at least 12 months which must exist and have a substance as at the reporting date. Only covenants with which a Group must comply on or before the reporting date may affect this right. • Amendments to IFRS 16 “Leases” which introduce a new model for accounting of variable payments and will require seller-lessees to reassess and possibly restate sale-leaseback transactions. • Introduction of IFRS S1 “General Requirements for Disclosure of Sustainability -related Financial Information” and IFRS S2 “Climate-related Disclosures” which provide a framework for Group to report on all sustainability-related topics across the areas of governance, strategy and risk management. The Group intends to adopt these new standards and amendments, if applicable, when they become effective. These new standards and amendments have no material effect on the financial position and performance of the Group. 5. CRITICAL ACCOUNTING ESTIMATES AND PROFESSIONAL JUDGEMENTS IN APPLYING ACCOUNTING POLICY The Group makes estimates and assumptions that affect within the next financial period the amounts of assets and liabilities recognized in consolidated financial statements. Estimates and judgments are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Management also makes certain judgments, apart from those involving estimations, in the process of applying the accounting policies. Judgments that have the most significant impact on the figures recorded in the consolidated financial statements and estimates that can cause a significant adjustment to the carrying amounts of assets and liabilities within the next financial period include: Significant accounting judgments, estimates and assumptions The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions at the end of the reporting period that affect the amounts of revenue, costs, assets and liabilities, presented in statements. However, uncertainty of these assumptions and estimates could result outcomes, that could require in future material adjustments of book value of asset or liability in respect of which such assumptions and estimates are made. Judgments In the process of applying the Group’s accounting policy, management has used the following judgments, which have the most significant effect on the amounts recognized in the consolidated financial statements: Estimates and assumptions The key assumptions about the future and other key sources of estimation of uncertainty at the reporting date, which may cause significant adjustments of the carrying value of assets and liabilities during the next 28 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 5. CRITICAL ACCOUNTING ESTIMATES AND PROFESSIONAL JUDGEMENTS IN APPLYING ACCOUNTING POLICY (continued) financial year, are discussed below. Assumptions and estimates are based on the Group’s source data, which it had at the time of preparation of the consolidated financial statements. However, current circumstances and assumptions regarding the future are subject to change due to market changes or circumstances beyond the control of the Group. Such changes are reflected in the assumptions as they occur. Impairment of non-financial assets Impairment occurs when the carrying amount of an asset or the cash-generating unit, exceeds its recoverable amount, which is the higher of fair value less costs to sell and value in use. The fair value less costs to sell is based on available information on commercial deals of sales of similar assets or observable market prices less incremental costs incurred in connection with the disposal of an asset. The calculation of value in use is based on a discounted cash flow model. Cash flows are taken from the budget for the next five years and do not include restructuring activity, in conducting of which the Group does not have obligations or significant investment in future, which will improve the asset tested for impairment of cash generating unit. The recoverable amount is most sensitive to the discount rate used in the discounted cash flow model, and also to the expected cash inflows and the growth rate, used for extrapolation. More information about the key assumptions used to determine the recoverable amount of the various units, generating cash, including sensitivity analysis, is provided in Note 31. The fair value of financial instruments In cases when the fair value of financial instruments and financial liabilities recorded in the statement of financial position cannot be derived from active markets, they are determined using valuation techniques, including discounted cash flow model. As a source data for these models is used information from observable markets, but in those cases where this is not feasible, a certain proportion of judgment is required to determine fair value. The judgments include considerations of such data as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the fair value of financial instruments, recognised in the consolidated financial statements. Allowance for doubtful debts, advances paid, investments and allowance for cost decrease to net realizable value inventories Determining the direction of allowance for doubtful debts, advances paid, investments and allowance for cost decrease to net realizable value inventories requires management to make assumptions based on the best estimates of the Group’s ability to realize these assets. As a result of the general changes in the economy or other similar circumstances after the reporting date, management may draw conclusions that may differ from the finding made in the preparation of these consolidated financial statements. Useful lives of property, plant and equipment The Group estimates the useful lives of fixed assets at each reporting date. The estimation of the useful lives of fixed assets depends on factors such as economical use, repair and customer service programs, technological progress and other business conditions. Ma nagement’s assessment of the useful lives of fixed assets reflects the relevant information available to management as at the date the consolidated financial statements. Market rate of borrowings received The Group uses valuation techniques that include inputs that are not based on observable market date to estimate the fair value of non-current borrowings. Borrowings are discounted at a rate of 4.10% per annum as at December 31, 2023 (4.11% as at December 31, 2022), which the Management of the Group has defined as the market rates on non-current borrowings. 29 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 5. CRITICAL ACCOUNTING ESTIMATES AND PROFESSIONAL JUDGEMENTS IN APPLYING ACCOUNTING POLICY (continued) Revaluation and impairment of property, plant and equipment The Property, Plant and Equipment have been revalued using the work of an external valuator. The methodology applied was discounted cash-flow in the absence of comparable assets in the market. The following assumptions were used by the during the revaluation of property, plant and equipment. In the event that any of these assumptions used will not be materialized or the limiting conditions will be realized then impairment loss might be necessary to be recorded in the consolidated financial statements to reflect the revised assumptions. 6. RESTATEMENT AND RECLASSIFICATION In 2023 the Group made the adjustments in the consolidated financial statements for the year ended December 31, 2022 in accordance with IAS 8 “Accounting policies, changes in accounting estimates and errors” due to changes in accounting policies, changes in accounting estimates and adjustments of misstatements. Comparative amounts were restated and the corrections were made to the earliest prior period presented. The effect of the adjustments made to the consolidated financial statements for the year ended December 31, 2022 is as follows: December Reclassificatio Adjustments December 31, 2022 n 31, 2022 ASSETS: NON-CURRENT ASSETS Property, plant and equipment 16,573,769 - 313,905 16,887,674 Intangible assets 963 - - 963 Long-term advances paid - 1,813,443 (21,593) 1,791,850 Non-current advances paid 1,745,118 (1,745,118) - - Long-term investments - 182,399 - 182,399 Other non-current assets 250,874 (250,874) - - 18,570,724 (150) 292,312 18,862,886 CURRENT ASSETS: Inventories 646,981 - (36,830) 610,151 Trade and other accounts receivable 753,142 12 (148,422) 604,732 Advances paid - 140,337 (108,178) 32,159 Current advances paid 140,199 (140,199) - - Taxes paid in advance 130,748 - (62,744) 68,004 Cash and cash equivalents 43,042 - - - 43,042 1,714,112 150 (356,174) 1,358,088 TOTAL ASSETS 20,284,836 - (63,762) 20,220,974 6. RESTATEMENT AND RECLASSIFICATION (CONTINUED) 30 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) December Reclassificatio Adjustments December 31, 2022 31, 2022 n SHAREHOLDER’S EQUITY AND LIABILITIES: SHAREHOLDER’S EQUITY: Share capital 10,952,745 - - 10,952,745 Revaluation reserve on property, plant and equipment 5,101,233 - 39 5,101,272 Reserve capital 24,302 - - 24,302 (27,691,933 Accumulated deficit ) - (341,372) (28,033,305) (11,613,653 ) - (341,333) (11,954,986) NON-CURRENT LIABILITIES: Long-term borrowed funds - 11,203,906 (1,692,349) 9,511,557 Non-current borrowed funds 9,511,557 (9,511,557) - - Deferred income long- term portion - 2,347,288 (4,356) 2,342,932 Non-current portion of deferred income 2,347,288 (2,347,288) - - Deferred tax liability 762,253 - (39) 762,214 12,621,098 1,692,349 (1,696,744) 12,616,703 CURRENT LIABILITIES: Short-term borrowed funds - 6,527,125 1,693,434 8,220,557 Current borrowed funds 8,219,474 (8,219,474) - - Trade and other accounts payable 8,854,917 905,480 175,819 9,936,216 Advances received 1,147 - - 1,147 Taxes payable 26,376 - 110,127 136,503 Other payables and accrued expenses 2,175,477 (905,480) (5,165) 1,264,833 19,277,391 (1,692,349) 1,974,215 19,559,256 TOTAL LIABILITIES 31,898,489 - 277,471 32,175,959 TOTAL SHAREHOLDER’S EQUITY AND LIABILITIES 20,284,836 - (63,862) 20,220,978 31 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 6. RESTATEMENT AND RECLASSIFICATION (CONTINUED) The effect of the adjustments made to the consolidated statement of profit and loss and other comprehensive income for the year ended December 31, 2022 is as follows: December 31, Reclassificatio Adjustments December 31, 2022 n 2022 Revenue 3,298,261 4,534 - 3,302,795 Cost of sales (3,455,155) - (22,183) (3,477,338) GROSS PROFIT (156,894) 4,534 (22,183) (174,543) Selling expenses (85,172) - (115,194) (200,366) General and administrative expenses (230,235) - (299) (230,534) Net loss on foreign exchange operations 2,820,148 - (610) 2,819,538 Financial loss (2,465,355) 2,465,354 1 - Financial expenses - (2,465,354) 15,358 (2,449,996) Other non-operating income/(loss), net - 187,301 (32,506) 154,741 Other non-operating (loss)/gain, net 191,835 (191,835) - - LOSS BEFORE INCOME TAX 74,327 - (155,487) (81,160) Income tax benefit 142,512 - - 142,512 NET OPERATING INCOME 216,839 - (155,487) 61,352 Other comprehensive income - - - TOTAL COMPREHENSIVE INCOME 216,839 - (155,487) 61,352 32 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 7. PROPERTY, PLANT AND EQUIPMENT As at December 31, 2023 and 2022 property, plant and equipment of the Group are presented as follows: Buildings and Machinery and Other Construction in Total constructions equipment progress and equipment for installation Cost December 31, 2021 5,890,146 4,807,538 58,882 4,281,253 15,037,819 Additions 8,612 165,682 8,524 3,214,072 3,396,890 Internal movement 47,756 98,534 4,685 (150,975) - Disposals (576) (6) (238) (5,372) (6,192) Transfer to inventory - (383) - (4,783) (5,166) December 31, 2022 (restated) 5,945,938 5,071,365 71,853 7,334,195 18,423,351 Additions 9,020 125,165 7,439 1,089,052 1,230,676 Transfer from inventory 6,801 196,031 1,883 14,115 218,830 Internal movement 376,070 587,745 16,623 (980,490) (52) Disposals (10,787) (85,925) (126) (61,837) (158,675) Transfer to inventory - - (65) (3,057) (3,122) Disposal of subsidiary (9,389) (323) (58) - (9,770) December 31, 2023 6,317,653 5,894,058 97,549 7,391,978 19,701,238 Accumulated depreciation December 31, 2021 283,028 614,459 14,542 126,417 1,038,446 Charge for the period 139,749 347,098 10,385 - 497,232 December 31, 2022 (restated) 422,777 961,557 24,927 126,417 1,535,678 Charge for the period 154,043 524,397 14,169 44,235 736,844 Internal movement (7,436) 7,670 (234) - - Disposals (15,059) (150,911) (44) - (166,014) Disposal of subsidiary (905) (162) (53) - (1,120) December 31, 2023 553,420 1,342,551 38,765 170,652 2,105,388 Net book value at December 31, 2022 (restated) 5,523,161 4,109,808 46,926 7,207,778 16,887,673 at December 31, 2023 5,764,233 4,551,507 58,784 7,221,326 17,595,850 33 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 7. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) As at December 31, 2023 and 2022 fixed assets and construction in progress were not insured. The Group monitors the use of its assets, but because the Group’s sole shareholder is the Government of the Republic of Tajikistan, it is not able to write-off fixed assets without the permission of the State Committee on Investments and Property Management of the Republic of Tajikistan. Fixed assets received as grant mostly consist of electrical equipment and power transmission devices transferred under the control of the Group by the Government of the Republic of Tajikistan and by electricity consumers - legal entities and individuals of the Republic of Tajikistan. These grants were recognized as deferred income in accordance with IAS 20 “Accounting for government grants and disclosure of government assistance” which is amortized over the useful life of the associated granted assets. The Group borrows funds to acquire assets and capitalizes the interest on assets that meets certain requirements prescribed in IAS 23 “Borrowing costs” . In 2023 and 2022, the Group capitalized 148,746 thousand somoni and 63,618 thousand somoni, respectively, on the cost of construction in progress. As of December 31, 2023 amount of fully depreciated property and equipment equaled to 106,135 thousand somoni. As at December 31, 2023 and 2022 Group’s assets were pledged as collateral on borrowings comprised of buildings and constructions, machinery and equipment, other fixed assets, construction in progress and equipment for installation of subsidiary of the Group - Baipaza hydropower station. As at December 31, 2023 and 2022 net book value of Baipaza hydropower station fixed assets equaled to 616,182 thousand somoni and 641,097 thousand somoni, respectively. The Group uses the model of accounting for PPE at revalued cost in accordance with IAS 16 "Property, Plant and Equipment". The last revaluation of fixed assets by the Group was carried out by independent qualified appraisers using the amortized cost of replacement method, at December 31, 2019. 8. LONG-TERM ADVANCES PAID As at December 31, 2023 and 2022 the Group’s long-term advances paid are as follows: December 31, December 31, 2023 2022 (restated) Non-current advances paid 559,288 1,942,140 Allowance for doubtful long-term advances paid (189,353) (150,290) 369,935 1,791,850 As at December 31, 2023 and 2022 long-term advances paid include advances for the construction of production facilities and supply of equipment. The movement in allowance for doubtful long-term advances paid for the years ended December 31, 2023 and 2022 is presented as follows: 2023 2022 at January 1 150,290 175,853 Accrual of allowance 39,063 (25,563) at December 31 189,353 150,290 34 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 9. LONG-TERM INVESTMENTS As at December 31, 2023 and 2022 the Group’s long-term investments are as follows: December 31, December 31, 2023 2023 (restated) Shares in “Sangtuda - 2” HPP 150,796 150,796 OJSC “Rogun HPP” 31,604 31,604 182,400 182,400 In 2006 the Group has signed agreement with OJSC “Sangob” on financing of the construction of Sangtuda-2 HPP in the amount of 40,000 thousand US dollars. In accordance with the agreement after 12 years of use the Hydropower Plant would be transferred to the Group. As at December 31, 2012 the Group has fully paid obligations under the agreement. In accordance with terms of the agreement on purchase of electricity the Group has to purchase electricity from HPP Sangtuda-2 at fixed price which should be increased by 5% annualy starting from 2015. In 2010 the Group acquired the shares of OJSC “Rogun HPP” amounting to 23,700 thousand somoni. The obligations of OJSC “Rogun HPP” to the Group in the amount of 7,933 thousand somoni were converted into shares at the agreement of both parties and the Ministry of Finance of the Republic of Tajikistan. 10. INVENTORIES As at December 31, 2023 and 2022 inventories of the Group are as follows: December 31, December 31, 2023 2022 (restated) Supplies and others 736,368 510,822 Fuel and lubricants 301,284 279,581 Spare parts 250,334 179,381 Low valuable items in storehouse 24,658 16,457 Construction materials 3,197 1,032 Other 17,546 4,136 Net realizable value impairment allowance (372,466) (395,000) 960,921 596,409 The movement in allowance for cost decrease to net realizable value and obsolete inventories for the years ended December 31, 2023 and 2022 is presented as follows: 2023 2022 at January 1 395,000 253,120 (Recovery)/accrual of allowance (22,534) 141,880 at December 31 372,466 395,000 35 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 11. TRADE AND OTHER ACCOUNTS RECEIVABLE As at December 31, 2023 and 2022 trade and other accounts receivable of the Group are as follows: December 31, December 31, 2023 2022 (restated) Accounts receivable for electricity 837,999 1,041,018 Accounts receivable for heat 44,894 42,518 Accounts receivable for goods and services 7,576 7,424 ECL for doubtful debts (439,322) (486,228) 451,147 604,732 The movement in the ECL for doubtful debts for the years ended December 31, 2023 and 2022 is presented as follows: 2023 2022 at January 1 486,228 337,806 Accrual of ECL (46,894) 148,422 Disposal of subsidiary (12) - at December 31 439,322 486,228 The most significant debtors of the Group are as follows: December 31, December 31, 2023 2022 (restated) Shabakahoi taqsimoti barq, OJSC 316,414 405,808 DA Afganistan Breshna Sherkat 60,452 161,572 "Uzbekenergo", JSC 45,168 12,259 422,034 579,639 12. ADVANCES PAID As at December 31, 2023 and 2022 advances paid of the Group are as follows: December 31, December 31, 2023 2022 (restated) Advances paid for goods and services 325,958 296,114 Prepaid expenses 103,099 32,106 Other advance prepayments 500 567 Allowance for doubtful advances paid (262,477) (296,628) 167,080 32,159 36 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) The movement in allowance for doubtful advances paid for the years ended December 31, 2023 and 2022 is presented as follows: 2023 2022 at January 1 296,628 304,286 Accrual of allowance (34,151) (7,658) at December 31 262,477 296,628 13. TAXES PAID IN ADVANCE As at December 31, 2023 and 2022 taxes paid in advance of the Group are as follows: December 31, December 31, 2023 2022 (restated) Income tax 47,866 - VAT for recoverable 31,226 13,015 Property tax - 5 Other 19,604 54,984 98,696 68,004 14. CASH AND CASH EQUIVALENTS As at December 31, 2023 and 2022 cash and cash equivalents of the Group are as follows: December 31, December 31, 2023 2022 (restated) Cash in bank account 91,645 42,767 Cash on hand 335 275 91,980 43,042 15. SHARE CAPITAL As at December 31, 2023, the recorded and paid-up share capital of the Group amounted to 14,527,904 thousand somoni and 10,947,763 thousand somoni, respectively (December 31, 2022: 14,527,904 thousand somoni and 10,952,745 thousand somoni). In 2022 the share capital of the Group was increased by 8,828,499 thousand somoni as follows: ✓ 8,546,092 thousand somoni in accordance with the Decree of the Government of the Republic of Tajikistan No. 571 dated October 28, 2020, debt of the Group to the Ministry of Finance of the Republic of Tajikistan, formed under sub-loan agreements from grant funds as of April 1, 2020, including funds received, interest and fines accrued was settled through share capital increase: of which principal amount is 15,782 thousand somoni, interest 939,672 thousand somoni (Note 14), penalty 7,573,524 thousand somoni (Note 17) and upfront fee 17,114 thousand somoni; ✓ 282,407 thousand somoni in accordance with the Decree of the Government of the Republic of Tajikistan No. 605 dated December 20, 2022. The increase was resulted from offset of the Group's obligations for electricity to JSC Sangtudinskaya HPP-1 and tax obligations of Sangtudinskaya HPP-1 to the state budget of the Republic of Tajikistan. This amount of increase in the authorised capital (8,828,499 thousand TJS) is reflected in the state register of legal entities as unpaid part of the capital. In 2023 the Group did not announce any dividends. 37 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 16. BORROWED FUNDS As at December 31, 2023 and 2022 long-term borrowed funds of the Group are as follows: December 31, December 31, 2023 2022 (restated) Loan from the Ministry of finance of Republic of Tajikistan 7,152,135 6,927,027 Loans from OJSC “Orienbank” 2,147,591 1,703,801 Loan from the European Bank for Reconstruction and Development 819,444 897,689 Unamortized portion of front-end fee (17,084) (16,960) 10,102,086 9,511,557 To assess the fair value of borrowed funds, the Group uses valuation methods that take into account initial data not based on observable market data. According to the Decree of the Government of the Republic of Tajikistan n dated October 28, 2020 No. 571 On State financial support of the closed joint-stock holding company “Barqi Tojik”, the Ministry of Finance of the Republic of Tajikistan, the State Committee for Investment and State Property Management of the Republic of Tajikistan jointly with the OJSC "Barqi Tojik" until December 31, 2021, shall: • Bring into compliance the terms of loan agreements between the Republic of Tajikistan and development partners, in view of no more than 1 percent rate. • Determine and submit, in accordance with Appendix 2, the difference between the initial and adjusted rates, as well as accrued fines under the terms of sub-loan agreements, to the authorized capital of OJSC "Barqi Tojik" on the date of liabilities renewal. As a result of the application of this resolution, the Group settled 335,471 thousand somoni discount as income in the profit or loss statement. Movement of discount on non-current borrowed funds for the years ended December 31, 2023 and 2022 is presented as follows: 2023 2022 at January 1 - 1,187,725 Discount write-down - (335,471) Unwinding of discount - (852,254) at December 31 - - As at December 31, 2023 and 2022 short-term borrowed funds of the Group are as follows: December 31, December 31, 2023 2022 (restated) Loan from the Ministry of finance of Republic of Tajikistan 5,625,428 4,754,477 Loan from the European Bank for Reconstruction and Development 207,895 146,989 Interest payable 3,732,020 3,321,198 Unamortized portion of front-end fee (1,130) (2,107) 9,564,213 8,220,557 Current portion of non-current borrowings is allocated in accordance with the repayment schedule of principal on loans. 38 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 16. BORROWED FUNDS (continued) As at December 31, 2023 and 2022 outstanding amount on loans received from Ministry of finance of the Republic of Tajikistan and European Bank for Reconstruction and Development is presented in the following table: Loan # Creditor Loan purpose Agreement Maturity date Loan amount Interest rate December 31, December 31, date 2023 2022 1817 Asian Development Financing of the energy system August 20, December 15, 26,576 2.5% Bank rehabilitation project 2001 2025 thousand SDR - 54,127 6015 Eximbank Construction of 500 kV South- December June 21, 2026 267,219 3,00% North transmission Line 21, thousand 2006 USD 2,203,676 2,261,748 6016 Eximbank Construction of 220 kV December June 21, 2026 55,228 3,00% transmission line "Lolazor- 16, thousand Khatlon" 2006 USD 605,134 563,454 IDB -011-029-031 Islamic Reliable energy supply in rural November December 31, 10,400 3.5% Development regions of Tajikistan 26, 2020 thousand . Bank 2004 Islamic Dinars 155,289 143,426 IBR -0022 Islamic Construction of small March 18, December 31, 7,623 3,50% Development hydroelectric power plants 2005 2029 thousand Bank Islamic Dinars 98,094 1912-TAJ (SF) Asian Development Financing Emergency project October 20, December 1 , 4,001 2,50% Bank on Baikazin landslides 2003 2033 thousand Stabilization SDR 45,014 41,576 2303 Asian Development Construction of cross-border May 21, December 1, 14,475 2,5% Bank interconnection line 2007. 2031 thousand SDR 181,020 167,192 665 The Kuwait Fund Financing of the project of September October 1, 3,600 2.5% reconstruction of Dushanbe city 20, 2029 thousand 126,297 electric networks 2003 Kuwaiti Dinars 118,086 06015-06016 Eximbank Additional construction of a May 29, 2007 December 21, 51,000 3,00% 500/220 kV South-North 2028 thousand high-voltage transmission line, USD 467,868 Lolazor-Khatlon 435,642 TAD 030-032 BT Islamic Expansion of energy June 28, November 14,067 3,5% Development cooperation between Tajikistan 2011 30, 2031 thousand Bank and Afghanistan USD 153,178 142,628 39 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 16. BORROWED FUNDS (continued) Loan # Creditor Loan purpose Agreement Maturity date Loan amount Interest rate December 31, December 31, date 2023 2022 2010 (024)TOTAL Eximbank Construction of 220 kV high- December September 21 35,055 3,00% 131- 029BT voltage power transmission line 15, , 2031 thousand "Khujand Aini" 2010 USD 384,101 357,645 1141P OFID (OPEC) Expansion of energy June 28, August 15 , 8,500 3,00% cooperation between Tajikistan 2011 2026 thousand and Afghanistan USD 86,634 80,667 2011 (19) TOTAL Exim Bank Creation of a unified electricity July 20, 2011 March 21 , 26,464 3,00% NO. (170)-030 BT system in the northern region 2031 thousand of the Republic of Tajikistan USD 289,966 269,994 Loan № 4093 TJ International Financing of the project to December 6, September 11,446 1,75% Development reduce electricity losses 2005 15, 2026 thousand Association USD 107,235 99,849 No.TAJ 2015- International Financing of the project September April 15 , 5,000 2,42% 10(BT) Development Providing electricity in 21, 2035 thousand 54,681 winter period” 2015 USD 50,915 EIB Serapis No. Eurasian Bank Tajikistan's energy sector October 12, September 10,141 3,00% 2009 0675 - 031BT rehabilitation project 2011 15, 2030 thousand USD 111,123 103,469 Taj 021 BT KfW Replacement of the 220 kV February 3, November 1 , 18,000 1,75% distribution device at the 2009 2033 thousand Nurek HPP EUR 217,691 196,033 Financing State Project financing January 1, June 30, 1,200 1% the construction of committee "Construction of small 2008 2018 thousand small on investment and hydroelectric power plants Somoni HPPs Kulob and state property "Kulob" and "Vose" for Vose management provision of electricity of the Republic of to rural population" Tajikistan 1,200 266-025 Exim Bank Reconstruction of the Regar July 31, 2013 November 21 35,043 3,00% substation , 2033 thousand USD 383,973 357,526 TAJ 2014-028-1 Exim Bank Funding of the project December June 21 , 178,969 3,00% “Construction of the second 18, 2034 thousand phase of the HES– 2” 2014 USD 1,960,984 1,825,916 40 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 16 BORROWED FUNDS (continued) Loan # Creditor Loan purpose Agreement Maturity date Loan amount Interest rate December 31, December 31, date 2023 2022 TAJ 2014-028-2 Exim Bank Funding of the project December August 21 , 929.977 2.5% “Construction of the second 18, 2039 thousand phase of the HES– 2” 2014 Yuan 1,434,769 1,387,340 TAJ 2014-007(BT- Islamic Financing of the project May 5, 2015 October 15 , 13,070 3,5% 027 Development "Reconstruction of the 2038 thousand Bank Ravshan substation" USD 134,980 125,683 TAJ 2016-03 (BT- Islamic Electricity sales project August 19, June 15, 2045 70,000 2.5% 037) Development between Central Asia and 2016 thousand Bank South Asia (CASA-1000) USD 426,520 295,149 TAJ 2016-03 (BT- Electricity sales project August 19, June 15, 2045 70,000 1.692% 036) between Central Asia and 2016 thousand South Asia (CASA-1000) EUR 745,094 631,840 TAJ 2017-02 (BT- Exim Bank Rehabilitation and construction December August 21 , 546.032 2.5% 039) of power transmission lines of 29, 2042 thousand 500 kW 2017 Yuan 842,418 814,571 TAJ 2018-01 (BT- Nurek HPP Rehabilitation January 15, October 15, 64,135 2.42% 040) Project, Phase 1 part 2018 2055 thousand A 6024-TJ USD 516,567 316,232 TAJ 2018-01 (BT- Nurek HPP Rehabilitation January 15, October 15, 100,000 5.5% 040) Project, Phase 1 Part 2018 2055 thousand B 6025-TJ USD 2,551 TAJ 2018-02 (BT- Asian Development Nurek HPP rehabilitation January 29, October 15, 60,000 2,50% 041) Bank project, Phase 1 2018 2042 thousand USD 412,073 295,959 Reconstruction of EBRD Kairokum January 23, April 07 , 27,000 USD Libor the Kayrokum HPP HPP rehabilitation Project, 2nd 2019 2058 +2% Tranche 200,348 128,077 TAJ 2020-04 (BT - EBRD Rehabilitation of April 24 , October 15 , 40,000 USD 1% 001) Nurek HPP, Phase 1 (BT -001) 2020 2039 173,645 142,337 41553 EBRD Kairakum HPP Rehabilitation June 25, December 8, 50,000 Libor 2014 2029 thousand +1% USD 341,128 403,144 41538 EBRD Reduction of electricity losses June 15, April 5 , 2026 10,150 Libor in Sughd region 2011 thousand +1% USD 43,150 56,249 41 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 16. BORROWED FUNDS (continued) Loan # Creditor Loan purpose Agreement Maturity date Loan amount Interest rate December 31, December 31, date 2023 2022 47221 EBRD CASA 1000 August 01, July 31, 2030 110,000 USD Libor 2015 +1% 643,007 585,279 47253 EBRD Sughd region April 13, 2018 December 8, 38,000 Libor 2029 thousand +2% USD 172,580 42 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 17. DEFERRED INCOME As at December 31, 2023 and 2022 deferred income of the Group comprises of current and non-current portions. Non-current portion of deferred income: December 31, December 31, 2023 2022 (restated) Deferred income on grants received from Government of the Republic of Tajikistan 3,329,361 2,342,932 3,329,361 2,342,932 Deferred income on grants received is presented in the form of targeted funding for the construction of fixed assets and granted assets from the state bodies, which include mainly electrical equipment and facilities for power transfer devices transferred to the control of the Group by the Government of the Republic of Tajikistan. Movement of deferred income on discounting of non-current borrowed funds at the rate lower than market rate for the years ended December 31, 2023 and 2022 was as follows: 2023 2022 at January 1 2,342,932 1,884,724 Grants directly paid to suppliers 145,899 464,089 Grants received during the year 1,076,563 216,060 Amortization for the year (236,033) (221,941) at December 31 3,329,361 2,342,932 18. TRADE AND OTHER ACCOUNTS PAYABLE As at December 31, 2023 and 2022 trade and other accounts payable of the Group are as follows: December 31, December 31, 2023 2022 (restated) Accounts payable for electricity 7,316,230 6,220,656 Accounts payable for fixed assets 1,282,222 2,521,673 Accounts payable for goods and services 410,636 288,271 Other accounts payable 751 905,616 9,009,839 9,936,216 43 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) Below is information on the largest creditors: December 31, December 31, 2023 2022 Santguda-2 Hydroelectric Power Plant 3,577,913 2,914,020 Sangtuda HPP-1 OJSC 2,988,875 2,368,097 Rogun HPP OJSC 723,000 938,538 Tajiktransgaz OJSC 284,455 324,383 COBRA Instalaciones y Servicios, SA 234,506 121,940 7,808,749 6,666,978 19. ADVANCES RECEIVED As at December 31, 2023 and 2022 advances received by the Group are as follows: December 31, December 31, 2023 2022 (restated) Prepayments received for electricity 44,058 922 Advances received for thermal energy 581 52 Prepayments received for goods and services 81 173 44,720 1,147 20. TAXES PAYABLE As at December 31, 2023 and 2022 taxes payable of the Group are as follows: December 31, December 31, 2023 2022 (restated) Value added tax payable 23,780 121,005 Royalty tax payable 4,911 - Social tax payable 3,544 3,424 Personal income tax payable 2,932 11,899 Property tax payable - 177 Other taxes 1 (2) 35,168 136,503 44 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 21. OTHER PAYABLES AND ACCRUED EXPENSES As at December 31, 2023 and 2022 other payables and accrued expenses of the Group are as follows: December 31, December 31, 2023 2022 (restated) Fines and penalties on overdue borrowed funds 2,772,742 1,192,298 Unused vacation provision 12,066 10,832 Fines and penalties on taxes 8,457 - Other liabilities (8,726) 61,706 2,784,539 1,264,836 The movement in provision for unused vacation for the years ended December 31, 2023 and 2022 is presented as follows: 2023 2022 at January 1 10,832 10,819 Accrual/(recovery) of provision 1,444 13 Disposal subsidiary (210) - at December 31 12,066 10,832 22. INCOME TAX The Group measures and records its current income tax payable and its tax bases in its assets and liabilities in accordance with the tax regulations of the Republic of Tajikistan where the Group operates, which may differ from IFRS. For the years ended December 31, 2023 and 2022 on the territory of the Republic of Tajikistan, the income tax rate for production legal entities was 13%, but not less than 1% from gross revenue according to the tax law of the Republic of Tajikistan. The Group is subject to certain permanent tax differences due to the non-tax deductibility of certain expenses and certain income being treated as non-taxable for tax purposes. Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Temporary differences as at December 31, 2023 and 2022 relate mostly to different methods of income and expense recognition as well as to temporary differences generated by tax – book bases’ differences for certain assets and liabilities. Year ended Year ended December 31, December 31, 2023 2022 (restated) Current income tax expenses - 11,892 Changes in deferred income tax - (154,404) Income tax expenses - (142,512) 45 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 23. INCOME TAX (continued) Temporary differences as at December 31, 2023 and 2022, comprise: December 31, December 31, 2023 2022 (restated) Deferred income tax assets: Tax loss carry forward 681,927 1,607,132 ECL for doubtful debts 439,322 486,228 Deferred income 3,329,361 2,342,932 Allowance for cost decrease to net realizable value and obsolete inventories 372,466 395,000 Allowance for doubtful advances paid 262,477 296,628 Allowance for doubtful non-current advances paid 189,353 150,290 Unused vacation provision 12,066 10,832 Total deferred income tax assets 5,286,972 5,289,042 Deferred income tax liabilities: Revaluation of property and equipment 5,576,672 5,863,181 Discount on borrowed funds - - Total deferred income tax liabilities 5,576,672 5,863,181 Net deferred income tax liabilities at statutory tax rate (13%) 724,967 762,214 Temporary differences between tax accounting and current financial statement as well as tax losses lead to deferred tax liabilities as at December 31, 2023 and 2022 as a result of the following: December 31, Recognized in the Recognize December 31, 2022 statement of profit d in equity 2023 (restated) or loss and other comprehensive income Temporary differences: Revaluation of property and equipment 762,214 - (37,247) 724,967 762,214 - (37,247) 724,967 December 31, Recognized in the Recognize December 31, 2021 statement of profit d in equity 2022 or loss and other (restated) comprehensive income Temporary differences: Revaluation of property and equipment 824,497 - (62,283) 762,214 Discount on borrowed funds 154,404 (154,404) - - 978,901 (154,404) (62,283) 762,214 46 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 24. REVENUE The Group’s revenues from sales of electricity and thermal energy for the years ended December 31, 2023 and 2022 are as follows: Year ended Year ended December 31, December 31, 2023 2022 (restated) Revenue from sale of electricity 3,673,188 3,272,935 Revenue from sale of thermal energy 20,686 26,847 Other 666 3,013 3,694,540 3,302,795 25. COST OF SALES The cost of electricity and thermal energy produced for the years ended December 31, 2023 and 2022 were as follows: Year ended Year ended December 31, December 31, 2023 2022 (restated) Cost of electricity 3,253,322 2,943,136 Cost of thermal energy 526,211 534,202 3,779,533 3,477,338 Cost of sales includes the following articles: Year ended Year ended December 31, December 31, 2023 2022 (restated) Cost of purchased electricity 1,920,010 1,818,598 Materials 731,788 648,644 Depreciation of fixed assets 519,635 448,878 Transportation cost 204,688 301,051 Salary and related taxes 221,824 144,929 Taxes other than income tax 75,989 62,185 Other 105,599 53,053 3,779,533 3,477,338 26. SELLING EXPENSES The selling expenses of the Group for the years ended December 31, 2023 and 2022 are as follows: Year ended Year ended December 31, December 31, 2023 2022 (restated) Electricity transmission services 104,504 85,173 Accrual of allowance for doubtful advances paid 6,840 (33,229) Accrual of expected credit losses for accounts receivable (46,894) 148,422 64,450 200,366 47 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 27. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses for the years ended December 31, 2023 and 2022 are as follows: Year ended Year ended December 31, December 31, 2023 2022 (restated) Fines and penalties on taxes 20,375 - Salary and related taxes 29,673 24,770 Depreciation of fixed assets 11,023 11,645 Professional services 5,080 1,076 Taxes other than income tax 4,901 162,010 Utility 3,322 594 Unused vacation provision 2,863 699 Fuel 2,547 2,225 Fixed assets maintenance 1,561 1,737 Charity 1,514 1,285 Stationery 692 604 Rent expenses 670 1,464 Business trip 667 642 Communication 566 259 Bank fees 450 14,506 Representation expenses 227 279 Other 4,366 6,739 90,497 230,534 Annually as a result of tax audit carried out by tax authorities the Group accrues fines and penalties for different taxes. 28. FINANCIAL EXPENSES Financial expenses for the years ended December 31, 2023 and 2022 are as follows: Year ended Year ended December 31, December 31, 2023 2022 (restated) Penalties on borrowed funds 1,413,689 1,322,684 Interest expenses 602,921 671,922 Amortization of discount on borrowed funds - 455,390 2,016,610 2,449,996 48 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 29. OTHER NON-OPERATING LOSS, NET Other non-operating gain/(loss), net for the years ended December 31, 2023 and 2022 are as follows: Year ended Year ended December 31, 2023 December 31, 2022 (restated) Income from deferred income 262,885 337,425 Recovery/(accrual) of allowance for cost decrease to net realizable value and obsolete inventories 22,534 (129,613) Inventory sales, net 2,909 3,491 Loss from disposal of property, plant and equipment (105,049) (433) Other expenses 167,357 154,740 (105,049) (433) 30. FAIR VALUE OF FINANCIAL INSTRUMENTS IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions As no readily available market exists for large part of the Group’s financial instruments, judgment is necessary in arriving at fair value, based on current economic conditions and specific risks attributable to the instrument. As at December 31, 2023 and 2022 the following methods and assumptions were used by the Group to estimate the fair value of each class of financial instrument for which it is practicable to estimate such value: Cash and cash equivalents - The carrying amount represents their fair value. Trade and other receivables - The carrying amount is considered a reasonable estimate of their fair value as the allowance for estimated doubtful amounts is considered a reasonable estimate of the discount required to reflect the impact of credit risk. Trade and other payables - The carrying amount is a reasonable estimate of their fair value due to their current nature. Non-current borrowing - The carrying amount is considered a reasonable estimate of their fair value as applied interest rate on non-current borrowings is considered to be a reasonable approximation of the market rate with reference to loans with similar credit risk level and maturity period at the reporting date. Fair values are primarily determined using quoted market prices or standard pricing models using observable market inputs where available and are presented to reflect the expected gross future cash in/outflows. The Group classifies the fair values of its financial instruments into a three level hierarchy based on the degree of the source and observability of the inputs that are used to derive the fair value of the financial asset or liability as follows: Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can assess at the measurement date; or Level 2 Inputs other than quoted inputs included in Level 1 that are observable for the assets or liabilities, either directly or indirectly; or Level 3 Unobservable inputs for the assets or liabilities, requiring the Group to make market based assumptions. 49 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 30. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) Level 1 classifications primarily include financial assets and financial liabilities that are exchange traded, whereas Level 2 classifications primarily include financial assets and financial liabilities which derive their fair value primarily from exchange quotes and readily observable quotes. Level 3 classifications primarily include financial assets and financial liabilities which derive their fair value predominately from models that use applicable market based estimates surrounding location, quality and credit differentials. In circumstances where the Group cannot verify fair value with observable market inputs (Level 3 fair values), it is possible that a different valuation model could produce a materially different estimate of fair value. It is the Group’s policy that transactions and activities in trade related financial instruments be concluded under master netting agreements or long form confirmations to enable balances due to/from a common counterparty to be offset in the event of default, insolvency or bankruptcy by the counterparty. The following tables show the fair values of financial assets and financial liabilities as at December 31, 2023 and 2022. Other assets and liabilities which are measured at fair value on a recurring basis are cash and cash equivalents. There are no nonrecurring fair value measurements. Level 1 Level 2 Level 3 December 31, 2023 Total FINANCIAL ASSETS: Cash and cash equivalents 91,980 - - 91,980 Trade and other accounts receivable - - 451,147 451,147 Non-current investments - - 182,400 182,400 TOTAL FINANCIAL ASSETS 91,980 - 633,547 725,527 FINANCIAL LIABILITIES: Current trade and other accounts payable - - 9,009,839 9,009,839 Short-term borrowed funds - 9,564,213 - 9,564,213 Long-term borrowed funds - 10,102,086 - 10,102,086 Other short-term payables and accrued expenses - - 2,784,808 2,784,808 TOTAL FINANCIAL LIABILITIES - 19,666,299 11,794,647 31,460,946 50 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 30. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) Level 1 Level 2 Level 3 December 31, 2022 (restated) Total FINANCIAL ASSETS: Cash and cash equivalents 43,042 - - 43,042 Trade and other accounts receivable - - 604,732 604,732 Non-current investments - - 182,400 182,400 TOTAL FINANCIAL ASSETS 43,042 - 787,132 830,174 FINANCIAL LIABILITIES: Current trade and other accounts payable - - 9,936,216 9,936,216 Short-term borrowed funds - 8,220,557 - 8,220,557 Long-term borrowed funds - 9,511,557 - 9,511,557 Other short-term payables and accrued expenses - - 1,203,130 1,203,130 TOTAL FINANCIAL LIABILITIES - 17,732,114 11,139,346 28,871,460 31. CONTINGENT LIABILITIES AND CONTINGENT ASSETS (a) Social commitments and pensions and retirement plans The Group incurs expenses on development and maintenance of social objects and welfare of its employees and other social needs. Employees of the Group receive pension benefits in accordance with the laws and regulations of the Republic of Tajikistan. As at December 31, 2023 and 2022 the Group was not liable for any supplementary pensions, post- retirement health care, insurance benefits, or retirement indemnities to its current or former employees. (b) Insurance As at December 31, 2023 and 2022 the Group had no insurance coverage in respect of its assets, activities and its public obligations and other risks, to be insured. Since the absence of insurance does not mean reducing the cost of the assets or incurrence of liabilities, provisions were not considered in the consolidated financial statements for uncertain losses. (c) Environment protection issues Official laws of the Republic of Tajikistan #58 “On environment protection” dated June 15, 2004, and #228 “On air protection” dated February 1, 1996, are aimed to protect atmosphere from pollution and established maximum permissible level of emission of harmful substances. Integrated control and permits for allowable emissions of pollutants are conducted in accordance with the article 11 “Basic requirements for the valuation of atmosphere air quality” and article 13 “Measurement and control of emissions into the atmosphere”. 51 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 31. CONTINGENT LIABILITIES AND CONTINGENT ASSETS (continued) The Republic of Tajikistan has acceded to the Kyoto Protocol and ratified it on November 22, 2008. After the ratification of Kyoto Protocol coordination is assigned to Committee for environmental protection under the Government of the Republic of Tajikistan. Legislation for environmental protection in the Republic of Tajikistan is in the process of development and government agencies continuously revise standards for the application of such legislation. The Group periodically evaluates its obligations under environmental regulations. As obligations are defined, they are recognized immediately in the consolidated statements. Potential liabilities that may arise as a result of changes in existing regulations, litigation in civil cases or legislation cannot be estimated with any certainty, but could be significant. Under the existing system of control and penalties for non-compliance with the existing legislation, Management believes that at the moment there are no significant liabilities related to environmental damage. (d) Litigation In Management’s opinion at present time there are no any pending legal proceedings or other claims, which could have a material adverse effect on the financial results and financial position of the Group, or which would not be accrued or disclosed in these consolidated financial statements. (e) Technical risks Reconstruction of the electric power industry is dictated by the current situation in the energy sector due to the rapid deterioration of the technical condition of the fixed assets of the Group. Implementation of current and capital repairs is not enough; new construction, rehabilitation, reconstruction and technical re- equipment are required in accordance with technical progress. Thus, technical risk of impairment is high. (f) Liabilities with counterparties The Group’s trade and other accounts payable include a liability towards the supplier HPP “Sangtuda 2”. HPP “Sangtuda-2” charged penalties for the Group's accounts payable due to overdue payment for electricity. The Management of the Group believes that the amount of penalties will not be claimed by the HPP “Sangtuda-2” and probability of payment of penalties is remote. 32. TRANSACTIONS WITH RELATED PARTIES In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. Transactions with state companies The Group applies the exemption from the application of IAS 24, disclosures in respect of related party transactions and balances and transactions, including commitments, because it is associated with the state organization. Accordingly, the Group discloses the nature of their relationship with the Government, the description and the amount of each operation that is significant, individually or in the aggregate. Nature of operation Related party Cash and cash equivalents SUE SB RT Amonatbonk Advances paid Shabakahoi taqsimoti barq, OJSC Trade and other accounts receivable Shabakahoi taqsimoti barq, OJSC State Unitary Enterprise City heating Networks of Trade and other accounts receivable Dushanbe Trade and other accounts receivable Shabakahoi intiqoli barq, OJSC Trade and other accounts receivable Rogun HPP, OJSC Trade accounts payable Sangtuda-2 HPP Trade accounts payable Sangtuda-1 HPP, OJSC Trade accounts payable Shabakahoi taqsimoti barq, OJSC 52 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) b) The consolidated statement of profit or loss and other comprehensive income for the years ended December 31, 2023 and 2022 reflected the following transactions arising from transactions with related parties: Nature of operation Related party Cost of sales Sangtuda-1 HPP, OJSC Cost of sales Shabakahoi taqsimoti barq, OJSC Cost of sales Rogun HPP, OJSC Cost of sales Shabakahoi taqsimoti barq, OJSC Revenue Shabakahoi taqsimoti barq, OJSC Revenue Shabakahoi intiqoli barq, OJSC Financial loss Ministry of Finance of the Republic of Tajikistan Selling expenses Shabakahoi intiqoli barq, OJSC For the years ended December 31, 2023 and 2022 the remuneration of key management was as follows: December 31, December 31, 2023 2022 (restated) Salary and bonuses 96 84 Contributions to social fund 19 17 115 101 33. FINANCIAL RISKS MANAGEMENT Main financial liabilities of the Group include loans, trade and other payables and agreements of financial guarantee. Main purpose of these financial liabilities is financing Group’s operations and support of its activity. Group has trade and other receivables, cash and cash equivalents and current deposits, which directly arise in the course of Group’s operational activity. The Group also keeps investment held for sale. 33. FINANCIAL RISKS MANAGEMENT (CONTINUED) The Group is subject to market risk, credit risk and liquidity risk. Management of the Group controls risk management process. Management reviews and approves risk management policy. Prior to placement of Group’s shares, duties of Superior Body are performed by the Government of the Republic of Tajikistan. Exclusive powers of Superior Body are: • Determination of main directions of Group’s activity, approval of annual reports and consolidated financial statements, • Amending of Group’s charter, including change of its share capital, • Election of members of auditing committee (inspector) of the Group and their dismissal, • Approval of Audit committee reports, • Taking decision on acquisition of shares, issued by the Group, • Taking decision on reorganisation and liquidation of the Group, assignment of liquidation committee and approval of liquidation balance sheet, • Election of Group’s Chairman and his termination, • Exercise of other powers, prescribed by laws of the Republic of Tajikistan and charter of the Group. 53 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 33. FINANCIAL RISKS MANAGEMENT (CONTINUED) Geographical concentration The geographical concentration of assets and liabilities are disclosed below: Republic of OECD Other 2023 Tajikistan countries Total FINANCIAL ASSETS: Cash and cash equivalents 91,980 - - 91,980 Trade and other accounts receivable 342,742 - 108,405 451,147 Non-current investments 182,400 - - 182,400 TOTAL FINANCIAL ASSETS 617,122 - 108,405 725,527 FINANCIAL LIABILITIES: Current trade and other accounts payable 8,173,237 836,602 - 9,009,839 Current borrowed funds 9,329,363 234,850 - 9,564,213 Non-current borrowed funds 9,282,642 819,444 - 10,102,086 Other current payables and accrued Expenses 2,784,808 - - 2,784,808 TOTAL FINANCIAL LIABILITIES 29,570,050 1,890,896 - 31,460,946 Republic of OECD Other 2022 Tajikistan countries (restated) Total FINANCIAL ASSETS: Cash and cash equivalents 43,042 - - 43,042 Trade and other accounts receivable 430,901 - 173,831 604,732 Non-current investments 182,400 - - 182,400 TOTAL FINANCIAL ASSETS 656,343 - 173,831 830,174 FINANCIAL LIABILITIES: Current trade and other accounts payable 8,056,212 1,880,004 - 9,936,216 Current borrowed funds 8,047,822 172,735 - 8,220,557 Non-current borrowed funds 8,613,868 897,689 - 9,511,557 Other current payables and accrued Expenses 1,203,130 - - 1,203,130 TOTAL FINANCIAL LIABILITIES 25,921,032 2,950,428 - 28,871,460 Market risk Market risk is a risk of possible fluctuations of the fair value of future cash flows as a result of changes in market prices. Market prices include four types of risks: interest rate risk, currency risk, risk of price change and other price risks. Financial instruments, which are subject to market risk, include loans, deposits, investments held for sale. Sensitivity analysis as at December 31, 2023 and 2022 is presented below. 33. FINANCIAL RISKS MANAGEMENT (CONTINUED) Sensitivity analysis was prepared on the basis of assumption that amount of net debt and part of financial instruments in foreign currency is constant. 54 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) Analysis does not include effect of changes of market variables on book value of pensions and other liabilities on employee’s termination, provisions and also nonfinancial assets and liabilities of subdivisions. In preparing sensitivity analysis the following assumptions were made: Sensitivity of statement of financial position is associated with debt instruments held for sale. Sensitivity of relevant account of statement of profit or loss and other comprehensive income is the effect of proposed changes of relevant market risks. The analysis was made on the basis of financial assets and financial liabilities existing as at December 31, 2023 and 2022. Risk of price changes Risk of price changes is the risk or uncertainty arising from possible changes in market prices and their impact on future performance and results of operational activity of the Group. Price decrease can lead to decrease of net income and cash flows. Maintaining low prices for an extended period of time can lead to a reduction in activity and may ultimately have an impact on the Group’s ability to fulfill its obligations under the contracts. Management estimates the decline as hardly probable and Group does not use derivative instruments to reduce its exposure to this risk. The Group enters into non-current contracts for products supply on standard commercial terms; thereby the Group is not exposed to the risk of loss of revenue due to price increase on the market. Currency risk Currency risk is a risk that the fair value of future cash flows of financial instruments will fluctuate due to changes in exchange rates. The Group’s exposure to foreign currency exchange rates is stipulated primarily due to Group’s operating activity (when sales or expenses are denominated in currencies, other than the functional currency of the Group), as well as the Group’s net investment in foreign subsidiaries. The Group exports its production to Afghanistan and countries of Central Asia, acquires equipment and materials from overseas suppliers and attracts a substantial amount of non-current loans in foreign currency. Significant concentration of currency risk lies in loans denominated in various foreign currencies (mainly in US dollars). In accordance with the Group’s accounting policy, these loans were translated to somoni using exchange rates prevailed at the reporting date. However, future changes in exchange rate of somoni to US dollar are unpredictable. Future changes in exchange rates may affect the carrying value of liabilities denominated in foreign currencies. There are strict restrictions and controls in respect of Somoni conversion into other currencies. Currently Somoni is not convertible currency outside the Republic of Tajikistan. 55 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 33. FINANCIAL RISKS MANAGEMENT (continued) TJS USD EUR XDR KWD Other 2023 Total FINANCIAL ASSETS: Cash and cash equivalents 9,913 79,641 89 - - 2,337 91,980 Trade and other accounts receivable 342,742 108,405 - - - - 451,147 Long-term investments 182,400 - - - - - 182,400 TOTAL FINANCIAL ASSETS 535,055 188,046 89 - - 2,337 725,527 FINANCIAL LIABILITIES: Current trade and other accounts payable 7,872,601 986,786 122,847 - - 27,605 9,009,839 Short-term borrowed funds 1,320 7,833,813 259,885 144,528 766,628 558,039 9,564,213 Long-term borrowed funds - 7,246,656 792,250 113,111 31,574 1,918,495 10,102,086 Other current payables and accrued expenses 12,089 2,270,716 57,738 193,354 46,712 204,199 2,784,808 TOTAL FINANCIAL LIABILITIES 7,886,010 18,337,971 1,232,721 450,993 844,914 2,708,337 31,460,946 (7,350,955 Open currency position ) (18,149,925) (1,232,632) (450,993) (844,914) (2,706,000) (30,735,419) 33. FINANCIAL RISKS MANAGEMENT (continued) 56 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) TJS USD EUR XDR KWD Other 2022 (restated) Total FINANCIAL ASSETS: Cash and cash equivalents 7,637 32,362 - - - 3,043 43,042 Trade and other accounts receivable 430,901 173,831 - - - - 604,732 Non-current investments 182,400 - - - - - 182,400 TOTAL FINANCIAL ASSETS 620,938 206,193 - - - 3,043 830,174 FINANCIAL LIABILITIES: Current trade and other accounts payable 4,811,115 4,914,055 211,046 - - - 9,936,216 Short-term borrowed funds 1,318 6,861,621 150,199 467,717 126,284 613,418 8,220,557 Long-term borrowed funds - 6,658,295 734,757 1,930,097 152,982 35,426 9,511,557 Other current payables and accrued expenses 10,832 1,044,850 25,846 88,058 21,671 11,873 1,203,130 TOTAL FINANCIAL LIABILITIES 4,823,265 19,478,821 1,121,848 2,485,872 300,937 660,717 28,871,460 Open currency position (4,202,327) (19,272,628) (1,121,848) (2,485,872) (300,937) (657,674) (28,041,286) 57 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 33. FINANCIAL RISKS MANAGEMENT (continued) Currency risk sensitivity The following table details the Group’s sensitivity to a 10% increase and decrease in the USD and XDR against the TJS for 2023 and 2022, respectively. These rates are the sensitivity rates used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign currency exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the period for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower. 2023 2022 Official USD Official USD Official USD Official USD exchange rate, exchange rate, exchange exchange +10% -10% rate, +10% rate, -10% Impact on profit and loss (1,814,993) 1,814,993 (1,927,263) 1,927,263 2023 2022 Official XDR Official XDR Official XDR Official XDR exchange rate, exchange rate, exchange exchange +10% -10% rate, +10% rate, -10% Impact on profit and loss (45,099) 45,099 (248,587) 248,587 2023 2022 Official EUR Official EUR Official EUR Official EUR exchange rate, exchange rate, exchange exchange +10% -10% rate, +10% rate, -10% Impact on profit and loss (123,263) 123,263 (112,185) 112,185 The Group is not exposed to interest rate risk as the amount of the Group’s borrowings raised with floating rate is insignificant. Credit risk Credit risk is a risk that the Group will incur financial loss because the counterparties fail to meet their obligations under financial instrument or client contract. The Group is exposed to credit risk related to its operating activity (primarily, trade receivables). The carrying value of accounts receivable, net of allowance for doubtful debt, represents the maximum amount exposed to credit risk. Need for impairment recognition is reviewed at each reporting date, individually for each large entity. In addition, the amounts due from a large number of individuals are Grouped into homogeneous Groups and assessed for impairment on a collective basis. The calculations are based on the information on actual losses incurred in the past. The maximum exposure to credit risk at the reporting date is presented by the book value of each class of financial assets. The Group does not have the property received as security for the debt owed to it. 58 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) Although collection of receivables could be influenced by economic factors, Management believes that there is no substantial risk of loss beyond the provision for impairment of receivables. 33. FINANCIAL RISKS MANAGEMENT (continued) Liquidity risk Group exercises control over the risk of shortage of funds using a recurring liquidity planning tool. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and payment by installments contracts. The Group has access to financing in sufficient amounts and terms of loans to be paid within 12 months may be postponed to a later date by agreement with current creditors. The following table summarizes the contractual undiscounted payments on financial liabilities of the Group by maturity. 59 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 33. FINANCIAL RISKS MANAGEMENT (continued) Less than 1–3 3 1-5 years More Undefined 2023 Total 1 month months months - than 1 year 5 years FINANCIAL ASSETS: Cash and cash equivalents 91,980 - - - - - 91,980 Trade and other accounts receivable 451,147 - - - - - 451,147 Non-current investments - - - - - 182,400 182,400 TOTAL FINANCIAL ASSETS 543,127 - - - - 182,400 725,527 FINANCIAL LIABILITIES: Trade and other accounts payable 9,009,839 - - - - - 9,009,839 Short-term borrowed funds 8,427,691 289,382 847,140 - - - 9,564,213 Long-term borrowed funds - - 4,727,959 5,374,127 - 10,102,086 Other current payables and accrued expenses 2,772,742 - 12,066 - - - 2,784,808 TOTAL FINANCIAL LIABILITIES 20,210,272 289,382 859,206 4,727,959 5,374,127 - 31,460,946 Difference between financial assets and liabilities (19,667,145 (289,382) (859,206) (4,727,959) (5,374,127) 182,400 (30,735,419) 60 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 33. FINANCIAL RISKS MANAGEMENT (continued) Less than 1–3 3 months - 1-5 years More than Undefined 2022 1 month months 1 year 5 years (restated) Total FINANCIAL ASSETS: Cash and cash equivalents 43,042 - - - - - 43,042 Trade and other accounts receivable 604,732 - - - - - 604,732 Non-current investments - - - - - 182,400 182,400 TOTAL FINANCIAL ASSETS 647,774 - - - - 182,400 830,174 FINANCIAL LIABILITIES: Current trade and other accounts payable 9,936,216 - - - - - 9,936,216 Short-term borrowed funds 7,363,315 104,567 752,675 - - - 8,220,557 Long-term borrowed funds - - - 4,990,349 4,521,208 - 9,511,557 Other current payables and accrued expenses 1,203,130 - - - - - 1,203,130 TOTAL FINANCIAL LIABILITIES 18,502,661 104,567 752,675 4,990,349 4,521,208 - 28,871,460 Difference between financial assets and liabilities (17,854,887) (104,567) (752,675) (4,990,349) (4,521,208) 182,400 (28,041,286) 61 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 33. FINANCIAL RISKS MANAGEMENT (continued) Analysis of undiscounted financial liabilities The table below shows the distribution of the Group's obligations as at December 31, 2023 and 2022 based on contractual undiscounted cash flows. Less than 1 1 – 3 months 3 months – 1-5 years More than 5 Undefined 2023 month 1 year years Total FINANCIAL LIABILITIES: Current trade and other accounts payable 9,009,839 - - - - - 9,009,839 Current borrowed funds 25,055 2,333,079 5,977,510 - - - 8,335,644 Non-current borrowed Funds - - - 7,358,874 6,465,438 - 13,824,312 Other current payables and accrued expenses 2,772,742 - 12,066 - - - 2,784,808 TOTAL FINANCIAL LIABILITIES 11,807,636 2,333,079 5,989,576 7,358,874 6,465,438 - 33,954,603 Less than 1 1 – 3 months 3 months - 1 1-5 years More than 5 Undefined 2022 month year years (restated) Total FINANCIAL LIABILITIES: Current trade and other accounts payable 9,936,216 - - - - - 9,936,216 Short-term borrowed funds 25,055 2,333,079 5,977,510 - - - 8,335,644 Long-term borrowed Funds - - - 7,358,874 6,465,438 - 13,824,312 Other current payables and accrued expenses 1,203,130 - - - - - 1,203,130 TOTAL FINANCIAL LIABILITIES 11,164,401 2,333,079 5,977,510 7,358,874 6,465,438 - 33,299,302 62 OJSC “BARQI TOJIK” NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 (in thousand Tajik somoni, unless otherwise stated) 33. FINANCIAL RISKS MANAGEMENT (continued) Capital management Capital includes capital owned by the Government of the Republic of Tajikistan. The main objective of the Group’s capital management is to ensure strong credit worthiness and an adequate level of capital to conduct its operations and maximize shareholder value. The Group manages its capital structure and its changes in response to changes of economic conditions. For the year ended December 31, 2023 and 2022 no changes were made in the objectives, policies and processes for managing capital. 34. SUBSEQUENT EVENTS At the date of the issue of the consolidated financial statements of the Group there were no events, except described above that must be disclosed in the consolidated financial statements in accordance with IAS 10 “Events after the reporting period”. 63