ernst - ПАО «Интер РАО»...(np acr). ernst&young llc is registered in the register...

ERNST &YOUNG 2

Audit Report – JSC “INTER RAO UES”

Table of Contents Page

Independent Auditor’s Report 3 Accounting Balance Sheet 5 STATEMENT OF FINANCIAL RESULTS 7 STATEMENT OF CHANGES IN EQUITY for the year 2012 8

3

Independent Auditor’s Report

To shareholders of JSC ―INTER RAO UES‖

We audited accounting (financial) statements of JSC ―INTER RAO UES‖ attached hereto, which

consist of accounting balance-sheet as of December 31, 2012, statement of financial results for

the year 2012, and annexes thereto.

Liability for Accounting (Financial) Statements of the Audited Entity

The management staff of JSC ―INTER RAO UES‖ bears responsibility for preparation and

accuracy of the said accounting (financial) statements in accordance with rules for preparing

accounting (financial) statements established in the Russian Federation, as well as for internal

control system required for preparing accounting (financial) statements without material

misstatements whether due to fraud or error.

Auditor’s liability

Our liability is in expressing opinion on the accuracy of these statements on the basis of our

audit.

We conducted audit in accordance with the federal standards of auditing activity applicable in

the Russian Federation, and International Standards of Auditing. These standards require the

compliance with applicable ethical norms, as well as planning and conducting an audit in the

manner as to obtain sufficient confidence that the accounting (financial) statements are free from

material misstatements.

Audit includes conducting the auditing procedures aimed at obtaining audit evidences

confirming the numerical indicators contained in the accounting (financial) statements, as well as

information disclosed in them. The choice of auditing procedures remains a subject of auditor’s

judgment, which is based on the risk assessment of material misstatements in the accounting

(financial) statements, whether due to fraud or error. In the process of assessing this risk, the

auditor studies internal control system, which ensures preparation and accuracy of accounting

(financial) statements, in order to select an appropriate set of auditing procedures, but not to

express opinion on the internal control system efficiency. Audit also includes assessment of

proper character of the applied accounting policy, and validity of assessment estimates made by

the management staff, as well as assessment of submitting accounting (financial) statements in

general.

We believe that audit evidences found by us constitute sufficient and proper basis for expressing

our opinion.

Ernst & Young LLC ООО «Эрнст энд Янг»

77 Sadovnicheskaya Nab., bld. 1 Россия, 115035, Москва

Moscow, 115035, Russia Садовническая наб., 77, стр. 1

Tel: +7 (495) 705 9700 Тел.: +7 (495) 705 9700

+7 (495) 755 9700 +7 (495) 755 9700

Fax: +7 (495) 755 9701 Факс: +7 (495) 755 9701

www.ey.com ОКПО:59002827

A member firm of Ernst & Young Global Limited

http://www.ey.com/

4

Opinion

In our opinion, the accounting (financial) statements authentically reflect in all material aspects

the financial position of JSC ―INTER RAO UES‖ as of December 31, 2012, the results of its

financial and economic activities and cash flows in the year 2012 in accordance with the rules of

preparing accounting (financial) statements established in the Russian Federation.

Other information

Accounting (financial) statements attached hereto are not intended to represent financial position

and results of activity in accordance with accounting principles or methods generally accepted in

the countries and other territories other than the Russian Federation. Therefore, accounting

(financial) statements attached hereto are not intended for persons that are not familiar with

accounting principles, procedures and methods accepted in the Russian Federation.

D.E. Lobachev

Partner, CEO

Ernst&Young LLC

February 21, 2013

Information about the entity under audit

Name: JSC ―INTER RAO UES‖ Details of registration in the Unified State Register of Legal Entities concerning the legal entity (certificate of state

registration of legal entity under 1022302933630 issued by Interdistrict FTSI of Russia No. 7 for Krasnodar Region

(Territorial area 2320 for Central District) dated November 1, 2002).

Location: 27, Bolshaya Pirogovskaya Str., Building 3, Moscow, 119435 Russian Federation

Information about auditor

Name: Ernst&Young LLC Primary State Registration Number 1027739707203.

Location: 77, Sadovnicheskaya Emb., Building 1, Moscow 115035 Russia. Ernst&Young LLC is a member of Non-commercial Partnership Audit Chamber of Russia

(NP ACR). Ernst&Young LLC is registered in the register of auditors and audit organizations NP ACR under No.

3028, and is included into the control copy of the register of auditors and audit organizations under Primary State

Registration Number 10201017420.

5

Annex No. 1

to the Order of the Ministry of Finance of the

Russian Federation

dd. 02/07/2010 No. 66n

Accounting Balance Sheet as of December 31, 2012

Organization Open Joint Stock Company “INTER RAO UES” Taxpayer Identification Number

Type of activity _____________ Electricity resale and production Legal form/form of ownership

Open Joint Stock Company/private property Unit of measurement: thousand rubles

Location (address) 27, Bolshaya Pirogovskaya Str., Building 3, Moscow, 119435

Clarification

s Name of the indicator Indicator

code As of December

31, 2012 As of December


31, 2010

PZ-1

ASSET

I. CAPITAL ASSETS

Intangible Assets 1110 75 857 6 630 3 533

PZ-2 Results of research and development 1120 - 1 908 5 555

Intangible research assets 1130 - - -

Tangible research assets 1140 - - -

PZ-3 Fixed assets 1150 3 241 714 28 551 362 61 771 367

PZ-4 including unfinished construction 1151 11 381 9 425 348 22 340 149

PZ-3 Income-bearing investments in tangible assets 1160 84 727 42 053 17 846

PZ-6 Financial Investments 1170 334 946 242 241 150 388 46 454 407

Deferred tax assets 1180 3 814 926 8010018 470 704

PZ-5 Other capital assets 1190 27 151 917 5 000 301 5 279 270

PZ-8.1 including long-term

receivables 1191 26 967 810 3 862 219 2 308 241

TOTAL on section I 1100 369 315 383 282 762 660 114 002 682

PZ-7

II. CURRENT ASSETS

Inventories 1210 13 823 851 783 657 151

Value Added Tax on assets purchased 1220 765 487 868 103 1 078 983

PZ-8 Receivables 1230 59 345 981 61 497 955 11 328 889

PZ-8.2 including

buyers and customers 1231 2 806 082 3 773 174 5 112 631

PZ-8.4 advance payments granted 1232 3 503 957 1 302 231 2 184 478

PZ-8.3 other debtors 1233 53 035 942 56 422 550 4 031 780

PZ-6.2 Financial investments (other than cash equivalents) 1240 937 985 6 028 375 4 020 736

PZ-9 Cash and cash equivalents 1250 14 069 790 4 868 696 4 062 822

PZ-10 Other current assets 1260 210 461 440 626 125 573

TOTAL on section II 1200 75 343 527 74 555 538 21 274 154

BALANCE 1600 444 658 910 357 318 198 135 276 836

CODES OKUD Form No. 2 0710001

Date (day, month, year) 31 12 2012

OKPO form 33741102

TIN 2320109650

OKVED form 40.10.11 51.56.4

OKOPF/OKFS form 47 41

OKEI form 384

6

Form 0710001 p. 2

Clarification

s Name of the indicator Indicator

code As of December



31, 2010

PZ-11

LIABILITY

III. CAPITAL AND RESERVES

Authorized capital 1310 293 339 703 272 996 962 81 287 328

PZ-11 Treasury shares 1320 (409) - -

Revaluation of capital assets 1340 308 415 352 952 6 110 175

PZ-11 Additional capital (without revaluation) 1350 195 416 130 195 090 785 21 771 383

PZ-11 Reserve capital 1360 296 339 296 339 161 118

Retained profit (uncovered loss), including: 1370 (105 340 945) (154 609 257) (16 953 277)

retained profit of previous years 1371 (90 980 304) (11 481 290) (16 953 277)

retained profit of current year 1372 (14 360 641) (143 127 967) -

TOTAL on section III 1300 384 019 233 314 127 781 92 376 727

PZ-13 IV. LONG-TERM LIABILITIES

Borrowed funds 1410 10 951 941 17 965 196 19 731 635

Deferred tax liabilities 1420 52 721 241 196 698 112

Estimated liabilities 1430 - - -

PZ-14.3 Other long-term liabilities 1450 1 726 174 19 269 014 -

TOTAL on section IV 1400 12 730 836 37 475 406 20 429 747

PZ-13 V. SHORT-TERM LIABILITIES

Borrowed funds 1510 3 235 056 340 268 660 792

PZ-14 Payables 1520 43 778 492 4 481 858 6 811 969

PZ-14.1 including:

suppliers and contractors 1521 3 489 736 3 584 965 2 919 632

payables to organization’s employees 1522 1 762 234 6 258

payables to government extrabudgetary funds 1523

taxes and levies due 1524 594 50 722 406 080

advance payments received 1525 2 097 550 496 864 615 434

PZ-14.2 other creditors 1526 38 188 850 349 073 2 864 565

Deferred revenues 1530 - - -

PZ-12 Estimated liabilities 1540 895 293 892 885 567 956

Other short-term liabilities 1550 - - 14 429 645

TOTAL on section V 1500 47 908 841 5 715 011 22 470 362

BALANCE 1700 444 658 910 357 318 198 135 276 836

Head B.Yu. Kovalchuk Chief accountant A.O. Chesnokova

(signature) (full name) (signature) (full name)

" 21 " February 2013

7

Annex


Russian Federation

dd. 02/07/2010 No. 66n

STATEMENT OF FINANCIAL RESULTS for a period of January 01 to December 31,

2012




Clarificati

ons Name of the indicator Code For January –

December 2012 For January –

December 2011

PZ-15 Proceeds (net) from sales of goods and services (net of value added tax,

excise and similar mandatory payments), including: 2110 42 692 178 73 387 956

Electricity export 2111 25 574 816 36 919 150

Sale of electricity (power) in the domestic market 2112 16 646 011 35 264 217

Other 2114 471 351 1 204 589

PZ-16 Prime cost of goods, products, works, services sold 2120 (35 175 079) (60 755 152)

Purchase of electricity (power) in the domestic market 2121 (27 695 611) (40 351 447)

electricity (power) production 2122 (4 396 357) (16 291 204)

Electricity import 2123 (2 260 700) (2 913 588)

Other 2125 (822 411) (1 198 913)

Gross profit 2100 7 517 099 12 632 804

PZ-16 Commercial costs 2210 (4 153 181) (6 646 199)

PZ-16 Administrative costs 2220 (4 510 163) (3 899 084)

Profit (loss) from sales 2200 (1 146 245) 2 087 521

Revenues from participation in other organizations 2310 2 573 215 1 355 352

Interest receivable 2320 1 723 504 1 262 734

Interest payable 2330 (1 919 141) (1 739 263)

PZ-17 Other revenues 2340 121 529 638 65 327 947

PZ-17 Other costs 2350 (132 550 135) (218 698 144)

Profit (loss) before tax 2300 (9 789 164) (150 403 853)

PZ-19 Current income tax 2410 (660 220) (626 525)

including permanent tax liabilities (assets) 2421 7 196 334 23 557 657

Change in deferred tax liabilities 2430 171 780 (191 961)

Change in deferred tax assets 2450 (4 235 418) 7 612 670

Other 2460 152 381 481 702

Net profit (loss) of the reporting period 2400 (14 360 641) (143 127 967)

FOR REFERENCE

Result from revaluation of fixed assets not included in net profit (loss) for

the period

2510

- -

Result from other transactions not included in net profit (loss) for the

period 2520

- -

Aggregate financial result for the period 2500 (14 360 641) (143 127 967)

PZ-20 Base profit (loss) per share (kopecks) 2900 (0,1472) (2,0824)

PZ-20 Diluted profit (loss) per share (kopecks) 2910 (0,1472) (2,0824)






OKPO form 33741102

TIN 2320109650

OKVED form 40.10.11 51.56.4


OKEI form 384

8

Annex


Russian Federation

dd. 02/07/2010 No. 66n

STATEMENT OF CHANGES IN EQUITY for the year 2012 For 2012




1. Cash Flow

Name of the indicator Code Authorized

capital Treasury

shares Additional capital Reserve

capital Retained profit

(uncovered loss) Total

Value of capital as of December 31, 2010 3100 81 287 328 - 27 881 558 161 118 (16 953 277) 92 376 727

For 2011

Increase in capital – total: 3210 191 709 634 173 319 402 365 029 036

including

net profit 3211 X X X X

revaluation of assets 3212 X X - X - -

revenues booked directly to the

increase in capital 3213 X X - X

additional issue of shares 3214 191 709 634 - 173 319 402 X X 365 029 036

Increase in nominal value of

shares 3215 - - X

legal entity’s reorganization 3216 - - - -

Reduction in capital – total: 3220 - - - - (143 277 982) (143 277 982)

including

loss 3221 X X X X (143 127 967) (143 127 967)


expenses booked directly to the

decrease in capital 3223 X X X -

decrease in nominal value of

shares 3224 - X -

decrease in number of shares 3225 - - X - -

legal entity’s reorganization 3226 - - - -

dividends 3227 X X X - (150 015) (150 015)

Change in additional capital 3230 X X (5 757 223) - 5 757 223 X Change in reserve capital 3240 X X X 135 221 (135 221) X Value of capital as of December 31, 2011 3200 272 996 962 195 443 737 296 339 (154 609 257) 314 127 781

For 2012

Increase in capital – total 3310 20 342 741 6 493 057 325 345 63 584 416 90 745 559

including

net profit 3311 X X X X


revenues booked directly to the

increase in capital 3313 X X - X

additional issue of shares 3314 20 342 741 - - X X 20 342 741

Increase in nominal value of

shares 3315 - X X

legal entity’s reorganization 3316 - 325 345 63 584 416 63 909 761

sale of treasury shares 3317 - 6 493 057 - 6 493 057

Reduction in capital – total 3320 - (6 493 466) (44 537) - (14 316 104) (20 854 107)

including loss 3321 X X X X (14 360 641) (14 360 641)


expenses booked directly to the decrease in capital 3323 X X (44 537) X 44 537

decrease in nominal value of

shares 3324 - - X -



OKPO form 33741102

TIN 2320109650

OKVED form 40.10.11 51.56.4


OKEI form 384

9

decrease in number of shares 3325 - - X -

legal entity’s reorganization 3326 - (6 493 466) - (6 493 466)

dividends 3327 X X X - -

Change in additional capital 3330 X X - - X Change in reserve capital 3340 X X X - X Value of capital as of December 31,

2012 3300 293 339 703 (409) 195 724 545 296 339 (105 340 945) 384 019 233

2. Adjustments due to changes in accounting policy and error corrections

Name of the indicator

code As of

December 31, 2011

Change in capital for 2012 As of December 31, 2012

at the expense of net profit (loss)

at the expense of other factors

Capital - total

before adjustments 3400 314 127 781 49 268 312 20 623 140 384 019 233

adjustment due to: changes in the accounting policy 3410 - - - -

correction of errors 3420 - - - -

after adjustments 3500 314 127 781 49 268 312 20 623 140 384 019 233

including: retained profits (uncovered losses):

before adjustments 3401 - - - -

adjustment due to:

changes in the accounting policy 3411 - - - -


after adjustments 3501 - - - -

other items of capital adjusted -

before adjustments 3402 - - - -

adjustment due to: changes in the accounting policy 3412 - - - -


after adjustments 3502 - - - -

3. Net assets

Name of the indicator Code As of December 31,

2012 As of December 31,


2010 Net assets 3600 384 019 233 314 127 781 92 376 727




10

Annex


Russian Federation

dd. 02/07/2010 No. 66n STATEMENT OF CASH FLOW

For 2012

Organization Open Joint Stock Company “INTER RAO UES“ Taxpayer Identification Number



Name of the indicator Code For 2012 For 2011

Cash flows from current transactions

Proceeds - total 4110 47 971 248 78 478 823

including:

from sales of products, goods, works and services 4111 43 836 454 76 771 224

lease payments, license fees, royalties, commissions and other similar

payments 4112 336 868 113 278

from resale of financial investments 4113 - -

other proceeds 4119 3 797 926 1 594 321

Payments - total 4120 (50 826 306) (77 452 865)

including

to suppliers (contractors) for raw materials, materials, works and

services 4121 (41 445 008) (65 408 314)

due to payment of employees’ remuneration 4122 (2 858 752) (3 293 852)

interests on debt liabilities 4123 (1 309 016) (1 644 097)

organizations’ income tax 4124 (765 454) (1 631 237)

other payments 4129 (4 448 076) (5 475 365)

Balance of cash flows from current transactions 4100 (2 855 058) 1 025 958

Cash flows from investment transactions

Proceeds - total 4210 36 409 799 13 575 504

including:

from sales of current assets (other than financial investments) 4211 2 255 854 3 782 329

from sales of shares (participatory interest) in other organizations 4212 24 287 712 3 484 096

from return of loans provided, from sales of debt securities (right of

demand of cash to other persons) 4213 5 227 000 4 145 753

dividends, interest on debt financial investments and similar proceeds

from equity participation in other organizations 4214 3 633 733 2 163 326

other proceeds 4219 1 005 500 -

Payments - total 4220 (11 539 961) (12 926 384)

including

due to acquisition, creation, modernization, reconstruction and

preparation for use of non-current assets 4221 (303 325) (2 314 613)

due to acquisition of shares (participatory interest) in other organizations 4222 (9 696 789) (4 127 972)

due to acquisition of debt financial investments (right of demand of cash

to other persons), provision of loans to other entities 4223 (1 539 847) (5 478 299)

Interests on debt liabilities, including into the cost of investment asset 4224

other payments 4229 - (1 005 500)

Balance of cash flows from investment transactions 4200 24 869 838 649 120

Cash flows from financial transactions

Proceeds - total 4310 16 082 285

including:

obtaining credits and loans 4311 16 031 902

Cash contributions of owners (participants) 4312 - -

from issue of shares, increase of participatory interest 4313 - 50 383



OKPO form 33741102

TIN 2320109650

OKVED form 40.10.11 51.56.4


OKEI form 384

11

from issue of bonds, bills of exchange and other debt securities, etc. 4314

other proceeds 4319 - -

Payments - total 4320 (12 609 506) (17 018 809)

including:

to owners (participants) due to repurchase of organization’s shares

(participatory interest) from them or their quit from composition of

participants 4321 (6 493 466)

for payout of dividends and other payments on distribution of profits in

favor of owners (participants) 4322 (150 015)

due to repayment (repurchase) of bills of exchange and other debt

securities, repayment of credits and loans 4323 (6 116 040) (16 868 794)

other payments 4329 - -

Balance of cash flows from financial transactions 4300 (12 609 506) (936 524)

Balance of cash flows for reporting period 4400 9 405 274 738 554

Balance of cash and cash equivalents at the beginning of reporting

period 4450 4 868 696 4 062 822

Balance of cash and cash equivalents at the end of reporting period 4500 14 069 790 4 868 696

The influence of fluctuations in the exchange rate of foreign currency vs.

Russian ruble 4490 (204 180) 67 320




EXPLANATIONS

to the accounting (financial) statements of

JSC “INTER RAO UES” for the year 2012

12

These explanations constitute an integral part of the annual accounting (financial) statements of JSC

―INTER RAO UES‖ for the year 2012 prepared in accordance with applicable laws of the Russian

Federation.

All sums are shown in thousand rubles, unless otherwise specified.

I. GENERAL INFORMATION

Open Joint Stock Company ―INTER RAO UES‖ 1 (the Company) was founded on October 23, 2002.

Core activity of the Company was production of electricity and power. The Company and its

subsidiaries are hereinafter collectively referred to as INTER RAO UES Group.

In 2008 as a result of reorganization, CJSC ―INTER RAO UES‖, JSC ―North-West Thermal Power

Plant‖, JSC ―Ivanovskie PGU‖, JSC ―Kaliningradskaya TEC-2‖, JSC ―INTER RAO HOLDING‖ were

incorporated in the Company. Branches of the same name have been established on the basis of assets

of JSC ―North-West Thermal Power Plant‖, JSC ―Ivanovskie PGU‖, JSC ―Kaliningradskaya TEC-2‖,

JSC ―Sochinskaya TEC‖. Executive Office carrying out the management functions over the Company

has been established on the base of JSC ―INTER RAO UES‖. Core activity of the Company

throughout 2008-2011 was production of electricity and heat energy on the base of the branches, and

electricity sale at the domestic market and outside the Russian Federation.

In 2011 – 2012 in the result of structural re-arrangement of the model of business conduct, aimed at

creating a Holding Company on the base of JSC ―INTER RAO UES‖, production branches of ―North-

West Thermal Power Plant‖, ―Kaliningradskaya TEC-2‖, ―Sochinskaya TEC‖, and ―Ivanovskie PGU‖

being a part of the Company were moved to the balance-sheet of 100 % subsidiary of INTER RAO –

Electric Power Plants, OJSC. Sales activity previously conducted on the base of the branch in Orel was

assigned to 100 % subsidiary INTER RAO – Orel Energy Distribution, LLC. Detailed information is

provided in section 26 ―Terminated Activity‖ of this Explanatory note.

In 2012 as a result of reorganization, the Company was incorporated with JSC ―OGK-1‖, JSC ―OGK-

3‖, JSC ―INTER RAO – Energy‖, JSC ―INTER RAO - EnergyAsset‖, and JSC ―Bashenergoaktiv‖.

Production branches generating electricity and heat energy, which used to be a part of JSC ―OGK-1‖,

―OGK-3‖, were incorporated with 100 % subsidiary INTER RAO – Electric Power Plants, OJSC.

1 Before renaming – JSC ―Sochinskaya TEC‖ (renamed in pursuance of the decision of a sole shareholder of the Company

– JSC RAO ―UES of Russia‖ dd. 28/03/

EXPLANATIONS



13

Assets were moved to the balance-sheet of the Company in the form of financial investments in

subsidiary and affiliate companies, different kinds of payables and receivables. Detailed information is

provided in section 27 ―Reorganization‖ of this Explanatory Note.

At the present time the Company conducts activity on selling electricity at the domestic market and

outside the Russian Federation, supplying power equipment abroad, and controls activity of generating

and selling companies of INTER RAO UES Group. Company’s activity on production of electricity

and heat energy is a terminated activity, its scope has been of vestigial nature throughout the year of

report. The Company’s shares are quoted within the Russian Trading System, Moscow Interbank

Currency Exchange.2

JSC ―INTER RAO UES‖ is registered at: 27, Bolshaya Pirogovskaya Str., Building 3, Moscow

119435, Russia. Before July 29, 2011, JSC ―INTER RAO UES‖ was registered at: 12,

Krasnopresnenskaya Emb., Entrance 7, Moscow 123610, Russia.

Taxpayer Identification Number (TIN): 2320109650.

Average number of listed employees of the Company in 2012 amounted to 539 persons (2,246 persons

in 2011).

This statement was signed on February 21, 2013

2 December 2011, Russian Trading System and Moscow Interbank Currency Exchange merged into a single trading

platform.

EXPLANATIONS



14

Branches and representative offices of the Company as of December 31, 2012.

Name Type of activity Location

Branch ―North-West

Thermal Power Plant‖

In the process of liquidation.

Activity was assigned to 100 %

subsidiary

34, 3rd

Konnaya Lakhta,

Olgino, St. Petersburg,

Russia

Branch

―Kaliningradskaya TEC-2"

In the process of liquidation.


subsidiary

2, Energetikov Lane,

Kaliningrad, Russia

Branch ―Sochinskaya TEC‖ In the process of liquidation.


subsidiary

133, Transportnaya Str.,

Sochi, Russia

Branch ―Ivanovskie PGU‖ In the process of liquidation.


subsidiary

1, Komsomolskaya Str.,

Komsomolsk,

Ivanovo Region, Russia

Orel branch In the process of liquidation.


subsidiary

137, Moskovskoye Shosse,

Orel, Russia

Representative office in the

Republic of Cuba

Representative office functions 3rd

Avenida/ 70 and 80, Santa

Clara,

Playa, Miramar,

Havana, Republic of Cuba

Representative office in the

Republic of Ecuador

Representative office functions World Trade Center, Tower B,

Office 403,

12 October Ave. No. 24-528 and

Louis Cordero, Quito, the

Republic of Ecuador

Office on the territory of the

Kingdom of Belgium

Representative office functions Rond Point Schuman 6, Brussels

1040, Kingdom of Belgium

EXPLANATIONS



15

Composition of the Company’s Board of Directors from January 01, 2012 to February 15, 2012.

1 Grigoriy Markovich Kurtser Chairman of the Board of Directors

of JSC ―INTER RAO UES‖, President of

JSC ―Russian Regional Development Bank‖

2 Oleg Mikhailovich Budargin Chairman of the Management Board, Member of the

Board of Directors of Federal Grid Company of

Unified Energy System OJSC

3 Evgeniy Vyacheslavovich Dod Chairman of the Management Board of JSC

―RusHydro‖

4 Vladimir Aleksandrovich Dmitriev Chairman of the State Corporation ―The Bank for

Development and Foreign Economic Affairs (

Vnesheconombank)‖

5 Boris Yuryevich Kovalchuk Chairman of the Management Board of

JSC ―INTER RAO UES‖

6 Vyacheslav Mikhailovich Kravchenko General Director of JSC ―OESK‖

7 Aleksandr Markovich Lokshin Deputy General Director – director of the Directorate

for Nuclear Power Complex of the State Corporation

for Nuclear Power ―Rosatom‖

8 Kirill Gennadyevich Seleznev Member of the Management Board, Head of Gas &

Liquid Hydrocarbons Marketing and Processing

Department of JSC ―Gazprom‖

9 Vladimir Igorevich Strzhalkovskiy General Director, Chairman of the Management

Board of JSC ―MMK Norilsk Nickel‖

10 Denis Vladimirovich Fedorov Head of Power Sector Development and Marketing

Department in JSC ―Gazprom‖, General Director

of Gazpromenergoholding LLC

11 Dmitriy Evgenyevich Shugaev Deputy General Director of the Rostec State

Corporation

EXPLANATIONS



16

Composition of the Company’s Board of Directors from February 15, 2012 to December 31, 2012.

1 Grigoriy Markovich Kurtser Chairman of the Board of Directors of JSC ―INTER

RAO UES‖, President of JSC ―Russian Regional

Development Bank‖

2 Oleg Mikhailovich Budargin Chairman of the Management Board, Member of the

Board of Directors of JSC ―Federal Grid Company of

Unified Energy System‖

3 Vladimir Aleksandrovich Dmitriev Chairman of the State Corporation ―The Bank for

Development and Foreign Economic Affairs (

Vnesheconombank)‖

4 Boris Yuryevich Kovalchuk Chairman of the Management Board of JSC ―INTER

RAO UES‖

5 Vyacheslav Mikhailovich Kravchenko Chairman of the Management Board of Non-

Commercial Partnership ―Market Council‖

6 Aleksandr Markovich Lokshin First Deputy General Director – Director of the

Directorate for Nuclear Power Complex of the State

Corporation for Nuclear Power ―Rosatom‖

7 Kirill Gennadyevich Seleznev Member of the Management Board, Head of Gas &

Liquid Hydrocarbons Marketing and Processing

Department of JSC ―Gazprom‖, General Director of

Mezhregiongaz LLC

8 Vladimir Igorevich Strzhalkovskiy General Director, Chairman of the Management

Board of JSC ―MMK Norilsk Nickel‖

9 Ferdinando Falco Beccalli President and Chief Executive Officer of GE Europe

& North Asia

10 Denis Vladimirovich Fedorov Head of Power Sector Development and Marketing

Department in Gazprom OJSC, General Director of

Gazpromenergoholding LLC

11 Dmitriy Evgenyevich Shugaev Deputy General Director of the Rostec State

Corporation

EXPLANATIONS



12

Composition of the Company’s Audit Commission from January 01, 2012 to June 25, 2012.

1 Aleksandr Evgenyevich Abramkov Head of the Internal Audit, Controlling and Risk

Management Unit of JSC ―INTER RAO UES‖

2 Natalia Aleksandrovna Ananyeva Head of the Foreign Assets Audit Division of the

Internal Audit Department of the Internal Audit,

Controlling and Risk Management Unit of JSC

―INTER RAO UES‖

3 Elena Fedorovna Ivanova Deputy Head of the Internal Audit Department of the

Internal Audit, Controlling and Risk Management

Unit of JSC ―INTER RAO UES‖

4 Svetlana Gennadyevna Meshcherina Deputy Chief Accountant of the State Corporation

for Nuclear Power "Rosatom"

5 Elena Gennadyevna Ryzhkova Head of the Internal Audit Department of the Internal

Audit, Controlling and Risk Management Unit of

JSC ―INTER RAO UES‖

Composition of the Company’s Audit Commission from June 25, 2012 to December 31, 2012

1 Nikolay Nikolaevich Varlamov Deputy Chairman of the Management Board of JSC

―FGC UES‖

2 Anna Valeryevna Drokova Deputy Head of the FEC and Coal Industry

Companies Division of the Federal Agency for State

Property Management

3 Elena Aleksandrovna Kabizskina Deputy Head of Control and Audit Department of JSC

―FGC UES‖

4 Ekaterina Viktorovna Heymits Head of Assets Safety Control Division of JSC

―MMK Norilsk Nickel‖

5 Yuriy Aleksandrovich Shcherbakov Head of Treasury Department of JSC ―INTER RAO

UES‖

EXPLANATIONS



12

Composition of the Company’s Management Board from January 01 to February 13, 2012


RAO UES‖

2 Vyacheslav Yuryevich Artamonov Deputy Chairman of the Management Board – Head

of Trading Unit of JSC ―INTER RAO UES‖

3 Aleksandr Gennadyevich Boris Member of the Management Board of JSC ―INTER

RAO UES‖

4 Andrey Vladimirovich Golovlev Member of the Management Board – Head of

financial and economic center of JSC ―INTER RAO

UES‖

5 Ilnar Ilbatyrovich Mirsiyapov Member of the Management Board – Head of

Strategy and Investment Unit of JSC ―INTER RAO

UES‖

6 Pavel Ivanovich Oklei Member of the Management Board – Head of

Production Activity Unit of JSC ―INTER RAO

UES‖

7 Dmitriy Nikolaevich Palunin Member of the Management Board – Financial

Director of JSC ―INTER RAO UES‖

8 Aleksandr Aleksandrovich Pakhomov Member of the Management Board – Head of Legal

Support Unit of JSC ―INTER RAO UES‖

9 Sergey Yuryevich Rumyantsev Member of the Management Board – Director of

Economy of JSC ―INTER RAO UES‖

10 Yury Vladimirovich Sharov Deputy Chairman of the Management Board – Head

of Capital Construction and Engineering Unit of JSC

―INTER RAO UES‖

EXPLANATIONS



13

Composition of the Company’s Management Board from February 14 to May 04, 2012


RAO UES‖

2 Vyacheslav Yuryevich Artamonov Deputy Chairman of the Management Board of JSC

―INTER RAO UES‖


RAO UES‖

4 Andrey Vladimirovich Golovlev Member of the Management Board – Head of


UES‖



UES‖



UES‖









―INTER RAO UES‖

11 Karina Valeryevna Tsurkan Member of the Management Board – Head of

Trading Unit of JSC ―INTER RAO UES‖

EXPLANATIONS



14

Composition of the Company’s Management Board from May 05 to September 23, 2012


RAO UES‖


―INTER RAO UES‖


RAO UES‖



UES‖



UES‖









―INTER RAO UES‖



EXPLANATIONS



15

Composition of the Company’s Management Board from September 24 to December 13, 2012


RAO UES‖


―INTER RAO UES‖


RAO UES‖



UES‖

5 Valeriy Valeryevich Murgulets Member of the Management Board – Head of

Innovation, Investment and Cost Management Unit

of JSC ―INTER RAO UES‖



UES‖

7 Dmitriy Nikolaevich Palunin Member of the Management Board – Head of


UES‖







―INTER RAO UES‖



EXPLANATIONS



16

Composition of the Company’s Management Board from December 14 to December 31, 2012


RAO UES‖


―INTER RAO UES‖


RAO UES‖



UES‖

5 Valeriy Valeryevich Murgulets Member of the Management Board – Head of

Innovation, Investment and Cost Management Unit

of JSC ―INTER RAO UES‖



UES‖

7 Dmitriy Nikolaevich Palunin Member of the Management Board – Head of


UES‖





―INTER RAO UES‖



EXPLANATIONS



17

II. BASIC PROVISIONS OF THE ACCOUNTING POLICY

These accounting (financial) statements of the Company have been prepared based on the following

accounting policy.

Basic Approaches to Preparation of the Annual Accounting (Financial) Statements

Acounting (financial) statements of the Company are drawn up proceeding from the rules of

accounting and reporting applicable in the Russian Federation, particularly, Federal Law dd. December

06, 2011 No. 402-FZ On Accounting, Regulations On Accounting ―Accounting Policy of the

Organization‖ PBU 1/2008 approved by order of the Ministry of Finance of the Russian Federation dd.

December 9, 1998 No. 60n, Regulation On Accounting and Reporting in the Russian Federation

approved by order of the Ministry of Finance dd. July 29, 1998 No. 34n, Regulation On Accounting

―Accounting Reports of the Organization‖ PBU 4/99, approved by order of the Ministry of Finance of

the Russian Federation dd. July 06, 1999 No. 43n.

Uncertainty of accounting estimates

There are basic assumptions given below, which concern future events, as well as other sources of

uncertainty of accounting estimates as of the reporting date, which imply considerable risk of the

necessity to make material adjustments in the book value of assets and liabilities in the next reporting

year:

- Provision for doubtful debts

- Provision for depreciation of inventories

- Provision for depreciation of financial investments

- Provision for liabilities and charges

- Reserve for contingency

- Useful life of intangible assets and fixed assets.

Fixed assets

Fix assets account the property with the useful life of over 12 months. Housing facilities, including

apartments, are accounted in fixed assets.

EXPLANATIONS



18

Completed, commissioned, and actually used items of immoveable property, documents to which have

been submitted for state registration, are accounted separately in fixed assets.

Purchased items with initial value up to 40 thsd. rubles per item are accounted in the inventories.

Items of fixed assets are accepted for accounting depending on the actual costs of their purchasing

(erection).

Upon purchasing items of fixed assets under the contracts that provide for discharge of liabilities not in

cash, initial cost of such items shall be the cost of valuables transferred or to be transferred. The cost of

valuables either transferred or to be transferred by the Company is determined proceeding from the

price at which the Company usually determines the cost of similar valuables in the similar

circumstances. The Company has not acquired items of fixed assets other than for money in the

reporting period.

The Company carries out revaluation of fixed assets in case if current (replacement) value of fixed

assets differs considerably from the value reflected in the Company’s books. Considerable difference

shall be the difference of cumulative replacement value of a group of similar items from the current

(replacement) value of this group of similar items by 20 %.

Revaluation shall be done for the following equipment:

- Steam boilers, except for central heating boilers

- Power distributing equipment and control equipment

- Process control equipment.

In the year of report, the Company did not carry out revaluation of fixed assets for the reason of

retirement of the groups of equipment being subject to revaluation.

Fixed assets are shown in the accounting (financial) statements at their initial value minus amortization

accumulated for the time of operation.

EXPLANATIONS



19

Depreciation of fixed assets is charged using straight-line method.

Depreciation of fixed assets, including fixed assets received during reorganization in 2008, is

calculated proceeding from the useful life, as determined in accordance with the Classification of

Fixed Assets Included in the Depreciation Groups approved by resolution of the Government of the

Russian Federation on January 1, 2002 No. 1. Useful life for the groups of fixed assets approved by the

Company is given below.

Group of Fixed Assets Useful Life (years) of Items Put on the Books

Buildings 7 - 101

Structures and transmitting equipment 13 - 40

Machines and equipment 7 - 30

Transport vehicles 5 - 15

Production and household inventory 3 - 10

Other types of fixed assets 3 - 15

Land plots and objects of nature management -

No Depreciation is charged on:

- Land plots

- Objects completely depreciated but not written off from the balance sheet

- Fixed assets temporary closed down.

Profits and loss from retirement of fixed assets are reflected in the statement of financial results in the

structure of other profits and losses.

Expenses on credits and loans received for purchasing, erecting, making items of fixed assets, accrued

before putting such items of fixed assets on the books, are included in their initial value, and those

accrued after putting the items of fixed assets on the books are reflected in the statement of financial

results in the structure of other expenses.

Leased fixed assets are reflected off-balance at the value specified in the lease agreement.

Intangible Assets

Intangible assets are accepted for accounting at their initial value. The initial value of intangible assets

acquired for a fee is specified in the actual costs of purchase.

EXPLANATIONS



20

The initial value of intangible assets received under agreements that provide for discharge of liabilities

in kind is determined based on the value of goods (valuables) transferred or subject to transfer. If it is

impossible to determine the value of goods (assets) transferred or subject to transfer under such

agreements, the value of intangible assets received by the Company is fixed based on the price at

which similar intangible assets are acquired in comparable circumstances. The Company has not

acquired intangible assets objects for consideration in kind in the reporting period.

Depreciation of intangible assets is charged using a straight-line method, based on the following terms

of useful life:

- Rights to software products - 2 to 10 years.

- Rights to use a trade mark - 7 to 10 years.

In the accounting (financial) statements intangible assets are shown at their initial value minus

depreciation accumulated for the entire period of use.

Expenses for Research and Development, Experiment/Design and Technology Works (R&D)

Costs of research and development, experiment/design and technology works are subject to writing-off

to costs of usual kinds of activity during the fixed period of useful operation. If use of the results of a

certain research and development, experiment/design and technology work in the manufacture of

products (performance of work, provision of services) or for the Company's administrative needs is

terminated, the amount of costs is subject to be written-off to costs of the reporting period. Decision on

non-use of the R & D results is made based on an analysis of the Company's middle-term and/or long-

term development plans.

Information concerning the costs of research and development, experiment/design and technology

works is reflected on the balance sheet in Non-current assets section. The Company reflects costs of

research and development, experiment/design and technology works in the line item Research and

development results. Writing-off to costs is carried out using a linear method.

Inventories

The following assets shall be regarded by the Company as inventories:

Used as raw, materials etc. when manufacturing products intended for sale (performance of

works, provisions of services).

Intended for sale.

EXPLANATIONS



21

Used for the organization’s administrative needs.

Inventories are evaluated in the sum of actual costs of purchase (manufacture) thereof. If the cost of

materials is reduced, the Company shall create a provision for depreciation. Provision is calculated

using the method that implies determination of the market value (possible selling price) of low-rotation

inventories, except for inventories included in the following groups:

Materials transferred for processing

Special equipment and special clothing in use.

Rotation is considered to be low if the sum of write-offs for inventory costs during the period of report

makes less than 5 % of their book value at the beginning of the year of report. The sum of reserve is

accounted in the structure of other expenses. In the year of report the Company did not create a

provision for depreciation of materials.

Evaluation of inventories upon their retirement is carried out:

By actual net value of each item - for writing off the goods for re-sale (purchased electricity

(power));

According to a FIFO method – for all other inventories.

Inventories acquired for construction, modernization or reconstruction of fixed assets objects are

reflected on the balance sheet in Non-current assets section on the line ―Other non-current assets‖. All

the rest of inventories are reflected on the balance sheet in the structure of current assets.

Receivables

Accounts receivable from buyers and customers have been determined based on the prices fixed by

agreements between the Company and buyers (customers), taking into account all discounts

(surcharges) provided/charged by the Company, VAT and prices as established under the contract.

Receivables repayable (payable) within 12 months after the reporting date are reflected on the balance

sheet in the structure of current assets. Receivables repayable (payable) within more than 12 months

after the reporting date are reflected on the balance sheet in Non-current assets section on the line

―Other non-current assets‖.

EXPLANATIONS



22

The Company forms a provision for bad debts in respect of trade and other accounts receivable. The

provision is formed for each bad debt not repaid within a period exceeding 1 month, unless it is

secured with pledge, surety or a bank guarantee.

The main factor influencing the calculation of the provision amount is the period of delay in payment.

The Company has accepted the following principles of calculation of this provision:

Period of delay in payment, months Provision, %

Over 12 months 100

From 6 to 12 months 50



Less than 1 month No provision is formed

This method does not apply to receivables of subsidiaries and affiliated companies. The Company has

the right to change or apply a separate provision rate in respect of individual debtors in the case of

information received, which allows making a conclusion on a significant change in their financial

situation. The last rule also applies to subsidiaries and affiliated companies.

With respect to the suppliers’ receivables (advance payments granted), the Company charges a

provision in the event of the supplier’s failure to comply with its obligations within the term stipulated

by the agreement.

Period of delay in performing obligations on advance payments

granted, months

Provision, %

Over 12 months 100


Income

Proceeds are accepted for accounting in the amount calculated in monetary terms equal to the amount

of cash and other property received, and/or to the amount of receivables (subject to the provisions of

Clause 3 of the Rules of Accounting Incomes of Organization PBU 9/99 No. 32n (as amended on

December 30, 1999; March 30, 2001; September 18, 2006, and November 27, 2006)). If the funds

received cover a part of proceeds only, then the proceeds accepted for accounting are defined as the

amount of the funds received and the receivables (to the extent not covered with the funds received).

EXPLANATIONS



23

Proceeds are recognized by the Company in accounting if the following conditions are simultaneously

met:

The organization is entitled to such proceeds, as follows from a certain agreement, or as duly

confirmed otherwise.

The amount of proceeds may be determined.

There is confidence that economic benefits will grow as a result of a certain transaction.

The right of ownership (possession, use, or disposal) for products (goods) has passed from the

organization to the buyer, or the work has been accepted by the customer (service has been

provided).

The costs, which have been or may be incurred in connection with such transaction, may be

determined.

The structure of other incomes includes proceeds from lease of property, interests charged upon

borrowed funds provided (including upon deposits placed), income from participation in other

organizations, income from revaluation of financial investments, income from sale of currency and

fixed assets, disposal of financial investments and other assets, penalties receivable under agreements

in the area of power trade-in, profits of previous years, positive exchange differences, changes in the

accounting estimates etc. The Company also accounts stock-market variation margin received from

transactions in sale/purchase of futures at the Moscow Energy Exchange in the structure of other

incomes.

Costs

The Company's costs are recognized in the reporting period in which they are incurred, irrespective of

payment of funds.

The net value of trading transactions (purchase of electricity (power) in the domestic market, import of

electricity, sale of electricity without delivery to the RF customs territory) consists in the costs of

purchase of electricity and power.

The prime cost of products manufactured includes plants' general production and general business

costs. General production and general business costs are distributed among the kinds of products

manufactured pro rata to the production cost price of separate kinds of products.

EXPLANATIONS



24

The Company's commercial costs are not distributed among the prime cost of separate kinds of sales.

The structure of commercial costs includes costs of transportation of electricity, loss of electricity,

customs payments, wages of personnel engaged in trading and selling activity, etc.

Management costs of the Company’s Executive Office are not distributed among the prime cost of

separate kinds of sales.

The structure of other costs includes costs connected with lease of property, interests charged upon

borrowed funds provided, costs of sale of currency and fixed assets, disposal of financial investments

and other assets, penalties payable under agreements in the area of power trade-in, losses of previous

years, negative exchange differences, chaitable contributions, changes in the accounting estimates etc.

The Company also accounts stock-market variation margin paid on transactions in sale/purchase of

futures on the Moscow Energy Exchange in the structure of other costs.

Accounting of Loans and Credits

The indebtedness under a loan and/or a credit is reflected by the Company in the amount of the funds

actually received or in the value of other assets assessment stipulated by an agreement at the moment

of actual transfer of the funds or other assets.

Indebtedness at the end of the reporting period is stated subject to interests payable in the structure of

payables. The Company charges interests depending on the terms of agreement.

Indebtedness under loans and/or credits received is subdivided in accounting into short-term and long-

term, as well as into mature and overdue. The Company transfers liabilities from long-term to short-

term when, according to the terms of agreement, 365 (or 366) days remain to repayment of the

principal part of the debt.

Additional charges connected with receipt of loans and/or credits are included as a lump-sum in the

structure of other costs at the moment of arising thereof. Payments to the banks in consideration for

credit line opening are reflected in the statement of financial results in the structure of interests

payable.

Financial Investments

Financial investments are accepted for accounting based on the actual costs of their purchase.

EXPLANATIONS



25

Financial investments for which current market value can be determined in accordance with

established procedure are accounted in the accounting (financial) statements at the end of the year of

report at their current market value. The difference between evaluation of financial investments at their

current market value on the date of report and previous evaluation of financial investments is classified

as financial results in the structure of other profits and expenses. Such revaluation is done once a year,

while drawing up the annual accounting (financial) statements.

Financial investments for which no current market value is determined are reflected in the accounting

balance-sheet as of the end of the year of report at their book (balance-sheet) value minus provision for

depreciation of financial investments, created for assets for which there are conditions of stable

considerable depreciation as of the date of report.

Provision for depreciation of financial investments is created once a year, based on the inventory

results as of December 31 of the year of report. Upon determining the amount of provision, the

Company based on available information determines the estimated cost of financial investments with

the signs of stable depreciation, and creates a provision for depreciation of financial investments for a

sum of excess of book (balance-sheet) value of these investments over their estimated cost. In respect

of loans issued to third parties, the Company forms a provision for depreciation proceeding from the

following principles:

Period of delay in payment, months Provision, %

Over 36 months 100






Less than 6 months No provision is formed

The total amount of the provision formed is attributed to other costs.

Accounting of REPO transactions is carried out according to the procedure similar to accounting of

loans provided. Income from REPO transactions is determined as the difference between the prices of

EXPLANATIONS



26

purchase and repurchase of the object of a transaction, and are reflected in the structure of interest

incomes.

If an asset disposes, which has been accepted for accounting as a financial investment the market value

for which cannot be determined, its value is determined based on the initial value of each unit of

financial investments.

Income and costs from financial investments are reflected in the structure of other income and costs.

Income and costs from transactions with financial bills of exchange are reflected in the statement of

financial results in details.

Property Appraisal Methods

In accordance with Clause 1, Art. 12 of the Federal Law No. 402-FZ, assets and liabilities are

evaluated for their reflection in accounting and in the accounting (financial) statements in monetary

terms.

Property acquired for a consideration is evaluated by summing up the actual costs of purchase thereof;

property received on a free of charge basis – at its market value at the date of registration; property

produced by the organization – at the cost of manufacture thereof.

Depreciation of fixed assets and intangible assets is charged irrespective of the results of the

Company's business activities in the reporting period.

Cash and Cash Equivalents, Reflection of Cash Flows

Cash and Cash Equivalents

For the purpose of preparing Statement of cash flow, the Company includes in the structure of cash the

cash equivalents, which mean short-term highly liquid financial investments that may easily be

converted to a known amount of cash and are subject to an insignificant risk of changes in value. In

particular, the Company attributes to cash equivalents the deposits in credit institutions issued at the

request and/or with a maturity of three months or less, as well as highly liquid bank bills of exchange

with a maturity up to three months. For the purpose of preparing balance sheet, the Company includes

in the structure of cash the cash equivalents.

Minimized Reflection of Cash Flows

EXPLANATIONS



27

Cash flows are reflected in the statement of cash flows minimized in cases where they characterize not

only the organization's activities, but the activities of its contractors. In particular, the Company

reflects the principal’s cash flows minimized in cases where the Company is a commission agent or an

agent.

Cash flows are also reflected in the statement of cash flows minimized in cases where they are

distinguished by a great turnover, large amounts and shorter repayment periods. Likewise, income and

expenses from foreign exchange transactions are reflected minimized (purchase/sale of foreign

currency).

Accounting of Cash Flows in Foreign Currency

For the purpose of drawing up a statement of cash flow, the sum of cash flows in foreign currency is

converted in Russian rubles according to the exchange rate of this foreign currency to Russian ruble, as

established by the Central Bank of the Russian Federation on the date of making and receiving

payment.

Other

Assets and Liabilities in Foreign Currencies

Upon accounting economic transactions settled in foreign currency, official exchange rate of foreign

currency to Russian ruble established on the date of transaction shall apply. The cost of currency notes

in the Company’s cash desk, funds kept at bank accounts (bank deposits), money and payment

documents, securities (except for shares), resources in settlements, including those on loan obligations

(except for funds received, and advance payments and downpayment paid), expressed in foreign

currency, is reflected in the accounting (financial) statements in the sums calculated on the basis of

official exchange rate on December 31, 2012. Exchange rates on this date made 30.3727 RUB per 1

US Dollar (December 31, 2011 – 32.1961 RUB), 40.2286 RUB per 1 EUR (December 31, 2011 -

41.6714 RUB).

Exchange difference shall be classified in the financial results of the Company as other profits or other

expenses, except for exchange difference connected with formation of the authorized capital of the

Company, which is to be classified as additional capital.

Accounting of Financial Instruments of Forward Deals

EXPLANATIONS



28

The Company settles transactions with financial instruments of forward deals (FIFD) for the purpose

of hedging currency, interest and other risks. Upon settling transactions with FIFD, the books shall

reflect the settlements connected with fulfillment of respective contracts. At the moment of settling the

deal, no records in the books are made. Profits and expenses on the transactions with FIFD are

determined as of the closing date of the period of report, as of the date of interim settlements (if

provided for by the contract), and as of the date of deal settlement.

The financial result from transactions with FIFD on hedging the interest risk under a credit is reflected

in the structure of interests receivable (payable); for other transactions – in the structure of other

income/charges.

Deferred Costs

Costs incurred by the Company in the accounting year, but relating to forthcoming reporting periods,

have been reflected as deferred costs. These costs are written off evenly during the period to which

they relate. The duration of such period is fixed at the moment of acceptance of deferred costs for

accounting.

The structure of deferred costs includes such costs as: software products for which the Company has

no exclusive rights; licenses and certificates obtained; compensations paid to advisers and/or

intermediaries for the conclusion of agreements being a source of economic benefits for the Company

during several reporting periods, other costs.

Deferred costs related to periods after expiration of the year following the accounting year have been

shown on the balance sheet in Non-current assets section on the line Other non-current assets. Deferred

costs subject to a write-off within 12 months are reflected on the balance sheet in the structure of

current assets on line Other current assets.

Authorized, Additional, and Reserve Capital

Authorized capital is reflected as par value of ordinary shares. The amount of the authorized capital

corresponds to the amount specified in the Company’s Articles of Association.

EXPLANATIONS



29

Additional capital of the Company includes the sum of increase in the value of the items of fixed assets

determined during revaluation, paid-in capital received in the result of distributing the Company’s

shares at the price exceeding their par value.

In accordance with the Articles of Association, the Company creates a reserve fund in the amount of

15 % of the authorized capital.

Procedure for Formation of the section “Capital and Provisions” During Company’s Reorganization

through Affiliation of Reorganized Companies to the Company

During reorganization, the Company forms a balance-sheet section ―Capital and Provisions‖ in a

special way, as set forth in the order of the Ministry of Finance No. 44n dd. 20/05/2003 On Approving

Procedural Guidelines For Formation Of Accounting (Financial) Statements During Reorganization

Of Companies, i.e.:

- Authorized capital of legal successor (JSC ―INTER RAO UES‖) is formed in the sum fixed

in the contract of affiliation; yet, if the contract of affiliation provides for reduction of the legal

successor’s authorized capital against the sum of authorized capitals of affiliated companies, the

difference between algebraic sum of authorized capitals of all reorganized companies and the

authorized capital fixed in the contract of affiliation shall be reflected in the legal successor’s balance

sheet in the section ―Capital and Provisions‖ as a numerical indicator ―Undistributed income

(uncovered loss)‖

- If the cost of legal successor’s net assets exceeds the sum of authorized capital fixed in the

contract of affiliation during conversion of shares, numerical indicators of the section ―Capital and

Provisions‖ of accounting balance-sheet shall be formed in the amount of net assets, with division into

authorized capital and additional capital

- In other cases the difference is accounted in ―Undistributed income (uncovered loss)‖

- Other balance-sheet items in the section ―Capital and Provisions‖, such as revaluation of capital

assets, reserve capital, treasury shares, are formed on the basis of legal successor’s (JSC ―INTER RAO

UES‖) data.

EXPLANATIONS



30

Segment Reporting

Risks and profits of the Company are mainly defined by distinctions between the geographical regions

where the Company sells electricity. Therefore, primary accounting segment is geographic – by

regions of sales markets.

Profits of the primary segment are distributed by segments, depending on geographically defined place

of ownership transfer from the Company to the buyer of electricity (irrespective of the buyer’s country

of incorporation).

Secondary segment is operational segment. The Company discloses information on the operational

segments with the breakdown by proceeds received, assets and capital investments.

Changes in the Accounting Policy

In accordance with the Orders of the Ministry of Finance of the Russian Federation taking effect with

accounting (financial) statements for the year 2012, the following documents have been approved:

Regulation on accounting ―Accounting of costs of natural resources development‖ (RAS 24/2011)

Federal Law ―On Accounting‖ No. 402-FZ dd. February 6, 2011;

Federal Law ―On Consolidated Accounting (Financial) Reporting‖ No. 208-FZ dd. July 27, 2010.

Changes in the laws did not affect the Company’s accounting policy in 2012. In 2012 no considerable

changes were made to the Company’s accounting policy. The Company does not plan making

considerable changes to the accounting policy for the year 2013 if compared to the year 2012.

III. CHANGES TO THE OPENING BALANCE-SHEET

Changes to the opening balance, indicators of the statement of financial results, statement of changes

in equity for the years 2011-2010 were not made.

EXPLANATIONS



31

IV. DISCLOSURE OF SIGNIFICANT PARAMETERS

1. INTANGIBLE ASSETS

Flow of intangible assets during the year of report is shown in the table below:

Name of the

indicator Code Period

As of the beginning of the year Changes for the period As of the end of the year

received

disposed

accumulated

depreciation original value accumulated

depreciation original value

accumulated

depreciation

and

impairment

losses

original value

accumulated

depreciation

and

impairment

losses

Intangible assets

- total

5100 2012 14 317 (7 687) 78 886 (12 804) 8 019 (4 874) 80 399 (4 642)

5110 2011 8 607 (6 074) 6 710 - - (2 613) 14 317 (7 687)

including:

Exclusive rights

to software

products

5101 2012 14 086 (7 611) 78 886 (12 804) 8 019 (4 846) 80 168 (4 438)

5111 2011 8 376 (5 026) 5 710 - - (2 585) 14 086 (7 611)

Other IA 5102 2012 231 (76) - - - (28) 231 (104)

5112 2011 231 (48) - - - (28) 231 (76)

As of December 31, 2012 the Company has no intangible assets that are subject to depreciation and

have indefinite period of useful life. Remaining period of useful life of intangible assets amounts to:

For exclusive rights to software products – from 3 to 5 years

For a trade mark – from 3 to 7 years.

Initial value of intangible assets in the year of report did not change, useful life was not revised.

Intangible assets with fully paid value, but not written off the books, make 0.5 % (378 thsd. rubles) of

the book value of exclusive rights to software products. The Company has no intangible assets created

by the Company itself.

In the year of report the Company included in its intangible assets exclusive rights to creating

information systems for management of Company’s activity, which have been developed on the basis

of ORACLE software. These systems include:

Software complex ―Unified Information System of Procurements‖ designed for

procurement management in JSC ―INTER RAO UES‖;

EXPLANATIONS



32

Software complex ―TAS/INTER IAS‖ designed for information and analytical support of

decision-making with regard to the sale of electricity at the wholesale market;

- Software complex ―Property Complex Management System‖ designed for corporate

management of assets in INTER RAO UES Group;

Information system ―Register of Lawsuits‖.

In the year of report the Company excluded from its intangible assets exclusive rights to software

products in the result of their sale to 100 % subsidiary INTER RAO – Electric Power Plants, OJSC,

because of termination of Company’s activity. These intangible assets have been sold at a market price

calculated by the appraiser. The loss from sale made 3 thsd. rubles.

2. RESEARCHES AND DEVELOPMENTS RESULTS (R&D)

R&D process and results during the year of report are shown in the table below:

Name of the indicator Code Period

As of the beginning of the

year Changes for the period

As of the end of the year

received

disposed part of

the cost

expensed as

incurred for

the period original

value

part of the

cost

expensed as

incurred

original

value

part of the

cost

expensed as

incurred original value

part of the

cost

expensed as

incurred

R&D - total 5140 2012 1908 - - - (670) (1238) - -

5150 2011 5555 - 3409 - - (7056) 1 908 -

including:

Development to improve the

reliability of the heat-recovery

boilers PGU-450T of the North-

Western Thermal Power Plant

5141 2012 - - - - - - - -

5151 2011 4263 - - - - (4263) - -

Development of dynamic OES

model of the North-Western

Thermal Power Plant

5142 2012 - - - - - - - -

5152 2011 458 - - - - (458) - -

Development and testing of

dynamic model of the Finnish

energy system

5143 2012 - - - - - - - -

5153 2011 834 - - - - (834) - -

Development for studying heat

energy market in terms of

developing the TPP capacity to the

project level

5147 2012 1786 - - - (670) (1116) - -

5157 2011 - - 2679 - - (893) 1786 -

Development of software and

graphic modules of thermal circuit

of the North Western Thermal

Power Plant

5148 2012 122 - - - (122) - -

5158 2011 - - 730 - - (608) 122 -

EXPLANATIONS



33

R&D process and unfinished and non-documented results thereof, as well as unfinished transactions on

purchasing intangible assets throughout the year of report is shown in the table below.

Name of the indicator Code Period As of the

beginning

of the year

Changes for the period

As of the

end of the

period expenses

for the

period

expenditures expensed as

incurred without giving a

positive result reclass

accepted to be registered

as intangible assets or

R&D

Expenses on unfinished

researches and developments -

total

5160 2012 - 136 300 - - (78 886) 66 416

5170 2011 160 379 14 968 (21 696) (140 242) (3 410) -

including: Development of software and

graphic modules of thermal

circuit of the North Western

Thermal Power Plant

5161 2012 - - - - -

5171 2011 730 - - - (730) -

Development to create and test

low emission combustion

chamber GTE-110

5162 2012 - - - - - -

5172 2011 127 954 12 288 - (140 242) - -

Development of scheme of

power distribution of

Baltiyskaya NPP

5163 2012 - - - - - -

5173 2011 21 695 - (21 695) - -

Development of heat energy

market model in terms of

developing the TPP capacity to

the project level

5167 2012 - - - - - -

5177 2011 - 2 680 - (2 680) -

Development of automated

management systems of

Company’s activity

5168 2012 - 134 073 - - (78 885) 55 188

5178 2011 - - - - - -

Other developments 5169 2012 - 1 227 - - - 1 227

5179 2011 - - - - - -

As of 31/12/2012б the scope of unfinished transactions on purchasing intangible assets include the

costs of creating automated information systems for management of Company’s activity, which have

been developed on the basis of different software products. They include the management system for

Company’s investment programs, management of IT activity, corporate planning etc. As of

31/12/2012 the costs of creating the said systems amounted to 55,188 thsd. rubles. Their

commissioning is planned for the first half-year of 2013.

In the Company’s accounting balance-sheet unfinished transactions on purchasing intangible assets are

reflected in the line 1190 ―Other intangible assets‖.

3. FIXED ASSETS AND INCOME BEARING INVESTMENTS IN TANGIBLE ASSETS

Book value of fixed assets as of December 31, 2012 amounted to 3,230,333 thousand rubles

(19,126,014 thousand rubles - as of December 31, 2011; 39,431,218 thousand rubles – as of December

31, 2010). Book value of completely depreciated fixed assets with no consideration to wear and tear as

EXPLANATIONS



34

of December 31, 2012 amounted to 66,838 thousand rubles (110,229 thousand rubles - as of December

31, 2011; 276,264 thousand rubles - as of December 31, 2010). The Company has not got any pledged

fixed assets.

Fixed Assets Acquisition

During the year of report the Company commissioned new items of fixed assets (not including those

received from reorganization), including upgraded items, for a total sum of 9,926,700 thsd. rubles

(15,183,517 thsd. rubles in 2011). Items of fixed assets of the 2nd

power unit of CCP-325 of the branch

"Ivanovskie PGU" have been commissioned. Initial value of the said items amounted to 9,599,152

thsd. rubles. In the executive bodies of the Company items of fixed assets with the initial value of

304,418 thsd. rubles (13,603 thsd. rubles in 2011) have been commissioned. They are mainly server,

network and communication equipment.

In November 2012 the Company received on its balance buildings and structures in the result of

affiliation with JSC ―Bashenergoaktiv‖ 3

. According to the general conditions of formation of spin-off

balance-sheet of JSC ―Bashkirenergo‖, the property, including fixed assets, are transferred to its legal

successor at their book value. Book value of buildings and structures amounted to 124,491 thsd. rubles

according to the deed of transfer, including facilities accounted in the structure of fixed assets in the

amount of 55,106 thsd. rubles, and facilities accounted in the structure of income-bearing investments

in tangible assets in the amount of 69,385 thsd. rubles.

Retirement of Fixed Assets

In 2012 the Company continued its operations on transferring fixed assets to 100 % subsidiary –

INTER RAO – Electric Power Plants, OJSC – for the purpose of implementing the decision made in

2011 on the shutdown of electricity and heat energy production, and transferring this function to the

said company. As of 31/12/2012 the book value of the items of fixed assets sold amounted to

25,078,548 thsd. rubles (in 2011 – 3,101,420 thsd. rubles). The sum of liquidated items of fixed assets

amounted to 68,311 thsd. rubles (in 2011 – 2,718 thsd. rubles).

3 Bashnergoaktiv‖ was formed in November 2012 through separation during reorganization of JSC ―Bashkirenergo‖.

EXPLANATIONS



35

3.1

. A

vail

ab

ilit

y a

nd

flo

w o

f fi

xed

ass

ets

As

of

the

end o

f th

e yea

r

Acc

um

ula

ted

dep

reci

atio

n

(884 8

11)

(1 7

11 3

58)

(752 7

77)

(1 0

21 2

48)

(124 6

48)

(641 4

83)

(5 3

19)

(35 2

64)

(1 8

81)

(12 3

53)

(186)

(1 0

10)

Reg

iste

red

as

inco

me

bea

rin

g i

nves

tmen

ts i

n t

he

tan

gib

le a

sset

s -

tota

l (4

55)

(1 4

52)

-

(1 4

52)

(134)

-

(418)

Ori

gin

al v

alue

4 1

15 1

44

20 8

37 3

72

3 6

37 8

73

8 9

47 7

13

409 0

21

11 7

84 8

14

51 7

20

50 4

22

7 1

50

30 2

86

2 0

40

22 7

63

7 3

40

1 3

74

85 2

79

43 5

05

-

4 3

05

59 0

41

-

26 2

38

Chan

ges

for

the

per

iod

Dec

reas

e in

cost

due

to

Par

tial

liquid

atio

n

Div

esti

ture

of

faci

liti

es

(70 0

16)

(1 9

36 4

83)|

(69 5

13)

(1 1

48 8

31)

-

(787 0

52)

- -

- -

(503)

(600)

- - - -

- -

- -

-

Dis

posa

l

Acc

um

ula

ted

dep

reci

atio

n

1 5

57 1

76 |

14 0

78

129 |

545 3

93

2 1

04

342

963 5

49

11 8

60 8

05

34 1

31

40 2

57

12 9

79

71 5

99

- -

1 1

24

1 1

26

1 7

07

-

1 7

07

-

- -

-

Dis

posa

l O

rigin

al

val

ue

(26 7

04 0

35)

(47 1

03 0

44)

(8 1

11 6

65)

(14 8

14 6

75)

(18 4

91 6

08)

(32 1

01 9

03)

(49 7

67)

(51 1

89)

(25 7

63)

(110

041)

(23 8

57)

(20

522)

(1 3

75)

(4 7

14)

(43 5

05)

-

(43

505)

-

- -

-

Dep

reci

atio

n

(730 6

29)

(2 4

63 8

07)

(276 9

22)

(551 1

79)

(446 7

14)

(1 8

93 3

07)

(4 1

86)

(8 4

19)

(2 5

07)

(10

452)

- -

(300)

(450)

(807)

(890)

(255)

(890)

(134)

(418)

Incr

ease

in c

ost

due

to D

ow

nsi

zing o

f F

A

obje

cts

70 0

16

1 9

36 4

84

69 5

13

873 0

40

-

1 0

62 8

44

- -

- -

503

606

- - - -

- -

- -

-

Moder

niz

atio

n,

reco

nst

ruct

ion o

f th

e

FA

obje

cts

1 2

17 4

06

635 8

27

1 2

15 3

45

221 4

24

2 0

61

414 4

03

- -

- -

- -

- - - -

- -

- -

-

Rec

eipt

8 7

64 4

01

| 14 5

47 6

90

1 5

86 4

80

3 0

59 0

52

7 1

13 7

54

11 4

63 8

87

51 0

65

9 9

30

2 6

27

13 1

83

Lan

d p

lots

an

d o

bje

cts

of

natu

re m

an

agem

ent

3 1

34

1 6

38

7 3

41

-

85 2

79

| 25 0

97 |

Tra

nsf

er i

nto

ren

t re

sid

ual

pre

mis

es

-

25 0

97

59 0

41

-

Mach

ines

an

d e

qu

ipm

ent

26 2

38

As

of

the

beg

innin

g o

f th

e yea

r

Acc

um

ula

ted

dep

reci

atio

n

(1 7

11 3

58)

(13 3

25 6

80)

(1 0

21 2

48)

(2 5

74 4

11)

(641 4

83)

(10 6

08 9

81)

Tools

an

d u

tili

ty a

cces

sori

es

(35 2

64)

(67 1

02)

(12 3

53)

(73

500)

- -

(1 0

10)

(1 6

86)

( 1 4

52)

(562)

(1 4

52)

(562)

- - -

Ori

gin

al v

alue

20 8

37 3

72

52 7

56 8

98

incl

ud

ing

Bu

ild

ings

an

d c

on

stru

ctio

ns

8 9

47 7

13

20 7

57 7

03

Mach

ines

an

d e

qu

ipm

ent

11 7

84 8

14

31 7

32 6

35

50 4

22

91 6

81

Tra

nsp

ort

veh

icle

s

30 2

86

127 1

44

22763

41 6

47

Oth

er t

yp

es o

f fi

xed

ass

ets

1 3

74

6 0

88

43 5

05

18 4

08

incl

ud

ing:

43 5

05

18 4

08

Bu

ild

ing

s an

d c

on

stru

ctio

ns

- - -

Code

5200

5210

5201

5211

5202

5212

5203

5213

5204

5214

5205

5215

5206

5216

5200

5210

5220

5230

5220

5230

5220

Per

iod

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2011

EXPLANATIONS



36

3.2 Other use of fixed assets

Name of the indicator Code As of December 31,



2010

Fixed assets accounted on the balance sheet, including:

Fixed assets transferred into operational lease 5280 2 671 976 771 036 1 780 627

Real estate objects transferred for operation and

actually used being in the process of state

registration 5284 3 368 284 847 1 931 649

Fixed assets on conservation 5285 16 664 26 887 3 092 467

TOTAL 2 691 998 1 082 770 6 804 633

Fixed assets accounted on the off-balance sheet , including:

Fixed assets received into operational lease, total 5283 18 702 263 43 034 004 868 210

Fixed assets received into operational lease

(leasing) 5283 678 417 678 417 2 734 141

TOTAL 19 380 680 43 712 421 3 692 361

Leased Fixed Assets

Fixed Assets Received on a Leasing Basis

Fixed assets received under leasing agreements are accounted on the lessor's balance sheet. Company

accounts the property received off the balance.

Information on the fixed assets received under leasing agreement is given below:

Name of the object of

leasing

Duration: Value as of

31/12/2011

Arrived in

2012

Disposed in

2012

Value as of

31/12/2012

Aircraft Bombardier

CL-60002B16 2015 678 417 678 417

TOTAL 678 417 - - 678 417

Leasing payments charged in 2012 amounted to 67 148 thousand rubles (64 ,080 thousand rubles - in

2011). Advance payment on the redemption payments for the aircraft as of December 31, 2012

amounted to 231 .189 thousand rubles. (129 ,994 thousand rubles – as of 31/12/2011; 33 ,423 thousand

rubles - as of December 31, 2010).

EXPLANATIONS



37

Fixed assets Taken on Lease

Information on the fixed assets received under leasing (sub-leasing) agreement is given below:

Name of the object of

leasing Duration:

Value as of

31/12/2011

Arrived in

2012

Disposed in

2012

Value as of

31/12/2012

Main production

equipment of North-

West Thermal Power

Plant February

2012 19 136 712 (19 136 712)

Main production

equipment of

Kaliningradskaya

TEC-2 February

2012 8 824 973 (8 824 973)

Main production

equipment of

Ivanovskie PGU August

2013 7 005 272 8 973 360 15 978 632

Main production

equipment of

Sochinskaya TEC February

2012 4 891 086 (4 891 086)

Main process

equipment of

SochinskayaTEC February

2012 1 644 585 (1 644 585)

Main process

equipment of

Kaliningradskaya

TEC-2 February

2012 411 139 (411 139)

Property of Test stand

of Ivanovskaya GRES August

2013 297 522 (191 533) 105 989

TOTAL

42 211 289 8 973 360 (35 100 028) 16 084 621

Besides the aforesaid equipment, fixed assets taken on lease as of December 31/2012 include land

plots with cadastral value of 1,519,324 thsd. rubles (817,197 thsd. rubles – as of 31/12/2011), office

space of the executive bodies of the Company with the value of 1,095,762 thsd. rubles, and other

equipment for a total sum of 2,556 thsd. rubles (5,518 thsd. rubles – as of 31/12/2011).

4. UNFINISHED CONSTRUCTION

EXPLANATIONS



38

In 2011 in the process of transferring fixed assets to 100 % subsidiary – INTER RAO – Electric Power

Plants, OJSC – the Company sold the objects of capital investments in purchase (creation) of future

fixed assets required for production activity. The book value of sold objects as of 31/12/2012

amounted to 218,574 thsd. rubles. The sum of liquidated objects of unfinished capital expenditures

unfit for further use amounted to 94,218 thsd. rubles as of 31/12/2012.

Information about the flow and existence of the objects of unfinished construction and unfinished

operations on purchasing and upgrading fixed assets is given in the table below.



As of the end of

the period As of the

beginning of

the year

expenses for

the period

expenses as

incurred

(including

realized)

Put on the books in

the structure of

fixed

assets/material and

non-material

valuables

Unfinished construction and

unfinished transactions on acquisition,

modernization of fixed assets - total

5240 2012 9 426 348 938 181 (412 687) (9 939 461) 11 381

5250 2011 22 340 149 2 905 428 (617 646) (15 202 684) 9 425 348

including:

expenses for construction and

acquisition of fixed assets objects

5241 2012 9 253 099 934 123 (240 460) (9 935 381) 11 381

5251 2011 22 23 520 1 961 606 (415 542) (14 531 485) 9 253 099

expenses for reconstruction,

modernization of fixed assets objects

5242 2012 172 249 4 058 (172 227) (4 080) -

5252 2011 101 629 943 822 (202 103) (671 099) 172 249

5. OTHER CAPITAL ASSETS

Information on other capital assets of the Company is presented below:

EXPLANATIONS



39

Name As of December 31,

2012 As of December


31, 2010 Receivables 26 967 810 3 862 219 2 308 241

Total deferred expenses, including 124 622 1 062 881 331 309

- fee for process integration

of power receivers - 784 748 23 596

- software products 105 545 125 815 138 893

- rights to use land 2 632 105 277 110 536

plots

- commissioning work on new fixed assets 18 738 28 108

- agency fee receivable 4 756 7 134 9 513

- other 11 689 21 169 20 663

Costs of a feasibility study of investments 72 130

Unfinished operations on purchasing intangible assets

56 414

Apartments 3 071 3 071 28 058

Costs of unfinished R&D - - 150 379

Materials intended for modernization of fixed assets 222 443

Value-added tax on the costs of construction of the starting complex of

the second power unit PGU-450 MW of Kaliningrad TPP-2 2 238 840

TOTAL 27 151 917 5 000 301 5 279 270

Flow and structure of receivables is shown in the section 8 ―Long-Term Receivables‖ and in the

section 8.1 ―Long-Term Receivables‖ of this Explanatory Note.

6. FINANCIAL INVESTMENTS

6.1. Long-term financial investments

Financial investments on the balance sheet are shown net of a provision for devaluation of financial

investments in the amount of 334,946,242 thousand rubles as of December 31, 2012 (241,150,388

thousand rubles - as of December 31, 2011, 46,454,407 thousand rubles - as of December 31, 2010).

Shares quoted on the Stock Exchange are reflected on the balance sheet at the market value calculated

by exchange trade organizer (MICEX) on the last working day, December 28, 2012

As of December 31, 2012 the value of provision created for devaluation of financial investments in the

authorized (share) capitals of other companies amounts to 49,387,799 thousand rubles (2,554,855

thousand rubles – as of December 31, 2011; 633,513 thousand rubles – as of December 31, 2010).

EXPLANATIONS



40

Information about the existence and flow of financial investments in the period of report is shown in

the table below.

Avail

ab

ilit

y a

nd

flo

w o

f fi

nan

cial

inves

tmen

ts

As

of

the

end o

f th

e per

iod

Impai

rmen

t pro

vis

ion

(49 3

87 7

99)

(2 5

54 8

55)

- -

(49 3

87 7

99)

(2 5

54 8

55)

- - - - - - - -

(11 9

76)|

(6 1

92)

- -

(11 9

76)

( 6192) - - - -

(49 3

99 7

75)|

(2 5

61 0

47)

Book v

alue

384 3

34 0

41

243 7

05 2

43

76 8

74 4

78

179 9

97 0

82

301 3

42 0

89

59 5

80 8

79

6 1

00 0

38

4 0

43 7

24

- - -

66 1

22

17 4

36

17436

949 9

61

6 0

34 5

67

28 8

69

3 2

64 9

78

921 0

92

1 7

64 0

89 -

1 0

05 5

00 - -

385 2

84 0

02

249 7

39 8

10

Chan

ges

for

the

per

iod

Rec

lass

134 3

18

(5 4

12 6

97)

(83 5

76)

(47609)

83 5

76

47 6

09

163 1

87

(3 2

85 1

98)

(2 1

27 4

99)

(28 8

69)

-

-

(134 3

18)

5 4

12 6

97

28 8

69

(163 1

87)

3 2

85 1

98

2 1

27 4

99

- -

Dev

aluat

ion

pro

vis

ion

(46 8

32 9

44)

(1 9

21 3

42)

(46

832 9

44)

(1 9

21 3

42)

-

-

(5 7

84)

25 4

86

(5 7

84)

25 4

86

(46 8

38 7

28)

(1 8

95 8

56)

Infl

uen

ce o

f

mar

ket

quota

tions,

exch

ange

rate

dif

fere

nce

s,

dis

count

on b

ills

of

exch

ange

1 8

70 6

41

(120 0

67 8

10)

1 8

59 7

59

(119 8

38 1

95)

-

8 4

95

(172 1

30)|

(57 5

35)

2 3

87

50 -

20 9

37

128 0

04

171 0

38

31 4

98

(150

101)

157 7

69

(61 2

63)

1 8

91 5

78

(119 9

39 8

06)

Dis

pose

d (

repai

d)

(150 3

99 7

36)

(8 8

03 9

21)

(150 3

01 7

71)

(5 7

37 6

79)

(3 0

65 2

83)

(58 3

25)

(959)

-

(39 6

40)

-

-

(12 4

25 2

77)

(9 9

03 0

42)

(8 3

37 1

76)

| (1

582 8

24)|

(1 7

32 6

01)

(5 2

73 9

82)

(2 3

55 5

00)

(980 0

00)

(2 0

66 2

36)

(162 8

25 0

13)

(18 7

06 9

63)

Rec

eived

289 0

23 5

75

330 9

01 7

51

45 4

02 9

84

281 2

95 1

08

241 6

77 6

34

46 9

15 4

00

1 9

42 9

57

2 6

19 3

57 -

66 0

72

5 8

14

7 4

54 0

52

6 3

44 4

94

4 9

01 1

60

3 8

98 2

18

1 2

02 8

92

460 7

76

1 3

50 0

00

1 9

85 5

00

-

296 4

77 6

27

337 2

46 2

45

As

of

the

beg

innin

g o

f th

e yea

r

Dev

aluat

ion

pro

vis

ion

(2 5

54 8

55)

(633 5

13)

- -

(2 5

54 8

55)

(663513) - - - - - - -

(6 1

92)

(31 6

78)

- -

(6 1

92)

(31

678) - - - -

(2 5

61 0

47)

(665

191)

Book v

alue

243 7

05 2

43

47 0

87 9

20

179 9

97 0

82

24 3

25 4

57

59 5

80 8

79

15 6

83 1

53

4 0

43 7

24

4 8

82 6

54 -

2 1

85 0

34

66 1

22

-

17 4

36

11 6

22

6 0

34 5

67

4 0

52 4

14

3 2

64 9

78

1 7

64 0

89

249 7

39 8

10

51 1

40 3

34

Per

iod

2012

2011

those

take

n i

nto

acc

ount

by

curr

ent

mark

et v

alu

e 2012

2011

those

take

n i

nto

acc

ount

by

act

ual

cost

s 2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

those

take

n i

nto

acc

ount

by

act

ual

cost

s 2012

| 2011

2012

| 2011

2012

2011

2012

2011

2012

2011

Code

5301

5311

5302

532

2

530

3

532

3

530

4

5324

530

5

5325

530

6

532

6

5307

532

7

5308

5328

5309

532

9

531

0

533

0

5311

5331

5312

5332

EXPLANATIONS



41

Nam

e of

the

indic

ator

Lon

g-t

erm

- t

ota

l

incl

udin

g:

shar

es q

uote

d o

n s

tock

exch

ange

shar

es a

nd i

nves

tmen

t unit

s

loan

s

deb

t ac

quir

ed o

n t

he

bas

is o

f

conce

ssio

n

deb

t se

curi

ties

contr

ibuti

ons

into

join

t ac

tivit

y

Sh

ort

-ter

m -

tota

l

incl

udin

g:

deb

t se

curi

ties

loan

s

dep

osi

ts i

n b

anks

deb

t ac

quir

ed o

n t

he

bas

is o

f

conce

ssio

n

Fin

an

cial

inves

tmen

ts -

tota

l

6.1. Long-term financial investments – continue

Participation in the Authorized Capital of Other Organizations

Unlisted Financial Investments:

In the period of report the Company increased investments in the subsidiary and affiliate companies by

making additional contribution to the authorized (share) capital of the following companies:

Name of legal entity Amount of

financial

investment as

of 31/12/2011

Amount of

additional

contribution

Devaluation

provision

Amount of

financial

investment as of

31/12/2012

INTER RAO – Capital

CJSC 1 923 000 69 333 907 (48 001 092) 23 255 815

INTER RAO Holding B.V.

3 724 544 689 124 4 413 668

RAO Intertech B. V. 71 169 300 201 - 371 370

INTER RAO – Export

LLC 30 000 270 000 - 300 000

INTER RAO – Orel

Energosbyt LLC 10 000 50 000 60 000

TOTAL: 5 758 713 70 643 232 (48 001 092) 28 400 853

In the result of reorganization and affiliation of JSC ―OGK-1‖, JSC ―OGK-3‖, JSC ―INTER RAO –

Energy‖, JSC ―INTER RAO – EnergoAktiv‖, JSC ―Bashenergoaktiv‖, the Company received on its

balance financial investments in the form of shares in the authorized capital of the following

companies:


financial

investment as

of 31/12/2011

Received in the

result of

reorganization

Devaluation

provision

Amount of

financial

investment as of

31/12/2012

INTER RAO – Electric

Power Plants, OJSC 34 631 499 149 144 213 183 775 712

EXPLANATIONS



42

Bashkiria Generating

Company LLC 17 157 773 17 157 773

CCP TPP-5 LLC - 2 193 231 - 2 193 231

Bashkiria Heat Distribution

Systems LLC 2 359 923 (672 438) 1 687 485

OGK-1 Finance LLC - 10 000 - 10 000

Coal Mine LLC

79 515 (79 515)

TOTAL: 34 631 499 170 944 655 (751 953) 204 824 201

In the period of report the Company purchased stock/shares in the authorized (share) capital of the

following companies under purchase agreements:


financial

investment as

of 31/12/2011

Purchased in the

year of report

Devaluation

provision

Amount of

financial

investment as of

31/12/2012

JSC ―Elektroluch‖ 2 020 825 44 748 - 2 065 573

INTER RAO UES Energy

Efficiency Center LLC 45 000 - 45 000

TOTAL: 2 020 825 89 748 - 2 110 573

Quoted Financial Investments:

Information about purchase and disposal of quoted shares is given in the table below:

Name of legal

entity

Amount of

financial

investment as

of 31/12/2011

Arrived in 2012 Revaluation Amount of

financial

investment as of

31/12/2012

from

reorganization

from

purchase/sale

JSC ―Saint

Petersburg Sale

Company‖

9 838 857

1 292 154 1 492 052 12 623 063

JSC ―TGK-6‖ 3 254 521 235 911 - (1 632 610) 1 857 822

JSC ―TGK-11‖ 3 115 973 255 783 2 138 619 2 397 483 7 907 858

TOTAL: 16 209 351 491 694 3 430 773 2 256 925 22 388 743

In 2012 in the course of reorganization of JSC ―Bashkirenergo‖, the Company purchased shares of the

latter from minority shareholders, and also purchased shares of JSC ―Bashkirenergo‖ from JSC

―System-Invest‖ with the consent of JSC ―AFK System‖. By mutual consent of the parties a part of the

sum was paid in cash, the remaining sum was paid by Company’s bills of exchange. Maturity time of

EXPLANATIONS



43

the bills of exchange is January – September 2013. The Company’s debt on its own bills of exchange

is reflected in the books in the structure of other payables, and is itemized in the section 14.2 hereof. In

January 2013 the Company extinguished its debt on its own bills of exchange in the amount of

3,467,416 thsd. rubles. In 2012 the Company purchased shares of JSC ―OGK-1‖, JSC ―OGK-3‖,

JSC ―Saint Petersburg Sale Company‖, JSC ―TGK-11‖ from its subsidiary – JSC ―INTER RAO

Capital‖, for a total sum of 26,296,486 thsd. rubles. Company’s debt for purchased securities is

reflected in the books in the structure of other payables, and is itemized in the section 14.2 hereof.

Quoted Financial Investments (continue)

Information about purchasing and disposal of quoted shares is given in the table below:

Name of legal

entity

Amount of

financial

investment as

of 31/12/2011

Arrived in

2012

Disposed in 2012 Amount of

financial

investment as

of 31/12/2012

from

reorganization

from

purchase/sale

JSC ―OGK-3‖ 33 310 742 9 632 798 (32 778 734) (10 164 806) -

JSC ―OGK-1‖ 32 346 558 12 489 048 (34 055 704) (10 779 902) -

Enel OGK-5 17 090 794 - - (17 090 794) -

JSC

―Bashkirenergo‖ 8 722 230 18 614 804 (27 337 034)

JSC ―RusHydro‖ 5 091 474 - (5 091 474)

E.ON Russia 4 386 405 - - (4 386 405) -

JSC ―Mosenergo‖ 3 433 616 - (3 433 616)

OGK-2 2 562 701 - - (2 562 701) -

JSC ―Saint

Petersburg Sale

Company‖ 743 867 (743 867)

JSC ―TGK-1‖ 717 483 - - (717 483) -

JSC ―TGK-9‖ 361 700 - - (361 700) -

JSC

―Kuzbassenergo‖ 275 335 - (275 335)

JSC ―Kvadra‖ 244 947 - - (244 947) -

JSC ―Enisey TGK‖

211 842 (211 842)

JSC ―TGK-2‖ 44 579 - - (44 579) -

JSC ―TGK-14‖ 13 136 - - (13 136) -

JSC

―Novosibirskenergo‖ 7 712 (7 712)

TOTAL: 109 565 121 40 736 650 (94 171 472) (56 130 299) -

EXPLANATIONS



44

As a result of sale of the shares, the Company received income exceeding the value of purchase.

Detailed information is presented in the section 15 ―Other incomes and costs" of this Explanatory note.

Information about financial investments as of 31/12/2012 kept in pledge and in trust management is

given in the table below:

6.2. Other use of financial investments

Name of the indicator Code As of 31/12/2012 As of 31/12/2011 As of 31/12/2010

Financial investments kept in pledge - total 5320 1 069 412 2 536 129 1 215 027

including

shares of JSC ―Saint Petersburg Sale Company‖ 5321 - 1 388 580 1 215 027

shares of JSC ―Stantsiya Ekibastuzskaya GRES-2‖ 5322 1 069 412 1 147 549 -

Financial investments transferred to third parties

(other than by sale) - total 5325 7 254 610 24 750 396 -

including shares of JSC ―Bashkirenergo‖ transferred into trust

management of Gazprombank Asset Management CJSC 5326 - 659 929 -

shares of JSC ―Volga TGK‖ transferred into trust

management of Gazprombank Asset Management CJSC 5327 6 824 034 8 421 324 -

shares of JSC ―OGK-1‖ transferred into trust

management of Gazprombank Asset Management CJSC 5328 - 8 192 726 -

shares of JSC ―OGK-3‖ transferred into trust

management of Gazprombank Asset Management CJSC 5329 - 7 318 660 -

shares of JSC ―TGK-6‖ transferred into trust

management of Gazprombank Asset Management CJSC 5330 409 191 136 372 -

shares of Tomsk Energy Retail Company OJSC

transferred into trust management of Gazprombank

Asset Management CJSC 5331 21 385 21 385 -

Other use of financial investments 5335 - - -

Subsidiary and Associated Companies

The Company controls another entity when by virtue of its participation or in accordance with the

powers received from other entities, it has more than 50 % of the total number of votes related to

voting shares (participatory interest) in the authorized (share) capital of the legal entity, and can

determine decisions made by such entity. Such participation shall be attributed by the Company to a

category of participation in subsidiaries.

The Company influences another entity when it has the right to manage directly or through its

subsidiaries more than 20 % of the total number of votes related to voting shares (participatory

interest) in the authorized (share) capital of the legal entity and has the ability to determine decisions

made by such entity. Such participation shall be attributed by the Company to a category of

participation in associated companies.

EXPLANATIONS



45

Information about Company’s participation in the authorized capitals of other entities, specifying the

share therein as of December 31, 2012, is given below:

Name

of a legal entity Percentage

of

participation

in the capital

as of

31.12.2012

Amount of

financial

investment

as of

31.12.2012

Devaluation

provision

as of

31.12.2012

Amount of

investment

minus

provision

as of

31.12.2012

Amount of

investment

minus

provision

as of

31.12.2011

Amount of

investment

minus

provision

as of

31.12.2010

Investments in subsidiaries - 323 232 499

48 978

546

274 253

953

140 194

350

37 610

785

INTER RAO –

Elektrogeneratsiya OJSC Russia 100,0000 183 775 712 -

183 775

712

34 631

499 -

CJSC ―INTER RAO – Capital‖

Russia 100,0000 71 256 907

48 001

092

23 255

815 - 1 923 000

Bashkiria Generating Company

LLC, Russia 100,0000 17 157 773 -

17 157

773 - -

JSC ―Saint Petersburg Sale

Company‖

(ordinary shares) Russia** 85,37 11 493 589 -

11 493

589 9 094 990 2 439 611

JSC ―Saint Petersburg Sale

Company‖

(preferred shares) Russia** 14,63 1 129 474 - 1 129 473 743 867 332 670

Territorial Generation Company

No. 1 OJSC Russia * 98,5326 7 907 858 - 7 907 858 3 115 973 275 175

JSC ―MOSENERGOSBYT―

Russia* 50,9189 6 363 592 - 6 363 592 6 675 731 -

LLC ―RN-Energo Ltd" Russia 100,0000 4 995 804 - 4 995 804 4 995 804 -

Moldavskaya GRES CJSC

Pridnestrovian Moldavian

Republic 80,9000 4 964 103 - 4 964 103 4 964 103 2 646 004

INTER RAO HOLDING B.V.

the Netherlands 100,0000 4 413 668 - 4 413 668 3 724 544 1 861 680

Bashkiria Distribution Systems

LLC, Russia 92,84 2 359 923 672 438 1 687 485

JSC ―Eastern

Energy Company‖, Russia 100,0000 2 190 290 - 2 190 290 2 190 290 2 190 290

JSC ―Elektroluch‖ Russia 99,82 2 065 573 - 2 065 573 2 020 825 1 756 693

EXPLANATIONS



46

Name of legal entity Percentage

of

participation

in the capital

Amount of

financial

investment

Devaluation

provision Amount of

investment

minus

provision

Amount of

investment

minus

provision

Amount of

investment

minus

provision as of

31.12.2012

as of

31.12.2012

as of

31.12.2012

as of

31.12.2012

as of

31.12.2011

as of

31.12.2010

Razdan Energy Company OJSC

(RazTES)

Republic of Armenia* 100,0000 624 579 - 624 579 624 579 -

RAO Intertech B.V.

the Netherlands 100,0000 371 370 - 371 370 71 169 853

JSC ―Altaienergosbyt‖

Russia 100,0000 330 000 - 330 000 330 000 -

INTER RAO – Export LLC Russia 100,0000 300 000 - 300 000 30 000 -

Testing stand of JSC ―Ivanovskie

GPU‖

Russia 82,8359 290 055 186 348 103 707 103 707 103 707

JSC «Tambov Energy Retail

Company‖

Russia* 59,3845 246 129 - 246 129 343 489 -

INTER RAO Middle East B.V. the

Netherlands 100,0000 245 362 - 245 362 245 362 245 362

JSC ―Saratovenergo‖

Russia 56,9715 220 357 - 220 357 279 404 -

INTER RAO – Procurement

Management Center LLC

Russia 100,0000 122 038 - 122 038 122 038 19 342

INTER RAO Finance B.V. the

Netherlands 100,0000 82 748 - 82 748 82 748 -

INTER RAO Central Asia LLP

Kazakhstan 100,0000 47 443 - 47 443 47 443 47 443

JSC ―United Energy Retailing

Company‖

Russia 100,0000 44 800 - 44 800 44 800 -

RAO Nordic Oy Republic of Finland 100,0000 43 410 - 43 410 43 410 43 410

Coal Mine LLC

Russia 100,0000 79 515 79 515 - - -

INTER RAO – Orel Energy

Distribution LLC

Russia 100,0000 60 000 - 60 000 10 000 -

TGR Enerji Electrik Toptan Ticaret

A.S.

Republic of Turkey 70,0000 39 153 39 153 - - -

INTER RAO – Engineering

LLC

Russia 100,0000 775 - 775 775 -

INTER RAO – Management of

Electric Power Plants LLC

Russia 100,0000 500 - 500 500 -

EXPLANATIONS



47

Name


of

participation

in the capital

Amount of

financial

investment

Devaluation

provision Amount of

investment

minus

provision

Amount of

investment

minus

provision

Amount of

investment

minus

provision as of

31.12.2012

as of

31.12.2012

as of

31.12.2012

as of

31.12.2012

as of

31.12.2011

as of

31.12.2010

FREECOM Trading Limited,

Republic of Cyprus - - - - - 2 447 545

OGK-1 Finance LLC

Russia 100,0000 10 000 - 10 000 -

JSC ―First Generation Company of

Wholesale Electricity Market‖

Russia** - - - - 32 346 558 21 278 000

JSC ―Third Generation Company of

Wholesale Electricity Market‖

Russia* - - - - 33 310 742 -

Investments in subsidiaries 53 114 883 12 899 53 101 984 78 004 994 655 563

JSC ―Irkutskenergo‖

Russia 40,0070 32 263 558 - 32 263 558 28 594 384 -

JSC ―Volga TGK‖

Russia 32,4400 15 370 715 - 15 370 715 18 968 509 -

CCP TPP-5 LLC

Russia 43,69 2 193 231 - 2 193 231 - -

Territorial Generating Company No.

6 OJSC

Russia 27,6179 1 857 822 - 1 857 822 3 254 521 -

JSC ―Stantsiya Ekibastuzskaya

GRES-2‖

Kazakhstan 50,0000 603 311 - 603 311 603 311 603 311

INTER RAO – LED Systems OJSC

Russia 35,1700 600 000 - 600 000 600 000 -

JSC ―Tomsk Energy Retailing

Company‖4

(ordinary shares)

Russia 24,5644 83 602 - 83 602 83 602 -

INTER RAO UES Energy

Efficiency Center

LLC

Russia 50,0000 45 000 - 45 000 - -

Kambartinskaya GES-1, CJSC

Republic of

Kyrgyzstan 50,0000 28 864 - 28 864 28 864 28 864

JSC ―Tomsk Energy Retailing

Company‖

(preferred shares) Russia 6,7089 21 358 - 21 358 21 358 -

4 In June 2012 trading of shares of Tomsk Energy Distribution Company at the Russian stock exchange markets was

stoppedCurrent market value as of 31/12/2012 is not determined, shares are reflected in the accounting nooks at the value

of their last valuation – as of 31/12/2011

EXPLANATIONS



48

Name of legal entity Percentage

of

participation

in the capital

Amount of

financial

investment

Devaluation

provision Amount of

investment

minus

provision

Amount of

investment

minus

provision

Amount of

investment

minus

provision

as of

31.12.2012

as of

31.12.2012

as of

31.12.2012

as of

31.12.2012

as of

31.12.2011

as of

31.12.2010

Inter RAO – WorleyParsons LLC

Russia 51,0000 19 384 - 19 384 19 384 19 384

Industrial Energy Company CJSC

Russia 50,0000 10 000 10 000 - - -

RT – Energotrading LLC

Russia 50,0000 9 805 - 9 805 9 805 -

Energoconnect LLC

Republic of Belarus 50,0000 4 229 - 4 229 4 229 -

INTERENERGOEFFECT LLC

Russia 50,0000 4 004 2 899 1 105 4 004 4 004

JSC ―Enel OGK-5‖

Russia - - - - 17 090 794 -

JSC ―Bashkirenergo‖ (ordinary

shares)

Russia - - - - 8 501 797 -

JSC ―Bashkirenergo‖ (preferred

shares)

Russia - - - - 220 432 -

Investments in other

companies - 1 869 185 396 354 1 472 831 18 823 761 1 108 747

AKKUYU NPP ELECTRICITY

GENERATION JOINT-STOCK

COMPANY

Republic of Turkey 3,4700 1 025 707 - 1 025 707 1 025 707 1 025 707

Sangtuda GES-1 OJSC,

Tajikistan 14,8700 795 869 396 354 399 515 399 515 83 040

SIBEKO OJSC

Russia 0,1613 18 738 - 18 738 18 738 -

Elektromagistral OJSC (preferred

shares)

Russia 0,1085 16 022 - 16 022 16 022 -

Elektromagistral OJSC (ordinary

shares)

Russia 0,0870 12 849 - 12 849 12 849 -

Federal Hydrogeneration Company

OJSC

Russia - - - - 5 091 474 -

JSC ―E.ON Russia‖

Russia - - - - 4 386 405 -

JSC ―Mosenergo‖

Russia - - - - 3 433 616 --

EXPLANATIONS



49

Name


of

participation

in the capital

Amount of

financial

investment

Devaluation

provision Amount of

investment

minus

provision

Amount of

investment

minus

provision

Amount of

investment

minus

provision

as of

31.12.2012

as of

31.12.2012

as of

31.12.2012

as of

31.12.2012

as of

31.12.2011

as of

31.12.2010

JSC ―Second Generation Company

of Wholesale Electricity Market‖

Russia - - - - 2 562 701 -

JSC ―Territorial Generating

Company No. 1‖

Russia - - - - 717 483 -


Company No. 9‖

Russia - - - - 361 700 -

JSC ―Kuzbassenergo‖

Russia - - - - 275 335 -

JSC ―Kvadra-Generation company‖

(preferred shares)

Russia - - - - 244 301 -

JSC ―Kvadra-Generation company‖

(ordinary shares)

Russia - - - - 646 -

JSC ―Yenisei TGK (TGK-13)‖

Russia - - - - 211 842 -


Company No. 2‖

Russia - - - - 44 579 -


Company No. 14‖

Russia - - - - 13 136 -

JSC ―Novosibirskenergo‖ (ordinary

shares)

Russia - - - - 4 051 -

JSC ―Novosibirskenergo‖ (preferred

shares)

Russia - - - - 3 661 -

Total (investment units and

shares) - 378 216 567 49 387 799 328 828 768 237 023 105 39 375 095

Investments into joint activity

In 2007 the Company concluded a simple partnership agreement for participation in the joint activity

on receiving written substantiation of investments into joint construction of Kambartinskaya GES-1

and GES-2 in the Kyrgyz Republic. Another participant under the contract is Electricheskiye Stantsii

EXPLANATIONS



50

OJSC /Power Plants OJSC/ (Kirghizia). The participants make the following contributions in cash in

the joint activity. Company’s contribution as of 31/12/2012 made 17,436 thsd. rubles (17,436 thsd.

rubles – as of 31/12/2011; 11,622 thsd. rubles – as of 31/12/2010).

Debt Financial Investments

Long-term loans issued in foreign currency

Information about long-term loans issued in foreign currency is given in the table below:

In the currency of the contract

Name Remaining

loan as of

31/12/2011

Arrived in 2012 Disposed in 2012 Remaining

loan as of

31/12/2012 Issued in

2012

Transferred

from short-

term loans

Repaid in

2012

Transferred

to short-

term loans

Loans in USD 8 065 3 476 54 014 (1 800) (16 115) 47 640

Loans in EUR 30 000 - - - - 30 000

Loans in RUB

equivalent 1 509 803 108 761 1 591 857 (57 366) (507 744) 2 645 311

Exchange rate

influence - - 8 495

Total in RUB

equivalent 2 653 806

The Company provides long-term loans in currency to the companies of INTER RAO UES Group.

Terms for repayment of loans in USD – 2015-2023, in EUR – 2023. Interest rates applicable in 2012

made 10 % to 15 % per annum for loans in USD, and 10 % to 12.5 % per annum - for loans in EUR.

Long-term loans issued in rubles

Information about long-term loans issued in rubles is given in the table below:

Name Remaining

loan as of

31/12/2011


loan as of


2012

From

reorganization

Repaid in

2012

Reclassified

into short-

term loans

Loans in rubles 2 533 921 1 128 196 706 000 (959) (920 926) 3 446 232

EXPLANATIONS



51

The Company provides long-term loans in rubles to the companies of INTER RAO UES Group and to

the employees of the Company. The term of loan repayment is in 2014-2015. Interest rates applicable

in 2012 made 10 % to 13.5 % per annum.

Long-term debt securities

As of 31/12/2012 the Company has no long-term debt securities (66,122 thsd. rubles as of 31/12/2011;

no debt securities as of 31/12/2010). Bills of exchange accounted as of 31/12/2011 as long-term

financial investments in the sum of 66,122 thsd. rubles were submitted for receipt in the amount of

39,639 thsd. rubles, and moved to short-term financial investments in accordance with their repayment

terms in the amount of 28,869 thsd. rubles. Discount was charged on bills of exchange in the structure

of interest yield in the amount of 2,386 thsd. rubles in the year 2012.

6.2. Short-term financial investments (other than cash equivalents)

Financial investments (other than cash equivalents) on the balance sheet are shown net of a provision

for devaluation of financial investments in the amount of 937,985 thousand rubles as of December 31,

2012 (6,028,375 thousand rubles - as of December 31, 2011, 4,020,736 thousand rubles - as of

December 31, 2010).

The amount of provision created for devaluation of financial investments with respect to the short-term

financial investments in the form of loans issued, as of December 31, 2012 amounts to 11,976

thousand rubles (6,192 thousand rubles – as of December 31, 2011; 31,678 thousand rubles – as of

December 31, 2010).

Short-term loans issued in foreign currency

Information about short-term loans issued in foreign currency is given in the table below:

In the currency of the contract

Name

Remaining

loan as of

31/12/2011


loan as of


2012 Transferred

from long-

term loans

Repaid in

2012 Transferred

to long-term

loans

Loans in USD 54 740 268 16 115 (16 467) (54 014) 642

Provision for

devaluation in

USD

(204) (190) - (394)

EXPLANATIONS



52

Loans in RUB

equivalent 1 762 426 7 896 507 744 (516 606) (1 591 857) 169 603

Exchange rate

influence - - (150 101)

Total in RUB

equivalent 19 502

Provision for

devaluation in

RUB

(6 192) (5 784) (11 976)

The Company provides short-term loans in foreign currency to INTER RAO UES Group with the term

of repayment less than 365 days. As of 31/12/2012 short-term loans in foreign currency include

remaining debt on the long-term loan with the maturity time in 2013 in the amount of 248 thsd. USD

(7,526 thsd. rubles). Detailed information is given in the section ―Related Parties‖.

Short-term loans issued in rubles

Information about short -term loans issued in rubles is given in the table below:

Name

Remaining

loan as of

31/12/2011

Arrived in 2012

Repaid in

2012

Remaining

loan as of


2012

From

reorganization

Transferred

from long-

term loans

Loans in rubles 1 663 294 996 900 000 920 926 (1 215 995) 901 590

The Company provides short-term loans in rubles to the companies of INTER RAO UES Group and to

the employees of the Company with the term of repayment less than 365 days. Interest rates applicable

in 2012 made 7.8 % to 10.25 % per annum.

Bank deposits

In 2012 the Company used to keep free cash funds at bank deposits. Deposits were made in Russian

rubles. Interest rates on deposits in rubles varied within 3.9 %-7.7 % per annum (2.05 % - 7.7 % per

annum in 2011). The term of deposits made 1 to 214 days.

Deposits with the term of repayment less than 3 months are reflected by the Company in the books in

the structure of cash funds and their equivalents. Cash equivalents as of 31/12/2012 made 2,100,000

EXPLANATIONS



53

thsd. rubles (3,357,000 thsd. rubles – as of 31/12/2011; no cash equivalents – as of 31/12/2010). As of

31/12/2012 the Company has no deposits with the term of repayment over 3 months (1,005,500 thsd.

rubles – as of 31/12/2011; no deposits – as of 31/12/2010).

Information about deposits in the commercial banks as of 31/12/2012 is given in the table below:

Name of the credit organization Period of placement (year, month) Amount

thousand rubles

Effective as of Up to

JSC ―Gazprombank‖ December 2012 January 2013 1 000 000

JSB Peresvet CJSC December 2012 January 2013 1 100 000

TOTAL Deposits reflected in the structure of cash funds and their equivalents 2 100 000

TOTAL - -

2 100 000

Comparative information about deposits in the commercial banks as of 31/12/2011 is given in the table

below:

Name of the credit organization Period of placement (year, month) Amount

thousand rubles

Effective as of Up to

Moscow Credit bank OJSC December 2011 January 2012 1 970 000

NOVIKOMBANK CJSC December 2011 March 2012 500 000

Nordea OJSC December 2011 January 2012 300 000

JSB Peresvet CJSC December 2011 February 2012 587 000

TOTAL Deposits reflected in the structure of cash funds and their equivalents 3 357 000

Sobinbank OJSC October 2011 August 2012 1 005 500

TOTAL Deposits reflected in the structure of short-term financial investments 1 005 500

TOTAL - -

4 362 500

EXPLANATIONS



54

7. INVENTORIES

Information about existence and flow of inventories as of 31/12/2012 is shown in the table below:


As of the beginning of the year Changes for the period As of the end of the

year

book value receipts disposed Inventory turnover

among their groups (types)

book value book value

Inventories - total 5400 2012 964 081 2 376 391 (3 326 649) - 13 823

5420 2011 886 572 10 263 937 (10 186 428) - 964 081

including:

raw and materials 5401 2012 132 558 57 559 (195 087) 4 994 24

5421 2011 91 279 314 875 (275 623) 2 027 132 558

fuel and petroleum products 5402 2012 253 510 2 136 380 (2 384 722) (4 985) 183

5422 2011 244 907 9 543 680 (9 534 219) (858) 253 510

spare parts 5403 2012 267 819 11 141 (278 960) - -

5423 2011 163 587 148 532 (28 912) (15 388) 267 819

construction materials 5404 2012 148 690 - (148 690) - -

5424 2011 141 367 29 618 (1 752) (20 543) 148 690

inventory and utility

appliances 5405 2012 31 448 38 143 (67 238) 432 2 785

5425 2011 16 255 96 693 (80 571) (929) 31 448

special equipment and special

clothing 5406 2012 9 022 - (9 022) - -

5426 2011 9 058 8 596 (9 408) 776 9 022

low-value fixed assets 5407 2012 10 507 73 291 (87 070) 6 372 3 100

5427 2011 3 487 44 553 (38 174) 641 10 507

other materials 5408 2012 110 527 59 877 (155 860) (6 813) 7 731

5428 2011 216 632 77 390 (217 769) 34 274 110 527

value of reserve for a value decrease

5409 2012 (112 298) - 112 298 - -

5429 2011 (6 979) (112 264) 6 945 - (112 298)

As of 31/12/2012 the Company has no morally obsolete inventories, which have fully or partially lost

their quality or are pledged. Provision for devaluation of inventories in 2012 was not formed (112,298

thsd. rubles – as of 31/12/2011, 6,979 thsd. rubles – as of 31/12/2010).

In the period of report the Company sold its inventories to its 100 % subsidiary INTER RAO – Electric

Power Plants, OJSC in the course of activity termination. Inventories have been sold at their current

market value determined by the appraiser. The Company received income from the said operations.

Detailed information is provided in section 26 ―Terminated Activity‖ hereof.

8. RECEIVABLES

EXPLANATIONS



55

8.1

. P

rese

nce

an

d f

low

of

lon

g-t

erm

rec

eiv

ab

les

As

of

the

end

of

the

yea

r

ov

erdu

e d

ebt

rese

rve

12

(88

317

)

(428

35

5)

incl

ud

ing

:

-

(428

35

5) - - - - - - - -

(88

317

) -

Rec

ord

ed u

nd

er

the

term

s o

f

con

trac

t

11

27

056

12

7

4 2

90

574

10

8 6

10

1 2

23

359

82

805

32

0 8

48

1 2

06

366 -

2 1

50

242

2 7

46

367

17

192

41

6 -

6 3

15

688 -

Ch

ang

es f

or

the

per

iod

recl

ass

10

58

2 9

93

(620

32

9)

(20

902

)

(40

263

) -

(33

578

)

1 2

06

366

(499

80

6)

(697

32

1) - - -

94

850

(46

682

)

ov

erdu

e d

ebt

rese

rve

9

34

0 0

38

(381

67

3)

42

8 3

55

(428

35

5) - - - - - - - -

(88

317

)

46

682

dis

po

sal

Wri

ting

-off

to

fin

anci

al r

esu

lt

8

- - - - - - - - - - - - -

rep

aym

ent

7

(3 8

27 2

16

)

(515

36

8)

(1 2

02 4

58

)

-

(238

04

3)

- -

(451

28

8)

-

( 6

4 0

80

)

(2 3

86 7

15

)

- -

rece

ipt

as a

resu

lt o

f

bu

sin

ess

tran

sact

ion

s

6

26

009

77

6

3 0

71

348

10

8 6

11

27

148

-

76

475

-

19

0 7

01

10

1 1

96

2 7

77

024

19

579

13

1

-

6 2

20

838

As

of

the

beg

inn

ing o

f th

e

yea

r ov

erdu

e d

ebt

rese

rve

5

(428

35

5)

(46

682

)

(428

35

5) - -- - - - - - - - -

(46

682

)

Rec

ord

ed

un

der

th

e

term

s o

f

con

trac

t

4

4 2

90

574

2 3

54

923

1 2

23

359

1 2

36

474

32

0 8

48

27

7 9

51

-

76

0 3

93

2 7

46

367

33

423

- - -

46

682

Per

iod

3

20

12

20

11

20

12

20

11

20

12

20

11

20

12

20

11

20

12

20

11

20

12

20

11

20

12

20

11

Co

de

2

55

01

55

21

55

02

55

22

55

03

55

23

55

04

55

24

55

05

55

25

55

06

55

26

55

07

55

27

EXPLANATIONS



56

Nam

e o

f th

e

ind

icat

or

1

Lo

ng

-ter

m

rece

iva

ble

s -

tota

l

secu

riti

es

tra

nsa

ctio

ns

on

th

e in

tere

st-f

ree

loa

ns

(in

sta

lmen

t

pla

n)

inte

rest

rev

enu

es

ad

va

nce

pa

ym

ents

gra

nte

d

On

th

e p

rop

erty

sale

tra

nsa

ctio

ns

oth

er d

ebts

8.1. Long-term receivables

Long-term receivables are reflected net of provision for bad debts included in other capital assets of

the balance sheet in the amount of 26,967,810 thousand rubles as of December 31, 2012 (3,862,219

thousand rubles - as of December 31, 2011; 2,308,241 thousand rubles – as of December 31, 2010).

The amount of provision for bad debts formed in terms of long-term receivables, as of December 31,

2012 amounts to 88,317 thousand rubles (428,355 thousand rubles – as of December 31, 2011; 46,682

thousand rubles – as of December 31, 2010).

The long-term receivables include debt on the interest-free bank bills of exchange of Alfa-Bank OJSC

and Bashkiria Industrial Bank OJSC, received in payment for supplied electricity. Bills of exchange of

Bashkiria Industrial Bank OJSC were received by the Company in the result of reorganization and

affiliation of JSC ―Bashenergoaktiv‖ in November 2012. The term of payment of bills of exchange is

in 2014-2017.

Other long-term receivables include debt of subsidiary companies Bashkiria Generating Company

LLC and Bashkiria Heat Distribution Systems LLC in the amount of 6,220,838 thsd. rubles. This debt

has been received to the Company’s balance in the result of reorganization and affiliation of JSC

―Bashenergoaktiv‖ in November 2012. The debt has been formed under different agreements, and

includes settlements for inventories, settlements for the assignment of receivables.

The debt of subsidiary company INTER RAO – Electric Power Plants OJSC in the amount of

17,192,416 thsd. rubles was formed under the property purchase agreements as a part of Company’s

terminated activity on production of electricity and heat energy, and transferring this function to the

said subsidiary company. The Company provided payment by instalments with the monthly payment

of interests at 8.25 % per annum. The term for debt repayment is 2017.

Long-term receivables net of provision for doubtful debts as of 31/12/2012 is given in the table below:

EXPLANATIONS



57

Kind of debts As of

December 31,

2012

As of

December 31,

2011

As of

December 31,

2010

Repayment

term

On the operations of property sale as a part of Company’s

terminated activity:

Debt of subsidiary company

INTER RAO – Electric Power

Plants OJSC 17 192 416 - - 2017

Advance payments paid to suppliers:

For supply of power equipment 1 919 052 2 616 373 - 2014-2015

On redemption payment to a

leasing company 231 190 129 994 33 423 2015

On interest yields

Organizations of INTER RAO

UES Group 1 206 366 - 760 393 2014-2023

On the transactions with securities:

Organizations of INTER RAO

UES Group - 767 856 1 196 211 2013

Bank bills of exchange received in

payment for electricity 108 610 27 148 40 263 2014-2017

On interest-free loans:

Debts of the Company's employees

on apartments bought on

instalment plan 6 330 244 373 277 951 2014-2026

Debts of the Company's employees

on the special-purpose interest-free

loans 76 475 76 475 - 2015

Other debts (mainly of subsidiary

companies) 6 227 371 - - 2014-2017

TOTAL 26 967 810 3 862 219 2 308 241 -

8.2. Short-term receivables of buyers and customers

Short-term receivables of buyers and customers are reflected net of provision for doubtful debts

included in current assets of the balance sheet in the amount of 2,806,082 thousand rubles as of

December 31, 2012 (3,773,174 thousand rubles - as of December 31, 2011; 5,112,631 thousand rubles

– as of December 31, 2010). The amount of provision for doubtful debts formed in terms of short-term

receivables, as of December 31, 2012 amounts to 770,356 thousand rubles (815,501 thousand rubles –

as of December 31, 2010; 647,427 thousand rubles – as of December 31, 2010).

Short-term receivables as of 31/12/2012 are shown in the table below:

EXPLANATIONS



58

8.2

. P

rese

nce a

nd

flo

w o

f sh

ort-

term

receiv

ab

les

As

of

the

end o

f th

e yea

r

size

of

over

due

deb

t re

serv

e

(1 0

65 6

52)

(30 0

15 0

69)

inclu

din

g:

Tra

de r

eceiv

ab

les

(540 2

01)

(462 2

61)

(230 1

55)

(243 9

72) -

(76 4

48) -

(32 8

20)

(770 3

56)

(815 5

01)|

Oth

er r

eceiv

ab

les

(40 3

22)|

(1 0

44 0

10) - - - -

(197 0

25)

(28 0

62 2

73)

(237 3

47)

(29 1

06 2

83)

Ad

va

nce p

ay

men

ts g

ra

nte

d

(57 9

49)

(93 2

85)

Rec

ord

ed u

nder

the

term

s of

contr

act

60 4

11 6

33

91 5

13 0

24

1 4

95 4

45

2 0

59 7

14

1 8

38 9

50

2 1

68 8

60

37 2

90

294 6

86

204 7

53

65 4

15

3 5

76 4

38

4 5

88 6

75

38 1

39 9

97

2 9

18 8

49

309 4

02

1 1

25 5

73

5 2

80

223 5

08

14 8

18 6

10

81 2

60 9

03

53 2

73 2

89

85 5

28 8

33

3 5

61 9

06

1 3

95 5

16

Ch

ang

es f

or

the

per

iod

recl

ass

(582 9

92)

620 3

29

- - -

(76 2

64)

27 7

18

- -

(76

264)

27 7

18

20 9

02

40 2

63

(1 2

06 3

66)

499 8

06

- -

(18 5

85)

52 5

42

(1 2

04 0

49)

592 6

11

697 3

21

over

due

deb

t

rese

rve

28 9

49 4

17

(29 2

50 8

57)

(77 9

40)

(238 9

47)

13 8

17

148 8

79

76 4

48

(46 9

19)

32 8

20

(31 0

87)

45 1

45

(168 0

74)

1 0

03 6

88

(1 0

44 0

10)

- - - -

27 8

65 2

48

(28 0

48 6

41)

28 8

68 9

36

(29 0

92 6

51)

35 3

36

9 8

68

|Dis

po

sal| W

riti

ng

-off

to

fin

anci

al r

esu

lt

(92

)

(41

00

2)

(92

)

(16

37

6) - - - - - -

(92

)

(16

37

6) - - -

(53

) - - -

(5 1

11

) -

(5 1

64

) -

(19

46

2)

rep

aym

ent

(15

9 4

15

60

7)

(57

3 3

10

87

4)

(20

61

4 1

88

)

(41

95

3 1

06

)

(26

07

7 1

40

)

(38

25

3 2

49

)

(64

0 0

16

)

(78

6 3

94

)

(32

8 3

81

)

(5 4

53

) (4

7 6

59

72

5)

(80

99

8 2

02

)

(2 8

78

58

5)

(42

1 3

50

66

4)

(1 1

27

59

9)

(1 5

52

80

1)

(22

3 5

08

)

(1 2

58

12

4)

(81

23

6 0

26

)

(23

56

9 0

43

)

(85

46

5 7

18

)

(44

7 7

30

63

2)

(26

29

0 1

64

)

(44

58

2 0

40

)

Rec

eiv

ed i

n

the

resu

lt o

f

eco

no

mic

op

erat

ion

s

12

8 8

97

30

0

65

2 1

51

47

0

20

05

0 0

11

41

82

0 0

72

25

74

7 2

30

37

18

9 2

46

45

8 8

84

87

2 5

88

46

7 7

19

(66

42

9)

46

72

3 8

44

79

81

5 4

77

38

07

8 8

31

42

4 2

29

25

0

1 5

17

79

4

1 3

66

39

4

5 2

80

1 0

45

36

1

14

81

2 3

18

10

1 9

85

60

1

54

41

4 2

23

52

8 6

26

60

6

27

75

9 2

33

43

70

9 3

87

As

of

the

beg

inn

ing

of

the

yea

r

ov

erd

ue

deb

t

rese

rve

(30

01

5 0

69

)

(76

4 2

12

)

(46

2 2

61

)

(22

3 3

14

)

(24

3 9

72

)

(39

2 8

51

)

(76

44

8)

(29

52

9)

(32

82

0)

(1 7

33

)

(81

5 5

01

) (6

47

42

7)

(1 0

44

01

0) - - - - -

(28

06

2 2

73

)

(13

63

2)

(29

10

6 2

83

)

(13

63

2)

(93

28

5)

(10

3 1

53

)

Rec

ord

ed u

nd

er

the

term

s o

f

contr

act

91 5

13

02

4

12 0

93

10

1

2 0

59

71

4

2 2

09

12

4

2 1

68

86

0

3 2

32

86

3

294

68

6

180

77

4

65

41

5

137

29

7

4 5

88 6

75

5 7

60

05

8

2 9

18 8

49

-

1 1

25 5

73

812 2

27

223 5

08

436 2

71

81 2

60 9

03

2 7

96 9

14

85 5

28 8

33

4 0

45 4

12

1 3

95

51

6

2 2

87

63

1

Yea

r

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2102

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

Code

5510

5530

5511

5531

5512

5532

5513

5533

5514

5534

5515

5535

5516

5536

5517

5537

5518

5538

5519

5539

5520

5540

5521

5541

Nam

e o

f th

e in

dic

ato

r

Sh

ort-

term

receiv

ab

les

- to

tal

for e

lectr

icit

y (

po

wer)

sold

in

sid

e

the R

F

for e

lectr

icit

y (

po

wer)

sold

ou

tsid

e

the R

F

oth

er d

eb

ts

Tota

l co

mm

ercia

l d

eb

t

On

th

e o

pera

tio

ns

wit

h s

ecu

rit

ies

On

in

terest

yie

lds

On

th

e d

ivid

en

ds

pa

ya

ble

oth

er d

eb

ts

Tota

l o

ther d

eb

ts

ad

van

ce p

ay

men

ts g

ra

nte

d

EXPLANATIONS



59

The Company's largest debtors in terms of payment for electricity (power) as of December 31, 2012:

Centre of Financial Settlements JSC ―CFR‖. The debt of JSC ―CFR‖ to the Company amounts to

771,252 thousand rubles (872,629 thousand rubles as of December 31, 2011; 1,459,731 thousand

rubles as of December 31, 2010). The Company has formed a provision for doubtful debts in

respect of this debt in the amount of 35,567 thousand rubles (173,823 thousand rubles as of

December 31, 2011; 116,691 thousand rubles as of December 31, 2010).

INTER RAO Lietuva (Republic of Lithuania). The debt to the Company amounts to 508,077

thousand rubles (344,549 thousand rubles as of December 31, 2011; 794,056 thousand rubles —

as of December 31, 2010).

8.3. Other short-term receivables

Other receivables are reflected in the balance-sheet net of provision for bad debts included in current

assets in the amount of 53,035,942 thousand rubles as of December 31, 2012 (56,422,550 thousand

rubles - as of December 31, 2011; 4,031,780 thousand rubles – as of December 31, 2010).

The amount of provision for doubtful debts formed in terms of other receivables, as of December 31,

2012 amounts to 237,347 thousand rubles (29,106,283 thousand rubles – as of December 31, 2011;

13,632 thousand rubles – as of December 31, 2010). Previously formed provision for receivables of

subsidiary company INTER RAO Capital CJSC in the amount of 29,002,645 as of 31/12/2011 was

reclassified into provision for devaluation of financial investments as of 31/12/2012 into the said

Company.

Other short-term receivables are given below net of doubtful debt provision:

Other receivables As of

31/12/2012

As of

31/12/2011

As of

31/12/2010

Other debtors total: 53 035 942 56 422 550 4 031 780

including:

Debt of subsidiary company INTER RAO

Capital CJSC on payment for securities (shares) 37 817 839 1 799 284

EXPLANATIONS



60

Other receivables As of

31/12/2012

As of

31/12/2011

As of

31/12/2010

Debt of subsidiary company INTER RAO –

Electric Power Plants OJSC for the property 10 861 751

Debt of subsidiary company INTER RAO –

Electric Power Plants OJSC for the assignment

of receivables 1 636 439

Debt of subsidiaries and affiliates relating to the

due income on borrowed funds and deferred

payments 309 402 1 124 863 812 227

Overpayment of taxes to the federal budget, the

budgets of the constituent entities of the Russian

Federation 351 102 898 911 11 045

Debt on settlements for electricity under

contracts of commission, assignments 792 604 415 255 129 169

VAT to be compensated from the budget

including on export 783 159 1 507 741 2 390 247

Debts in bank interest-free bills of exchange

received in payment for electricity supplied 68 585

Debts payable on dividends 5 280 223 508 436 271

Debt of subsidiary company INTER RAO

Capital CJSC on the interest-free loan 50 189 901

Debt on securities (shares) 75 555

Other debtors 409 781 187 532 252 821

Debt of subsidiary company INTER RAO Capital CJSC was counted in 2012 as payment of

Company’s debt on the contribution to the authorized capital of INTER RAO Capital CJSC.

8.4 Advance payments granted

Advance payments granted are reflected net of provision for doubtful debts included in current assets

of the balance sheet in the amount of 3,503,957 thousand rubles as of December 31, 2012 (1,302,231

thousand rubles - as of December 31, 2011; 2,184,478 thousand rubles – as of December 31, 2010).

The amount of provision for doubtful debts formed in terms of advance payments granted as of

December 31, 2012 amounts to 57,949 thousand rubles (93,285 thousand rubles – as of December 31,

2011; 103,153 thousand rubles – as of December 31, 2010).

As of 31/12/2012 advance payments granted mainly include advance payment paid for supply of

power equipment to Bolivarian Republic of Venezuela in the amount of 2,204,000 thsd. rubles

(296,332 thsd. rubles – as of 31/12/2011). Increase in the sum of advance payments granted as of

31/12/2012 against the sum of advance payments as of 31/12/2011 is connected with reclassification of

EXPLANATIONS



61

advance payment paid for supply of power equipment to Ecuador from long-term to short-term, in the

amount of 697,320 thsd. rubles. Besides, in the year of report current advance payments were paid for

supply of power equipment to Venezuela according to the contract conditions in the amount of

1,210,348 thsd. rubles.

9. CASH FUNDS AND CASH EQUIVALENTS

Cash Funds As of December

31, 2012

As of December

31, 2011

As of December

31, 2010

Cash in rubles in the cash desk and on

accounts in banks 10 882 874 493 494 3 222 647

Cash in foreign currency in the cash

desk and on accounts in banks 1 086 890 1 018 180 840 160

Monetary documents in rubles in the

cash desk 26 22 15

TOTAL 11 969 790 1 511 696 4 062 822

Cash funds in foreign currency

In thousand units of currency

Cash Funds As of 31/12/2012 As of 31/12/2011 As of 31/12/2010

Cash on accounts in banks in USD 24 335 12 829 8 238

RUB equivalent according to the

exchange rate of the Central Bank 739 109 413 031 251 060

Cash on accounts in banks in EUR 8 645 14 522 14 606

RUB equivalent according to the

exchange rate of the Central Bank 347 781 605 149 589 100

TOTAL in rubles 1 086 890 1 018 180 840 160

Cash equivalents

Kind of cash equivalents As of 31/12/2012 As of 31/12/2011 As of 31/12/2010

Short-term bank deposits (with a term

up to three months) 2 100 000 3 357 000 -

The Company has no funds unavailable for use. As of December 31, 2012 the Company has an

opportunity to raise additional cash funds within open, but unused credit lines opened for the Company

as of the reporting date for a total sum of 7,000,000 thousand rubles.

10. OTHER CURRENT ASSETS

EXPLANATIONS



62

Deferred expenses with a writing-off period within 12 months after reporting date, costs of unfinished

research and development and experimental and technological works, costs proposed to be disposed

within 12 months after the reporting date, and so on are reflected in the structure of other current

assets. As of December 31, 2011 unfinished R&D in the amount of 116,563 thsd. rubles were

transferred to the Scientific & Innovation Activity Support Foundation ―Energy Beyond Borders‖.

Unfinished R&D for a sum of 66,305 thsd. rubles were written off to financial result as given no

effect. Unfinished R&D in the amount of 73,937 thousand rubles is to be transferred by the Company

in 2013 to the Scientific and Innovation Activity Support Foundation ―Energy Beyond Borders‖.

Information on other current assets of the Company is presented below:

Description As of

31.12.2012

As of

31.12.2011

As of

31.12.2010

Total unfinished R&D costs,

including: 73 937 256 805 -

- unfinished developments to create and test low

emission combustion chamber GTE-110 73 937 140 242

- unfinished developments to improve energy

efficiency, reliability and safe operation of TPP 116 563

Total deferred expenses, including 136 524 178 954 125 573

- software products 72 492 62 992 66 356

- costs of voluntary health insurance 44 373 49 747 568

- payment for process connection of power-receiving

devices 27 735 989

- voluntary property and liability insurance 6 163 10 006 27 805

- commissioning work on new fixed assets 9 369 9 369

- rights to use land plots 4 251 4 099

- agent's fee - 2 378 2 378

- other 13 496 12 476 14 009

Other - 4 867 -

TOTAL 210 461 440 626 125 573

11. CAPITAL AND RESERVES

On April 26, 2012 the Company’s shareholders made a decision at the special General Meeting of

Shareholders on the Company’s reorganization by consolidation with JSC ―OGK-1‖, JSC ―OGK-3‖,

JSC ―Bashenergoaktiv‖, INTER RAO – Energy OJSC, INTER RAO – EnergoAktiv OJSC.

Consolidation with JSC―OGK-1‖, JSC ―OGK-3‖, INTER RAO – Energy OJSC, INTER RAO –

EnergoAktiv OJSC took place on October 01, 2012. JSC ―Bashenergoaktiv‖ was connected to the

Company on November 06, 2012.

EXPLANATIONS



63

Authorized capital

On December 25, 2012 the Company registered an increase in the authorized capital through additional

placement of ordinary shares. In accordance with the decision on reorganization through consolidation

with JSC ―OGK-1‖, JSC ―OGK-3‖, JSC ―Bashenergoaktiv‖, INTER RAO – Energy OJSC, INTER

RAO – EnergoAktiv OJSC, all ordinary registered uncertified shares of consolidated companies were

converted into additional ordinary registered uncertified shares of JSC ―INTER RAO UES‖, placed for

the purpose of conversion. The scope of additional issue for the purpose of conversion made

724,000,997,683 shares with a par value of 0.02809767, for a total sum of 20,342,741 thsd. rubles.

In the result of additional issue of shares the authorized capital of the Company was increased by

20,342,741 thsd. rubles, and as of December 31, 2012 makes 293,339,703 thsd. rubles. It is divided

into 10,440,000,997,683 ordinary shares with a par value of 0.02809767 rubles. The Company has no

preferred shares.

The major shareholders of the Company as of December 31, 2012 are the companies of FSK UES

Group (18.57 %), the Russian Federation represented by the Federal Agency for State Property

Management (13.76 % shares), INTER RAO Capital CJSC (13.93 %), companies the Norilsk Nickel

Group (13.21 %), companies of the Rosatom Group (12.49 %).

As of December 31, 2012 the subsidiary companies INTER RAO Capital CJSC, INTER RAO Invest

CJSC, Bashkiria Generating Company LLC own Company’s shares with a par value of 40,851,089

thsd. rubles, 329,926 thsd. rubles, and 176,576 thsd. rubles respectively (as of 31/12/2012 –

34,279,211 thsd. rubles, 332,870 thsd. rubles and 0 thsd. rubles respectively).

As of December 31, 2012 the Company's authorized capital has been fully paid.

Treasury shares

On April 26, 2012 a special meeting of shareholders of JSC ―INTER RAO UES‖ was held. At this

meeting reorganization of the Company through consolidation of JSC ―OGK-1‖, JSC ―OGK-3‖, JSC

―INTER RAO EnergoAktiv‖, JSC ―INTER RAO Energy‖, and JSC ―Bashenergoaktiv‖ was approved.

The shareholders who did not take part in voting, or voted against reorganization, received the right to

offer their shares for repurchase. In the result thereof 228,643,162,642 shares were offered and

repurchased by the Company in June – July 2012 at a price of 0.0284 rubles per share, for a total sum

of 6,493,466 thsd. rubles. These shares were reflected in the treasury shares.

EXPLANATIONS



64

In October 2012 the Company sold 228,628,756,041 shares repurchased from shareholders at a price

of 0.0284 per share to the subsidiary company INTER RAO Capital CJSC, for a total sum of

6,493,057 thousand rubles.

Therefore, as of 31/12/2012 the Company has its own shares accounted on its balance, which have

been repurchased from the shareholders in the amount of 14,406,601 shares for a sum of 409 thousand

rubles.

Reserve capital

In accordance with the laws and the Articles of Association, the Company creates a reserve fund in the

amount of 15 % of its authorized capital. In 2012 no deductions to the reserve fund were made because

of facing net loss in the year 2011. Reserve capital has not changed in the result of Company’s

reorganization. The amount of reserve capital as of 31/12/2012 makes 296,339 thsd. rubles, which

makes 0.1010 % of the authorized capital.

Additional capital

In the structure of its additional capital, the Company accounts:

Line-items of additional capital Amount

As of 31/12/2012 As of 31/12/2011 As of 31/12/2010

Paid-in income 195 090 772 195 090 772 21 771 370

Increase in the value of the items of

fixed assets 308 402 352 952 6 110 175

Profit from reorganization 325 345 - -

Other 13 13 13

TOTAL 195 724 532 195 443 737 27 881 558

The amount of additional capital was changed in the period of report because of the following events:

- Decrease in additional capital with regard to increase in the value of the items of fixed assets

in 2012 compared to the previous year was caused by disposal of the items of fixed assets in 2012 in

connection with the termination of production of electricity and heat energy and transfer of this

function to 100 % subsidiary INTER RAO - Electric Power Plants OJSC. Retirement of the increase in

value of the items of fixed assets in the amount of 44,550 thousand rubles was carried out at the

expense of Company’s retained profits.

- In the result of Company’s reorganization through connection of the last of reorganized

companies JSC ―Bashenergoaktiv‖ as of November 06, 2012, the difference between net assets of

EXPLANATIONS



65

connected company Bashenergoaktiv OJSC aand increase in the authorized capital formed in the result

of additional issue for the purpose of converting shares of minority shareholders of JSC

―Bashkirenergo‖ into Company’s shares, appeared. The difference in the amount of 325,345 thousand

rubles was attributed to the additional capital of the Company. Detailed information is provided in

section 27 ―Reorganization‖ of this Explanatory Note.

Dividends

In 2012 the Company did not pay dividends because of net loss faced in the year 2011. Dividends for

the year 2010 on the ordinary shares in the amount of 150,015 thousand rubles, at 0.00001544 rubles

per one ordinary share were paid in the year 2011.

12. ESTIMATED LIABILITIES

The table below shows the progress between the items of provisions for future costs for the year 2012:

Kind of provision As of

31/12/2011

Received Disposed As of

31/12/2012

Provision for future costs on

payment of remunerations for

the year 2012 to the Company's

employees, and Members of the

Board of Directors 464 524 424 892 (464 524) 424 892


payment for vacations unused

by the Company's employees

164 211 32 967 (55) 197 123

Unfinished legal proceedings 60 711 9 128 - 69 839

Provision for possible losses

203 439 - - 203 439

TOTAL 892 885 466 987 (464 579) 895 293

Provision for future costs on payment of remunerations

Provision for future costs on payment of remunerations for the year 2012 to the Company’s employees

in the amount of 424,892 thousand rubles was formed due to the substantial value of the planned

payments. Remunerations are provided for by the collective agreement and the regulation on bonus

payments to the Company’s employees. This provision will be used in the first half of the year 2013.

In the opinion of the management staff, the actual payments for the said purposes will not exceed the

sum of provision formed.

Provision for future costs on payment for vacations unused

EXPLANATIONS



66

Provision for future costs of payment for vacations unused in the amount of 197,123 thousand rubles

was formed by the Company on the basis of statistics of accounting data of working days and vacation

days within the period of 2008-2012. Pursuant to the principle of prudence, the Company has

recognized its obligation to the employees on payment for vacations unused as of December 31, 2012.

This provision will be recalculated as of each reporting date, and adjusted downwards (upwards)

depending on the decrease (increase) of unused vacation days. Provision will be fully expended in the

event of simultaneous dismissal of employees during the reorganization (liquidation) of the Company

Provision for unfinished legal proceedings

Provision for unfinished legal proceedings in the amount of 69,839 thousand rubles was formed on the

basis of data on probability of the legal proceedings outcome not in favor of the Company. In 2011 a

field tax audit was conducted in the Company for the period of activity from 2008 to 2010. Based on

the audit results tax authority issued a decision on additional accrual of taxes, penalties and fines

amounting to 60,711 thousand rubles. The Company disagreed with the decision of the tax authority

and decided to defend its position in court. As of 31/12/2012 legal proceedings on this claim have not

been finished yet. The Company left the provision accrued without changes. Additional provision in

the amount of 9,128 thsd. rubles was received by the Company in 2012 in the structure of liabilities

received in the result of reorganization of JSC ―Bashenergoaktiv‖.

Provision for possible losses

Provision for possible losses in the amount of 203,439 thousand rubles was formed in 2011 on the

basis of data on likely reduction of economic benefits in the result of fulfilling the following

obligations by the Company:

Repayment of obligations of subsidiary INTER RAO Capital CJSC on the payment of the part of

profits from the sale of a block of shares of JSC ―Kuban Generation Company‖ in the amount of

203,439 thousand rubles of JSC ―Rosneft‖.

It is expected that the provision will be expended before the end of 2013.

The table below shows the progress between the items of provisions for future costs for the year 2011:

Kind of provision As of

31/12/2010

Received Disposed As of

31/12/2011


payment of remunerations for

the year 2011 to the Company's

employees, and Members of the 389 433 464 524 389 433 464 524

EXPLANATIONS



67

Board of Directors


payment for vacations unused

by the Company's employees

176 985 22 141 34 915 164 211

Provision for future costs of

payment for auditor's services 1 538 1 538

Unfinished legal proceedings 60 711 60 711

Provision for possible losses 203 439 203 439

TOTAL 567 956 750 815 425 886 892 885

13. CREDITS AND LOANS

In 2012 the Company borrowed funds in the form of bank credits and loans. Credits were provided

within the framework of open credit lines. Information on free remains of the funds available for the

Company under credit lines is given in the section ―Credit Lines‖. As of December 31, 2012 the

Company has not overdue debts on the borrowed funds.

Itemization of credits and loans attracted by the Company is given below:

Thousand rubles

Creditor Currency

of credit Remaining

credit as of

31/12/2010

Remaining

credit as of

31/12/2011

Remaining

credit as of

31/12/2012

Date of

credit

repayment

Security

Bank credits

Sberbank of Russia JSC

(OJSC) Roubles 4 000 000 2 000 000 2 000 000 14.06.2013 none SC "Vnesheconombank" US

Dollars 4 967 735 12.11.2013 none Gazprombank (OJSC) Roubles 1 680 628 - - 29.08.2014 none SC "Vnesheconombank" Roubles 2 449 312 - - 30.09.2018 none Bank VTB Capital US

Dollars 253 974 21.03.2011 none Gazprombank (OJSC) Roubles 850 000 - - 20.10.2014 none Gazprombank (OJSC) Roubles 1 700 000 2 200 000 - 07.06.2013 None, (a) TransCreditBank (OJSC) Roubles 2 200 000 27.05.2013 None, (a) "Alfa-Bank" (OJSC) Roubles 2 200 000 2 200 000 900 000 30.06.2013 None, (a) "Alfa-Bank" (OJSC) Roubles 2 500 000 2 500 000 31.12.2015 None, (a) JSB Russia (OJSC) Roubles 2 000 000 2 000 000 31.05.2014 none Loans

INTER RAO Credit B.V. Roubles - 2 133 272 1 817 232 29.09.2018 none

INTER RAO Credit B.V. US

Dollars 5 247 964 4 950 750 11.11.2015 none TOTAL net of interest 20 301 649 18 281 236 14 167 982

Debts on interests (short-

term) 90 778 24 228 19 015

TOTAL, with interests

Line 1410 + line 1510 of

Form 1 20 392 427 18 305 464 14 186 997

EXPLANATIONS



68

The total amount of long-term credits repayable within not more than one year from the reporting date

and transferred to short-term debts, not taking into account interests, made 3,216,041 thousand rubles

as of December 31, 2012 (316,040 thousand rubles – as of December 31, 2011; 570,014 thousand

rubles - as of December 31, 2010).

Interest rates under long-term credits in 2012 ranged from 7.5 % to 8.95 % under credits in rubles (7.5

% to 8.95 % in 2011), and from 5.2 to 5.5 % (5.5 % in 2011) under credits in foreign currency.

In the period of report the Company received to its balance in the result of reorganization and

consolidation of JSC ―OGK-1‖ the liabilities on the loan in the sum of 2,309,586 thousand rubles,

including interests in the amount of 9.586 thousand rubles. This liability was extinguished by the

Company in full, and there is no debt as of 31/12/2012.

Interests on borrowings included in the value of investment assets

There have been no interests on credits and loans included in the value of investment assets in 2011

and 2012.

Credit lines

Creditor Limit Unused sum as of

31/12/2012

Availability deadline

"Alfa-Bank" (OJSC) 3 800 000 1 300 000 December 2015

"Alfa-Bank" (OJSC) 2 200 000 1 300 000 June 2013

Gazprombank (OJSC) 2 200 000 2 200 000 June 2013

TransCreditBank (OJSC)

2 200 000 2 200 000 May 2013

TOTAL 10 400 000 7 000 000

14. PAYABLES

As of December 31, 2012 and 2010-2011, the structure of the Company's accounts payable includes

current (not overdue) debts to suppliers and contractors, personnel of the organization, tax authorities,

extra-budgetary funds and other creditors.

The flow and existence of accounts payable is given in the table below.

EXPLANATIONS



69

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EXPLANATIONS



70

14.1 Payables to suppliers and contractors

The major creditors of the Company as at December 31, 2012 are:

Centre of Financial Settlements JSC ―CFR‖. The debt of the Company to JSC ―CFR‖ for

electricity (power) amounts to 1,039,753 thousand rubles (969,662 thousand rubles as of

December 31, 2011; 999,245 thousand rubles — as of December 31, 2010).

INTER RAO – Electric Power Plants OJSC The debt of the Company to INTER RAO – Electric

Power Plants OJSC for the power supplied and for the lease of production equipment amounts to

1,072,486 thousand rubles (940,957 thousand rubles – as of 31/12/2011; none – as of

31/12/2010).

Federal Grid Company OJSC The debt of the Company for transportation of electricity to FGC

OJSC amounts to 366,620 thousand rubles (323,501 thousand rubles as of December 31, 2011;

313,235 thousand rubles — as of December 31, 2010).

14.2 Other payables

Other accounts payable mainly include the sums of debt on payment for purchased securities (shares),

and the debt on the agreements of assignment of liabilities, the debt on contribution to the authorized

capital of subsidiary, and settlements with other creditors of the Company.

The Company's other payables are given below:

Other payables As of

31/12/2012

As of

31/12/2011

As of

31/12/2010

Other creditors, total: 38 188 850 349 073 2 864 565

including:

Debts to the subsidiary on payment for

securities 26 296 486 1 471 610

Company’s debt on its own bills of exchange 10 402 247 -

Debt on settlements for electricity under

contracts of commission, assignments 588 940 86 979 129 169

Value-added tax 499 378 18 838 85 348

Debts on contribution to the authorized capital

of the subsidiary (affiliated) company 152 929 159 188 1 158 952

Debt on assignment of liabilities to the

subsidiary 150 870

Debts to insurance companies 46 981 47 944

other creditors 51 019 36 124 19 486

EXPLANATIONS



71

In 2012 in the course of reorganization of JSC ―Bashkirenergo‖ the Company purchased shares of the

latter from minority shareholders, and also purchased shares of JSC ―Bashkirenergo‖ from JSC

―System-Invest‖ with the consent of JSC ―AFK System‖. The cost of purchase made 11,115,870

thousand rubles. By mutual consent of the parties a part of the sum in the amount of 713,623 thousand

rubles was paid in cash, the remaining sum in the amount of 10,402,247 thousand rubles was paid by

the Company with its own bills of exchange. Maturity time of the bills of exchange is January, May,

September 2013.

In 2012 the Company purchased shares of JSC ―OGK-1‖, JSC ―OGK-3‖, JSC ―Saint Petersburg Sale

Company‖, JSC ―TGK-11‖ from the subsidiary company INTER RAO Capital CJSC. The cost of

purchasing the said shares made 26,296,786 thousand rubles. This debt will be repaid during the year

2013. The Company plans to repay the debt through the offset of mutual similar liabilities.

14.3 Other long-term liabilities


Balance as

of the

beginning

of the year


Balance as of

the end of the

year

proceeds disposal reclass

as a result of

business

transactions repayment

Writing-off

to financial

result

Long-term payables - total 5551 2012 19 269 014 - (16 895 753) - (647 087) 1 726 174

5571 2011 - 19 269 014 - - - 19 269 014

including:

debt appeared on the basis of

concession

5552 2012 16 895 753 - (16 895 753) - - -

5572 2011 - 16 895 753 - - -

16 895 753

advance payments received 5553 2012 2 373 261 - - (647 087) 1 726 174

5573 2011 - 2 373 261 - - -

2 373 261

As of 31/12/2012 the Company reflects in the structure of other long-term liabilities the debt on

advance payments received from the buyers of power equipment. During the period of report a part of

long-term debt was reclassified into short-term debt in the sum of 647,087 thousand rubles.

Company’s long-term liabilities broken down by creditors are shown below:

Other long-term liabilities As of As of As of

EXPLANATIONS



72

31/12/2012 31/12/2011 31/12/2010

Debt to subsidiary INTER RAO Capital CJSC formed

as a result of assignment of debt (including interest) 16 895 753

Advances received from buyers of power equipment,

total 1 726 174 2 373 261

including:

BARIVEN

(Bolivarian Republic of Venezuela) 864 165 1 511 252

HIDROTOAPI (Republic of Ecuador) 862 009 862 009

TOTAL 1 726 174 19 269 014 -

15. PROCEEDS FROM SALES

The Company discloses information on the proceeds from sales in the years 2011-2012 in the section

22 ―Segment Reporting‖.

16. EXPENDITURES ON REGULAR ACTIVITIES

Expenditures on regular activities are shown in the table below.

EXPLANATIONS



73


Tangible costs - total 5610 32 218 939 53 297 853

including: electricity (power) for resale 5611 29 956 311 43 265 035

process fuel (gas) 5612 2 097 817 9 495 359

other materials 5613 164 811 509 823

power equipment for export 5614

- 27 636

Remuneration costs 5620 2 571 074 3 465 608

Allocations for social needs 5630 347 289 361 432

Depreciation - total 5640 536 460 2 402 822

including: fixed assets depreciation 5641 531 803 2 400 209

intangible assets depreciation 5642 4 657 2 613

Other costs – total, 5650 8 164 661 11 772 720

including: electricity transportation costs 5651 3 007 991 5 281 801

operational property lease 5652 1 958 823 2 299 888

infrastructure services costs 5653 805 361 1 162 658

taxes and levies, including customs payments 5654 137 300 628 127

fixed assets repairs and maintenance costs 5655 811 073 624 589

consultation and information, legal, audit services 5657

333 442 530 543

travel, transport costs 5658 305 831 355 799

financial lease (leasing) 5659 75 587 278 253

expenses on voluntary insurance of property, civil

liability, medical insurance 5660 52 703 184 367

expenses on software purchase and support 5661 153 963 136 943

security services costs 5662 17 211 92 229

representation and advertisement costs 5663 50 004 49 043

other expenses 5664 455 372 148 480

Total on elements 5665 43 838 423 71 300 435

Change in balances (growth (-), decrease (+))

unfinished construction, finished product (growth (-)) 5670

unfinished construction, finished product (decrease

(+)) 5680

TOTAL expenses on regular activities 5600 43 838 423 71 300 435

17. OTHER PROFITS AND EXPENSES

In the statement of financial results of the Company for the years 2012 and 2011, the structure of other

profits and expenses mainly reflect proceeds and costs from operations with currency, exchange

differences from revaluation of assets and liabilities expressed in foreign currency, incomes (costs)

from lease of property, income (costs) from revaluation of quoted securities, provisions for

depreciation of financial investments, etc.

Other profits and expenses from the settled operations are given in the table below.

EXPLANATIONS



74

Other profits For 2012 For 2011

Other profits, total: 121 529 638 65 327 947

including:

Profits from the operations of currency sale 19 730 983 41 824 824

Profits received as a result of revaluation of quoted

securities 7 558 709 5 600 841

Profits derived from disposal of financial investments

traded on the Organized Market 55 081 135 5 570 208

Profits from disposal of fixed assets, material assets

and other property 26 928 326 4 108 874

Exchange differences from revaluation of assets and

liabilities in foreign currency 2 671 695 3 732 288

Profits derived from disposal of financial investments

not traded on the Organized Market 8 384 387 3 340 177

Restoration of provisions for doubtful debts 379 706 313 724

Insurance indemnity 29 114 185 181

Fines, penalties on the business agreements 131 136 149 972

Profits derived from the sale of of receivables 28 375 132 594

Profits from the lease of property 295 930 76 225

Profits derives from assignment of rights (except for

rights of claim for receivables) 46 345

Profits of previous years 19 393 74 516

Exchange differences from purchase/sale of currency

at the exchange rate other than that fixed by the RF

Central Bank 12 353 69 746

Income formed as a result of confirmation of 0 %

VAT rate - 55 209

Restoration of provision for devaluation - 32 135

of financial investments

Restoration of provision for reduction in the value of

materials 112 299 6 945

Profits from writing off the payables with an expired

period of limitation 447 3 908

Stock exchange variation margin 55 462 3 561

Other profits 63 843 47 019

EXPLANATIONS



75

Other expenses For 2012 For 2011

Other expenses, total: 132 550 135 218 698 144

including:

Costs of revaluation of quoted securities 5 698 950 125 439 036

Costs of operations for purchasing foreign currency 18 998 242 41 404 843

Provisions for bad debts 348 531 29 946 254

Costs derived from disposal of financial investments

traded on the Organized Market 51 601 451 5 737 679

Costs derived from disposal of financial investments

not traded on the Organized Market 8 376 815 4 728 541

Exchange differences from revaluation of assets and

liabilities in foreign currency 2 771 769 4 003 615

Costs of disposal of fixed assets, material assets and

other property 26 655 236 3 404 738

Costs derives from assignment of rights (except for

rights of claim for receivables) 46 345

Provisions for devaluation of financial investments 16 655 774 1 927 991

Contributions to the scientific and innovation activity

support foundations - 968 230

Provision for forthcoming costs 98 854 301 804

Costs of organizing the issue and service of securities 19 132 139 771

Costs derived from the sale of receivables 30 020 133 453

Provision for reduction in the value of inventories - 112 264

Losses of previous years 86 001 87 841

Other expenses For 2012 For 2011

Costs of cultural and sports events for the Company’s

employees 63 396 71 500

Costs of lease of property 153 843 45 794

Shareholders’ meeting costs 47 527 44 608

Bank services 271 293 43 025

Writing-off receivables with an expired period of

limitation 95 41 002

Other taxes (including VAT) 63 789 18 002

Contributions to non-profit organizations 12 357 17 425

Charity costs 6 000 12 815

Fines, penalties on the business agreements 78 091 9 068

Stock exchange variation margin 60 732 4 553

Exchange differences from purchase/sale of currency

at the exchange rate other than that fixed by the RF

Central Bank 44 103 4 423

Costs of reorganization 116 532

Other expenses 245 257 49 869

19. TAXES

Amount

EXPLANATIONS



76

Loss before tax (except for profits from participation in other entities) according

to accounting books (12 362 379)

Amount of provisional profit tax income 2 472 476

Permanent differences of the reporting period, including: 35 981 668

- on the sale of financial investments (quoted shares) (12 103 039)

- on the revaluation of financial investments (quoted shares) (1 859 759)

- on commercial and administrative costs 756 731

- on depreciation of fixed assets 33 459

- on the liquidation of fixed assets 37 062

- on the liquidation of other property 10 965

- on the provision for devaluation of financial investments 46 086 774

- on the provision for future costs 98 854

- on the provision for reduction in the value of inventories (112 299)

- on the sale of fixed assets 252 566

- on the sale of inventories 132 460

- on the sale of unfinished construction 5 110

- on the retirement of R&D that has given no result 66 305

- on other costs 2 576 479

Deductible temporary differences of the reporting period, including: (21 177 091)

- under the provision for unused vacations and forthcoming costs (237 939)

- under provision for bad debts (29 462 175)

- under electricity transportation costs (78 710)

- on the sale of securities 8 615 784

- on other costs (14 051)

Taxable temporary differences of the reporting period, including: 858 902

- on depreciation of fixed assets 41 357

- Process consolidation (2nd

power unit of the Branch ―Kaliningrad TPP-2‖ 822 203

- on other costs (4 658)

Taxable profit under tax accounting 3 301 100

Profit tax rate 20 %

Profit tax 660 220

Profits from participation in other entities (dividends) received by the Company in 2012 amounted to

2,573,215 thousand rubles (1,355,352 thousand rubles – in 2011). Profit tax charged from the profits

from participation in other entities is accounted by the Company in a separate line 2460 ―Other‖ of the

EXPLANATIONS



77

Statement of Financial Results. Profits from participation in other entities in the amount of 208,826

thousand rubles (384,531 thousand rubles – in 2011) are subject to profit taxation at the rate of 0 %.

Itemization of the line 2460 ―Other‖ of the Statement of Financial Results.

2012 2011

Profit tax from participation in other entities (dividends) (38 158) (86 079)

Profit tax payable in addition under clarified tax returns (16)

Adjustment (charging) of deferred tax liability (5 720) (895)

Penalties under taxes (5) (696)

Profit tax to be reduced under clarified tax returns 194 310 12 086

Adjustment (charging) of a deferred tax asset (949) (73 356)

Adjustment (writing-off) of a deferred tax liability 2 903 630 658

Total 152 381 481 702

Value-added tax

The total debt in compensation of VAT from federal budget, including supplies of electricity for

export, is equal to 783,159 thousand rubles as of 31/12/2012 (1,507,741 thousand rubles – as of

31/12/2011; 2,390,247 thousand rubles – as of 31/12/2010). This amount is in the structure of other

receivables of the balance sheet.

20. PROFIT PER SHARE

The base profit per share reflects a part of the profits of the reporting period, which can be potentially

distributed among the shareholders – holders of ordinary shares. It is calculated as the ratio of the base

profit for the accounting year to the average quantity of outstanding ordinary shares in the accounting

year.

In June 2012 the Company repurchased its own shares from the shareholders who did not take part in

voting or voted against reorganization of the Company, in the amount of 195,177,711,798 shares at

0.0284 RUB per share, for a total sum of 5,543,047 thousand rubles.

EXPLANATIONS



78

In July 2012 the Company repurchased its own shares from the shareholders who did not take part in

voting or voted against reorganization of the Company, in the amount of 33,465,450,844 shares at

0.0284 RUB per share, for a total sum of 950,419 thousand rubles.

In October 2012 the Company sold 228,628,756,041 shares of its own at a price of 0.0284 RUB per

share to the subsidiary company INTER RAO Capital CJSC, for a total sum of 6,493,057 thousand

rubles.

In October 2012 within the frames of reorganization the Company carried out additional issue of

ordinary shares in the amount of 664,956,390,935 shares at the placing price of 0.02809767 RUB, for

a total sum of 18,683,725 thousand rubles. The date of actual placement of shares is 01/10/2012. Issue

has been carried out for the purpose of converning the shares kept by minority shareholders of JSC

―PGK-1‖, JSC ―OGK-3‖, JSC ―INTER RAO Energy‖, JSC ―INTER RAO EnergoAktiv‖, into shares

of JSC ―INTER RAO UES‖ upon consolidation of the said companies with the Company.

In November 2012 within the frames of reorganization the Company carried out additional issue of

ordinary shares in the amount of 59,044,606,748 shares at the placing price of 0.02809767 RUB, for a

total sum of 1,659,016 thousand rubles. The date of actual placement of shares is 06/11/2012. Issue has

been carried out for the purpose of converning the shares kept by minority shareholders of JSC

―Bashkirenergo‖ into shares of JSC ―INTER RAO UES‖ upon consolidation of the said company with

the Company.

The calculation of the

average quantity of shares

outstanding during the

reporting period has been

made according to the

Methodical

recommendations on

disclosure of information

on profits per share,

approved by the RF

Ministry of Finance Order

of March 21, 2000 No.

29n.

2012 2011 2010

Base profit/(loss) for the

reporting period, thousand

rubles (14 360 641) (143 127 967) 2 704 427

Quantity of shares, units 9 758 318 447 974 6 873 094 737 595 2 639 852 861 935

Base profit (loss) per share

(kopecks) (0,1472) (2,0824) 0,1024

EXPLANATIONS



79

Diluted profit per share,

kopecks (0,1472) (2,0824) 0,1024

In 2012 and 2011-2010 the Company had no bonds convertible into shares.

21. RELATED PARTIES

21.1. Major entities

As of December 31, 2012 there is no shareholder (legal entity or individual) in the structure of the

Company's shareholders with a participation interest exceeding 20 % of the authorized capital.

21.2. Subsidiaries and associated companies

Full list of subsidiaries and associated companies is posted on the Company’s website

http://www.interrao.ru/investors/disclosure/affiliated/

21.2.1. Proceeds from sales to subsidiaries and associated companies

Company’s proceeds from sales of goods (works, services) to subsidiaries and associated companies in

2012 amounted to 16,873,727 thousand rubles. (30,353,147 thousand rubles - in 2011) without VAT.

Sale of electricity was carried out on regular commercial terms at market prices for the corresponding

regions of supplies. Other sales mainly include agent’s fee and operations on the sale of information

and process services. The cost of services rendered corresponds to the market value.

Proceeds from sale Sum

2012 2011

Total sales 16 873 727 30 353 147

including:

Sale of electricity (power) under bilateral agreements 14 059 055 25 558 015

Sale of electricity (power) under the contract of

commission concluded with JSC ―CFR‖ 2 739 258 4 698 396

Other sales 75 414 96 736

21.2.2. Profits in the form of dividends received from subsidiaries and associated companies

http://www.interrao.ru/investor/accounts/affiliated/

EXPLANATIONS



80

Name of related party Sum

2012 2011

Total interests, including: 2 453 767 1 223 211

- on the ordinary shares 2 453 767 1 191 506

- on the preferred shares - 31 705

21.2.3. Interest yield from all types of borrowings issued to subsidiaries and associated companies

Interest yield from all types of borrowings issued to subsidiaries and associated companies in 2012

amounted to 801,534 thousand rubles (856,114 thousand rubles – in 2011). Interest rates applicable in

2012 corresponded to the level of market interest rates for similar borrowings.

21.2.4. Other profits in the form of profits from the sale of property, lease of property, fines under

agreements and other non-operating income received from subsidiaries and associated

companies

Other profits in the form of profits from the sale of property, lease of property, fines under agreements,

and other non-operating income received from subsidiaries and associated companies in 2012

amounted to 27,145,607 thousand rubles (4,101,362 thousand rubles - in 2011), not including VAT.

The Company leases out its own property with the book value of 2,571,976 thousand rubles as of

31/12/2012 (771,036 thousand rubles - as of 31/12/2011).

EXPLANATIONS



81

21.2.5. Purchase of goods (works, services) from subsidiaries and associated companies

The cost of purchased goods, works, services provided by subsidiaries and associated companies in

2012 amounted to 6,273,535 thousand rubles. (11,473,261 thousand rubles - in 2011) without VAT.

Purchases were carried out on regular commercial terms and conditions. Itemization is given below:

Name of related party Sum

2012 2011

Purchase of electricity (power), total 6 273 535 11 473 261

Purchase of electricity (power) 3 324 582 9 111 504

Purchase of services 2 948 953 2 245 195

Purchase of R&D - 116 562

The scope of expenses on purchasing the services reflects the expenses on the lease of equipment and

office premises from subsidiaries with the total book value of 17,180,383 thousand rubles (detailed

information is provided in note 3).

21.2.6. State of settlements with subsidiaries and associated companies

RECEIVABLES

Short-term receivables of associated companies

Name of related party Receivables

As of

31.12.2012

As of

31.12.2011

As of

31.12.2010

Short-term receivables of buyers

and customers 879 799 585 951 1 861 814

Short-term receivables of buyers of

electricity (power) under

commission agreement entered into

with JSC ―CFR‖. 82 283 113 821 72 126

Advances paid to suppliers and

contractors 1 082 620 164 068 7 952

Other receivables 52 345 479 53 742 377 1 330 798

TOTAL 54 390 181 54 606 217 3 272 690

EXPLANATIONS



82

Long-term receivables of associated companies

Name of related party Receivables

As of

31.12.2012

As of

31.12.2011

As of

31.12.2010

Long-term receivables 24 466 099 767 856 1 956 604

TOTAL 24 466 099 767 856 1 956 604

PAYABLES

Short-term payables of associated companies

Name of related party Payables

As of

31.12.2012

As of

31.12.2011

As of

31.12.2010

Payables of suppliers and

contractors 1 418 180 1 284 529 261 349

Advance payments received from

buyers - 112 915 598 028

Other payables 26 607 819 159 187 2 630 561

TOTAL 28 025 999 1 556 631 3 489 938

Other long-term payables of associated companies

Name of related party Payables

As of

31.12.2012

As of

31.12.2011

As of

31/12/2010

Other long-term payables

- 16 895 753 -

TOTAL - 16 895 753 -

21.2.7. Loans issued to subsidiaries and associated companies

Interest rates on the borrowings issued in 20122 made 10 % to 15 % per annum in foreign currency

(6.924 % to 15 % - in 2011), 7.8 % - 10.25 % per annum - in rubles (8 % to 14.6 % - in 2011).

EXPLANATIONS



83

Data in the table below are exclusive of interests.

Name of related

party

Remaining

loan as of

31/12/2011

Issued in

2012

Repaid in

2012 Provision

Exchange

differences

balance

Remaining

loan as of

31/12/2012

Electric Networks

of Armenia CJSC 1 470 685 - - - (55 774) 1 414 911

INTERENERGO

B.V. - - - - - -

ASIA ENERGY

B.V. 39 118 - (29 857) - (1 736) 7 525

Moldavskaya

GRES CJSC 1 749 732 116 656 (544 116) - (83 377) 1 238 895

Elektroluch CJSC 2 527 558 328 195 (120 000) - - 2 735 753

INTER RAO

CREDIT B.V. - 1 094 996 (1 094 996) - - -

Bashkiria

Generating

Company LLC **

- 900 000 - - - 900 000

Coal Mine LLC ** - 706 000 - - - 706 000

TGR ENERJI* 6 502 - - (5 783) (719) -

TOTAL 5 793 595 3 145 847 (1 788 969) (5 783) (141 606) 7 003 084

(*) Data in the table are provided net of provision for devaluation of loans issued in the amount

of 11,976 thousand rubles as of 31/12/2012 in respect of the debt of subsidiary company

TGR ENERJI (6.193 thousand rubles – as of 31/12/2011).

(**) The said loans have been transferred to the Company in the result of reorganization and

consolidation of JSC ―Bashenergoaktiv‖ and JSC ―OGK-3‖. These sums are not accounted

in the statement of cash flows, in the structure of the operations with related parties in the

line 4223.

21.2.8. Loans received from subsidiaries and associated companies

Long-term loans in foreign currency

In 2011 the Company raised borrowed funds in the amount of 163,000 thousand USD. Interest rate

corresponds to the market interest rate for similar borrowings. The term of repayment is 2015. Data in

the table below include interests.

EXPLANATIONS



84

Name of related

party

Remaining

loan as of

31/12/2011

Issued/charged

in 2012

Repaid in

2012

Exchange

differences

balance

Remaining

loan as of

31/12/2012

INTER RAO

CREDIT B.V. 5 255 080 275 795 (282 363) (292 124) 4 956 388

Including interests 7 116 275 795 (282 363) 5 090 5 638

Long-term loans in rubles

In 2011 the Company raised borrowed funds in rubles. Interest rate corresponds to the market interest

rate for similar borrowings. The term of repayment is 2018. Data in the table below include interests.

Name of related

party

Remaining

loan as of

31/12/2011

Issued/charged

in 2012

Repaid in

2012

Transferred to

short-term loans

Remaining

loan as of

31/12/2012

INTER RAO

CREDIT B.V. 1 822 055 180 089 (181 261) (316 040) 1 504 843

Including interests 4 824 180 089 (181 261) - 3 652

Short-term loans in rubles

In 2012 in the result of consolidation with JSC ―OGK-1‖, the Company received to its balance an

intra-group loan in the amount of 2,309,586 thousand rubles, including interests in the amount of 9.586

thousand rubles. The Company additionally charged the interests due in the amount of 2,663 thousand

rubles, and repaid debt in full in October 2012. Data in the table below include interests.

Name of related

party

Remaining

loan as of

31/12/2011

Issued/charged

in 2012

Repaid in

2012

Transferred

from long-term

loans

Remaining

loan as of

31/12/2012

INTER RAO

CREDIT B.V. 316 040 2 312 249 (2 628 289) 316 040 316 040

Including interests - 12 249 (12 249) - -

EXPLANATIONS



85

21.2.9. Bills of exchange of subsidiaries and associated companies (excluding interest)

Name of related party

Remaining

loan as of

31/12/2011

Issued in

2012

Repaid in

2012

Exchange

differences

balance

Remaining

loan as of

31/12/2012

INTER RAO UES

Energy Efficiency

Center LLC

400 000 - 400 000 - -

INTER RAO –

Information

Technologies LLC

- 10 020 10 020 - -

TOTAL 400 000 10 020 410 020 - -

21.3. Information on transactions with key management personnel

The Company attributes Management Board and Board of Directors members to the key management

personnel. Their lists are given in the General data section of the Explanatory Note.

In 2012 the Company has charged bonuses to the members of the Board of Directors for participation

in meetings in the total amount of 12,908 thousand rubles (in 2011 - 10,903 thousand rubles). No other

payments were made for the members of the Board of Directors in 2012.

In 2012 the Company has charged remuneration to the members of the Management Board (wages,

bonuses, privileges, interest-free loans) for the total amount of 667,421 thousand rubles (in 2011 -

420,546 thousand rubles). Besides, in 2012 the Company transferred voluntary pension fees to non-

state pension fund GAZFOND in favor of the members of the Management Board in the amount of

27,372 thousand rubles (in 2011 - no). No other payments to the members of the Management Board

were effected in 2012 and 2011.

Besides, in 2012 the Company has charged remuneration to the members of the Audit Committee

(wages, bonuses, privileges, remunerations) for the total amount of 49,978 thousand rubles (in 2011 -

22,349 thousand rubles). In 2012 the Company transferred voluntary pension fees to non-state pension

fund GAZFOND in favor of the Company’s employees - members of the Audit Committee in the the

amount of 3,254 thousand rubles (in 2011 - no). No other payments to the members of the Audit

Committee were effected in 2012 and 2011.

EXPLANATIONS



86

21.4. Cash flows on transactions with related parties



Proceeds - total 4110 17 709 897 31 486 203

including

from sales of products, goods, works

and services 4111 13 706 785 26 798 962

from the sale of electricity (power)

under commission agreement entered

into with FIC CJSC 4111 2 739 258 4 656 701

lease payments, license fees, royalties,

commissions and other similar

payments 4112 272 912 30 540

other proceeds 4119 990 942 -

Payments - total 4120 (6 474 846) (11 065 586)

including

to suppliers (contractors) for raw

materials, works and services 4121 (5 860 461) (10 581 142)

due to payment of employees’

remuneration 4122 (569 935) (413 541)

other payments 4129 (44 450) (70 903)


Proceeds - total 4210 7 283 015 9 801 661

including

from sales of current assets (other than

financial investments) 4211 2 105 915 3 782 329

from sales of shares (participatory

interest) in other organizations 4212

from return of loans provided, from

sales of debt securities (right of demand

of cash to other persons) 4213 2 198 989 4 145 753

dividends, interest on debt financial

investments and similar proceeds from

equity participation in other

organizations 4214 2 978 111 1 873 579

EXPLANATIONS



87


Payments - total 4220 (4 158 890) (9 342 139)

including

due to acquisition of shares

(participatory interest) in other

organizations 4222 (2 609 023) (3 863 840)

due to acquisition of debt financial

investments (right of demand of cash to

other persons), provision of loans to

other entities 4223 (1 549 867) (5 478 299)

Cash flows from financial transactions

Proceeds - total 4310 - 7 357 116

including

obtaining credits and loans 4311 - 7 357 116

Payments - total 4320 (9 585 380) (124 577)

including

to owners (participants) due to

repurchase of organization’s shares

(participatory interest) from them or

their quit from composition of

participants 4321 (6 493 466)

for payout of dividends and other

payments on distribution of profits in

favor of owners (participants) 4322 (45 567)

due to repayment (repurchase) of bills

of exchange and other debt securities,

repayment of credits and loans 4323 (3 091 914) (79 010)

22. INFORMATION BY SEGMENTS

Risks and profits of the Company are defined mainly by distinctions between the geographical regions

where the Company sells electricity. Thus, the Company distinguishes as the primary information

geographical segments by the principle of sales markets of electricity. The main share of sales in 2012

falls on the domestic market (40 %).

Considerable volume of electricity is supplied to Lithuania (18 %), Belarus (17 %), Finland (14 %).

The segment ―other countries‖ includes minor supplies to Azerbaijan, Georgia, Kazakhstan, Ukraine,

South Ossetia. The share of proceeds falling on sales to each of the listed countries separately is less

than 10 %.

EXPLANATIONS



88

Indicators of the reportable segments to be disclosed are set out in the assessment, in which they are

submitted to the Company's management for decision making (according to management accounting).

Retained costs represent the costs related to the Company in general. Segment assets consist mainly of

fixed assets, intangible assets, inventories, receivables and cash Segment assets generally do not

include investments. Segment liabilities comprise operating liabilities and exclude items such as tax

liabilities and certain types of loans related to the Company in general. Capital costs include the receipt

of fixed assets. Impairment loss and provisions relate to the segment only if they relate to the assets

thereof.

In the reporting period there was no changes in way to assess the indicators used for determining the

financial result (profit or loss) of the reportable segment, as compared to previous periods and,

accordingly, the effect of changes in the financial result (profit, loss) of the reportable segment in the

reporting period.

The tables below present information on income and profits, as well as assets and liabilities by the

Company’s geographical segments.

Description Russia Finland Lithuania Belarus Other

countries Total

For 2012

Proceeds 17 117 362 5 774 561 7 782 284 7 192 853 4 825 118 42 692 178

Costs (18 924 103) (4 152 720) (4 874 724) (4 212 557) (3 010 975) (35 175 079)

Profit by segments (1 806 741) 1 621 841 2 907 560 2 980 296 1 814 143 7 517 099

Retained costs (17 306 263)

Total profit before taxation (9 789 164)

Assets by segments 84 338 817 345 397 508 077 318 459 803 040 86 313 790

Retained assets 358 345 120

Total on assets 444 658 910

Capital assets by

segments 3 402 298 - - - - 3 402 298

Retained capital assets 365 913 085

Total on capital assets 369 315 383

EXPLANATIONS



89

Liabilities by

segments 41 306 365 116 - 43 797 4 152 032 45 502 310

Undistributed liabilities 15 137 367

60 639 677 Total on liabilities

Capital investments

1 067 051 - - - - 1 067 051

For 2011

Proceeds 36 436 576 18 314 219 9 116 217 5 553 083 3 967 861 73 387 956

Costs (38 756 546) (10 543 299) (5 322 740) (3 370 176) (2 762 391) (60 755 152)

Profit by segments (2 319 970) 7 770 920 3 793 477 2 182 907 1 205 470 12 632 804

Retained costs (163 036 657)

Total profit before taxation (150 403 853)

Assets by segments 9 105 878 136 008 344 549 432 521 4 446 491 14 464 447

Retained assets 342 853 751

Total on assets 357 318 198

Capital assets by

segments 29 689 654 - - - 2 616 374 32 306 028

Retained capital assets 250 456 632

Total on capital assets 282 762 660

Liabilities by

segments 20 625 575 72 001 112 915 29 655 2 859 769 23 699 915

Undistributed liabilities 19 490 502

Total on liabilities 43 190 417

Capital investments 2 552 992 - - - - 2 552 992

In 2011-2012 the Company was engaged in the production of electricity. In this connection, the

Company discloses information by operational segments, with a breakdown into proceeds from

realization of electricity (power and other products) acquired, and realization of other goods (work,

services). Production activity of the Company is in the process of termination, and is of closing nature

in the period of report. In the structure of other sales the Company mainly includes compensation for

electricity supply under the contracts of commission.

EXPLANATIONS



90

Description Production of

electricity (power and

other products)

Resale of electricity

(power) Other sales Retained assets Total

As of 31/12/2012

Proceeds 4 826 491 37 766 224 99 463 - 42 692 178

Assets by

segments 2 861 931 861 012 87 746 440 848 221 444 658 910

Capital

investments 594 764 469 239 3 048 - 1 067 051

As of 31/12/2011

Proceeds 18 813 248 54 132 023 442 685 - 73 387 956

Assets by

segments 30 355 270 103 472 2 933 072 323 926 184 357 318 198

Capital

investments 2 534 152 18 840 - - 2 552 992

As of 31/12/2010

Proceeds 12 479 810 47 746 702 1 166 800 - 61 393 312

Assets by

segments 50 437 521 416 590 14 697 943 69 724 782 135 276 836

Capital

investments 9 397 204 55 281 - - 9 452 485

The following table represents information on buyers (customers), sales to which provides proceeds at

least 10 % of total proceeds from sales to the Company’s buyers (customers):

Name of buyer Total value of

proceeds

Share in the total

proceeds from sale,

%

Name of the

reporting segment

For 2012

RAO NORDIC OY 4 882 430 11,44 Finland

UAB "INTER RAO Lietuva" 7 782 283 18,23 Lithuania

GPO Belenergo 7 192 853 16,85 Belarus

JSC ―CFR‖ 13 462 582 31,53 Russia

TOTAL 33 320 148 78,05

For 2011



JSC ―CFR‖ 24 060 151 32,78 Russia

TOTAL 47 630 017 64,89

For 2010


EXPLANATIONS



91


JSC ―CFR‖ 20 558 043 33,49 Russia

TOTAL 37 880 318 61,71

These parameters are given in the evaluation applicable for reflection in the accounting (financial)

statements of the similar parameters of the Company in general.

23. DISCLOSURE OF INFORMATION ABOUT OFF-BALANCE-SHEET ITEMS

Itemization of securities and other bonds issued by the Company

The total amount of securities and other bonds issued by the Company is equal to 77,681,752 thousand

rubles as of December 31, 2012 (75,054,136 thousand rubles – as of December 31, 2011; 41,583,600

thousand rubles – as of December 31, 2010).

Itemization of securities and other bonds is given below.

Name of security issued Date of issue Fulfilment

period

Organization

the surety bond

has been issued

to

The sum of

security as of

December 31,

2012

Surety for obligations of

Silvelteria Holdings LTD to

Vnesheconombank Group

under option agreement

25.06.2010 25.06.2016 Silvelteria

Holdings LTD 26 646 880

Surety issued for obligations of

INTER RAO Capital CJSC to

JSC ―Mezhregiongaz‖ 27.06.2011 23.06.2015 INTER RAO –

Capital CJSC 17 036 925

Liabilities on payment of base

asset 05.08.2011 31.12.2013 CJSC UniCredit 7 723 891

on forward transactions

concluded with UniCredit Bank

CJSC, the Royal Bank of

Scotland, BNP Paribas and

HSBC Bank Ltd

Bank, the Royal

Bank of Scotland,

BNP Paribas,

HSBC Bank Ltd

TOTAL

51 407 696

EXPLANATIONS



92

Description of securities and other bonds issued by the Company (continued)


period

Organization

the surety bond

has been issued

to

The sum of

security as of

December 31,

2012

Surety on the loan issued by

Vnesheconombank Group to

INTER RAO Credit B.V. 21.12.2011 30.09.2018 INTER RAO

Credit B.V. 6 780 503


EABR (Vnesheconombank) to

JSC ―Stantsiya Ekibastuzskaya

GRES-2‖

23.12.2011 30.09.2018

JSC ―Stantsiya

Ekibastuzskaya

GRES-2‖

4 663 694

Counter-guarantee of VTB

Bank OJSC isssued to BNP

Paribas, Netherlands, which has

issued a direct guarantee to

BARIVEN S.A.

24.03.2011 08.03.2013 BARIVEN

S.A., Venezuela 2 997 856


ING Bank N.V. to

INTER RAO Credit B.V. 27.09.2011 23.09.2016

INTER RAO

Credit B.V. 2 264 452

Surety issued on theliability of

INTER RAO Turkey Enerji

Holding A.S. under the Loan

Agreement to ING Bank B.V. 04.12.2012 04.12.2018

INTER RAO

Turkey Enerji

Holding A.S.

2 055 013

Surety on the loan issued by the

European Bank of

Reconstruction and

Development to Electric

Networks of Armenia CJSC

17.06.2009 01.10.2018

Electric

Networks of

Armenia CJSC

1 280 809

Pledge of shares of JSC

―Stantsiya Ekibastuzskaya

GRES-2‖ (7,559,026 of

common shares) for ensuring

obligations of JSC ―Stantsiya

Ekibastuzskaya GRES-2‖ with

respect to EBRD and

Vnesheconombank Group

17.10.2011

until

fulfilment of

obligations

JSC ―Stantsiya

Ekibastuzskaya

GRES-2‖

1 069 413

TOTAL

21 111 740

EXPLANATIONS



93

Description of securities and other bonds issued by the Company (continued)


period

Organization

the surety

bond has been

issued to

The sum of

security as of

December 31,

2012

Surety on the Guarantee issued

by Nordea Bank Finland Plc. to

RAO Nordic Oy 28.12.2009

until

fulfilment of

obligations

RAO Nordic

Oy 1 005 715

Counter-guarantees of Nordea

Bank, issued to Banco

PICHINCHA C.A. (Ecuador),

which has issued direct

guarantees to HIDROTOAPI EP

25.08.2011 19.05.2015 HIDROTOAP I

EP, Ecuador 880 800


Gazprombank to INTER RAO

Credit B.V.

24.09.2012 31.03.2020 INTER RAO

Credit B.V. 821 324


EBRD to JSC ―Telasi‖ 02.02.2011 04.11.2020 JSC ―Telasi‖ 764 174


Vnesheconombank CJSC to

Electric Networks of Armenia

CJSC

09.03.2010 01.10.2018

Electric

Networks of

Armenia CJSC

689 423


Gazprombank to INTER RAO

Credit B.V.

20.06.2012 06.06.2017 INTER RAO

Credit B.V. 483 123

Obligation to pay money (return

investments), reserve letter of

credit issued by VTB Bank OJSC

to GE Energy Holdings Vostok

B.V.

17.08.2012 17.08.2017

GE Energy

Holdings

Vostok B.V.

265 509

Surety issued on the liabilities

of INTER RAO UES Energy

Efficiency Center LLC

to Moscow Credit Bank OJSC 25.08.2011 28.02.2013

INTER RAO

UES Energy

Efficiency

Center LLC

252 248

TOTAL

5 162 316

Description of securities of obligations and payments received by the Company

EXPLANATIONS



94

The total amount of securities for liabilities and payments received by the Company is equal to

36,952,247 thousand rubles as of December 31, 2012 (16,601,427 thousand rubles – as of December

31, 2011; 17,847,310 thousand rubles – as of December 31, 2010).

Itemization of securities and other bonds is given below.

Name of security received, Guarantor Term of validity

of the guarantee

Organization the

guarantee has been

received for

/Pledger

The sum of

security as of

December 31,

2012

Surety under the General Agreement

dd. 12/05/2012 with System-Invest

OJSC and Ecu Gest Holding S.A. on

discharge of obligations thereunder

06.11.2018

JSC ―System-Invest‖

and Ecu Gest

Holding S.A.

22 500 000

Obligations on paying for a base asset

under forward transactions concluded

with UniCredit Bank CJSC, the Royal

Bank of Scotland, BNP Paribas and

HSBC Bank Ltd

31.12.2013

UniCredit Bank

CJSC, the Royal

Bank of Scotland,

BNP Paribas, HSBC

Bank Ltd

8 450 530

Property received in pledge under the

mortgage agreement. Subjects of

pledge: non-residential buildings owned

by the pledgor on the base of the rights

of ownership; right of use of land plots

under long-term lease agreements.

Location of the property: 27, Bolshaya

Pirogovskaya Str., Moscow

01.07.2014 Elektroluch CJSC 2 093 431

Bank guarantee for advance payment

return, issued by OJSC 11.01.2014 NGO Privod LLC 2 634 099


of the guarantee

Organization the

guarantee has been

received for

/Pledger

The sum of

security as of

December 31,

2012

TransCreditBank under the contract

with NGO Privod LLC

Bank guarantee for return of advance

payment, issued by JSC

―Gazprombank‖ under agreement with

JSC ―TYAZHMASH‖

27.02.2015 JSC

―TYAZHMASH‖ 1 220 703


return, issued by Bank VTB 24 OJSC

under the contract with Service-Sklad

CJSC

01.04.2013 Service-Sklad CJSC 12 041

TOTAL

36 910 804

EXPLANATIONS



95

Description of securities of obligations and payments received by the Company (continued)


of the guarantee

Organization for

which the guarantee

has been received

The sum of

security as of

December 31,

2012

Bank guarantee for proper fulfilment of

obligations of the guarantee period

under the contract with NPO

Energoresurs CJSC

23.05.2013 NPO Energoresurs

CJSC 11 102

Obligations received from individuals –

employees of the Company under

apartments sale-purchase agreements in

the amount equal to the balance of their

debts

until repayment

of debts

individuals –

employees of the

Company

9 960


return, issued by HSBC Bank LLC

(RR) under the contract with the

Moscow Representative Office of

Deloitte & Touche Regional Consulting

Services Ltd.

10.01.2013

Moscow

Representative Office

of Deloitte & Touche

Regional Consulting

Services Ltd.

9 942

Bank guarantee issued by CB United

Bank of Development LLC under the

contract with Novogradstroy LLC 01.07.2013 Novogradstroy LLC 6 490

Bank guarantee for return of advance

payment, issued by JSC

―Gazprombank‖ under the agreement

with IskraSvyaz LLC

10.02.2013 IskraSvyaz LLC 2 548

EXPLANATIONS



96


return, issued by MTS-Bank OJSC

under the contract with Reduction

Cooling Plants CJSC

19.03.2013 Reduction Cooling

Plants CJSC 1 401

TOTAL

41 443

24. CONDITIONAL LIABILITIES AND FACTS OF BUSINESS ACTIVITIES

Factors influencing the financial standing of the Company

Conditions of the Company's activities

Economic reforms and development of the legal, tax and administrative infrastructure continue in

Russia, which infrastructure would meet the requirements of the market economy. Stability of the

Russian economy will to a high degree depend on the course of such reforms, as well as on the

efficiency of the measures taken by the Government in the sphere of economics, financial and fiscal

policy.

Market fluctuations and reduced pace of economic development in the world economy also produce

considerable influence on the Russian economy. World financial crisis resulted in uncertainty as to the

future economic growth, availability of financing, and the cost of equity, which can negatively

influence the financial standing, results of operations, and economic prospects of the Company in

future. At present, it is impossible to forecast such influence. The Company's management believes

that they take all the appropriate measures to support economic stability of the Company in these

conditions.

Taxation

The Russian tax, currency and customs laws suppose different interpretation and are subject to

frequent changes. Interpretation of such laws by the Company's management concerning the

operations and activity of the Company's companies may be challenged by competent regional and

federal authorities. Recent events in the Russian Federation have shown that tax authorities may take a

stricter position in the interpretation of the laws and the audit of tax calculations. As a consequence,

tax authorities may produce claims as to those transactions and methods of accounting to which they

have never produced claims before. As a result, significant taxes, fines and penalties may be charged.

Determination of amounts of claims under possible but not produced claims, as well as estimation of

EXPLANATIONS



97

the probability of negative outcome, are impossible. Tax audits may cover three calendar years of

activity immediately preceding to the year of audit. In certain conditions, earlier periods may also be

subject to auditing.

In the management's opinion, as at December 31, 2012, corresponding provisions of the laws are

interpreted by them correctly, and the probability of preservation of the Company's state in connection

with the tax, currency and customs laws, is high.

Existing and potential actions against the Company

The Company participates in legal proceedings arising in the course of its financial and business

activity. The provision for possible risks connected with unfavourable outcome of legal proceedings

for the Company has been formed as of December 31, 2012 in the amount of 68,691 thousand rubles

(60,711 thousand rubles – as of 31/12/2011; as of December 31, 2010 it has not been formed due to its

insignificant amount).

Guarantees

As of 31/12/2012 the Company issued sureties to third persons’ creditors, the maturity time of which

has not come yet, for a total sum of 77,681,752 thousand rubles (75,054,136 thousand rubles – as of

31/12/2011; 27,935,851 thousand rubles – as of 31/12/2010). The Company’s management does not

expect occurrence of any considerable liabilities in connection with these sureties.

Obligations under forward deals

Forwards for currency sale

In connection with receiving regular currency proceeds, the Company performs transaction in the

market of derivative financial instruments in order to minimize currency risk on the regular basis.

Transactions with derivative financial instruments are made with the main leading banks within the

framework of the relevant General agreement entered into and incorporate minimum guaranteed

exchange rate, at which the Company undertakes to sell the defined the currency amount, and the Bank

respectively undertakes to buy the specified currency amount on the specified date in the future. All of

the settled transactions with derivative financial instruments for the purpose of reducing the currency

risk constitute deliverable transactions with a deferred term of execution.

EXPLANATIONS



98

As of the reporting date of December 31, 2012 the off-balance-sheet items of the Company reflected

security of Company’s obligations under forward contracts in the amount of 7,723,891 thousand

rubles, calculated on the basis of the exchange rate of the Central Bank of the Russian Federation as of

December 31, 2012, as well as the security of obligations of counteragent banks in the amount of

8,450,530 thousand rubles, calculated at the rate of forward deals. All deals will be executed in 2013.

Net fair value of forward contracts as of December 31, 2012 is equal to 179,086 thousand rubles

(45,761 thousand rubles – as of December 31, 2011). When assessing the fair value, Bloomberg

analytical system data were used.

Interest Swap

In order to minimize potential financial losses, in consequence of the growth of LIBOR6m floating

rate index, the Company entered into a transaction — interest-rate swap to hedge changes in future

interest payments on the loan received. The financial result of the Transaction is reflected by the

Company in the structure of interests received/paid. Fulfilment of obligations under the transaction

occurs once in half a year until the end of the interest rate swap -November 12, 2013.

Under the terms of Transaction the Company effects payments to the Bank-counteragent based on a

fixed rate and receives payments based on LIBOR6m floating rate index calculated similarly to the

interests on the loan received on the basis of the LIBOR6m floating rate index. This hedging

transaction allows, in terms of established share of hedging, insurance against the fall of cash flows of

the Company in consequence of the growth of LIBOR6m floating rate index.

When assessing the efficiency, the Company uses retrospective and perspective hedge efficiency

analyses. Based on the results of perspective and retrospective analyses, as of December 31, 2012,

hedging of interest rate risks with the use of the said interest rate swap transaction has been found

efficient.

Net negative fair value (loss) of interest swap as of December 31, 2012 is equal to 68,649 thousand

rubles (121,288 thousand rubles – as of December 31, 2011). When assessing the fair value,

Bloomberg analytical system data were used.

Futures Contracts at the Energy Exchange

EXPLANATIONS



99

Futures used for Hedging Purposes

The Company uses futures as a price risk hedging instrument at the DAM (Day-Ahead Market).

Unfavourable changes in electricity prices at the DAM may reduce the profit margin relative to a

margin profit indicator, approved in the Company's business plan. The purpose of entering into

hedging futures is the reduction in price risk at the DAM and the achievement of profit margin

indicator, approved in the Company's business plan.

As of December 31, 2012, the Company reflects on the off-balance-sheeet items open long futures

positions on futures in order to hedge the risk of increase in the electricity prices at the Day-Ahead

Market at market valuation of 61,847 thousand rubles.

For the purposes of assessing the hedging efficiency with the use of these instruments, the Company

uses the retrospective and prospective analyzes using a hypothetical derivative method. According to

the said method it is defined how the actual change in the fair value of net cash flows of hypothetical

derivative is compensated with the actual change in the fair value of net cash flows of hedging

instruments.

Based on the retrospective and prospective hedging efficiency analysis as of December 31, 2012, the

hedging of obligations on purchase of electricity in a free sector of Wholesale Electricity and Power

Market (WEPM) for ensuring the electricity supplies for export at the price prevailing in the market for

each hour (date) during the period of supply with the help of transactions with futures contracts on the

average price index can be considered efficient, since at the time of decision on hedging, a prospective

analysis of its efficiency has been positive.

Other futures

As of December 31, 2012, the market valuation of forward transactions open positions is reflected on

the off-balance accounts of the Company, and namely:

• Transactions aimed at speculation for a purchase of futures contracts in the quantity of 316 at

market valuation of 56,001 thousand rubles with the purpose of its further resale (execution) at the

market price.

• Transactions aimed at speculation for a sale of futures contracts in the quantity of 528 at market

valuation of 23,462 thousand rubles with the purpose of its further purchase (execution) at the

market price.

EXPLANATIONS



100

Term of execution of the above said contracts is 2013.

25. EVENTS AFTER THE REPORTING DATE

The shares of INTER RAO UES of additional issues, the shares of minority shareholders of JSC

―OGK-1‖, JSC ―OGK-3‖, JSC ―INTER RAO – Energy‖, and JSC ―INTER RAO – EnrgoAktiv‖ have

been converted into, have been consolidated with the shares of primary issue of JSC ―INTER RAO

UES‖ (state registration number 1-03-33498-E dd. October 29, 2009) pursuant to the decision of the

Federal Financial Markets Service. Individual numbers (codes) of these issues have been cancelled.

26. TERMINATED ACTIVITY

In 2011 the Company founded a 100 % subsidiary INTER RAO – Electric Power Plants OJSC for the

purpose of transferring the latter the activity on production of electricity and heat energy, within the

frames of changeover of JSC ―INTER RAO UES‖ for holding structure of management.

In the period of report within the frames of activity termination the Company sold the items of fixed

assets, inseparable improvements and unfinished capital investments into fixed assets, intangible

assets, inventories at their market value. Market value has been determined by the parties based on the

data provided by independent appraiser.

As a result of selling the items of fixed assets the Company has received profit of 501,360 thousand

rubles, which is reflected in other profits and expenses in the Statement of Financial Results for 2012.

The sum of profit tax from sale amounted to 382,473 thousand rubles. The debt of INTER RAO –

Electric Power Plants OJSC to the Company for purchased property amounted to 28,014,193 thousand

rubles as of 31/12/2012.

As of 31/12/2012 the balance-sheet of the Company included items of fixed assets, which are to be

sold in 2013. Book value of these items makes 2,832,061 thousand rubles.

In the period of report the Company transferred the subsidiary INTER RAO - Electric Power Plants

OJSC receivables and payables under the agreements concluded within the framework of carrying out

production activity. Such agreements particularly include agreements on the sale of electricity and heat

EXPLANATIONS



101

energy, agreements on purchase of fuel, parts, works and services required for repair and upgrade of

the items of fixed assets, etc. The debt of INTER RAO – Electric Power Plants OJSC for assigned

liabilities under the said agreements as of 31/12/2012 amounts to 1,636,438 thousand rubles.

Statement of Financial Results for the year 2012

with regard to information about terminated activity

Name of the indicator Code Continued activity Terminated

activity

Organization in

general

Proceeds from realization

(excluding VAT) 2110 37 865 687 4 826 491 42 692 178

Cost of sales 2120 (30 166 466) (5 008 613) (35 175 079)

Gross profit 2100 7 699 221 (182 122) 7 517 099

Commercial costs 2210 (4 153 181) (4 153 181)

Administrative costs 2220 (4 510 163) (4 510 163)

Profit (loss) from sales 2200 (964 123) (182 122) (1 146 245)

Revenues from participation

in other organizations 2310 2 573 215 2 573 215


Interest payable 2330 (1 919 141) - (1 919 141)

Other profits 2340 94 528 373 27 001 265 121 529 638

including

realization of fixed assets 2 012 25 622 473 25 624 485

Sale of income-bearing

investments in tangible

assets 41 803 41 803

Sale of unfinished capital

expenditures 220 555 220 555

Sale of inventories - 998 267 998 267

Sale of intangible assets and

R&D 5 903 5 903

Provision for reduction in

the value of inventories 112 264 112 264

Other expenses 2350 (106 232 352) (26 317 783) (132 550 135)

including

realization of fixed assets (1 767) (25 077 184) (25 078 951)

Sale of income-bearing

investments in tangible

assets (41 798) (41 798)

Sale of inventories - (974 324) (974 324)

Sale of unfinished capital

investments into fixed assets (218 574) (218 574)

Sale of intangible assets and

R&D (5 903) (5 903)

Profit (loss) before tax 2300 (10 290 524) 501 360 (9 789 164)

Profit tax 2410 (277 747) (382 473) (660 220)

EXPLANATIONS



102

including PTl (PTA): 2421 7 068 438 127 896 7 196 334

Change in deferred tax

liabilities 2430 (6 055) 177 835 171 780


assets 2450 (4 211 888) (23 530) (4 235 418)

Other 2460 156 268 (3 886) 152 381

including - (4 945) -

Net profit (loss) 2400 (14 629 946) 269 305 (14 360 641)

EXPLANATIONS



103

Statement of Financial Results for the year 2011

with regard to information about terminated activity


activity

Organization in

general

Proceeds from realization

(excluding VAT) 2110 54 574 708 18 813 248 73 387 956

Cost of sales 2120 (43 297 171) (17 457 981) (60 755 152)

Gross profit 2100 11 277 537 1 355 267 12 632 804

Commercial costs 2210 (6 646 199) (6 646 199)

Administrative costs 2220 (3 899 084) (3 899 084)

Profit (loss) from sales 2200 721 576 1 365 945 2 087 521

Revenues from participation

in other organizations 2310 1 355 352 1 355 352


Interest payable 2330 (1 739 263) - (1 739 263)

Other profits 2340 61 285 288 4 042 659 65 327 947

including

Sale of fixed assets 4 887 3 782 330 3 787 217

Sale of inseparable

improvements 260 329 260 329

Sale of inventories - - -

Other expenses 2350 (215 224 164) (3 473 980) (218 698 144)

including

Sale of fixed assets (2 748) (3 101 420) (3 104 168)

Sale of inseparable

improvements (260 296) (260 296)

Sale of inventories - - -

Provision for reduction in

the value of inventories (112 264) (112 264)

EXPLANATIONS



104


activity

Organization in

general

Profit (loss) before tax

2300 (152 338 477) 1 934 624 (150 403 853)

Profit tax 2410 (244 744) (381 781) (626 525)

including PTl (PTA): 2421 23 361 977 195 680 23 557 657


liabilities

2430 3 642 (195 603) (191 961)


assets

2450 7 617 891 (5 221) 7 612 670

Other 2460 (75 616) 557 318 481 702

including

Write-off of DTL/DTA on

disposed fixed assets

557 318 557 318

Net profit (loss) 2400 (145 037 304) 1 909 337 (143 127 967)

Statement of Cash Flow for the year 2012

on the terminated activity

Name of the indicator Code For 2012



including

from sales of products, goods, works and services 4111 5 082 847

lease payments, license fees, royalties, commissions

and other similar payments 4112 283 536

other proceeds 4119 990 942

Payments - total 4120 (4 690 210)

including

to suppliers (contractors) for raw materials, works and

services 4121 (4 570 975)

due to payment of employees’ remuneration 4122 (119 235)-

other payments 4129 -



including

from sales of current assets (other than financial

investments) 4211 2 106 220

EXPLANATIONS



105

Payments - total 4220 (303 325)

including

due to acquisition, creation, modernization,

reconstruction and preparation for use of non-current

assets 4221 (303 325)

Statement of Cash Flow for the year 2011

on the terminated activity

Name of the indicator Code For 2011



including

from sales of products, goods, works and services 4111 18 407 950

lease payments, license fees, royalties, commissions

and other similar payments 4112 40 443

other proceeds 4119 1 127 910

Payments - total 4120 (14 904 417)

including

to suppliers (contractors) for raw materials, works and

services 4121 (12 704 206)

due to payment of employees’ remuneration 4122 (1 131 851)

other payments 4129 (1 068 360)



including

from sales of current assets (other than financial

investments) 4211 3 782 329

Payments - total 4220 (2 314 613)

including

due to acquisition, creation, modernization,

reconstruction and preparation for use of non-current

assets 4221 (2 314 613)

Terminated activity does not significantly affect the cash flow from financial transactions of the

Company.

27. REORGANIZATION

EXPLANATIONS



106

On April 26, 2012 the Company’s shareholders made a decision at the special General Meeting of

Shareholders on the Company’s reorganization by consolidation with JSC ―OGK-1‖, JSC ―OGK-3‖,

JSC ―INTER RAO – Energy‖, JSC ―INTER RAO – EnergoAktiv‖, JSC ―BashEnergoAktiv‖.

Purpose and procedure of reorganization

Within the frames of forming a target corporate structure of INTER RAO UES Group, which provides

for transition to 100 % possession of the main generating assets, in March 2012 the Board of Directors

of the Company decided to implement the following activities:

1. To separate two companies from JSC ―OGK-1‖ and JSC ―OGK-3‖ – JSC ―First Generation‖ and

JSC ―Third Generation‖ respectively, and to transfer them the assets and liabilities of primary

companies. At the same time, to connect separated companies to INTER RAO - Electric Power

Plants OJSC (which currently includes Kaliningradskaya TEC-2, North-West Thermal Power

Plant, Sochinskaya TEC and Ivanovskie PGU). Alongside with that, to connect JSC ―OGK-1‖ and

JSC ―OGK-3‖ to JSC ―INTER RAO UES‖.

2. To connect the following associated companies to JSC ―INTER RAO Energy‖ and JSC ―INTER

RAO EnergoAktiv‖ to JSC ―INTER RAO UES‖ for consolidating at the Company’s balance-sheet

the packages of shares of JSC ―TGK-6‖ and JSC ―TGK-11‖.

3. To separate two companies from JSC ―Bashkirenergo‖ by means of non-proportional division:

Bashkiria Electric Grid Company OJSC, to which all electric grid assets shall be transferred, and

JSC ―Bashenergoaktiv‖ (with simultaneous connection to JSC ―INTER RAO UES‖), to which the

whole generating business shall be transferred in the form of participatory shares in Bashkiria

Generating Company LLC, Bashkiria Heat Distribution Systems LLC, and CCP TPP-5 LLC.

The shares of connected companies have been converted into Company’s shares. Share conversion

factors have been determined on the basis of reports of the independent appraiser – Institute of

Independent Appraisal LLC. Conclusion on the fairness of conversion factors has been submitted by

investment banks Morgan Stanley and Troika Dialogue. 0.0416666666666667 of ordinary share og

JSC ―OGK-1‖, 0.025 of ordinary share of JSC ―OGK-3‖, 0.00218293620292083 of preferred share of

Bashenergoaktiv OJSC, and 0.0016588785046729 of ordinary share of Bashenergoaktiv OJSC was

converted into one ordinary share of JSC ―INTER RAO UES‖. The scope of additional issue for the

purpose of conversion made 724,000,997,683 shares with a par value of 0.02809767, for a total sum of

20,342,741 thsd. rubles.

Influence of reorganization on Company’s reports

EXPLANATIONS



107

Consolidation of the Company with JSC ―OGK-1‖, JSC ―OGK-3‖, JSC ―INTER RAO – Energy‖, JSC

―INTER RAO – EnergoAktiv‖ took place on October 01, 2012.

In the result of consolidation Company’s assets as of 01/10/2012 increased by 85,165,472 thousand

rubles, including repayment of financial investments of the Company in the shares of JSC ―OGK-1‖ in

the amount of 34,055,703 thousand rubles, and in the shares of JSC ―OGK-3‖ in the amount of

32,778,733 thousand rubles. Liabilities of the Company grew by 2,897,331 thousand rubles.

Authorized capital of the Company in the result of additional issue of shares increased by 18,683,725

thousand rubles, and made 291,680,687 thousand rubles as of October 01, 2012. As the difference

between the authorized capital of the Company recorded in the contract of consolidation, and algebraic

sum of authorized capitals of reorganized entities calculated as of 01/10/2012 was negative, the effect

from consolidation was attributed to retained income of the Company. Cumulative effect from

consolidation on the retained income of the Company as of 01/10/2012 made 63,584,415 thousand

rubles, and represents the difference between conneccted net assets and the amount of increase in the

authorized capital of the Company.

JSC ―Bashenergoaktiv‖ was connected to the Company on November 06, 2012. In the result of

consolidation, Company’s assets as of 06/11/2012 grew by 2,324,182 thousand rubles, including

repayment of financial investments of the Company in the shares of JSC ―Bashkirenergo‖ in the

amount of 27,337,033 thousand rubles. Company’s liabilities grew by 339,821 thousand rubles.

Authorized capital of the Company in the result of additional issue of shares increased by 1,659,016

thousand rubles, and made 293,339,703 thousand rubles as of November 06, 2012. As the difference

between the authorized capital of the Company recorded in the contract of consolidation, and the

authorized capital of reorganized entity is positive, the effect from consolidation was reflected in the

item ―Additional Capital‖. Additional capital of the Company increased by 325,345 thousand rubles as

of 06/11/2012 in the result of the difference between connected net assets and the increase in the

authorized capital of the Company.

Company’s expenses on reorganization amounted to 116,532 thousand rubles as of 31/12/2012. These

expenses mainly consist of the sums paid to consultants for financial and legal services of transaction

support, audit firms for verification of information specified in the prospects of securities issue, and fee

to the register holder for the operations on registering transactions with Company’s shares.

Disclosure of the scope and sums of received assets and liabilities has been described in the respective

sections they are attributed to herein.

Received to the Company’s balance in the result of

reorganization 01.10.2012 06.11.2012

ASSET

EXPLANATIONS



108

I. CAPITAL ASSETS 150 387 601 27 389 399

including

Fixed assets - 55 105

Financial Investments 150 351 908 21 038 489

Income-bearing investments in tangible assets - 69 385

Deferred tax assets 35 693 5 582

Other capital assets - 6 220 838

including

Long-term receivables - 6 220 838

II. CURRENT ASSETS 1 612 306 2 271 816

including

Inventories - 434

Receivables 1 611 515 1 050 186

Financial Investments - 901 893

Cash funds and

cash equivalents 789 313 717

Other current assets 2 5 586

LIABILITY

V. SHORT-TERM LIABILITIES 2 897 331 339 821

including

Borrowed funds 2 309 586 -

Payables 587 745 302 784

Estimated liabilities - 37 037

EXPLANATIONS



109

26. RISKS OF BUSINESS ACTIVITY

Information about the risks of business activity is published by the Company in the issuer’s quarterly

report posted on the website, in the section ―For shareholders and investors‖

http://www.interrao.ru/investors/disclosure/quarterly/.

February 21, 2013

Chairman of the Management

Board

B.Yu. Kovalchuk

Chief accountant A.O. Chesnokova

http://www.interrao.ru/investors/disclosure/quarterly/

Total number of sheets stitched, numbered and sealed - 117

ernst - ПАО «Интер РАО»...(np acr). ernst&young llc is registered in the register...

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