A statement of management's responsibility for the preparation and approval of the consolidated financial statements for the year ending 31 December 2014 of

Independent auditors' report

Consolidated statement of financial position

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT DECEMBER 31, 2014

(in thousand Tajik Somoni)

	Notes	December 31,	December 31,
		2014	2013
			(restated)
ASSETS:
NON-CURRENT ASSETS:
Property, plant and equipment	7	8,892,058	9,319,152
Intangible assets	8	303	213
Non-current advances paid	9	134,598	104,919
Non-current investments	10	182,399	182,399
Deferred tax assets	23	-	-
Other non-current assets		7	18
		9,209,365	9,606,701
CURRENT ASSETS:
Inventory	11	900,518	1,000,072
Trade and other accounts receivable	12	360,999	444,451
Advances paid	13	33,892	83,499
Tax prepayments		4,052	6,296
Cash and cash equivalents	14	11,007	3,001
		1,310,468	1,537,319
TOTAL ASSETS		10,519,833	11,144,020

EQUITY AND LIABILITIES:
EQUITY:
Share capital	15	383,836	383,836
Foreign exchange differences
from translation of foreign subsidiaries		(69)	(9)
Property, plant and equipment revaluation reserve		5,051,949	5,781,686
Reserve capital	16	24,302	24,302
Accumulated deficit		(2,705,733)	(1,698,796)
		2,754,285	4,491,019
NON-CURRENT LIABILITIES:
Non-current borrowed funds	17	2,985,776	878,405
Deferred income non-current portion	18	293,108	1,815,336
		3,278,884	2,693,741

	Notes	December 31,	December 31,
		2014	2013
			(restated)
CURRENT LIABILITIES
Trade and other accounts payable	19	1,335,216	1,115,582
Advances received	20	56,601	35,956
Taxes payable	21	181,978	388,099
Income tax payable	23	2,238,886	1,743,079
Current borrowed funds	17	2,032	1,443
Deferred income current portion	18	671,951	675,101
Other payables and accrued expenses	22	4,486,664	3,959,260
		7,765,548	6,653,001
TOTAL EQUITY AND LIABILITIES		10,519,833	11,144,020

On behalf of the Management:

Ismoilzoda M.                                                          Dustmukhamedov A.

Chairman                                                                 Chief Accountant

September 7, 2015                                                   September 7, 2015

Dushanbe,                                                                Dushanbe,

Republic of Tajikistan                                             Republic of Tajikistan

The notes on pages 9-58 form an integral part of these consolidated financial statements.

Consolidated statement of comprehensive income

CONSOILDATED STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2014

(in thousand Tajik Somoni)

	Notes	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Revenue	24	1,306,015	1,251,881
Cost of sales	25	(1,065,132)	(599,635)
GROSS PROFIT		240,883	652,246
Selling expenses	26	(819,793)	(621,123)
General and administrative expenses	27	(127,601)	(161,329)
Net loss on foreign exchange operations		(314,958)	(24,132)
Finance expenses	28	(476,669)	(596,443)
Other non-operating expenses, net	29	(330,190)	(1,630,039)
LOSS BEFORE INCOME TAX		(1,828,328)	(2,380,820)
Income tax benefit	23	91,654	48,366
NET OPERATING LOSS		(1,736,674)	(2,332,454)
Other comprehensive income	7	-	5,781,686
NET COMPREHENSIVE (LOSS)/GAIN		(1,736,674)	3,449,232

On behalf of the Management:

Ismoilzoda M.                                                     Dustmukhamedov A.

Chairman                                                            Chief Accountant

September 7, 2015                                              September 7, 2015

Dushanbe,                                                           Dushanbe,

Republic of Tajikistan                                        Republic of Tajikistan

The notes on pages 9-58 form an integral part of these consolidated financial statements.

Consolidated statement of changes in equity

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2014

(in thousand Tajik Somoni)

	Notes	Share capital	Reserve capital	PPE revaluation reserve	Accumula- ted deficit	Exchange differences on translation of foreign subsidiaries	Total equity
Balance at December 31, 2012 (restated)	15	383,836	24,302		633,658		1,041,787
Recognition of PPE revaluation reserve		-	-	5,781,686	-	-	5,781,686
Loss for the year		-	-	-	(2,332,454)	-	(2,332,454)
Balance at December 31, 2013 (restated)	15	383,836	24,302	5,781,686	(1,698,796)	(9)	4,491,019
Amortization of PPE revaluation reserve		-	-	(729,737)	729,737	-	-
Exchange differences on translation of foreign operations into the reporting currency						(60)	(60)
Loss for the year		-	-	-	(1,736,674)	-	(1,736,674)
Balance at December 31, 2014	15	383,836	24,302	5,051,949	(2,705,733)	(69)	2,754,285

On behalf of the Management:

Ismoilzoda M.                                                 Dustmukhamedov A.

Chairman                                                        Chief Accountant

September 7, 2015                                          September 7, 2015

Dushanbe,                                                       Dushanbe,

Republic of Tajikistan                                    Republic of Tajikistan

The notes on pages 9-58 form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

(in thousand Tajik Somoni)

	Notes	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
CASH FLOWS FROM OPERATING ACTIVITY:
Sales proceeds		1,070,697	928,045
Other operating income		26,937	22,167
Total cash inflow from operating activity		1,097,634	950,212
Cost of sales		(309,350)	(349,643)
Payroll and social tax		(257,939)	(206,168)
Payment for services		(21,106)	(64,799)
Interest payment		(116,915)	(144,564)
Income tax payment		(20,170)	(41,103)
Other taxes payment		(253,669)	(188,792)
Other operating payments		(26,874)	(55,959)
Total cash outflow from operating activity		(1,006,023)	(1,051,028)
Net cash inflow/(outflow) from operating activity:		91,611	(100,816)
CASH FLOWS FROM INVESTING ACTIVITY:
Acquisition of property, plant and equipment		(86,494)	(147,153)
Net cash outflow from investing activity:		(86,494)	(147,153)

	Notes	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
CASH FLOWS FROM FINANCING ACTIVITIES::
Proceeds from loans received Principal payments of loans received		277,530 (275,013)	554,314 (314,239)
Net cash inflow from financing activities:		2,517	240,075
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS		7,634	(7,894)
Effect of exchange rate changes on the balance of cash held in foreign currencies		372	1,483
CASH AND CASH EQUIVALENTS, beginning of the year	14	3,001	9,412
CASH AND CASH EQUIVALENTS, end of the year	14	11,007	3,001

On behalf of the Management:

Ismoilzoda M.                                                 Dustmukhamedov A.

Chairman                                                         Chief Accountant

September 7, 2015                                           September 7, 2015

Dushanbe,                                                         Dushanbe,

Republic of Tajikistan                                     Republic of Tajikistan

The notes on pages 9-58 form an integral part of these consolidated financial statements.

1. GENERAL INFORMATION

Open Joint Stock Holding Company Barqi Tojik (hereinafter the “Group”) was registered in the Ministry of Justice of the Republic of Tajikistan on 3 June 1999. The Company and its subsidiaries (the “Group”) carry out its activity in the Republic of Tajikistan. The Group is a joint stock company and was established in accordance with the legislation of the Republic of Tajikistan.

The Group's principal activity is generation, transmission and distribution of electricity and heat in the Republic of Tajikistan. The Group also sells electricity to neighboring countries due to its operational needs. Electricity is generated on five hydropower stations, which are the structural units of the Group. Operating activity of the Group is regulated by the Law of the Republic of Tajikistan “On natural monopolies” (hereinafter the “Law”), as the Group is the dominant in the generation and supply of electricity power in the Republic of Tajikistan. In accordance with the Law, tariffs of the Group must be coordinated and agreed with the Agency for regulation of natural monopolies of the Republic of Tajikistan (hereinafter the “Agency”). The main customers are SUE Tajik Aluminum Company, OJSC Azot, Tojikazot, Tojikkimiesanoat, OJSC Pamir Energy Company, Breshna Company of Republic of Afganistan and the population of the Republic of Tajikistan.

The Group’s Head office is located at the Republic of Tajikistan, Dushanbe, I. Somoni ave, 64.

As at 31 December 2014 and 2013 the sole shareholder of the Group was the Government of the Republic of Tajikistan. Ultimate control of the Group is carried out by the Government of the Republic of Tajikistan.

Property of the Group was formed from the assets which were on the books of State Joint Stock Holding Company Barqi Tojik. The Group is owner of the property transferred to it by the founder, other than the property of legal entities listed as joint stock companies, state enterprises, organisations and institutions under the management of the Group.

Open Joint Stock Holding Company Barqi Tojik is the holder of shares of joint stock companies, granted by the Government of the Republic of Tajikistan, operating in the electricity sector and performs the right of possession, use and disposition of property, businesses and institutions, given for management in accordance with the article 232 of the Civil Code of the Republic of Tajikistan.

The property of the Group includes the following branches and representative offices:

Nurek branch                                                                    Nurek hydropower station

Baipaza branch                                                                 Baipaza hydropower station

Varzob branch                                                                  Cascade and Varzob hydropower stations

Vakhsh branch                                                                 Cascade and Vakhsh hydropower stations

Kairakkum branch                                                             Kairakkum hydropower station

Dushanbe branch                                                             Central electric networks

Kayrakkum branch                                                            Sogd electric networks

Khujand branch                                                                Khujand electric networks

Rasht branch                                                                    Rasht electric networks

Kurgan Tube branch                                                          Kurgan Tube city electric networks

Chkalovsk branch                                                              Chkalovsk city electric networks

Representation of OJSHC Barqi Tojik in the Russian Federation

The following organisations are under control of the Group:

OJSC Shabakahoi Barqii Istaravshan

OJSC Shabakahoi Barqii Panjakent

OJSC Shabakahoi Barqii Shahri Dushanbe

OJSC Shabakahoi Barqii Shahri Kulob

OJSC Shabakahoi Barqii Kulob

OJSC Shabakahoi Barqii Tursunzoda

OJSC Shabakahoi Barqii Janubi

OJSC Dushanbinskaya Heat Station

OJSC Shabakahoi Barqii Yavon

OJSC Remontno-Mekhanicheskiy Zavod

OJSC Shabakahoi Barqii Dangara

OJSC Shabakahoi Barqii Isfara

OJSC Yavanskaya Heat Station

DPMTO Tajikenergosnab

The Group has a subsidiary - Limited Liability Company Barq - Servis. The Group is sole owner of the subsidiary.

Number of Group’s personnel for the year ended December 31, 2014 and 2013 in average was 13,009 and 13,328 employees, respectively.

The consolidated financial statements were authorised for issue by the Group’s management on September 7, 2015.

2. CURRENT ECONOMIC ENVIRONMENT

In the last few years in the Republic of Tajikistan has undergone substantial economic and social changes. As a country with developing economy, the Republic of Tajikistan does not have a fully developed business and regulatory infrastructure, what is usually characterized by countries with more developed market economies. As a result, operations conducted in the Republic of Tajikistan are subject to risks that are not typical for countries with developed market economies. Relatively high risk level in the Republic of Tajikistan impacts the level of interest rate, which is considered to be higher than international benchmarks.

These consolidated financial statements do not include any adjustments that would have been required due resolution of the uncertainty in the future. Potential adjustments may be added to the statements in the period when necessity of their reflection becomes evident, and thereafter it will be possible to estimate adjustments' numerical values.

3. BASIS FOR PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS

Report on compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (hereinafter - "IFRS").

Use of estimates and assumptions

The preparation of the financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Due to the inherent uncertainty in making those estimates, actual results reported in future periods could differ from such estimates.

Basis of presentation

The consolidated financial statements have been prepared on the historical cost basis except for revaluation of property, plant and equipment and certain financial instruments. The principal accounting policies applied in preparation of the consolidated financial statements are set out below. These accounting policies were consistently applied in all periods covered in this consolidated financial statements, unless otherwise stated.

These consolidated financial statements have been prepared on the historical cost basis except for the following lines:

• Non-current financial liabilities at amortised cost;

• Fixed assets and construction in progress are stated at revalued cost based on revaluation carried by an independent consulting company “BDO Consulting” as of December 31, 2013.

Going concern

These consolidated financial statements have been prepared on the assumption that the Group is a going concern and will continue its operation for the foreseeable future. The management and shareholder have the intention to further develop the Group’s activities in the Republic of Tajikistan. The Group is owned by the Government of the Republic of Tajikistan and generates, distributes and sells electricity in Tajikistan. Electricity remains the key element for the economy of Tajikistan, as well as fundamental for the Government’s social and economical objectives.

Based on above, the Management believes that the going concern assumption is appropriate for the Group due to its sufficient capital and continuing financing from the sole shareholder of the Group.

Functional and presentation currency

The functional currency of each of the Group’s consolidated entities is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and the Group’s presentation currency is national currency of the Republic of Tajikistan Tajik Somoni (“Somoni”).

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries), which are recorded as branches for the purpose of the consolidated financial statements as at 31 December 2014 and 2013.

The subsidiary is consolidated from the date of acquisition, which is the date when control is achieved over the subsidiary, and discontinued from consolidation when the control is transferred. The consolidated financial statements of the subsidiaries is prepared for the same period as for the Company, based on consistently applied accounting policy for all branches of the Company.

Changes in ownership of subsidiaries without loss of control are treated as transactions equity. If the Group transfers the control over the subsidiary the following is reflected:

• discontinues recognition of assets and liabilities of the subsidiary;

• records the fair value of proceeds received in exchange;

• records fair value of outstanding portion of the investment;

• records gains or losses in statement of comprehensive income;

• reclassifies interest of the Company in subsidiaries, recognised in other comprehensive income before to statement of comprehensive income or retained earnings in accordance with particular requirements.

The consolidated financial statements of the subsidiaries is prepared for the same period as the Company, based on consistently applied accounting policy for all branches of the Company.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

4.SIGNIFICANT ACCOUNTING POLICIES

Foreign currency transactions

The functional currency of the Company and the Group’s presentation currency is national currency of the Republic of Tajikistan Tajik Somoni (“Somoni”). The Group applies direct method of consolidation, and upon disposal of foreign investment performs the reclassification of gains and losses from translation differences to statement of comprehensive income.

	31 December 2014	31 December 2013
Somoni / USD	5.3079	4.7741
Somoni / EUR	6.4550	6.5772
Somoni / Russian Rouble	0.0933	0.1446
Somoni / SDR	7.6896	7.3770

Transactions in foreign currency are initially recognised by the companies of the Group in functional currency at exchange rate at the date of transaction.

Monetary assets and liabilities denominated in foreign currency are revalued at spot rate of functional currency effective at the reporting date.

All foreign currency differences are transferred to statement of profit or loss and other comprehensive income.

Non-monetary lines at historical cost in foreign currency are recognised at exchange rate effective at the date of initial transaction. Non-monetary lines at revalued method in foreign currency are recognised at the exchange rate effective at the date of consideration of fair value. Gains and losses arising from non-monetary items are treated same as gains and losses from foreign currency transactions (foreign exchange differences on lines, gains and losses for which are recognised in other comprehensive income and added to other comprehensive income, for lines of gains and losses, which are recorded in gains and losses - in gains and losses).

Assets and liabilities in foreign investments are translated to somoni at the exchange rate effective at the reporting date, and statement of comprehensive income of such subsidiaries, are recorded at the rate effective on the date of transaction. Translation differences arising from such treatment are recorded in other comprehensive income. Upon disposal of foreign investment the component of other comprehensive income, related to this foreign investment are transferred to consolidated statement of comprehensive income.

Until 1 January 2010, the date of transition to IFRS, the Group considered adjustments to the carrying value of assets and liabilities to fair value arising on the acquisition, as assets and liabilities of the Company. Therefore, these assets and liabilities are non-monetary items that are already expressed in

the functional currency of the Company and, therefore, the additional exchange rate differences do not occur.

Revenue recognition

Revenue is recognised only if inflow of economic benefits to the Group is probable, and if revenue can be reliably measured, despite of the timing of cash proceeds. The revenue is measured at fair value of the consideration received or receivable, in accordance with contractual terms of payments.

Electricity sales

Electricity sales revenue is recognised when customers on post-paid metering are billed for the power consumed. The billing is done for each monthly billing cycle based on the units consumed as read on the customers’ electricity meters and the approved customer tariffs. Electricity sales revenue is recognised in the consolidated financial statements net of Valued Added Tax (VAT).

Interest income

Interest income and expense on financial instruments held at amorti sed cost, and interest bearing financial assets, classified as held-for-sale are recognised based on effective interest rate method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition. The interest income is added to finance income in the consolidated statement of comprehensive income.

Taxes

Current income tax

Current tax assets and liabilities for the current period as measured at recoverable from or payable to taxation authorities. The tax rates and tax legislation applied for calculations are the rates and legislation accepted or factually adopted as at reporting date in the countries, where the Group performs its activities and has taxable income.

Deferred taxes

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are recognised for all taxable temporary differences, except for cases when:

• Deferred tax liabilities arising at initial recording of goodwill, asset or liability as a result of transaction other than business combination, and at transaction date does not impact accounting profit nor taxable profit or loss;

• Taxable temporary differences in respect of investments in subsidiaries, associates, as well as interest in joint ventures, and if possible to control distribution by periods related to recoverability of temporary differences, and there is high probability of recovery of temporary difference in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, unused tax incentives and unused tax losses, to the extent of highly probable upcoming profits, against which the recovery of deductible temporary differences, unused tax incentives and unused tax losses will take place, except for:

• Deferred tax asset, related to temporary difference as a result of initial recognition of asset or liability arising from business combinations, which at the date of transaction does not impact accounting nor tax profit or losses;

• Deductible temporary differences as a result of investments in subsidiaries, associated companies, as well as interest in joint venture where the deferred tax assets are recognised to the extend of highly probable upcoming profits, against which the recovery of deductible temporary differences, unused tax incentives and unused tax losses will take place.

The book value of deferred tax assets is reviewed at each reporting date and decreased to the extent of sufficient profits, which will allow to use all or part of the deferred tax assets, are assessed as unlikely. Deferred tax assets not recognised in the statements are reviewed at each reporting date and are recognised to the extent, when there is high probability of upcoming profits, allowing to recover such tax assets.

Deferred tax assets and liabilities are valued at tax rates, which are expected to be applied in the period, when such asset will be recovered or liability settled at tax rates (tax regulation), which were accepted or factually adopted at the reporting date.

Deferred tax, related to the components other than statement of comprehensive income, as also not recorded in statement of comprehensive income. The deferred taxes are recognised in accordance with underlying transactions or in as a component of other comprehensive income, or directly on equity.

Deferred tax assets and deferred tax liabilities are offset only if there are legal right for offset of current income tax assets and liabilities, and deferred taxes are related to the same company and tax authority.

Property, plant and equipment

After initial recognition as an asset, property, plant and equipment are carried at revalued cost, being the fair value of the object on the date of revaluation less any subsequent accumulated depreciation and impairment losses.

The equipment is held at revalued amount less accumulated depreciation and/or accumulated loss from impairment, if any. This cost includes cost of replaced spare parts, as well as borrowing costs, in case of non-current construction projects, when certain criteria are met. When there is a need for significant component replacement within defined period the Group disposes the replaced component and recognizes new components in accordance with useful life and depreciation. Expenses related to major technical check are included to the cost of the asset, as replaced equipment, when related criteria are met. All other expenses for maintenance are included in the consolidated statement of profit or loss and other comprehensive income as incurred.

The buildings are held at revalued amount less accumulated depreciation and impairment losses.

Depreciation is charged at straight line method during the useful life of the assets as follows:

Useful life

Property, plant and equipment group (years)

1. Building 1-227

2. Constructions

- Transmission equipment 1-135

3. Machinery and equipment

- Hydro turbines 1-45

- Electronic equipment 1-50

- Production equipment 1-100

4. Other fixed assets

- Vehicles 1-51

- Office equipment 1-100

- Furniture and appliances 1-100

- Leasehold improvements 1-55

- Land improvements 1-85

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss, and presented in the consolidated statement of comprehensive income for the period, when derecognition took place.

The useful life term and depreciation method are annually reassessed, and adjusted if needed.

Government grants

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised as expenses, in the period when such expenses incurred. Borrowing costs include the payment for interest and other expenses, incurred by the Group in respect of borrowings.

Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost. Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date. Subsequent to initial recognition, intangible assets acquired are recorded at cost less accumulated amortisation and accumulated impairment losses (if any). Internally generated intangible assets, except for development costs included to the cost of an asset, and related expenses included in the consolidated statement of comprehensive income in the period, when incurred.

The useful life of intangible assets can be definite or indefinite.

Intangible assets with definite useful life are amortised during the period of this period and subject for impairment assessment if such indicators exist. The period and amortisation method for all intangible asset with definite useful life are reassessed at least at each reporting date. Changes in estimated useful life or structure of inflow of future benefits inherent to the asset are added to the consolidated financial statements as changes in period and method of amortisation, depending on situation, and disclosed as changes in estimates. The amortisation expenses for intangible assets with definite useful life recognised in the consolidated statement of comprehensive income in the category, which relates to the function of the intangible asset.

Intangible assets with indefinite useful life are not amortised, rather tested separately for impairment on an annual basis. The useful life term of intangible assets with indefinite useful life is reviewed on an annual basis in order to determine whether it is reasonable to continue classify the asset as intangible asset with indefinite useful life. If it is not acceptable, the change in useful life of an asset is prospectively changed from indefinite to definite.

Gains and losses from disposal of intangible assets are measured as difference from proceeds and book value of the asset and recognised in the consolidated statement of comprehensive income at the date of disposal of use asset.

Patents and licenses

Patents are issued for the period of 10 years by the relevant state body with a right to prolong. License on right for intellectual property issued from 5-10 years, depending on type of license.

Licenses can be prolonged in the end of the term, if the Group will comply with preset conditions. Prolongation can be maid for notional fee or free of charge. Therefore the useful life of these licenses is treated as indefinite.

Financial instruments - initial recognition and subsequent measurement

(a) Financial assets

Initial recognition and measurement

Financial assets within the scope of IAS 39 are classified into the following specified categories: financial assets ‘at fair value through profit or loss' (FVTPL), financial assets and ‘loans and receivables', ‘held-to-maturity' investments, ‘available-for-sale' (AFS). The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets initially recognised at fair value plus, in case of investments not at fair value through profit or loss, the transaction costs.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. Financial assets of the Group includes the cash and current deposits, trade and other receivables, loans and other amounts receivables and unquoted financial instruments.

Subsequent measurement

Subsequent measurement of financial assets is subject of its classification in a following way:

Accounts receivable

Accounts receivable are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, such financial assets are measured at amortized cost using effective interest rate method, less any impairment losses.

Amortized cost is calculated considering any discount or premium on acquisition and fee or costs that are an integral part of the effective interest rate. Amortization based on the use of the effective interest rate is included in finance income in the consolidated statement of profit or loss and other comprehensive income. The losses arising from impairment are recognized in the consolidated statement of profit or loss and other comprehensive income in finance costs.

Current trade accounts receivable recognizes at cost less allowance on doubtful debts.

Available-for-sale financial assets

Available-for sale financial assets include equity and promissory notes. Equity investments classified as available-for-sale are the investments, are those not classified as held for trading, nor at fair value through profit or loss. Promissory notes within this category are instruments without defined term of sale and can be sold for liquidity purposes as a result of changing market conditions.

Subsequent to initial recognition the financial investments available-for-sale are measured at fair value, and resulting gains and losses are recorded as component of other comprehensive income as reserve for available-for-sale instruments. The instrument is held within this classification until derecognition or impairment adjustment, upon which the accumulated gains and losses from reserve on available-for-sale investments are reclassified to other operating gains and losses of statement of comprehensive income. Interest income on promissory notes available-for-sale are recorded at effective interest rate method and added to the statement of comprehensive income.

The Group has assessed its financial assets, available-for-sale for assumption of ability an intention to sell in the foreseeable future.

Derecognition

Derecognition of financial asset (or if applicable -part of the financial asset or part of the group of financial assets) performed if:

• The rights for cash proceeds and asset matured;

• The Group has transferred its rights for cash proceeds from the asset, or has accepted the liability to perform the payment to the third party in full and without any delays; or if (a) the Group has transferred substantially all risks and rewards from such asset, or (b) Group did not transfer, but also did not retain risks and rewards from such asset, therefore transferred the control over such asset.

If the Group has transferred all rights for cash proceeds from asset, or has concluded an agent agreement, but did not retain all risks and rewards from such asset, as well as did not transfer control over such asset, the new asset is recognised to the extend the Group continues its participation in the asset.

In this case the Group also recognizes related liabilities. The transferred asset and related liabilities are valued based rights and liabilities retained by the Group.

The continuous participation in form of guarantee on asset transferred is recognised at lower of initial book value and maximum possible amount to be claimed from the Group.

Impairment of financial instruments

At each reporting date the Group performs the assessment of indicators of impairment of financial asset or group of financial assets. Financial asset or group of financial assets can be impaired if, and only if, when there is a reliable evidence of impairment as a result of one of number of events taking place subsequent to initial recognition (the “event resulting the loss”), which resulted the impact, which can be reliably measured, on expected future cash flows of the financial asset or group of financial assets. The indicators of impairment can include the fact that debtor or group of debtors are experiencing insolvency issues, and cannot repay the debt or has delays is repayment of interest or principal amount of debt, as well as probability of insolvency and upcoming liquidation process or financial restructuring. Moreover, such indicators include observable evidence, indicating existence of reliably measured decrease in expected cash flows of the financial instrument, in particular, the changes in overdue debts or economic environment, which has certain dependencies with defaults in repayments of debt.

Financial assets recorded at amortized cost

The Group performs the assessment of indicators of impairment financial assets recorded at amortised cost if individually significant or if individually insignificant, than by groups. If the Group identifies the reliable evidence of absence of impairment, despite of the significance, such asset is included in the group of financial assets with similar characteristic of credit risk, and subsequently reviews this group for impairment indicators in aggregate. Assets, individually assessed as impaired are not included in aggregate assessment of the group for impairment.

When there is reliable evidence of incurred losses from impairment, the amount of loss is recognised as a difference of book value and discounted expected future cash flows (without expected future credit losses not yet incurred).

Present value of expected future cash flows are discounted at initial effective interest rate of the financial asset. If the interest rate of borrowing is a floating rate, the discount rate for impairment loss calculation is current effective interest rate.

The book value of the asset decreases through reserve account, and amount of loss added to the consolidated statement of comprehensive income. Accrual of interest income on decreased book value continued based on rate, used for discounting future cash flows for the purpose of assessing losses from impairment. Interest income is included in financial income in the consolidated statement of comprehensive income. Loans along with related provisions are not included in the consolidated statement of financial position if there is not evidence of recoverability of such and all available security was sold or transferred to the Group. If during the subsequent period the amount of calculated losses from impairment increases or decreases as a result of an event taking place after recognition of impairment, the amount of losses recognised increase or decrease by means of reserve account adjustment. If the subsequently the write-off of value of financial asset recovers, the amount of recovery recognised as decrease of finance costs in the consolidated statement of profit or loss and other comprehensive income.

Financial investments, available-for-sale

The Group performs the annual assessment for impairment indicators for the investments held-for- sale.

If the investments in equity instruments, classified as available-for-sale, the reliable evidence of impairment would be significant and continuous decrease in fair value of the investment below its initial acquisition cost. The significance is measured in comparison to initial acquisition cost, continuous means the comparison to the period, when decrease below initial acquisition cost took place. When reliable evidence of impairment is identified the amount of comprehensive loss, calculated as difference of book value and current fair value, less any other impairment loss recognised in the statement of comprehensive income, the loss is reclassified from other comprehensive income to the consolidated statement of comprehensive income.

The promissory notes classified as available-for-sale are subject of same impairment criteria applied to financial assets recorded at amortised cost. However the amount of impairment loss recognised is the difference of amortised cost and current fair value, less accumulated impairment loss for this investment, recognised previously in the consolidated statement of comprehensive income.

Accrual of interest income on decreased book value continued based on rate, used for discounting future cash flows for the purpose of assessing losses from impairment. Interest income is included in financial income in the consolidated statement of comprehensive income. If during the subsequent period the fair value of the promissory note will increase and this increase can be reliably tied with event taking place after initial loss recognition in the consolidated statement of comprehensive income, the impairment losses are recovered in profit and loss.

(b) Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit and loss and borrowings. Group classifies the financial liabilities at initial recognition.

Financial liabilities initially recorded at fair value and in case of borrowings and loans, which are recorded at amortised costs its initial recognition includes the transaction costs directly related to issue and acquisition.

Financial liabilities of the Group include the trade and other accounts payable, loans and borrowings.

Subsequent measurement

Subsequent measurement of financial liabilities depends on classification as follows:

Loans and borrowings

Subsequent to initial recognition interest bearing loans and borrowings are measured at amortized cost based on effective interest rate method. Gains and losses resulting from these instruments included in consolidated statement of profit or loss and other comprehensive income at derecognition, as well as amortizing at effective interest rate.

Amortized cost includes the discounts and premiums at acquisition, as well as commissions or other fees, which are integral part of the effective interest rate. Amortization based on effective interest rate method is included in finance income in the consolidated statement of profit or loss and other comprehensive income.

Derecognition

The financial liabilities in consolidated statement of financial position is derecognised when liability is settled, cancelled or the matured.

If the existing financial liability is substituted by another liability with the same counterparty with substantially different terms, or if existing liability terms are substantially changed, than such change is treated as derecognition of initial instrument and recognition of the instrument, and difference of book value are recorded in consolidated statement of profit or loss and other comprehensive income.

(c) Offset of financial instruments

Financial assets and financial liabilities are offset and net amount is presented in the consolidated statement of financial position if, and only if there is existing contractual and legal right to offset these instruments, as well as intention to recognize as net amount, or dispose assets simultaneously with liabilities.

(d) Fair value of financial instruments

Fair value of financial instruments, which are quoted on active marketplace at each reporting date, determined based on market quotes or dealer quotes (quotes for bid for long position and quotes for ask for short position), without transaction costs consideration.

Financial instruments which are not quoted on an active marketplace the fair value is determined based on application of valuation methods. These methods include use of prices recently performed transactions based on market conditions, use of current fair value of similar instruments, analysis of discounted cash flows and other valuation models.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost of inventories is determined using the FIFO method.

Impairment of non-financial assets

The Group performs the assessment of impairment indicators of the assets at each reporting date. If such indicators exist or if there is a requirement to perform impairment test, than Group perform the assessment of recoverability of asset. The recoverable amount of the asset or component, generating cash flows (“CGI”) is higher of fair value of the asset (CGI) less cost to sell and value in use of the asset (CGI). Recoverable amount is determined for separate asset, except for cases, when such asset does not generate cash flows, which dependent on cash flows generated by other assets or group of assets. If the book value of the asset or CGI exceeds its recoverable amount, the asset is impaired and written off to recoverable amount. When estimated value in use future cash flows are discounted at the discount rate before taxation, which reflects the current market estimate of time value of money and risks related to the asset. When determining fair value of the asset less cost to sell recent market deals (if any) are taken into account. If no such information is available, appropriate valuation model is used. These calculations are supported by valuation coefficients, market prices of freely convertible shares of the subsidiaries or other available indicators of the fair value.

If the book value of the asset or CGI exceeds its recoverable amount, the asset is considered as impaired and written down to recoverable amount. Under assessment of value in use the future cash flows are discounted at the rate net of tax, which reflects the present market value of cash flows and risks inherent to the asset. Under assessment of the fair value less cost to sell, the recent market transactions (if were existent) are taken into consideration. If no such transaction took place the relevant valuation model is applied. These computations are supported by estimated coefficients, active market quotes of subsidiaries shares and other available indicators of fair value.

Impairment losses from ongoing activities (including inventory impairment) are included in the consolidated statement of comprehensive income as a component of those expenses, which are related to the function of the asset, except for previously revalued real estate if revaluation was recognised in other comprehensive income. In such cases the impairment loss is deducted from other comprehensive income to the extent the revaluation gain was recognised.

The Group performs assessment of indicators whether indicators of impairment loss still exist or decreased on an annual basis. If such indicator exist the Group assess the recoverable amount of the asset or cash generating component. Previously recorded impairment losses recovered only if the changes in applied estimate of the recoverability of the asset, since most recent impairment loss recorded. The recovery is limited to the book have not exceeding its recoverable amount, as well as not exceeding book value less depreciation, which would be charged if such impairment loss would not be recorded. This recovery of loss is included in the statement of comprehensive income.

Cash and current deposits

Cash and current deposits in the consolidated statement of financial position include the cash in banks and petty cash.

Provisions

Provision are recorded if the Group has current liabilities (legal or constructive), as a result of the past events, with a probable outflow economic benefits required to settle liability, and such liability can be reliably measured. If the Group expects to recover all or part of the provisions, e.g. under insurance contracts, the recovery is recorded as a separate asset, but only when such recovery inflow is not doubted. Expenses, related to the provision, are added to the consolidated statement of comprehensive income less recovery/

Pensions and another employee benefits Post-employment benefits

The Group performs payments to Social Fund in accordance with pension scheme of the Republic of Tajikistan. The payments to social fund are fixed. The Group will not have any further legal or constructive liabilities to the Fund in relation to the retirement benefits if Fund will not have sufficient resources to perform payments to employees for services performed in current and previous years.

The Group performs fixed payments to State Social Fund amounting to 25% of salaries of the employees and recorded in the period as incurred. The Group does not have any other pension or other schemes or liabilities to perform pension payments to its employees.

Application of new and revised international financial reporting standards (IFRSs)

A number of new Standards and Interpretations has been issued and not yet adopted as at December 31, 2014 and had not been applied in preparation of these consolidated financial statements. Following Standards and Interpretations are relevant to operations of the Group. The Group intends to adopt these Standards and Interpretations from their effective dates. The Group has not analyzed potential effect of adoption of these standards on its consolidated financial statements.

The Group has adopted the following new or revised standards and interpretations issued by International Accounting Standards Board and the International Financial Reporting Interpretations Committee (the “IFRIC”) which became effective for the Group’s consolidated financial statement for the year ended December 31, 2014:

• IFRS 10 “Consolidated Financial Statements” - the new standard replaces the part of IAS 27 “Consolidated and Separate Financial Statements” that deals with consolidated financial statements and SIC 12 “Consolidation - Special Purpose Entities” and focuses on control in determining whether an investor needs to consolidate an investee. The definition of control under the new standard has been changed.

• IFRS 12 “Disclosure of Interests in Other Entities” - IFRS 12 is a new disclosure standard that sets out what entities need to disclose in their annual consolidated financial statements when they have interests in subsidiaries, joint arrangements, associates or unconsolidated structured entities.

• IAS 27 “Separate Financial Statements” (as revised in 2011) - the revised standard sets out the requirements regarding separate financial statements only. Most of the requirements in the revised Standard are carried forward unchanged from the previous standard.

• IAS 28 “Investments in Associates and Joint Ventures” (as revised in 2011) - similar to the previous Standard, the new Standard deals with how to apply the equity method of accounting. However, the scope of the revised Standard has been changed so that it covers investments in joint ventures as well because IFRS 11 requires investments in joint ventures to be accounted for using the equity method of accounting.

• Amendments to IAS 32 “Financial Instruments: Presentation” - Offsetting Financial Assets and Financial Liabilities - the amendments to IAS 32 clarify existing application issues relating to the offsetting requirements;

• Amendments to IAS 36 “Impairment of assets” - amendments clarifies disclosure of the information regarding recoverable amount for non-financial assets.

• Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” - Amendments make it clear that there is no need to discontinue hedge accounting if a hedging derivative is novated, provided certain criteria are met.

• IFRIC 21 “Levies” Provides guidance on when to recognise a liability for a levy apart from profit tax and imposed by a government.

The adoption of the new or revised standards did not have significant effect on the financial position or performance of the Group.

New and revised IFRSs in issue but not yet effective

At the date of authorization of these consolidated financial statements, the following new standards and interpretations were in issue, but not mandatorily yet effective, and which the Group has not early adopted:

• IFRS 9 “Financial Instruments” - IFRS 9 is a new standard for financial instruments that is ultimately intended to replace IAS 39 in its entirety. The replacement project consists of the following three phases: Phase 1: Classification and measurement of financial assets and financial liabilities. Phase 2: Impairment methodology. Phase 3: Hedge accounting;

• Amendments to IFRS 10 “Consolidated Financial Statements”, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 27 “Consolidated and Separate Financial Statements” - the amendments to IFRS 10 introduce an exception from the requirement to consolidate subsidiaries for an investment entity. Consequential amendments to IFRS 12 and IAS 27 have been made to introduce new disclosure requirements for investment entities.

• Amendments to IAS 19 “Employee contributions” clarify the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service.

• IFRS 11 “Joint arrangements”. Number of joint arrangements reduced to two: joint operation and joint venture. Accounting based on proportionate consolidation principle is cancelled for joint ventures, equity accounting is to be used instead.

• IFRS 14 “Regulatory Deferral Accounts” permits an entity which is a first-time adopter of International Financial Reporting Standards to continue to account, with some limited changes, for 'regulatory deferral account balances' in accordance with its previous GAAP, both on initial adoption of IFRS and in subsequent financial statements.

• IFRS 15 “Revenue from contracts with customers” provides a single model of Revenue accounting. It will replace all actual standards on Revenue recognition including IAS 18 “Revenue” and IAS 11 “Construction contracts” and corresponding interpretations.

• Amendments to IAS 16 “Property, plant and equipment” and IAS 38 “Intangible assets” clarify acceptable methods of depreciation and amortization

The Group does not expect these amendments to have a material effect on its financial position or results of operations

5. CRITICAL ACCOUNTING ESTIMATES AND PROFESSIONAL JUDGEMENTS IN APPLYING ACCOUNTING POLICY

The Group makes estimates and assumptions that affect within the next financial period the amounts of assets and liabilities recognised in consolidated financial statements. Estimates and judgments are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Management also makes certain judgments, apart from those involving estimations, in the process of applying the accounting policies. Judgments that have the most significant impact on the figures recorded in the consolidated financial statements and estimates that can cause a significant adjustment to the carrying amounts of assets and liabilities within the next financial period include:

Significant accounting judgments, estimates and assumptions

The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions at the end of the reporting period that affect the amounts of revenue, costs, assets and liabilities, presented in statements. However, uncertainty of these assumptions and estimates could result outcomes, that could require in future material adjustments of book value of asset or liability in respect of which such assumptions and estimates are made.

Judgments

In the process of applying the Group’s accounting policy, management has used the following judgments, which have the most significant effect on the amounts recognized in the consolidated financial statements:

Estimates and assumptions

The key assumptions about the future and other key sources of estimation of uncertainty at the reporting date, which may cause significant adjustments of the carrying value of assets and liabilities during the next financial year, are discussed below. Assumptions and estimates are based on the Group’s source data, which it had at the time of preparation of the consolidated financial statements. However, current circumstances and assumptions regarding the future are subject to change due to market changes or circumstances beyond the control of the Group. Such changes are reflected in the assumptions as they occur.

Impairment of non-financial assets

Impairment occurs when the carrying amount of an asset or the cash-generating unit, exceeds its recoverable amount, which is the higher of fair value less costs to sell and value in use. The fair value less costs to sell is based on available information on commercial deals of sales of similar assets or observable market prices less incremental costs incurred in connection with the disposal of an asset. The calculation of value in use is based on a discounted cash flow model. Cash flows are taken from the budget for the next five years and do not include restructuring activity, in conducting of which the Group does not have obligations or significant investment in future, which will improve the asset tested for impairment of cash generating unit. The recoverable amount is most sensitive to the discount rate used in the discounted cash flow model, and also to the expected cash inflows and the growth rate, used for extrapolation. More information about the key assumptions used to determine the recoverable amount of the various units, generating cash, including sensitivity analysis, is provided in Note 33.

The fair value of financial statements

In cases when the fair value of financial instruments and financial liabilities recorded in the consolidated statement of financial position can not be derived from active markets, they are determined using valuation techniques, including discounted cash flow model. As a source data for these models is used information from observable markets, but in those cases where this is not feasible, a certain proportion of judgment is required to determine fair value. The judgments include considerations of such data as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the fair value of financial instruments, recognised in consolidated financial statements.

Useful lives of property, plant and equipment

The Group reviews the estimated useful lives of property and equipment at the end of each annual reporting period. Useful life of property, plant and equipment was reconsidered afeter recognition of revaluation of property, plant and equipment as at December 31, 2013. During the financial year, Management of the Group did not change useful life of property, plant and equipment.

Market rate of borrowings received

The Group uses valuation techniques that include inputs that are not based on observable market date to estimate the fair value of non-current borrowings. Borrowings are discounted at a rate of 3.66% per annum as of December 31, 2014 (24% at December 31, 2013), which the Management of the Group has defined as the market rates on non-current borrowings.

Revaluation of property, plant and equipment

The following assumptions were used by the Management of the Group during the revaluation of property, plant and equipment:

	Assumptions		Forecast			After-
		2015	2016	2017	2018	Forecast period
a)	Tariffs increase (internal sales)	5%	10%	10%	10%	15%
b)	Tariff increase (export)	30%	5%	5%	5%	5%
c)	Production volume increase	5%	5%	5%	5%	5%
d)	Volume of export increase	5%	5%	5%	5%	5%
e)	Cost of sales increase	5%	5%	5%	5%	5%
f)	General and administrative expenses increaseincrease	10%	10%	10%	10%	10%
h)	Selling expenses increase	10%	10%	10%	10%	10%
g)	Adjustment on trading activities increase*	5%	5%	5%	5%	5%

*Tradung activity is related to purchase of electricity from Sangtuda-1 HPS, OJSC and Islamic Republic of Iran Company Sangob (Sangtuda-2 HPS) and selling it to consumers. Loss from trading activity was excluded from calculation of fair value of fixed assets and construction in progress. The Group purchases electricity from them at fixed prices which are higher than sale tariffs. According to purchase agreement with Sangtuda-1 HPS, OJSC electricity purchase price must be increased annually not less then 4%. According to additional agreement between Islamic Republic of Iran Company Sangob and the Group purchase prices must be increased 5% annually starting from 2015.

6. RESTATEMENT AND RECLASSIFICATION

Restatements

In 2014 the Group made retrospective adjustment of the consolidated financial statements for the year ended December 31, 2013 in accordance with IFRS (IAS) 8 "Accounting Policies, Changes in Accounting Estimates and Errors" in connection with the corrections of errors and recognition of property, plant and equipment revaluation. Comparative amounts have been presented and have been adjusted in the previous period.

Effect of changes in the consolidated financial statements for the year ended December 31, 2013 is presented below:

	As previously reported on article of financial statement December 31, 2013	Amount of adjustment	Reclassification amount	Restated as in the consolidated financial statements December 31, 2013
Consolidated statement of financial position lines: NON-CURRENT ASSETS :
Property, plant and equipment	5,050,251	4,268,901	-	9,319,152
Intangible assets	213	-	-	213
Non-current advances paid	1,303	-	103,616	104,919
Non-current investments	182,512	(113)	-	182,399
Deferred tax assets	111,034	(111,034)	-	-
Other non-current assets	18	-	-	18
CURRENT ASSETS:
Inventories Trade and other accounts	1,150,853	(150,781)	-	1,000,072
receivable	453,653	(11,823)	2,621	444,451
Advances paid	264,433	(60,822)	(120,112)	83,499
Taxes paid in advance	-	(7,349)	13,645	6,296
Cash and cash equivalents	3,001	-	-	3,001
SHAREHOLDERS’ EQUITY:
Share capital	(383,836)	-	-	(383,836)
Foreign currency transactions Provisions for property, plant and	9	-	-	9
equipment revaluation	-	(5,781,686)	-	(5,781,686)
Reserve capital	(24,302)	-	-	(24,302)
Retained earnings	(25,110)	1,705,796	18,110	1,698,796
NON-CURRENT LIABILITIES:
Non-current borrowed funds Deferred income - non-current	(1,048,405)	-	170,000	(878,405)
portion	(1,823,831)	8,495	-	(1,815,336)
Deferred tax liabilities	-	-	-	-
CURRENT LIABILITIES
Trade and other accounts payable	(1,137,902)	109,720	(87,400)	(1,115,582)
Advance received	(105,652)	405	69,291	(35,956)
Tax payable	-	24,113	(412,212)	(388,099)
Income taxes payable	(4)	-	4	-
Current loans received	(1,225,441)	10,324	(527,962)	(1,743,079)
Deferred income - current portion	-	(1,443)	-	(1,443)
Other liabilities and accrued expenses	(1,442,797)	(2,703)	770,399	(675,101)

7. PROPERTY, PLANT AND EQUIPMENT

As of December 31, 2014 and 2013 property, plant and equipment of the Group are presented as
follows:

	Buildings and constructions	Machinery and equipment	Other	Construction in progress	Total
At cost December 31, 2012 (restated)	2,672,164	2,830,545	128,289	846,407	6,477,405
Additions		46,415	11,378	394,480	452,273
Internal movement	37,477	148,522	3,855	(189,854)	-
Disposals	(1,209)	(41,452)	(3,240)	-	(45,901)
Decrease in value due to disposal of accumulated depreciation during recognition of revaluation	(975,277)	(745,417)	(86,546)		(1,807,240)
Increase of value due to recognition of revaluation	4,027,441	1,660,911	24,268	69,066	5,781,686
December 31, 2013 (restated)	5,760,596	3,899,524	78,004	1,120,099	10,858,223
Aditions	4,251	76,822	656	424,275	506,004
Internal movement	74,542	259,432	4,575	(338,549)	-
Disposals	(14,130)	(2,093)	(708)	(9,600)	(26,531)
Decrease in revalued amount due to disposal of related assets	(41,667)	(3,196)	(1,921)	(10,500)	(57,284)
December 31, 2014	5,783,592	4,230,489	80,606	1,185,725	11,280,412
Accumulated depreciation December 31, 2012 (restated)	918,795	646,820	73,919	(386)	1,639,148
Charge for the year	57,611	107,313	15,145		180,069
Disposals	(1,129)	(8,716)	(2,518)	-	(12,363)
Decrease in value due to disposal of accumulated depreciation during recognition of revaluation	(975,277)	(745,417)	(86,546)		(1,807,240)
Recognition of impairment losses in profit and loss	522,977	872,123	32,824	111,533	1,539,457
December 31, 2013 (restated)	522,977	872,123	32,824	111,147	1,539,071
Charge for the year	323,073	538,633	9,282		870,988
Disposals	(4,782)	(1,244)	(491)	-	(6,517)
Internal movement	(351)	2,793	(2,442)	-	-
Decrease of impairment due to disposal		(12,756)	(924)	(1,508)	(15,188)
December 31, 2014	840,917	1,399,549	38,249	109,639	2,388,354
Net book value At December 31, 2013 (restated)	1,506,631	1,944,364	79,587	1,519,669	9,319,152
At December 31, 2014	4,942,675	2,830,940	42,357	1,076,086	8,892,058

Fixed assets and construction in progress are not insured.

The Group monitors the use of its assets, but because the Group's sole shareholder is the Government of the Republic of Tajikistan, it is not able to write-off fixed assets without the permission of the State Committee on Investments and Property Management of the Republic of Tajikistan.

Fixed assets received as grant include mainly electrical equipment and power transmission devices transferred under the control of the Group by the Government of the Republic of Tajikistan and by electricity consumers - legal entities and individuals. These grants were recognized as deferred income in accordance with IAS 20 which is amortized equally over the useful life of the granted assets. As at December 31, 2014 and 2013 amount of deferred income equaled to 19,921 thousand somoni and 12,313 thousand somoni, respectively (Note 18).

The Group borrows funds especially to get assets which meet certain requirements and determine the amount of borrowing costs to be capitalizated as the sum of the actual costs incurred on these loans during the period. In 2014 and 2013 the Group capitalized 373,917 thousand somoni and 205,719 thousand somoni respectively for the cost of construction in progress.

As of December 31, 2014 and 2013 the Group did not have fixed assets pledged as collateral as security on liabilities.

As of December 31, 2014 amount of fully depreciated property and equipment equaled to 105,373 thousand somoni. As of December 31, 2013 there were no fully depreciated fixed assets.

The Group adopted a revaluation model for property and equipment accounting in accordance with IAS 16 Property, plant and equipment. In 2014 was performed and recognized revaluation of property, plant and equipment as of December 31, 2013.

Before recognition of revaluation the carrying value of fixed assets at December 31, 2013 amounted to 6,883,777 thousand somoni, accumulated depreciation amounted to 1,806,854 thousand somoni.

The following assumptions were used by the Management of the Group during the revaluation of property, plant and equipment:

	Assumptions	Forecast				After-
		2015	2016	2017	2018	forecast period
a)	Tariffs increase (internal sales)	5%	10%	10%	10%	15%
b)	Tariff increase (export)	30%	5%	5%	5%	5%
c)	Production volume increase	5%	5%	5%	5%	5%
d)	Volume of export increase	5%	5%	5%	5%	5%
e)	Cost of sales increase	5%	5%	5%	5%	5%
f)	General and administrative expenses increase	10%	10%	10%	10%	10%
h)	Selling expenses increase	10%	10%	10%	10%	10%
g)	Adjustment on trading activities increase*	5%	5%	5%	5%	5%

* Tradung activity is related to purchase of electricity from Sangtuda-1 HPS, OJSC and Islamic Republic of Iran Company Sangob (Sangtuda-2 HPS) and selling it to consumers. Loss from trading activity was excluded from calculation of fair value of fixed assets and construction in progress. The Group purchases electricity from them at fixed prices which are higher than sale tariffs. According to purchase agreement with Sangtuda-1 HPS, OJSC electricity purchase price must be increased annually not less then 4%. According to additional agreement between Islamic Republic of Iran Company Sangob and the Group purchase prices must be increased 5% annually starting from 2015.

8. INTANGIBLE ASSETS

As of December 31, 2014 and 2013 the Group's intangible assets are as follows:

	Intangible assets
Cost As at 31 December 2012 (restated)	323
Additions	11
Disposals	-
As at 31 December 2013 (restated)	334
Additions	127
Disposals	-
As at 31 December 2014	461
Accumulated depreciation As at 31 December 2012 (restated)	86
Accrued for the period	35
Disposals	-
As at 31 December 2013 (restated)	121
Accrued for the period	37
Disposals	-
As at 31 December 2014	158
Net book value As at 31 December 2013 (restated)	213
As at 31 December 2014	303

9. NON-CURRENT ADVANCES PAID

As of December 31, 2014 and 2013 the Group’s long- term advances paid are as follows:

	December 31, 2014	December 31, 2013 (restated)
Long- term advances paid	134,598	104,919
	134,598	104,919

As of December 31, 2014 and 2013 non-current advances paid include advances for the construction of production facilities and supply of equipment.

10. NON-CURRENT INVESTMENTS

As of December 31, 2014 and 2013 the Group’s long- term investments are as follows:

	December 31, 2014	December 31, 2013 (restated)
Investment in Sangtuda-2 HPS	150,796	150,796
Investment in Roghun HPS	31,603	31,603
Others	113	113
Allowance on impairment of non-current investments	(113)	(113)
	182,399	182,399

In 2006 the Group has signed agreement with OJSC Sangob on financing of the construction of Sangtuda HPS in the amount of 40,000 thousand USD. In accordance with the agreement after 12 years of use, the Hydropower Plant would be transferred to the Group. As at 31 December 2012 the Group has fully paid obligations under the agreement. In accordance with terms of contract on purchase of electricity the Group purchases electricity from Sangtuda HPS at fixed price which should be incresed by 5% annualy starting from 2015.

In 2010 the Group acquired the shares of Roghun HPS, OJSC amounting to 23,700 thousand Somoni. The obligations of Roghun HPS, OJSC to the Group in the amount of 7,933 thousand somoni were converted into shares at the agreement of both parties and the Ministry of Finance of the Republic of Tajikistan.

The movement in the provision for impairment of non-current investments for the years ended December 31, 2014 and 2013 presented as follows:

	2014	2013
As at January 1	(113)	(113)
Accrual of provision	-	-
As at December 31	(113)	(113)

11. INVENTORY

As of December 31, 2014 and 2013 inventory of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
Materials and disposables	738,716	857,585
Spare parts	173,181	169,994
Oil products	92,555	50,817
Goods	24,079	33,942
Construction materials	4,133	4,379
Supplies and other	24,029	34,724
Allowance for cost decrease to net realizable value of inventories	(156,175)	(151,369)
	900,518	1,000,072

The movement in the allowance for cost decrease to net realizable value of inventories for the years

ended December 31, 2014 and 2013 presented as follows:

	2014	2013
As at January 1	151,369	587
Accrual of allowance	4,806	150,782
As at December 31	156,175	151,369

12. TRADE AND OTHER ACCOUNTS RECEIVABLE

As of December 31, 2014 and 2013 trade and other accounts receivable of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
Accounts receivable for electricity	727,375	686,307
Accounts receivable for heat	7,871	7,146
Accounts receivable for goods and services	4,795	6,076
Other receivables	574	1,414
	740,615	700,943
Allowance on bad debts	(379,616)	(256,492)
	360,999	444,451

The movement in the allowance on bad debts for the years ended December 31, 2014 and 2013

presented as follows:

	2014	2013
As at January 1	256,492	578,814
Accrual of allowance	123,634	73,570
Write-off	(510)	(395,892)
As at December 31	379,616	256,492

The most significant debtors of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
SUE "Tajik Aluminum Company"	376,736	212,163
Da Afganistan Breshna Sherkat	26,189	12,503
OJSC "Tochikhimprom"	15,154	13,866
SUE "Dushanbevodokanal"	9,268	9,340
Dushanbe heating network enterprise	7,777	7,034

13. ADVANCES PAID

As of December 31, 2014 and 2013 prepayments of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
Advances paid for goods and services	71,910	75,074
Advances paid for construction works	22,787	57,732
Advances to employees	489	928
Other advance prepayments	31	931
Allowance for doubtful advances paid	(61,325)	(51,166)
	33,892	83,499

The movement in the allowance for doubtful amount of advances for the years ended December 31, 2014 and 2013 are as follows:

	2014	2013
As at January 1	51,166	-
Accrual of allowance	10,159	51,166
As at December 31	61,325	51,166

14. CASH AND CASH EQUIVALENTS

As of December 31, 2014 and 2013 prepayments of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
Cash in bank accounts	10,059	2,153
Cash on hand	948	812
Cash in foreign bank account	-	26
Cash in transit	-	9
Restricted cash	-	1
	11,007	3,001

15. EQUITY

As at December 31, 2014 and 2013 announced, issued and paid capital of the Group amounted to

383,836 thousand somoni.

In 2014 and 2013 the Group did not announce any dividends.

16. RESERVE CAPITAL

As at December 31, 2014 and 2013 the reserve formed from retained earnings based on decision of

the sole shareholder of the Group amounted to 24,302 thousand somoni.

17. BORROWED FUNDS

As of December 31, 2014 and 2013 non-current borrowed funds of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
Loans received	3,089,691	2,700,451
Discount on loans received	(103,915)	(1,822,046)
	2,985,776	878,405

The Group uses valuation techniques that include inputs that are not based on observable market date to estimate the fair value of non-current borrowings. Borrowings are discounted at a rate of 3.66% per annum as of December 31, 2014 (24% at December 31, 2013), which the Management of the Group has defined as the market rates on non-current borrowings.

Movement of discount on loans received for the years ended December 31, 2014 and 2013 are as follows:

	2014	2013
As at January 1	1,822,046	1,838,192
Recognition of discount	-	146,434
Amortization of discount	-	(169,544)
Effect of change in discount rate	(1,888,963)	-
Exchange difference	170,832	6,964
As at December 31	103,915	1,822,046

As of December 31, 2014 and 2013 current borrowed funds of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
Current portion of non-current debt	856,587	600,854
Loans received from OJSC Orienbank	563,128	588,350
Loans received from the Ministry of Finance of the Republic of Tajikistan	50,067	32,084
Interest payable	761,018	517,638
Front-end fee payable	8,086	4,153
	2,238,886	1,743,079

Current portion of non-current loans allocated in accordance with the repayment schedule of principal

on loans.

Loan #	Lender	Purpose of the loan	Origination date	Maturity date	Loan amount under the agreement	Interest rate
2010 (024-029 ВТ)	EximBank	Construction of high-tension transmission line 220 kilowatt «Khuj and-Ayni»	16 December 2010	21 September 2036	35,055 thousand US Dollars	3%
1141P	OFID	For expansion of cooperation in energy sector between Tajikistan and Afghanistan	6 September 2007	15 March 2027	8,500 thousand US Dollars	1%
0030	Islamic Developmentn Bank	For expansion of cooperation in energy sector between Tajikistan and Afghanistan	31 October 2007	30 November 2031	14,067 thousand US Dollars	3%
0124- TAJ (SF)	Asian Development Bank	Project on reconstruction of ОРУ-500 kilowatt on Nurek HPP	26 December 2008	15 October 2033	54,770 thousand US Dollars	5%
No number	KfW International Development	For change of transmittal equipment 220 kilowatt on Nurek HPP	25 July 2008	1 November 2033	18,000 thousand Euro	8%
Grant №566TJ	Development Association	Emergency Energy Recovery Assistance Project	16 July 2010	15 September 2030	9,900 thousand SDR	6%
Grant №H372 TJ)	Development Association International	Emergency increasing of volume and solidity of import of electricity especially in winter period	30 October 2008	15 September 2028	4,342 thousand US Dollars	6%
Credit №4093 TJ	Development Association	Energy Loss Reduction Project	6 December 2005	15 June 2026	11,183 thousand US Dollars	6%
06016.	EximBank	For construction of power grid 220 кw «Lolazor-KСatlon»	19 April 2006	21 February 2028	55,228 thousand US Dollars	3%
06015.	EximBank	For construction of power grid 500 кw «ug-Sever	19 April 2006	21 February 2028	267,219 thousand US Dollars	2%
665	Kuweit fund	Reconstruction of power grid of Dushanbe city	24 June 2003	15 November 2030	3,600 thousand Kuweit Dinars	0%
IDB -0022	Islamic Development Bank	Construction of small HPPs	18 April 2004	30 June 2031	6,623 thousand Islamic Dinars	3.5%
IDB -011-029- 031	Islamic Development Bank	Solid power supply in rural regions of Tajikistan	29 January 2001	31 December 2021	7,000 thousand Islamic dinars	5%
Swiss Government	Swiss Government	For financing of Swiss Subproject on energy loss reduction	8 September 2003	1 August 2017	8,862 thousand US Dollars	2%
2303	Asian Development Bank	For construction of intersystem power grid	22 February 2007	1 December 2031	8,500 thousand US Dollars	Libor+
1817	Asian Development Bank	Power grid rehabilitation project	26 February 2001	15 December 2025	39,947 thousand US Dollars	1,5%
06015-06016	EximBank	Additional construction of high tension transmission line 500/220 кw Юг-север, Lolazor-Khatlon	15 May 2009	21 August 2028	51,000 thousand US Dollars	5%
1912-TAJ (SF)	Asian Development Bank	Emergency project on stabilisation of Baipaza landslide	20 October 2003	1 December 2033	5,320 thousand US Dollars	2,5%
0213-TAJ -28 БТ	Asian Development Bank	Regional project on electricity transmission	23 November 2010	15 September 2036	112,500 thousand US Dollars	5%
KFW-034БТ	KFW	Construction of distributing facility of 220кw on Nurek HPS	28 June 2011	30 May 2032	7,000 thousand US Dollars	3%
TOTAL № (170)-030 БТ	EximBank	Constrcution of united electricity system in Northern Tajikistan	20 July 2011	21 March 2031	26,464 thousand US Dollars	3%
Swiss Government	Development Association	Electricity Loss Reduction Project	29 June 2007	30 June 2012	6,600 thousand US Dollars	6%
Grant №TF096573- 035 BT	Swiss trust fund	Electricity Loss Reduction Project	20 December 2011	15 September 2031	3,150 thousand US Dollars	6%
266-025	Exim Bank	Reconstruction of Regar substation	31 July 2013	31 July 2033	35,043 thousand US Dollars	6%
n/a	EBRD	PIU	n/a	n/a	158 thousand US Dollars	n/a
41538	EBRD	PIU	n/a	05 April 2026	10,150 thousand US Dollars	Libor 4

18. DEFERRED INCOME

As of December 31, 2014 and 2013 deferred income of the Group are as follows:

Non-current portion of deferred income:

	December 31, 2014	December 31, 2013 (restated)
Deferred income on grants received	185,074	141,195
Deferred income on discounting of non-current borrowed funds at the rate lower than market rate	89,007	1,662,232
Deferred income on fixed assets received as grant	19,027	11,909
	293,108	1,815,336

Current portion of deferred income:

	December 31, 2014	December 31, 2013 (restated)
Deferred income on grants received	1,138	1,039
Deferred income on fixed assets received as grant	894	404
	2,032	1,443

Deferred income on grants received is presented in the form of targeted funding for the construction of fixed assets and assets obtained free from the the state bodies, which include mainly electrical equipment and facilities for power transfer devices transferred to the control of the Group by the Government of the Republic of Tajikistan.

Deferred income on fixed assets received as grant represents by fixed assets transferred under the control of the Group by the electricity consumers - legal entities and individuals. These grants were recognized as deferred income in accordance with IAS 20 which is amortized equally over the useful life of the granted assets. As at December 31, 2014 and 2013 amount of deferred income equaled to 19,921 thousand somoni and 12,313 thousand somoni, respectively

Movement of deferred income on discounting of non-current borrowed funds at the rate lower than market rate for the years ended December 31, 2014 and 2013 was as follows:

	2014	2013
As at January 1	1,662,232	1,685,342
Recognition of deferred income	-	146,434
Amortization of deferred income	-	(169,544)
Effect of change in discount rate recognized in the statement of profit or loss and other comprehensive income	315,738	-
Effect of change in discount rate	1,888,963)	-
As at December 31	89,007	1,662,232

Movement of deferred income on grants received for the years ended December 31, 2014 and 2013

was as follows:

	2014	2013
Non-current portion
As at January 1	141,195	98,383
Grants received for the year	45,017	43,851
Transferred to current part	(1,138)	(1,039)
As at December 31	185,074	141,195
	2014	2013
Current portion
As at January 1	1,039	741
Transferred from non-current part	1,138	1,039
Amortized during the year	(1,039)	(741)
As at December 31	1,138	1,039
Movement of deferred income on fixed assets received as grant for the years ended December 31, 2014 and 2013 was as follows:
	2014	2013
Non-current portion
As at January 1	11,909	-
Grants received for the year	8,136	24,636
Impairment of grants received	-	(12,214)
Transferred to current part	(1,018)	(513)
As at December 31	19,027	11,909
	2014	2013
Current portion
As at January 1	404	-
Transferred from non-current part	1,018	513
Amortised during the year	(528)	(109)
As at December 31	894	404

19. TRADE AND OTHER ACCOUNTS PAYABLE

As of December 31, 2014 and 2013 trade and other accounts payable of the Group are as follows:

	December31, 2014	December 31, 2013 (restated)
Accounts payable for goods and services	651,045	509,943
Accounts payable for electricity	641,957	573,823
Accounts payable for equipment	12,377	9,273
Accounts payable for construction work	4,754	21,386
Other accounts payable	25,083	1,157
	1,335,216	1,115,582
Below is information on the largest creditors:
	December 31, 2014	December 31, 2013 (restated)
OJSC Sangtuda HPS-1	439,515	427,187
Company Sangob from Islamic Republic of Iran	190,253	133,075
Talco Management Limited	123,511	53,634
LLC Zarvora	22,844	14,590
LLC Safoi Poytakht	22,417	28,457
LLC Sintez	21,939	22,182

20. ADVANCES RECEIVED

As of December 31, 2014 and 2013 advances received by the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
Advances received for electricity	55,945	35,227
Advances received for heat	424	406
Other advances received	232	323
	56,601	35,956

21. TAXES PAYABLE

As of December 31, 2014 and 2013 taxes payable of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
VAT payable	156,875	228,449
Road tax payable	10,307	84,722
Social tax payable	8,884	18,620
Personal income tax payable	4,965	8,542
Inocme tax payable	497	8,955
Royalty tax payable	-	30,550
Other taxes	450	8,261
	181,978	388,099

22. OTHER PAYABLES AND ACCRUED EXPENSES

As of December 31, 2014 and 2013 other payables and accrued expenses of the Group are as follows:

	December 31, 2014	December 31, 2013 (restated)
Penalties on overdue loans received	621,747	598,204
Salary payable	28,330	58,966
Unused vacation provision	16,956	11,889
Other liabilities	4,918	6,042
	671,951	675,101
The movement in the unused vacation provision during the years ended December 31, 2014 and 2013 were as follows:
	2014	2013
As at January 1	11,889	11,232
Accrual of provision	5,067	657
As at December 31	16,956	11,889

23. INCOME TAX

The Group measures and records its current income tax payable and its tax bases in its assets and liabilities in accordance with the tax regulations of the Republic of Tajikistan where the Group operates, which may differ from IFRS. For the years ended December 31, 2014 and 2013 on the territory of the Republic of Tajikistan, the income tax rate for production legal entities was 15% according to the tax law in that jurisdiction.

The Group is subject to certain permanent tax differences due to the non-tax deductibility of certain expenses and certain income being treated as non-taxable for tax purposes.

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Temporary differences as at December 31, 2014 and December 31, 2013 relate mostly to different methods of income and expense recognition as well as to temporary differences generated by tax - book bases’ differences for certain assets and liabilities.

	Year ended 31 December 2014	Year ended 31 December 2013 (restated)
Current income tax expenses	15,723	23,546
Changes in deferred income tax	(107,377)	(71,912)
Income tax benefit	(91,654)	(48,366)

Reconciliation of tax and accounting profits for the years ended December 31, 2014 and 2013 is as follows:

	Year ended 31 December 2014	Effective tax rate	Year ended 31 December 2013	Effective tax rate
Loss before taxes	(1,828,328)		(2,380,820)
Tax at statutory rate (15%)	(274,249)	(15%)	(357,123)	(15%)
Tax effect on permanent differences	182,595	10%	308,757	13%
Savings on income tax	(91,654)	(5%)	(48,366)	(2%)

Temporary differences as at December 31, 2014 and 2013 comprise:

	December 31, 2012 (restated)	Recognized in the statement of profit or loss and other compre­hensive income	December 31, 2013 (restated)	Recognized in the statement of profit or loss and other compreh­ensive income	December 31, 2014
Deferred tax assets on income:
Tax loss carry forward	-	576,871	576,871	501,806	1,078,677
Allowance for doubtful debts	578,814	(322,322)	256,492	123,124	379,616
Deferred income	117,757	36,789	154,546	51,587	206,133
Allowance for impairment to net realizable value of inventories	587	150,782	151,369	4,806	156,175
Allowance for doubtful advances paid paid	-	51,166	51,166	10,159	61,325
Unused vacation provision	11,232	657	11,889	5,067	16,956
Impairment allowance on non-current investments	113	-	113	-	113
Impairment allowance of property,plant and equipment	7,569	(7,569)	-	-	-
Total deferred tax assets	716,072	486,374	1,202,446	696,549	1,898,995
Deferred income tax liabilities:
Discount on borrowed funds	152,850	6,963	159,813	(144,905)	14,908
Total deferred income tax liabilities	152,850	6,963	159,813	(144,905)	14,908
Net deferred income tax assets	563,222	479,411	1,042,633	841,454	1,884,087
Net deferred tax assets	84,483	71,912	156,395	107,377	263,772
Allowance on net deferred income tax assets	(84,483)		(156,395)		(263,772)
Net deferred income tax assets less allowance	-		-		-

The net deferred income tax assets as of December 31, 2014 have been recognized using the tax rate of 14%, because the Management of the Group expects income tax in the Republic of Tajikistan to change within 2015 year down to 14%.

24. REVENUE

The Group's revenues from sales of electricity and heat energy for the years ended December 31,

2014 and 2013 are as follows:

	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Revenue from the sale of electricity	1,303,595	1,248,771
Revenue from the sale of heat	2,420	3,041
Other revenue	-	69
	1,306,015	1,251,881

25. COST OF SALES

The cost of electricity produced for the years ended December 31, 2014 and 2013 were as follows:

	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Cost of electricity	989,933	510,692
Cost of heat	75,199	88,943
	1,065,132	599,635
Cost of sales includes the following articles:
	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Depreciation of fixed assets	497,645	29,557
Cost of purchased electricity	294,468	295,685
Inventories	106,543	128,388
Salary and related taxes	82,755	73,993
Taxes	33,209	34,630
Other	50,512	37,382
	1,065,132	599,635

26. SELLING EXPENSES

The selling expenses of the Group for the years ended December 31, 2014 and 2013 are as follows:

	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Depreciation of fixed assets	366,075	127,511
Salary and related taxes Accrual of the amount of allowance for doubtful accounts	140,621	151,890
receivable	123,634	73,570
Inventories	110,283	140,524
Accrual of the amount of allowance for doubtful advances	10,159	51,166
Service expenses	10,091	16,456
Other	58,930	60,006
	819,793	621,123

Distribution costs include household expenses of the branches - power grids, are engaged in the

transmission and sale of electricity.

27. GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the years ended December 31, 2014 and 2013 are as follows:

	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Fines and penalties on taxes	42,696	100,481
Taxes other than income tax	41,307	24,069
Salary and related taxes	16,555	15,478
Professional services	6,882	8,752
Depreciation of fixed assets	3,346	2,987
Commission of the bank	436	214
Other	16,379	9,348
	127,601	161,329

General and administrative expenses include the expenses of the HQ, the Center of projects

implementation, DPMTO representative offices in the Russian Federation, subsidiary – Limited

Liability Company Barq - Servis

Annually, as a result of the tax audit carried out by tax authorities the Group accrues fines and

penalties for different taxes.

28. FINANCE COSTS

Financial expenses for the years ended December 31, 2014 and 2013 are as follows:

	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Interest expenses on loans	276,318	239,049
Penalties on loans	200,351	187,850
Amortization of discount on borrowed funds	-	169,544
	476,669	596,443

29. OTHER NON-OPERATING EXPENSES, NET

Net non-operating expenses for the years ended December 31, 2014 and 2013, are as follows:

	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Tax penalties write-off	170,000	-
Income from sale of Inventories, net	2,892	8,679
Effect on deferred income from change in interest rate of discounting	(315,738)	-
Accrual of allowance on deferred tax assets	(107,377)	(71,912)
Losses on disposal of property, plant and equipment	(51,198)	(3,668)
Accrual of allowance for impairment to net realizable value of inventories	(4,806)	(150,782)
Amortization of deferred income on non-current borrowed funds	-	169,544
Losses from the revaluation of property, plant and equipment	-	(1,539,457)
Other	(23,963)	(42,443)
	(330,190)	(1,630,039)

30. FAIR VALUE OF FINANCIAL INSTRUMENTS

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions As no readily available market exists for large part of the Group’s financial instruments, judgment is necessary in arriving at fair value, based on current economic conditions and specific risks attributable to the instrument.

As at December 31, 2014 and 2013, the following methods and assumptions were used by the Group to estimate the fair value of each class of financial instrument for which it is practicable to estimate such value:

Cash and cash equivalents - The carrying amount represents their fair value.

Trade and other receivables- The carrying amount is considered a reasonable estimate of their fair value as the allowance for estimated doubtful amounts is considered a reasonable estimate of the discount required to reflect the impact of credit risk.

Trade and other payables- The carrying amount is a reasonable estimate of their fair value due to their current nature.

Non-current borrowing - The carrying amount is considered a reasonable estimate of their fair value as applied interest rate on non-current borrowings is considered to be a reasonable approximation of the market rate with reference to loans with similar credit risk level and maturity period at the reporting date.

Fair values are primarily determined using quoted market prices or standard pricing models using observable market inputs where available and are presented to reflect the expected gross future cash in/outflows. The Group classifies the fair values of its financial instruments into a three level hierarchy based on the degree of the source and observability of the inputs that are used to derive the fair value of the financial asset or liability as follows:

Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can assess at the measurement date; or

Level 2 Inputs other than quoted inputs included in Level 1 that are observable for the assets or liabilities, either directly or indirectly; or

Level 3 Unobservable inputs for the assets or liabilities, requiring the Group to make market based assumptions.

Level 1 classifications primarily include financial assets and financial liabilities that are exchange traded, whereas Level 2 classifications primarily include financial assets and financial liabilities which derive their fair value primarily from exchange quotes and readily observable quotes. Level 3 classifications primarily include financial assets and financial liabilities which derive their fair value predominately from models that use applicable market based estimates surrounding location, quality and credit differentials. In circumstances where the Group cannot verify fair value with observable market inputs (Level 3 fair values), it is possible that a different valuation model could produce a materially different estimate of fair value.

It is the Group’s policy that transactions and activities in trade related financial instruments be concluded under master netting agreements or long form confirmations to enable balances due to/from a common counterparty to be offset in the event of default, insolvency or Groupruptcy by the counterparty.

The following tables show the fair values of financial assets and financial liabilities as at 31 December 2014 and 2013. Other assets and liabilities which are measured at fair value on a recurring basis are cash and cash equivalents. There are no nonrecurring fair value measurements.

	Level 1	Level 2	Level 3	December 31, 2014 Total
FINANCIAL ASSETS:
Cash and cash equivalents	-	-	11,007	11,007
Trade and other accounts receivable	-	-	360,999	360,999
Non-current investments	-	-	182,399	182,399
TOTAL FINANCIAL ASSETS			554,405	554,405
FINANCIAL LIABILITIES:
Trade and other accounts payable	-	-	1,335,216	1,335,216
Current borrowed funds	-	-	2,238,886	2,238,886
Non-current borrowed funds	-	-	2,985,776	2,985,776
Other current payables and accrued
expenses	-	-	671,951	671,951
TOTAL FINANCIAL LIABILITIES			7,231,829	7,231,829
	Level 1	Level 2	Level 3	December 31, 2013 Total
FINANCIAL ASSETS:
Cash and cash equivalents	-	-	3,001	3,001
Trade and other accounts receivable	-	-	444,451	444,451
Non-current investments	-	-	182,399	182,399
TOTAL FINANCIAL ASSETS	-	-	629,851	629,851
FINANCIAL LIABILITIES:
Trade and other accounts payable	-	-	1,115,582	1,115,582
Current borrowed funds	-	-	1,743,079	1,743,079
Non-current borrowed funds	-	-	878,405	878,405
Other current payables and accrued expenses	-	-	675,101	675,101
TOTAL FINANCIAL LIABILITIES	-	-	4,412,167	4,412,167

31. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(a) Changes in the energy sector

Industry as well as the other systemssystem of the Republic of Tajikistan is experiencing significant restructuring and reform (the process of transformation of the country with a planned economy into a state with a market economy), and the future direction of reforms and results are unknown at this time. Potential reforms in tariff policy, repayment of debt by state enterprises, reorganization of the market of gross sale and implementation of measures to promote competition in gross sale market, can have a significant impact on companies in this industry. Due to uncertainty regarding the ongoing changes in the industry, management is unable to assess the impact of reforms on the present and future financial position of the Group. However management believes that these uncertainties will have not a significant impact on operational activity compared to other companies operating in the Republic of Tajikistan.

(b) Social commitments and pensions and retirement plans

The Group incurs expenses on development and maintenance of social objects and welfare of its employees and other social needs.

Employees of the Group receive pension benefits in accordance with the laws and regulations of the Republic of Tajikistan.

As at 31 December 2014, the Group was not liable for any supplementary pensions, post- retirement health care, insurance benefits, or retirement indemnities to its current or former employees.

(c) Insurance

As at 31 December 2014, the Group had no insurance coverage in respect of its assets, activities and

its public obligations and other risks, to be insured. Since the absence of insurance does not mean

reducing the cost of the assets or incurrence of liabilities , provisions were not considered in the

consolidated financial statements for uncertain losses.

(d) Environment protection issues

Official laws of the Republic of Tajikistan #58 “On environment protection” dated 15 June 2004 and #228 “On air protection” dated 01 February 1996 are aimed to protect atmosphere from pollution and established maximum permissible level of emission of harmful substances.

Integrated control and permits for allowable emissions of pollutants are conducted in accordance with the article 11 “Bask requirements for the valuation of atmosphere ah quahty” and article 13 “Measurement and control of emissions into the atmosphere”.

The Republic of Tajikistan has acceded to the Kyoto Protocol and ratified it on 22 November 2008. After the ratification of Kyoto Protocol coordination is assigned to Committee for environmental protection under the Government of the Republic of Tajikistan.

Legislation for environmental protection in the Republic of Tajikistan is in the process of development and government agencies continuously revise standards for the application of such legislation. The Group periodically evaluates its obligations under environmental regulations. As obligations are defined, they are recognized immediately in the consolidated statements. Potential liabilities that may arise as a result of changes in existing regulations, litigation in civil cases or legislation can not be estimated with any certainty, but could be significant. Under the existing system of control and penalties for non-compliance with the existing legislation, Management believes that at the moment there are no significant liabilities related to environmental damage.

(e) Litigation

In Management’s opinion at present time there are no any pending legal proceedings or other claims, which could have a material adverse effect on the financial results and financial position of the Group, or which would not be accrued or disclosed in these consolidated financial statements.

(f) Technical risks

Reconstruction of the electric power industry is dictated by the current situation in the energy sector due to the rapid deterioration of the technical condition of the fixed assets of the Group. Implementation of current and capital repairs is not enough; new construction, rehabilitation, reconstruction and technical re-equipment are required in accordance with technical progress.

Thus technical risk of impairment is high.

(g) Capital commitments

As at December 31, 2014 and 2013 the Group had capital commitments to continue financing the

constructions and maintainance of infrastructure for generation, transmission and distribution of the

electricity in the Republic of Tajikistan.

32. TRANSACTIONS WITH RELATED PARTIES

In considering each possible related party relationship, attention is directed to the substance of the

relationship, and not merely the legal form.

For the years ended December 31, 2014 and 2013 Remuneration of key management was as follows:

	Year ended December 31, 2014	Year ended December, 31 2013 (restated)
Salary and bonuses	205,347	192,245
Contributions to social fund	51,337	48,061
	256,684	240,306

Transactions with state-owned companies

Exceptions to disclosure requirements introduced in IAS 24 (as revised in 2010) have been applied by

the Group, as the Group is an enterprise associated with the state. Consequently, several associated

with the government parties previously meet the definition of related parties were excluded from the

scope of the Standard.

33. FINANCIAL RISKS MANAGEMENT

Main financial liabilities of the Group include loans, trade and other payables and agreements of financial guarantee. Main purpose of these financial liabilities is financing Group’s operations and support of its activity.

Group has trade and other receivables, cash and cash equivalents and current deposits, which directly arise in the course of Group’s operational activity. The Group also keeps investment held for sale.

The Group is subject to market risk, credit risk and liquidity risk.

Management of the Group controls risk management process. Management reviews and approves risk management policy.

Prior to placement of Group’s shares, duties of Superior Body are performed by the Government of the Republic of Tajikistan. Exclusive powers of Superior Body are:

• Determination of main directions of Company’s activity, approval of annual reports and financial

statements,

• Amending of Group’s charter, including change of its share capital,

• Election of members of auditing committee (inspector) of the Group and their dismissal,

• Approval of Audit committee reports,

• Taking decision on acquisition of shares, issued by the Group,

• Taking decision on reorganisation and liquidation of the Group, assignment of liquidation committee and approval of liquidation balance sheet,

• Election of Group’s Chairman and his termination,

• Exercise of other powers, prescribed by laws of the Republic of Tajikistan and charter of the Group.

Geographical concentration

The geographical concentration of assets and liabilities are disclosed below:

	Republic of Tajikistan	OECD	Other	2014 Total
FINANCIAL ASSETS:
Cash and cash equivalents	11,007	-	-	11,007
Trade and other accounts receivable	360,999	-	-	360,999
Non-current investments	182,399	-	-	182,399
TOTAL FINANCIAL ASSETS	554,405	-	-	554,405
FINANCIAL LIABILITIES:
Trade and other accounts payable	1,322,538	385	12,293	1,335,216
Current borrowed funds	2,237,618	1,268	-	2,238,886
Non-current borrowed funds	2,975,247	10,529	-	2,985,776
Other current liabilities and accrued expenses	671,951	-	-	671,951
TOTAL FININCIAL LIABILITIES	7,207,354	12,182	12,293	7,231,829
	Republic of Tajikistan	OECD	Other	2013 Total
FINANCIAL ASSETS:
Cash and cash equivalents	3,001	-	-	3,001
Trade and other accounts receivable	428,415	-	16,036	444,451
Non-current investments	182,399	-	-	182,399
TOTAL FINANCIAL ASSETS	613,815		16,036	629,851
FINANCIAL LIABILITIES:
Trade and other accounts payable	1,103,575	-	12,007	1,115,582
Current borrowed funds	1,743,079	-	-	1,743,079
Non-current borrowed funds	878,405	-	-	878,405
Other payables and accrued expenses	675,101	-	-	675,101
TOTAL FININCIAL LIABILITIES	4,400,160	-	12,007	4,412,167

Market risk

Market risk is a risk of possible fluctuations of the fair value of future cash flows as a result of changes in market prices. Market prices include four types of risks: interest rate risk, currency risk, risk of price change and other price risks. Financial instruments which are subject to market risk include loans, deposits, investments held for sale.

Sensitivity analysis as at 31 December 2014 and 2013 is presented below. Sensitivity analysis was prepared on the basis of assumption that amount of net debt and part of financial instruments in foreign currency is constant.

Analysis does not include effect of changes of market variables on book value of pensions and other liabilities on employee’s termination, provisions and also nonfinancial assets and liabilities of subdivisions.

In preparing sensitivity analysis the following assumptions were made:

Sensitivity of consolidated statement of financial position is associated with debt instruments held for sale.

Sensitivity of relevant account of consolidated statement of comprehensive income is the effect of proposed changes of relevant market risks.

Risk of price changes

Risk of price changes is the risk or uncertainty arising from possible changes in market prices and their impact on future performance and results of operational activity of the Group.

Price decrease can lead to decrease of net income and cash flows. Maintaining low prices for an extended period of time can lead to a reduction in activity and may ultimately have an impact on the Group’s ability to fulfill its obligations under the contracts. Management estimates the decline as hardly probable and Group does not use derivative instruments to reduce its exposure to this risk.

The Group enters into non-current contracts for products supply on standard commercial terms; thereby the Group is not exposed to the risk of loss of revenue due to price increase on the market.

Currency risk

Currency risk is a risk that the fair value of future cash flows of financial instruments will fluctuate due to changes in exchange rates. The Group’s exposure to foreign currency exchange rates is stipulated primarily due to Group’s operating activity (when sales or expenses are denominated in currencies, other than the functional currency of the Group), as well as the Group’s net investment in foreign subsidiaries.

The Group exports its production to Afganistan and countries of Central Asia, acquires equipment and materials from overseas suppliers and attracts a substantial amount of long-term loans in foreign currency. Significant concentration of currency risk lies in loans denominated in various foreign currencies (mainly in US dollars). In accordance with the Group’s accounting policy, these loans were translated to Somoni using exchange rates prevailed at the balance sheet date. However future changes in exchange rate of Somoni to US dollar are unpredictable. Future changes in exchange rates may affect the carrying value of liabilities denominated in foreign currencies.

There are strict restrictions and controls in respect of Somoni conversion into other currencies. Currently Somoni is not convertible currency outside the Republic of Tajikistan.

	TJS	USD	EUR		SDR	KWD	Other		2014 Total
FINANCIAL ASSETS:
Cash and cash equivalents	10,357	18	-	-		-	632	11,007
Trade and other accounts receivable	335,136	25,863	-	-		-	-	360,999
Non-current investments	182,399	-	-	-		-	-	182,399
TOTAL FINANCIAL ASSETS	527,892	25,881	-	-		-	632	554,405
FININCIAL LIABILITIES:
Trade and other accounts payable	1,101,835	227,674	5,707	-		-	-	1,335,216
Current borrowed funds	269,379	1,577,557	48,835	302,144		40,971	-	2,238,886
Non-current borrowed funds	793	2,537,039	137,853	265,189		44,902	-	2,985,776
Other payables and accrued expenses	68,457	405,570	8,979	168,773		20,172		671,951
TOTAL FININCIAL LIABILITIES	1,440,464	4,747,840	201,374	736,106		106,045	-	7,231,829
OPEN CURRENCY POSITION	(912,572)	(4,721,959)	(201,374)	(736,106)		(106,045)	632	(6,677,424)

	TJS	USD	EUR	SDR	2013 Total
FINANCIAL ASSETS:
Cash and cash equivalents	2,713	288	-	-	3,001
Trade and other accounts receivable	305,320	139,131	-	-	444,451
Non-current investments	182,399	-	-	-	182,399
TOTAL FINANCIAL ASSETS	490,432	139,419			629,851
FININCIAL LIABILITIES:
Trade and other accounts payable	1,097,526	18,056	-	-	1,115,582
Current borrowed funds	242,507	834,148	174,148	492,276	1,743,079
Non-current borrowed funds	-	791,962	86,443	-	878,405
Other payables and accrued expenses	569,230	105,871	-	-	675,101
TOTAL FININCIAL LIABILITIES	1,909,263	1,750,037	260,591	492,276	4,412,167
OPEN CURRENCY POSITION	(1,418,831)	(1,610,618)	(260,591)	(492,276)	(3,782,316)

Currency risk sensitivity

The following table details the Company’s sensitivity to a 10% increase and decrease in the USD against the TJS for 2014 and 2013, respectively. These rates are the sensitivity rates used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign currency exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the period for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Company where the denomination of the loan is in a currency other than the currency of the lender or the borrower.

	2014		2013
	Official exchange rate USD, +10%	Official exchange rate USD, -10%	Official exchange rate USD, +10%	Official exchange rate USD, -10%
Impact on profit or loss	(472,196)	472,196	(161,062)	161,062

	2014		2013
	Official exchange rate USD, +10%	Official exchange rate USD, -10%	Official exchange rate USD, +10%	Official exchange rate USD, -10%
Impact on profit or loss	(73,611)	73,611	(49,228)	49,228

Credit risk

Credit risk is a risk that the Group will incur financial loss because the counterparties fail to meet their obligations under financial instrument or client contract. The Group is exposed to credit risk related to its operating activity (primarily, trade receivables).

Trade accounts receivable

Credit risk management associated with customers is performed by each subsidiary in accordance with the policies, procedures and control system established by the Group in respect of credit risk management associated with customers. Regular monitoring of outstanding accounts receivable is carried out.

Financial assets of the Group, which are potentially subject to credit risk, compose primarily of trade receivables.

In 2014 the percentage of money collection for the sold energy in the whole group was 75,4% (accrued - 1,379,332 thousand Somoni, paid - 1,040,612 thousand Somoni), including Tajik Aluminium Plant 30% (accrued - 235,150 thousand Somoni, paid - 70,631 thousand Somoni).

In 2013 the percentage of money collection for the sold energy in the whole group was 76,1% (accrued - 1,276,987 thousand Somoni, paid - 971,356 thousand Somoni), including Tajik Aluminium Plant 47.8% (accrued - 279,099 thousand Somoni, paid - 133,544 thousand Somoni).

Approximately 17% of all sales in 2014 (21,9% in 2013) were supplied to the largest industrial consumer Tajik Aluminum Plant (TADAZ), which is currently controlled by the Government of the Republic of Tajikistan.

The carrying value of accounts receivable, net of allowance for bad debt, represents the maximum amount exposed to credit risk.

Need for impairment recognition is reviewed at each balance sheet date, individually for each large entity. In addition, the amounts due from a large number of individuals are grouped into homogeneous groups and assessed for impairment on a collective basis. The calculations are based on the information on actual losses incurred in the past. The maximum exposure to credit risk at the reporting date is presented by the book value of each class of financial assets. The Group does not have the property received as security for the debt owed to it.

Although collection of receivables could be influenced by economic factors, Management believes that there is no substantial risk of loss beyond the provision for impairment of receivables.

Liquidity risk

Group exercises control over the risk of shortage of funds using a recurring liquidity planning tool.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and payment by installements contracts.

The Group has access to financing in sufficient amounts and terms of loans to be paid within 12 months may be postponed to a later date by agreement with current creditors.

The following table summarizes the contractual undiscounted payments on financial liabilities of the Group by maturity.

	Up to 1 month	From 1 to 3 months	From months 3 to 1 year	From 1 to 5 years	Over 5 years	Term is not established	2014 Total
FINANCIAL ASSETS: Cash and cash equivalents	11,007	-	-	-	-	-	11,007
Trade and other accounts receivable	360,999	-	-	-	-	-	360,999
Non-current investments	-	-	-	-	150,796	31,603	182,399
TOTAL FINANCIAL ASSETS	372,006	-	-	-	150,796	31,603	554,405
FINANCIAL LIABILITIES
Trade and other accounts payable	1,335,216	-	-	-	-	-	1,335,216
Current borrowed funds	1,535,961	74,086	628,839	-	-	-	2,238,886
Non-current borrowed funds	-	-	-	1,042,149	1,943,627	-	2,985,776
Other payables and accrued expenses	656,408	2,826	12,717	-	-	-	671,951
TOTAL FINANCIAL LIABILITIES	3,527,585	76,912	641,556	1,042,149	1,943,627	-	7,231,829
Difference between financial assets and liabilities	(3,155,579)	(76,912)	(641,556)	(1,042,149)	(1,792,831)	31,603	(6,677,424)

	Up to 1 month	From 1 to 3 months	From months 3 to 1 year	From 1 to 5 years	Over 5 years	Term is not established	2014 Total
FINANCIAL ASSETS: Cash and cash equivalents	3,001	-	-	-	-	-	3,001
Trade and other accounts receivable	444,451	-	-	-	-	-	444,451
Non-current investments	-	-	-	-	150,796	31,603	182,399
TOTAL FINANCIAL ASSETS	447,452	-	-	-	150,796	31,603	629,851
FINANCIAL LIABILITIES Trade and other accounts payable	1,115,582	-	-	-	-	-	1,115,582
Current borrowed funds	517,638	-	1,225,441	-	-	-	1,743,079
Non-current borrowed funds	-	-	-	-	878,405	-	878,405
Other payables and accrued expenses	466,221	-	208,880	-	-	-	675,101
TOTAL FINANCIAL LIABILITIES	2,099,441	-	1,434,321	-	878,405	-	4,412,167
Difference between financial assets and liabilities	(1,651,989)	-	(1,434,321)	-	(727,609)	31,603	(3,782,316)

An analysis of undiscounted financial liabilities

The table below shows the distribution of the Group's obligations as at December 31, 2014 and 2013 based on contractual undiscounted cash flows.

	Less than 1 month	1 - 3 months	3 months - 1 year	1-5 years	More than 5 years	Total 2014
FINANCIAL LIABILITIES: Trade and other accounts payable	1,335,216	-	-	-	-	1,335,216
Current borrowed funds	1,550,350	102,477	825,368	-	-	2,478,195
Non-current borrowed funds	-	-	-	1,462,428	2,400,025	3,862,453
Other current payables and
accrued expenses	656,408	2,826	12,717	-	-	671,951
TOTAL FINANCIAL LIABILITIES	3,541,974	105,303	838,085	1,462,428	2,400,025	8,347,815
	Less than 1 month	1 - 3 months	3 months - 1 year	1-5 years	More than 5 years	Total 2013
FINANCIAL LIABILITIES: Trade and other accounts payable	-	-	1,115,582	-	-	1,115,582
Current borrowed funds	517,638	-	1,225,441	-	-	1,743,079
Non-current borrowed funds	-	-	-	-	2,870,451	2,870,451
Other current payables and accrued expenses	466,221	-	208,880	-	-	675,101
TOTAL FINANCIAL LIABILITIES	983,859	-	2,549,903	-	2,870,451	6,404,213

Capital management

Capital includes capital owned by the Government of the Republic of Tajikistan.

The main objective of the Group’s capital management is to ensure a strong credit worthiness and an adequate level of capital to conduct its operations and maximize shareholder value.

The Group manages its capital structure and its changes in response to changes of economic conditions.

For the year ended 31 December 2014 and 2013 no changes were made in the objectives, policies and processes for managing capital.

The Group monitors capital using gearing ratio, which is calculated by dividing net debt by total capital and net debt.

Group’s policy is to maintain the value of this ratio in the range 25-40%. Net debt includes interest- bearing loans and borrowings, trade and other payables less cash and cash equivalents.

	December 31, 2014	December 31, 2013 (restated)
Current borrowed funds	2,238,886	1,743,079
Non-current borrowed funds	2,985,776	878,405
Trade and other accounts payable	1,335,216	1,115,582
Other payables and accrued expenses	671,951	675,101
Less cash and cash equivalents	(11,007)	(3,001)
Net debt	7,220,822	4,409,166
Total equity	2,754,285	4,491,019
Equity and net debt	9,975,107	8,900,185
Gearing ratio	72%	50%

34. SUBSEQUENT EVENTS

Due to the difficult financial situation of the main consumer of electricity SUE "Tajik Aluminum Company", the Group accrued an allowance for bad debts on outstanding balance of enterprise debt in amount of 376.7 mln TJS. In June 2015 the enterprise paid part of the debt in amount of 197.2 mln TJS. The Group corrected the allowance for bad debts on that amount.

At the date of the issue of consolidated financial statements of the Group there were no events, except described above that must be disclosed in the consolidated financial statements in accordance with IAS 10 "Events after the reporting period”.