Modificación microestructura l durante los recocidos posteriores al procesado ECAP

Information on the composition, initial (replacement) value of intangible assets and the amount of depreciation accrued is provided for each completed financial year, since the Issuer has been in his business for less than 5 years:

Group of intangible assets Initial (replacement) value,

rubles Accrued depreciation, rubles Reporting date: 31.12.2005

Intangible assets were unavailable Reporting date: 31.12.2006 Intangible assets were unavailable Reporting date: 31.12.2007 Intangible assets were unavailable Reporting date: 31.12.2008

Intangible assets were unavailable - -

Expenses on research, development and engineering work 45,833,333 0

Patents 182,637 67,262

R&D 6,561,166 0

Other 4,206,129 1,621,403

Total: 56,783,265 1,688,665

The financial accounting standards (rules) in accordance with which the Issuer presents the information about its intangible assets:

ƒ PBU 4/99 "Corporate accounting" (approved by Order of the Ministry of Finance of Russia dated 6 July 1999

No. 43n);

ƒ Regulations on financial accounting "Intangible asset accounting" PBU 14/2007 (approved by Order of the

Ministry of Finance of Russia No. 153n dated 27 December 2007).

5.4. Information on the Issuer's politics and costs related to scientific and technical development, licences, patents and new research and developments

The Issuer conducts research on a regular basis for the purpose of finding way of improving operating procedures (investigation of material properties, equipment condition, testing, etc.) with the aim of enhancing reliability, safety and efficiency of HPP operation.

In 2008, the following research was conducted in the field of scientific and research development: • Rationale of hydropower development extent within the framework of the Russian energy strategy

• Analysis of unconventional power stations stability factors within the energy system framework.

• Definition and validation of possible and feasible share of unconventional power stations in the generating facilities structure.

• Mathematical modeling of unconventional power stations and the modeling results.

• Formalization of the task of integrated optimization of various type generating facilities (HPP, NPP, TPP) development and functioning within the framework of the Unified Energy System of Russia, working out its mathematical description and the task accomplishment technique.

In 2008 the expenses on research on account of the Issuer’s own funds amounted to 92,748 thousand rubles, VAT included. In 2009, the following research was conducted in the field of scientific and research development:

• Analysis of unconventional power stations stability within the energy system framework.

• Definition and validation of possible and feasible share of unconventional power stations in the generating facilities structure.

• Formalization of the task of integrated optimization of various type generating facilities (HPP, NPP, TPP) development and functioning within the framework of the Unified Energy System of Russia, working out its mathematical description and the task accomplishment technique.

In 2009 the expenses on research on account of the Issuer’s own funds amounted to 52,392 thousand rubles, VAT included. Over the period from 2004 till 2007, no research was conducted in the field of scientific and research development. Over the period from 2004 till 2009, the Issuer did not develop any intellectual property items that may be subject to legal protection (including patents for invention, useful model, industrial prototype, state registration of trademarks and service trademarks, denomination of a good origin location). At the same time, OJSC RusHydro by way of legal succession received the following patents from OJSC Neporozhny Sayano-Shushenskaya HPP:

• Invention Patent # 2224226. Appliance for monitoring layer deformations in solid body; • Invention Patent # 2226678. Device for pressure measuring in pipelines;

• Invention Patent # 2263744 Appliance for deep soil freezing;

• Invention Patent # 2172801. Technique for improvement of hydropower facility foundation operating properties; • Invention Patent # 2224067. Concrete dam, method of the dam construction, method of the dam operation, and device for

concrete temperature regulation on the dam exterior wall side.

Risk factors related to eventual expiration of the Issuer’s major patents or licenses to use trademark validity terms: non- existent.

5.5. Analysis of trends in the Issuer's core business development Key factors affecting the state of the industry:

Over the last 5 years, the following trends may be identified as having been common to the industry as a whole: ⎯ a substantial growth of energy consumption since the end of the 1990s, and a corresponding rise in electricity

production;

⎯ greater payment discipline among electricity consumers; ⎯ better financial performance of energy companies; ⎯ a lower level of cross-subsidies;

⎯ launch of large-scale work on technical upgrading and modernization of the main equipment of energy companies (power plants, electricity grids and the like) thanks to the reform of JSC RAO UES of Russia and appearance of new investors in the electricity sector;

⎯ higher economically justified tariffs for electricity in connection with the planned transfer to a free tariff-setting market in the electricity sector;

⎯ stabilization of the political and the socio-economic situation in the country and the region; ⎯ dynamically evolving legislation in the sphere of the production and sale of electricity; ⎯ industry personnel with higher qualifications;

⎯ a federal law has been passed on Energy Saving and Higher Energy Efficiency. Key development trends in the branch of the Issuer's core business:

The global financial crisis that affected Russia in 2008 increased uncertainty of hydropower development prospects: • The extent of possible decline in electric power consumption and prospects of its recovery are uncertain. • Processes pertaining to transition to a target model of electric power and capacity markets and development of a necessary regulatory framework are not completed; the crisis developments require the government’s wider participation in the branch regulation including price rise containment.

• Recovery of capital markets that provide for investment in the branch will take time.

• The extent of government support of electric power industry on account of government’s sources has declined. At the same time:

• The federal government develops technologies for long-term forecasting and planning of the power sector developments (The Energy Strategy for the Russian Federation for the period till 2030 is developed; General plan of electric power facilities deployment for the period till 2020, the Concept of long-term social and economic development of the Russian Federation for the period till 2020 and regional development strategies are adopted)

• Due to the sector reformation and transition to the sector target structure, the extent of cross-subsidization is declining and investment process is reviving.

• The government attaches more attention to efficiency and expansion of RER use; a number of relevant policy documents have been adopted. Nevertheless, to achieve the planned level of RER development, regulatory documents providing for RER projects recoupment (first of all, those setting the rate of market price premium for RER-generators) are to be adopted. • In view of the global financial crisis, a number of regulatory acts on support provision to the Russian economy, the power sector included, have been adopted. The Issuer is included in the list of strategic enterprises of the country that allows relying on implementation of the government support arrangements, etc.

• Large-scale re-equipment of power companies and their basic equipment (power stations, electrical grids, etc.) upgrading have started due to OJSC RAO UES of Russia reformation and new investors’ entering the electric power sector.