OREANDA-NEWS. On 27 May 2008 was announced, that the work of financial statements preparation in accordance with international standards for 2007 has been carried out in the framework of the approved plan of measures on JSC Far Eastern Energy Company’s capitalization management.

JSC FEEC has prepared finical statements in accordance with the application of all international standards, that directly refer to the activity of the Group FEEC and are in force as of 31 December 2007. The structure of the Group FEEC includes JSC FEEC, its daughter Companies: the main from DDCs are JSC FEGC and JSC FEDGC as also 20 repair-maintenance DDCs and 5 non core DDCs.

It must be noted that particularity of the Group FEEC is great interdependence of the Groups’ enterprises. Thus commercial output of JSC FEGC by 57% falls on JSC FEEC, and commercial output of JSC FEDGC – by 87%. In its turn expenditures of JSC FEGC and JSC FEDGC amount in the total expenditures of JSC FEEC to 72%.

A certificate that proves the confidence and correspondence of the holding company FEEC to the international standards of financial statements, has been issued by independent auditing company JSC BDO Unikon. Financial statements prepared in compliance with the International Standards of Financial Statements (ISFS) is a vital instrument under entering the market of borrowings as it contains the information on all factors of Company’s activity.

ISFS is universally received language of financial reporting. The system of financial accounting & reporting of the Company, including preparation of the statements in accordance with ISFS standards - is one of the major factors defining the Company’s capitalization, including under holding IPO.

From the business point of view statements in compliance with ISFS shows clear, transparent and objective picture. Thus the preparation of statements by ISFS is necessary for each company interested in the capitalization increase or in entering in near future public market of investments and borrowings – Russian and international.

To attract the foreign capital without statements in accordance with ISFS is practically impossible. Both investment analytics and different investment funds prefer working with international statements. In the absence of financial reporting in accordance with ISFS can lead to the reduction of the investment base, to the refuse in a company’s crediting by foreign banks. Besides that the presence of financial statements by ISFS is obligatory for free float equity issue.

Starting from this year JSC FEEC is further on planning to prepare the financials statements in accordance with ISFS.

For reference:

It will be noted that JSC Dalenergo and JSC Khabarovskenergo by the moment of merging had prepared financial statements in accordance with ISFS: first such report in the said JS-energo was prepared in 2004, wherein the standards as of 31 December 2002 were applied.

Also starting from 2004 the reporting in accordance with ISFS is being prepared by JSC Yakutskenergo.

The Group FEEC has taken into account the merging of the reformed JS-energo(JSC Dalenergo, JSC Khabarovskenergo, JSC Amurenergo, CJSC LuTEK and JSC Uzhnoe Yakutskenergo): the assets and liabilities of the merged companies by their historical cost as if these companies had been united in the earliest presented in the financial statements periods dates.