Open Joint Stock Company State transport leasing company

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Open Joint Stock Company

“State transport leasing company”

Interim Consolidated Condensed Financial Statements

for the Nine-Month Period

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Open Joint Stock Company “State transport leasing company”

Interim Consolidated Condensed Financial Statements for the Nine-Month Period Ended 30 September 2013

Contents

Auditors’ Report on Review of the Interim Consolidated Condensed Financial Information

Interim Consolidated Condensed Statement of Financial Position ... 5

Interim Consolidated Condensed Statements of Profit or Loss and Other Comprehensive Income ... 6

Interim Consolidated Condensed Statement of Cash Flows ... 7

Interim Consolidated Condensed Statement of Changes in Equity ... 8

1. Principal activities ... 9

2. Basis of preparation ... 10

3. Significant accounting policies ... 10

4. Net investment in leases ... 11

5. Assets leased out under operating leases ... 18

6. Trade and other receivables ... 18

7. Advances to suppliers ... 19

8. Investment property ... 20

9. Inventories ... 20

10. Taxation ... 20

11. Loans received and promissory notes issued ... 21

12. Liability under finance lease agreements ... 23

13. Bonds issued ... 24

14. Share capital ... 24

15. Administrative expenses ... 25

16. Fair value of financial instruments ... 25

17. Related parties ... 26

18. Events subsequent to the reporting date ... 28

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Interim Consolidated Condensed Statements of Profit or Loss and other Comprehensive Income for the Three- and Nine-Month Periods Ended 30 September 2013

(all amounts in thousands of Russian roubles unless otherwise indicated)

Interim Consolidated Condensed Statement of Profit or Loss and Other Comprehensive Income Note Nine-Month Period Ended 30 September 2013 Unaudited Nine-Month Period Ended 30 September 2012 Unaudited Three-Month Period Ended 30 September 2013 Unaudited Three-Month Period Ended 30 September 2012 Unaudited

Finance lease interest income 4 948 701 3 541 293 1 734 700 1 430 384 Other interest income 353 338 123 570 103 112 57 470 Interest expense (3 590 193) (2 232 978) (1 278 240) (930 396)

Net interest income 1 711 846 1 431 885 559 572 557 458

Impairment of interest-earning assets 4 (851 943) (686 314) (349 621) (398 480)

Net interest income after

impairment of interest-earning

assets 859 903 745 571 209 951 158 978

Administrative expenses 15 (624 456) (544 039) (169 715) (150 824) Income from sales activities - 17 827 - - Income from operating leases 36 784 - 36 784 - Other operating income 165 530 61 964 1 918 13 059 Other operating expenses (149 433) (53 401) (90 667) (13 909) Foreign exchange translation

gain/(loss) 16 012 (212) (11 713) (625) Reversal of impairment of

non-interest-earning assets 6 10 331 1 326 11 963 24 164

Profit/(loss) before taxation 314 671 229 036 (11 479) 30 843

Income tax expense 10 (107 004) (47 487) (14 799) (7 988)

Profit/(loss) for the period 207 667 181 549 (26 278) 22 855 Other comprehensive (loss)/income

Items that are or may be reclassified subsequently to profit or loss:

Currency translation difference (3 071) (38) (1 986) 14

Total items that are or may be reclassified subsequently to profit or

loss (3 071) (38) (1 986) 14

Other comprehensive (loss)/income,

net of income tax (3 071) (38) (1 986) 14

Total comprehensive income/(loss)

for the period 204 596 181 511 (28 264) 22 869

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Interim Consolidated Condensed Statement of Cash Flows for the Nine-Month Period Ended 30 September 2013

Interim Consolidated Condensed Statement of Cash Flows

Nine-Month Period Ended 30 September 2013 Unaudited Nine-Month Period Ended 30 September 2012 Unaudited Net cash flows used in operating activities (12 715 148) (15 455 349) Net cash flows used in investing activities (929) (11 237) Net cash flows from financing activities 19 914 744 15 353 868

Effect of exchange rate changes on cash and cash

equivalents 17 043 (3 244)

Net increase/(decrease) in cash and cash equivalents 7 215 710 (115 962)

Cash and cash equivalents at the beginning of the

period 5 425 298 3 170 747

Cash and cash equivalents at the end of the period 12 641 008 3 054 785

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Interim Consolidated Condensed Statement of Changes in Equity for the Nine-Month Period Ended 30 September 2013

Interim Consolidated Condensed Statement of Changes in Equity

The notes set out on pages 9 to 28 form an integral part of these interim consolidated condensed financial statements.

Share capital Retained earnings Total equity Balance as at 1 January 2012 10 001 000 153 139 10 154 139

Profit for the period (Unaudited) - 181 549 181 549 Foreign currency translation (Unaudited) - (38) (38)

Total comprehensive income (Unaudited) - 181 511 181 511

Dividends declared and paid (Unaudited) - (54 681) (54 681)

Balance as at 30 September 2012

(Unaudited) 10 001 000 279 969 10 280 969

Balance as at 1 January 2013 10 001 000 193 749 10 194 749

Profit for the period (Unaudited) - 207 667 207 667 Foreign currency translation (Unaudited) - (3 071) (3 071)

Total comprehensive income (Unaudited) - 204 596 204 596

Dividends declared and paid (Unaudited) - (32 524) (32 524)

Balance as at 30 September 2013

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Notes to the Interim Consolidated Condensed Financial Statements for the Nine-Month Period Ended 30 September 2013

1. Principal activities

Open Joint Stock Company “State transport leasing company” (the Company) was incorporated in the Russian Federation as a Closed Joint Stock Company “Leasing Company of Civilian Aviation” on 12 November 2001.

On 17 January 2006 the Company was reorganized and renamed to Open Joint Stock Company “State transport leasing company”.

The Company’s principal business activity is provision of finance leases to companies within the Russian Federation.

The Company’s registered office is located at 125284, Russia, Moscow, Leningradskiy prospect, 31a, bld.1.

As at 30 September 2013 and 31 December 2012, the sole shareholder of the Company is the Russian Federation.

On 9 May 2012 the Company established a 100% subsidiary GTLK Europe LTD in Republic of Ireland to facilitate aviation leasing. GTLK Europe LTD in its turn organized a number of subsidiaries during 2012 and 2013 which are used for aviation leasing transactions structuring. All these entities are 100% directly owned by GTLK Europe LTD.

Company registration number Country of incorporation Date of incorporation

GTLK 7706 Limited 522912 Bermuda 9 October 2012 GTLK 5 737 Limited 522912 Ireland 24 January 2013 GTLK AFL Limited 47929 Bermuda 11 July 2013 GTLK BO1 Limited 47930 Bermuda 11 July 2013 GTLK BO2 Limited 47931 Bermuda 11 July 2013 STLC Europe One Leasing Limited 530075 Ireland 10 July 2013 GTLK 2 737 Limited 533928 Ireland 10 October 2013 GTLK BO3 Limited 47987 Bermuda 24 July 2013

Open Joint Stock Company “State transport leasing company” and GTLK Europe LTD together with its subsidiaries (the Subsidiaries) form the STLC Group (the Group).

The Group operates in industry where significant seasonal or cyclical variations in operating income are not experienced during the financial year.

Russian business environment

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2. Basis of preparation

Statement of Compliance

The accompanying interim consolidated condensed financial statements are prepared in accordance with IAS 34 Interim Financial Reporting. The interim consolidated condensed financial statements are prepared on a condensed basis and should be read in conjunction with the financial statements of the Group for the year ended 31 December 2012, as these interim consolidated condensed financial statements provide an update of previously reported financial information.

Use of estimates and judgements

The preparation of interim consolidated condensed financial statements in conformity with International Financial Reporting Standards (IFRS) requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Although these estimates are based on management’s best knowledge of current events and actions, actual results ultimately may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing these interim consolidated condensed financial statements, the significant judgements made by management in applying accounting policies and the key sources of estimation uncertainty are the same as those that applied to the financial statements for the year ended 31 December 2012.

Segment reporting

The Group’s operations constitute a single industry segment, leasing.

3. Significant accounting policies

The accounting policies applied in these interim condensed consolidated financial statements applied by the Group were consistent with those applied in the consolidated financial statements as at and for the year ended 31 December 2012. New standards and amendments were adopted effective as of 1 January 2013. The Group started adoption of these standards and amendments when they become effective. These standards do not have significant impact on the interim condensed consolidated financial statements of the Group.

 IFRS 10 Consolidated Financial Statements introduces a single control model according to which the investor controls an investee when it is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee and there is a link between power and returns.

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 IFRS 13 Fair Value Measurement replaces the fair value measurement guidance contained in individual IFRSs with a single source of fair value measurement guidance. It provides a revised definition of fair value, establishes a framework for measuring fair value and sets out disclosure requirements for fair value measurements. IFRS 13 does not introduce new requirements to measure assets or liabilities at fair value, nor does it eliminate the practicability exceptions to fair value measurement that currently exist in certain standards.

 Amendment to IAS 1 Presentation of items of other comprehensive income modified the presentation of items of other comprehensive income in the consolidated statement of profit or loss and other comprehensive income to present separately items that would be reclassified to profit or loss in the future from those that would never be. Comparative information is also re-presented accordingly. The adoption of the amendment to IAS 1 has no impact on the recognised assets, liabilities or comprehensive income.

4. Net investment in leases

30 September 2013 Unaudited

31 December 2012

Gross investment in leases 85 078 621 68 241 972 Unearned income (34 790 899) (28 648 362)

Net investment in leases gross of impairment allowance 50 287 722 39 593 610

Less impairment allowance (1 985 055) (1 137 672)

Net investment in leases 48 302 667 38 455 938

As at 30 September 2013 there were 1 965 finance lease contracts (31 December 2012: 2 562).

The Group holds title to the leased assets during the lease term. Titles to the assets under finance lease agreements pass to the lessees at the end of the lease term. Risks related to the leased property such as damage and theft are insured. The beneficiary under the insurance policy on the vast majority of the lease agreements is the Group.

Net investment in leases are secured by assets for which leases were obtained, such as railroad wagons, cars, other vehicles and equipment.

The vast majority of lease agreements are also secured by personal sureties of lessees or third parties and/or buyback agreements with the suppliers of the leased equipment.

The Group provides two types of finance lease products to its customers: preferential leases and commercial leases. There are no differences in internal procedures of risk assessment and decision making between these two types of leases. A unified risk management policy is applied to all the leases regardless of their type.

Preferential leases

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Commercial leases

Commercial leases are a standard lease program under which leases are issued on market terms. The commercial leases program has no specific requirements to lessees except that they must meet requirements on their financial position and creditworthiness. There are no specific requirements related to the type of leased assets. These types of lease agreements are funded with borrowings from third parties. The lease term under commercial leases normally varies from 3 to 10 years. The initial payment amount varies from 5.0% to 30.0% of the initial price of the leased asset. Lease payments are normally made on a monthly and quarterly basis.

The breakdown of gross and net investment in leases by type of lease product as at 30 September 2013 is as follows (unaudited): Gross investment in leases Unearned income Net investment in leases gross of impairment allowance Impairment allowance Net investment in leases Net investment in leases as % of total Commercial 77 558 331 (33 574 158) 43 984 173 (1 590 403) 42 393 770 87.8 Preferential 7 520 290 (1 216 741) 6 303 549 (394 652) 5 908 897 12.2 Total 85 078 621 (34 790 899) 50 287 722 (1 985 055) 48 302 667 100.0

The breakdown of gross and net investment in leases by type of lease product as at 31 December 2012 is as follows: Gross investment in leases Unearned income Net investment in leases gross of impairment allowance Impairment allowance Net investment in leases Net investment in leases as % of total Commercial 58 884 064 (26 907 673) 31 976 391 (746 815) 31 229 576 81.2 Preferential 9 357 908 (1 740 689) 7 617 219 (390 857) 7 226 362 18.8 Total 68 241 972 (28 648 362) 39 593 610 (1 137 672) 38 455 938 100.0

As at 30 September 2013 the weighted average interest rate for commercial leases is 16.5% (31 December 2012: 18.1%).

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The outstanding contractual maturities of the net investment in leases as at 30 September 2013 are as follows (unaudited): Gross investment in leases Unearned income Net investment in leases gross of impairment allowance Impairment allowance Net investment in leases

Overdue and less than one

month 4 292 314 (528 711) 3 763 603 (574 312) 3 189 291 From one to three months 2 393 973 (1 369 523) 1 024 450 (121 756) 902 694 From three to six months 3 478 550 (1 828 201) 1 650 349 (135 463) 1 514 886 From six months to one year 6 721 751 (3 460 339) 3 261 412 (206 923) 3 054 489 From one year to five years 38 776 366 (19 151 410) 19 624 956 (630 643) 18 994 313 More than five years 29 415 667 (8 452 715) 20 962 952 (315 958) 20 646 994

Total 85 078 621 (34 790 899) 50 287 722 (1 985 055) 48 302 667

The outstanding contractual maturities of the net investment in leases as at 31 December 2012 are as follows: Gross investment in leases Unearned income Net investment in leases gross of impairment allowance Impairment allowance Net investment in leases

Overdue and less than one

month 1 922 802 (574 463) 1 348 339 (451 721) 896 618 From one to three months 2 150 284 (1 073 552) 1 076 732 (24 791) 1 051 941 From three to six months 3 059 396 (1 593 770) 1 465 626 (34 805) 1 430 821 From six months to one year 5 929 637 (3 012 302) 2 917 335 (68 603) 2 848 732 From one year to five years 33 415 334 (15 731 503) 17 683 831 (337 939) 17 345 892 More than five years 21 764 519 (6 662 772) 15 101 747 (219 813) 14 881 934

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The currency breakdown of the net investment in leases as at 30 September 2013 are as follows (unaudited): Gross investment in leases Unearned income Net investment in leases gross of impairment allowance Impairment allowance Net investment in leases USD 620 274 (109 054) 511 220 (6 646) 504 574 RUB 84 458 347 (34 681 845) 49 776 502 (1 978 409) 47 798 093 Total 85 078 621 (34 790 899) 50 287 722 (1 985 055) 48 302 667

The currency breakdown of the net investment in leases as at 31 December 2012 are as follows:

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The industry breakdown of net investment in leases is as follows:

31 December 2012

Value % Value %

Railroad transportation services 27 565 637 54.8 21 446 913 54.2 Logistics and transportation services 7 944 771 15.8 4 620 008 11.7 Road construction and services 4 093 374 8.3 4 869 796 12.2 Construction and production of

construction materials 2 795 677 5.6 2 458 184 6.2 Aircraft industry, transportation and

airport services 3 291 166 6.5 1 418 843 3.6 Trading activities 1 026 505 2.0 1 043 343 2.6 Rent-a-car and leasing services 1 038 629 2.1 623 625 1.6 Production of various machinery and

equipment 701 600 1.4 834 578 2.1

Extraction of mineral resources 565 176 1.1 590 689 1.5 Pipeline construction and transportation 378 405 0.8 214 285 0.5 Ferrous and non-ferrous metallurgy 316 003 0.6 322 083 0.8 Community facilities 304 154 0.6 386 043 1.0 Oil, gas and power industries 138 431 0.3 115 103 0.3

Food production 61 526 0.1 59 553 0.2

Agricultural sector 24 456 0.0 111 784 0.3 Naval transportation and port facilities 20 169 0.0 23 188 0.1 Timber cutting and wood processing 14 761 0.0 447 504 1.1

Other industries 7 282 0.0 8 088 0.0

Net investment in leases gross of

impairment allowance 50 287 722 100.0 39 593 610 100.0

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The geographical breakdown of net investment in leases is as follows:

Value % Value %

Moscow and Moscow region 27 142 277 54.0 20 285 365 51.3 Privoljsky region 7 857 922 15.6 4 909 246 12.4 North-West region 5 149 924 10.2 3 033 958 7.7 Central region 3 025 714 6.0 3 308 501 8.4 Siberia region 2 703 340 5.4 3 180 612 8.0 South region 1 664 309 3.3 1 956 583 4.9 North-Caucasus region 1 480 741 3.0 1 471 396 3.7 Far-East region 774 443 1.5 916 328 2.3 Ural region 489 052 1.0 531 621 1.3

Net investment in leases gross of

impairment allowance 50 287 722 100.0 39 593 610 100.0

Net investment in leases 48 302 667 38 455 938

Concentration of net investment in leases

As at 30 September 2013 the Group had the following ten largest lessees (unaudited):

Net investment in leases gross of impairment allowance

% of portfolio

“TGK” ZAO 8 828 011 17.6

TEK “Nizhegorodskiy Ekspress” OOO 5 023 051 10.0 “Obyedinennaya transportnaya kompaniya” OOO 3 688 544 7.3

“A-B-Rail” OOO 2 272 739 4.5

“Optima TransAvto” ООО 1 843 448 3.7

“Sitall” OAO 1 659 114 3.3

“TalTEK Trans” ZAО 1 376 568 2.7

“Severnaya Gruzovaya Kompaniya”ООО 1 306 455 2.6

“Transfer LTD” OOO 1 179 799 2.3

“A-C-Rail” OOO 998 233 2.0

As at 31 December 2012 the Group had the following ten largest lessees:

Net investment in leases gross of impairment allowance

% of portfolio

“TGK” ZAO 9 043 891 22.8

“Obyedinennaya transportnaya kompaniya” OOO 3 345 144 8.4

“A-B-Rail” OOO 2 066 168 5.2

“Privolzhskaya transportnaya kompaniya” ООО 1 775 406 4.5 TEK “Nizhegorodskiy Ekspress” OOO 1 509 330 3.8

“Sitall” OAO 1 434 920 3.6

“Transfer LTD” OOO 1 209 784 3.1

“PiterAvto” ООО 1 005 463 2.5

“Trans TEK” OOO 839 272 2.1

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As at 30 September 2013 the Group acquired equipment for further transfer into leasing in the amount of RUB 78 620 thousand (31 December 2012: RUB 35 539 thousand). This equipment is recorded as equipment purchased for leasing purposes in the consolidated statement of financial position.

As at 30 September 2013 the amount of gross investment in leases on contracts that have been signed but which have not commenced is RUB 9 620 484 thousand (31 December 2012: RUB 9 606 463 thousand).

Impairment of net investment in leases

The Group evaluates the impairment of net investment in leases on an individual and collective basis. The objective indicators of impairment include the following:

 overdue payments under a leasing contract

 significant difficulties in financial position of a lessee

 deterioration in business environment, negative changes in certain industrial markets  decreasing value of the leased object.

The following factors and estimates are taken into account when identifying the amount of the allowance for impairment: realizable value of the collateral, timeframe of expected cash flows, sustainability of the lessee's business plan, ability of the lessee to improve performance in case of financial difficulties.

Evaluation is performed on a collective basis with respect to the lease agreements that are not individually significant or to the individually significant transactions where there are no indications of individual impairment.

The impairment allowance of net investment in leases as at 30 September 2013 is presented below (unaudited):

Gross amount

Impairment

allowance Net amount

Impairment allowance to gross amount, %

Net investment in leases for which no

individual impairment has been identified 39 154 132 (786 331) 38 367 801 2.0 Individually impaired net investment in

leases 11 133 590 (1 198 724) 9 934 866 10.8

Net investment in leases 50 287 722 (1 985 055) 48 302 667 3.9

The impairment allowance of net investment in leases as at 31 December 2012 is presented below:

Gross amount

Impairment

allowance Net amount

Impairment allowance to gross amount, %

Net investment in leases for which no

individual impairment has been identified 33 159 946 (647 307) 32 512 639 2.0 Individually impaired net investment in

leases 6 433 664 (490 365) 5 943 299 7.6

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The movement in the allowance for impairment is as follows:

Nine-Month Period Ended 30 September 2013 Unaudited Nine-Month Period Ended 30 September 2012 Unaudited Three-Month Period Ended 30 September 2013 Unaudited Three-Month Period Ended 30 September 2012 Unaudited

Balance at the beginning of the period 1 137 672 269 159 1 637 304 556 993 Net charge for the period 851 943 686 314 349 621 398 480 Write-offs for the period (4 560) - (1 870) -

Balance at the end of the period 1 985 055 955 473 1 985 055 955 473 Including:

Collective impairment 786 331 548 169 786 331 548 169 Individual impairment 1 198 724 407 304 1 198 724 407 304

5. Assets leased out under operating leases

During the nine-month period ended 30 September 2013 the Group has arranged several operating lease transactions with OJSC “Aeroflot”. Equipment leased out under these leases is two new Airbus A-320 aircraft.

Equipment leased out under operating leases is recorded as a separate line of the consolidated condensed statement of financial position.

6. Trade and other receivables

Advances to suppliers (other than for leased assets and

property and equipment) 143 471 158 131

Other receivables 293 863 244 922

Other tax receivables - 1 913

Receivables under loss compensation agreement 676 196 704 963 Less impairment allowance (145 625) (155 956)

Total trade and other receivables 967 905 953 973

The movement in the allowance for impairment is as follows:

Nine-Month Period Ended 30 September 2013 Unaudited Nine-Month Period Ended 30 September 2012 Unaudited Three-Month Period Ended 30 September 2013 Unaudited Three-Month Period Ended 30 September 2012 Unaudited

Balance at the beginning of the period 155 956 5 308 157 588 28 146 Net reversal the period (10 331) (1 326) (11 963) (24 164)

Write-off for the period - (4) (4)

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The impairment allowance for trade and other receivables as at 30 September 2013 and 31 December 2012 relates to other receivables overdue more than 180 days.

The Group evaluates the impairment of trade and other receivables on an individual basis.

7. Advances to suppliers

Advances to suppliers represent prepayments for assets to be leased.

As at 30 September 2013 advances were issued to the following suppliers (unaudited):

Advances to suppliers % of total

AVIAAM LEASING AB 1 098 116 33.1

“Promzheldortrans” ООО 757 601 22.8

“TradeCentre” OOO 424 074 12.8

“GOST” ООО 413 490 12.4

“Barnaulskiy vagonoremontniy zavod” ОАО 297 360 9.0

“Jet Transfer SARL” 241 577 7.3

“UralPromService” TK OOO 72 641 2.2 “Technotrade” ООО 5 527 0.2 “SDM” ООО 5 047 0.1 “Kominnvest-AKMT” ZАО 4 095 0.1 “Beltehavia” OOO 722 0.0 Total 3 320 250 100.0

As at 31 December 2012 advances were issued to the following suppliers:

Advances to suppliers % of total

“Gamma les youg” OOO 2 914 524 62.3

“Transpostavka” OOO 526 260 11.2

“TradeCentre” OOO 448 124 9.6

“Merkator Kholding” OOO 233 079 5.0

“TEKHNOSNABAVTO” OOO 151 322 3.2

“Russkiye Avtobusy - Gruppa GAZ” OOO 91 456 2.0

“Lier Group” ООО 80 750 1.7

“Leon Kom Trans” OOO 76 017 1.6

“Megaspecstroy” ZAO 34 698 0.7

“RМ – Tereks” ZАО 28 670 0.6

“Ruskhimmash”ОАО 18 408 0.4

“Merkator Construction” OOO 5 777 0.1

Others 76 201 1.6

Total 4 685 286 100.0

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8. Investment property

During the year ended 31 December 2012 the Group repossessed office premises located in the centre of Novosibirsk. These assets are recorded as investment property as the Group is planning to benefit both from growth of the market value of the premises and from leasing them out under operating lease contracts.

Management believes that the fair value of investment property is at least equal to the carrying amount as at the review date.

9. Inventories

Inventories generally represent assets repossessed by the Group from delinquent lessees under cancelled finance lease contracts and spare parts and materials.

Upon termination of lease contracts the leased object is measured at the lower of cost, which is equivalent to the net investment in the related lease, or net realizable value. When estimating the net realizable value the Group makes assumptions to assess the market values depending on the type of asset being assessed and then applies market realization cost adjustments to certain types of assets for obsolescence, illiquidity and trade discounts expected.

The breakdown of inventories by type is presented below:

Equipment and vehicles repossessed after the

termination of lease agreements 1 074 974 641 365

Office supplies 4 008 2 411

Total inventories 1 078 982 643 776

10. Taxation

Income tax expense

Current tax (charge)/benefit (209 793) (121 243) 14 587 (44 356) Deferred tax movement due to

origination and reversal of temporary

differences 102 789 73 756 (29 386) 36 368

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Reconciliation of effective tax rate

Profit/(loss) before taxation 314 671 229 036 (11 479) 30 843 Theoretical income tax

(expense)/benefit (at the statutory tax

rate of 20%) (62 934) (45 807) 2 296 (6 168) Net non-taxable income /

nondeductible costs (44 070) (1 680) (17 095) (1 820)

Income tax expense for the period (107 004) (47 487) (14 799) (7 988)

11. Loans received and promissory notes issued

Secured bank loans 37 485 330 40 165 956

Promissory notes issued - 394 154

Total loans received and promissory notes issued 37 485 330 40 560 110

The bank loans were received to purchase assets to be leased. The loans received are collateralized by the assets or rights to lease agreements.

The average effective interest rates on secured bank loans as at 30 September 2013 are 10.7% in RUB and 5.9% in USD (31 December 2012: 10.6% in RUB). As at 30 September 2013 the Group didn’t have promissory notes issued, the average effective interest rate on promissory notes issued in RUB is 9.3% as at 31 December 2012.

The remaining contractual maturities of loans received as at 30 September 2013 are as follows (unaudited): 30 September 2013 Secured bank loans Promissory notes Total

Less than one month 433 734 - 433 734

From one to three months 764 253 - 764 253 From three to six months 1 135 949 - 1 135 949 From six months to one year 2 135 591 - 2 135 591 From one year to five years 30 488 019 - 30 488 019 More than five years 2 527 784 - 2 527 784

Total loans received and

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The remaining contractual maturities of loans received and promissory notes issued as at 31 December 2012 is as follows: 31 December 2012 Secured bank loans Promissory notes Total

Less than one month 3 381 472 - 3 381 472 From one to three months 1 389 432 394 154 1 783 586 From three to six months 898 855 - 898 855 From six months to one year 2 370 365 - 2 370 365 From one year to five years 28 450 359 - 28 450 359 More than five years 3 675 473 - 3 675 473

Total loans received and

promissory notes issued 40 165 956 394 154 40 560 110

The currency breakdown of loans received as at 30 September 2013 is as follows:

30 September 2013 Secured bank loans

Unaudited

USD 4 209 147

RUB 33 276 183

Total loans received 37 485 330

As at 31 December 2012 all loans received and promissory notes are denominated in RUB. As at 30 September 2013 loans were received from the following creditors (unaudited):

Loans received % of total

“VTB Bank” OAO 13 634 728 36.4

“Credit Suisse International AG” 4 209 147 11.2

“GazPromBank” OAO 4 026 716 10.8

“Alfa Bank” ZAO 3 202 509 8.5

Deutsche Bank AG 2 704 921 7.2

“AB “Rossiya” OAO 2 142 757 5.7

“VTB North-West” OAO 1 821 725 4.9

“Bank Saint Petersburg” OAO 1 719 997 4.6

“SMP Bank” OAO 1 597 763 4.3

“UniCreditBank” ZAO 933 333 2.5

“KB Russkiy Universalniy Bank” OOO 800 000 2.1

“JSCB “Sviaz Bank” ОАО 426 195 1.1

“Zapsibcombank” ОАО 185 882 0.5

“Nefteprombank” ZAO 79 657 0.2

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As at 31 December 2012 loans were received and promissory notes issued to the following creditors:

Loans received and

promissory notes issued % of total

“TransCreditBank” OAO 14 658 777 36.1

“GazPromBank” OAO 4 904 683 12.1

“AB “Rossiya” OAO 3 633 771 9.0

“Alfa Bank” ZAO 3 423 608 8.4

“Bank VTB” ОАО 3 008 566 7.4

Deutsche Bank AG 2 706 393 6.7

“VTB North-West” OAO 2 029 255 5.0

“SMP Bank” OAO 1 878 554 4.6

“Bank Saint Petersburg” OAO 1 866 687 4.6

“UniCreditBank” ZAO 1 134 355 2.8

“KB Russkiy Universalniy Bank” OOO 800 000 2.0

“URSA Capital” OOO 394 159 1.0

“JSCB “Sviaz Bank” ОАО 121 302 0.3

Total loans received and promissory notes issued 40 560 110 100.0

12. Liability under finance lease agreements

Assets acquired under finance lease agreements are further leased out either under operating or finance lease. The Company uses finance leases as funding source for aircraft purchases.

As at 30 September 2013 the Group has leased 2 Airbus A320 aircraft further transferred to OJSC “Aeroflot”. The lessor under the corresponding financial lease agreement is Sky High XXVI Leasing Company Limited, a company for which the ultimate controlling party is Industrial and Commercial Bank of China.

The average effective interest rate on finance leases as at 30 September 2013 is 4.3%.

The remaining contractual maturities of obligations under finance lease agreements as at 30 September 2013 are as follows:

30 September 2013

Obligations under finance lease agreements Unaudited

Less than one month 8 567

From one to three months 45 930

From three to six months 45 930

From six months to one year 91 860

From one year to five years 821 566

More than five years 1 905 773

Total obligations under finance

lease agreement 2 919 626

There were no obligations under finance lease agreements as at 31 December 2012.

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13. Bonds issued

During January-February 2013 the Company issued documentary interest-bearing non-convertible bonds series 01 and 02 with a nominal amount of RUB 10 000 000 thousand. Later in 2013 during September the Company issued documentary interest-bearing non-convertible bonds series B-01 and B-02 with a nominal amount of RUB 10 000 000 thousand.

As at 30 September 2013 bonds issued are as follows:

Nominal amount,

RUB’000 Issuance date

Principal amount

maturity Offer date

Coupon interest rate as at 30 September 2013

Series 01 5 000 000 January 2013 January 2018 January 2016 10.0% Series 02 5 000 000 February 2013 February 2018 February 2016 10.0% Series B-01 5 000 000 September 2013 September 2018 N/A 9.5% Series B-02 5 000 000 September 2013 September 2018 N/A 9.5%

14. Share capital

As at 30 September 2013 and 31 December 2012 registered, issued and fully paid share capital comprised RUB 10 001 000 thousand.

Ordinary shares

All shares rank equally with regard to the Group’s residual assets. The holders of ordinary shares are entitled to receive dividends as declared, and are entitled to one vote per share at general shareholder’s meetings of the Group.

Dividends

In accordance with Russian legislation distributable reserves are limited to the balance of retained earnings as recorded in the Group’s statutory financial statements prepared in accordance with Russian accounting principles.

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15. Administrative expenses

Salary and related social costs 443 102 401 852 109 863 103 637 Rent of premises 35 976 30 624 11 426 10 745 Information and consulting services 24 466 8 496 6 085 3 369 Transportation expenses 21 685 18 151 7 589 6 091 Advertising and representation expenses 15 484 27 230 4 570 7 964 Depreciation of property and equipment 14 665 5 848 6 577 2 010 Business-travel services 11 513 13 583 4 038 5 183 Insurance expenses 11 417 1 079 1 864 397 Repair and maintenance of equipment 9 521 8 002 2 948 2 616 Communication services 7 554 7 911 1 722 2 776 Materials and stationery 3 991 5 658 652 1 587 Amortization of intangible assets 3 684 2 123 1 430 788

Other taxes 3 445 2 337 3 416 1 253

Security 2 340 2 340 780 780

Other administrative expenses 15 613 8 805 6 755 1 628

Total administrative expenses 624 456 544 039 169 715 150 824

16. Fair value of financial instruments

The Group has disclosed information on the fair value of financial instruments, as required by IFRS 7

Financial Instruments: Disclosures and IFRS 13 Fair Value Measurements. The estimates of fair value

are intended to approximate the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. However given the uncertainties and the use of subjective judgment, the fair value should not be interpreted as being realisable in an immediate sale of the assets or settlement of liabilities.

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

Level 1: quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: inputs other than quotes prices included within Level 1 that are observable either directly (i.e, as prices) or indirectly (i.e, derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: inputs that are unobservable. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

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Fair value of financial assets and liabilities accounted at amortized cost approximates their carrying value.

17. Related parties

In accordance with IAS 24 Related Party Disclosures, parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.

Related parties may enter into transactions which unrelated parties might not, and transactions between related parties may not be effected on the same terms, conditions and amounts as transactions between unrelated parties.

Transactions with government related entities

The Group is directly owned by Russian Federation (100.0%) and managed by the Ministry of Transport of the Russian Federation. The Group has transactions with other government related entities including but not limited to lease of assets, rendering and receiving services, depositing and borrowing money, and use of public utilities.

These transactions are conducted in the ordinary course of business on terms comparable to those with other entities that are not government related.

The Group has established procurement policies, pricing strategy and approval process for purchases and sales of products and services, which are independent of whether the counterparties are government-related entities or not.

The major outstanding balances as at 30 September 2013 with related parties and their corresponding average effective interest rates are as follows:

30 September 2013 Unaudited Key management personnel Government owned entities and

state bodies % Total

Assets

Cash and cash equivalents - 7 437 395 6.7 7 437 395

Net investment in leases - 5 436 583 15.8 5 436 583

Trade and other receivables - 78 043 - 78 043

Liabilities

Loans received and

promissory notes issued - 19 909 364 10.4 19 909 364

Advances received - 28 253 - 28 253

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The major outstanding balances as at 31 December 2012 with related parties and their corresponding average effective interest rates are as follows:

31 December 2012 Key management personnel Government owned entities

and state bodies % Total

Assets

Cash and cash equivalents - 4 859 882 7.0 4 859 882

Net investment in leases - 4 344 776 15.2 4 344 776

Trade and other receivables - 98 223 - 98 223 Liabilities

Loans received and promissory

notes issued - 24 722 587 10.3 24 722 587

Advances received - 19 760 - 19 760

Trade and other payables 522 3 819 - 4 341

The results of major transactions with related parties for the nine-month period ended 30 September 2013 are as follows (unaudited):

Key management personnel

Government owned entities and state

bodies Total

Finance lease interest income - 616 478 616 478

Other interest income - 256 246 256 246

Interest expense - (1 353 209) (1 353 209)

Other operating expenses - (6 516) (6 516)

Administrative expenses (44 724) - (44 724)

The results of major transactions with related parties for the nine-month period ended 30 September 2012 are as follows (unaudited):

Key management personnel

Government owned entities and state

bodies Total

Finance lease interest income - 670 543 670 543

Other interest income - 114 424 114 424

Interest expense - (1 599 330) (1 599 330)

Other operating expenses - (4 792) (4 792)

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18. Events subsequent to the reporting date

During October and November 2013 the Group significantly increased its leasing portfolio. During this period the Group concluded lease agreements with total gross investment in leases of RUB 9 147 408 thousand.

During November 2013 the Group received a USD 100 million loan from a syndicate of banks with the maturity of 4.5 years. The effective interest rate is 3m USD LIBOR + 525 bps.

In October 2013 GTLK Europe Limited established a subsidiary in Malta in order to facilitate leasing of shipping vessels.