The assets valuation is held in the Company by an independent appraiser in the events as set out by the Federal Law "On Joint Stock Companies" and internal documents of IDGC of North-West.

Regulatory framework used to value assets:

•  Federal Law No. 135-FZ "On Valuation Activities in the Russian Federation" dated 29.07.1998;
•  Federal Valuation Standard "General Valuation Concepts; Approaches and Requirements to Valuation (FSO No.1)" approved by order No.256 of the Ministry of Economic Development and Trade of the Russian Federation dated 20.07.2007;
•  Federal Valuation Standard "Valuation Goal and Types of Value (FSO No.2)" approved by order No.255 of the Ministry of Economic Development and Trade of the Russian Federation dated 20.07.2007;
•  Federal Valuation Standard "Requirements to a Valuation Report (FSO No.3)" approved by order No.254 of the Ministry of Economic Development and Trade of the Russian Federation dated 20.07.2007;
•  International Valuation Standards (IVS);
•  International Financial Reporting Standards (IFRS);

Valuers use the following approaches to value assets:

1.   Profit Approach - a set of valuation methods to value the object of valuation based on determination of the profit expected be obtained from use of the object of valuation.

2.   Comparative Approach - a set of valuation methods to value the object of valuation based on comparison of the object of valuation with its peers, in respect of which the information on their prices is available. A peer object of valuation for valuation purposes is an object which is analogous to the object of valuation as regards the main economic, material, technical and other properties which determine its value.

3.   Cost approach - a set of valuation methods to value the object of valuation based on determination of the costs required for reproduction or replacement of the object of valuation in view of obsolescence and deterioration. The costs for reproduction of the object of valuation are the costs required for creation of an exact copy of the object of valuation with use of materials and technologies applied in the process of creation of the object of valuation. The costs for replacement of the object of valuation are the costs required for creation of an analogous object with use of materials and technologies applied as at the date of valuation.