1st Quarter Results

RUSHYDRO GROUP

IFRS Condensed Consolidated Interim

Financial Information (Unaudited)

As at and for the three months ended 31 March 2013

CONTENTS

Condensed Consolidated Interim Financial Information as at and for the three months ended 31 March 2013 (Unaudited)

Condensed Consolidated Interim Statement of Financial Position................................................................. 3

Condensed Consolidated Interim Income Statement.................................................................................... 4

Condensed Consolidated Interim Statement of Comprehensive Income......................................................... 5

Condensed Consolidated Interim Statement of Cash Flows.......................................................................... 6

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

Notes to the Condensed Consolidated Interim Financial Information

Note 1. The Group and its operations

Note 2. Basis of preparation

Note 3. Significant accounting policies and new pronouncements

Note 4. Principal subsidiaries

Note 5. Segment information

Note 6. Related party transactions

Note 7. Property, plant and equipment

Note 8. Investments in associates and jointly controlled entities

Note 9. Available-for-sale financial assets

Note 10. Other non-current assets

Note 11. Cash and cash equivalents

Note 12. Accounts receivable and prepayments

Note 13. Inventories

Note 14. Other current assets

Note 15. Equity

Note 16. Income tax

Note 17. Current and non-current debt

Note 18. Other non-current liabilities

Note 19. Accounts payable and accruals

Note 20. Other taxes payable

Note 21. Revenue

Note 22. Government grants

Note 23. Expenses

Note 24. Finance income, costs

Note 25. Discontinued operations

Note 26. Earnings per share

Note 27. Commitments

Note 28. Contingencies

Note 29. Subsequent events

Chairman of Management Board E. V. Dod

Chief Accountant D. V. Finkel

3 July 2013

Chairman of Management Board E. V. Dod

Chief Accountant D. V. Finkel

3 July 2013

Chairman of Management Board E. V. Dod

Chief Accountant D. V. Finkel

3 July 2013

Chairman of Management Board E. V. Dod

Chief Accountant D. V. Finkel 3 July 2013

Chairman of Management Board E. V. Dod

Chief Accountant D. V. Finkel 3 July 2013

Note 1. The Group and its operations

Open Joint Stock Company RusHydro (OJSC RusHydro - hereinafter referred to as "the Company") was incorporated and is domiciled in the Russian Federation. The Company is a joint stock company limited by shares and was set up in accordance with Russian regulations.

The primary activities of the Company and its subsidiaries (hereinafter referred to as "the Group") are generation and sale of electricity and capacity on the Russian wholesale and retail markets, as well as generation and sale of heat energy.

Economic environment in the Russian Federation. The Russian Federation displays certain characteristics of an emerging market, including relatively high inflation and high interest rates.

The tax, currency and customs legislation within the Russian Federation is subject to varying interpretations and frequent changes. The future economic direction of the Russian Federation is largely dependent upon the effectiveness of economic, financial and monetary measures undertaken by the Government, together with tax, legal, regulatory and political developments.

Management is unable to predict all developments which could have an impact on the Russian economy and consequently what effect, if any, they could have on the future financial position of the Group. Management believes it takes all the necessary measures to support the sustainability and development of the Group's business.

During the three months ended 31 March 2013 no substantial changes to the rules of Russian wholesale and retail electricity and capacity markets, their functioning and price setting mechanisms have been made.

Relations with the Government and current regulation.As at 31 March 2013 the Russian Federation owned 60.50 percent of the total voting ordinary shares of the Company (31 December 2012: 60.50 percent).

The Group's major customer base includes a large number of entities controlled by, or related to the Government. Furthermore, the Government controls contractors and suppliers, which provide the Group with electricity dispatch, transmission and distribution services, and a number of the Group's fuel and other suppliers(Note 6).

In addition, the Government affects the Group's operations through:

·; participation of its representatives in the Company's Board of Directors;

·; regulation of tariffs for electricity, capacity and heating;

·; approval and monitoring of the Group's investment programme, including volume and sources of financing.

Economic, social and other policies of the Russian Government could have a material effect on operations of the Group.

Note 2. Basis of preparation

This Condensed Consolidated Interim Financial Information has been prepared in accordance with and complies with IAS 34, Interim Financial Reporting and should be read in conjunction with the annual Consolidated Financial Statements as at and for the year ended 31 December 2012, which have been prepared in accordance with International Financial Reporting Standards (IFRS).

This Condensed Consolidated Interim Financial Informationis unaudited and does not contain certain information and disclosures required in annual IFRS financial statements. Disclosures duplicating information included in the annual Consolidated Financial Statements as at and for the year ended 31 December 2012 have been omitted or condensed.

Note 3. Significant accounting policies and new pronouncements

The accounting policies followed in the preparation of this Condensed Consolidated Interim Financial Informationare consistent with those applied in the annual Consolidated Financial Statements as at and for the year ended 31 December 2012 except for income tax which is accrued in the interim periods using the tax rate that would be applicable to expected total annual profit or loss.

Certain reclassifications have been made to prior period data to conform to the current period presentation. These reclassifications are not material (Notes 21, 23).

The Group has adopted all new standards and interpretations that were effective from 1 January 2013. The impact of the adoption of these new standards and interpretations has not been significant with respect to this Condensed Consolidated Interim Financial Information.

Certain new standards, interpretations and amendments to standards and interpretations, as disclosed in the Consolidated Financial Statements as at and for the year ended 31 December 2012, have been issued but are not effective for the financial year beginning 1 January 2013 and which the Group has not early adopted.

Critical accounting estimates and judgements. The preparation of Condensed Consolidated Interim Financial Information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing this Condensed Consolidated Interim Financial Information, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Consolidated Financial Statements as at and for the year ended 31 December 2012 with the exception of changes in estimates that are required in determining the provision for income taxes.

Note 4. Principal subsidiaries

All subsidiaries with the exception of foreign companies are incorporated and operate in the Russian Federation. The Group operates in three main reportable segments (Note 5). The principal subsidiaries are presented below according to their allocation between the reportable segments as at 31 March 2013 and 31 December 2012. Differences between the ownership interest and voting interest held in some subsidiaries represent the effect of preference shares and / or effects of indirect ownership, or non-corporate partnership (LLC).

Generation

Generation segment includes the Company and the Group's subsidiaries with production and sale of electricity and capacity:

Retailing

Retailing segment includes the Group's subsidiaries - participants of the electricity market where they buy electricity and capacity and resell it to final customers. All the entities included in this segment have the guaranteeing supplier status and are obliged to sign contracts on supplies with all final consumers of their region upon their request.

RAO Energy System of East Group

RAO Energy System of East Group segment consists of OJSC RAO Energy System of East and its subsidiaries that generate and sell electricity and heat and render transportation, distribution, construction, repair and other services in the Far East region of the Russian Federation.

Principal subsidiaries of this segment are presented below:

* Voting and ownership percent interests in OJSC RAO Energy System of East include 1.80 percent interest held by the Group's subsidiary LLC Vostok-Finance

** Subsidiary acquired in 2011 exclusively with a view for resale and classified as a disposal group and discontinued operation.

Other segments

Other segments include:

·; the Group's subsidiaries primarily engaged in research and development related to the utilities industry and construction of hydropower facilities;

·; the Group's subsidiaries engaged in repair, upgrade and reconstruction of equipment and hydropower facilities;

·; the Group's subsidiaries engaged primarily in hydropower plants construction;

·; minor segments which do not have similar economic characteristics.

Principal subsidiaries included in all other segments are presented below:

Note 5. Segment information

Chief Operating decision maker (CODM) of the Group generally analyses information by the groups of operations which are consolidated in the following separate reportable segments: Generation, Retailing, RAO Energy System of East Group and all other segments (Note 4).

CODM reviews the segment financial information which is prepared in accordance with RSA. Such information differs in certain aspects from IFRS:

·; property, plant and equipment are stated at historic cost less accumulated depreciation;

·; liabilities for the Group's post-employment obligations are not recognised;

·; provision for impairment of accounts receivable is recognised based on management's judgement and availability of information rather than based on the incurred loss model and time value of money concept prescribed in IAS 39;

·; investments in subsidiaries are not consolidated, investments in associates and jointly controlled entities are not accounted for using the equity method;

·; other intercompany assets and liabilities balances are not eliminated.

CODM believes that EBITDA represents the most useful means of assessing the performance of ongoing operating activities of the Company and the Group's subsidiaries, as it reflects the earnings trends without showing the impact of certain charges.

Segment information for the three months ended 31 March 2013 and 31 March 2012 and as at 31 March 2013 and 31 December 2012 based on financial information prepared in accordance with RSA is presented below:

Assets of all other segments include assets of the generation objects under construction which will be transferred to the Generation segment on their completion in the amount of RR 133,655 million as at 31 March 2013 (31 December 2012: RR 128,361 million). Liabilities of all other segments consist primarily of intercompany current and non-current debt, accounts payable and accruals.

* EBITDA - sales profit (loss) under RSA before depreciation.

** Capital expenditure represents additions to property, plant and equipment and construction in progress under RSA, including advances to construction companies and suppliers of property, plant and equipment.

OJSC DRSK classified as a disposal group and discontinued operation is included in RAO Energy System of East Group segment as at 31 March 2013 and 31 December 2012 (Notes 4, 25).

A reconciliation of the reportable segments' results to the Condensed Consolidated Interim Financial Information for the three months ended 31 March 2013 and 31 March 2012 and as at 31 March 2013 and 31 December 2012 is presented below:

Reportable segments' assets are reconciled to total assets as follows:

Reportable segments' liabilities are reconciled to total liabilities as follows:

Information for revenue from external customers in accordance with IFRS for the three months ended31 March 2013 and 31 March 2012 is presented below:

Note 6. Related party transactions

Parties are generally considered to be related if they are under common control or if one party has the ability to control the other party or can exercise significant influence or joint control over the other party in making financial and operational decisions, as described by IAS 24 Related Parties Disclosure. In considering each possible related party relationship, attention is paid to the substance of the relationship, not merely the legal form.

The Group's principal related parties for the three months ended 31 March 2013 were jointly controlled entities, associates of the Group and government-related entities.

Jointly controlled entities

The Group had the following balances with its jointly controlled entities:

The Group had the following transactions with its jointly controlled entities:

Associates

The Group had the following balances with its associates:

The Group had the following transactions with its associates:

Government-related entities

In the normal course of business the Group enters into transactions with the entities controlled by the Government. The Group had transactions during the three months ended 31 March 2013 and 31 March 2012 and balances outstanding as at 31 March 2013 and 31 December 2012 with a number of government-related banks. All transactions are carried out on market rates.

The Group's sales of electricity, capacity and heat to government-related entities comprised approximately 28 percent of total sales of electricity, capacity and heat for the three months ended 31 March 2013  (for the three months ended 31 March 2012: approximately 19 percent). Sales of electricity and capacity under the regulated contracts are conducted directly to the consumers, within the day-ahead market (DAM) - through commission agreements with OJSC Centre of Financial Settlements (hereinafter referred to as "CFS"). Electricity and capacity supply tariffs under the regulated contracts are approved by FTS. On DAM the price is determined by balancing the demand and supply and such price is applied to all market participants. Sales of heat are subject to tariff regulations.

The Group's purchases of electricity, capacity and fuel from government-related entities comprised approximately 24 percent of total expenses on purchased electricity, capacity and fuel for the three months ended 31 March 2013 (for the three months ended 31 March 2012: approximately 17 percent).

Electricity distribution services provided to the Group by government-related entities comprised approximately 57 percent of total electricity distribution expenses for the three months ended 31 March 2013 (for the three months ended 31 March 2012: approximately 52 percent). The distribution of electricity is subject to tariff regulations.

Key management of the Group.Key management of the Group includes members of the Board of Directors of the Company, members of the Management Board of the Company, key management of RAO Energy System of East Group and heads of the business subdivisions of the Company.

Remuneration to the members of the Board of Directors of the Company for their services in their capacity and for attending Board meetings is paid depending on the results for the year and is calculated based on specific remuneration policy approved by the Annual General Shareholders Meeting of the Company.

Remuneration to the members of the Management Board and to other key management of the Group is paid for their services in full time management positions and is made up of a contractual salary and performance bonuses depending on the results of the work for the period based on key performance indicators approved by the Board of Directors of the Company.

Main compensation for Key management of the Group generally is short-term excluding future payments under pension plans with defined benefits. Pension benefits for key management of the Group are provided on the same terms as for the rest of employees.

Short-term remuneration paid to the key management of the Group for the three months ended 31 March 2013 comprised RR 154 million (for the three months ended 31 March 2012: RR 250 million).

Note 7. Property, plant and equipment

Assets under construction represent the carrying amount of property, plant and equipment that has not yet been put into operation, including power plants under construction and advances to construction companies and suppliers of property, plant and equipment. As at 31 March 2013 such advances amounted to RR 48,076 million (31 December 2012: RR 48,326 million).

Additions to assets under construction included capitalised borrowing costs in the amount of RR 1,522 million, the capitalisation rate was 8.31 percent (for the three months ended 31 March 2012: RR 1,534 million, the capitalisation rate was 8.07 percent).

Additions to assets under construction included capitalised depreciation in the amount of RR 143 million (for the three months ended 31 March 2012: RR 183 million).

Other property, plant and equipment include motor vehicles, land, computer equipment, office fixtures and other equipment.

Leased equipment. The Group leases equipment under a number of finance lease agreements. At the end of each of the leases the Group has the option to purchase the equipment at a beneficial price. As at31 March 2013 the net book value of the leased property, plant and equipment was RR 5,853 million(31 December 2012: RR 5,932 million). The leased equipment is pledged as a security for the lease obligation.

Operating lease. The Group leases a number of land areas owned by local governments and production buildings under non-cancellable operating lease agreements. Land lease payments are determined by lease agreements. The land areas leased by the Group are the territories on which the Group's hydropower plants and other assets are located. According to the Land Code of the Russian Federation such land areas are limited in their alienability and cannot become private property. The Group's operating leases typically run for an initial period of 5-49 years with an option to renew the lease after that date. Lease payments are reviewed regularly to reflect market rentals.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Pledged assets. As at 31 March 2013 RR 208 million of property, plant and equipment have been pledged as collateral for borrowings (31 December 2012: RR 211 million).

Note 8. Investments in associates and jointly controlled entities

In February 2013 in exchange for additional shares of the Company the Group has received 42.53 percent of shares of OJSC Irkutsk electronetwork company and increase its share in OJSC Sakhalin Energy Company to 44.64 percent of shares (Note 15).

As at 31 March 2013 investment in OJSC Irkutsk electronetwork company was recognised at cost of acquisition as the fair value of transferred shares of the Company in the amount of RR 5,581 million.The Group is currently in the process of purchase price allocation.

Note 9. Available-for-sale financial assets

The fair values of available-for-sale financial assets were calculated based on quoted market prices, for those which are not publicly traded fair values were estimated by reference to the discounted cash flows of the investees.

For the three months ended 31 March 2013 an impairment of available-for-sale financial assets in respect of shares of OJSC INTER RAO UES was recognised in profit or loss to the amount of RR 3,541 million (for the three months ended 31 March 2012: loss in respect of OJSC INTER RAO UES shares in the amount of RR 1,950 million was recorded within other comprehensive income).

Loss arising on other available-for-sale financial assets for the three months ended 31 March 2013 totaled RR 169 million, net of tax, was recorded within other comprehensive income (for the three months ended 31 March 2012: gain in the amount of RR 464 million, net of tax).

Note 10. Other non-current assets

Included in Long-term promissory notes are promissory notes of OJSC Boguchanskaya HPP andCJSC Boguchansky Aluminium Plant at amortised cost of RR 16,607 million and RR 3,142 million (31 December 2012: RR 16,708 million and RR 3,178 million respectively). In 2011these promissory notes were pledged as collateral to the State Corporation Vnesheconombank (Note 28).

Note 11. Cash and cash equivalents

Cash equivalents held as at 31 March 2013 and 31 December 2012 comprised short-term bank deposits with original maturities of three months or less.

Cash and cash equivalents balances denominated in US Dollars as at 31 March 2013 were RR 15 million (31 December 2012: RR 17 million). Cash and cash equivalents balances denominated in Euros as at 31 March 2013 were RR 166 million (31 December 2012: RR 665 million).

Note 12. Accounts receivable and prepayments

The Group does not hold any accounts receivable pledged as collateral.

Note 13. Inventories

There are no inventories have been pledged as collateral for borrowings as at 31 March 2013 and 31 December 2012.

Note 14. Other current assets

Note 15. Equity

Additional share issue 2012-2013. On 16 November 2012 the Extraordinary General Meeting of shareholders of the Company adopted a resolution to make a placement of 110,000,000,000 ordinary shares with a par value of RR 1.00 by open subscription with cash and non-cash considerations.On 10 December 2012 the Board of Directors of the Company determined the placement price of RR 1.00 per share.

In December 2012 the Group recorded RR 50,000 million of cash received from the Russian Federation, represented by the Federal Agency for State Property Management, as a contribution for the additional share issue which is expected to be finalised in 2013. A corresponding obligation was recorded. The funds raised will be used to fund construction of generating facilities in the Far East region of the Russian Federation.

In February 2013 the Group has received the following contributions in exchange for additional shares of the Company: 9.60 percent of ordinary shares of OJSC RAO Energy System of East, 24.54 percent of shares of OJSC Sakhalin Energy Company, 14.83 percent of shares of OJSC Ust'-Srednekanskaya HPP, 42.53 percent of shares of OJSC Irkutsk electronetwork company.

As at 31 March 2013 the Group had an obligation of RR 66,995 million in respect of additional share issue including obligation of RR 66,006 million to the Russian Federation, represented by the Federal Agency for State Property Management (as at 31 December 2012: RR 50,000 million).

Additional share issue 2011-2012. On 30 June 2011 the Annual General Meeting of shareholders of the Company adopted a resolution to make a placement of 89,000,000,000 ordinary shares with a par value of RR 1.00 and placement price of RR 1.65 per share by open subscription with cash and non-cash considerations.

Results of the additional share issue were registered on 6 September 2012. 27,334,817,715 shares (or 30.71 percent of the total offering) were placed and the premium of RR 17,768 million was recorded within equity.

Among others in the course of this share issue the following assets were received:

·; controlling interests in RAO Energy System of East Group, controlling and non-controlling interests in other companies;

·; hydropower facilities: dams of Bratskaya, Ust'-Ilimskaya and Irkutskaya HPPs (Note 10).

Transactions with parties under common control. The change of merge reserve for the three months ended 31 March 2013 in the amount of RR 8,165 million relates to assets that were received in February 2013 from the Russian Federation in the course of additional share issue 2012-2013.

As a result of the increase in Group`s share in OJSC RAO Energy System of East non-controlling interest decreased by RR 2,315 million and retained earnings of the Group increased in the same amount.

As a result of the increase in Group`s share in OJSC Ust'-Srednekanskaya HPP non-controlling interest increased by RR 293 million and retained earnings of the Group decreased by the same amount due to change of share in losses accumulated by OJSC Ust'-Srednekanskaya HPP.

Effect of changes in non-controlling interest of subsidiaries. In February 2013 the Group has received shares of OJSC RAO Energy System of East form shareholders with non-controlling interest in the course of additional share issue 2012-2013. As a result non-controlling interest decreased by RR 1,588 million and retained earnings of the Group increased by RR 992 million.

The Report on the share issue for 2,317,068,930 additional ordinary shares of OJSC RAO Energy System of East was registered on 7 February 2012. As a result for the three months ended 31 March 2012 non-controlling interest increased by RR 1,566 million and retained earnings of the Group decreased by RR 814 million.

Note 16. Income tax

Income tax expense is recognised based on the management's best estimate of the weighted average annual income tax rate expected for the full financial year. The tax effect of the exceptional or one-off items has not been included in the estimation of the weighted average annual income tax rate. The estimated average annual effective income tax rate used for the three months ended 31 March 2013 was 28 percent (for the three months ended 31 March 2012: 22 percent).

In accordance with the tax legislation, tax losses and current income tax assets of different entities of the Group may not be offset against current income tax liabilities and taxable profits of other entities of the Group and, accordingly, taxes may be accrued even where there is a consolidated tax loss. Therefore, deferred income tax assets and liabilities are offset only when they relate to the same taxable entity.

The Group did not have significant unrecognised deferred tax liabilities in respect of taxable temporary differences associated with investments in subsidiaries as at 31 March 2013 and 31 December 2012.

Note 17. Current and non-current debt

Non-current debt

* The bonds mature in 10 years with a put option to redeem them in 2016.

** Fixed interest rate applied to 90 percent of the credit facility, to the rest 10 percent of the facility the quarterly variable export finance rate published by OeKB (Oesterreichische Kontrollbank AG) less 0.25 percent is applied.

Russian bonds issued in February 2013. In February 2013 the Group placed non-convertible ten years interest bearing bonds of series 07 with a nominal amount of RR 10,000 million and series 08 with a nominal amount of RR 10,000 million, shown as at 31 March 2013 net of transaction costs in the amount of RR 23 million. The term of the offer (period of redemption of bonds on request of their owners) - five years, coupon rate of 8.50 percent per annum was determined for the first five years only.

Current debt

Compliance with covenants. The Group is subject to certain covenants related primarily to its debt.

As at 31 March 2013 and 31 December 2012 some of the Group's credit contracts are subject to covenant clauses, whereby the Group is required to meet certain key performance indicators. The Group did not fulfill some of the requirements. Before 31 March 2013 and 31 December 2012 management received covenant waivers from banks confirming absence of intention to request early repayment of loans.