6. Operating Segments
The Group has eleven reportable segments representing branches of the Company, as described below. These are the Group’s strategic business units. The strategic business units offer similar services representing transmission of electric power and connection services, and are managed separately. For each of the strategic business units, the Board of Experts, the Group’s operating decision making body, reviews internal management reports on at least a quarterly basis.
“Others” include operations of subsidiaries and the head office branch. None of them meets any of the quantitative thresholds for determining reportable segments in 2011 or 2010.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Board of Experts.
Segment reports are based on the information reported in statutory accounts, which differ significantly from the consolidated financial statements prepared under IFRSInternational Financial Reporting Standards. The reconciliation of items measured as reported to the Board of Experts with similar items in these Financial Statements includes those reclassifications and adjustments that are necessary for financial statements to be presented in accordance with IFRS.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment.
(i) Information about reportable segments
| As at and for the year ended 31 December 2011:Open the table |  Open the table |
| As at and for the year ended 31 December 2010:Open the table | Open the table |
(ii) Major customer
In 2011 revenue from one customer of the Group’s segment (Belgorodenergo) represented approximately 13%
(iii) Reconciliations of reportable segment revenues, profit or loss and assets and liabilities
Reconciliation of key segment items measured as reported to the Board of Experts with similar items in these Financial Statements is presented in the tables below.
| Revenues | Year ended 31 December 2011 |
Year ended 31 December 2010 |
|---|---|---|
| Total revenue for reportable segments | 69,665,850 | 60,938,299 |
| Elimination of inter-segment revenue | (986,387) | (389,933) |
| Reclassification | 361,763 | 65,252 |
| Consolidated revenue | 69,041,226 | 60,613,618 |
| Profit before income tax | Year ended 31 December 2011 |
Year ended 31 December 2010 |
|---|---|---|
| Total profit before income tax for reportable segments | 7,628,810 | 5,599,520 |
| Adjustments for of property, plant and equipment | (412,947) | (167,951) |
| Recognition of financial assets related to employee benefit fund | (16,680) | (240,331) |
| Unused vacation and annual bonus provision | 2,313 | 195,960 |
| Recognition of employee benefit obligations | (254,367) | (372,585) |
| Adjustment for finance lease | 411,660 | 580,324 |
| Adjustment for allowance for impairment of account receivables | 58,660 | 293,285 |
| Provision for inventory obsolescence | 26,990 | 97,515 |
| Other adjustments | (68,922) | 404,042 |
| Consolidated profit before income tax | 7,375,517 | 6,389,779 |
| Assets | 31 December 2011 | 31 December 2010 |
|---|---|---|
| Total assets for reportable segments | 87,444,848 | 73,008,314 |
| Elimination of investments in subsidiaries | (1,116,395) | (1,116,295) |
| Elimination of other inter-segment assets | (365,787) | (274,135) |
| Adjustments for deemed cost of property, plant and equipment | (10,988,302) | (11,137,976) |
| Adjustments for property, plant and equipment under finance lease | 1,852,934 | 2,601,091 |
| Recognition of financial assets related to employee benefit fund | 368,054 | 384,734 |
| Adjustment for allowance for impairment of account receivables | 7,596 | (51,064) |
| Provision for inventory obsolescence | (167,558) | (194,548) |
| Adjustment for deferred tax | (194,469) | (215,385) |
| Other adjustments | (24,126) | (32,658) |
| Consolidated total assets | 76,816,795 | 62,972,078 |
| Liabilities | 31 December 2011 | 31 December 2010 |
|---|---|---|
| Total liabilities for reportable segments | 35,489,809 | 25,769,957 |
| Elimination of inter-segment liabilities | (362,553) | (274,135) |
| Adjustment for finance lease | 863,652 | 1,444,635 |
| Unused vacation and annual bonus provision | 2,085 | 4,398 |
| Recognition of employee benefit obligations | 2,083,121 | 1,828,754 |
| Adjustment for deferred tax | 156,742 | 573,243 |
| Other adjustments | 6,211 | (29,231) |
| Consolidated total liabilities | 38,239,067 | 29,317,621 |
Return to Notes to the Consolidated Financial Statements for the year ended 31 December 2011