Consolidated statement of cash flows

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011 (In millions of Russian Rubles)
  Note 2011 2010
OPERATING ACTIVITIES:      
Total comprehensive income for the year   3,374 2,221
Adjustments for:      
Income tax expense recognized in the statement of      
comprehensive income 15 1,264 1,041
Depreciation and amortization 24 1,638 1,289
Change in allowance for doubtful trade and      
other accounts receivable and prepaid expenses 10 42 216
Share-based payment 29 79 86
Change in allowance for obsolete and slow-moving inventories and      
inventory losses, net of surpluses 23 (237) 125
Other non-cash reconciling items, net   303 450
Operating cash flows before movements in working capital   6,463 5,428
Increase in inventories   (3,499) (5,395)
Decrease/(increase) in trade and other accounts receivable and      
prepaid expenses   11 (144)
Increase in other taxes receivable   (10) (70)
Increase in trade accounts payable   7,636 4,542
Increase in other payables and accrued expenses   342 472
Increase in deferred revenue   870 591
(Decrease)/increase in advances received   (91) 387
Other changes in working capital, net   43 (169)
Cash generated by operations   11,765 5,642
Income tax paid   (1,502) (1,108)
Interest paid   (37) (30)
Forward contracts settlement   (16) -
Net cash generated by operating activities   10,210 4,504
INVESTING ACTIVITIES:      
Purchases of property, plant and equipment   (3,000) (2,384)
Purchase of intangible assets   (567) (429)
Interest received   85 46
Net cash used in investing activities   (3,482) (2,767)
FINANCING ACTIVITIES:      
Dividends paid   (691) (413)
Purchase of treasury shares   - (588)
Proceeds from short-term borrowings   6,386 7,785
Repayment of short-term borrowings   (6,386) (7,785)
Net cash used in financing activities   (691) (1,001)
NET INCREASE IN CASH AND CASH EQUIVALENTS   6,037 736
CASH AND CASH EQUIVALENTS, at the beginning of the year   7,183 6,447
CASH AND CASH EQUIVALENTS, at the end of the year   13,220 7,183

Refer to Notes 6, 7, 8, 10, 15, 17, 20, 21 and 32 for details of non-cash transactions.

The Notes form an integral part of these consolidated financial statements. The independent auditor’s report is presented here.

Signed on behalf of the Board of Directors: 29 March 2012.

Signature

Signature

A. Tynkovan C. Parks
President Chief Financial Officer