586

APPENDIX 4

CONSOLIDATED PROFIT AND LOSS ACCOUNT OF JSC

«RUSSIAN RAILWAYS»

APPENDIX 5

CONSOLIDATED CASH FLOW STATEMENT OF JSC

«RUSSIAN RAILWAYS»

GLOSSARY

Accounting — a system of recording the money value of business dealings and income and expenditure accounts to enable the management of a concern to see the financial position at any time

Accounting equation — the basic principle on which all financial accounting depends, that the resources possessed by a business are equal to the sum of the sources from which those resources were obtained

Accounting standards — accounting rules and procedures relating to measurement, valuation and disclosure

Accounting Standards Committee — in the UK, the committee responsible for the preparation of Statements of Standard Accounting Practice and the issue of Statements of Recommended Practice

Accounts payable — a current liability account showing amounts payable by a firm to suppliers for purchases of materials, stocks, or services on credit

Accounts receivable — a current asset account showing amounts payable to a firm by customers who have made purchases of goods and services on credit

Accruals — one of the accounting principles under which all income and charges relating to a financial year shall be taken into account, without regard to date of receipt or payment

Annual report — a report prepared at yearly intervals and in particular the report required by law or other regulation to be made annually by the directors of a company to its shareholders giving information about the company’s trading activities and including certain documents, namely the balance sheet, the profit and loss account and the auditors’ and directors’ reports

Assets — all things owned by a person or business and having some money value, esp. if they can be used to pay debts, produce goods, or in some way help the business to make a profit

Audit — an official examination and checking of the annual accounts of an organization by independent qualified person, called an auditor, in order to make certain that they show accurately the true financial position and do not hide any dishonesty, and also that they are presented in proper form ordered by law

Audit report — a report written by the auditor officially appointed by an organization to audit its accounts. The report usu. written on the balance sheet or attached to it, must be law state

Bad debts — debts which are likely never to be paid and must be treated as worthless by being entered as written off in a bad debts account

Balance sheet — a statement showing the financial position of a business at a certain date, usu. the end of the financial year

Book value — the original cost of a fixed asset, less the accumulated depreciation

Breakeven — to be in a situation where income from sales equals the expenses of production, so that neither profit nor loss is made

Capital — proprietorship interest as represented in a balance sheet by a contributed and accumulated capital equal in amount to the assets less liabilities

Cash — money in the form of coin and bank-notes, and perh. cheques and negotiable instruments that can be quickly and easily exchanged for coin and bank-notes

Cash flow — the amount of cash made by a business during a specified period which it can use for investment; it can be calculated from the accounts of a business and is a means of measuring its financial strength

Cost — the value given for accounting purposes to the stock of an article or commodity at the end of an accounting period

Creditors — amounts (representing either cash or a claim to services) owed to an accounting enti-

ty

Current asset — an asset that can be reasonably be expected to be used up or converted into cash or sold within 1 year or less

Current liability — a debt that is payable within 1 year or the current accounting period, whichever is longer

Depreciation — the gradual loss of value of fixed assets such as buildings, plant and machinery, etc. because they wear out or decay or are replaced by more modern efficient things. This is one of the costs of running a business and must be charged against the profits

Dividends — a corporation’s distribution of income to the shareholders of the corporation. The form of the dividend may be either cash or additional shares

Double-entry system — the basic system of modern book-keeping by which each account has two sides, a debit side and a credit side, and each transaction is entered twice, as a debit in one account and as a credit in another

Earned income — the income, which, for tax purposes, one receives as a reward for work, and includes one’s salary or wages; pension or retirement annuity; profits received from one’s trade or profession from an active partnership, royalties from patents and copyrights if one created them oneself Equity — 1) that part of capital of a company that consists of ordinary, deferred or founders’

shares, all of which together, in effect, carry the right of ownership in the business;

2) the difference between total assets and total liabilities. It represents the capital owned by a business

Expenditure — the spending of something having value, such as time, money; Capital expenditure — money spent on fixed assets or on improvements of fixed assets

Expenses — sums of money spent on the running a business in such a way that they do not add to the value of its assets. Thus money spent on rent, local taxes, electricity, insurance, salaries, advertising, etc.

Financial accounting — that part of accounting which is concerned mainly, with external reporting to shareholders, government and other users of accounting outside the enterprise

Financial analysis — the study of the present financial situation of a company, industry or country, using statistical information about the immediate past and taking note of present market tendencies, such as consumer demand and government spending. From such a study, a skilful analyst will produce a forecast of future movements of prices of securities and commodities, rates of interest, cost of living, etc.

Fixed assets — assets that are intended for use on a continuing basis in an enterprise’s activities. A fixed asset should be recognized in an enterprise’s balance sheet when a) it is probable that future economic benefits associated with the asset will flow to the enterprise; and b) the asset has a cost, and, where carried at a valuation, a value that can be measured with reliability

Goodwill — the capital value of an intangible asset, that is the right to receive the extra profits, which an established business may be expected to earn, over and above the normal earnings for a similar business

Historical cost — the monetary amount for which an asset was originally purchased or produced Holding company — a company which holds a majority of the shares in another company (its sub-

sidiary); or is a member of it and has the right to appoint or remove a majority of its board of directors Income Statement — a financial statement of an enterprise’s revenues, expenses and profit Intangible assets — assets, which are valuable in helping the business, but since they have no ma-

terial form, are not easily turned into cash, e. g. goodwill, copyrights, trademarks, etc.

Internal control — control of an organization’s operations, through procedures designed to safeguard its assets, generate appropriate accounting data, and ensure efficient productivity

Inventories — goods held for sale by a retail or wholesale business (merchandise inventory) or by a manufacture (finished goods); goods in intermediate stages of production (work in process); and raw materials and supplies

Joint Venture — a partnership, formed by two or more persons or companies co-operating in some special business activity in which there is some risk of loss, but a reasonable hope of profit. The parties in the venture share the costs and the profits in agreed proportions

Journal — any book (or other record) in which either one or both aspects of an accounting transaction or other event are recorded chronologically on a day-to-day basis

Lease — an agreement in writing by which one person (a lessor) gives another (a lessee) the right to use property, usually for a fixed number of years, in return for either a single sum of money called a premium or a series of regular payments called rent

Ledger — in double-entry book-keeping, one of a set of main account books, or books of final entry. In the ledgers, the debits and credits of all business dealings of a particular organization are recorded

Liabilities — the debts owed by a business to its creditors and to its owner (s)

Management accounting — the part of accounting which is concerned mainly with internal reporting to the managers of an enterprise. It emphasizes the control and decision-making. It is relatively free of constraints imposed by legal regulation and accounting standards

Mortgage — a charge over real property giving by a borrower to a lender to secure the repayment of a loan

Net present value (NPV) — the discounted value of the future incremental cash receipts expected from the use of an asset less the discounted value of the incremental cash outlays

Net profit — the excess of revenues over expenses. It may be calculated before or after extraordinary items and before or after tax depending upon the context

Net realizable value — the amount of money for which an asset can be exchanged in a market, i. e. selling price less selling costs

Overdraft — an agreed sum of money which by an arrangement a bank allows a customer to overdraw his account, i. e. to run into debt to the bank by drawing more than the amount standing to his credit in the account. The customer can make use of this money when he wishes, and for an agreed length of time. Interest is payable only on the amount overdrawn at the end of each day, but the bank may make an additional charge for agreeing to the arrangement, and will usually demand that the customer should deposit easily saleable stocks and shares as security for repayment of debt

Overheads — the expenses of running a business, esp. those fixed costs that cannot be related to particular units of goods produced or goods sold, such as rent, rates and management salaries

Payroll — a list of all employees and their respective salaries for a given period

Profit and Loss Account — an accounting summary which is prepared for the purpose of calculating the net profit of the business before taxation, i. e. the gross profit plus non-trading credits such as interest and discounts received, less the expenses of selling and of administering the business

Progressive tax — a tax that is based on the amount of money that an individual earns

Profitability — the power of a business to earn profits, or the degree to which a business is profitable, esp. as compared to another business

Receivables — amounts owing to an enterprise whether current or non-current

Revenue — amounts earned by trading (sales, turnover), providing services (fees) or by other activities (e. g. investment)

Sales — amounts derived from the sale of goods and services (both for cash or on credit), falling within a business’s ordinary activities

Shareholder — a member of a limited company and therefore a holder of none or more shares in that company

Tangible assets — assets, which have material form and therefore can be turned into cash fairly quickly, e. g. securities, cash, cheques, etc.

Taxes — compulsory levies made by public authorities for which nothing is received directly in return. They are used in part to provide public goods