Q U A R T E R L Y R E P O R T
Joint Stock Company Interregional Distribution Grid Company of Center and Volga Region
Issuer’s code: 12665-E
st for the 1 quarter of 2011
Issuer’s location: 33 Rozhdestvenskaya Str., Nizhny Novgorod City, Russia 603950
Information contained in this quarterly report shall be disclosed in compliance with the laws of the Russian Federation on securities
General Director
Date: 13 May 2011 E.V. Ushakov signature
Chief Accountant
Date: 13 May 2011 I.Yu. Rodionova signature
Contact person: Marina Vladimirovna Borovkova, Leading Specialist of the financial investments management and information disclosure division in the corporate governance department of IDGC of Center and Volga Region, JSC Tel.: (831) 431-7400 #30-05 Fax: (831) 431-8391 E-mail: [email protected] Internet web page(s) used to disclose the information contained in this quarterly report: www.mrsk-cp.ru/?id=2933
1 Contents Contents 2 Introduction 5 I. Brief information on the persons forming part of the issuer’s governance bodies, information on the issuer’s 6 bank accounts, auditor, appraiser and financial consultant, and on other persons who signed the quarterly report 1.1. Persons forming part of the issuer’s governance bodies 6 1.2. Issuer’s bank accounts 6 1.3. Issuer’s auditor (auditors) 9 1.4. Issuer’s appraiser (appraisers) 11 1.5. Issuer’s consultants 11 1.6. Other persons who signed the quarterly report 11 II. Main information on the issuer’s financial and economic position 11 2.1. Indicators of the issuer’s financial and economic operations 11 2.2. Issuer’s market capitalization 12 2.3. Issuer’s liabilities 12 2.3.1. Accounts payable 13 The structure of the issuer’s accounts payable 13 2.3.2. Issuer’s credit history 14 2.3.3. Issuer’s liabilities from the security provided to third parties 15 2.3.4. Issuer’s other liabilities 16 2.4. Goals of the issue and lines of use of the money received as a result of equity securities placement 16 2.5. Risks related to purchase of equity securities, which are placed or in the process of placement 16 2.5.1. Sector risks 17 2.5.2. Country and regional risks 19 2.5.3. Financial risks 20 2.5.4. Legal risks 21 2.5.5. Risks related to the issuer’s activities 22 III. Detailed information on the issuer 23 3.1. History of establishment and development of the issuer 23 3.1.1. Information on the issuer’s firm name (naming) 23 3.1.2. Information on the issuer’s state registration 24 3.1.3. Issuer’s establishment and development history 24 3.1.4. Contact information 25 3.1.5. Taxpayer’s identification number 25 3.1.6. Issuer’s branches and representative offices 25 3.2. Issuer’s main economic activities 26 3.2.1. Issuer’s sector properties 26 3.2.2. Issuer’s main economic operations 27 3.2.3. Issuer’s materials, goods (raw material) and suppliers 29 3.2.4. Issuer’s sales markets of goods (works, services) 29 3.2.5. Information on the issuer’s licenses 30 3.2.6. Issuer’s joint activities 32 3.3. Issuer’s outline for future activities 33 3.4. Issuer’s participation in industrial, bank and financial groups, holdings, concerns and associations 34 3.5. Issuer’s subsidiaries and dependent economic entities 34 3.6. Composition, structure and value of the issuer’s fixed assets, information on plans for purchase, 39 replacement, retirement of fixed assets and on all facts of encumbrance of the issuer’s fixed assets 3.6.1. Fixed assets 39 IV. Information on the issuer’s financial and economic operations 41 4.1. Results of the issuer’s financial and economic activities 41 4.1.1. Profit and loss 41 4.1.2. Factors which had impact on change of the amount of the earnings from selling goods, products, 42 works, services by the issuer, and the issuer’s profit (loss) from main operations 4.2. Issuer’s liquidity, sufficiency of capital and current assets 42 4.3. Amount and structure of the issuer’s capital and current assets 43 4.3.1. Amount and structure of the issuer’s capital and current assets 43 4.3.2. Issuer’s financial investments 44 4.3.3. Issuer’s intangible assets 48 4.4. Information on the issuer’s policy and expenditure in the field of the scientific and engineering 49 development, in relation to licenses and patents, new developments and researches 4.5. Analysis of the development tendencies in the field of the issuer’s main activities 49 4.5.1. Analysis of factors and conditions influencing the issuer’s operations 49 4.5.2. Issuer’s competitors 51 V. Detailed information on the persons forming part of the issuer’s governance bodies, issuer’s bodies for control 51 2 over its financial and economic operations, and short data on the issuer’s employees (staff) 5.1. Information on the structure and competence of the issuer’s governance bodies 51 5.2. Information on the persons forming part of the issuer’s governance bodies 57 5.2.1. Membership of the issuer’s board of directors (supervisory council) 57 5.2.2. Information on the issuer’s executive body 71 5.2.3. Membership of the issuer’s collegial executive body 72 5.3. Information on the amount of remuneration, privileges and/or compensation of charges with regard to 80 each of the issuer’s governance body 5.4. Information on the membership and competence of the bodies controlling the issuer’s financial and 81 economic operations 5.5. Information on the persons forming part of the bodies controlling the issuer’s financial and economic 87 operations 5.6. Information on the amount of remuneration, privileges and/or compensation of charges with regard to 91 the body controlling the issuer’s financial and economic operations 5.7. Information on the number and general data on education and membership of the issuer’s employees 93 (staff), as well as on change of the number of the issuer’s employees (staff) 5.8. Information on any liabilities of the issuer to its employees (staff) which concern a possibility of their 93 participation in the charter (joint-stock) capital (share fund) of the issuer VI. Information on the issuer’s participants (shareholders) and interested-party transactions completed by the 93 issuer 6.1. Information on the total number of the issuer’s shareholders (participants) 93 6.2. Information on the issuer’s participants (shareholders) owning at least 5 percent of its charter (joint- 93 stock) capital (share fund) or at least 5 percent of its ordinary shares; information on participants (shareholders) of such persons owning at least 20 percent of the charter (joint-stock) capital (share fund) or at least 20 percent of their ordinary shares 6.3. Information on a stake of the government or municipal institution in the issuer’s charter (joint-stock) 94 capital (share fund), availability of a special right (“golden share”) 6.4. Information on restrictions for participation in the issuer’s charter (joint-stock) capital (share fund) 95 6.5. Information on changes in the structure and amount of the issuer’s shareholders (participants) owning at 95 least 5 percent of its charter (joint-stock) capital (share fund) or at least 5 percent of its ordinary shares 6.6. Information on interested-party transactions completed by the issuer 96 6.7. Information on the amount of debt receivable 97 VII. Issuer’s accounting reports and other financial information 98 7.1. Issuer’s annual accounting reports 98 7.2. Issuer’s quarter accounting reports for the last completed reporting quarter 140 7.3. Issuer’s consolidated accounting reports for the last completed financial year 142 7.4. Information on the issuer’s accounting policy 142 7.5. Information on the total amount of export, and on the export share in the total amount of sales 144 7.6. Information on the value of the issuer’s real estate and material changes which occurred in the structure 144 of the issuer’s property after the date of the end of the last completed financial year 7.7. Information on participation of the issuer in litigations, if such participation may have a material effect 144 on the issuer’s financial and economic activities VIII. Additional information on the issuer and on equity securities placed by it 144 8.1. Additional information on the issuer 144 8.1.1. Information on the amount, structure of the issuer’s charter (joint-stock) capital (share fund) 144 8.1.2. Information on change of the amount of the issuer’s charter (joint-stock) capital (share fund) 144 8.1.3. Information on formation and use of the reserve fund and other funds of the issuer 145 8.1.4. Information on the procedure of convening and carrying out of a meeting (proceedings) of the issuer’s 146 supreme governance body 8.1.5. Information on commercial organizations, in which the issuer owns at least 5 percent of the charter 147 (joint-stock) capital (share fund) or at least 5 percent of ordinary shares 8.1.6. Information on essential transactions completed by the issuer 149 8.1.7. Information on the issuer’s credit ratings 150 8.2. Information on each category (type) of the issuer’s shares 150 8.3. Information on the issuer’s previous equity securities, except for the issuer’s shares 150 8.3.1. Information on the issues, all the securities of which were canceled (annulled) 150 8.3.2. Information on the issues, the securities of which are placed 150 8.3.3. Information on the issues, the issuer’s liabilities under the securities of which were not complied with 151 (default) 8.4. Information on the person (persons), who provided security for the bonds of the issue 151 8.5. Terms of security in respect of compliance with the liabilities under the bonds of the issue 151 8.5.1. Terms of security in respect of compliance with liabilities under the mortgage-backed bonds 151 8.6. Information on the entities which keep records of rights to the issuer’s equity securities 151 8.7. Information on legal acts governing the issues of capital import and export, which may have impact on 151 3 payment of dividends, interest and other payments to non-residents 8.8. Description of the procedure for taxation of income per the issuer’s equity securities which were placed 152 or are in the process of placement 8.9. Information on declared (accrued) and paid dividends per the issuer’s shares, and on the income per the 155 issuer’s bonds 8.9.1. Information on declared (accrued) and paid dividends per the issuer’s shares for the last 5 completed 155 financial years or for each completed financial year, if the issuer has been carrying its activities for less than 5 years 8.9.2. Bond issues, in respect of which income was paid for the last 5 completed financial years prior to the 155 date of the end of the last reporting quarter, and if the issuer has been carrying out its activities for less than 5 years – for each completed financial year prior to the date of the end of the last reporting quarter 8.10. Other information 155 8.11. Information on the issuer’s presented securities and the issuer of the presented securities, the title 156 whereto is certified by Russian depositary receipts
Enclosure: Auditor’s Opinion in respect of the issuer’s accounting (financial) statements
4 Introduction Grounds for occurrence of the issuer’s obligation to disclose information in the form of a quarterly report: Registration of the securities prospectus was performed in respect of the issuer’s securities
The registration of the securities prospectus was carried out by the Federal Financial Markets Service of the Russian Federation on 21 February 2008.
This quarterly report contains assessments and estimates of the issuer’s authorized governance bodies regarding future events and/or actions, prospects of development of the economic sector, in which the issuer conducts main activity, and the issuer’s business performance including the issuer’s plans, probability of certain events occurrence and certain actions performance. Investors should not rely unconditionally on the assessments and estimates of the issuer’s authorized governance bodies since actual issuer’s performance may differ from the projected performance in the future for many reasons. Acquisition of the issuer’s securities is related to the risks described in this quarterly report. Additional information (data on the issuer’s name in English): The issuer’s full name: «Interregional Distribution Grid Company of Center and Volga Region», Joint Stock Company The issuer’s abbreviated name: IDGC of Center and Volga Region, JSC
5
I. Brief information on the persons forming part of the issuer’s governance bodies, information on the issuer’s bank accounts, auditor, appraiser and financial consultant, and on other persons who signed the quarterly report
1.1. Persons forming part of the issuer’s governance bodies
Membership of the issuer’s Board of Directors Full name Year of birth
Alexey Yurevich Perepyolkin (Chairman) 1970 Alexander Markovich Branis 1977 Vladimir Vyacheslavovich Inozemtsev 1977 Dmitry Grigorievich Kolesnik 1969 Pavel Ivanovich Okley 1970 Alexey Vladimirovich Sergutin 1961 Denis Alexandrovich Spirin 1980 Sergey Borisovich Syutkin 1959 Roman Alexeevich Fil’kin 1983 Vladimir Sergeevich Chistyakov 1959 Valery Mukhamedovich Shogenov 1981
Sole Executive Body of the issuer Full name Year of birth Evgeny Victorovich Ushakov 1964
Membership of the issuer’s collegial executive body
Full name Year of birth
Evgeny Victorovich Ushakov (Chairman) 1964 Sergey Timofeevich Andrus 1962 Evgeny Vladimirovich Nikitushkin 1977 Lada Alexandrovna Podolskaya 1974 Olga Vladimirovna Tikhomirova 1964 Andrey Yurevich Vedernikov 1976 Irina Victorovna Yashanina 1962 Alexander Vasilievich Prepodobny 1954 Vladimir Victorovich Shitts 1972
1.2. Issuer’s bank accounts 1. Information on a credit entity Full firm name: Branch of the Joint-Stock Commercial Savings Bank of the Russian Federation (Open Joint-Stock Company) - Volgo-Vyatsky Bank in the City of Nizhy Novgorod Abbreviated firm name: Volgo-Vyatsky Bank of Sberbank RF (OJSC) Location: 35, Oktyabrskaya Street, Nizhny Novgorod, 603005 TIN: 7707083893 RCBIC: 042202603 Account number: 40702810842020002900 Correspondent account: 30101810900000000603 Account type: settlement 2. Information on a credit entity 6 Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in the city of Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in the city of Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810300010001790 Correspondent account: 30101810700000000764 Account type: settlement
3. Information on a credit entity Full firm name: Nizhny Novgorod Branch of the Joint-Stock Commercial Bank “Moscow Bank of Reconstruction and Development” (Open Joint-Stock Company) Abbreviated firm name: Nizhny Novgorod Branch of JSCB “MBRD” (OJSC) Location: 117 Gorkogo Street, Nizhny Novgorod 603000 TIN: 7702045051 RCBIC: 042202717 Account number: 40702810600160000046 Correspondent account: 30101810100000000717 Account type: settlement
4. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810500010001930 Correspondent account: 30101810700000000764 Account type: settlement
5. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810700014101995 Correspondent account: 30101810700000000764 Account type: settlement
6. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810900014201996 Correspondent account: 30101810700000000764 Account type: settlement
7. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810100014301997 Correspondent account: 30101810700000000764 Account type: settlement 7
8. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810300014401998 Correspondent account: 30101810700000000764 Account type: settlement
9. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810500014501999 Correspondent account: 30101810700000000764 Account type: settlement
10. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810000014602000 Correspondent account: 30101810700000000764 Account type: settlement
11. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810200014702001 Correspondent account: 30101810700000000764 Account type: settlement
12. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova Street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810400014802002 Correspondent account: 30101810700000000764 Account type: settlement
13. Information on a credit entity Full firm name: Branch “Gazprombank” (Open Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: Branch “GPB” (OJSC) in Nizhny Novgorod Location: 3, bld. 3, Piskunova street, Nizhny Novgorod city 603005 TIN: 7744001497 RCBIC: 042202764 Account number: 40702810600014902003 Correspondent account: 30101810700000000764 8 Account type: settlement
14. Information on a credit entity Full firm name: Limited Liability Company “Barclays Bank” Abbreviated firm name: LLC “Barclays Bank” Location: 29, bld. 2, Kalanchevskaya Street, Moscow, 107078 TIN: 7729065633 RCBIC: 044585460 Account number: 40702810904000001219 Correspondent account: 30101810900000000460 Account type: settlement
15. Information on a credit entity Full firm name: Branch of the Joint-Stock Commercial Bank “Absolut Bank” (Closed Joint-Stock Company) in Nizhny Novgorod Abbreviated firm name: BJSCB “Absolut Bank” (CJSC) in Nizhny Novgorod Location: 68A Studenaya Street, Nizhny Novgorod, 603115 TIN: 7736046991 RCBIC: 042202860 Account number: 40702810322620000504 Correspondent account: 30101810400000000860 Account type: settlement
1.3. Issuer’s auditor (auditors) The auditor (auditors) carrying out independent inspection of book keeping and financial (accounting) statements of the issuer, on the basis of the agreement concluded with it, as well as the auditor (auditors) approved (chosen) for audit of the annual financial (accounting) statements of the issuer based on the results of the current or completed financial year:
Full firm name: Closed Joint Stock Company “Joint Stock Audit Firm “Auditinform” Abbreviated firm name: CJSC “JSAF Auditinform” Location : 4 Yaroslavskaya Street, Moscow 129164 TIN: 7717025530 PSRN: 1027739185044 Tel.: (495) 933-8165 Fax: (495) 933-8165 E-mail: [email protected]
Information on the license for implementation of audit activity: Name of the authority which issued the license: Ministry of Finance of the Russian Federation Number: Е003505 Issued on: 4 March 2003 Expires before: 4 March 2013
Information on membership of the auditor in self-regulated entities of auditors: Full name: Self-regulated entity of auditors Noncommercial Partnership “Moscow Audit Chamber” Location: 8, bld. 2, Petrovsky Lane, Moscow, Russia 107031
Information on membership of the auditor in boards, associations or other professional unions (entities): The issuer has no information on the membership of the auditor in boards, associations or other professional unions (entities)
Financial year (years), which was (were) target(s) for the auditor to hold an independent inspection of book keeping and financial (accounting) statements of the issuer:
Year
9 2010 Factors which may influence the independent status of the auditor from the issuer, including information on any material interests available that connect the auditor (auditor’s officials) with the issuer (issuer’s officials): There are no factors which may influence the independent status of the auditor from the issuer, as well as any material interests available that connect the auditor (auditor’s officials) with the issuer (issuer’s officials).
Procedure of choosing the auditor of the issuer Presence of the procedure of tender related to selection of the auditor, and its main terms: IDGC Holding, OJSC holds selection of auditors to audit the financial (accounting) statements of IDGC of Center and Volga Region, JSC prepared according to RAS. The main requirements placed on auditor entities: - not to be in the process of liquidation; - not to have a decision on suspension of activity taken according to the procedure stipulated by the Russian Federation Code on Administrative Offences, as at the date of consideration of the Bid; - not to have debts in respect of accrued taxes, collections and other obligatory payments to the budgets of any level or state extra-budgetary funds for the last calendar year, the amount of which exceeds twenty five percent of the book value of the participant's assets according to the accounting reports for the last completed reporting period; - not to have features enumerated in clause 1 of Article 12 of the Federal Law “On Audit Activity”.
Procedure of recommendation of a candidate of the auditor for approval by the shareholders (participants) meeting, including the management body making the respective decision: The IDGC Holding, OJSC recommends a candidate of the auditor for approval by the Company’s General Meeting of Shareholders based on the results of selection of audit firms. The General Meeting of Shareholders annually approves the Company’s Auditor in accordance with subclause 11 clause 10.2 Article 10 of the Company’s Charter. The amount of payment for services of the auditor is approved by the Company’s Board of Directors according to subclause 14 clause 15.1 Article 15 of the Company’s Charter. The decision of the Annual General Meeting of Shareholders of IDGC of Center and Volga Region, JSC (minutes #3 dated 21 June 2010) approved CJSC “JSAF “Auditinform” as the auditor of IDGC of Center and Volga Region, JSC for carrying out of audit inspection of financial (accounting) statements for the year 2010.
The information on the works held by the auditor within the framework of special audit tasks: Such works were not held.
Description of the procedure of determining the amount of remuneration of the auditor, reference to the actual amount of remuneration paid by the issuer to the auditor based on the results of each of the last five completed financial years, for which the auditor held independent check of book keeping and financial (accounting) reports of the issuer: The procedure of payment and the amount of remuneration in money terms to the audit firms and individual auditors for carrying out of audit (including the obligatory one) and rendering of services which accompany it are determined by the agreements of rendering audit services and may not be put into dependence on performance of any requirements of audited persons about the contents of the conclusions which may be made based on the audit. The amount of payment for the services of the issuer’s auditor approved by the issuer’s annual general meeting of shareholders for obligatory annual inspection and confirmation of the issuer’s annual financial reporting is determined by the issuer’s Board of Directors. According to agreement # D2010/56967 (06/141) dated 26 August 2010, the amount of remuneration paid to the auditor in 2010 for the independent inspection of book keeping and financial (accounting) statements of the issuer based on the results of 6 months of 2010 was RUR 1,416 thousand and in the first quarter of 2011 – in the amount of RUR 1,416 thousand for independent inspection of book keeping and financial (accounting) statements of the issuer based on the results of 12 months of the year 2010.
The information on presence of deferred and back payments for services rendered by the auditor: There are no deferred and back payments for services rendered by the auditor.
1.4. Issuer’s appraiser (appraisers) 10 The issuer did not involve appraisers
1.5. Issuer’s consultants The issuer did not involve financial consultants
1.6. Other persons who signed the quarterly report Full name: Irina Yurievna Rodionova Year of birth: 1956 Information on the main place of work: Entity: Joint Stock Company Interregional Distribution Grid Company of Center and Volga Region Position: Chief Accountant
II. Main information on the issuer’s financial and economic position 2.1. Indicators of the issuer’s financial and economic operations Measurement unit: thousands of rubles
2007 2008 2009 2010 2011, 3 Values months
10,073 39,968,819 40,524,235 41,912,980 43,620,501 Issuer’s net asset value
The ratio of the borrowed funds amount to 513.4 48.57 52.1 56.52 58.53 capital and reserves, % The ratio of the short-term liabilities 508.72 17.26 18.78 16.77 19.69 amount to capital and reserves, % 0 122.27 239.43 192.73 283.55 Debt servicing payment cover, % Arrears level, % 0 0.19 1.44 0.03 0.37 7 3.43 6.38 9.09 2.4 Turnover of accounts receivable, times
Dividend share in profit, % 0 0 0 0 0 Productiv ity of labor, thousands of 3 303 2 015 2 352 2 526 843 rubles/people Depreciation to the revenue amount, % 0 7.64 6.75 6.4 5.28
The method recommended by the “Regulations for disclosure of the information by equity securities issuers” approved by order # 06-117/pz-n of the Federal Financial Markets Service dated 10 October 2006 was used in order to calculate the specified indicators,. IDGC of Center and Volga Region, JSC was established under the resolution of its founder - JSC RAO “UES of Russia” on 28 June 2007 (Order #193r of JSC RAO “UES of Russia” dated 22 June 2007), therefore the first completed financial year prior to the reporting period is 2007. 29 February 2008 is the date of the reorganization of IDGC of Center and Volga Region, JSC in the form of accession of the regional distribution grid companies included in the responsibility zone of IDGC of Center and Volga Region, JSC to it. In this connection, the scales and peculiarities of the activities of the Company, and, accordingly, the indicators describing the financial and economic activities of the issuer essentially changed. The indicator “Net assets” is calculated according to the order of assessment of the net asset value of a joint-stock company approved by Order #10n of the Ministry of Finance of Russia and #03-6/pz of the Federal Securities Commission of Russia dated 29 January 2003. The net asset value as at the end of the 1 st quarter of 2011 was RUR 43,620,501 thousand; the amount of the net assets has grown by RUR 2,401,998 thousand or 5.8 % in relation to the similar period of the last year. The growth of the net assets was caused by an increase in the unallotted profit of the last years and the reporting quarter.
11 The indicator of the ratio of the borrowed funds amount to capital and reserves describing the degree of dependence of the enterprise on the borrowed funds and determining the degree of risk for creditors has grown from 54.95% to 58.53% in the 1 st quarter of the current year in comparison with the similar period of the last year. The major factor of the growth is attraction of long-term borrowed funds for implementation of the issuer’s investment program. The indicator of the ratio of the short-term liabilities amount to capital and reserves has decreased from 19.79% to 19.69% as a result of repayment of accounts payable and growth of the net worth. The indicator “Debt servicing payment cover” for the reporting period was 283.55%. The major factor of the indicator growth is the increase in the net profit in comparison with the similar period of the last year. The arrears level for the reporting period was 0.37%. The low value of this indicator proves the sufficient level of the financial discipline of the issuer. The indicator of the turnover of accounts receivable reflecting the speed, with which buyers (debtors) pay under their liabilities to the Company, as at the end of the 1st quarter of 2011 has grown from 1.62 to 2.40 in comparison with the similar period of the last year. The growth of the indicator is explained by the increase in the earnings and reduction in the accounts receivable. Distribution of the net profit to dividends and for other purposes (formation of the reserve fund, investment-related use of profit) is approved by the General Meeting of Shareholders based on the results of the year. Accordingly, the indicator “Dividend share in profit” is not calculated in the reporting quarter. An increase of labor productivity and decrease in the relation of depreciation to the revenue amount in the reporting quarter in comparison with the similar period of the last year have occurred due to a growth of volumes of the issuer’s revenues. As a whole, the issuer’s financial position is stable as at the end of the reporting period.
2.2. Issuer’s market capitalization Market capitalization is calculated as product of the number of shares of the respective category (type) and the market price of one share disclosed by the trade organizer at the securities market and defined according to the Procedure of Calculation of the Market Price of Equity Securities and Investment Shares of Share Investment Funds Admitted to Placement through Trade Organizers approved by Resolution #03-52/ps of the Federal Securities Commission of Russia dated 24 December 2003.
Indicator 2007 2008 2009 2010 Q 1 2011 Market capitalization, RUR 0 10,018,835,935.12 20,511,002,701.83 33,775,535,767.79 31,945,323,219.01
The information on the trade organizer at the securities market, whose data serves as the basis for calculation of the market capitalization, as well as additional information on the public placement of securities upon the issuer’s discretion: The information from the website of CJSC “MICEX Stock Exchange” (http://www.micex.ru)
2.3. Issuer’s liabilities
2.3.1. Accounts payable The structure of the issuer’s accounts payable For the year 2010 Measurement unit: RUR
Accounts payable name Maturity Up to 1 year Over 1 year 2,550,438,416.71 7,809,213.93 Payables to suppliers and contractors
Including arrears 6,395,225.05 x Payables to the entity’s personnel 331,524,904.83 0 Including arrears 0 x 440,133,662.16 3,314,884.11 Payables to the budget and state non-budgetary funds
Including arrears 0 x
12 Credits 1,648,653,955.35 13,846,728,620.79 Including arrears 0 x Loans, total 0 0 Including arrears 0 x Including bonded loans 0 0 Including bonded loans overdue 0 x Other accounts payable 2,401,696,844.41 890,564,789.91 Including arrears 265,457.2 X Total 7,372,447,783.46 14,748,417,508.74 Including arrears 6,660,682.25 X If there exists accounts payable in arrears, including under facility agreements or loan agreements, as well as under debt securities issued by the issuer (bonds, notes, others) - reference to the reasons of default and consequences which appeared or may appear in the future for the issuer owing to the mentioned default on obligations, including penalties imposed on the issuer, and the term (prospective term) of repayment of the accounts payable in arrears: The amount of the accounts payable in arrears is insignificant and equals 0.10% of the total amount of the accounts payable, hence, the risk of lumpsum presentation of the debts in arrears for repayment is considered by the issuer as insignificant. The creditors, whose provided facilities amount to at least 10 percent of the total amount of the accounts payable: None.
For 3 months of the year 2011 Measurement unit: RUR
Accounts payable name Maturity Up to 1 year Over 1 year 3,011,189,944.93 32,536,373.26 Payables to suppliers and contractors
Including arrears 26,352,357.57 x Payables to the entity’s personnel 325,369,469.07 0 Including arrears 0 x 1,402,869,940.31 22,226.86 Payables to the budget and state non-budgetary funds
Including arrears 0 x Credits 1,118,405,133.39 14,447,087,969.13 Including arrears 0 x Loans, total 0 0 Including arrears 0 x Including bonded loans 0 0 Including bonded loans overdue 0 x Other accounts payable 2,543,260,013.23 857,739,665.17 Including arrears 68,254,597.01 x Total 8,401,094,500.93 15,337,386,234.42 Including arrears 94,606,954.58 x If there exists accounts payable in arrears, including under facility agreements or loan agreements, as well as under debt securities issued by the issuer (bonds, notes, others) - reference to the reasons of default and consequences which appeared or may appear in the future for the issuer owing to the mentioned default on obligations, including penalties imposed on the issuer, and the term (prospective term) of repayment of the accounts payable in arrears:
13 The amount of the accounts payable in arrears is insignificant and equals 1.16% of the total amount of the accounts payable, hence, the risk of lumpsum presentation of the debts in arrears for repayment is considered by the issuer as insignificant. The creditors, whose provided facilities amount to at least 10 percent of the total amount of the accounts payable: None.
2.3.2. Issuer’s credit history Compliance by the issuer with the liabilities under the facility and/or loan agreements, which were in effect within the last 5 completed financial years or for each completed financial year, if the issuer has been carrying out its activity for less than 5 years, and which were in effect as at the date of the end of the reporting quarter, the amount of the main debt under which is 5 and more percent of the issuer’s asset book value as at the date of the last completed reporting quarter prior to signing the respective agreement, as well as under other facility and/or loan agreements considered by the issuer to be essential. If the issuer carried out issuance of bonds - description of compliance by the issuer with the liabilities under each issue of bonds, the total par value of which is 5 and more percent of the issuer’s asset book value as at the date of the end of the last completed quarter prior to the state registration of the report based on the results of the issue of bonds; if placement of bonds is not completed or state registration of the report on the results of their issue is not carried out for other reasons - as at the date of the end of the last completed quarter prior to the state registration of the issue of the bonds
Liability Creditor Amount of main Currency Term of the Presence of delay in name (lender) debt facility (loan) / respect of compliance name term of with the liability as repayment regards the main debt amount payment and/or determined interest, time of the delay expressed in days Loan Bank of Moscow 379,612,999.38 RUR 11 months/27.11.2011 none Loan Bank of Moscow 112,506,724.89 RUR 2.5 years/27.02.2013 none Credit JSB 300,500,000 RUR 5 years /19.07.2012 none “Gazprombank ” (OJSC) Credit RF JS Sberbank 57,760,000 RUR 3.5 years /30.12.2011 none (OJSC), Udmurt SB division # 8618 Loan Bank of 386,657,269.68 RUR 2.5 years /27.02.2013 none Moscow Credit “Gazprombank 2,000,000,000 RUR 5 years /20.09.2013 none ” (OJSC) Credit “Gazprombank” 2,000,000,000 RUR 5 years /22.11.2013 none (OJSC) Credit “Gazprombank” 1,000,000,000 RUR 5 years /24.12.2015 none (OJSC) Credit “Gazprombank” 1,000,000,000 RUR 5 years /24.12.2015 none (OJSC) Credit “Gazprombank” 500,000,000 RUR 2 years /20.07.2011 none (OJSC) Credit OJSC JSCB 1,946,809,941.9 RUR 3 years /15.09.2012 none “Svyazbank” Credit OJSC JSCB 351,105,514.65 RUR 3 years /15.10.2012 none “Svyazbank”
14 Credit OJSC JSCB 500,000,000 RUR 3.5 years /24.09.2013 none “Svyazbank” Credit OJSC JSCB 500,000,000 RUR 3.5 years /24.09.2013 none “Svyazbank” Credit OJSC JSCB 1,000,000,000 RUR 3.5 years /06.03.2014 none “Svyazbank” Credit OJSC JSCB 1,000,000,000 RUR 3.5 years /06.03.2014 none “Svyazbank” Credit OJSC JSCB 462,015,242.9 RUR 5 years /14.12.2015 none “Svyazbank” Credit LLC “Barclays 1,000,000,000 RUR 3 years /29.09.2013 none Bank”
Credit LLC “Barclays 1,000,000,000 RUR 3.5 years /26.05.2014 none Bank”
Total: 15,496,967,693.4 RUR
As at 1 April 2011, the amount of liabilities under the facilities of IDGC of Center and Volga Region, JSC was RUR 15,496,968 thousand, including the short-term liabilities – RUR 1,049,880 thousand, long-term liabilities – RUR 14,447,088.
The agreement liabilities were carried out by the issuer in full in the 1st quarter of 2011. The issuer does not have delayed debts under its facility agreements.
2.3.3. Issuer’s liabilities from the security provided to third parties Measurement unit: thousands of rubles .
Indicator 2007 2008 2009 2010 2011, 3 months Total amount of the issuer’s liabilities from 0 165,949 694,049 117,580 110,595 the security provided by it including the total amount of the third parties’ 0 61,484 594,584 31,314 26,529 liabilities, under which the issuer provided security to third parties, including in the form of pledge or guarantee
The issuer's liabilities from the security provided to third parties for the period from the date of the beginning of the current financial year up to the date of the end of the reporting quarter, including in the form of pledge or guarantee, representing at least 5 percent of the issuer's asset book value as at the date of the end of the last completed reporting period prior to provision of the security:
No such liabilities occurred in the reporting period .
2.3.4. Issuer’s other liabilities There are no other liabilities, which were not reflected in the balance sheet, which may have a material influence on the issuer’s financial position, its liquidity, sources of financing and terms of their use, performance and charges
2.4. Goals of the issue and lines of use of the money received as a result of equity securities placement The issuer did not carry out securities placement in the form of subscription in the reporting quarter.
2.5. Risks related to purchase of equity securities, which are placed or in the process of placement
15 Issuer’s policy in the field of risk management: Despite stability and steadiness of operation of the electric grid complex of IDGC of Center and Volga Region, JSC, it is impossible to exclude completely an opportunity of occurrence of any external event as a whole. IDGC of Center and Volga Region, JSC manages risks systematically aiming to prevent them and improve corporate governance and internal control of the Company. This is a continuous process consisting of determining the events potentially influencing any of the Company’s activity aspects, estimating and controlling probable negative consequences or arising opportunities, taking a complex of effectual measures to minimize threats, implementing opportunities and updating results of the chosen strategy. The objective of the risk management system is to increase the probability of achievement of the Company’s goals and reduce the probability of potential losses and damages, maintain the Company’s long-term stable operation and achieve the balance of interests of all interested persons at the same time. The main methods of the Company’s risk management: refuse to cooperate with unreliable counterparts; reject risky investment projects; insure property, industrial objects and vehicles, civil liability, medical insurance, etc.; diversify purchases of raw material, other materials, services in order to decrease the Company’s dependence on individual counterparts; diversify sales market in order to distribute consumers’ shares in the total amount of services. In order to anticipate potential risks, the Company regularly monitors the social and economic and regulatory environment, projects external economic conditions and designs respective scripts of development, carries out strategic planning of, and control over the activities. Work on improvement of management quality is carried out; the Integrated Management System is implemented, including the Quality Management System, Health Protection and Labor Safety System and Ecological Management System. The system of reserves of stocks of raw material and other materials, reserves of money resources, personnel reserve is created. In each case, the decision on risk management is taken, which is in compliance with the current laws and allows to provide a reasonable parity of the positive effect and the expenses related to it. After that, the current analysis of efficiency of the taken decisions is held. The Company approved the Risk Management Policy (minutes #57 of the Company’s Board of Directors dated 15 June 2010). This document determines the main principles of arrangement, implementation of, and control over risk management processes in IDGC of Center and Volga Region, JSC. The policy sets out prime actions to form the risk management system. Development of risk management skills is carried out continuously in the Company and helps IDGC of Center and Volga Region, JSC to estimate risks and manage them effectively.
2.5.1. Sector risks
The electricity industry is the sector the issuer belongs to; it is one of the leading infrastructural sectors of the Russian economy. The following risks may be included into the number of the issuer’s sector risks: 1. Operational (industrial) risks related to physical wear, infringement of conditions of operation and critical change of equipment operation parameters, the main ones of which are as follows: - risk of high-grade performance of obligations under agreements for rendering electricity transmission services; - deterioration of operational and economic indices of electric grid equipment; - occurrence of adverse ecological consequences; - risk of failures with partial or full shortfall in electricity supply with possible adverse social consequences. The issuer carries out a complex of measures to maintain reliability of equipment and structures on a duly level: - indices of the repair activities included in the programs are performed in full; - modern methods of diagnostics without interruption of equipment operation are implemented; - the structure and amount of spare parts are constantly optimized; - tender selection of service and supplying organizations has been implemented in order to improve quality of provided services and materials, responsibility of counterparts and reduction in specific expenses; - automatic protective devices have been implemented and are modernized according to modern requirements in order to decrease a probability of occurrence of failures of the system nature. Risk management in the field of meeting requirements of industrial safety in the total structure of the Company’s industrial risk management is ensured with observance of the federal laws in the field of industrial safety and, on its basis, of the functioning system of industrial inspection over observance of industrial safety requirements.
16 2. Risks related to possible change of prices for the issuer’s services (separately on internal and external markets), and their influence on the issuer’s activity and compliance with obligations under securities.
Owing to the fact that electricity transmission through distribution grids and engineering connection to electric grids are the activities governed by the state; the risks of changes in prices are related to state regulation of tariffs. Besides, the Government of the Russian Federation has been pursuing the restrictive policy in respect of tariffs growth for products and services of natural monopolies recently. The risks related to state tariff regulation include: - risk of fixing tariffs below the economically proved level and, as a consequence, lack of the issuer’s financial assets; - risk of a decrease in actual consumption of electricity in comparison with the targets when approving tariffs for electricity transmission; - risks related to change of laws in the pricing sphere for electricity on the retail markets. The following measures are taken to eliminate these risks: - work is held with the Federal Tariff Service and tariff regulatory authorities of the RF constituent entities in the field of economic substantiation of the expenses included into tariffs, substantiation of the declared parameters when forming summary projected balance of electricity (power) of the region for the next period of regulation, in the field of changes in the Russian Federation laws in the sphere of pricing for services of natural monopolies in order to take into account interests of distribution grid companies when fixing tariffs for electricity on the retail market; - elaboration and coordination of long-term programs of development of regions of the activity zones of the issuer’s branches is held with regional and local authorities accompanied by signing Agreements, where, in particular, volumes of financing sources of investment programs are coordinated; - regular work is held to reduce the issuer’s costs and optimize the investment program; - implementation of the tariff regulation using the method of return on investments (RAB). As from 1 January 2009, RAB regulation is implemented in the issuer’s branches “Ryazanenergo” and “Tulenergo”. As from 1 January 2010 - in the branches “Vladimirenergo”, “Kalugaenergo”, “Udmurtenergo”. As from 1 January 2011, all of the branches of IDGC of Center and Volga Region, JSC adopted RAB regulation; application of RAB regulation should contribute to attraction of long- term investments into the sector, as well as to decrease influence of subjective factors on taking tariff decisions. There are no risks related to change of the prices on foreign markets, since the issuer is not engaged in rendering services on electricity transmission outside the Russian Federation.
3. Risks of receiving less profit than one’s due, which are related to the payment discipline of energy selling companies or decrease in the level of energy consumption in comparison with the target. The main buyers of the Company are selling companies which carry out delivery of electricity to end users. Accordingly, the main risk related to buyers is a probability of increase in accounts receivable due to violation of the payment discipline of electricity end users and occurrence of necessity to attract additional facility resources. In order to reduce the probability of this risk and minimize the consequences of its occurrence, the Company’s financial management works on pursuing a well-balanced credit policy in respect of accounts receivable management aimed to optimize its amount and return debts. The issuer also holds active claim administration work to collect debts, pursues the policy of signing direct agreements with consumers of electricity. Since the company’s earnings are influenced by the dynamics of energy consumption of regions, on the territories of which the issuer carries out its activity, the issuer runs the risk of receiving less profit than one's due because of reduction in energy consumption by separate large consumers in relation to the target. In order to decrease the probability of occurrence of this risk and minimize its consequences, the issuer implements a complex of actions to expand sales markets, optimize costs, optimize contractual relations with consumers and so forth.
4. Risks of uncertainty of the limiting volumes of rendering electricity transmission services. The risk of uncertainty of volumes of rendering services arises because of absence in a number of the Russian Federation constituent entities and municipal formations of economic development plans showing dynamics of energy consumption for a certain period. Such circumstances complicate the mid-term and long-term forecasting of volumes of investments into development of capacities. This risk mainly influences compliance with obligations of rendering services on electricity transmission. Minimization of this risk is achieved through the following actions: 17 - work with state authorities of the constituent entities of the Russian Federation and local government institutions in order to form mid-term and long-term economic development plans of the region; - protection of electricity transmission tariffs in state bodies for regulation in view of the investment component aimed to develop the issuer’s power according to the estimates of economic development of the region.
5. Risks related to possible change of the prices for components and services used by the issuer in its activity (separately on the internal and external markets), and their influence on the issuer’s activity and performance of obligations under securities. Since the state regulates electricity tariffs, the issuer runs the risk related to a rise in prices for raw material and services used by the Company, which are above the inflation level taken into account when the tariffs are approved. In order to mitigate this risk, the Company applies expenses optimization mechanisms: - raising in the company’s operational efficiency through implementation of industrial costs reduction programs; - centralization of purchasing activity, signing of agreements based on the results of the tenders on the terms, which are the most suitable for the company. The risk of default by the issuer as regards the obligations to the equity securities holders owing to sector changes is not described by the issuer, because the issuer has no obligations in respect of payment of dividends to owners of preferred shares and payment of interest and repayment of bonds. The issuer does not carry out purchases on the external market; therefore it does not run the risks of change of the prices on the external market.
2.5.2. Country and regional risks 1) Risks related to the political and economic situation in the country and region, in which the issuer is registered as a tax bearer and/or carries out its primary activity. IDGC of Center and Volga Region, JSC is registered in the Russian Federation, Nizhny Novgorod city, and carries out its activity in the regions of the Center and Volga Region: in the territories of the Vladimir, Ivanovo, Kaluga, Kirov, Nizhny Novgorod, Ryazan, Tula Regions, the Mari El Republic and the Republic of Udmurtia. The estimates of electricity consumption and development of energy production in the regions, where IDGC of Center and Volga Region, JSC carries out its activities, is determined by macroeconomic factors and economic situation in the country as a whole. In 2008 – 2009, the social and economic development of the Russian Federation was significantly influenced by the global financial crisis. Sharp deterioration of external economic conditions became a serious test for the Russian economy, led to a fall in export, outflow of capital, which caused a significant recession in industrial production, trade and investment sphere. Recession of industrial production caused a reduction in consumption of power resources, including electricity, which in its turn influenced volumes of electricity transmission services and led to a reduction in the issuer’s incomes. The positive dynamics of the country economy development is observed in 2010. Based on the results of the year 2010, the GNP growth was 4.0%. Such level of growth shows that the Russian economy has not been recovered yet to the pre-crisis level (a fall in the economy in 2009 was 7.9%). According to the estimation of the Ministry of Economic Development and Trade, the pre-crisis dynamics of GNP growth of about 6-7% will not be achieved in the nearest 3 years. GNP of Russia grew by 4.5% for the 1 st quarter if the current year against the respective period of the last year; the industrial production growth went up by 5.9%. The negative impact on the development of the economy is rendered by the low investment demand, a fall in which for the 1 st quarter was 1.5%. According to the estimation of the Ministry of Economic Development and Trade, it is early to speak about the stable growth in spite of the features of the economy activity. According to the base variant of development of the economy in 2012-2014 in conditions of pursuing the active state policy aimed to improve the investment climate, raise competitiveness and efficiency of business, stimulate the economic growth and modernization, the economic growth in 2011 will be 4.2%, in 2012 – 3.5%, and in 2013-2014 – 4.2-4.6% a year. According to the pessimistic estimates, the growth will slow down to 1.1-2.5% in 2012-2014. IDGC of Center and Volga Region, JSC continues implementing the program of actions aimed to improve efficiency of work in the conditions of unstable economic situation: reduction of expenses for operational activity, optimization of relations with contractors, optimization of contractual relations with consumers, work with accounts receivable, maintenance of optimum tariff-balance solutions in the regions, where the Company carries out its activity. In order to maintain stability of calculations, settlement of accounts is carried out by IDGC of Center and Volga Region, JSC in highly reliable banks with the state participation; the restriction in respect of the 18 volume and rate of interest of involved borrowed money is implemented in order to minimize the debt loading. For the purposes of optimization of the investment activity, the investment programs are formed taking into account the order of priority of implementation of investment projects and excluding the objects which were not secured with financing. As a whole the estimates in relation to the Company’s economic situation is positive. IDGC of Center and Volga Region, JSC is a subsidiary of IDGC Holding, OJSC, the position of which is estimated by international rating agencies as steady enough. The agency Moody’s Investors Service assigned IDGC Holding, OJSC the international credit rating Ba1 in 2010. The rating change forecast is stable. Besides, Moody’s Interfax Rating Agency assigned IDGC Holding, OJSC the rating Aa1.ru under the national scale, which reflects the credit condition in respect of its competitors in the Russian Federation. Rating Ва 1/ Аа 1.ru given to IDGC Holding, OJSC reflects the following key factors: - average level of risk, which takes into account the position of the company as a regulated monopoly existing on the developing electricity market of Russia; - conservative credit policy of the company; - potential support of the majority shareholder of the company - the state. The stable estimates of change of the rating mean high probability of conformity of the assessment to the established level. The rating is based on the consolidated assessment of industrial and financial indices of subsidiaries and dependent companies of IDGC Holding, OJSC. The positive influence on the assessment of the companies was rendered by: - strategic position of IDGC Holding, OJSC in electricity industry of Russia; - advantages of geographical diversification of operational activity; - support of introduction of a new method of tariff regulation (RAB) by the state. The negative factors which influenced the assessment of the company: - instability of the mode of regulatory environment including imperfection of laws in the tariff formation sphere; - potential risk of non-compliance with significant investment programs and their influence on the financial policy of the company. The political situation in the Russian Federation is characterized as stable. The overwhelming majority of the population renders trust to the President and the Government. Therefore the risk of deterioration of the Company’s performance as a result of internal political instability in the country is estimated as minimal.
2) Risks related to possible military conflicts, announcement of the state of emergency and strikes in the country and region, where the issuer is registered as a tax bearer and/or carries out its primary activity. The risks related to possible military conflicts, announcement of the state of emergency and strikes in the country and regions, on the territory of which the issuer carries out its activity, are estimated as minimal.
3) Risks related to geographical features of the country and region, where the issuer is registered as a tax bearer and/or carries out its primary activity, including an increased danger of acts of nature, possible interruption of transport communication due to remoteness and/or inaccessibility, etc. The risks related to geographical features of regions, in the territory of which the issuer carries out its activity, may include danger of incurring losses due to adverse weather conditions. In order to decrease the influence of these risks, the issuer implements a complex of measures to prepare the grid complex for the autumn and winter period, and each branch of the issuer will be certificated for preparedness for the autumn and winter period. The branches of IDGC of Center and Volga Region, JSC have a long-term experience of successful active liquidation of consequences of the acts of nature on equipment and infrastructure of electric grids. The regions, in the territory of which the issuer carries out its activity, are characterized by a developed transport infrastructure and are not subject to the risks related to interruption of transport communication due to remoteness and/or inaccessibility.
2.5.3. Financial risks
1) Risk of change of interest rates During its activity the issuer involves borrowed funds as sources of financing; in this connection it runs the risk related to a change in interest rates under involved facilities and loans. In order to minimize the risk of increase in interest rates, the issuer signs the facility agreements in respect of raising borrowed funds, the terms of which stipulate change of the interest rate per credits as agreed by parties in compliance with the current laws or in connection with the change of the tare of refinancing of the RF Central
19 Bank. In the 1 st quarter of 2011, the value of the refinancing rate was raised from 7.75% to 8.0% per annum – the rate of refinancing was increased for the first time since 24 April 2009. However, the value of the borrowed funds through the 1 st quarter of 2011 was at the same low level. Thus, in the 1 st quarter of 2011, the situation on the Russian market of the borrowed capital was stable enough, the value of the credit resources continued to be on the low level. It should be also noted that IDGC of Center and Volga Region has a facility portfolio representing Russia’s largest banks as partner banks: OJSC “Gazprombank”, OJSC: “Transcreditbank”, OJSC JSCB “Svvyaz-Bank”. Based on the results of the work performed by the issuer in 2010, the interest rates under facility agreements were lowered, so their value was approximated to the rate of refinancing. During the 1 st quarter of 2011, none of the bank proposed to raise the interest rate under the issuer’s credit despite the increase in the rate of refinancing. The risk of increase in interest rates under the facility portfolio of the issuer in the near future is estimated as low.
2) Risk of change of foreign currencies rates The financial position of the issuer (its liquidity, sources of financing, performance, etc.) is not subject to the risks of change of the exchange rates of foreign currencies since the Company carries out electricity transmission services on the home market of the Russian Federation and settles accounts in rubles. The issuer does not plan to carry out any activity on the external market. It should be also noted that the Company’s facility portfolio has no facilities and loans in a foreign currency or the obligations, the amount of which becomes tied with a foreign currency.
3) Risk caused by inflation The negative influence of inflation on the financial and economic activity of the Company may be related to the following risks: - risk related to the losses in the real value of accounts receivable, when there occurs essential delayed or deferred payment; - risk of increase in the value of services of contractor entities that will lead to increase in the Company’s expenses; - risk of substantial growth in interest rates and, as a consequence, growth in expenses for servicing debts of the issuer (the probability of their occurrence is estimated as low); the growth of interest rates leads to the growth in interest payments for using facilities of commercial banks (operational charges).
The risk of inflation growth in Russia is projected as average for the near future.
The main index which is most subject to change, which is related to the above listed financial risks, is the issuer’s profit. The growth of interest rates leads to the growth in interest payments for using facilities of commercial banks (operational charges) and, accordingly, the issuer’s profit decreases. Besides, the profit decreases if the cost price of electricity transmission services grows when the tariff level is fixed.
On the other hand, in the event of growing inflation rates, the real value of payments under obligations in the national currency falls, which is a favorable factor for the issuer.
Assumed actions of the issuer to reduce financial risks: In order to minimize the specified financial risks, the Company holds permanent work to reveal and estimate them, pursues a circumspect credit policy according to the Credit Policy Regulations approved by the Board of Directors of IDGC of Center and Volga Region, JSC, and holds active work with the enforcement authorities of the constituent entities of the Russian Federation in the field of state regulation of tariffs for establishment of economically proved tariffs.
2.5.4. Legal risks The issuer carries out its primary activity mainly in the territory of the Russian Federation. In this connection, there are potential legal risks arising in the process of implementation of operations in the home market, which is typical of the majority of the entities performing enterprise activity. Almost all of the issuer’s operations are subject to obligatory preliminary legal examination in order to minimize legal risks.
Risks related to change of the currency and customs laws of the Russian Federation. As a whole, change of the currency and customs laws of the Russian Federation has immaterial effect on the activity of the issuer, since its activity is not related with large-scale export or import of products. Hence, changes
20 within the framework of currency regulation or rules of the customs control do not entail essential legal risks for the Company in this sphere.
Risks related to change of the tax laws of the Russian Federation. Changes in the sphere of the tax laws and ambiguous treatment of separate provisions of the laws governing this sector may entail legal risks for the issuer. Growing tax rates or change in the order and terms of calculation and payment of taxes may lead to reduction of the net profit of the issuer, which in its turn will lead to reduction in the amount of paid dividends. However, in order to minimize this category of risks, the Company holds the constant analysis of the legal base, including provision of explanation and comments in respect the taxation for the purpose of calculation and payment of taxes in strict conformity with the current laws of the Russian Federation. In the event of making essential changes to the laws on taxes and tax collections of the Russian Federation, the issuer will plan its financial and economic activities subject to such changes.
Risks related to change of the licensing laws. The activity of the issuer is not basically subject to licensing. In this connection, changes in the laws in this area will not render material influence.
Risks related to change of the practice of the courts. Legal risks management for the issuer is aimed to minimize the legal consequences rendering negative influence on the issuer’s activity. The majority of the Company’s business processes and legal disputes arising in the activity of the issuer go through the legal examination including the legal analysis of both changes in the laws and changes in the practice of the courts in the Russian Federation. However, similar changes may lead to delivery of judgments, which are not in favor of the issuer, as well as to increase in the expenses for involvement of the foreign entities rendering legal services, which in its turn may have negative impact on the activity of the issuer. In the event of essential changes in the practice of the courts, the issuer will plan the activity subject to such changes.
The probability of occurrence of the practice of the courts, which may have material effect on the activity of the issuer, is insignificant.
2.5.5. Risks related to the issuer’s activities
Risks related to licensing: According to clause 6.1. Section 18 of Federal Law #128 “On licensing of separate kinds of activities” (as amended by Federal Law #148-FZ dated 22 July 2008), since 1 January 2010 the following kinds of activity will not be licensed: - designing of buildings and structures, except for the structures of seasonal nature or auxiliary purpose; - construction of buildings and structures, except for the structures of seasonal nature or auxiliary purpose; - engineering researches for construction of buildings and structures, except for the structures of seasonal nature or auxiliary purpose. Owing to the above, the following innovations are stipulated. To carry out the mentioned works, entities and individual businessmen should unite into respective self- regulated entities (SRE) since 1 January 2010 which will issue a certificate for admission to works to its members. When becoming a member of the SRE, an entity should pay a certain amount (an entrance fee, membership fees and payments to the indemnification fund, and insurance of civil liability, as may be necessary), which will be a kind of guarantee of good faith behavior. For now, all the contracting entities performing works at the objects of IDGC of Center and Volga Region, JSC, have joined SRE. However, there is a risk of withdrawal of certificates for admission to works and, as a consequence, there are risks of untimely commissioning of objects of construction and reconstruction of the Company. In order to prevent such probability, the capital construction department holds periodic monitoring of the data on the status of the certificates for admission of contracting entities to works.
Risks related to the issuer’s possible responsibility under third parties’ debts, including those of subsidiaries , are estimated by the issuer as insignificant.
Risks related to litigations: The Company does not expect the situations, in which court judgments may be passed for recovery of money resources, or the situations, in which satisfaction of its claims may be rejected in the amounts, which could negatively affect the activity of IDGC of Center and Volga Region, JSC as a whole.
21 Moreover, by virtue of the features of tariff regulation, in the event of passing a court judgment in the sphere of carrying our by the issuer of primary kinds of activity, which is negative for the issuer, all the money, which was paid or received less than one is due, will be represented to the enforcement authority of the constituent entity of the Russian Federation in the field of the state tariff regulation as the “dropping out” (received less than one is due) profits for the purposes of their inclusion into tariffs of the following period of regulation. Owing to the above, the issuer does not expect to run significant risks, which are peculiar exclusively for it, which are related to the current litigations, in which the issuer participates in the sphere of its primary activity.
Risks related to the loss of services consumers: The issuer does not run the risks related to the loss of services consumers, since IDGC of Center and Volga Region, JSC is a natural monopoly in the attended territories and is regulated by state regulation authorities (Federal Tariff Service, Regional Tariff Services). Energy selling companies are consumers of services.
III. Detailed information on the issuer 3.1. History of establishment and development of the issuer 3.1.1. Information on the issuer’s firm name (naming)
Full firm name of the issuer: Joint Stock Company Interregional Distribution Grid Company of Center and Volga Region, Abbreviated firm name of the issuer: IDGC of Center and Volga Region, JSC
Full and abbreviated firm names of the issuer (name for noncommercial entities) are similar to the name of another legal entity Names of such legal entities: 1. “Interregional Distribution Grid Company of Center”, Joint Stock Company (IDGC of Center, JSC). 2. “Interregional Distribution Grid Company of Northern Caucasus”, Joint Stock Company (IDGC of Northern Caucasus, JSC). 3. “Interregional Distribution Grid Company of Volga”, Joint Stock Company (IDGC of Volga, JSC). 4. “Interregional Distribution Grid Company of North-West”, Joint Stock Company (IDGC of North-West, JSC). 5. “Interregional Distribution Grid Company of Urals”, Joint Stock Company (IDGC of Urals, JSC). 6. “Interregional Distribution Grid Company of Siberia”, Joint Stock Company (IDGC of Siberia, JSC). 7. “Interregional Distribution Grid Company of South”, Joint Stock Company (IDGC of South, JSC). 8. “Interregional Distribution Grid Companies Holding”, Joint Stock Company (IDGC Holding, OJSC).
Explanations required in order to avoid mixing of the above names: In order to prevent mixing of the names of the Company with the above listed names, the Company asks to pay special attention to the geographical component of the full and abbreviated firm names of the companies.
All the previous names of the issuer during the time of its existence: The name of the issuer did not change during the time of its existence
3.1.2. Information on the issuer’s state registration Primary state registration number of the legal entity: 1075260020043 Date of the registration: 28 June 2007 Name of the registering authority: Inspection of the Federal Tax Service in Nizhegorodsky District of the city of Nizhny Novgorod City
3.1.3. Issuer’s establishment and development history The time of existence of the issuer from the date of its state registration; the time, up to which the issuer will exist, if it was created for a certain period of time or up to the moment of achievement of a definite goal: The term of existence of the Company from the date of its state registration up to the date of the end of the reporting quarter: 3 years and 9 months.
22 The Company was created for an unlimited period of time. Brief description of the issuer’s history of creation and development. The goals of the issuer’s creation, issuer’s mission (if any), and other information on the issuer’s activity which is important for decision-making in respect of purchase of the issuer’s securities: IDGC of Center and Volga Region, JSC was registered by the Federal Tax Service Board in Nizhegorodsky District of Nizhny Novgorod City on 28 June 2007 in compliance with the decision of the sole founder (Resolution of JSC RAO “UES of Russia” #193r as of 22 June 2007) within the framework of implementation of resolution of the Board of Directors of JSC RAO “UES of Russia” with respect to participation in IDGC (Minutes #250 as of 27 April 2007). The following distribution grid companies (DGCs) were included into IDGC of Center and Volga Region, JSC subject to configuration of IDGC approved by the resolution of the Board of Directors of JSC RAO “UES of Russia” (Minutes #250 as of 27 April 2007): JSC “Vladimirenergo”, JSC “Ivenergo”, JSC “Kalugaenergo”, JSC “Kirovenergo”, JSC “Marienergo”, JSC “Nizhnovenergo”, JSC “Ryazanenergo”, JSC “Tulenergo”, JSC “Udmurtenergo”. The DGCs’ extraordinary General Meetings of Shareholders were held in December 2007 where they made the decisions on reorganization in the form of accession. The Management Board of JSC RAO “UES of Russia” made the decision on reorganization of IDGC of Center and Volga Region, JSC on 25 December 2007. To form the target structure of IDGC in the new configuration, the Chairman of the RF Government signed Order #1857-r as of 19 December 2007. It stipulated the opportunity for IDGC to be founded on the basis of DGCs’ shares belonging to JSC RAO “UES of Russia” in the new IDGC configuration. IDGC of Center and Volga Region, JSC was reorganized on 29 February 2008; JSC “Vladimirenergo”, JSC “Ivenergo”, JSC “Kalugaenergo”, JSC “Kirovenergo”, JSC “Marienergo”, JSC “Nizhnovenergo”, JSC “Ryazanenergo”, JSC “Tulenergo”, JSC “Udmurtenergo” joined it. IDGC of Center and Volga Region, JSC is a natural monopoly entity in the field of transmission of electricity to consumers. The main objective of the company is profit generation.
Mission of IDGC of Center and Volga Region, JSC: - creation and maintenance of reliable functioning of the innovation-based distribution grid complex, which meets the needs of the social and economic development of the regions, in which the Company performs its operations. IDGC of Center and Volga Region, JSC bears the responsibility for ecological and technological safety of industrial activity and observance of the balance of interests of shareholders, investors and clients.
3.1.4. Contact information Location: 33 Rozhdestvenskaya Street, Nizhny Novgorod, Russia 603950 Location of the constantly operating executive body: 33 Rozhdestvenskaya Street, Nizhny Novgorod, Russia 603950 Address for sending correspondence: 33 Rozhdestvenskaya Street, Nizhny Novgorod, Russia 603950 Tel.: (831) 431-83-11 Fax: (831) 431-85-51 E-mail: [email protected]
Internet web page (pages) containing the information on the issuer, the securities issued by it or the securities which are in the process of issuance: www.mrsk-cp.ru
Name of the issuer’s special division for shareholder and investor relations: Shareholder and Investor Relations Division in the Corporate Governance Department Location of the division: 33 Rozhdestvenskaya Street, Nizhny Novgorod, Russia 603950 23 Tel.: (831) 431-74-46, (831) 431-74-00 (ext. 30-03, 30-04) Fax: (831) 431-83-91 E-mail: [email protected]
Internet web page: www.mrsk-cp.ru/?id=257
3.1.5. Taxpayer’s identification number 5260200603
3.1.6. Issuer’s branches and representative offices Branches and representative offices of the issuer according to its charter (constituent documents): Full name: Branch “Vladimirenergo” of IDGC of Center and Volga Region, JSC Seat: 106, Bolshaya Nizhegorodskaya Street, Vladimir City, 600016 Date of opening: 23 November 2007 Head of the branch (representative office) Full name: Valentin Pavlovich Martyanov Effective period of the power of attorney: 31 December 2011
Full name: Branch “Ivenergo” of IDGC of Center and Volga Region, JSC Seat: 8/2 Krutitskaya Street, Ivanovo City, 153000 Date of opening: 23 November 2007 Head of the branch (representative office) Full name: Sergey Nikolaevich Tchizhov Effective period of the power of attorney: 31 December 2011
Full name: Branch “Kalugaenergo” of IDGC of Center and Volga Region, JSC Seat: 35 Grabtsevskoe Highway, Kaluga, 248009 Date of opening: 23 November 2007 Head of the branch (representative office) Full name: Andrey Alexandrovich Khapilin Effective period of the power of attorney: 31 December 2011
Full name: Branch “Kirovenergo” of IDGC of Center and Volga Region, JSC Seat: 51 Drelevskogo Street, Kirov City, 610000 Date of opening: 23 November 2007 Head of the branch (representative office) Full name: Oleg Lyubomirovich Kharivsky Effective period of the power of attorney: 31 December 2011
Full name: Branch “Marienergo” of IDGC of Center and Volga Region, JSC Seat: 39 А Panfilova Street, Ioshkar Ola City, 424006 Date of opening: 23 November 2007 Head of the branch (representative office) Full name: Victor Iosifovich Kotikov Effective period of the power of attorney: 31 December 2011
Full name: Branch “Nizhnovenergo” of IDGC of Center and Volga Region, JSC Seat: 33 Rozhdestvenskaya Street, Nizhny Novgorod City, 603950 Date of opening: 23 November 2007 Head of the branch (representative office) Full name: Oleg Borisovich Shavin Effective period of the power of attorney: 31 December 2011
Full name: Branch “Ryazanenergo” of IDGC of Center and Volga Region, JSC Seat: 12 MOGES Street, Ryazan City, 390013 Date of opening: 23 November 2007 Head of the branch (representative office)
24 Full name: Vladimir Filippovich Skorikov Effective period of the power of attorney: 31 December 2011
Full name: Branch “Tulenergo” of IDGC of Center and Volga Region, JSC Seat: 99 Timiryazeva Street, Tula City, 300012 Date of opening: 23 November 2007 Head of the branch (representative office) Full name: Yury Nikolaevich Timonin Effective period of the power of attorney: 31 December 2011
Full name: Branch “Udmurtenergo” of IDGC of Center and Volga Region, JSC Seat: 30 Sovetskaya Street, Izhevsk City, 426004 Date of opening: 23 November 2007 Head of the branch (representative office) Full name: Vyacheslav Ivanovich Bakulev Effective period of the power of attorney: 31 December 2011
3.2. Issuer’s main economic activities
3.2.1. Issuer’s sector properties
OKVED (Russian National Classifier of Economic Activities) Code
40.10.2
40.10.3
40.10.5
64.20.11
74.14
74.15.2
3.2.2. Issuer’s main economic operations Economic operations (types of activities, types of products (works, services)) ensuring at least 10 percent of the issuer’s earnings (income) for the reporting period
Measurement unit: thousands of rubles
Name of the type of products (works, services): Electricity transmission services
Indicator name 2007 2008 2009 2010 2011, 3 months
Amount of earnings (income) of this type of 0 29,528,534 45,688,548 53,105,566 18,048,745 economic operation, thousands of rubles
25 Share of the amount of earnings 0 93 97 98 99 (income) from this type of economic operation in the total amount of the earnings (income) of the issuer, %
Change of the amount of the issuer’s earnings (income) from the main economic activities by 10 and more percent in comparison with the respective reporting period of the previous year and the reason of such changes: The material growth of the issuer’s earnings in 2008 against 2007 was caused by the reorganization in the form of accession of subordinated regional distribution grid companies included into the attendance zone of IDGC of Center and Volga Region, JSC to it, which was held on 29 February 2008. The reorganization changed the main kinds of activity of the Company. The main kind of activity of IDGC of Center and Volga Region, JSC before the reorganization was provision of services of the subordinated regional grid companies management; as from the moment of the reorganization - services of electricity transmission and services of technological connection of consumers to the grids of the Company in the territory of 9 regional entities. 99% of the sales earnings are earnings generated as a result of provision of electricity transmission services.
In the 1 st quarter of 2011, the growth of the earnings generated as a result of provision of electricity transmission services was RUR 3,814,197 thousand (or 26.8%). The main cause of the growth is the increase in electricity transmission tariffs as a result of the growth of the investment component in the structure of the Company’s tariff earnings.
Name of the type of products (works, services): Management services
Indicator name 2007 2008 2009 2010 2011, 3 months
Amount of earnings (income) of this type of 158,548 61,064 0 0 0 economic operation, thousands of rubles Share of the amount of earnings 100 0.2 0 0 0 (income) from this type of economic operation in the total amount of the earnings (income) of the issuer, % Change of the amount of the issuer’s earnings (income) from the main economic activities by 10 and more percent in comparison with the respective reporting period of the previous year and the reason of such changes: The reorganization changed the main kinds of activity of the Company. The main kind of activity of IDGC of Center and Volga Region, JSC before the reorganization was provision of services of the subordinated regional grid companies management; as from the moment of the reorganization - services of electricity transmission and services of technological connection of consumers to the grids of the Company in the territory of 9 regional entities.
Seasonal nature of the main economic activity of the issuer This type of activity is of seasonal nature; volumes of electricity transmission grow during the autumn and winter period because of the seasonal growth of electricity consumption.
General structure of the issuer’s cost
Indicator 2010 2011, 3 months Raw material and other materials, % 2.81 1.28 Purchased complementary parts, semifinished items, % 0 0 Works and services of industrial nature performed by outside 43.27 40.96 agencies, % Fuel, % 0 0 Energy, % 24.64 31.3
26 Expenses for labor payment, % 14.18 11.19 Interests under facilities, % 0 0 Rent payment, % 0.57 0.48 Contributions for social needs, % 3.22 3.78 Depreciation of fixed assets, % 6.92 6.2 Taxes included into the cost of products, % 0.38 0.32 Other expenses (to be explained) 4.02 4.49 Amortization in respect of intangible assets 0.01 0.01 Remuneration for efficiency proposals 0 0 Obligatory insurance payments 0.16 0.12 Hospitality expenditure 0 0 Other 3.85 4.37
Total: expenses for production and sale of products (works, services) 100 100 (cost), % For reference: products (works, services) sale earnings, % 108.32 117.67
Additional information in respect of the cost structure.
The main share in the structure of the issuer’s expenses is expenses for services of industrial nature and expenses for purchase of energy for compensation of losses in grids. In the reporting period, the share of these expenses was 40.96% and 31.30% accordingly.
New kinds of products (works, services) having essential value and offered by the issuer on the market of its primary activity in the degree, which is in correspondence with the public information on such kinds of products (works, services). The stage of development of such kinds of products (works, services) is shown: There are no new kinds of products, works and services having essential value
Standards (rules), according to which the accounting reports reflected in this clause of the quarterly report were prepared and calculations were made: - Federal Law #129-FZ “On book keeping” dated 21 November 1996 - Order #34n of the Ministry of Finance of the Russian Federation “On adoption of the provisions for conducting book keeping and keeping accounting records in the Russian Federation” dated 29 July 1998. - Accounting Regulation “Incomes of an Entity” AR 9/99 approved by order #32n of the Ministry of Finance of the Russian Federation dated 6 May 1999 - as amended; - Accounting Regulation “Charges of an Entity” AR 10/99 approved by Order #33n of the Ministry of Finance of the Russian Federation dated 6 May 1999 - as amended; - Tax Code of the Russian Federation.
3.2.3. Issuer’s materials, goods (raw material) and suppliers For the year 2010 Suppliers of the issuer providing at least 10 percent of all deliveries of materials and goods (raw material): There are no suppliers providing at least 10 percent of all deliveries of materials and goods (raw material)
Information on change of the prices by more than 10 % for the main materials and goods (raw material) during the respective reporting period in comparison with the respective reporting period of the previous year: There were no changes of prices by more than 10 % for the main materials and goods (raw material) during the respective reporting period
Share of import in deliveries of materials and goods, the estimates of availability of sources of import in the future and possible alternative sources: There are no import deliveries
27 For the reporting quarter Suppliers of the issuer providing at least 10 percent of all deliveries of materials and goods (raw material): There are no suppliers providing at least 10 percent of all deliveries of materials and goods (raw material)
Information on change of the prices by more than 10 % for the main materials and goods (raw material) during the respective reporting period in comparison with the respective reporting period of the previous year: There were no changes of prices by more than 10 % for the main materials and goods (raw material) during the respective reporting period
Share of import in deliveries of materials and goods, the estimates of availability of sources of import in the future and possible alternative sources: There are no import deliveries
3.2.4. Issuer’s sales markets of goods (works, services) The main markets, where the issuer carries out its activity: Market of services of engineering connection to the Company’s electric grids The market of services of implementation of engineering connection of energy receiving devices of consumers did not change in terms of quantity. The major part of applications is represented by applications from individuals and from representatives of small and medium-sized business. The main part of the total of applications is represented by the applications for engineering connection of privileged categories of consumers with declared power of up to 15 kW and from 15 kW to 100 kW. The increase of demand for engineering connection with a great volume of power is observed owing to the decrease in the negative phenomena caused by the economic crisis.
Market of electricity (power) transmission services through the Company’s electric grids IDGC of Center and Volga Region, JSC is a natural monopoly entity. By order #236-e of the Federal Tariff Service of Russia dated 27.06.2008, the Company is included into the register of natural monopolies entities in the fuel and energy complex, in relation whereof state regulation and control is carried out. IDGC of Center and Volga Region, JSC is the unique grid entity in the served territories, which has engineering connection to the Unified National Electric Grid (UNEG) and generating companies. In this situation the Company occupies the leading position on the market of rendering electricity transmission services. The significant part of electricity supplied to consumers goes through the Company’s grids, except the consumers directly connected to buslines of generation.
Factors, which may negatively affect selling by the issuer of its products (works, services), and p ossible actions of the issuer to mitigate such influence: Market of services of engineering connection to the Company’s electric grids Taking into account that the electric grids of 0.4-110 kV voltage occupy the dominating position actually in all regions of the zone of the issuer’s activity, there are no factors which can materially affect the market of services of implementing engineering connection to the issuer’s electric grids.
Market of services of electricity (power) transmission through the Company’s electric grids Despite the aforesaid, there are subordinate grid entities in a number of regions of the Company’s zone of electricity transmission services sales market, which render similar electricity transportation services. Nevertheless, these grid entities are connected to the Company’s grids and receive electricity from the Company’s grids. These entities in their majority are owned by the State and Municipal Units and are presented as to their forms of incorporation as municipal unitary enterprises or State unitary enterprises. The peculiarity of the electric grid sector is the continuity of the process of production, transmission and consumption of electricity. The state regulation authorities annually fix tariffs for the Company for electricity transmission. Owing to the existing economic situation, power consumption falls, which will slightly affect receipt of necessary total earnings based on the results of the year. Therefore, there are no factors, which may essentially affect the market of services of electricity transmission through the issuer’s electric grids.
3.2.5. Information on the issuer’s licenses 1. Name of the licensing authority: Department for Subsurface Resources Management for the Volga Region Federal District in the MNR (Ministry of Natural Resources) of Russia “Rosnedra” Number: KIR 01183
28 Name of the type (types) of activity: for the right to use subsoil (extraction of underground waters for their use in systems of domestic potable and industrial water supply in Kotelnich city of the Kotelnichesky District of the Kirov Region) Issued on: 6 August 2008 Valid before: 30 April 2025
2. Name of the licensing authority: Department for Subsurface Resources Management for the Volga Region Federal District in the MNR of Russia “Rosnedra” Number: KIR 01191 Name of the type (types) of activity: for the right to use subsiol (extraction of underground waters for their use in systems of domestic potable and industrial water supply in Podosinovets settlement of the Podosinovsky District of the Kirov Region) Issued on: 5 September 2008 Valid before: 30 June 2029
3. Name of the licensing authority: FSE (Federal State Establishment) “TIF (Territorial Information Fund) in the VRFD (Volga Region Federal District)” Privolzhsknedra Number: NZHG 01185 Name of the type (types) of activity: for the right to use subsiol (extraction of underground waters for domestic potable and industrial water supply of the enterprise Semenovskie Electric Grids in the northern part of Semenov city ) Issued on: 8 July 2008 Valid before: 26 February 2019
4. Name of the licensing authority: FSE “TIF in the VRFD” Privolzhsknedra Number: NZHG 01186 Name of the type (types) of activity: for the right to use subsiol (extraction of underground waters for domestic potable water supply of the children's camp “Gagarinets” located 1 km to the north-east of the Lukino village of the Balakhninsky District of the Nizhny Novgorod Region) Issued on: 8 July 2008 Valid before: 5 May 2012
5. Name of the licensing authority: FSE “TIF in the VRFD” Privolzhsknedra Number: NZHG 01228 Name of the type (types) of activity: for the right to use subsiol (extraction of underground waters for industrial water supply for the needs of the ID (Industrial Division) Sergachskie Electric Grids of the branch “Nizhnovenergo”) Issued on: 23 January 2009 Valid before: 23 January 2014
6. Name of the licensing authority: Ministry of Wildlife Management and Ecology of the Ryazan Region Number: 000015 Name of the type (types) of activity: for the right to use of fauna objects Issued on: 25 September 2008 Valid before: 15 September 2018
7. Name of the licensing authority: Department for Natural Resources for the Central Federal District “Rosnedra” Number: VLM 00020 Name of the type (types) of activity: for the right to use subsoil. Extraction of fresh underground waters for domestic potable and industrial needs of IDGC of Center and Volga Region, JSC, transmission to other entities, the city of Kameshkovo of the Kameshkovsky District of the Vladimir Region Issued on: 25 May 2009 Valid before: 1 January 2015
8. Name of the licensing authority: Federal Service for Ecological, Technological and Nuclear Supervision Number: OT 00-010141 (00) Name of the type (types) of activity: for implementation of activity of gathering, use, neutralization, transportation, placement of dangerous waste 29 Issued on: 20 May 2009 Valid before: 20 May 2014
9. Name of the licensing authority: FSE “TIF in the VRFD” Privolzhsknedra Number: NZHG 01276 Name of the type (types) of activity: for the right to use subsoil (extraction of the subsurface water for technological water supply of the city of Uren of the Urensky District of the Nizhny Novgorod Region) Issued on: 24 July 2009 Valid before: 24 July 2014
10. Name of the licensing authority: Department for Natural Resources for the Central Federal District “Rosnedra” Number: RYAZ 00035 Name of the type (types) of activity: for the right to use subsoil (exploring and extraction of underground water for the technological water supply of the substation Pushchino in the city of Ryazan, the Sysoevo District of the Ryazan Region) Issued on: 16 July 2009 Valid before: 1 June 2019
11. Name of the licensing authority: Division of Geology and Licensing in the Mari El Republic (Mariysknedra) of the Department for Natural Recourses for the Volga Region Federal District (Privolzhsknedra) Number: ISHK 02097 Name of the type (types) of activity: for the right to use subsoil (extraction of underground waters for drinking and public water supply of the village Chuvash-Otary of the Zvenigovsky Region of the Mari El Republic) Issued on: 21 May 2010 Valid before: 21 May 2015
12. Name of the licensing authority: Department for Natural Resources for the Central Federal District “Rosnedra” Number: NZHG 01330 Name of the type (types) of activity: for the right to use subsoil (extraction of underground waters for potable, public water supply and technological water support of the workers settlement Voskresenskoe of the Voskresensky District of the Nizhny Novgorod Region) Issued on: 28 July 2010 Valid before: 1 November 2034
13. Name of the licensing authority: Department for Natural Resources for the Central Federal District “Rosnedra” Number: NZHG 01331 Name of the type (types) of activity: for the right to use subsoil (extraction of underground waters for potable, public water supply and technological water support of the workers settlement Vetluzhsky of the Krasnobakovsky District of the Nizhny Novgorod Region) Issued on: 28.07.2010 Valid before: 01.11.2034
14. Name of the licensing authority: Natural Resources Management Administration for the Republic of Udmurtia Number: IZHV 01571 VE Name of the type (types) of activity: for the right to use subsoil (extraction of technological subsurface water for technological water support of the enterprise) Issued on: 14 March 2011 Valid before: 11 March 2036
3.2.6. Issuer’s joint activities
30 As a result of reorganization in the form of accession of JSC “Nizhnovenergo” to IDGC of Center and Volga Region, JSC, the Company received the contribution of RUR 25,669 thousand under joint activity agreement #16/3-36DC dated 18 September 1995 and agreement w/n dated 27 October 2000. The subject matter of the joint activity: Construction and reconstruction of block #1 of the gas and steam installation of Igumnovskaya CHP. The goal of investments under the joint activity agreement: income generation after commissioning of construction objects. At the current stage, the main purpose of investments is completion of construction and commissioning of objects. Achievement of the financial result of the joint activity: achievement of the financial result from investments is supposed after completion of construction and commissioning of the objects. Other participants of the joint activity: IDGC Holding, OJSC, which is the assignee of JSC RAO “UES of Russia”.
2. The subject matter of the joint activity: maintenance of operation of "Zavodskaya" 110 kV substation (S), maintenance of reliable supply of power to the electricity consumers connected to it. The amount of contribution: RUR 11,938 thousand. The goal of investments under the joint activity agreement: maintenance of operation of "Zavodskaya" 110 kV substation (S), maintenance of reliable supply of power to the electricity consumers connected to it, and profit generation. Achievement of the financial result of the joint activity: The profit generated in 2010 as a result of shared use of property was RUR 116.91 thousand, the profit st generated in the 1 quarter of 2011 was RUR 5.36 thousand within the framework of the agreement. Other participants of the joint activity: LLC "Energo-PS".
3. The subject matter of the joint activity: maintenance of operation of "Start" 110 kV substation (S), maintenance reliable supply of power to the electricity consumers connected to it. The amount of contribution: RUR 15,931 thousand. The goal of investments under the joint activity agreement: maintenance of operation of "Start" 110 kV substation (S), maintenance of reliable supply of power to the electricity consumers connected to it, and profit generation. Achievement of the financial result of the joint activity: The profit generated in 2010 as a result of shared use of property was RUR 136.77 thousand, the profit st generated in the 1 quarter of 2011 was RUR 0.64 thousand within the framework of the agreement Other participants of the joint activity: LLC "Energo-PS".
As at 31 March 2011, the reserve for depreciation of the contribution under joint activity agreement #16/3- 36DC dated 18 September 199 and agreement w/n dated 27 October 2000 was RUR 25,669 thousand.
3.3. Issuer’s outline for future activities The main lines in the plans of the future activity: - expansion of the market and, accordingly, volume of electricity transmission services; - construction of objects of the electric grid complex in order to liquidate zones of deficiency of electric power in modes of distribution grids equal to 110 kV and maintenance of reliable and trouble-free operation of power supply systems, as well as engineering connection of new consumers; - modernization and reconstruction of main devices and equipment, implementation of projects in order to increase efficiency of the issuer’s activity; - achievement of target values of the level of reliability and quality of the services rendered to the branches of the Company. The issuer plans to expand the market and volume of electricity transmission services through purchase of electric grid assets, connection of new consumers attracted by guaranteed conditions of uninterrupted and reliable provision with qualitative electricity, and connection of additional power of generation objects, such as Kirov CHP-3 (210 MW), Novogorkovskaya CHP (200 MW), Novomoskovskaya SDPS (190 MW), Kaluzhskaya CHP-1 (36.9 MW), Izhevskaya CHP-1 (220 MW). Moreover, the issuer plans expansion of grid facilities through lease and purchase of the electric grid registered in the balance sheet of third parties.
31 When constructing new electric grid objects, the issuer should proceed from the conditions of optimization of investment expenses, fast and qualitative construction with the maximum admissible load of a commissioned object. In order to implement this, the issuer is going to continue participation in preparation and coordination of draft new schemes and programs of development of the electric power industry of the Russian Federation constituent entities, where the Company is present, as well as to develop preliminary schemes of external electricity supply of large consumers, such as production of high-quality metal, cement production, large areas of housing-and-municipal construction, etc.: The most important strategic projects include construction of “Strelka” S-110, “Sennaya” S-110, “Varvarskaya” S-110 in the Nizhniy Novgorod Region, “Soyuznaya” 110 S, “Pazely” 110 kV S, “Martyany” S- 110, in the Republic of Udmurtiya, new “Tovarkovo” S-110, “Voskresenskaya” S-110, “Zeleny Krupets” S-110, reconstruction of “Vorsino” 110 kV S with transfer to the voltage of 220 kV in the Kaluga Region, new “Urvantsevo” S-110 and “Chistye Prudy” S-35 in the Kirov Region, “Medvenka” S-110 in the Tula Region, “Lizunovo” S-110, “Semyazino” S-110 in the Vladimir Region, new “Technopark Dega” S-110 in the Ryazan Region. The issuer plans to continue modernization and reconstruction of fixed assets and equipment on the basis of an economically proved balance between commissioning of modern, more expensive effective equipment where it is really necessary, and application of reliable and time-proved plans and technologies. As at 31 March 2011, all of the Company branches operate using the tariff regulation system under the method of return on invested capital (RAB).
3.4. Issuer’s participation in industrial, bank and financial groups, holdings, concerns and associations The issuer does not participate in industrial, bank and financial groups, holdings, concerns and associations
3.5. Issuer’s subsidiaries and dependent economic entities 1. Full firm name: Open Joint-Stock Company “Motor Transport Enterprise” Abbreviated firm name: OJSC “MTE” Location: 50 Yuzhnaya Str., Orichi Settl., Orichevsky District, Kirov Region, Russia TIN: 4324006553 PSRN: 1034314502771
Subsidiary: Yes Dependent entity: Yes The grounds to recognize the company to be a subsidiary or dependent entity in relation to the issuer: OJSC “MTE” is recognized a subsidiary, since IDGC of Center and Volga Region, JSC by virtue of the predominant participation in its charter capital has the right to determine the resolutions passed by OJSC “MTE” . Issuer’s stake in the charter capital of the person, %: 100 Ordinary shares of the person belonging to the issuer, %: 100 Stake of the person in the charter capital of the issuer, %: 0 Issuer’s ordinary shares belonging to the person, %: 0 Description of the main type of the company’s activities. Description of the company’s importance for the issuer’s activities: Rendering of transportation services, storage services, after-sales service of vehicles, intermediate services, repair and maintenance of vehicles, re-equipment and assessment of vehicles. It renders IDGC of Center and Volga Region, JSC transportation services. It does not have material effect on the issuer’s main activity. The membership of the board of directors (supervisory council) of the company Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter belonging to the person, capital, % % Galina Yurievna Baruzdina (Chairman) 1961 0 0 Vladimir Igorevich Koltunov 1978 0.0008 0.0008 Lidia Vitalievna Degtyaryova 1960 0 0 Dmitry Vasilievich Katynov 1973 0 0 Margarita Alexandrovna Storchay 1982 0 0 The company’s Sole Executive Body
32 Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter belonging to the person, capital, % % Dmitry Vasilieivich Katynov 1973 0 0 The membership of the company’s collegial executive body The collegial body is not stipulated
2. Full firm name: Closed Joint-Stock Company “Svet” Abbreviated firm name: CJSC “Svet” Location: 8 Lunacharskogo, Bor City, Nizhny Novgorod Region, Russia 606440 TIN: 5246015831 PSRN: 1025201206502
Subsidiary: Yes Dependent entity: Yes The grounds to recognize the company to be a subsidiary or dependent entity in relation to the issuer: CJSC “Svet” is recognized a subsidiary, since IDGC of Center and Volga Region, JSC by virtue of the predominant participation in its charter capital has the right to determine the resolutions passed by CJSC “Svet”. Issuer’s stake in the charter capital of the person, %: 100 Ordinary shares of the person belonging to the issuer, %: 100 Stake of the person in the charter capital of the issuer, %: 0 Issuer’s ordinary shares belonging to the person, %: 0 Description of the main type of the company’s activities. Description of the company’s importance for the issuer’s activities: Electricity transmission. Specialized activity . It does not have material effect on the issuer’s main activity. The membership of the board of directors (supervisory council) of the company Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter capital, belonging to the % person, % Ivan Sergeevich Zavalin (Chairman) 1982 0 0 Vladimir Igorevich Koltunov 1978 0.0008 0.0008 Lidia Vitalievna Degtyaryova 1960 0 0 Valery Alexandrovich Smirnov 1952 0 0 Maxim Mikhailovich Saukh 1979 0 0
The company’s Sole Executive Body Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter capital, belonging to the % person, % Valery Alexandrovich Smirnov 1952 0 0 The membership of the company’s collegial executive body The collegial body is not stipulated
3. Full firm name: Open Joint-Stock Company “Berendeyevskoye” Abbreviated firm name: OJSC “Berendeyevskoye” Location: Berendeyevka Village, Lyskovsky District, Nizhny Novgorod Region, Russia 606241 TIN: 5222014807 PSRN: 1045206491384
Subsidiary: Yes Dependent entity: Yes The grounds to recognize the company to be a subsidiary or dependent entity in relation to the issuer: OJSC “Berendeyevskoye” is recognized a subsidiary, since IDGC of Center and Volga Region, JSC by virtue of the predominant participation in its charter capital has the right to determine the resolutions passed by OJSC “Berendeyevskoye”. Issuer’s stake in the charter capital of the person, %: 100 33 Ordinary shares of the person belonging to the issuer, %: 100 Stake of the person in the charter capital of the issuer, %: 0 Issuer’s ordinary shares belonging to the person, %: 0 Description of the main type of the company’s activities. Description of the company’s importance for the issuer’s activities: Production, processing and selling of agricultural products. Nonspecialized activity . It does not have material effect on the issuer’s main activity. The membership of the board of directors (supervisory council) of the company Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter capital, % belonging to the person, % Lidia Vitalievna Degtyaryova (Chairman) 1960 0 0 Vladimir Igorevich Koltunov 1978 0.0008 0.0008 Olga Dmitrievna Golubeva 1983 0 0 Alexander Victorovich Rodionov 1955 0 0 Anna Yurievna Katina 1982 0 0
The company’s Sole Executive Body Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter capital, belonging to the % person, % Alexander Viktorovich Rodionov 1955 0 0 The membership of the company’s collegial executive body The collegial body is not stipulated
4. Full firm name: Open Joint-Stock Company “Agricultural Enterprise “Luchinskoye” Abbreviated firm name: OJSC “Agricultural Enterprise “Luchinskoye” Location: Luchinskoye V., Sobinsky District, Vladimir Region, Russia TIN: 3323007288 PSRN: 1033302602321
Subsidiary: Yes Dependent entity: Yes The grounds to recognize the company to be a subsidiary or dependent entity in relation to the issuer: OJSC “Agricultural Enterprise “Luchinskoye” is recognized a subsidiary, since IDGC of Center and Volga Region, JSC by virtue of the predominant participation in its charter capital has the right to determine the resolutions passed by OJSC “Agricultural Enterprise “Luchinskoye”. Issuer’s stake in the charter capital of the person, %: 100 Ordinary shares of the person belonging to the issuer, %: 100 Stake of the person in the charter capital of the issuer, %: 0 Issuer’s ordinary shares belonging to the person, %: 0 Description of the main type of the company’s activities. Description of the company’s importance for the issuer’s activities: Production, processing and selling of agricultural products. Nonspecialized activity . It does not have material effect on the issuer’s main activity.
The membership of the board of directors (supervisory council) of the company Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter capital, % belonging to the person, % Vladimir Igorevich Koltunov (Chairman) 1978 0.0008 0.0008 Lidia Vitalievna Degtyaryova 1960 0 0 Olga Dmitrievna Golubeva 1983 0 0 Nadezhda Leonidovna Artemieva 1964 0 0 Ilya Alexandrovich Shpinev 1983 0 0
The company’s Sole Executive Body 34 Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter capital, belonging to the % person, % Nadezhda Leonidovna Artemieva 1964 0 0 The membership of the company’s collegial executive body The collegial body is not stipulated
5. Full firm name: Open Joint-Stock Company “Health Resort “Energetic” Abbreviated firm name: OJSC “Health Resort “Energetic” Location: 10 Aviatsionnaya Str., Izhevsk, Republic of Udmurtia, Russia . TIN: 1835053854 PSRN: 1031801950564
Subsidiary: Yes Dependent entity: Yes The grounds to recognize the company to be a subsidiary or dependent entity in relation to the issuer: OJSC “Health Resort “Energetic”is recognized a subsidiary, since IDGC of Center and Volga Region, JSC by virtue of the predominant participation in its charter capital has the right to determine the resolutions passed by OJSC “Health Resort “Energetic”. Issuer’s stake in the charter capital of the person, %: 100 Ordinary shares of the person belonging to the issuer, %: 100 Stake of the person in the charter capital of the issuer, %: 0 Issuer’s ordinary shares belonging to the person, %: 0 Description of the main type of the company’s activities. Description of the company’s importance for the issuer’s activities: Rendering of medical, sanatorium, sports and health-improvement services to population; accommodation (temporary residence), food and supporting services. Nonspecialised activity. It does not have material effect on the issuer’s main activity.
The membership of the board of directors (supervisory council) of the company Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter capital, % belonging to the person, % Olga Vasilievna Tokaeva (Chairman) 1978 0 0 Vladimir Igorevich Koltunov 1978 0.0008 0.0008 Lidia Vitalievna Degtyaryova 1960 0 0 Irina Mikhailovna Starkova 1960 0 0 Adel Fyaritovich Bikmurzin 1979 0 0
The company’s Sole Executive Body Full name Year of Person’s stake in the Issuer’s ordinary shares birth issuer’s charter capital, belonging to the % person, % Irina Mikhailovna Starkova 1960 0 0 The membership of the company’s collegial executive body The collegial body is not stipulated
6. Full firm name: Open Joint-Stock Company “Interregional Energy Service Company “IESC “Energy-Efficient Technologies” Abbreviated firm name: OJSC “IESC “Energy-Efficient Technologies” Location: 6 Proviantskaya Str., Nizhny Novgorod, Russia, 603155 TIN: 5260292724 PSRN: 1105260018478 Subsidiary: Yes Dependent entity: Yes The grounds to recognize the company to be a subsidiary or dependent entity in relation to the issuer: it is recognized a subsidiary, since IDGC of Center and Volga Region, JSC by virtue of the predominant 35 participation in its charter capital has the right to determine the resolutions passed by OJSC “IESC “Energy- Efficient Technologies”. Issuer’s stake in the charter capital of the person, %: 51 Ordinary shares of the person belonging to the issuer, %: 51 Stake of the person in the charter capital of the issuer, %: 0 Issuer’s ordinary shares belonging to the person, %: 0 Description of the main type of the company’s activities. Description of the company’s importance for the issuer’s activities: - performance design, construction and assemblage works of electricity, hot and cold water supply measuring units; - designing, installation and adjustment of thermal power, gas measuring units and process equipment units; - repair and construction works, assembly, specialized works in respect of installation of gas supply systems, service of facilities; - installation and adjustment of process equipment, boiler units and auxiliaries; - installation and adjustment works at control and measuring devices and units (CMDU) of fuel consuming units (boilers and furnaces); - works in respect of arrangement of external engineering networks, systems and equipment, adjustment of thermal grids; - works in respect of arrangement of internal engineering systems, including fire-fighting systems and fire warning system; - performance of tool inspection of energy facilities; - activity within the framework of energy service agreements; - estimation and reduction of losses of power resources in the power supply systems of apartment houses (including multiroom ones), village and garden cottages, industrial enterprises and state-financed organizations; - financial engineering of energy saving projects and programs; - optimization of payments for consumed power resources; - implementation of "ready-to-operate" energy saving projects; - activity related with maintenance of working capacity of electric and thermal grids; - creation of the automated information-measuring systems (AIMS) of electricity commercial accounting (pre-design inspection, designing (design works, development of operational documentation), assembly and adjustment works, manufacture of necessary equipment and materials, organization and performance of measurements (operation and performance of measurements (operation), metrological service); - organization of information and educational support of consumers of power resources, including creation of databanks in the field of rational energy consumption, energy saving and ecological life safety, automated systems, measuring computer complexes, multipurpose express diagnostics; - performance and introduction of new progressive technologies, scientific and technical development, research, test surveys and design works (research and development); - assessment activity; - other kinds of activity, which are not forbidden by the Russian Federation laws.
The activity of OJSC "IESC Energy-Efficient Technologies" is related with the issuer's core activity, but does not have material effect on its activity.
The membership of the board of directors (supervisory council) of the company Full name Year of birth Person’s stake in the Issuer’s issuer’s charter capital, ordinary % shares belonging to the person, %
Vladimir Vladimirovich Perevalov (Chairman) 1967 0 0 Vladimir Igorevich Koltunov 1978 0.0008 0.0008 Artem Gennadievich Alyoshin 1977 0 0 Dmitry Dmitrievich Mikheev 1983 0 0 Yury Evgenievich Zenyutich 1969 0 0
36 Anatoly Sergeevich Shevchenko 1971 0 0 Evgeny Arkadievich Zenyutich 1943 0 0 The company’s Sole Executive Body Full name Year of Person’s stake in the Issuer’s ordinary birth issuer’s charter capital, shares belonging % to the person, % Yury Evgenievich Zenyutich 1969 0 0
The membership of the company’s collegial executive body The collegial body is not stipulated
7. Full firm name: Open Joint-Stock Company “Tulenergokoplekt” Abbreviated firm name: OJSC “Tulenergokomplekt” Location: 101 А Timiryazeva Str., Tula, Russia, 300600 TIN: 7107067346 PSRN: 1027100507356
Subsidiary: No Dependent entity: Yes The grounds to recognize the company to be a subsidiary or dependent entity in relation to the issuer: IDGC of Center and Volga Region, JSC owns over 20% of the voting shares of OJSC “Tulenergokomplekt”. Issuer’s stake in the charter capital of the person, %: 50 Ordinary shares of the person belonging to the issuer, %: 50 Stake of the person in the charter capital of the issuer, %: 0 Issuer’s ordinary shares belonging to the person, %: 0 Description of the main type of the company’s activities. Description of the company’s importance for the issuer’s activities: Material supply, operation and service of vehicles, transportation services. Nonspecialised activity. It does not have material effect on the issuer’s main activity.
On 22 November 2010, the Arbitration Court of the Tula Region passed the resolution on recognition of OJSC "Tulenergocomplect" to be insolvent (bankrupt) under case #A68-2160/10. The bankruptcy management procedure was initiated in respect of OJSC "Tulenergocomplect"; Elena Victorovna Rusakova was approved as bankruptcy supervisor.
According to clause 2 of Section 126 of the Federal Law "On insolvency (bankruptcy)", the powers of the manager of the debtor and other management bodies of the debtor are terminated as from the date of passing the resolution by the arbitration court in respect of recognition of the debtor to be bankrupt and initiation of the bankruptcy management procedure.
3.6. Composition, structure and value of the issuer’s fixed assets, information on plans for purchase, replacement, retirement of fixed assets and on all facts of encumbrance of the issuer’s fixed assets 3.6.1. Fixed assets For the year 2010 Measurement unit: RUR
Amount of accrued Name of the group of fixed assets Initial (recovery) value depreciation
Industrial buildings 9,477,054,511.84 4,100,239,392.49 Hydraulic engineering facilities 33,904,432.48 22,036,385.77 Power lines and accessories 75,416,233,445.236 49,994,716,863.79 Heat-supply grids 93,058,843.05 65,415,578.03 Equipment and plants 694,313,518.89 339,989,446.88
37 Power machines 20,548,191,824.55 13,295,447,279.86 Substations 17,275,715,198.18 11,847,515,739.53 Non-production fixed assets 268,894,805.43 40,956,481.7 Others 8,699,665,924.71 4,506,015,688.4 In total 132,507,032,504.36 84,212,332,856.45
Information on ways of charge of depreciation contributions per the groups of fixed asset objects: Depreciation in respect of the fixed asset objects is made by a linear way, proceeding from the time of productive use of these objects.
Reporting date: 31 December 2010
As at the date of the end of the reporting quarter Measurement unit: RUR
Amount of accrued Name of the group of fixed assets Initial (recovery) value depreciation
Industrial buildings 9,489,588,963.6 4,144,889,194.17 Hydraulic engineering facilities 48,835,664.88 36,606,028.42 Power lines and accessories 75,803,400,429.05 50,471,325,649.27 Heat-supply grids 75,485,168.79 52,026,743.74 Equipment and plants 682,058,448.76 345,640,778.37 Power machines 21,455,617,998.69 13,780,325,607.61 Substations 16,621,984,027.12 11,710,699,553.93 Non-production fixed assets 268,673,317.4 42,494,815.27 Others 8,672,305,140.4 4,575,915,011.13 In total 133,117,949,158.69 85,159,923,381.91
Information on ways of charge of depreciation contributions per the groups of fixed asset objects: Depreciation in respect of the fixed asset objects is made by a linear way, proceeding from the time of productive use of these objects.
Reporting date: 31 March 2011 Results of the last reassessment of fixed assets and the fixed assets leased under the long-term basis, which was carried out for 5 completed financial years prior to the reporting quarter, or for each completed financial year prior to the reporting quarter if the issuer has been carrying out its activity for less than 5 years, and for the reporting quarter No reassessment of fixed assets was held for the mentioned period
Information on the plans for purchase, replacement, retirement of fixed assets, the value of which is 10 and more percent of the issuer’s fixed assets value, and other fixed assets upon the issuer’s discretion, as well as information on all facts of encumbrance of the issuer’s fixed assets (with the indication of the nature of the encumbrance, the moment of occurrence of the encumbrance, term of its effect and other conditions upon the issuer’s discretion),existing as at the date of the end of the last completed reporting period: Information on plans for purchase, replacement, retirement of the fixed assets, the value of which 10 and more percent of the issuer’s fixed assets value, and other fixed assets upon the issuer’s discretion: no such plans available as at the date of the end of the reporting period . Information on all facts of the issuer’s fixed assets encumbrance: no encumbrance exists in respect of the fixed assets as at the date of the end of the reporting period .
IV. Information on the issuer’s financial and economic operations 38 4.1. Results of the issuer’s financial and economic activities 4.1.1. Profit and loss Measurement unit: thousands of rubles
Indicator 2007 2008 2009 2010 2011, 3 months Earnings 158,548 31,686,190 47,191,290 54,395,050 18,307,273 Gross profit 19,777 3,221,768 3,181,077 4,177,794 2,748,933 Net profit (undistributed profit) 73 1,428,560 426,939 1,397,757 1,708,380 (uncovered loss) 0.72 3.57 1.05 3.33 3.92 Return on equity, % Return on assets, % 0.12 2.41 0.69 2.13 2.47 0.05 4.51 0.9 2.57 9.33 Net profitability ratio, % 12.47 10.17 6.74 7.68 15.02 Product (sales) profitability, % Capital turnover 15.04 0.61 0.88 0.93 0.3 Amount of uncovered loss as at the 0 0 0 0 0 reporting date Relation of the uncovered loss as at the reporting date and the balance 0 0 0 0 0 sheet total
The economic analysis of profitability/running at a loss of the issuer based on the dynamics of the provided indicators. Including, description of the information on the reasons which, in opinion of the issuer’s governance bodies, led to the fact that the issuer ran at a loss/gained profit reflected in the accounting reports as at the end of the reporting quarter in comparison with the similar period of the previous year (previous years): The method recommended by the “Regulations for disclosure of the information by equity securities issuers” approved by order # 06-117/pz-n of the Federal Financial Markets Service dated 10 October 2006 was used in order to calculate the specified indicators,. The sufficient change of indicators in 2008 against 2007 was caused by the reorganization held on 29 February 2008 in the form of accession of the regional distribution grid companies included in the responsibility zone of IDGC of Center and Volga Region, JSC to it. The growth of the profitability and efficiency indicators for the 1 st quarter of the current year against the similar period of the last year was caused by the advancing rates of growth of the earnings against the expenses growth rates. The growth of the earnings was RUR 3,868,730 thousand or 26.8% of the analogous amount of the last year; the growth of expenses was accordingly RUR 2,286,725 thousand or 17.2%. The earnings grew as a result of an increase in electricity transmission tariffs because of the growth of the investment component in the structure of the Company tariff earnings in the process of adoption of a new tariff regulation method under the method of the return on the invested capital (RAB). The major factor of the expenses growth is the increase in those expenses, which cannot be controlled by the Company: purchased electricity for compensation of losses, electricity transmission services of distribution grid companies and JSC "FGC UES". The growth of these expenses was caused by the increase in the volumes of transmitted electricity and increase in the tariffs approved by the state regulatory bodies for the entities rendering services. The low rates of the capital turnover are related with the fact that by virtue of peculiarity of the Company activity the main share in the balance structure is represented by the fixed assets and long-term investments, thus the share of the current liabilities is rather low. The capital turnover based on the results of the reporting quarter was 0.30. The issuer has no uncovered losses for the reporting period.
The Charter of IDGC of Center Volga Region does not stipulate approval of the quarterly report of the issuer of securities by the Company’s Board of Directors or Management Board.
39
4.1.2. Factors which had impact on change of the amount of the earnings from selling goods, products, works, services by the issuer, and the issuer’s profit (loss) from main operations Growth of the issuer’s earnings and profit in the 1st quarter of 2011 as compared to the 1st quarter of the previous year was caused by a growth in tariffs for electricity transmission services, which were fixed for the issuer by tariff regulation authorities. The Charter of IDGC of Center Volga Region does not stipulate approval of the quarterly report of the issuer of securities by the Company’s Board of Directors or Management Board.
4.2. Issuer’s liquidity, sufficiency of capital and current assets Measurement unit: thousands of rubles
Indicator 2007 2008 2009 2010 2011, 3 months Working capital 8,255 -6,195,025 -9,027,247 -13,056,691 -11,358,980 Fixed asset index 0.18 1.16 1.23 1.31 1.26 Current liquidity ratio 1.17 1.88 1.56 1.5 1.65 Quick assets ratio 1.09 1.66 1.34 1.37 1.5 Equity funds autonomy ratio 0.16 0.67 0.66 0.64 0.63
The economic analysis of liquidity and solvency of the issuer based on the economic analysis of the dynamics of the provided indicators: The sufficient change of the liquidity indicators in 2008 against 2007 was caused by the reorganization held on 29 February 2008 in the form of accession of the regional distribution grid companies included in the responsibility zone of IDGC of Center and Volga Region, JSC to it. The indicator “working capital” reflects difference of the amount of own capital and noncurrent assets. The amount of the issuer’s own working capital as at the end of the reporting period is negative and has decreased compared to the similar period of the last year by RUR 3,593,256 thousand. The fixed asset index characterizes the relation of noncurrent assets to the sources of own capital. In the analyzed period, the value of the indicator was 1.26 (in the 1st quarter of the last year, it was 1.19) that proves a growth of noncurrent assets generated due to the borrowed capital. The negative value of the indicator “working capital” and the fixed assets index exceeding 1 are caused by an increase in the issuer’s noncurrent assets as a result of performance of the large-scale investment program aimed to update main production assets, due to attraction of long-term extra funds. Since 2008, the issuer has been carrying out scheduled transition to the system of regulation of tariffs for electricity transmission based on the method of the return on invested capital (RAB) which provides a return of the money resources spent for the investment program, in the long-term period, repayment of long-term loans, and improvement of values of the indicator “working capital” and the fixed asset index. The current liquidity ratio and quick assets ratio characterize liquidity of the issuer, i.e. ability to meet obligations at the expense of the current assets. The values of the indicators are on the normative level: in the 1st quarter of the current year they were 1.65 and 1.50 accordingly; this proves the ability of the enterprise to meet its obligations. Their reduction in comparison with the similar period of the last year occurred due to a reduction in the issuer’s accounts receivable and growth of the short-term credits and loans. The equity funds autonomy ratio shows a share of own assets in the total amount of all of the issuer’s funds. The larger is the share of own means, the larger is the issuer’s chances to cope with the unforeseen circumstances arising during its activity, and the higher is the stability of the enterprise and its financial independence. Following the performance in the reporting quarter, the equity funds autonomy ratio of the issuer was 0.63. The value of the indicator is on the normal level. It fell against the 1 st quarter if the last year due to attraction by the issuer of long-term borrowed funds to implement the large-scale investment program. The Charter of IDGC of Center Volga Region, JSC does not stipulate the adoption of the quarterly report of the issuer of securities by the Company’s Board of Directors or Management Board.
4.3. Amount and structure of the issuer’s capital and current assets 4.3.1. Amount and structure of the issuer’s capital and current assets Measurement unit: thousands of rubles
40 Наименование показателя 2007 2008 2009 2010 2011, 3 months Amount of the charter capital 10,000 11,269,782 11,269,782 11,269,782 11,269,782 Total value of the issuer’s shares (stakes) bought out by the issuer for subsequent 0 0 0 0 0 resale (transfer) Percentage of shares (stakes) bought out by the issuer for subsequent resale (transfer) from the issuer’s placed 0 0 0 0 0 shares (charter capital) Amount of the issuer’s reserve capital formed due to contributions from the 447,261 0 354,486 425,914 447,261 issuer's profit
Amount of the issuer’s additional capital reflecting increase in the value of the assets revealed following the results of reassessment, as well as the amount of the difference between the sale price 0 24,654,248 24,629,540 24,606,535 24,604,798 (placement price) and par value of shares (stakes) of the company at the expense of sale of the shares (stakes) at the price which exceeds the par value Amount of the issuer’s unallotted net profit 73 3,604,452 4,121,542 5,520,957 7,231,074
Total amount of the issuer’s capital 10,073 39,882,968 40,446,778 41,844,535 43,552,915
The amount of the charter capital shown in this clause complies with the issuer’s documents of incorporation Structure and amount of the issuer’s current assets in accordance with the issuer’s accounting reports
Indicator 2007 2008 2009 2010 2011, 3 months TOTAL current assets 59,971 13,092,245 11,402,258 10,523,797 14,065,239 Stocks 4,340 1,358,796 1,029,154 870,167 1,142,679 Raw material, materials and other similar 1,132 797,359 780,618 794,539 1,028,430 values Rearers and fatteners 0 0 0 0 0 Expenses in the production in process 0 3,404 6,861 10,082 7,480 Ready products and goods for re-sale 0 597 460 1,454 2,245
Goods loaded out 0 0 0 0 0 Prepaid expenses 3,208 557,436 241,215 64,092 104,524 Other stocks and expenses 0 0 0 0 0 Value added tax in respect of purchased 0 74,452 88,609 66,746 64,659 values
41 Accounts receivable (payments 0 342,338 218,269 87,013 67,844 under which are expected in more than 12 months after the reporting date)
Including buyers and customers 0 147,899 55,112 29,711 38,623
Accounts receivable (payments under 22,661 8,888,785 7,174,302 5,896,758 7,558,717 which are expected within 12 months after the reporting date) Including buyers and customers 6,793 3,097,417 4,920,958 4,180,196 5,068,944
Short-term financial investments 28,800 565,769 6,691 3,991 4,822
Money 4,170 1,862,105 2,488,347 3,147,344 4,788,789
Other current assets 0 0 396,886 451,778 437,729
Sources of financing of the issuer’s current assets (own sources, loans, facilities): earnings from rendering services, borrowed funds. Policy of the issuer in the field of financing current assets, factors which may entail change in the policy of financing current assets, and estimation of probability of their occurrence: Policy of the issuer for financing current assets : preservation of the level of liquidity, turn-round rate of accounts payable and receivable and solvency of the company of the issuer on the level providing duly performance of obligations to creditors. Factors which may entail change in the policy of financing current assets, and estimation of probability of their occurrence: the policy of financing current assets is based on formation of the balanced budget of cash flow. The current financing of current assets is carried out mainly at the expense of the earnings from primary activity, and obtaining of loans. Thus, the probability of occurrence of factors which may entail negative changes in the policy of financing current assets is minimal.
4.3.2. Issuer’s financial investments For the year 2010 List of financial investments of the issuer which equal or exceed 10 percent of all of its financial investments as at the date of the end of the reporting period Investments into equity securities
Type of securities: shares Full firm name of the issuer: Open Joint-Stock Company “Motor Transport Enterprise” Abbreviated name of the issuer: OJSC “MTE” Location of the issuer: 50 Yuzhnaya Str., Orichi Settl., Orichevsky District, Kirov Region, Russian Federation Date of state Registration number Registering authority registration of the issue (issues) 20.02.2004 1-01-11616-Е RD of the FCSM of Russia in the Volga Region Federal Region Number of the securities owned by the issuer: 205,063,407 Total par value of the securities owned by the issuer: 205,063,407 Currency: RUR Total book value of the securities owned by the issuer, RUR: 42 166,032,893.48 Dividends per ordinary shares for 2009: it was resolved not to pay dividends.
Type of securities: shares Full firm name of the issuer: Open Joint-Stock Company “Berendeyevskoye” Abbreviated firm name of the issuer: OJSC “Berendeyevskoye” Location of the issuer: Berendeyevka Village, Lyskovsky District, Nizhny Novgorod Region, Russia
Date of state registration Registration number Registering authority of the issue (issues)
26.05.2004 1-01-11677-Е RD of the FCSM of Russia in the Volga Region Federal Region
Number of the securities owned by the issuer: 54,670,600 Total par value of the securities owned by the issuer: 54,670,600 Currency: RUR Total book value of the securities owned by the issuer, RUR: 59,194,211 Dividends per ordinary shares for 2009: it was resolved not to pay dividends.
Type of securities: shares Full firm name of the issuer: Open Joint-Stock Company “Agricultural Enterprise “Luchinskoye” Abbreviated firm name of the issuer: OJSC “Agricultural Enterprise “Luchinskoye” Location: Luchinskoye Village., Sobinsky District, Vladimir Region, Russian Federation Date of state registration Registration number Registering authority of the issue (issues)
27.01.2005 1-01-08447-А RD of the FCSM of Russia in the Central Federal Region
Number of the securities owned by the issuer: 5, 863,041 Total par value of the securities owned by the issuer: 58,630,410 Currency: RUR Total book value of the securities owned by the issuer, RUR: 46,435,452 Dividends per ordinary shares for 2009: it was resolved not to pay dividends.
Investments into non-equity securities No investments were made into non-equity securities comprising 10 and more percent of all financial investments
The issuer created the reserve for devaluation of the investments into securities The amount of the reserve for the devaluation of the securities as at the beginning and the end of the last completed financial year before the date of the end of the last reporting quarter: The reserve for devaluation of the investments into securities as at 1 January 2010 was not created. As at 31 December 2010, the reserve for devaluation of the financial investments into securities was created in the amount of RUR 85,849 thousand.
Other financial investments No other financial investments comprising 10 and more percent of all financial investments were made
The information on the amount of the potential losses related to the bankruptcy of the entities (enterprises), the investments were made to, by each kind of the specified investments: On 15 June 2010 the meeting of the Arbitration Court of the Tula Region for consideration of the application for bankruptcy of the dependent company of IDGC of Center and Volga Region, JSC - OJSC “Tulenergokomplekt” took place. The procedure of bankruptcy supervision was initiated, the bankruptcy supervisor was approved. 43 On 22 November 2010, the Arbitration Court of the Tula Region passed the resolution on recognition of OJSC "Tulenergocomplect" to be insolvent (bankrupt) under case #A68-2160/10. The bankruptcy management procedure was initiated in respect of OJSC "Tulenergocomplect"; Elena Victorovna Rusakova was approved as bankruptcy supervisor The potential losses related to the bankruptcy of OJSC “Tulenergokomplekt” are defined in the amount of the book value of this financial investment of IDGC of Center and Volga Region, JSC: RUR 71,114,054.50. The reserve for devaluation of this financial investment was created in the amount of RUR 57,053,054.50 and the book value equals RUR 14,061,000.00
Information on losses is provided in the issuer’s estimation in respect of financial investments reflected in the issuer’s accounting reports for the period from the beginning of the financial year to the date of the end of the last reporting quarter Standards (rules) of the accounting reports, according to which the issuer performed calculations reflected in this clause of the quarterly report: The book keeping of financial investments is carried out according to AR 19/02 “Accounting of financial investments” approved by order #126n of the Ministry of Finance of Russia dated 10 December 2002 (as amended).
As at the date of the end of the reporting quarter List of financial investments of the issuer which equal or exceed 10 percent of all of its financial investments as at the date of the end of the reporting period Investments into equity securities
Type of securities: shares Full firm name of the issuer: Open Joint-Stock Company “Motor Transport Enterprise” Abbreviated name of the issuer: OJSC “MTE” Location of the issuer: 50 Yuzhnaya Str., Orichi Settl., Orichevsky District, Kirov Region, Russian Federation Date of state Registration number Registering authority registration of the issue (issues) 20.02.2004 1-01-11616-Е RD of the FCSM of Russia in the Volga Region Federal Region Number of the securities owned by the issuer: 205,063,407 Total par value of the securities owned by the issuer: 205,063,407 Currency: RUR Total book value of the securities owned by the issuer, RUR: 166,032,893.48 Dividends per ordinary shares for 2009: it was resolved not to pay dividends.
Type of securities: shares Full firm name of the issuer: Open Joint-Stock Company “Berendeyevskoye” Abbreviated firm name of the issuer: OJSC “Berendeyevskoye” Location of the issuer: Berendeyevka Village, Lyskovsky District, Nizhny Novgorod Region, Russia
Date of state registration Registration number Registering authority of the issue (issues)
26.05.2004 1-01-11677-Е RD of the FCSM of Russia in the Volga Region Federal Region
Number of the securities owned by the issuer: 54,670,600 Total par value of the securities owned by the issuer: 54,670,600 Currency: RUR Total book value of the securities owned by the issuer, RUR: 59,194,211 44 Dividends per ordinary shares for 2009: it was resolved not to pay dividends.
Type of securities: shares Full firm name of the issuer: Open Joint-Stock Company “Agricultural Enterprise «Luchinskoye»” Abbreviated firm name of the issuer: OJSC “Agricultural Enterprise “Luchinskoye” Location: Luchinskoye Village., Sobinsky District, Vladimir Region, Russian Federation Date of state registration Registration number Registering authority of the issue (issues)
27.01.2005 1-01-08447-А RD of the FCSM of Russia in the Central Federal Region
Number of the securities owned by the issuer: 5, 863,041 Total par value of the securities owned by the issuer: 58,630,410 Currency: RUR Total book value of the securities owned by the issuer, RUR: 46,435,452 Dividends per ordinary shares for 2009: it was resolved not to pay dividends.
Investments into non-equity securities No investments were made into non-equity securities comprising 10 and more percent of all financial investments
The issuer created the reserve for devaluation of the investments into securities The amount of the reserve for the devaluation of the securities as at the beginning and the end of the last completed financial year before the date of the end of the last reporting quarter: The reserve for devaluation of the investments into securities as at 1 January 2010 was not created. As at 31 December 2010, the reserve for devaluation of the financial investments into securities was created in the amount of RUR 85,849 thousand.
Other financial investments No other financial investments comprising 10 and more percent of all financial investments were made
The information on the amount of the potential losses related to the bankruptcy of the entities (enterprises), the investments were made to, by each kind of the specified investments: On 15 June 2010 the meeting of the Arbitration Court of the Tula Region for consideration of the application for bankruptcy of the dependent company of IDGC of Center and Volga Region, JSC - OJSC “Tulenergokomplekt” took place. The procedure of bankruptcy supervision was initiated, the bankruptcy supervisor was approved. On 22 November 2010, the Arbitration Court of the Tula Region passed the resolution on recognition of OJSC "Tulenergocomplect" to be insolvent (bankrupt) under case #A68-2160/10. The bankruptcy management procedure was initiated in respect of OJSC "Tulenergocomplect"; Elena Victorovna Rusakova was approved as bankruptcy supervisor The potential losses related to the bankruptcy of OJSC “Tulenergokomplekt” are defined in the amount of the book value of this financial investment of IDGC of Center and Volga Region, JSC: RUR 71,114,054.50. The reserve for devaluation of this financial investment was created in the amount of RUR 57,053,054.50 and the book value equals RUR 14,061,000.00
Information on losses is provided in the issuer’s estimation in respect of financial investments reflected in the issuer’s accounting reports for the period from the beginning of the financial year to the date of the end of the last reporting quarter Standards (rules) of the accounting reports, according to which the issuer performed calculations reflected in this clause of the quarterly report: The book keeping of financial investments is carried out according to AR 19/02 “Accounting of financial investments” approved by order #126n of the Ministry of Finance of Russia dated 10 December 2002 (as amended).
45 4.3.3. Issuer’s intangible assets For the year 2010 Unit of measurement: RUR Name of the intangible assets group Initial (recovery) value Amount of accrued активов depreciation
Software products 17,768,369.47 8,920,418.5 Trade mark 352,499 51,732.54 Total 18,120,868.47 8,972,151.04
Standards (rules) of book keeping, according to which the issuer represents the information on the intangible assets: Accounting of intangible assets is carried out according to AR 14/2007 “Accounting of intangible assets” approved by Order #153n of the Ministry of Finance of the Russian Federation dated 27 December 2007.
As at the date of the end of the reporting quarter
Unit of measurement: RUR Name of the intangible assets group Initial (recovery) value Amount of accrued активов depreciation
Software products 17,768,369.47 10,395,077 Trade mark 352,499 62,916 Total 18,120,868.47 10,457,993
Standards (rules) of book keeping, according to which the issuer represents the information on the intangible assets: Accounting of intangible assets is carried out according to AR 14/2007 “Accounting of intangible assets” approved by Order #153n of the Ministry of Finance of the Russian Federation dated 27 December 2007.
4.4. Information on the issuer’s policy and expenditure in the field of the scientific and engineering development, in relation to licenses and patents, new developments and researches In the 1 st quarter of 2011, the design and estimates documentation in respect of creation of the utility model of the OL rapidly erected support of 35-110 kV in voltage for the purpose of liquidation of emergency damages in hard-to-reach places was developed in the branch "Vladimirenergo" under the agreement with LLC "AGIS Engineering". The expenses were RUR 481 thousand. The Company applies the Regulation on the Technical Policy in the Distribution Grid Complex of IDGC of Center and Volga Region, JSC approved by the Company General Director on 21 March 2008. The Regulation determines a set of administrative, technical and organizational actions for the short-tern and long-term period aimed to raise efficiency, technological level, reliability and safety of distribution electric grids on the basis of the engineering solutions and technologies, which were grounded scientifically and time- tested in practice. IDGC of Center and Volga Region, JSC did not register intellectual property (patents for invention, utility model, industrial pattern). In this connection no data on the lines and results of use of intellectual property, as well as on the risk factors related with use of intellectual property are specified. For the period from the moment of the state registration through the end of 2010, no work was held in the field of scientific and technical development, concerning licenses and patents, new developments and researches, charges were not incurred.
4.5. Analysis of the development tendencies in the field of the issuer’s main activities In 2008-2009, the global financial crisis became the major factor influencing the condition of the electric grid sector, which led to a fall in production and reduction in electricity consumption in the territory of the Russian Federation. Now the tendencies of overcoming the crisis have been observed in the national economy. For 2010, electricity consumption in the country against 2009 grew by 4.3%, in March 2011 - by 1.8% against March 2010. 46 The issuer's performance meets the general tendencies of the sector development. The steady growth of electricity consumption volumes in the regions of the issuer's presence were outlined before the crisis of 2008- 2009, and accordingly the volume of electricity transmission services and services of technological connection grew. In 2009, the negative consequences of the global financial crisis led to recession in the economic activities of the regions of the issuer's responsibility and reduction in electricity consumption and transmission. In 2010, in connection with the outlined animation of the Russian economy, the issuer's performance essentially improved, the volume of electricity transmitted to consumers considerably grew, growth of productive supply was 6.7% in relation to the last year. The following results were achieved regarding provision of technological connection services: in 2007, the number of connections for the power of 469 MW was 9,559; in 2008 - 12,368 connections for the power of 516 MW; in 2009 - 15,363 connections for the power of 362 MW; in 2010 - 16,385 connections for the power of 331 MW. For the 1 st quarter of 2011, 2,957 connections for the power of 62.2 MW were implemented.
The Charter of IDGC of Center Volga Region, JSC does not stipulate the adoption of the quarterly report of the issuer of securities by the Company’s Board of Directors or Management Board.
4.5.1. Analysis of factors and conditions influencing the issuer’s operations Factors and conditions influencing the Company activity and performance. The estimates in respect of the duration of the specified factors and conditions. The state regulation of the main kinds of the issuer's activity is the major factor influencing the issuer's activity. These kinds of activities are electricity transmission services and technological connection services. The regional regulating bodies establish tariffs for electricity transmission services within the framework of the marginal levels of tariffs for electricity established by the Federal Tariff Service of Russia. Another major factor influencing the issuer's performance is tendencies in the global and Russian economy. The economic crisis of 2008-2009 led to a reduction in productive supply, increase in the level of default of consumer payments and rise in credit resources price. Now the tendency of overcoming the crisis is observed, which has had impact on the issuer's performance: the growth of indices of productive supply, earnings, profit.
Actions undertaken by the Company, and actions planned by the Company for the future for the purpose of effective utilization of these factors and conditions. In order to form the optimal tariffs for the regional grid companies included in the issuer's responsibility zone, the issuer holds regular work with tariff authorities in the field of establishment of the tariffs including all economically feasible expenses as far as possible, and establishment of the proved specifications of losses. The work is also held in the filed of reduction of costs, minimization of electricity losses in grids by way of updating worn out equipment and increase in the volume of rendered services as a result of input of new powers. In order to decrease the negative effect of the factor of possible rise in credit resources price, the issuer undertakes the following actions: - carries out well-considered credit policy according to the "Regulation on the Credit Policy" approved by the Board of Directors of IDGC of Center and Volga Region, JSC; - concludes credit agreements in respect of raising borrowed funds, the conditions of which stipulate change of the interest rate per the credits or as agreed by the parties according to the current laws or in connection with change of the refinancing rate of the Central Bank of the Russian Federation. - involves credit resources from the largest and reliable banks of Russia. Work with such banks allows the issuer, including in the event of growth of inflation in Russia: - to avoid difficulties in raising credit resources in the required volume in connection with their rise in price, in the event of deterioration of the situation in the borrowed funds market; - in the event of deterioration of the situation in the financial market, to smooth the intensive growth of interest rates per already obtained borrowed funds, since large banks of Russia adhere to a more conservative policy in the field of preservation of interest rates at a former level; - to reduce probability of early return of credits, which may be a consequence of growth of interest rates; - to lower interest rates per current credit agreements, since in the event of change of the borrowed capital market condition for the best, large banks of Russia make advances to their clients, who initiated reduction of interest rates per the involved credits.
Material events / factors which may affect to the highest extent an opportunity of achievement by the Company of the same or higher results in the future against the results achieved for the last reporting period, and probability of occurrence of such events (occurrence of factors).
47 The factors which may affect to the highest extent an opportunity of achievement by the Company of the same or higher results in the future against the results achieved for the last reporting period include unstable situation in the global and national economy as a result of which there may be a reduction or stagnation of industrial production and energy consumption. In this case the issuer runs the risk of income reduction as a result of reduction in the volume of rendered services and the risk of default of consumer payments. The probability of prolongation of the crisis phenomena in the economy may be estimated as average. Now slow restoration of the national economy is expected. In 2010, large electricity consumers renewed their work; activity of large energy and capital-intensive consumers increased in respect of conclusion of and payment under technological connection agreements. Such entities in the reporting period are as follows: LLC "Ecodolie Obninsk", LLC "Zhilstroy-NN", CJSC "PIK-Zapad", LLC "TSUEGG RUSSIA", CJSC "Yamalgazinvest". If the crisis phenomena in the economy continue, rise in price of credit resources and difficulties in their raising are possible. As at the end of the 1 st quarter of 2011, the probability of rise in price of credit resources and difficulties with their attraction is estimated as average. In the 1 st quarter of 2011, the Company raised credit resources in the necessary volume under the rates close to the refinancing rate and below.
Material events / factors which may improve the Company's performance, probability of their occurrence and their duration. Implementation by the Company branches of the tariff regulation system based on the fair return on the invested capital (RAB) should be named as the essential factor which may improve the issuer's performance. The increase in the efficiency of the sector will be achieved at the expense of the following factors: - ensuring the balance of interests of consumers, investors and the state; - implementation of long-term projects, attraction of long-term investments at the floor price; - optimum allocation of risks between all participating parties; - creation of stimulus to increase efficiency of work by the companies owing to a reduction in costs and investments into new technologies; - development of electric grid complex with application of the scientifically feasible engineering solutions and technologies approved in the process of operation of the modern electric technical equipment; - ensuring the fair price for electricity transmission services, meeting their reliability and quality.
Another factor which may improve the issuer's performance is performed systematic work aimed to reduce volumes of technological charge (losses) of electricity in grids. The Loss Reduction Programs were developed in respect of the Company branches. Based on the results of the 1 st quarter of 2011, the reduction was 0.8% in comparison with the similar period of the last year as regards the absolute value and 0.01% as regards the relative value.
4.5.2. Issuer’s competitors IDGC of Center and Volga Region, JSC is a natural monopoly entity. By order #236-e of the Federal Tariff Service of Russia dated 27.06.2008, the Company is included into the register of natural monopolies entities in the fuel and energy complex, in relation whereof state regulation and control is carried out. IDGC of Center and Volga Region, JSC is the unique grid entity in the served territories, which has engineering connection to the Unified National Electric Grid (UNEG) and generating companies. In this situation the Company occupies the leading position on the market of rendering electricity transmission services. The significant part of electricity supplied to consumers goes through the Company’s grids, except the consumers directly connected to buslines of generation. There are consumers directly connected to the grids of UNPG; however, since 2005 IDGC of Center and Volga Region, JSC concludes electric grid property lease agreements with the entities owning the equipment of the UNPG grids, this property being registered on the border with directly connected consumers and by that acquired the formal right to provide such consumers with the electricity transmission services (so-called "last mile" agreements). Despite the aforesaid, there are subordinate grid entities in a number of regions of the Company’s zone of electricity transmission services sales market, which render similar electricity transportation services. Nevertheless, these grid entities are connected to the Company’s grids and receive electricity from the Company’s grids. These entities are mainly owned by the State and Municipal Unites and are presented in the forms of incorporation of the municipal unitary enterprises or the State Unitary Enterprises.
V. Detailed information on the persons forming part of the issuer’s governance bodies, issuer’s bodies for control over its financial and economic operations, and short data on the 48 issuer’s employees (staff) 5.1. Information on the structure and competence of the issuer’s governance bodies
Comprehensive description of the structure of the issuer governance bodies and their competence in accordance with the charter (documents of incorporation):
The Company governance bodies include: - General Meeting of Shareholders; - Board of Directors; - Management Board; - General Director.
The issuer supreme governance body is the General Meeting of Shareholders. According to Article 10 of the Charter of IDGC of Center and Volga Region, JSC the competence of the General Meeting of Shareholders covers the following issues: 1) making amendments and additions to the Company’s Charter and approving new wording of the Charter; 2) re-organizing the Company; 3) liquidating the Company, appointing a liquidation committee and approving intermediate and final liquidation balances; 4) estimating the quantity, nominal value, class (type) of authorized shares and the rights conferred by the said shares; 5) increasing the charter capital – either by increasing nominal share value or by distributing additional shares; 6) reducing the charter capital by decreasing nominal share value via corporate redemption of a portion of shares (with the purpose of further reducing total quantity), as well as via paying off shares acquired or purchased by the Company; 7) splitting and consolidating the Company shares; 8) resolving issues related to corporate distribution of bonds that are convertible into shares and other equity securities that can be converted into shares; 9) determining the number of the Board of Directors members, electing these members and early terminating their authority; 10) electing members of the Company’s internal audit commission and early terminating their authority; 11) approving the Company’s Auditor; 12) resolving the issue on delegating the authority of the individual executive body of the Company to a management company (managing director) and early terminating its authority; 13) approving the annual reports, annual accounting statements, including but not limited to profit and loss statements (profit and loss accounts), as well as the distribution of profit (including but not limited to paying out (declaring) dividends except for profit distributed as dividends following the first quarter, half and nine months of the financial year) and corporate losses based on the financial year results; 14) paying out (declaring) dividends based on the first quarter, half and nine months of the financial year; 15) setting up a proceeding order for the Company General Meeting of Shareholders; 16) resolving issues on approving transactions stipulated by Article No. 83 of the Russian Federal Law “On Joint Stock Companies;” 17) resolving issues on approving major transactions in events stipulated by Article No. 79 of the Russian Federal Law “On Joint Stock Companies;” 18) resolving issues on participating in financial-industrial groups, associations and other amalgamations of commercial entities; 19) approving corporate internal documents that regulate the activities of the Company’s bodies; 20) resolving issues on paying remuneration and/or compensation for expenses to members of the Company’s Internal Audit Commission; 21) resolving issues on remuneration and/or compensations for expenses to be paid to members of the Board of Directors; 22) resolving other issues stipulated by the Russian Federal Law “On Joint Stock Companies”.
10.1. The issues covered by the competence if the General Meeting of Shareholders may not be passed for resolving to the Board of Directors, Management Board and General Director of the Company.
The General Meeting of Shareholders is not entitled to consider the issues, which are not covered by the Federal Law “On Joint Stock Companies”, as well as pass resolutions in respect thereof. 49
The competence of the Company Board of Directors covers the following issues (Article 15 of the Charter): - setting up priority spheres for the Company’s activities; - calling Annual and Extraordinary General Meetings of the Company’s shareholders, except for events stipulated under Item 14.8 of Article No 14 of this Charter, as well as announcing the date that the new General Meeting will be held, instead of the previous one that failed to reach a quorum; - approving the agenda of the General Meeting of the Company’s shareholders; - electing the Secretary of the Company’s General Meeting of Shareholders; - setting the date for establishing the list of shareholders entitled to participate in the Company’s General Meeting of shareholders, approving estimated costs of holding the General Meeting of the Company’s Shareholders and resolving other issues related to preparing and holding the General Meeting of the Company’s Shareholders; - bringing up points stipulated under Subclauses 2, 5, 7, 8, 12 – 20 and clause 10.2 of Article No. 10 of the current Charter to be resolved by the General Meeting of Shareholders, as well as on issues related to reducing the Company’s charter capital, by decreasing nominal share value; - placing the Company’s bonds and other equity securities, except for events stipulated by Russian laws and the current Charter; - approving a resolution on issuing securities, the prospectus for the securities issue and the report on the results of the securities issue, the approval of reports on the results of redeeming shares from shareholders, reports on the results of paying off shares, reports on the results of requests made by shareholders for redeeming the shares held by them; - evaluating the price (pecuniary value) of property, the cost of placing and redeeming equity securities in events stipulated by Russian Federal Law “On Joint Stock Companies” as well as in the case of resolving issues stipulated under Subclauses 11, 23, 39 of clause 15.1 of Article No. 15 of the current Charter; - acquiring the shares, bonds and other equity securities distributed by the Company, in events stipulated by the Russian Federal Law “On Joint Stock Companies”; - carving-out (selling) corporate shares that come at the disposal of the Company following the acquisition or redemption from the Company shareholders, as well as in other cases stipulated by Russian Federal Law “On Joint Stock Companies”; - electing the Company’s General Director and aborting his/her powers, including resolving on early terminating the labor contract concluded with him; - establishing the number of members for the Company’s Management Board, electing members of the Company’s Management Board, fixing the amount of remuneration and compensation paid to them, aborting their powers; - making recommendations to the General Meeting of shareholders on the amount of remuneration and compensation paid out to members of the Company’s Management Board, as well as fixing the payment for services performed by the Company’s Auditor; - offering recommendations on the size of dividends per share and the method of paying them; - approving the Company internal documents that specify the order of generation and use of special purpose funds; - resolving issues as to the use of the Company funds, approving estimates of expenditures per special purpose fund and examining results of the disbursement of such estimates of expenditures related to the use of special purpose funds; - approving the Company internal documents, except for the internal documents, the approval of which is referred to the powers of the General Meeting of shareholders, as well as to other internal documents, the approval of which under this current Charter is referred to the powers of the Company’s executive bodies; - approving the business plan (the updated business plan), including the investment program and quarterly report on its execution; - considering the investment program and making amendments thereto; - approving (adjusting) target parameters for the Company’s cash flow; - founding branches and opening representative offices and winding them up, as well as making amendments and supplements to the Charter related to founding branches and opening representative offices of the Company (including making changes to the designation and location of such branches and representative offices) and their liquidation; - making a resolution as to the Company’s participation in other organizations (enlisting in an existing organization or founding a new organization including: the approval of constituent documents) and also acquiring, carving-out and encumbering shares and stakes in the charter capital of the organizations, in which 50 the Company is a participant, changing the participation share in the charter capital of a respective organization, as well as terminating participation in other organizations; - setting up a corporate credit policy in the part of issuing loans, entering into credit and loan agreements, granting sureties, assuming obligations ensuing from a bill (the issuance of promissory notes and bills of exchange), pledging property and making resolutions on the execution by the Company of said transactions when the order to resolve such issues is not determined by the Company’s credit policy, as well as making a resolution stipulated by the Company credit policy on adjusting the Company’s debt position in accordance with limits imposed by the Company credit policy; - approval of major transactions in events stipulated by Article X of the Russian Federal Law “On Joint Stock Companies;” - approval of major transactions in events stipulated by Article XI of the Russian Federal Law “On Joint Stock Companies;” - approval of the Company’s registrar, terms of agreement with the registrar, as well as the termination of said agreement; - election of the Chairman of the Company’s Board of Directors, and early terminating his/her powers; - election of the Deputy Chairman of the Company’s Board of Directors, and early terminating his/her powers; - election of the Secretary of the Company’s Board of Directors, and early terminating his/her powers; - preliminary approval of a resolution on the execution by the Company of transactions related to the gratuitous transfer of property or property rights (claims) of the Company to itself or to a third party; transactions related to the deliverance from property responsibilities to itself or a third party; transactions related to a gratuitous rendering of corporate services(executing work) to third parties in events (sizes) determined by separate resolutions of the Company’s Board of Directors and taking resolutions on the Company making such transactions when the above-mentioned cases (sizes) are not specified; - resolution on suspending the authority of the management company (managing director); - resolution on appointing an Acting General Director of the Company in cases defined by separate resolutions of the Board of Directors, as well as bringing him/her disciplinarily liable; - subject to RF Labor Laws, bringing the General Director and members of the Company’s Board of Directors disciplinarily liable and granting them incentives; - considering reports of the General Director on corporate activities (including execution of his/her functions), on executing resolutions of the Company’s General Meeting of Shareholders; - approving the Company’s coordination procedures with other organizations, where the Company is a participant; - setting up the Company’s (Company representatives’) position including: instructions either to take part in or not to participate in voting on agenda items, to cast votes of “For,” “Against” or “Abstained” for draft resolutions on the following (enumerated hereinafter) issues put on the agenda of the General Meeting of Shareholders (Participants) of subsidiary and dependent companies (hereinafter referred to as SDCs) (except for events when the functions of the General Meetings of SDCs are fulfilled by the Company’s Board of Directors) and meetings of the SDCs’ Boards of Directors (except for the issue on approving the agenda of the General Meetings of Shareholders (of the SDCs), when the functions of the General Meetings are fulfilled by the Company’s Board of Directors): a) on setting up the agenda of the General Meeting of Shareholders (Participants) in SDCs; b) on reorganizing and winding up SDCs; c) on establishing the number of members of management and control bodies of SDCs, recommending candidates for and electing members, as well as early terminating their powers, nominating and electing the Sole Executive Body of the SDCs and early terminating his/her powers; d) on setting up the quantity, nominal value, class (type) of authorized shares of SDCs and the scope of rights conferred by such shares; e) on increasing the charter capital of SDCs, by increasing the nominal value of shares or by distributing additional shares; f) on distributing shares (SDCs equity securities that are convertible into shares); g) on splitting and consolidating SDCs shares; h) on approving major transactions executed by the SDCs; i) on SDCs participation in other organizations (enlistment in existing organizations or the founding of new organizations) and also acquiring, carving-out and pledging shares and stakes in the charter capital of organizations in which an SDCs participates, changes in the participation share in the charter capital of an organization; j) on making up SDCs transactions (including several inter-related transactions) related to acquiring, alienating or possibly of alienating property that is a part of capital assets, intangible assets, carry-over 51 construction facilities used for the purpose of producing, transmitting electrical energy, dispatching and distributing electrical and thermal power in events (sizes) determined by the order of cooperative relations between the Company and organizations in which the Company participates, which is approved by the Company’s Board of Directors; k) on making amendments and supplements to SDCs constituent documents; l) on the order of paying remuneration to members of the Board of Directors and the SDCs internal audit commission; m) on approving target values for key performance indicators (updated target values for key performance indicators); n) on approving a report on the fulfillment of target values of the annual and quarterly key performance indicators; o) on approving a business plan (updated business plan), including the investment program and the quarterly fulfillment report; p) on approving (considering) a report on business plan fulfillment; q) on approving profit and loss distribution based on the financial year results; r) on recommendations on the size of dividends per share and the order of paying these dividends; s) on paying out (declaring) dividends based on the first quarter, half and nine months of the financial year, as well as results of the financial year; t) on considering (updating) the investment program and amendments to the program; u) on approving (considering) a report on fulfilling the investment program; - determining the Company’s (Company representatives’) position on the following issues on the agenda (including instructions either to take part in or not to participate in voting on agenda items, casting votes of “For,” “Against” or “Abstained”) as follows: a) setting up SDC representatives’ position on issues put on the agenda of the General Meeting of Shareholders (Participants) and meetings of the Board of Directors of subsidiary and dependent companies, with regards to the SDCs pertaining to making up (approving) transactions (including several inter-related transactions) related to acquiring, alienating, possibly alienating property that makes up capital assets, intangible assets, carry-over construction facilities used for the purpose of producing, transmitting, dispatching and distributing electrical and thermal energy in events (sizes) determined by the order of cooperative relations of the Company with organizations in which the Company is a participant, which are approved by the Company’s Board of Directors; b) establishing SDCs representatives’ positions on issues put on the agenda of General Meetings of Shareholders (Participants) and meetings of the Board of Directors of subsidiaries and dependent companies, with regard to SDC companies that engage in producing, transmitting, dispatching, distributing and selling electrical and thermal energy on the re-organization, winding-up, increasing the charter capital of such companies by distributing additional shares or by placing securities that can be converted into ordinary shares; - preliminary approval of resolutions on the execution by the Company of: a) transactions, the subject matter of which is be non-current assets of the Company in an amount of more than 10 percent of the value of such assets according to the accounting reports as of the last reporting date; b) transactions (including several inter-related transactions) related to acquiring, alienating or possibly of alienating property that makes up capital assets, intangible assets, carry-over construction facilities used for the purpose of producing, transmitting, dispatching and distributing electrical and thermal energy in the events (sizes) determined by separate resolutions of the Company’s Board of Directors; c) transactions (including several inter-related transactions) related to acquiring, alienating or possibly alienating property that makes up capital assets, intangible assets, carry-over construction facilities used for the purpose of producing, transmitting, dispatching and distributing electrical and thermal energy in the events (sizes) determined by separate resolutions of the Company’s Board of Directors; - recommending by the Company of candidates to be elected to positions on the individual executive body and other executive bodies, control bodies, as well as the candidate for the Auditor of companies engaged in production, transmission, dispatching, distribution and the sale of electrical and thermal energy, as well as repair and maintenance activities in which the Company participates; - setting up lines for providing the Company with insurance coverage, including approving the Company’s insurer; - approving the organizational structure of the Company’s executive machinery and amending it; - approving the regulation on material incentives for the General Director, the regulation on material incentives for the Company’s top managers; approving the list of top managers;
52 - coordinating candidates for certain posts in the Company’s executive machinery, as determined by the Board of Directors; - preliminarily approving the collective agreement, agreements made by the Company within the framework of the social-and-employment relationship, as well as approving documents for employees non-state pensions; - creation of Committees of the Company’s Board of Directors, election of committee members and the early termination of their powers, election of the Chairmen of the committees and premature termination of their powers; - approving the candidate for the independent appraiser(s), who values shares, property and other assets of the Company in events stipulated by the Russian Federal Law “On Joint Stock Companies,” this Charter and separate resolutions issued by the Company’s Board of Directors; - approving a candidate for the post of financial consultant invited in compliance with Russian Federal Law “On the Securities Market,” as well as approving candidates of arrangers of issuing securities and advisers on transactions directly related to attracting financial resources in the form of public loans; - preliminarily approving transactions that can result in the liabilities expressed in the foreign currency (or liabilities, the size of which is linked to foreign exchange) in events and amounts determined by separate resolutions of the Company’s Board of Directors, as well as when said events and amounts are not determined by Board resolutions; - setting up the Company’s procurement policy including: approving Regulations for the Order of Holding Administered Purchases of Goods, Work and Services, approving the Head of the Company’s Central Procurement Body and its members, as well as approving the annual procurement program and resolving any other issues related to approved documents of the Company that specify the Company’s procurement activities; - making a resolution on nominating the Company’s General Director as a candidate singled out for government awards; - approving target values (updated values) of key performance indicators (KPI) of the Company and reports on its fulfillment; - establishing the Company policy aimed at reliability enhancement of the electrical grid distribution complex and other power grid facilities, including: the approval of strategic corporate programs on reliability enhancement of the power grid complex, developing the power grid complex and its safety; - setting up the Company’s housing policy to provide company employees with corporate support for improving housing conditions in the form of: subsidies, expense compensation, interest-free loans and resolving issues on providing such support when the order for its provision is not determined by resolutions of the Company’s Board of Directors; - other issues referred by the Federal Law “On Joint Stock Companies” and the current Charter to the powers of the Company’s Board of Directors.
The competence of the Company Management Board covers the following issues (Article 22 of the Charter): - elaborating and submitting the Company Development Strategy to the Board of Directors; - preparing an annual (quarterly) business plan including the investment program and report on the results on its execution, as well as approval (adjustment) of the Company’s cash flow (budget); - preparing the annual report on the economic and financial operations of the Company and execution, by the Management Board of resolutions made by the General Meeting of Shareholders and the Company’s Board of Directors; - considering reports prepared by the Company’s Deputy General Directors and the heads of stand-alone sub- divisions of the Company on executing approved plans, programs, directives, consideration of reports, documents and other information on the operations of the Company and its subsidiaries and dependant companies; - resolving issues that pertain to the powers of the top management bodies of economic companies where 100 (One Hundred) percent of the charter capital belong to the Company (subject to subclauses 37 and 38 of Clause 15.1 of Article No. 15 of this Charter); - preparing and submitting to the Board of Directors for consideration the reports on economic and financial operations of companies where 100 (One Hundred) percent of the charter capital belong to the Company; - resolving on making transactions, the subject matter of which is property, works and services, which total from 1 to 25 percent of the book value of the Company’s assets, as determined as at the date of resolving on entering into the deal (except for events stipulated under Subclause 39 of Clause 15.1 of this Charter); - resolve other issues related to the management of the Company’s current operations in compliance with resolutions of the General Meeting of Shareholders, Board of Directors of the Company and other issues brought to the attention of the Management Board by the Company’s General Director;
53 The competence of the Company General Director covers all of the issues of management by the current activity of the Company, except for the issues covered by the competence of the General Meeting of Shareholders, Board of Directors and Management Board (Article 23 of the Charter).
The issuer approved (adopted) the corporate conduct code or another similar document Information on the corporate conduct code or a similar document: The Board of Directors of IDGC of Center and Volga Region, JSC approved a new version of the Company Corporate Governance Code (Minutes #52 dated 24 February 2010)
The address of the webpage in the Internet providing public access to its full text: www.mrsk-cp.ru/?id=253
Changes were made to the charter (documents of incorporation) of the issuer, or to the internal documents governing the activity of the issuer bodies during the last reporting period Information on the changes made for the last reporting period to the issuer charter, as well as to the internal documents governing the activity of the issuer bodies: - Changes were made to sections 1-3 of the new version of the Regulation on the Personnel and Remuneration Committee of the Company Board of Directors. The address of the webpage in the Internet providing public access to the full text of the current version of the issuer charter and the internal documents governing the activity of the issuer bodies: www.mrsk-cp.ru/?id=253
5.2. Information on the persons forming part of the issuer’s governance bodies
5.2.1. Membership of the issuer’s board of directors (supervisory council)
The current membership of the Board of Directors of IDGC of Center and Volga Region, JSC was elected on 16 June 2010 by the Company annual General Meeting of Shareholders (Minutes #3 dated 21 June 2010). The information on the positions occupied by the members of the Board of Directors contain the data available in the Company as at the moment of their election, as well as those obtained within the reporting quarter.
1. Full name: Alexey Yurievich Perepyolkin (Chairman) Year of birth: 1970 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position From to 2005 2006 LLC “Gasoil” Deputy General Director for Legal Issues 2006 2007 Federal Tax Service Chief of the Consolidated Analysis Administration
2007 2009 Ministry of Defense of the Russian Federation Advisor to Minister, Chief of the Main Legal Administration
2009 2009 IDGC Holding, OJSC Director for Corporate Policy
54 2009 currently IDGC Holding, OJSC Member of the Management Board, Deputy General Director for Corporate Governance and Property 2009 2010 IDGC of South, JSC Member of the Board of Directors 2010 2010 IDGC of Center and Volga Region, JSC Deputy Chairman of the Board of Directors 2010 currently IDGC of Center and Volga Region, JSC Chairman of the Board of Directors 2010 currently IDGC of Center, JSC Deputy Chairman of the Board of Directors 2010 currently IDGC of North-West, JSC Chairman of the Board of Directors 2010 currently JSC “UES Settlement Optimization Center” Member of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
2. Full name: Alexander Markovich Branis Year of birth: 1977 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2003 2008 JSC “Chemical and Pharmaceutical Complex Member of the Board of Directors «Akrikhin»” 2004 2006 JSC “Ostankino Dairy Complex” Member of the Board of Directors
2004 2007 IDGC of Center and Northern Caucasus, JSC Member of the Board of Directors
2005 2006 JSC “OKG-5” Member of the Board of Directors 2005 2006 JSC “Smolensk Generating Company” Member of the Board of Directors
2005 2006 JSC “Smolensk Transmission Electric Grids” Member of the Board of Directors
55 2005 2008 LLC “Prosperity Capital Management” Specialist for non-state fund asset management
2005 currently “Prosperity Capital Management (RF) Ltd.” Director
2005 2008 JSC “TGC-6”, Member of the Board of Directors 2006 2006 Moscow Representative Office of the firm Head of the Representative Office “Prosperity Capital Management Limited” 2006 2006 JSC “Konakovskaya GRES” Member of the Board of Directors 2006 2007 JSC “Yaroslavl Sales Company” Member of the Board of Directors 2006 2007 JSC “OGK-4” Member of the Board of Directors 2006 2008 JSC “Dalkhimform” Member of the Board of Directors 2006 2009 Representative Office of the company Director of the Analytical Division “Prosperity Capital Management (RF) Ltd.” 2006 2009 JSC “TGC-2” Member of the Board of Directors
2006 2009 JSC “TGC-4” Member of the Board of Directors 2007 2008 JSC “Plant «Saranskkabel»” Member of the Board of Directors 2007 2008 JSC “Sevzapelectrosetstroy” Member of the Board of Directors 2007 2008 JSC “Yuzhtruboprovodstroy” Member of the Board of Directors 2007 2008 JSC “Kalugaenergo” Member of the Board of Directors 2007 2009 JSC Prokatmontazh” Member of the Board of Directors 2007 currently IDGC of Center, JSC Member of the Board of Directors
2007 currently JSC “Bashkirenergo” Member of the Board of Directors
2008 2008 JSC “Novaya ERA” Member of the Board of Directors 2008 2009 LLC “Prosperity Capital Management” General Director 2008 2009 IDGC of Center and Volga Region, JSC Member of the Board of Directors 2008 2009 JSC “Novgorod Energy Sales Company”, Member of the Board of Directors
2008 currently JSC “TGC-6” Chairman of the Board of Directors
2008 currently LLC “Prosperity Capital Management” Chief Accountant
2009 currently LLC “Prosperity Capital Management” Chairman of the liquidation commission 2009 currently LLC “Prosperity Capital Management” Director for Investments
2010 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or 56 crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
3. Full name: Vladimir Vyacheslavovich Inozemtsev Year of birth: 1977 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position
Period Entity Position from to 2005 2006 JSC IC “Omskenergo” Chief of the Electricity Transportation Department 2006 2008 JSC “FGC UES” Chiefлектроэнергии of the Administration for Electricity Transportation and Loss Reduction of the IDGC MC 2008 2009 JSC “Electric Technical Repairing Plant” Member of the Board of Directors
2008 2009 IDGC of Center and Volga Region, JSC Member of the Board of Directors 2008 2010 IDGC Holding, OJSC Chief of the Electricity Transportation and Client Relations Department
2009 2010 JSC “UES Settlement Optimization Center” Member of the Board of Directors 2009 2010 IDGC of Volga, JSC Member of the Board of Directors 2010 currently IDGC Holding, OJSC Chief of the Electricity Transportation and Energy Saving Department
2010 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
4. Full name: Dmitry Grigorievich Kolesnik Year of birth: 1969 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and 57 currently, including holding of more than one position Period Entity Position from to 1986 2007 Service with the RF Armed Forces 2007 2008 Representative Office of the Amur Region Chief of the Protocol Division under RF President and RF Government, Moscow 2008 2009 Representative Office of the Amur Region Deputy Head of the under RF President and RF Government Representative Office
2009 currently IDGC Holding, OJSC Assistant to General Director
2009 currently JSC “S&RC (scientific and research center) of Member of the Board of Directors North-West” 2009 currently JSC “Real Estate of VNIPI Energoprom” Member of the Board of Directors
2009 currently JSC “Association of VNIPI Energoprom” Member of the Board of Directors
2010 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
2010 currently JSC “SKB VTI” Member of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
5. Full name: Pavel Ivanovich Okley Year of birth: 1970 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position
Period Entity Position from to
2005 2007 JSC “FGC UES” Deputy Head of the Interregional Distribution Grid Complexes Management Center
58 2007 2008 JSC “FGC UES” Head of the Interregional Distribution Grid Complexes Management Center
2008 2008 Business Unit “IDGC Holding” Deputy Managing Director JSC RAO “UES of Russia” (part-time basis) 2008 2010 IDGC Holding, OJSC Deputy General Director – Technical Director 2009 2010 IDGC Holding, OJSC Member of the Management Board 2007 2008 IDGC of Center, JSC Deputy Chairman of the Board of Directors 2007 2009 IDGC of Center and Volga Region, JSC Chairman of the Board of Directors 2007 2009 IDGC of Siberia, JSC Chairman of the Board of Directors 2007 currently JSC “Tyumenenergo” Member of the Board of Directors
2007 2010 IDGC of South, JSC Chairman of the Board of Directors 2008 2010 JSC “Lenenergo” Member of the Board of Directors 2008 2009 IDGC of Urals, JSC Member of the Board of Directors 2009 2010 IDGC of Center and Volga Region, JSC Deputy Chairman of the Board of Directors 2009 2010 IDGC of Volga, JSC Chairman of the Board of Directors 2009 2010 CJSC “Agency for Forecasting Balances in Member of the Board of Directors the Electric Power Industry” 2009 2010 NP “INVEL” Member of the supervisory council 2010 2010 IDGC of Center and Volga Region, JSC Chairman of the Board of Directors 2010 currently IDGC of South, JSC Member of the Board of Directors
2010 2010 NP “UES STC” (scientific and technical Member of the supervisory council council) 2010 currently JSC “NIITS IDGC” (scientific and research Member of the Board of Directors engineering center) (called “NIIEE” (scientific and research center of the energy industry economy) before 9 October 2010) 2010 currently JSC “INTER RAO UES” Member of the Management Board, Head of the Industrial Operational Block
2010 currently JSC “OGK-1” Member of the Management Board, Executive Director (part- time basis)
2010 currently IDGC of Volga, JSC Member of the Board of Directors
2010 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes 59 and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
6. Full name: Alexey Vladimirovich Sergutin Year of birth: 1961 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2003 2008 JSC “Nizhnovenergo” Deputy General Director - Director for Economy
2006 2008 FMS of Russia Chief of the Administration for Logistics and Arrangement of Works with Forced Migrants, Deputy Director
2008 currently IDGC Holding, OJSC Director for Economy
2010 currently IDGC of Center, JSC Member of the Board of Directors
2010 currently JSC “Tyumenenergo” Member of the Board of Directors
2010 2010 IDGC of Center and Volga Region, JSC Member of the Board of Directors
2010 currently IDGC of Center and Volga Region, JSC Deputy Chairman of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
60
7. Full name: Denis Alexandrovich Spirin Year of birth: 1980 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2005 2007 LLC “NTP-Audit” Associate (assistant), associate
2007 currently Representative Office of the company “Prosperity Director for Corporate Governance Capital Management (RF) Ltd.”
2008 2009 JSC “Smolenskenergosbyt” Member of the Board of Directors
2008 2009 JSC “Novgorod Energy Selling Company” Member of the Board of Directors
2008 2009 JSC “Bryansk Energy Selling Company” Member of the Board of Directors
2008 2009 JSC “Mordovian Energy Selling Company” Member of the Board of Directors
2008 2009 JSC “Mosenergoset’stroy” Member of the Board of Directors
2008 2009 JSC “TGC-6” Member of the Board of Directors
2008 2009 JSC “Orel Selling Company” Member of the Board of Directors
2008 2009 JSC “Penza Energy Selling Company” Member of the Board of Directors
2008 2009 JSC “Ryazan Energy Selling Company” Member of the Board of Directors
2008 2009 JSC “Selenginsk Cardboard Mill” Member of the Board of Directors
2008 2009 JSC “Tver Energy Selling Company” Member of the Board of Directors
2008 2009 JSC “Bank «Southern Region»” Member of the Board of Directors
2008 2009 JSC “TGC-2” Member of the Board of Directors
2008 currently JSC “Dalkhimfarm” Member of the Board of Directors
2008 2010 JSC “Rostpromstroybank” Member of the Board of Directors
2008 currently JSC “Urengoytruboprovodstroy” Member of the Board of Directors
2008 currently JSC “Energospetsmontazh” Member of the Board of Directors
2008 currently JSC “Smolensk Energy Repair Company” Member of the Board of Directors
61 2008 currently JSC “Yuzhtruboprovodstroy” Member of the Board of Directors
2008 2010 JSC “Voronezh Energy Selling Company” Member of the Board of Directors
2008 currently JSC “Penza Energy Repair Company” Member of the Board of Directors
2008 currently JSC Novgorodset’stroy” Member of the Board of Directors
2008 currently JSC “Tver Energy Repair Company” Member of the Board of Directors
2009 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
2009 currently IDGC of Center, JSC Member of the Board of Directors
2009 2009 JSC “Kursk Energy Selling Company” Member of the Board of Directors
2009 2010 JSC “Severtruboprovodstroy” Member of the Board of Directors
2009 2010 JSC “Arkhangelsk Selling Company” Member of the Board of Directors
2010 currently JSC “TGC-6” Member of the Board of Directors
2010 currently JSC “Selenginsk Cardboard Mill” Member of the Board of Directors
2010 currently JSC “Paper Mill «Kommunar»” Member of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
8. Full name: Sergey Borisovich Syutkin Year of birth: 1959 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position
62 Period Entity Position from to 2002 2009 JSC “SO UES” Member of the Management Board
2004 currently Branch of JSC “SO UES” – ODA (Operational Dispatch General Director Administration) of Center
2008 currently IDGC of Center, JSC Member of the Board of Directors
2009 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
9. Full name: Roman Alexeevich Fil’kin Year of birth: 1983 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2006 currently Representative Office of the company “Prosperity Deputy Director, Co-director, Electric Power Capital Management (RF) Ltd.” Industry, Machinery Construction
2006 2010 JSC “Arkhangelsk Selling Company” Member of the Board of Directors
2006 currently JSC “Smolensk Energy Repair Company” Member of the Board of Directors
2006 currently JSC “Dagestan Energy Selling Company” Member of the Board of Directors
63 2006 currently JSC “TGC-6” Member of the Board of Directors
2007 2010 JSC “Kursk Energy Selling Company” Member of the Board of Directors 2008 currently JSC Yuzhtruboprovodstroy” Member of the Board of Directors
2008 currently JSC “Dalenergomontazh” Member of the Board of Directors
2008 currently JSC “Energospetsmontazh” Member of the Board of Directors
2008 2010 JSC TBCP (Taganrog Boiler Construction Plant) Member of the Board of Directors “Krasny Kotelchshik”
2008 2010 JSC “Tambov Energy Selling Company” Member of the Board of Directors
2009 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
2009 currently IDGC of Center, JSC Member of the Board of Directors
2009 currently JSC “Urengoytruboprovodstroy” Member of the Board of Directors
2009 2010 JSC “Voronezh Energy Selling Company” Member of the Board of Directors
2009 2009 JSC “Bank «Southern Region»” Member of the Board of Directors 2009 currently JSC “Bashkirenergo” Member of the Board of Directors
2009 currently JSC “Novgorodset’story” Member of the Board of Directors
2009 currently JSC “Novaya Era” Member of the Board of Directors
2009 currently JSC “Novgorodoblkommunelektro” Member of the Supervisory Board
2009 currently JSC “Penza Energy Repair Company” Member of the Board of Directors
2009 2010 JSC “Severotruboprovodstroy” Member of the Board of Directors
2009 currently JSC “Sevzapelektrostroy” Member of the Board of Directors
2009 2009 JSC “Spetsset’story” Member of the Board of Directors
2009 2010 JSC “Voronezh Joint-Stock Aircraft Building Member of the Board of Directors Company” 2009 2010 JSC “Yaroslavl Energy Company” Member of the Board of Directors
2009 currently JSC “Tver Energy Repair Company” Member of the Board of Directors
2009 currently JSC “Magadanenergo” Member of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and 64 dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
10. Full name: Vladimir Sergeevich Chistyakov Year of birth: 1959 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2003 2005 JSC “Mosenergo” Deputy General Director for Fuel, Materials and Machinery Supplies
2005 2006 JSC “Management Energy Company” Acting General Director
2005 2006 JSC “Moscow City Electric Grid Acting General Director Company”
2005 2006 JSC “Mosenergosbyt” Acting General Director
2005 2006 JSC “Moscow Regional Electric Grid Acting Executive Director Company”
2006 currently JSC “Investment Holding "Energetichesky First Deputy General Director Soyuz"” 2009 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
2009 currently JSC “Energocentronaladka” (JSC ECN) Member of the Board of Directors
2010 currently LLC “Tolyattinsky Transformator” General Director (positions combining)
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. 65 Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
11. Full name: Valery Mukhamedovich Shogenov Year of birth: 1981 Education: higher vocational, Candidate of Economic Science All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2004 2008 Federal Energy Agency Deputy Chief of the division, Chief of the division
2007 2008 JSC “Neftegazspetsstroy” Member of the Board of Directors 2007 2008 JSC “Ukhtaneftegazgeologiya” Member of the Board of Directors 2007 2008 JSC “Neftegazspetsstroy” Member of the Board of Directors 2007 2009 JSC “Dagestantopprom” Member of the Board of Directors 2007 2009 JSC “Daggaz” Member of the Board of Directors 2008 2009 JSC “Tomskoblgaz” Member of the Board of Directors 2008 2009 JSC “Kabbalkgaz” Member of the Board of Directors 2008 2009 JSC “BNIINeftekhim” (All-Russia R&D Member of the Board of Directors Institute)
2008 2009 JSC “Altayskraygazservis” Member of the Board of Directors
2008 2010 Ministry of Energy Industry of Russia Deputy Director of the Department for Economic Regulation and Property Relations in the Fuel and Energy Complex
2008 currently JSC “Real Estate VNIPI-energoprom” (All- Member of the Board of Directors Russia R&D and Design Center) 2008 currently JSC “R&D Center of UES” Member of the Board of Directors
2008 currently JSC “R&D Center of North-West” Member of the Board of Directors
2008 currently JSC “EPIR&D of Volga Region” (Electric Member of the Board of Directors Power Industry R&D)
2008 currently JSC “R&D Center of South” Member of the Board of Directors
2008 currently JSC “EPIR&D Center of Ural” Member of the Board of Directors
2008 currently JSC “R&D Center of Siberia” Member of the Board of Directors
2008 currently JSC “Rostopprom” Member of the Board of Directors
2009 currently IDGC of Ural, JSC Member of the Board of Directors
66 2009 currently IDGC of North Caucasus, JSC Member of the Board of Directors
2009 2010 IDGC of South, JSC Member of the Board of Directors 2009 currently IDGC of Center and Volga Region, JSC Member of the Board of Directors
2009 currently IDGC of North-West, JSC Member of the Board of Directors
2009 2010 IDGC of Siberia, JSC Member of the Board of Directors 2009 2010 JSC “Stavropolneftegeofisika” Member of the Board of Directors
2009 currently JSC “Krasnodarneftegeofizika” Member of the Board of Directors
2009 currently JSC “Peredvizhnaya Energetika” Member of the Board of Directors
2009 2009 JSC “Altayenergosbyt” Member of the Board of Directors 2009 currently JSC “ESKMO” (Energy Selling Company Member of the Board of Directors of Moscow Region) 2009 currently JSC “DESP” (Dalenergosetproekt) Member of the Board of Directors
2009 currently JSC “Glavset’servis UNPG” Member of the Board of Directors
2009 currently JSC “CGE” (Central Geophysical Member of the Board of Directors Expedition) 2009 currently JSC “Moscovsky Neftemaslozavod” Member of the Board of Directors
2009 currently JSC “VNIMI” (R&D Institute of Member of the Board of Directors Geomechanics and Mine Survey”
2009 currently JSC “Moselektroshchit” Member of the Board of Directors
2010 currently RF Government Administration Deputy Director of the Department
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
5.2.2. Information on the issuer’s executive body
67 Full name: Evgeny Viktorovich Ushakov Year of birth: 1964 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2005 2007 IDGC of Ural and Volga, JSC First Deputy General Director
2007 2008 JSC “Nizhnovenergo” Chairman of the Board of Directors 2007 2008 JSC “Ivenergo” Chairman of the Board of Directors 2007 2008 JSC “Kirovenergo” Chairman of the Board of Directors 2007 2008 JSC “Ryazanenergo” Chairman of the Board of Directors 2007 2008 JSC “Udmurtenergo” Chairman of the Board of Directors 2007 2008 JSC “Tulenergo” Chairman of the Board of Directors 2007 2008 JSC “Kalugaenergo” Chairman of the Board of Directors 2007 2009 IDGC of Center and Volga Region, JSC Member of the Board of Directors
2007 currently IDGC of Center and Volga Region, JSC General Director
2008 currently IDGC of Center and Volga Region, JSC Chairman of the Management Board
2009 20.05.2010 NP “Council of Electric Power Industry Veterans” Member of the Supervisory Council
The person’s stake in the issuer’s charter capital, %: 0.0612. The stake in the issuer’s ordinary shares owned by the person, %: 0.0612. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options. The person’s stake in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is available. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
5.2.3. Membership of the issuer’s collegial executive body
The current membership of the Management Board of IDGC of Center and Volga Region, JSC was elected by the Board of Directors of IDGC of Center and Volga Region, JSC (Minutes #9 dated 5 March 2008, Minutes #10 dated 24 March 2008, Minutes #17 dated 25 June 2008, Minutes #21 dated 24 September 2008, Minutes #55 dated 30 April 2010).
68 1. Full name: Evgeny Viktorovich Ushakov Year of birth: 1964 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2005 2007 IDGC of Ural and Volga, JSC First Deputy General Director
2007 2008 JSC “Nizhnovenergo” Chairman of the Board of Directors 2007 2008 JSC “Ivenergo” Chairman of the Board of Directors 2007 2008 JSC “Kirovenergo” Chairman of the Board of Directors 2007 2008 JSC “Ryazanenergo” Chairman of the Board of Directors 2007 2008 JSC “Udmurtenergo” Chairman of the Board of Directors 2007 2008 JSC “Tulenergo” Chairman of the Board of Directors 2007 2008 JSC “Kalugaenergo” Chairman of the Board of Directors 2007 2009 IDGC of Center and Volga Region, JSC Member of the Board of Directors
2007 currently IDGC of Center and Volga Region, JSC General Director
2008 currently IDGC of Center and Volga Region, JSC Chairman of the Management Board
2009 20.05.2010 NP “Council of Electric Power Industry Veterans” Member of the Supervisory Council
The person’s stake in the issuer’s charter capital, %: 0.0612. The stake in the issuer’s ordinary shares owned by the person, %: 0.0612. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options. The person’s stake in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is available. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
2. Full name: Sergey Timofeevich Andrus Year of birth: 1962 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position 69 from to 2004 2007 JSC “Tyumenenergo” Director of Northern Electric Grids, Chief Engineer, Technical Director 2007 currently IDGC of Center and Volga Deputy General Director – Technical Director, Deputy General Region, JSC Director for Technical Issues – Chief Engineer
2008 currently IDGC of Center and Volga Deputy Chairman of the Management Board Region, JSC 2009 28.06.2010 CJSC “Svet” Deputy Chairman of the Board of Directors
2009 28.06.2010 OJSC “MTE” Deputy Chairman of the Board of Directors
2009 28.06.2010 OJSC “AE “Luchinskoye” Deputy Chairman of the Board of Directors
The person’s stake in the issuer’s charter capital, %: 0.0121. The stake in the issuer’s ordinary shares owned by the person, %: 0.0121. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options. The person’s stake in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is available. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
3. Full name: Evgeny Vladimirovich Nikitushkin Year of birth: 1977 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2005 2008 JSC “Tyumenenergo” Chief of the Treasury 2008 currently IDGC of Center and Volga Region, JSC Chief of the Treasury
2008 currently IDGC of Center and Volga Region, JSC Member of the Management Board
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and
70 dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions . 4. Full name: Lada Alexandrovna Podolskaya Year of birth: 1974 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2005 2007 IDGC of Ural and Volga, JSC Chief of the Legal Support Department
2007 currently IDGC of Center and Volga Region, JSC Deputy General Director for Corporate Governance
2008 2009 OJSC “Tulenergokomplekt” Deputy Chairperson of the Board of Directors
2008 currently IDGC of Center and Volga Region, JSC Member of the Management Board
2008 28.06.2010 CJSC “Svet” Chairperson of the Board of Directors
2008 28.06.2010 OJSC “MTE” Chairperson of the Board of Directors
2008 28.06.2010 OJSC “AE “Luchinskoye” Chairperson of the Board of Directors
2008 28.06.2010 OJSC “Berendeyevskoye” Chairperson of the Board of Directors
2008 28.06.2010 OJSC “Health Resort “Energetic” Chairperson of the Board of Directors
2008 08.04.2010 NINEO (non-state independent non-commercial educational Chairperson of the Guardianship Board organization) Educational Center “Energetik”
The person’s stake in the issuer’s charter capital, %: 0.00582. The stake in the issuer’s ordinary shares owned by the person, %: 0.00582. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options. The person’s stake in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. 71 Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is available. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
5. Full name: Olga Vladimirovna Tikhomirova Year of birth: 1964 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 1993 2008 JSC “Smolenskenergo” Economist for Planning, Economist of the 2 nd category for Planning, Economist of the 1 st category, Chief of the Planning and Economic Division, Deputy General Director for Economy and Finance, Director for Economy and Finance, Deputy General Director for Economy and Finance
2008 2008 JSC “OC (Oil Company) Deputy General Director for Economy and “Rosneft’” - Finance Smolensknefteprodukt”
2008 currently IDGC of Center and Volga Region, JSC Deputy General Director for Economy and Finance 2008 currently IDGC of Center and Volga Region, JSC Member of the Management Board
2009 28.06.2010 OJSC “Berendeyevskoye” Deputy Chairperson of the Board of Directors 2009 28.06.2010 OJSC “Health Resort “Energetic” Deputy Chairperson of the Board of Directors
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within 72 the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
6. Full name: Andrey Yurievich Vedernikov Year of birth: 1976 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 1998 2007 JSC “Kirovenergo” Electrical fitter – 3 rd ,4 th , 5 th categories for repairs of distribution devices of equipment with the Northern Electric Grids, Engineer of the 2 nd , 1 st categories, Leading Engineer of the Electric Grids Service, Chief of the Electricity Consumption Control Division, Chief of the Sales Division, Chief of the Electric Power Transportation Administration
2007 currently IDGC of Center Chief of the Electric Power Transportation Department, Acting Deputy and Volga Region, General Director for Development and Services Sale, Deputy General JSC Director for Development and Services Sale
2010 currently IDGC of Center Member of the Management Board and Volga Region, JSC 2009 2010 LLC Member of the Board of Directors ‘Energobalans- Centr”
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
7. Full name: Irina Viktorovna Yashanina Year of birth: 1962 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and
73 currently, including holding of more than one position Period Entity Position from to 2005 2007 Western branch of IDGC of Center and Director North Caucasus, JSC
2007 currently IDGC of Center and Volga Region, JSC Deputy General Director for Controlling and External Affairs 2008 2009 JSC “Kaluga SDPP (state district power plant)” Member of the Board of Directors
2008 2009 JSC “Kaluga City Energy Company” Chairperson of the Board of Directors
2008 currently IDGC of Center and Volga Region, JSC Member of the Management Board
The person’s stake in the issuer’s charter capital, %: 0.0047. The stake in the issuer’s ordinary shares owned by the person, %: 0.0047. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options. The person’s stake in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is available. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions . 8. Full name: Alexander Vasilievich Prepodobny Year of birth: 1954 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2004 2008 FDTCS (Federal Drug Trafficking Deputy Chief of the FAVFD (First Administration of the Control Service) of Russia Volga Federal District) in the Department
2008 currently IDGC of Center and Volga Region, Deputy General Director for Security JSC 2008 currently IDGC of Center and Volga Region, Member of the Management Board JSC
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . 74 The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions . 9. Full name: Vladimir Viktorovich Shitts Year of birth: 1972 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from To 1998 2007 Branch “Surgut Electric Master of the First Group, Leading Engineer, Chief of the Industrial Grids” in JSC and Technical Division, Chief of the Industrial and Techni cal Service, “Tyumenenergo” Deputy General Director for Prospective Development
2007 2007 JSC “Tyumenenergo” Deputy Director for Investments and Capital Construction
2007 currently IDGC of Center and Volga Deputy General Director for Capital Construction Region, JSC 2008 currently IDGC of Center and Volga Member of the Management Board Region, JSC
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
5.3. Information on the amount of remuneration, privileges and/or compensation of charges with regard
75 to each of the issuer’s governance body Information about the amount of remuneration concerning each management body (except for the individual, who exercises the functions of the issuer’s sole executive management body). All types of remuneration, including wages, bonuses, commission charges, benefits and/or compensation of charges, as well as other property representations, which were paid out by the issuer for the past completed financial year:
Unit of measurement: RUR Board of Directors Remuneration 16,297,818 Wages 0 Bonuses 0 Commission charges 0 Benefits 0 Compensation of charges 0 Other property representations 0
Other 0 TOTAL 16,297,818 Information on the existing agreements in respect of such payments in the current financial year: According to clause 2 of section 64 of the Federal Law “On Joint-Stock Companies”, the resolution on payment of remuneration to the members of the issuer’s Board of Directors may be passed only by the general meeting of shareholders or by way of approval of the regulation defining the procedure of payment of such remuneration, or by way of decision-making on payment of remuneration at the issuer’s general meeting of shareholders. The procedure of payment of remuneration to the members of the Board of Directors is defined by the Regulation on Payment of Remuneration and Compensation to the Members of the Board of Directors of IDGC of Center and Volga Region, JSC approved by the annual General Meeting of Shareholders of IDGC of Center and Volga Region, JSC on 30 May 2008 (Minutes #1). According to the above-stated Regulation, the issuer pays remuneration for participation in the meetings of the Board of Directors and additional remuneration depending on the issuer’s performance. The indicator of the net profit of the issuer based on the annual accounting reporting results and the increase in the amount of the market capitalization of the issuer are chosen as indicators of activity for payment of additional remuneration. The issuer did not enter into any additional payment-related agreements for 2011 with the members of the Board of Directors. The amount of remuneration in respect of this body based on the results of work for the last completed financial year, which was defined (approved) by the issuer’s authorized management body, but was not actually paid as at the end of the reporting period: No such facts are available . Collegial executive body Remuneration 0 Wages 80,523,249 Bonuses 0 Commission charges 0 Benefits 0 Compensation of charges 2,670,354 Other property representations 0 Other 0 TOTAL 83,193,603
Information on the existing agreements in respect of such payments in the current financial year: Members of the 76 Management Board are employees, who are charged with performance of the powers of a member of the Company’s collegial executive body – the Management Board, in accordance with the Company’s Charter and Regulation on the Management Board of the Company (minutes #1829pr/8 of the meeting held by the Management Board of JSC RAO “UES of Russia” dated 28.02.2008) in addition to the duties stipulated by the Labor Agreement. The amount of remuneration in respect of this body based on the results of work for the last completed financial year, which was defined (approved) by the issuer’s authorized management body, but was not actually paid as at the end of the reporting period: No such facts are available . Additional information: Remuneration of the issuer’s General Director The amount of remuneration to be paid to General Director is determined by the Labor Agreement concluded according to the issuer’s Charter and the Regulation on Remunerative Incentives of General Director of IDGC of Center and Volga Region, JSC approved by the issuer’s Board of Directors (minutes #22 dated 09.10.2008; minutes #30 dated 25.12.2008). Bonuses are paid to General Director based on the results of compliance with the key performance indicators determined by the issuer’s Board of Directors for the reporting periods and approved by Chairman of the issuer’s Board of Directors.
5.4. Information on the membership and competence of the bodies controlling the issuer’s financial and economic operations Comprehensive description of the structure of the bodies of control over financial and economic activity of the issuer and their competence in accordance with the charter (documents of incorporation) of the issuer: The structure of the bodies of control over financial and economic activity of the issuer and their competence are stipulated by Article 24 of the issuer’s Charter: “24.1. The Internal Audit Commission of the Company shall be elected by the General Meeting of Shareholders for the period before the next annual General Meeting of Shareholders to exercise control over financial and economic activity of the Company. If the Company’s Internal Audit Commission is elected by the extraordinary General Meeting of Shareholders, the members of the Internal Audit Commission shall be deemed elected for the period before the date of the Company’s annual General Meeting of Shareholders. The membership of the Company’s Internal Audit Commission shall be 5 (Five) people. 24.2. The powers of all or certain members of the Company’s Internal Audit Commission may be terminated early by a resolution of the Company’s General Meeting of Shareholders. 24.3. The Internal Audit Commission of the Company is empowered: − to confirm authenticity of information contained in the annual report, annual accounting statements, income statement of the Company; − to analyze the financial position of the Company, to identify reserves for improvement of the financial position of the Company and to define recommendations for the management bodies of the Company; − to arrange and perform audit of financial and economic activity of the Company, namely: − to audit (inspect) the financial, accounting, payment and other documents of the Company related to the financial and economic activity of the Company for their compliance with the Russian Federation laws, Charter, local and other documents of the Company; − to control integrity and use of fixed assets; − to control observation of the determined procedure of attributing insolvent debtors’ indebtedness to the losses of the Company; − to control expenditure of the Company’s money in compliance with the approved business plan and budget of the Company; 77 − to control formation and application of reserve and other special funds of the Company; − to control accuracy and timeliness of accrual and payment of dividends per the Company’s shares, interest per bonds, return on other securities; − to control implementation of earlier provided prescriptions regarding elimination of violations and shortfalls identified during previous audits; − to perform other activities (actions) related to audit of financial and economic activity of the Company.”
The issuer created the internal audit service. The period of work of the internal audit/internal control service and its key employees: The internal document of the Company, which defines the objectives of the internal control procedures, the bodies and people responsible for implementation of internal control procedures, the procedure of implementation of internal control procedures, as well as bodies and people responsible for control over implementation of internal control procedures is the Regulation on the Internal Control Procedures of IDGC of Center and Volga Region, JSC (approved by the resolution of the Board of Directors of IDGC of Center and Volga Region, JSC dated 25 December 2008, Minutes #30). The Internal Control Policy of the Company was designed and approved in order to develop and improve the Company’s internal control and risk management systems (Minutes #57 of the Company’s Board of Directors dated 15.06.2010). The Internal Control Policy defines main compulsory principles of arrangement of the internal control system in IDGC of Center and Volga Region, JSC and establishment of a uniform approach to implementation of the internal control processes in the Company. In accordance with the Organizational Structure of IDGC of Center and Volga Region, JSC the issuer created the Internal Control and Audit Department of IDGC of Center and Volga Region, JSC. The period of work of the Internal Control and Audit Department of IDGC of Center and Volga Region, JSC as at the date of the end of the reporting quarter is 3 years and 8 complete months. The key employee of the Internal Control and Audit Department of IDGC of Center and Volga Region, JSC: Olga Arkadievna Viktorova Year of birth: 1957 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2004 2005 JSC “Kaluga Energy Management Deputy General Director for Economic Company” Issues 2005 2007 Western branch of IDGC of Center and Deputy Director North Caucasus, JSC 2007 curren IDGC of Center and Volga Region, JSC Chief of the Internal Control and tly Audit Department Key functions of the internal audit service; accountability of the internal audit service, interaction with the issuer’s executive management bodies and the issuer’s Board of Directors (supervisory board): Primary functions of the internal audit service: Subject to the Regulation on the Internal Control and Audit Department approved by General Director of IDGC of Center and Volga Region, JSC the primary functions of the Department are as follows: 1. Functions according to the task in respect of the efficiency of the Company internal control system and implementation of monitoring as to observance of the internal control procedures: - check and estimation of the efficiency of the internal control system functioning; - check of presence and implementation of the internal control procedures;
78 - implementation of monitoring of the internal control system, taking measures to improve the internal control to ensure its effective functioning, including subject to the varying internal and external factors affecting the financial and economic activity of the Company; - control over conformity of internal procedures to the requirements of local normative documents, nature of activity and importance of the risks assumed within this framework; - presentation of the results of the internal control system monitoring to the Audit Committee subject to the estimation of efficiency of the internal control procedures; - elaboration of offers in respect of the internal control procedures improvement. 2. Functions according to the task in respect of control over performance by the Company of the requirements of current laws, internal statutory acts of the Company, as well as effective use and safety of the Company assets (property): - check of reliability and objectivity of the Company administrative reporting, as well as the information on financial and economic activity of the Company; - estimation of economic feasibility and efficiency of the economic operations performed by the Company; - check of reliability, completeness, objectivity and reliability of book keeping and reporting, their testing, as well as estimation of timeliness of collection and presentation of the information on the activity of the Company and reporting; - control over duly and full elimination of the revealed infringements and lacks; - control over efficiency of use and safety of the Company assets (property). 3. Functions according to the task in respect of building the risk management system in the Company: - organization of functioning of the Company risk management system, coordination of the activity of the system participants according to the requirements of the Company internal documents; - current control over the process of functioning of the Company risk management system, including the actions of the administrative personnel in the field of risk management; - improvement of the risk management system, provision of the risk management system participants with the information on the risks revealed as a result of checks of the Company activity; - check of completeness of application and efficiency of risk assessment methodology and procedures; - estimation of the risk management system efficiency, provision of the report on the results of the estimation to the Audit Committee of the Company Board of Directors; - analysis and estimation of the administrative personnel's offers in respect of elimination of the infringements and minimization of the risks revealed by the Division, elaboration of recommendations in respect of the specified offers. 4. Interaction with the Audit Committee, with external auditors in respect of the issues related with the accounting reports according to Russian and international standards, Internal Audit Commission of the Company, court, enforcement and legislature authorities of the Russian Federation, representatives of tax and other supervising bodies in respect of the issues covered by the competence of the Division. 5. Preparation of information and analytical materials in respect of the issues covered by the competence of the Division. 6. Improvement of the knowledge and skills of employees of the Division according to the plan of training of employees of the Division, as agreed by the Company Audit Committee. 7. Studying of domestic and foreign experience in respect of the issues covered by the competence of the Division. Accountability of the internal audit service, cooperation with the issuer’s executive management bodies and the issuer’s board of directors: According to the Regulation on the Internal Control Procedures in the Company (clause 6.2) the Company’s Board of Directors examines the results of the internal control (opinions of the Company’s Internal Audit Commission and other materials of the Company’s divisions, which are authorized to carry out internal control); holds regular estimation of the internal control system efficiency and constant improvement of the internal control procedures. According to clause 6.3. of the mentioned Regulation, supervision over the internal control systems of the Company in the field of book keeping and finance is performed by the Audit Committee of the Company’s Board of Directors created on 31.07.2008 (minutes #19 of the Company’s Board of Directors). The Audit Committee of the Board of Directors performs general estimation of efficiency of the internal control procedures held by the Company (including on the basis of statements and reports of the Company’s division, which is authorized to carry out the internal control/audit). According to the new version of the Regulation on the Audit Committee approved on 24.05.2010 (minutes 79 #56 of the Company’s Board of Directors), the main purpose of creation of the Committee is to ensure efficient work of the Company’s Board of Directors in the process of solution of the issues referred to its competence. The task of the Committee is development and submission of recommendations (opinions) to the Company’s Board of Directors in the field of audit and reporting of the Company. The competence of the Audit Committee includes: - control over performance of annual independent audit of consolidated financial reporting and accounting (financial) reporting of the Company; - estimation of the opinion made by the auditor and provided as information for the Company’s annual general meeting of shareholders; - control over preparation by the Company’s executive bodies of its quarter and annual reporting, and over objectivity of this reporting; - valuation of candidates for auditors of the Company; - control over the internal control systems of the Company in the field of accounting and finance and over activity of the Company’s internal audit service; - estimation of efficiency of the internal control procedures held by the Company and preparation of proposals aimed at their improvement; - consideration (obligatorily before sending to the Company’s Board of Directors) of the reports made by independent appraisers about carrying out of estimation of property and obligations of the Company in the process of completion by the Company of large transactions and other transactions, the resolution on completion of which is taken by the Board of Directors, in the process of transfer of the rights to property of the Company in a different way; - other issues on the instructions of the Company’s Board of Directors.
According to the Regulation on the Internal Control and Audit Department, the Department is an independent structural unit of the Company, is administratively subordinated directly to Company General Director and functionally accountable to the Company Audit Committee (hereinafter referred to as the “Audit Committee”). The personnel of the Department act in compliance with the job descriptions developed by Chief of the Department and approved by General Director of the Company. The employees of the Department in their professional work are independent from the Company’s executive bodies and the management of those branches and structural divisions, the work of which is subject to checks; they are guided by: - the Constitution, Federal laws, laws and other statutory acts of the Russian Federation and the respective constituent entity of the Russian Federation; - the Charter of the Company; - directives, orders, resolutions, guidelines and standards of IDGC Holding, OJSC; IDGC of Center and Volga Region, JSC; Regulation on the Internal Control and Audit Department of the Company, and the Regulation on the Internal Control Procedures of the Company; - Russian laws and accounting and audit standards; - recommendations by international audit standards and IFRS.
The primary goals of the Department are as follows: - estimation of the efficiency of the Company internal control system, implementation of monitoring in respect of observance of the internal control procedures; - control over performance by the Company of requirements of the current laws, internal statutory acts of the Company, as well as over efficient use and safety of the Company assets (property); - organization and support of functioning of the Company risk management process, coordination of activity of the divisions participating in this process, estimation of efficiency of the Company risk management process,
80 regular monitoring of the actions in the field of risk management, provision of recommendations as regards improvement of efficiency and productivity of risk management.
The chief and the personnel of the Department according to the Regulation on the Internal Control and Audit Department and job descriptions are entitled to the following under the established procedure in the process of performance of official duties (particular labour function): - explain and recommend to the Company divisions in respect of performance of decisions of the Company management on the issues covered by the competence of the Division; - request and receive documents and information required to perform the tasks and functions assigned for Division from the Company divisions; - enter into a premise of a checked division, and into premises used for storage of documents, cash and values, computer data processing and data storage, with observance of the procedures of the access determined by the Company internal documents; - send materials on the issues covered by the competence of the Division to the Company divisions in order to form conclusions. Chief of the department is entitled to the following: - cooperate with the Company divisions for rapid resolving of issues; - cooperate with the Company Audit Committee, Company Internal Audit Commission, external auditors of the Company according to internal normative documents of the Company, court, enforcement and legislature authorities of the Russian Federation and other organizations and establishments of the Russian Federation in respect of the issues covered by the competence of the Division; - study and estimate any documents requested during performance of the tasks and functions of the Division, and to send these documents and/or respective information to the Company Audit Committee, Company General Director and Company Internal Audit Commission; - request and receive the necessary help of employees of the divisions, which go through checks, and the help of the employees of other divisions of the Company; - get acquainted with current and long-term plans of the Company activity, draft decisions and decisions of the Company General Director; - define frequency, periodicity, themes and volume of checks; - bring the offers regarding improvement of the existing systems, processes, standards, methods of conducting the activity to the notice of the Audit Committee and Company General Director; - involve external experts in the process of performance of the Division tasks, as agreed by the Audit Committee; - organize and hold meetings in respect of the Division activity issues; - carry out monitoring of performance of the actions (correcting actions) performed based on the results of the held checks (estimations); - represent by attorney the Company in the Russian Federation government authorities and other organizations of the Russian Federation on the issues covered by the competence of the Division; - sign the documents related with exercise of the duties assigned to the Division and implementation of these rights according to the established procedure; - establish duties, rights and responsibility for other employees of the Division, delegate the rights and duties to other employees of the Division according to the established procedure, if necessary; - correspond with the Company divisions independently in respect of the issues covered by the competence of the Division; - answer the offers, applications and complaints of shareholders, bodies of the government of the Russian Federation, other organizations of the Russian Federation in respect of the issues covered by the competence of the Division according to the laws of the Russian Federation in accordance with the procedure established by the Company; - instruct in respect of the organization of work of the Division; - make offers in respect of employment and dismissal of employees of the Division, fixing of official salaries and additional payments for them, awarding the employees of the Division and their bringing to disciplinary liability. Chief of the Internal Control and Audit Department: - Manages the department and bears personal responsibility for performance of tasks and functions he/she was charged with; - Plans work of the offices;
81 - Develops regulations on offices and job descriptions of employees, amends and supplements them as may be necessary; - Represents the service at meetings and proceedings; - Distributes duties between offices and people; - Carries out control over observance of labor and administrative discipline by employees; - Represents offers on employment, dismissal and transfer of an employee; - Represents offers on awarding an employee and applying disciplinary punishment in respect of an employee in accordance with the procedure established by the laws of the Russian Federation; - Provides arrangement of professional retraining and improvement of professional skills; - Exercises other rights provided to him/her by normative documents of IDGC of Center and Volga Region, JSC.
Chief and the personnel of the Department bear the responsibility determined by their labour agreements with the Company, including according to the Russian Federation laws, job descriptions and this Regulation for: - default or inadequate performance of the assigned duties; - failure to observe the Russian Federation laws, Company Charter, decisions of the general meetings of shareholders, Board of Directors, orders, instructions and other local statutory acts of the Company, this Regulation; - breaking of rules of the internal labour schedule, labour discipline and legislative acts on labour safety, fire safety in the Company; - distortion of the information on infringement or concealment of infringements which may cause incurring of material damage by the Company; - disclosure of the confidential information and the data representing the trade secret of the Company. Chief of the Department bears the personal responsibility according to the Russian Federation laws and the labour agreement for the activity of the Department as a whole, for the damage caused to the Company as a result of default or inadequate performance of the tasks and functions of the Department, failure to use the provided rights . Cooperation of the internal audit service and the external auditor of the issuer: Since the tasks of the internal control are determined by the Company’s management bodies, they differ from the tasks of external audit, which is obliged to provide independent estimation of the presented accounting reporting. At the same time, the means of solution of specific tasks facing the external audit and the internal control may coincide and be used in some cases in the process of definition of the contents, dates and volume of external audit procedures. The results of the work of the subjects of the internal control may be used by the audit firm in the process of performance of check in the event of reaching the respective agreement. If the work of the subjects of the internal control is used, the audit check may include performance of following actions: a) mutual coordination of plans of audit check; b) exchange of reports; c) regular working meetings; d) free and open mutual access to the work documentation; e) joint submission of reports to the management and (or) proprietors of the economic subject; f) general order of the audit documenting. The audit organization under its inquiry may be provided with access to internal control reports. The audit organization informs the subjects of the internal control of IDGC of Center and Volga Region, JSC on any discovered factors which may be used in order to increase efficiency and productivity of the work of the internal control over the future. The audit organization bears the full responsibility for delivery of an audit opinion and written information by the auditor to the management of the economic subject based on the results of performed audit, as well as for 82 definition of the contents, dates and volume of audit procedures. This responsibility is not diminished, if any results of work of the internal control system are used. The issuer approved (adopted) the internal document establishing the rules of prevention of use of service (inside) information. Data on presence of the document on prevention of use of service (inside) information: The Board of Directors of IDGC of Center and Volga Region, JSC approved the Regulation on Inside Information (minutes #8 dated 18.02.2008). The address of a webpage in the Internet, which provides public access to its full text: www.mrsk- cp.ru/?id=253.
5.5. Information on the persons forming part of the bodies controlling the issuer’s financial and economic operations The name of the body control the issuer’s financial and economic activity: the Internal Audit Commission 1. Full name: Izumrud Aligadzhievna Alimuradova (Chairperson) Year of birth: 1971 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2003 2009 LLC “Energoconsulting” Director for Development
2009 currently IDGC Holding, OJSC Chief of the Internal Audit and Risk Management Department
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
2. Full name: Olga Vladimirovna Rokhlina Year of birth: 1974 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position
83 Period Entity Position from to 19.12.2001 30.09.2003 Representative office of JSC RAO Adviser for Internal Audit Commissions Work “UES of Russia” for management by “energo” JSCs of the Volga part of Russia “Volgaenergo”
01.10.2003 31.05.2004 Fund “Institute of Professional Adviser for Internal Audit Commissions Work Directors”
01.06.2004 01.07.2008 JSC RAO “UES of Russia” Leading Expert of the Division for Methodological Support of Conduct of an Audit of the Internal Audit Department of the CC (corporate center)
07.2008 currently IDGC Holding, OJSC Chief Expert of the Division for Arrangement of Conduct of an Audit of the Internal Audit Department The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
3. Full name: Vladimir Nikolaevich Arkhipov Year of birth: 1956 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2000 2006 FSUE (federal state unitary enterprise) Consultant “Rosoboronexport”
2006 2009 CJSC “Rustel” General Director 2009 currently IDGC Holding, OJSC First Deputy Chief of the Security Department The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options .
84 The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
4. Full name: Irina Alexandrovna Filippova Year of birth: 1958 Education: higher vocational All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 2005 03.2006 Municipal Enterprise of Electric and Main Economist Thermal Grids of the city of Sasovo in the Ryazan Region
03.2006 11.2009 LLC “Energoconsulting” Leading Expert 12.2009 currently IDGC Holding, OJSC Leading Expert of the Division of Internal Audit, Audit Inspection and Examination of IA&RMD (internal audit and risk management department)
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions .
5. Full name: Ksenia Valerievna Ivanova Year of birth: 1970 Education: higher vocational
85 All the positions held by this person with the issuer or with other entities for the previous 5 years and currently, including holding of more than one position Period Entity Position from to 15.05.2000 23.06.2004 JSC RAO “UES Specialist of the 1 st category of the Capital Accounting Department, of Russia” Leading Specialist, Main Specialist
23.06.2004 30.06.2008 JSC RAO “UES Leading Expert of the Corporate Governance Department of CC of Russia” (corporate center), Main Expert, Chief of the Corporate Information Service Division in the Corporate Governance and Shareholder Relations Department of CC
01.07.2008 currently IDGC Holding, Chief of the Information Disclosure Division of the Corporate OJSC Governance and Shareholder Relations Department
The person does not have any stakes in the issuer’s charter capital / ordinary shares. Number of the issuer’s shares of each category (type), which may be purchased by the person as a result of exercising the rights under the issuer’s options belonging to him/her: The issuer did not issue options . The person’s stakes in the charter (joint-stock) capital ( unit investment fund ) of the issuer’s subsidiaries and dependent entities: The person does not have the mentioned stakes. Information about the nature of any kinship with other persons included into the membership of the issuer’s management bodies and/or bodies of control over the issuer’s financial and economic activity: No mentioned kinship is present. Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: The person was not brought to the mentioned types of liability. Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings of bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: The person did not occupy the mentioned positions . The name of the body of control over the issuer’s financial and economic activity: the Audit Committee of the Company’s Board of Directors 1. Full name: Alexey Yurievich Perepyolkin (Chairman) The person is a member of the Board of Directors. The detailed information is provided in clause 5.2. of the quarterly report 2. Full name: Alexey Vladimirovich Sergutin The person is a member of the Board of Directors. The detailed information is provided in clause 5.2. of the quarterly report 3. Full name: Roman Alexeevich Fil’kin The person is a member of the Board of Directors. The detailed information is provided in clause 5.2. of the quarterly report 4. Full name: Vladimir Sergeevich Chistyakov The person is a member of the Board of Directors. The detailed information is provided in clause 5.2. of the quarterly report 5. Full name: Vladimir Vyacheslavovich Inozemtsev The person is a member of the Board of Directors. The detailed information is provided in clause 5.2. of the quarterly report 86 5.6. Information on the amount of remuneration, privileges and/or compensation of charges with regard to the body controlling the issuer’s financial and economic operations Information on the amount of remuneration with regard to each of the issuer’s body controlling financial and economic operations. All types of remuneration, including wages, bonuses, commission charges, benefits and/or compensation of charges, as well as other property representations, which were paid out by the issuer for the past completed financial year:
Unit of measurement: RUR The body of control over the issuer’s financial and economic activity: The Internal Audit Commission
Remuneration 345,488 Wages 4,965,163 Bonuses 0 Commission charges 0 Benefits 0 Compensation of charges 0 Other property representations 0 Other 0 TOTAL 5,310,651 Information about the current agreements concerning these payments in the current financial year: The system of payment of remuneration to the members of the issuer’s Internal Audit Commission is determined by the Regulation on Payment of Remuneration and Compensation to the Members of the Internal Audit Commission of IDGC of Center and Volga Region, JSC approved by the resolution of the annual General Shareholders Meeting of IDGC of Center and Volga Region, JSC on 30 May 2008 (Minutes #1). In accordance with the Regulation, the member of the Company’s Internal Audit Commission shall receive the lump sum remuneration for the participation in the check-up (inspection) of the financial and economic operations in the amount equivalent to twenty five minimum monthly wage rates of the first-class worker determined by the sector wage rate agreement in the RF electric grid complex (hereinafter referred to as the “Agreement”) for the period of carrying out of the check-up (inspection), taking into account the indexation determined by the Agreement,. The remuneration is paid within one week after issuance of the opinion based on the results of the performed check-up (inspection). In accordance with the Regulation, the amount of remuneration paid to the Chairman of the Internal Audit Commission is increased by 50%. Besides, in accordance with the Regulation, the member of the issuer’s Internal Audit Commission shall get the compensation of expenses related to the participation in the meeting of the Company’s Internal Audit Commission and performance of the check-up under the norms of reimbursement of trip expenses of the issuer applicable as at the moment of holding the meeting or check-up. The issuer did not enter into additional remuneration-related agreements with the members of the Internal Audit Commission. The amount of the remuneration with regard to this body based on the results of the work for the past completed financial year, which was determined (approved) by the issuer’s authorized management body, but was not actually paid out as at the moment of the end of the reporting period: No such facts are available The body of control over the issuer’s financial and economic activity: the Audit Committee of the Company’s Board of Directors Remuneration 128,123 Wages 0 Bonuses 0 Commission charges 0
87 Benefits 0 Compensation of charges 0 Other property representations 0 Other 0 TOTAL 128,123 Information about the current agreements concerning these payments in the current financial year:
According to the resolution of the Company Board of Directors, the members of the Committee may receive remuneration and compensation of expenses related with performance of their duties by them. The amount of such remuneration and compensation, procedure and time of their payment are determined by separate resolutions of the Company Board of Directors. The amount of the remuneration with regard to this body based on the results of the work for the past completed financial year, which was determined (approved) by the issuer’s authorized management body, but was not actually paid out as at the moment of the end of the reporting period: No such facts are available
5.7. Information on the number and general data on education and membership of the issuer’s employees (staff), as well as on change of the number of the issuer’s employees (staff) Unit of measurement: RUR thousand
Indicator 2010 Q 1 2011 Average number of employees, people 21,534 21,712 Share of the issuer’s employees with higher vocational education, % 34.6 34.6
Amount of money allocated for labor payment 7,472,986 1,923,617 Amount of money allocated for social support 306,884 130,633 Total amount of spent money 7,779,869 2,054,250 Professional organizations have been created in all branches and the executive body of the Company. The number of the issuer’s employees changed in 2010 due to filling-in the vacancies with the personnel in order to the perform the function of formation of the volume of rendered services in the field of electricity transmission, as well as due to employment of people in order to perform repairs by own resources. The change in the number of the personnel did not resulted in the consequences for the issuer’s financial and economic activities. The number of the issuer’s employees did not undergo essential changes in the 1 st quarter of 2011. The list of the employees, who render material influence on the issuer’s financial and economic operations (key employees): 1. Evgeny Victorovich Ushakov - General Director of IDGC of Center and Volga Region, JSC*. 2. Sergey Timofeevich Andrus - Deputy General Director for Technical Issues – Chief Engineer of IDGC of Center and Volga Region, JSC*. 3. Andrey Yurievich Vedernikov - Deputy General Director for Development and Services Sale of IDGC of Center and Volga Region, JSC*. 4. Lada Alexandrovna Podolskaya - Deputy General Director for Corporate Governance of IDGC of Center and Volga Region, JSC*. 5. Alexander Vasilievich Prepodobny - Deputy General Director for Security of IDGC of Center and Volga Region, JSC*. 6. Olga Vladimirovna Tikhomirova - Deputy General Director for Economy and Finance of IDGC of Center and Volga Region, JSC*. 7. Vladimir Victorovich Shitts - Deputy General Director for Capital Construction of IDGC of Center and Volga Region, JSC*. 8. Irina Victorovna Yashanina - Deputy General Director for Controlling and External Relations of IDGC of Center and Volga Region, JSC*.
88 * The information is provided in clause 5.2 of the quarterly report (the information on the members of the Company’s Management Board). 9. Irina Yurievna Rodionova - Chief Accountant of IDGC of Center and Volga Region, JSC. Year of birth: 1956. Education: higher vocational. Positions for the past 5 years: 1998-2007 - Chief Accountant of JSC “Nizhnovenergo” 06.2007-currently - Chief Accountant of IDGC of Center and Volga Region, JSC - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability . - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information . 10. Vyacheslav Ivanovich Bakulev - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Udmurtenergo”. Year of birth: 1947. Education: higher vocational. Positions for the past 5 years: 2003-2005 - Chief Engineer - Deputy Director of the branch “Distribution Grids” of JSC “Udmurtenergo” 2005-2007 - Chief Engineer of JSC “Udmurtenergo” 2007-2007 - Technical Director of JSC “Udmurtenergo” 2007-2007 – Acting Executive Director of JSC “Udmurtenergo”, IDGC of Ural and Volga, JSC 2007-2008 – Acting Deputy General Director of IDGC of Center and Volga Region, JSC – Managing Director of JSC “Udmurtenergo”, Acting Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch JSC “Udmurtenergo” 02.2008 - currently - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch JSC “Udmurtenergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability . - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information . 11. Victor Iosifovich Kotikov - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Marienergo”. Year of birth: 1946. Education: higher vocational, Candidate of Economic Sciences Positions for the past 5 years: 1993-2006 - General Director of JSC “Marienergo” 2006-2007 - Executive Director of JSC “Marienergo” 2007-2008 - Deputy General Director of IDGC of Center and Volga Region, JSC – Managing Director of JSC “Marienergo”
89 2008 – currently - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Marienergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability . - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information. 12. Valentin Pavlovich Martyanov - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Vladimirenergo”. Year of birth: 1952. Education: higher vocational. Positions for the past 5 years: 2003-2005 - Deputy General Director for Electric Grids of JSC “Vladimirenergo” 2005-2006 – Acting General Director of JSC “Vladimirenergo” 2006-2007 – Managing Director of JSC “Vladimirenergo” 2007-2007 - Deputy General Director of IDGC of Center and North Caucasus, JSC – Managing Director of JSC “Vladimirenergo” 2007-2008 - Deputy General Director of IDGC of Center and Volga Region, JSC – Managing Director of JSC “Vladimirenergo” 02.2008 - currently - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Vladimirenergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability . - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information . 13. Vladimir Filippovich Skorikov - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Ryazanenergo”. Year of birth: 1952. Education: higher vocational. Positions for the past 5 years: 2003-2006 - Chief Engineer of SUE (the State Unitary Enterprise) of the RD (the Ryazan Region) “Donenergo” 2006-2006 - Deputy General Director for Capital Construction of JSC “SGC TGC-8” 2006-2007 – Acting General Director of “Ryazanenergo” 2007-2007 - Deputy General Director of IDGC of Center and North Caucasus, JSC – Managing Director of JSC “Ryazanenergo” 2007-2008 - Deputy General Director of IDGC of Center and Volga Region, JSC – Managing Director of JSC “Ryazanenergo” 02.2008 - currently - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Ryazanenergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or 90 crimes against the state: was not brought to such liability. - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information . 14. Yury Nikolaevich Timonin - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Tulenergo”. Year of birth: 1959. Education: higher vocational. Positions for the past 5 years: 1998-2005 - Director of Shchekinskaya SDPP (state district power plant) of JSC “Tulenergo” 2005-2005 - First Deputy General Director - Executive Director of JSC “Tulenergo” 2005-2006 – Acting General Director of JSC “Tulenergo” 2006-2007 – Managing Director of JSC “Tulenergo” 2007-2007 - Deputy General Director of IDGC of Center and North Caucasus, JSC – Managing Director of JSC “Tulenergo” 2007-2008 - Deputy General Director of IDGC of Center and Volga Region, JSC – Managing Director of JSC “Tulenergo” 02.2008-currently - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Tulenergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability. - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information. 15. Andrey Alexandrovich Khapilin - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Kalugaenergo”. Year of birth: 1963. Education: higher vocational. Positions for the past 5 years: 2004-2006 - Deputy General Director of JSC “Kaluga Energy Management Company” for Generation and Repairs 2006-2007 - Deputy General Director of JSC “Kalugaenergo” for Electric Grids 2007-2007 - Director for Investments of JSC “Kalugaenergo” 2007-2008 - Deputy General Director of IDGC of Center and Volga Region, JSC – Managing Director of JSC “Kalugaenergo” 02.2008-currently - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Kalugaenergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability. - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information.
91 16. Oleg Lyubomirovich Kharivsky - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Kirovenergo”. Year of birth: 1969. Education: higher vocational. Positions for the past 5 years: 2004-2007 - Chief Engineer, Acting Director, Director of the Northern Electric Grids of JSC “Tyumenenergo” 2007-2008 - Deputy General Director for Development and Client Relations of Transmission Electric Grids of Ural - the branch of JSC “UES FGC” 07.2008-currently - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Kirovenergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability. - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information. 17. Sergey Nikolaevich Chizhov - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Ivenergo”. Year of birth: 1959. Education: higher vocational. Positions for the past 5 years: 2003-2005 - Deputy General Director for General Issues of JSC “Ural Energy Management Company” 2005-2007 - Deputy Director for General Issues, Director for General Issues of JSC “Tyumenenergo” 2008-2008 - Deputy General Director for General Issues of JSC “Ivenergo” 2008-2008 - Deputy Director for General Issues, First Deputy Director of the Branch “Ivenergo” of IDGC of Center and Volga Region, JSC 12.2008-currently - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Ivenergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability. - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information. 18. Oleg Borisovich Shavin - Deputy General Director of IDGC of Center and Volga Region, JSC- Director of the branch “Nizhnovenergo”. Year of birth: 1962. Education: higher vocational. Positions for the past 5 years: 2004-2005 - General Director of the Open Joint-Stock Company “Energoremont” 2005-2008 - Deputy General Director, Acting General Director, General Director of JSC “Volgosel’elektroset’stroy” 2008-2008 - Director for Reconstruction and Repairs of IDGC of Center and Volga Region, JSC 08.2008-currently
92 - Deputy General Director of IDGC of Center and Volga Region, JSC - Director of the branch “Nizhnovenergo” - Information about bringing the person to administrative liability for breach of law in the sphere of finances, taxes and levies, securities market or criminal liability (previous convictions) for crimes in the sphere of economy or crimes against the state: was not brought to such liability. - Information about holding by the person of the positions in the management bodies of commercial entities within the period, when legal proceedings for bankruptcy were instituted and/or one of bankruptcy proceedings stipulated by the Russian Federation laws on insolvency (bankruptcy) was initiated in respect of the mentioned entities: no information.
5.8. Information on any liabilities of the issuer to its employees (staff) which concern a possibility of their participation in the charter (joint-stock) capital (share fund) of the issuer The issuer doesn’t have any obligations towards the employees (workers), touching upon a possibility of their membership in the issuer’s authorized (joint-stock) capital.
VI. Information on the issuer’s participants (shareholders) and interested-party transactions completed by the issuer
6.1. Information on the total number of the issuer’s shareholders (participants)
Total number of persons registered in the register of the issuer’s shareholders as of the last reporting quarter’s end: 19 558 Total number of nominal holders of the issuer’s shares: 14
6.2. Information on the issuer’s participants (shareholders) owning at least 5 percent of its charter (joint-stock) capital (share fund) or at least 5 percent of its ordinary shares; information on participants (shareholders) of such persons owning at least 20 percent of the charter (joint-stock) capital (share fund) or at least 20 percent of their ordinary shares Participants (shareholders) of the issuer who own at least 5 percent of its authorized (joint-stock) capital (share fund) or at least 5 percent of its ordinary shares.
Full business name: Open Joint-Stock Company “Holding of Interregional Distribution Grid Companies” Shortened business name: IDGC Holding, OJSC Location: 117630 Russia, Moscow, Academika Chelomeya str., 5/А TIN: 7728662669 PSRN: 1087760000019 Share ownership of the person in the issuer’s authorized capital, %: 50.3997 Stake of the issuer’s ordinary shares belonging to the person, %: 50.3997
Participants (shareholders) of the given person who own at least 20 percent of its authorized (joint-stock) capital (share fund) or at least 20 percent of its ordinary shares Full business name: Russian Federation in the person of Federal agency on the state property governance Shortened business name: Rosimuschestvo Location: 109012 Russia, Moscow, Nikolsky lane, 9. TIN: 7710723134 Person’s stake in the authorized capital of the shareholder (participant) of the issuer, %: 52.6831 Stake of ordinary shares of the shareholder (participant) of the issuer, belonging to the given person, %: 54.9923 Share ownership of the person in the issuer’s authorized capital, %: 0.0014 Stake of the issuer’s ordinary shares belonging to the person, %: 0.0014
Nominal holder Information on the nominal holder: Full business name: Closed Joint-Stock Company “Depository Clearing Company” 93 Shortened business name: ЗА C “DCC” Location: 125009 Russia, Moscow, Vozdvizhenka str., 4/7, bulk 1 TIN: 7710021150 PSRN: 1027739143497 Telephone: (495) 956-0999 Fax: (495) 232-6804 E-mail: [email protected]
Data on the professional participant’s license of the securities market Number: # 177-111151-000100 Issuance date: 03.04.2008 Expiration date: Termless Title of the body that issued the license: FFMS of Russia Number of the issuer’s ordinary shares, registered in the register of the issuer’s shareholders for the nominal holder’s name: 40 601 516 193 Number of the issuer’s privileged shares registered in the register of the issuer’s shareholders for the nominal holder’s name: 0
6.3. Information on a stake of the government or municipal institution in the issuer’s charter (joint-stock) capital (share fund), availability of a special right (“golden share”)
Stake amount of the issuer’s authorized (joint-stock) capital which is in the federal property, %: 0.0014 Person managing by the block: Full business name: Russian Federation in the person of the Federal agency on the state property governance.
Stake amount of the issuer’s authorized (joint-stock) capital which is in the federal property, %: 0.000097 Person managing by the block: Full business name: Federal State Unitary Enterprise “Scientific Research Institute of computing machinery”.
Stake amount of the authorized (joint-stock) capital (share fund) of the issuer, owned by the Russian Federation’s constituent entities, %: 1.0021 Person managing by the block: Full business name: Ministry of property relations of the Udmurt Republic.
Stake amount of the authorized (joint-stock) capital (share fund) of the issuer, owned by the Russian Federation’s constituent entities, %: 0.0026 Person managing by the block: Full business name: State property Department of Yaroslavl region.
Stake amount of the authorized (joint-stock) capital (share fund) of the issuer, owned by the Russian Federation’s constituent entities, %: 0.00000035 Person managing by the block: Full business name: State property Department of Kirov region. Stake amount of the authorized (joint-stock) capital (share fund) of the issuer, which is in the municipal property, %: 0.0012 Person managing by the block: Full business name: Administration of property relations of Sarapul city
Stake amount of the authorized (joint-stock) capital (share fund) of the issuer, which is in the municipal property, %: 0.0004 Person managing by the block: Full business name: Municipal Unitary Enterprise “Ryazan City Distribution Electric Grids”
Special right availability for the participation of the Russian Federation, Russian Federation’s constituent entities, municipal formations in the governance by the issuer – joint-stock company ('golden share'), validity term
94 of the special right ('golden share') The given right is not stipulated
6.4. Information on restrictions for participation in the issuer’s charter (joint-stock) capital (share fund)
There are no restrictions for the participation in the issuer’s authorized (joint-stock) capital
6.5. Information on changes in the structure and amount of the issuer’s shareholders (participants) owning at least 5 percent of its charter (joint-stock) capital (share fund) or at least 5 percent of its ordinary shares Structures of the issuer’s shareholders (participants), who owned at least 5 percent of the issuer’s authorized (joint-stock) capital, and for the issuers which are joint-stock companies – also at least 5 percent of the issuer’s ordinary shares, defined as of the date of the persons’ list who had a right to take part in each General Shareholders’ Meeting (Participants) of the issuer, held for 5 last completed fiscal years, preceding the date of the reporting quarter’s end, or for each completed fiscal year preceding the date of the reporting quarter’s end, if the issuer implements its activity at least 5 years, and also for the last quarter according to the date of the persons’ list who had a right to participate in each meeting of the kind.
Date of the persons’ list compilation, who have a right to participate in the General Shareholders’ (Participants’) Meeting of the issuer: 07.05.2010 List of shareholders (participants в) Full business name: Open Joint-Stock Company “Holding of Interregional Distribution Grid Companies” Shortened business name: IDGC Holding, OJSC Share ownership of the person in the issuer’s authorized capital, %: 50.3997 Stake of the issuer’s ordinary shares which belonged to the person, %: 50.3997
Full business name: Jamica Limited Shortened business name: - Share ownership of the person in the issuer’s authorized capital, %: 16.8248 Stake of the issuer’s ordinary shares which belonged to the person, %: 16.8248
Full business name: HQ BANKAKTIEBOLAG Shortened business name: - Share ownership of the person in the issuer’s authorized capital, %: 5.6793 Stake of the issuer’s ordinary shares which belonged to the person, %: 5.6793
Full business name: Energosouz Holdings Limited Shortened business name: - Share ownership of the person in the issuer’s authorized capital, %: 5.3986 Stake of the issuer’s ordinary shares which belonged to the person, %: 5.3986
Compilation date of the persons’ list who have a right to participate in the General Shareholders’ (Participants’) Meeting of the issuer: 08.05.2009 List of shareholders (participants) Full business name: Open Joint-Stock Company “Holding of Interregional Distribution Grid Companies” Shortened business name: IDGC Holding, OJSC Share ownership of the person in the issuer’s authorized capital, %: 50.3997 Stake of the issuer’s ordinary shares which belonged to the person, %: 50.3997
Full business name: Jamica Limited Shortened business name: - Share ownership of the person in the issuer’s authorized capital, %: 16.8248 Stake of the issuer’s ordinary shares which belonged to the person, %: 16.8248
Full business name: Energosouz Holdings Limited Shortened business name: - Share ownership of the person in the issuer’s authorized capital, %: 5.3986
95 Stake of the issuer’s ordinary shares which belonged to the person, %: 5.3986
Compilation date of the persons’ list who have a right to participate in the General Shareholders’ (Participants’) Meeting of the issuer: 18.04.2008 List of shareholders (participants) Full business name: Russian Open Joint-Stock Company of power industry and electrification “UES of Russia” Shortened business name: JSC RAO “UES of Russia” Share ownership of the person in the issuer’s authorized capital, %: 50.3997 Stake of the issuer’s ordinary shares which belonged to the person, %: 50.3997
Full business name: Deutsche Bank AG London branch Shortened business name: - Share ownership of the person in the issuer’s authorized capital, %: 11.4107 Stake of the issuer’s ordinary shares which belonged to the person, %: 11.4107
Additional information: IDGC of Center and Volga Region, JSC is registered on 28.06.2007. The Company has had one shareholder owning 100% of the Company’s shares – JSC RAO “UES of Russia” since its establishment to the reforming completion (29.02.2008). General meetings of the shareholders for this period were held by way of the Governance Board of JSC RAO “UES of Russia”. From 01.07.2008 JSC RAO “UES of Russia” was reorganized, the batch of shares of IDGC of Center and Volga Region, JSC which had belonged to JSC RAO “UES of Russia”, transferred to IDGC Holding, OJSC under legal succession.
6.6. Information on interested-party transactions completed by the issuer
Data on the number and volume of transactions in monetary terms settled by the issuer, recognized interested party transactions according to the Russian Federation legislation. By the last reporting quarter’s results the transactions demanded the approval by an authorized governance body of the issuer
Indicator title Total Total volume in number, pcs. monetary terms Interested party transactions settled by the issuer for the reporting period and 9 684 401 144 which demanded approval of the issuer’s authorized governance body
Interested party transactions settled by the issuer for the reporting period and 0 0 which were approved by the General Participants’ (Shareholders’) Meeting of the issuer Interested party transactions settled by the issuer for the reporting period and 9 684 401 144 which were approved by the Board of Directors (Supervisory Board of the issuer) Interested party transactions settled by the issuer for the reporting period and 0 0 which demanded approval but were not approved by the issuer’s authorized governance body
96 Measurement body: RUR.
Transactions (groups of interrelated transactions) the price of which amounts to 5 and over percent of the balance sheet value of the issuer’s assets. The price is defined according to the data of the issuer’s accounting reports as of the last reporting date before the transaction settlement, completed by the issuer for the last reporting quarter No stated transactions were settled
Total volume in monetary terms of interested party transactions settled by the issuer for the last reporting quarter, RUR: 684 401 144.91
Interested party transactions (groups of interrelated transactions) and the decision on approval of which by the Board of Directors (Supervisory Board) or the General Shareholders’ (Participants’) Meeting of the issuer wasn’t taken in cases when such approval is obligatory according to the Russian Federation legislation.
No stated transactions were settled
6.7. Information on the amount of debt receivable
For 2010 Measurement unit: RUR. Debt receivable type Effective date of the payment Up to 1 year Over 1 year Debt receivable of buyers and customers 4 657 218 511.65 1 326 563 104.26 including overdue 82 263 832.78 x Debt receivable on bills receivable 0 0 including overdue 0 x Debt receivable of participants (founders) on contributions in the 0 0 authorized capital including overdue 0 x Debt receivable on advances made 115 001 665.41 1 235 267 043.77 including overdue 4 481 448.92 x Another debt receivable 369 179 418.31 51 212 050.14 including overdue 40 119 463.39 x
867 239 237.09
x Totally 4 657 218 511.65 1 326 563 104.26 including overdue
97 Debtors on which at least 10 percent fall from the total amount of the debt receivable for the stated reporting period Full business name: Open Joint-Stock Company “Federal Grid Company of United Energy System” Shortened business name: JSC “UES FGC” Location: 117630, Moscow, Academika Chelomeya str., 5 а Debt receivable amount, RUR: 1 153 120 516.82 Amount and terms of the overdue debt receivable (interest rate, fine sanctions, penalties): 0 Debtor is the issuer’s affiliated person: No
As of the date of the reporting quarter’s end Measurement unit: RUR. Type of debt receivable Effective date of payment Up to 1 year Over 1 year Debt receivable of buyers and customers 5 066 296 139.87 41 272 692.04 including overdue debt receivable 1 118 373 747.43 x Debt receivable on notes receivable 0 0 including overdue debt receivable 0 x Debt receivable of participants (founders) on contributions in the 0 0 authorized capital including overdue debt receivable 0 x Debt receivable on advances made 2 060 383 832.07 4 805 925.03 including overdue debt receivable 6 601 373.46 x Other debt receivable 428 483 534.93 25 328 272.79 including overdue debt receivable 47 765 086.7 x Totally 7 555 163 506.87 71 406 889.86 including overdue debt receivable 1 172 740 207.59 x
Debtors on which at least 10 percent fall from the total amount of the debt receivable for the stated reporting period Full business name: Open Joint-Stock Company “Federal Grid Company of United Energy System” Shortened business name: JSC “UES FGC” Location: 117630, Moscow, Academika Chelomeya str., 5 а Debt receivable amount, RUR: 1 189 452 112.86 Amount and terms of the overdue debt receivable (interest rate, fine sanctions, penalties): 0 Debtor is the issuer’s affiliated person: No
VII. Issuer’s accounting reports and other financial information
7.1. Issuer’s annual accounting reports
2010
98 Bookkeeping balance sheet as of 31 st of December of 2010 Codes Form # 1 on All- 0710001 Russian classifier of management Organization: Joint-Stock Company Interregional Distribution documentation Grid Company of Center and Volga Region Date 31.12.2010 Taxpayer identification number on All- 81296703 Type of activities Russian classifier of Legal status/form of ownership: Joint-Stock Company enterprises and Measurement unit: RUR. ths. organizations TIN 5260200603 Location (address): 33 Rozhdestvenskaya str., Nizhny Novgorod, Russia 603950 on OKVED 40.10.2 on All-Russian classifier of forms of ownership / Incorporation on All-Russian 384 classifier of measurement units ASSET Code As of the As of the reporting of line reporting year’s period’s end beginning 1 2 3 4 I. NONCURRENT ASSETS Intangible assets 110 14 959 9 149 Fixed assets 120 44 407 783 48 294 701 Construction-in-process 130 4 560 711 5 442 798 Income yielding investments into tangible assets 135 0 0 Long-term financial investments 140 485 192 429 224 Deferred tax assets 145 82 837 99 907 Other noncurrent assets 150 566 910 693 892 TOTALLY on section I 190 50 118 392 54 969 671 II. CURRENT ASSETS Stocks 210 1 029 154 870 167 raw material, materials and other similar valuables 211 780 618 794 539 rearers and fatteners 212 0 0 Expenses in production-in-process (circulation costs) 213 6 861 10 082
Finished products and goods for resale 214 460 1 454 Goods dispatched 215 0 0 deferred expenses 216 241 215 64 092 other stocks and reserves 217 0 0 Value added tax on the acquired valuables 220 88 609 66 746
Debt receivable (payments on which are expected in over 12 230 218 269 87 013 months after the reporting date) buyers and customers 231 55 112 29 711 Debt receivable (payments on which are expected within 12 240 7 174 302 5 896 758 months after the reporting date) buyers and customers 241 4 920 958 4 180 196 Short-term financial investments 250 6 691 3 991
Cash assets 260 2 488 347 3 147 344
99 Other current assets 270 396 886 451 778 TOTALLY on section II 290 11 402 258 10 523 797 BALANCE 300 61 520 650 65 493 468
LIABILITIES Code As of the As of the reporting of line reporting year’s period’s end beginning 1 2 3 4 III. CAPITAL AND RESERVES Authorized capital 410 11 269 782 11 269 782 Own shares bought back from the shareholders 411 0 0 Added capital 420 24 629 540 24 606 535 Reserve capital 430 425 914 447 261 reserves formed according to the legislation 431 425 914 447 261 reserves formed according to the constituent documents 432 0 0
Retained earnings (uncovered loss) 470 4 121 542 5 520 957 TOTALLY on section III 490 40 446 778 41 844 535 IV. LONG-TERM OBLIGATIONS Loans and credits 510 7 448 894 13 846 729 Deferred tax liabilities 515 1 092 223 1 403 465 Other long-term liabilities 520 979 397 1 380 392 TOTALLY on section IV 590 9 520 514 16 630 586 V. SHORT-TERM OBLIGATIONS Loans and credits 610 5 325 766 1 648 654 Accounts payable 620 5 814 654 5 245 088 suppliers and contractors 621 3 110 893 2 439 500 indebtedness towards the organization’s personnel 622 290 026 331 525 indebtedness towards the state non-budgetary funds 623 122 278 174 452
indebtedness on taxes and charges 624 282 546 268 994 other creditors 625 2 008 911 2 030 617 Indebtedness towards participants (founders) on revenues 630 61 780 56 160 payout Deferred revenues 640 77 457 68 445 Reserves for future expenses 650 0 0 Other short-term obligations 660 273 701 0 TOTALLY on section V 690 11 553 358 7 018 347 BALANCE 700 61 520 650 65 493 468
REFERENCE ON AVAILABILITY OF VALUABLES ACCOUNTED AT OFF BALANCE SHEET ACCOUNTS Indicator title Code As of the As of the reporting of line reporting year’s period’s end beginning 1 2 3 4 Leased fixed assets 910 4 633 647 5 299 771 Including that on leasing 911 263 365 77 530 Commodity stocks and supplies, taken under custody 920 184 829 73 317
100 101
Goods accepted for commission 930 0 0 insolvent debtors’ indebtedness written off as loss 940 1 844 694 1 762 140
Securities received for obligations and payments 950 12 297 8 405 Securities given for obligations and payments 960 694 049 117 580 Housing stock wear 970 25 266 26 888 Wear of land improvement facilities and other similar facilities 980 0 0
Intangible assets, received for usage 990 186 191 116 922 Other valuables accounted at off-balance accounts 1000 27 981 26 181 Leased out fixed assets 1001 15 212 13 287 Property which is in federal property 1001 12 769 12 894
102 Profit and loss statement for 2010 Codes Form # 2 on All- 0710002 Russian classifier of management Organization: Joint-Stock Company Interregional Distribution documentation Grid Company of Center and Volga Region Date 31.12.2010 Taxpayer identification number on All- 81296703 Type of activities Russian classifier of Legal status/form of ownership: Joint-Stock Company enterprises and Measurement unit: RUR. ths. organizations TIN 5260200603 Location (address): 33 Rozhdestvenskaya str., Nizhny Novgorod, Russia 603950 on OKVED 40.10.2 on All-Russian classifier of forms of ownership / incorporation
on All-Russian 384 classifier of measurement units Indicator title Code For the For the same of line reporting period of the period previous year 1 2 3 4 Revenues and expenses on ordinary activities types Proceeds (net) from sales of goods, production, works, services 010 54 395 050 47 191 290 (minus value added tax, excise duties and similar obligatory payments) Prime cost of sold goods, production, works, services 020 -50 217 256 -44 010 213 Gross profit 029 4 177 794 3 181 077 Commercial expenses 030 0 0 Managerial expenses 040 0 0 Profit (loss) from sales 050 4 177 794 3 181 077 Other revenues and expenses Interest receivable 060 42 072 23 437 Interest payable 070 -988 325 -799 960 Revenues from membership in other organizations 080 12 8 036 Other revenues 090 905 324 850 619 Other expenses 100 -1 831 306 -2 108 176 Profit (loss) before taxation 140 2 305 571 1 155 033 Deferred tax assets 141 16 115 5 476 Deferred tax liabilities 142 -313 826 -331 628 Current profit tax 150 -613 595 -354 547 Additional indicators 151 3 492 -47 395 Other similar obligations 152 3 492 -47 395 Net profit (loss) of the reporting period 190 1 397 757 426 939 REFERENTIALLY: Constant tax liabilities(assets) 200 450 192 449 692 Base profit (loss) per share 201 0 0 Diluted profit (loss) per share 202 0 0 103 Indicator title Code For the reporting period For the same period of the of line previous year
profit loss profit loss 1 2 3 4 5 6 Acknowledged fines, forfeitures and other l 53 776 17 893 47 122 729 penalties on which judicial (arbitration court’s) decisions are received on their collection Profit (loss) of past years 101 272 846 515 26 795 79 924
Indemnity for losses inflicted by non-fulfillment 0 0 0 0 or improper fulfillment of obligations
Currency differences on operations in a foreign 1 1 2 4 currency Allocations to valuation reserves 231 319 507 738 Receivables and payables writing off on which 11 251 17 597 8 158 297 749 the limitation period expired
104 Codes Form # 3 on All- 0710003 Russian classifier of Report on changes of capital management for 2010 documentation Organization: Joint-Stock Company Interregional Distribution Date 31.12.2010 Grid Company of Center and Volga Region on All-Russian 81296703 Taxpayer identification number classifier of Type of activities enterprises and Legal status/form of ownership: Joint-Stock Company organizations Measurement unit: RUR. ths. TIN 5260200603 Location (address): 33 Rozhdestvenskaya str., Nizhny Novgorod, on OKVED 40.10.2 Russia 603950 on All-Russian classifier of forms of ownership /
incorporation
on All-Russian 384
classifier of
H
measurement UNITS C
I. Changes of capital Indicator title Code of Authorized Added Reserve Retained Totally line capital capital capital earnings (uncovered loss) 1 2 3 4 5 6 7
Surplus as of the 31 st of 11 269 782 24 654 354 486 3 604 452 39 882 968 December of the year which 248 precedes the previous year Changes in accounting policy 0 0 0 0
Result from reappraisal of the 0 0 0 0 fixed assets’ facilities Additional data, including: 0 0 136 871 136 871
Changes of rules of 0 0 136 871 136 871 bookkeeping Surplus as of the 1st January 11 269 782 24 654 354 486 3 741 323 40 019 839 of the previous year 248 Result from recalculation 0 0 0 0 of foreign currencies Net profit 0 0 426 939 426 939 Dividends 0 0 0 0 Allocations in the reserve 0 71 428 0 71 428 fund Increase of the capital 0 0 0 0 amount, due to: Additional issuance of shares 0 0 0 0 increase of the shares’ 0 0 0 0 nominal value reorganization of legal 0 0 0 0 person Additional data, including: 0 0 24 708 24 708
105 other 0 0 0 24 708 24 708 Decrease of the capital 0 0 0 0 0 amount, due to: decrease of the shares’ 0 0 0 0 0 nominal decrease of shares number 0 0 0 0 0 Reorganization of legal 0 0 0 0 0 person Additional data, including: 0 -24 708 0 -71 428 -96 136 other 0 -24 708 0 -71 428 -96 136 Surplus as of the 31 st 11 269 782 24 629 540 425 914 4 121 542 40 446 778 December of the previous year 2010 year. Changes in the 0 0 0 0 0 accounting policy Result from the reappraisal of 0 0 0 0 0 the fixed assets’ facilities Additional data, including :
Changes of bookkeeping 0 0 0 0 0 rules Surplus as of the 1st of 100 11 269 782 24 629 540 425 914 4 121 542 40 446 778 January of the reporting year Result from recalculation 0 0 0 0 0 of foreign currencies Net profit 0 0 0 1 397 757 1 397 757 Dividends 0 0 0 0 0 Allocations in the reserve 110 0 0 21 347 0 21 347 fund Increase of the capital amount due to: additional issuance of shares 121 0 0 0 0 0 increase of the shares’ 122 0 0 0 0 0 nominal cost reorganization of legal 123 0 0 0 0 0 person Additional data, including: 0 0 0 23 005 23 005 other 0 0 0 23 005 23 005 Decrease of the capital amount due to: decrease of the shares 131 0 0 0 0 0 nominal decrease of the shares 132 0 0 0 0 0 number Reorganization of legal 133 0 0 0 0 0 person Additional data, including: 0 -23 005 0 -21 347 -44 352 other -23 005 0 -21 347 -44 352 Surplus as of the 31 st of 140 11 269 782 24 606 535 447 261 5 520 957 41 844 535 December of the reporting year
106 II. Reserves
Indicator title Code Surplus as of Amount that Amount that Surplus as of of line the reporting entered in the was spent the reporting year’s reporting (used) in the year’s end beginning year reporting year 1 2 3 4 5 6 Reserves formed according with the legislation Reserve fund data of the previous year 354 486 71 428 0 425 914 data of the reporting year 425 914 21 347 0 447 261 Reserves formed according to the constituent documents: data of the previous year 0 0 0 0 data of the reporting year 0 0 0 0 Valuation reserves: Reserve on doubtful debts data of the previous year 338 507 738 0 508 076 data of the reporting year 508 076 119 801 -267 875 360 002 Provision for impairment of financial investments data of the previous year 0 0 0 0 data of the reporting year 0 111 518 0 111 518
References Indicator title Code Surplus as of the reporting Surplus as of the reporting year’s beginning period’s end 1 2 3 4 1) Net assets 200 40 524 235 41 912 980 From the budget From non-budgetary funds for the for the for the for the reporting previous reporting previous year year year year 3 4 5 6 2) Received as of:
Expenses on ordinary activities types - totally 210 0 430 0 281 including:
For payout to people who suffered from 0 0 0 0 Chernobyl disaster other 0 430 0 281 Capital investments in noncurrent assets 220
107 Report on cash flow for 2010 Codes Form # 4 on All- 0710004 Russian classifier of management Organization: Joint-Stock Company Interregional Distribution documentation Grid Company of Center and Volga Region Date 31.12.2010 Taxpayer identification number Type of activities on All- 81296703 Russian classifier of Legal status/form of ownership: Joint-Stock Company enterprises and Measurement unit: RUR. ths. organizations Location (address): 33 Rozhdestvenskaya str., Nizhny Novgorod, TIN 5260200603 Russia 603950 on OKVED 40.10.2 on All-Russian classifier of forms of ownership / incorporation on All-Russian 384 classifier of measurement units Indicator title Code For the For the same of line reporting period of the period previous year 1 2 3 4 Demand balance as of the reporting year’s beginning 2 488 023 1 860 707 Cash flow on the current activities Funds received from the buyers, customers 63 210 821 51 652 082 Other revenues 1 468 881 486 059 Cash assets, directed to: -57 389 511 -48 454 112 payment of the acquired goods, services, raw material and other 150 -42 767 917 -36 725 284 current assets for payment of labor 160 -5 715 839 -5 637 683 for payout of dividends, interest 170 -1 286 403 -637 207 for calculations on taxes and charges 180 -3 871 406 -2 907 966 for other expenses -3 747 946 -2 545 972 Net cash assets from the current activities 200 7 290 191 3 684 029 Cash flow on the investment activities Proceeds from sales of the fixed assets’ facilities and other 210 17 714 7 038 noncurrent assets Proceeds from sales of securities and other financial 220 0 840 293 investments Received dividends 230 8 7 313 Received interest 240 42 067 24 661 Receipts from loan redemptions, represented to other organizations 250 0 0 Other revenues 511 133 503 099 Acquisition of branch organizations 280 0 0 Acquisition of the fixed assets’ facilities, interest-bearing 290 -9 462 247 -5 434 343 investments in tangible assets and intangible assets Acquisition of securities and other financial investments 300 -500 000 -65 Loans given to other organizations 310 -2 542 0 Other expenses -259 432 -650 055
Net cash assets from investment activities 340 -9 653 299 -4 702 059
108 Cash flow on financial activities Receipts from the stock issue or other equity securities 0 0 Receipts from loans and credits represented by other 9 366 441 2 701 702 organizations Other revenues 0 0 Redemption of loans and credits (without interest) -6 265 610 -894 232 Redemption o obligations on the financial lease -78 585 -162 124 Other expenses on the financial activities 0 0 Net cash assets from the financial activities 3 022 246 1 645 346 Net increase (decrease) of cash assets and their equivalents 659 138 627 316
Demand balance as of the reporting period’s end 3 147 161 2 488 023 Amount of influence of the foreign currency’s rate change in 0 0 relation to ruble
109 Appendix to bookkeeping balance sheet for 2010
Organization: Joint-Stock Company Interregional Distribution Grid Codes Company of Center and Volga Region Form # 5on All- 0710005 Taxpayer identification number Russian classifier of Type of activities management documentation Legal status/form of ownership: Joint-Stock Company Date 31.12.2010 Measurement unit: RUR. ths. on All- Russian 81296703 Location (address): 33 Rozhdestvenskaya str., Nizhny Novgorod, classifier of Russia 603950 enterprises and organizations
TIN 5260200603 on OKVED 40.10.2 on ALL- RUSSIAN classifier of forms of ownership / incorporation on All-Russian 384 Classifier of measurement units
110 Intangible assets
Indicator title Code of Availability Received Retired Surplus line as of the as of the reporting reporting year’s period’s beginning end
1 2 3 4 5 6 010 17 989 131 0 18 120 Intellectual property (exclusive rights for the intellectual property’s results) at the patent holder for an invention, industrial 011 0 0 sample, useful model at the possessor of a right for software programs, 012 17 828 - 17 768 data base 6 0 at the possessor of a right for integrated circuit 013 0 0 topographies at the owner for the trade mark and service mark, 014 161 191 352 title of place of the goods’ origin at the patent holder for selection achievements 015 0 0
Organizational expenses 020 0 0
Organization’s commercial goodwill 030 0 0
Other 040 0 0
Indicator title Code As of the As of the reporting period’s of line reporting year’s end beginning 1 2 3 4 Depreciation of intangible assets – totally 3 030 8 971
111 Fixed assets
Indicator title Code of Availability Received Retired Surplus line as of the as of the reporting reporting year’s period’s beginning end
1 2 3 4 5 6 Buildings 9 271 911 345 700 -15 953 9 601 658 Constructions and transfer devices 73 938 981 3 482 -58 109 77 363 886 758 Machinery and equipment 40 582 088 3 481 -97 574 43 966 650 164 Transport facilities 1 112 024 194 228 -31 740 1 274 512 Production and household equipment 181 722 9 024 -4 212 186 534
Draft cattle 0 0 0 0
Productive livestock 0 0 0 0
Perennial plantations 43 0 0 43
Other fixed assets types 58 043 5 274 -3 972 59 345
Land plots and land use facilities 53 233 1 785 0 55 018
Capital investments for radical lands 0 0 0 0 improvement Totally 125 198 045 7 520 -211 560 132 507 547 032
112
Indicator title Code As of the As of the reporting of line reporting year’s period’s end beginning 1 2 3 4 Depreciation of fixed assets- totally 140 80 790 262 84 212 331 including: buildings and constructions 53 217 628 55 025 673 machinery, equipment and transport facilities 27 400 033 29 024 223 other 172 601 162 435 Leased out fixed assets’ facilities - totally 94 097 114 518 including: buildings 57 309 80 225 constructions 2 232 0 other 34 556 34 293 including machinery, equipment, transport facilities 32 232 32 054 other 2 324 2 239 Fixed assets’ facilities transferred to preservation status 9 492 10 049
Fixed assets’ facilities received for lease - totally 4 633 647 5 299 771 including: Buildings and constructions 602 204 588 604 Machinery, equipment, transport facilities 459 904 340 771 other 3 571 539 4 370 396 Immovable property facilities accepted for operation and under 93 931 344 263 the state registration process REFERENTIALLY Result from the reappraisal of the fixed assets’ facilities: 0 0 initial (replacement) cost 171 0 0 depreciation 172 0 0 Cost change of the fixed assets’ facilities as a result of further 250 0 3 959 339 construction, further equipping, reconstruction, partial liquidation
113 Income yielding investments into tangible assets Indicator title Code Availability Received Retired Surplus as of the of line as of the reporting period’s reporting end year’s beginning 1 2 3 4 5 6 Property for leasing out 260 0 0 0 0 Property represented on the hiring contract 270 0 0 0 0
Other 290 0 0 0 0 Totally 300 0 0 0 0 Depreciation of income yielding 305 0 0 0 0 investments into tangible assets
Expenses for scientific research, design and experimental and technological works
Types of works Code Availability Received Retired Surplus as of the of line as of the reporting period’s end reporting year’s beginning
1 2 3 4 5 6 Totally 310 0 0 0 0 including:
Indicator title Code As of the As of the reporting period’s of line reporting year’s end beginning 1 2 3 4 REFERENTIALLY. Amount of expenses on unaccomplished scientific research, design experimental and technological works Indicator title Code For the For the same period of the of line reporting previous year period 1 2 3 4 Amount of expenses which haven’t brought any positive results on scientific research, design experimental and technological works related to extraordinary expenses
114
Expenses for natural resources development
Types of works Code of Surplus as of Received Written Surplus line the reporting off as of the period’s reporting Indicator title Code of line As of the reportingbeginning year’s As of the reporting period’s beginning period’s end end 1 2 3 4 Amount of expenses on subsoil plots, 420 0 0 1 2 3 4 5 6 not finished search and assessment of land deposits, filed survey and (or) hydrogeologicalExpenses for exploring natural resources and other development - totally 410 0 0 0 0 similar works Amount of expenses for natural 430 0 0 resources development relatedincluding: for extraordinary expenses in the reporting period as ineffective ones
115 Indicator title Code Long-term Short-term of line as of the as of the as of the as of the reporting reporting reporting reporting period’s end year’s period’s end year’s beginning beginning 1 2 3 4 5 6 Investments in authorized (joint-stock) 510 0 0 0 0 capitals of other organizations - totally including associated and dependent 511 0 0 0 0 business companies State and municipal securities 515 0 0 0 0
Securities of other organizations - totally 520 459 523 401 355 5 236 0 including debt securities (bonds, bills) 521 0 0 5 236 0
Loans granted 525 0 0 0 2 542 Deposit investments 530 0 0 0 0 Other 535 25 669 27 869 1 455 1 449 Totally 540 485 192 429 224 6 691 3 991 From the total sum financial investments 0 0 0 0 having the current market value: Investments in authorized (joint-stock) capital 550 0 0 0 0 of other organizations - totally including associated and dependent 551 0 0 0 0 business companies State and municipal securities 555 0 0 0 0 Securities of other organizations - totally 560 43 509 60 990 0 0 including debt securities (bonds, bills) 561 0 0 0 0 Other 565 0 0 0 0 Totally 570 43 509 60 990 0 0 REFERENTIALLY. Cost change as a result of the assessment 580 27 243 17 481 0 0 adjustment on the financial investments having the current market value
Financial investments
Receivables and payables
116 Difference on debt securities between the 590 0 0 0 0 initial cost and the nominal cost is related to the reporting period’s fiscal result
Indicator title Code Surplus as of the Surplus as of the of line reporting year’s reporting period’s beginning end 1 2 3 4 Accounts receivable : short term accounts receivable - totally 7 174 302 5 896 758 including: calculations with buyers and customers 4 920 958 4 180 196 advances made 1 463 481 1 341 465 other accounts receivable 789 863 375 097 long-term accounts receivable - totally 218 269 87 013 including: calculations with buyers and customers 55 112 29 711 advances made 12 451 7 079 other accounts receivable 150 706 50 223 Totally 7 392 571 5 983 771 Accounts payable: short-term accounts receivable - totally 11 140 420 6 893 742 including: calculations with suppliers and contractors 3 110 893 2 439 500 advances made 1 884 050 1 807 452 calculations on taxes and charges 282 546 268 994 credits 5 325 766 1 648 654 loans 0 0 other accounts payable 537 165 729 142 long-term accounts payable - totally 8 428 291 15 227 121 including: credits 7 448 894 13 846 729 loans 0 0 other accounts payable 979 397 1 380 392 including: calculations with suppliers and contractors 82 030 52 222 other accounts payable 897 367 1 328 170 TOTALLY 19 568 711 22 120 863
117 Expenses on ordinary types of activities (on elements of cost)
Indicator title Code For the reporting For the previous of line year year 1 2 3 4 Material expenses 710 24 438 331 20 311 523 Expenses for labor payment 720 7 120 805 6 226 260 Allocations for social needs 730 1 618 405 1 401 504 Depreciation 740 3 479 942 3 184 296
Other expenses 750 13 559 773 12 886 630 Totally on elements of cost 760 50 217 256 44 010 213 change of overall surplus (augmentation [+], decrease [-]): of production –in-process 765 3221 3457 deferred expenses 766 -50 141 250 689 reserve of costs to be incurred 767 0 0
Securities Indicator title Code of line Surplus as of Surplus as of the reporting the reporting period’s end year’s beginning 1 2 3 4 Received - totally 12 297 8 405 including: bonds 0 0 Property in pawn 0 0 from this property: 0 0 facilities of fixed assets 0 0 securities and other financial investments 0 0 other 0 0 Issued - totally 694 049 117 580 including: bills 99 465 86 266 Property transferred in pawn 513 376 0 from it: facilities of fixed assets 0 0 securities and other financial investments 0 0 other 513 376 0
State assistance Indicator title Code of line For the F the same period of the reporting period previous year 1 2 3 4 Budget funds received in the reporting year – 910 0 430 totally including: including: MOB reserve special-purpose allowance - other As of the Received for the Given back for As of the reporting period’s reporting period the reporting reporting period’s beginning period end 1 2 3 4 5 6 Budget credits - 920 totally including:
118 Elucidatory note JOINT-STOCK COMPANY “IDGC of Center and Volga Region” ACCOUNTING REPORT FOR 2010
ELUCIDATORY NOTE.
General data Full name is – Joint-Stock Company Interregional Distribution Grid Company of Center and Volga Region.
Shortened name is – IDGC of Center and Volga Region, JSC. Date of state registration: 28 th June of 2007, Number of certificate series 52 # 003273906. Body which makes the state registration – IFTS RF in Nizhny Novgorod region of Nizhny Novgorod city.
Legal address – 33 Rozhdestvenskaya str., Nizhny Novgorod 603950. IDGC of Center and Volga Region, JSC was registered in Nizhny Novgorod on 28 th June of 2007 according to Decree of the Russian Federation Government # 526 as of 11.07.2001 “Main reforming trends of the Russian Federation’s power industry” and to Instructions of the Russian Federation Government as of 01.09.2003 # 1254-r (revised as of 25.10.2004 # 1367-r). IDGC of Center and Volga Region, JSC is formed for the goals of the efficient management by the distribution electric grid complex of Center and Volga Region. The Company is founded by a decision of founder JSC RAO “UES of Russia” (Instruction of the Chairman of the Board of JSC RAO “UES of Russia” # 193r as of 22.06.2007) according to the Civil Code of the Russian Federation, Federal law “On joint-stock companies” and other normative legal acts of the Russian Federation. The Company was formed in realization terms of the next, investment reforming stage of JSC RAO “UES of Russia”, in the course of which the divestment of interregional distribution grid companies took place. The following distribution grid companies were included in the configuration of IDGC of Center and Volga Region, JSC: JSC “Vladimirenergo”, JSC “Ivenergo”, JSC “Kalugaenergo”, JSC “Kirovenergo”, JSC “Marienergo”, JSC “Nizhnovenergo”, JSC “Ryazanenergo”, JSC “Tulenergo”, JSC “Udmurtenergo”. Reorganization of IDGC of Center and Volga Region, JSC was completed by the entries introduction on 29.02.2008 in the Unified State Register of Legal Entities on activities termination of the companies connected to it (JSC “Vladimirenergo”, JSC “Ivenergo”, JSC “Kalugaenergo”, JSC “Kirovenergo”, JSC “Marienergo”, JSC “Nizhnovenergo”, JSC “Ryazanenergo”, JSC “Tulenergo”, JSC “Udmurtenergo”).
9 branches constitute legal person IDGC of Center and Volga Region, JSC:
# # Title Location
1 Vladimirenergo 106, B. Nizhegorodskaya str., Vladimir, 603016 2 Ivenergo 8/2, Krutitskaya str., Ivanovo, 153000 3 Kalugaenergo 35, Grabtsevskoye highway, Kaluga, 248009 4 Kirovenergo 51, Drelevsky str., Kirov, 610000 5 Marienergo 39a, Panfilov str., Ioshkar Ola, 424003 6 Nizhnovenergo 33 Rozhdestvenskaya str., Nizhny Novgorod 603950
119 8 Tulenergo 99, Timiryazaev str., Tula, 300600 9 Udmurtenergo 30, Sovetskaya str., Izhevsk, 426004 7 Ryazanenergo 12, MOGES str., Ryazan, 390013
Authorized capital of IDGC of Center and Volga Region, JSC as of 31.12.2010 amounts to RUR 11 269 782 ths. And is divided to 112 697 817 043 ordinary shares with the nominal cost of 10 copecks each. The number of the Company’s personnel as of the 31 st of December of 2010 amounted to 22074 people. As of 31.12.2009 the number of personnel amounted to 21 559 people.
1.1 Main Trends of the Company’s activities According to the Charter of IDGC of Center and Volga Region, JSC the Company’s main types of activities are: - implementation of the efficient and reliable functioning of the distribution electric grid complex’s facilities; - stable development provision of the distribution electric grid complex; - provision of reliable and good quality power supply of consumers (as to delivery and transmission of electric power); - services rendering on electric power transmission; - operating technological governance; - services rendering on technological connection of power receivers (power installations) of legal and natural person to electric grids; - functions discharging on collection, transmission and processing of technological information, including data of measurements and accounting; - control implementation over safe servicing of electric installations at consumers’ place, connected to the Company’s electric grids ; - activities on electric grids operation; - provision of working efficiency and good condition of the electric grids’ equipment according to the current normative requirements, technical maintenance making, diagnostics, repair of electric grids and other facilities of the electric grid sector; - making of tests and measurements of power installations (including consumers); - provision of working efficiency and good condition, technical maintenance making, diagnostics and repair of technological communication networks, measurement and accounting means, equipment of relay protection and emergency controls and other technological equipment connected to the electric grid sector functioning; - development of electric grids and other facilities of the electric grid sector including designing, engineering surveys, construction, reconstruction, re-equipment, installation and start-up; - development of networks of technological communications and teleautomatics, measurement and accounting means, equipment of relay protection and emergency controls and other technological equipment connected to the electric grid sector functioning, including designing, engineering surveys, construction, reconstruction, re-equipment, installation and start-up; - operation of explosive, chemically hazardous and fire hazardous production facilities; - establishment and development of new machinery and technologies, providing efficiency, fire, production and ecological safety of work of industrial facilities, conditions establishment for the electrical and energy system development of Russia, realization of branch-wise scientific technical and innovation programs, participation in forming of branch-wise funds R&D; - production control implementation over the industrial safety state of hazardous production facilities; - works production on installation, repair and maintenance of fire safety devices of buildings and constructions; - organization and performing of work with the staff, including training and re-training,
120 competence assessment of personnel of the technical operation rules, fire safety rules and occupational safety rules and also other rules and instructions according to the current normative documents at the enterprises of power industry; - carriage of passengers and freight by motor, railway, air and internal water transport (including in relation to hazardous cargos); - activities on the functions discharge of the customer-builder; - designing of buildings and constructions of I and II responsibility levels according to the state standard; - construction of buildings and constructions of I and II responsibility levels according to the state standard; - services of local, intra-zone and long-distance telephony; - lease of communication channels; - services of telematic services (including mail service, service of access to information resources, call center, service TeleFax, service Com-Fax, service BureauFax, service of message processing, service of voice mail, service of voice information transfer); - services of data transfer; - lease of buildings, constructions, equipment, machinery and mechanisms; - safeguarding activity exceptionally for the sake own security interests in terms of security established by the Company, which is guided in its activity by Law of RF “On private detective and guarding activities in RF” and by RF legislation; - activities on technical protection of confidential information; - organization and holding of arrangements on provision of safety and data protection which are of commercial secret; - implementation of other activities types which are not forbidden by the federal legislation.
1.2. Data on the structure of the Company’s governance and control bodies
Company’s governance bodies are: - General Shareholders’ Meeting; - Board of Directors; - Governance Board, - Director General. The following people constitute the Company’s Board of Directors:
1. Perepyolkin Alexey Yurievich – Chairman of the Board of Directors, Deputy Director General of IDGC Holding, OJSC, Member of the Board of IDGC Holding, OJSC. 2. Sergutin Alexey Vladimirovich – a member of the Board of Directors, Director on economics of IDGC Holding, OJSC. 3. Shogenov Valery Mukhamedovich – a member of the Board of Directors, Deputy Director of Department of the machinery of RF Government. 4. Olkey Pavel Ivanovich – a member of the Board of Directors, chief of block of the production activities of JSC “INTER RAO UES”, Executive Director of JSC “WGC-1” (Wholesale generating company), Member of the Board of IDGC Holding, OJSC.
121 5. Inozemtsev Vladimir Vyacheslavovich – a member of the Board of Directors, chief of Department of electric power transportation and power saving of IDGC Holding, OJSC. 6. Syutkin Sergey Borisovich – a member of the Board of Directors, Director General of branch of JSC “SO UES” Operational-Dispatching Office of Center. 7. Kolesnik Dmitry Grigorievich – a member of the Board of Directors, assistant of the Director General of IDGC Holding, OJSC. 8. Chistyakov Vladimir Sergeevich – a member of the Board of Directors, First Deputy Director General of CJSC “Investment holding “Energy Union”. 9. Branis Alexander Markovich – a member of the Board of Directors, Director of company “Prosperity Capital Management (RF) Ltd.”. 10. Spirin Denis Alexandrovich – a member of the Board of Directors, Director on corporate governance of the Representative branch of company “Prosperity Capital Management (RF) Ltd.”. 11. Fil’kin Roman Alexeevich – a member of the Board of Directors, Co-Director, electrical energy industry, machine-building industry of the Representative branch of company “Prosperity Capital Management (RF) Ltd.”.
The following people constitute the Governance Board:
1. Ushakov Evgeny Victorovich – Chairman of the Governance Board, Director General of IDGC of Center and Volga Region, JSC. 2. Andrus Sergey Timofeevich – Deputy Chairman of the Governance Board, Deputy Director General on technical issues – chief engineer of IDGC of Center and Volga Region, JSC. 3. Podol’skaya Lada Alexandrovna – a member of the Governance Board, Deputy Director General on corporate governance of IDGC of Center and Volga Region, JSC. 4. Tikhomirova Olga Vladimirovna – a member of the Governance Board, Deputy Director General on economics and finances of IDGC of Center and Volga Region, JSC. 5. Vefernikov Andrey Yurievich – a member of the Governance Board, Deputy Director General on development and sales of services of IDGC of Center and Volga Region, JSC. 6. Yashanina Irina Victorovna – a member of the Governance Board, Deputy Director General on controlling and external communications of IDGC of Center and Volga Region, JSC. 7. Shits Vladimir Victorovich - a member of the Governance Board, Deputy Director General on capital construction of IDGC of Center and Volga Region, JSC. 8. Prepodobny Alexander Vasilievich – a member of the Governance Board, Deputy Director General on safety of IDGC of Center and Volga Region, JSC. 9. Nikitushkin Evgeny Vladimirovich – a member of the Governance Board, chief of Treasury of IDGC of Center and Volga Region, JSC.
The following people constitute the Checkup Committee:
1. Alimuradova Izumrud Aligadzhievna – Chairperson of the Checkup Committee, Chief of the internal audit Department of IDGC Holding, OJSC. 2. Arkhipov Vladimir Nicolaevich – a member of the Checkup Committee, First Deputy Chief of the safety Department of IDGC Holding, OJSC. 3. Rokhlina Olga Vladimirovna – a member of the Checkup Committee, Chief expert of the department on audit organization and holding of the internal audit Department of IDGC Holding, OJSC. 4. Filippova Irina Alexandrovna – a member of the Checkup Committee, Key expert of the department on audit organization and holding of the internal audit Department of IDGC Holding, OJSC. 5. Ivanova Kseniya Valerievna – a member of the Checkup Committee, Chief of the department of information disclosure of the Department of corporate governance and cooperation with shareholders of IDGC Holding, OJSC.
122 2. Accounting policy
The accounting reports are prepared on basis of the Branches’ consolidated data, according to the accounting policy of IDGC of Center and Volga Region, JSC approved by order # 332 as of 31.12.2009 “On accounting policy of IDGC of Center and Volga Region, JSC for 2010”.
2.1. Basis of compilation
The Company’s accounting reports are formed on basis of the Russian Accounting Standards effective in the Russian Federation, in particular on basis of Federal law # 129-FL as of 21.11.1996 “On bookkeeping”, Russian Accounting Standard “Accounting policy of an organization” RAS 1/98, approved by order of the Ministry of Finances of the Russian Federation # 60n as of 09.12.1998, Provision on maintenance of accounting records in the Russian Federation approved by order of the Ministry of Finances # 34n as of 29.07.1998.
2.2. Assets and obligations in foreign currencies
Under economic operations accounting, settled in foreign currencies, they applied the official rate of RUR which was effective as of the day of an operation transaction.
2.3. Intangible assets
Bookkeeping of intangible assets is made according to RAS 14/2007, approved by order of the Ministry of finances of Russia # 153n as of 27.12.2007. Depreciation of intangible assets is made by a linear way, on basis of the useful life of intangible assets. Useful life term is defined by the Company’s commission. No depreciation is accrued on intangible assets with an indefinite useful life.
2.4. Fixed assets Bookkeeping of fixed assets is made according to RAS 6/01, approved by order of the Ministry of Finances of Russia # 26n as of 30.03.2001 (as amended and revised). The fixed assets composition reflects land plots, buildings, constructions, machinery, equipment, transport facilities and other facilities with the service life of over 12 months and initial cost of over RUR 20 ths. per unit. Assets in relation of which the conditions of item 4 of RAS 6/01 “Accounting of fixed assets” are fulfilled and with the cost of no more than RUR. 20 ths. per unit, are accounted in the inventories’ structure. Facilities which take part in electric power transmission (0,4 kv OL, 10 kv OL, 10/04 kv transformer substations and other), and in relation of which the conditions stipulated by item 4 of RAS 6/01 “Accounting of fixed assets” are fulfilled, are reflected in the bookkeeping in the fixed assets’ structure irrespectively of the cost. Facilities of the fixed assets are entered in accounting records on the actual expenses for their acquisition.
123 Fixed assets are shown in the reports on the initial cost minus depreciation accrued for all the time of operation. Cost of the enterprise’s fixed assets is redeemed by way of a monthly accrual of depreciation by a linear way, on basis of these facilities’ useful life. Depreciation is accrued on the fixed assets’ facilities entered in accounting records before 01.01.2002, according to the Decree of the Council of Ministers of USSR # 1072 as of 22.10.1990 “On united norms of depreciation charges for the full recovery of the fixed assets of the national economy of USSR”. On the fixed assets’ facilities entered in accounting records beginning from 01.01.2002 the depreciation is accrued on norms of depreciation charges approved by Decree of RF Government as of 01.01.2002 # 1 “On classification of the fixed assets included in the depreciation groups”. Fixed assets, the rights on which are subject to the state registration according to the Russian Federation legislation and on which the capital investments are finished, the corresponding primary accounting documents are drawn up on the delivery - take-over, documents are transferred to the state registration and are actually operated, are entered in accounting records as the fixed assets with singling out at a separate sub-account to the financial account of fixed assets. Depreciation is accrued on such facilities according to the general order from the first date of a month which follows the month of the facility putting into service. Revenues and expenses form sales, writing off of fixed assets and also the gratuitous transfer of fixed assets are reflected in the profit-and-loss Statement in the structure of other revenues and expenses. Fixed assets received for the lease according to the lease agreement’s clauses are accounted for the balance at off-balance account 001 “Leased fixed assets”. The depreciation on them is accrued by the lessor.
2.5. Inventories Bookkeeping of inventories is made according to RAS 5/01, approved by order of the Ministry of Finances of Russia # 44n as of 09.06.2001 (as amended and revised). Inventories are entered in accounting records on the actual prime cost. Instruments, inventory, household accessories with the service life of less than a year are accounted in the inventories’ structure. Special fitting and special clothing independently of the cost and service life, are accounted in the structure of active assets. Cost of special clothes, the term of operation doesn’t exceed 12 months is subject to the nonrecurrent writing off under transfer to operation. Cost of special clothes with the service life of over 12 months is redeemed by a linear way on basis of the useful life. Inventories written off to production, retired on other grounds are assessed on the average prime cost. 2.6. Financial investments Bookkeeping of financial investments is made according to RAS 19/02, approved by order of the Ministry of Finances of Russia # 126n as of 10.12.2002 (as amended and revised). The financial investments’ structure accounts investments in securities, shares, bonds, authorized (joint-stock) capitals of other organizations, loans represented to other organizations, deposit investments in credit organizations, debt receivable acquired on basis of assignment of right of demand, and also on basis of a bill in case of their acquisition on purchase and sale agreements.
124 All the financial investments are entered in accounting records in the sum of the actual expenses for their acquisition. Financial investments, on which one can define the current market value in the established order, are reflected as of the reporting year’s end by the current market value by way of their accounting value’s adjustment to the market value. Difference between the financial investments’ assessment on the current market value as of the reporting date and the previous assessment of financial investments is acknowledged by the Company as other revenues and expenses. Accounting of financial investments on basis of their assumed service life is made with a breakdown into long-term and short-term financial investments.
Financial investments are subdivided into two groups: on definition of the current market value; on non-definition of the current market value. Investments in authorized (joint-stock) capitals of other organizations are acknowledged as financial investments of an organization and are reflected in the accounting records in the sum of the investor’s actual expenses, i.e. on the cost of assets entered on the investment’s account, on which they were reflected in the Company’s bookkeeping balance sheet.
2.7. Accounting of capital investments
Capital investments are connected to: the capital construction implementation in form of new construction and also reconstruction, enlargement and re-equipment; acquisition of buildings, constructions, equipment, transport facilities and other separate facilities (or their parts) of the fixed assets; acquisition of land plots and land use facilities; acquisition and establishment of intangible assets.
Accounting of construction-in-process is made on separate facilities of construction.
Capital investments made in the course of works of capital character fulfilled for the Company are reflected in the accounting as far as they are fulfilled on basis of the signed acceptance certificates.
2.8. Loans and credits Accounts payable on the received credits and loans is accounted and reflected in the reports subject to interest payable as of the reporting period’s end. The accrued amounts of interest are accounted separately. Interest on the received loans and credits relating directly to the acquisition and (or) construction of an investment asset, are included in this asset’s cost and redeemed by way of the depreciation accrual. Exception are the cases when no depreciation accrual of the asset is stipulated by the Russian Accounting Standards.
2.9. Deferred expenses Expenses made by the Company in the reporting period but relating to the next reporting periods are reflected as deferred expenses.
125 The given expenses are subject to writing off evenly for the intended purpose within the periods to which they relate.
2.10. Accounting of calculations, other assets and obligations Assets and obligations in the reports are related to short-term ones if their circulation period doesn’t exceed 12 months after the reporting date. All the rest assets and obligations are represented in the reports as long-term ones.
Indebtedness of buyers and customers is defined on basis of prices established by the contracts between the Company and buyers and is reflected in the balance minus the reserve on doubtful debts. The Company establishes the reserve on doubtful debts by the results of inventory of receivables made annually. The reserve amount is defined separately on each doubtful debt depending on the financial state (solvency) of a debtor and probability assessment of the debt redemption fully or partially.
Indebtedness which is unreal to collect is subject to writing off from the balance as far as it’s acknowledged to be such.
Deferred tax assets and deferred tax liabilities in the accounting records are reflected extensively. Taking inventory of property and obligations is made according to article 12 of Federal law # 129- FL as of 21.11.1996 “On bookkeeping” (as amended and revised) and methodological instructive regulations on inventory taking of property and financial obligations approved by order # 49 of the Ministry of Finances of the Russian Federation as of 13.06.1995.
2.11. Authorized, added and reserve capital Authorized capital is reflected in the sum of the ordinary shares’ nominal value acquired by shareholders. The authorized capital’s amount corresponds to that established in the Company’s Charter. The Company’s Charter stipulates the establishment of the reserve and other funds necessary for its activity. The Company establishes the reserve fund in the amount of 5% from the Company’s authorized capital. The Company’s reserve fund is meant for its losses coverage and also for bonds redemption of the Company and buyback of the Company’s shares in case of other funds absence and can’t be used for other goals. Order of forming and usage of the Company’s funds is defined by the Company’s Board of Directors. 2.12. Reserves for future expenses No reserve for future expenses has been formed in IDGC of Center and Volga Region, JSC. 2.13. Acknowledgement of a revenue Proceeds are entered in the accounting records in the amount calculated in money terms being equal to the amount of cash inflow and other property and (or) the amount of accounts receivable. According to the accrual principle the joint-stock company’s revenues are acknowledged in that reporting period in which they took place independently of the actual time of cash inflow.
126 2.14. Acknowledgement of an expense
The Company subdivides expenses into expenses on ordinary types of activity and other expenses. Accounting of expenses for manufacture of production (production of works, services) is made separately of the capital character’s expenses. Expenses are included in the prime cost of production of that period to which they relate, independently of their payment time with division on activities types and on places of origin. Prime cost of services on transmission and distribution of electric power represents the totality of expenses connected to maintenance and operation of power transmission lines, means of accounting and control of electric power, substations and other constructions and equipment meant for transmission and distribution of electric power.
Accounting of expenses for production, prime cost calculation of the main production (works, services) is made on the calculation variant, with the expenses distribution to direct and indirect, calculation of the full prime cost of production (works, services). Expenses on electric power transmission are accounted in the structural subdivisions (places of their occurrence) with a breakdown into the cost items and elements of expenses and are transferred to the branches to form the production prime cost. Expenses connected to the governance of the Executive Body are distributed in the branches in proportion to conventionally constant expenses.
Process of electric power transmission is characterized by the production-in-process absence. Expenses incurred under the given activity type implementation are acknowledged expenses in the full amount.
Prime cost of other works and services represents the total expenses connected to their realization.
2.15. Changes in the accounting policy
No essential changes and amendments were introduced in the accounting policy.
2.16. Conformity of the reporting indicators for the previous year
The following amendments were introduced in the Company’s accounting balance as of 01.01.2010: -Transfer of the credit obligations’ sum subjected to redemption within 2010 from line 511 “Credits of banks subjected to redemption in more than 12 months after the reporting date” to line 611 “Credits of banks subjected to redemption within 12 months after the reporting date” in the amount of RUR 3 958,179 mln. -Transfer of the deferred expenses’ sum with the term of writing off of more than 12 months after the reporting date” from line 216 “Deferred expenses” to line 150 “Other noncurrent assets” in the amount of RUR 566,910 mln.
3. Disclosure of the reports’ essential indicators
3.1. Intangible assets (line 110 of the Bookkeeping balance sheet) As of 31.12.2010 the structure of intangible assets has software with the cost of RUR 17,8 mln. and trademarks with the cost of RUR 0,3 mln. Intangible assets received for usage on basis of license agreements, are reflected at off-balance account in the assessment defined on basis of the remuneration amount, established in contracts, in the amount of RUR 116,9 mln.
127 3.2 Fixed assets (line 120 of the Bookkeeping balance sheet) The Company’s fixed assets’ cost in the bookkeeping balance sheet is reflected by the residual value.
All the fixed assets’ cost is distributed by groups: (RUR. mln)
# Name of the fixed assets’ Recovery value as of Residual In % to group 31.12.10 value the result 1 31.1 2.10 31.12.10 2 Land plots 55 9 55 5 0,1 3 Buildings 604 490 11,4 Constructions and transfer 77 377 26 465 54,8 4 devices 5 Machinery and equipment 43 953 15 746 32,6 Other fixed assets 1 518 539 1,1
TOTALLY: 132 507 48 295 100 Residual value of the fixed assets as of 31.12.2009 is RUR -44 408 mln., as of 31.12.2010 RUR -48 295 mln. The amount increase of the fixed assets is explained the new facilities introduction at the sum of RUR 7 287 mln., entry as a result of inventory taking in the sum of RUR 153 mln., sales RUR -0,8 mln., transfer to the joint activities RUR -27,9 mln., transfer to operating governance RUR -3,6 mln., liquidation and other retirement RUR -22 mln. and the depreciation accrual. Depreciation of the fixed assets before 01.01.2002, is accrued by a linear way on the norms approved by Decree of USSR Government # 1072 as of 22.10.1990, acquired after 01.01.2002, on basis of the norms accrued on basis of the useful life established by Decree of RF Government # 1 as of 01.01.2002 (as amended and revised). Accrued wear as of the reporting year’s end amounted to : Buildings -43 % Constructions and transfer devices -66 %
Machinery and equipment -64 % Other fixed assets -65 % Reappraisal of the fixed assets of IDGC of Center and Volga Region, JSC was not made as of 01.01.2010. Cost of the fixed assets’ facilities received on lease agreements and accounted at off-balance account 001, amounts to RUR 5 299 mln., from this amount RUR -78 mln. – on financial lease contracts. Fixed assets, leased out and accounted at off-balance account 011, amount to RUR 13 mln.
3.3 Construction-in-process (line 130 of the Bookkeeping balance sheet) Company makes the construction and reconstruction of production facilities. Within the reporting year the Company made expenses at the sum of RUR 7 722 mln., the expenses at the sum of RUR 7 532 mln. are put into service and written off, the expenses at the sum of RUR 4 535 mln. are left in the construction-in-process.
The following large facilities are itemized in the structure of construction-in-process: 1. Construction of substation “Strelka” – RUR 306,4 mln. 2. Construction of 110/6 kv substation “Ivanovskaya-15” – RUR 103,1 mln. 3. Construction of 110/6 kv substation Bogorodsk-1 – RUR 52,6 mln. 4. Reconstruction of substation Kanavinskaya - RUR 60,6 mln.
128 5. Reconstruction of 110 kv substation Vorsino – RUR 150,8 mln. 7. Construction of 110 kv substation Detchino - RUR 234,1 mln. 8. Construction of 110/10 kv substation “Varvarskaya” – RUR 138,9 mln. 9. Reconstruction of a crossing of 110 kv OL # 118 through Oka river – RUR 56,4 mln. 10. Construction of 10 kv CL (Power supply of building-up of micro district Pravgorod of Kaluga city for power supply organization of plant “Volvo”) – RUR 66,5 mln. 11. Reconstruction of 110/35/6 kv substation “Perekop” – RUR 81,5 mln. 12. Reconstruction of 110 kv OL, adjoining to 110 kv substation “Perekop” - RUR 280,3 mln. 13. Reconstruction of 110 kv OL “Luzhnoye-Malakhovo” – RUR 86,6 mln. 14.Construction of 110 kv substation “Tovarkovo” – RUR 68,7 mln. Within the reporting year the equipment for installation at the sum of RUR 692 mln. was acquired and transferred for installation at the sum of RUR 583 mln. Equipment for installation amounted to RUR 908 mln. as of the reporting year’s end.
3.4 Long-term financial investments (line 140 of the Bookkeeping balance sheet) Long-term financial investments of the Company as of the reporting year’s end amount to RUR 429 mln. In the reporting period the financial investments increase has amounted to RUR 55,6 mln., it’s connected to: -participation in the foundation of associated company OJSC “IESC “Energy-Efficient Technologies”, the amount of contribution has amounted to RUR 10,2 mln.; -contracts conclusion on the joint activities with “Energo-PS”, LLC in the amount of RUR 27,9 mln. -difference between the shares’ assessment by the current market value as of 31.12.2010 in the amount of RUR 17,5 mln. Financial investments decrease amounted to RUR 111,5 mln. in the reporting period. It’s connected to the provision charge for impairment of investments.
Revenue from long-term financial investments amounted to RUR 0,012 mln. in 2010.
3.5 Inventories (line 210 of the Bookkeeping balance sheet) Inventories are assessed in the actual expenses’ sum for their acquisition, their amount as of the year’s end is RUR 870 mln., 8,3 % from the current assets or 1,3 % from all the Company’s assets.
3.6 Deferred expenses (lines 150 and 216 of the Bookkeeping balance sheet) In form 1 “Bookkeeping balance sheet” the deferred expenses with the maturity of over than one year, are reflected in section I “Noncurrent assets” by line 150, the deferred expenses with the maturity up to one year are reflected in section II “”Current assets” by line 216. (RUR mln.)
Type of deferred expenses Long-term Short-term
Line 150 Line 216 Software products 366,6 5,2 Licenses 6,2 0,1 Insurance 12,2 47,0 Leave allowances of future periods - 8,3 - Expenses on registration of rights for land plots 257,7 3,5 Other 51,2 Totally 693,9 64,1
129 3.7 Indebtedness of buyers and customers (lines 230 and 240 of the Bookkeeping balance sheet) The Company’s main activities types are services rendering on transmission and distribution of electric power in the grids and services rendering on technological connection to the grids. Tariffs for the given activities types are approved by the Regional Services on Tariffs of Vladimir, Ivanovo, Kaluga, Kirov, Nizhny Novogorod, Ryazan, Tula regions, those of Marii El and Udmurt Republics. Debt receivable of the Company, payments on which are expected in over 12 months after the reporting date, amount to RUR 87 mln. as of 31.12.2010. Interpretation of debt receivable by line 230 (RUR mln.) # Indicator title Sum 1 Buyers , customers , 29,7 From them: -Municipal Unitary Enterprise “Kirzhachskaya city electric grid” 5,9 -CJSC “Agroindustrial firm Paran’ginskaya” 3,7 - Agricultural production co-operative Collective Farm “Rodina” 1,5 2 -other debtors 18,6 3 Indebtedness of subsidiaries and affiliates 1,7 4 Bills receivable - 5 Advances made 7,1 Other debtors 48,5 from them: -Department of the state property of Kirov region 9,9 -JSC “Territorial generating company-5” 23,0 -other debtors 15,6 Totally: 87,0 Debt receivable of the Company, payments on which are expected within 12 months after the reporting date, amounts to RUR 5 897 mln. as of 31.12.2010. Interpretation of debt receivable by line 240: (RUR mln.) # Indic ator title Sum 1 Buyers, customers , 4 180, 2 from them: -JSC “Nizhny Novgorod sales company” 386,6 -JSC “Tula sales company” 460,5 -JSC “Tula energy sales company” 145,6 -JSC “Kirovenergosbyt” 534,3 -JSC “Udmurt energy sales company” 437,8 -JSC “Kaluga sales company” 306,2 -LLC “Rusenergosbyt” 109,0 -JSC “Vladimir communal systems” 100,9 -JSC “Vladimirenergosbyt” 131,1 -other 1 568,2 2 Indebtedness of subsidiaries and affiliates 5,4 3 Bills receivable 0 4 Advances m ade 1 341,5 from them: -JSC “UES FGC” 1151,9 -CJSC “NPSKH “Metallokonstruktsiya” 33,0 -LLC “Geokom” 20,5
130
5 -other 136,1
Other debtors 369,7 from them: -overpay on taxes in the budget and non-budgetary funds 145,1 - JSC “Territorial generating company-5” 92,0
-JSC “IZTS” 8,8 -LLC “Gaspromenergo” 9,3 -JSC ‘Kirov plant” 5,9 -other 108,6 Totally: 5 896,8
131 As a result of the inventory taken as of 31.12.2010 the debt receivable unreal to collect is written off from the proceeds in the amount of RUR 17,6 mln., the reserve on doubtful debts in the amount of RUR 119,8 mln. has been made. As of the reporting year’s end the reserve surplus on doubtful debts amounted to RUR 360 mln. 3.8 Short-term financial investments (line 250 of the Bookkeeping balance sheet) As of 31.12.2009 the short-term financial investments amounted to RUR 6,7 mln. Within the reporting year the short-term financial investments were acquired for the sum of RUR 552,1 mln., from them – bills were acquired for the sum of RUR 549,6 mln., the short-term loan in the amount of RUR 2,5 mln. was given. Bills for the sum of RUR 43,8 mln. were sold, bills at the sum of RUR 511 mln. were presented to redemption. Short-term financial investments of the Company amounted to RUR 4 mln. as of 31.12.2010, from them the loans were given for the sum of RUR 2,5 mln., the assignment of choses in action – for the sum of RUR 1,5 mln.
3.9 Other long-term obligations (line 520 of the Bookkeeping balance sheet) The structure of long-term obligations reflects the long-term accounts payable to suppliers and contractors, advances received on the technological connection contracts with a long term of the obligations fulfillment, bills payable. Interpretation of other long-term obligations by line 520 (RUR mln.)
# Indicator title Sum Long -term accounts payable amounts to : 1 380,4 1 including: Suppliers and contractors : 52,2 from them: 2 -CJSC “Energoleasing” Other long -term obligations 1 328,2 from them: - Advances on technological connection contracts: 1098,9 including: LLC “ARTSTROY” 204,5 CJSC “Nautilus” 29,3 LLC “Ryazan Shopping MOL Limited” 40,6 LLC “Exline” 67,2 LLC “Kvartstroy-NN” 19,8 LLC “Hotel-service” 26,0 JSC “Giprogascenter” 15,9 LLC “Gasprom transgas Nizhny Novgorod” 18,3 other 677,3 -Bills payable 229,1
132 The structure of the long-term accounts payable reflects own bills transferred to payment by JSC RAO “UES of Russia” against indebtedness of the connected DGC: on the dividends payout of JSC “Kirovenergo” in the sum of RUR 79,2 mln. and JSC “Nizhnovenergo” against indebtedness on interest and penal sanctions in the amount of RUR 149,9 RUR mln. Maturity of bills is till the year of 2020.
3.10 Loans and credits (lines 510 and 610 of the Bookkeeping balance sheet) The Company attracted long-term credit resources in the amount of RUR 8 785,0 mln. within 2010. Long-term credit resources are attracted for the investment activities financing. Maturity of long-term credit obligations is till the year of 2015. Indebtedness redemption takes place timely according to the concluded contracts. Within 2010 they attracted short-term credit resources in form of the bills novation in order to reduce expenses on the borrowed funds service in the sum of RUR 521,9 mln. Transfer from the long-term credits in short-term ones, subjected to redemption within 2011 amounts to RUR 1 079,8 mln. (RUR mln.) Indebtedness as Received / Given back Reclassificatio Indebtedness as of 01.01.2010 accrued /redeemed n of of 31.12.2010 indebtedness Long-term 7 448,9 8 785,0 1 307,4 -1 079,8 13 846,7 credits Interest 366,8 1 194,1 1 514,2 46,7
Short-term credits 4 958,2 521,9 4 958,2 1 079,8 1 601,7
Interest 0,8 25,0 25,5 0,3
The amount of interest payable for 2010 has amounted to RUR 1 219,1 mln, from them RUR 230,8 mln. are included in the investment assets’ cost, RUR 988,3 mln. are charged to other expenses. The following securities are accounted at off-balance account 009 "Securities given for obligations and payments" as of 31.12.10: contracts of guarantee for the leased equipment for the sum of RUR 30,2 mln., for the represented credit resources for the sum of RUR 1,1 mln., endorsement on bills transferred on account of settlements for the delivered production for the sum of RUR 86,3 mln.
3.11 Short-term accounts payable (line 620 of the Bookkeeping balance sheet)
Interpretation of the accounts payable by line 620 ( in RUR mln. ) # Indicator title Sum Short -term accounts payable amounts to : 5 245,1 1 including: Suppliers and contractors : ( line 621 of the balance) 2 439,5 From them: -JSC “UES FGC” 710,4 -JSC “Nizhny Novgorod sales company” 179,1 -JSC “Kommunenergo” 94,5 -JSC “Udmurt energy sales company” 93,1 -JSC “Marienergosbyt” 59,6 -JSC “Vladimir regional electric grid company” 74,0 -Municipal Unitary Enterprise “Gorelektroset’” 52,0
133 -JSC “Vladimirenergosbyt” 78,3 - Municipal Unitary Enterprise “Izhevsk electric grids” 52,8 2 -other 1 045,7 Indeb tedness towards subsidiaries and affiliates (line 67,4 3 623 of the balance) 4 Indebtedness on payment of labor (line 624 of the balance ) 331,5 Indebtedness to the state non -budgetary funds (line 625 of the balance ) 174,4 from them: -to Pension Fund of RF 135,2 -to Obligatory Health Insurance Fund 21,3 -to Social Insurance Fund 9,5 5 -on forfeitures in the state non-budgetary funds 8,4 Indebtedness towards the budget ( line 626 of the balance ) 269,0 from them: -to the federal budget 22,6 -to the budgets of RF constituent entities 227,4 6 -to the local budgets 19,0 Advances made ( line 627 of the balance) 1 807,5 from them: -JSC “Corporation of development of Kaluga region” 179,2 -JSC “Kvadra-Generating company” 86,6 -LLC “FORT” 37,8 -Administration of the city economy of Kaluga 130,2 -LLC “LEMMINKYANEN INVEST” 56,7 -LLC “Transstroyinvest” 30,0 -LLC “RN-Energo” 60,1 -LLC “Energo Service” 41,4 7 -other 1185,5 Other creditors ( line 628 of th e balance) 155,8 from them: -LLC “Rosgosstrakh” 27,0 -JSC “SOGAS” 24,1 -JSC “AlfaInsurance” 32,53 -CJSC “MAX” 23,06 -other 49,1 As of the reporting period’s end the Company’s accounts payable amounted to RUR 6 625,5 mln., including that on the main items: - to construction organizations – at the sum of RUR 90,0 mln. (according to the Company’s investment program); -to repair organizations – at the sum of RUR 29,3 RUR mln.; -to other suppliers and contractors - RUR 2 372,4 RUR mln.; -on advances received at the amount of RUR 2 906,6 mln.
3.12 Company’s shares As of 31.12.2010 the Company’s authorized capital amounted to RUR 11 269 781 704,30 and is composed of:
Nominal value (RUR) Total number (pcs.)
Ordinary shares 112 697 817 043 0,10
134
Privileged shares 0 0
TOTALLY: 112 697 817 043 0,10
Shareholders of IDGC of Center and Volga Region, JSC who own over 5% of the Company’s shares
Stake in the authorized capital, % IDGC Holding, OJSC 50,3997 Closed Joint-Stock Company “Depositary-Clearing Company” (Nominal 35,8339 holder)
3.13 Capital and reserves As of 31.12.2010 the added capital amounted to RUR 24 607 mln. In 2010 the added capital decrease took place, owing to writing off of reassessment for retained earnings of the previous years, under retirement of the fixed assets’ facilities in the amount of RUR 23 mln. The Company makes the Reserve fund in the amount of 5 % of the Company’s authorized capital. Amount of obligatory annual allocations according to the Company’s Charter is 5 % from the net profit till the established amount achievement by the Reserve fund. By the results of 2009 RUR 21,3 mln. were charged in the reserve fund. As of the reporting year’s end the reserve capital amounted to RUR 447,3 mln. As of 31.12.2009 the Company’s retained earnings amounted to RUR 4 121,5 mln. The following changes of the retained earnings took place for the reporting period: RUR 21,3 mln. were directed in the reserve fund, reappraisal on the retired fixed assets in the amount of RUR 23 mln. were received from the added capital. Net profit of the Company’s reporting year amounted to RUR 1 397,8 mln.
Company’s retained earnings as of 31.12.2010 amounts to RUR 5 521 mln.
Company didn’t pay any dividends for 2009.
3.14 State assistance IDGC of Center and Volga Region, JSC didn’t get any state assistance in the reporting year. 3.15 Main subsidiaries and affiliates
Title of subsidiary Stake in Location Type of activities the authoriz ed capital %
135 JSC “Berendeevskoye” 100 Rural settlement Production, processing and sales of Berendeevka, agricultural production. Lyskovsky district, Nizhny Novgorod region , 606241 CJSC “Svet” 100 16, Pobeda str., Electric power transmission worker’s settlement Sharanga, Nizhny Novgorod region , OJSC “Agricultural 100 Village606840 Luchinskoye, Production, processing and sales of Enterprise Sobinsky District, agricultural production. “Luchinskoye” Vladimir region JSC “Motor transport 100 50, Yuzhnaya Rendering of transport services of enterprise” str.,settlement Orichi, warehousing, maintenance of motor 4 Orichevsky district, transport facilities, intermediary Kirov region, services, repairs and maintenance of transport, services on re- equipping and assessment of transport. JSC “Sanatorium- 100 10, Aviatsionnaya str., Services rendering to the 5. preventorim Izhevsk city, Udmurt population of medical, sanatorium- “Energetik” Republic, 426009 resort, health and fitness character, services on accomodation (temporary residence), nourishment and servicing. JSC “IEC “Energy 51 6, Proviantskaya str., Scientific exploration and 6. efficient technologies” Nizhny Novgorod, developments as to natural and 603155 technical sciences. OJSC 50 101 А, Timiryazev str., Material-technical supply , 7. “Tulenergocomplect” Tula, 300600 operation and maintenance of motor transport, transport services.
3.16 Core business profit and expenditure Profit and expenditure for the reporting year are reflected in the profit and loss report separately in common kinds of activity, in other profit and expenditure with a breakdown in kinds and amounts. (mln. RUR) Title of Index Year 2010 Year 2009 Total earnings (Line 010 of Form No.2) 54 395 47 191 Including those from sale of: services in power transportation 53 106 45 689 services in technological connection 954 1 175 rental services 116 144 from sale of other industry-related goods, products, works, services 208 172 from sale of other noncommercial goods, products, works, services 11 11 Total prime cost (Line 020 of Form No.2) 50 217 44 010 Including those from sale of: services in power transportation 49 850 43 622 services in technological connection 230 259 rental services 26 35 from sale of other industry-related goods, products, works, services 93 75 from sale of other noncommercial goods, products, works, services 18 19 136 Sales profit 4 178 3 181
3.17 Other profit and expenditure Other profit and expenditure consist of the following groups: (mln. RUR) Title of Index Year 2010 Year 2009 Other profit 905.3 850.6 including that from: - sale of fixed assets 1.4 4.7 - sale of inventories 19.4 12.2 - sale of securities and other assets 46.9 533.8 - property surplus in accordance with the results of inventory 135.0 4.4 - donated assets, except for FA and ITA 0.4 18.2 - profit from FA liquidation, reconstruction, repair 15.5 18.0 - bad debts allowance recovery 257.0 > - recovery of damages 185.5 127.7 - accounts payable dated back for more than 3 years 11.3 8.2 - variation of book value for the financial investments 17.5 28.5 - profit of prior years 101.3 26.8 - statutory fines, penalties, forfeits 53.8 47.1 - profit from donated FA 8.9 8.8 - other 39.4 12.2 Other expenditure 1 831. 32 2108.2 including that from: - sale of fixed assets 0.3 2.9 - sale of inventories 13.3 8.8 - sale of securities and other assets 46.9 530.4 - bad debts allowance 119.8 507.7 - reserve for financial investment depreciation 111.5 - - contributions to NPF 40.3 36.0 - accounts receivable dated back for more than 3 years 17.6 297.7 - variation of book value for the financial investments - 1.3 - social and entitlement payments to employees 240.9 215.4 - sports and social events 10.5 9.9 - discount on notes 51.0 92.9 - residual value of liquidated FA, construction-in-process, inventories 42.2 39.5 - allocations to power-saving fund - 40.1 - banking services 40.6 48.3 - taxes out of the company’s funds 40.9 18.6 - remuneration to the members of the Board of Directors 17.8 12.0 - charitable contributions - 2.1 - social facilities maintenance 16.2 18.4 - loss of prior years 846.5 79.9 - membership dues 5.2 16.3 - allocations to trade unions 38.5 31.7 - statutory fines, penalties, forfeits 17.9 0.7 - other 113.4 97.6
3.18 Information on the usage of power resources In accordance with § 5 Article 22 of Federal Law No. 261 “On energy-saving, increasing power efficiency, and amending certain legislative enactments of the Russian Federation” as of 23.11.2009, expenditure of the Company for paying used power resources was as follows (w/t VAT):
137 (mln. RUR) Title of Index Year 2010 Year 2009 Power supply for loss compensation 10 970 .9 9 975 .9 Power supply for housekeeping 355.0 295.3 Heat power for housekeeping 47.4 38.6 Total: 11 373.3 10 309 .8
3.19 Taxes In accordance with the accounting policy of IDGC of Center and Volga Region, JSC, for taxation purposes, the Company computes and pays taxes and duties as consistent with the legislation of the Russian Federation on taxes and duties, legislation of the RF constituents on taxes and duties, legal enactments of the local authorities on taxes and duties. For taxation purposes, the Company acknowledges earnings from sale with regard to computation of value-added tax and income tax on accrual basis. The other taxes are treated in accordance with the Tax Code of the Russian Federation, Legislation of the Russian Federation, and RF constituents on taxes and duties. Accordingly, for the reporting year, the main tax liabilities of the Company can be represented as follows:
(mln. RUR)
Budgets Accounts receivable Accounts Restructured (fines, payable penalties) Federal budget 104.6 22.6 - Budgets of the RF territories 18.0 227.4 - Local budgets 6.5 19.0 -
The amount of value-added taxes payable for the year 2010 is RUR 2 007 000 000. The amount of the current income tax for the reporting year is RUR 613 600 000, on the basis of accounting records (contingent expenditure) RUR 461 100 000. The difference between the data of the book-keeping and tax accounting resulted from income (expenses) negligible for the taxation purposes (regular tax liabilities) in the amount of RUR 450 200 000, and income (expenses) accepted in the book-keeping and tax accounting for different reporting periods (deferred tax assets in the amount of RUR 16 100 000, and deferred tax liabilities in the amount of RUR 313 800 000). The deferred tax liabilities followed from the difference of accounting interest rates in credit instruments, and depreciation of fixed assets in the book-keeping and tax accounting.
3.20 Earnings per share The basic earnings per share reflect part of reporting period income, which can potentially be distributed between the shareholders, or owners of ordinary shares. It is calculated as a ration of basic earnings for the reporting period to the weighted average amount of ordinary shares in circulation, during the reporting year. The basic earnings equals net income of the reporting year (Line 190 of the profit and loss report) after deduction of dividends in cumulative preferred shares.
Title of Index Year 2010 Base profit ( loss ) for the reporting year , ths . RUR 1 397 757 Weighted average amount of ordinary shares in 112 697 817 043 circulation during the reportin g year , pcs. Base profit (loss) per share, RUR 0.0124
138
In connection with the absence of securities convertible into ordinary shares of the Company, and with the absence of any events related to the increase in the amount of ordinary shares, the Company does not prepare estimates of watered earnings per share.
3.21 Related parties
The notes of the Company disclose the most significant information on the related parties. The list of the affiliated entities is available on the web-site of the Company: http://www.mrsk- cp.ru/?id=2933
Sale of products to the affiliated entities
In the reporting year, IDGC of Center and Volga Region, JSC, rendered the following services to the affiliated entities: (in mln. RUR w/o VAT)
OJSC "Health OJSC “Motor CJSC “Svet” Resort Transport "Energetic"" Eenterprise” 1. Industry -related services - 0.233 0.5 2. Noncommercial services - 0.009 - 3. Rental fee 0.418 3.596 0.061 Total 0.418 3.838 0.561
Procurement from the affiliated entities
In the reporting year, IDGC of Center and Volga Region, JSC, enjoyed services from the affiliated entities in the following areas: (in mln. RUR w/o VAT)
Holding of CJSC “Svet” OJSC OJSC OJSC “Motor IDGC, JSC “Agricultural "Health Transport Enterprise Resort Enterprise” “Luchin skoye” "Energetic"" 1. Industry-related services 321.0 24.51 - 2.311 139.045 2. Noncommercial services - 1.6 - 3. Delivery of goods - 0.746 - - 4. Transportation services - - - 382.036 5. Rent al fee 0.571 Total 321.0 24.51 0.746 3.911 521.652
Status of accounts with the affiliated entities
As of 31 December 2010, the debt of the affiliated entities towards the Company is as follows:
(mln. RUR) Amount Accounts receivable of IDGC of Cen ter and Volga Region , JSC OJSC "Tulenergocomplect" 2.15 OJSC “Agricultural Enterprise “Luchinskoye”” 1.72 OJSC "Health Resort "Energetic"" 2.63 OJSC “Motor Transport Enterprise” 0.6 Total 7.1
139
As of 31 December 2010, the debt of the Company towards the affiliated entities is as follows: (mln. RUR) Amount Accounts payable of IDGC of Center and Volga Region , JSC Holding of IDGC, JSC 18.94 OJSC “Motor Transport Enterprise” 55.34 CJSC “Svet” 1.55 OJSC "Health Resort "Energetic"" 0.33 JSC "IESC "Energy efficient technologies"" 10.2 Total 86.36 Loans granted by the affiliated entities Loans by the affiliated entities in 2010 were not granted. Loans granted to the affiliated entities In 2010, IDGC of Center and Volga Region, JSC, granted a loan to OJSC “Agricultural Enterprise “Luchinskoye”” in the amount of RUR 2 500 000, with a payback period till 30.11.2011 at a rate of 9 % per annum.
Remuneration and loans to the members of the Board of Directors and members of the Management Board
In 2010, the Company paid remuneration (salary, bonuses, benefits) for a total amount of RUR 98 400 000. The list of the members of the Board of Directors and Management Board is given in the Section “General” of the notes. IDGC of Center and Volga Region, JSC, did not grant monetary loans to the members of the Board of Directors and Management Board in 2010.
3.22 Information on segments Primary information – operating segments The activity of the Company distinguishes the following operating segments Services in power transportation Services in technological connection Other kinds of the Company’s economic activity include industry-related and noncommercial services. None corresponds to the conditions of distinguishing reporting segments stipulated by RAS 12/2000 “Information on segments”. The information thereon is not separately disclosed.
(mln. RUR) Power Technolo- Other Total for FY 2010 transporta- gical the tion connection Company Earnings of the segment 53 106 954 335 54 395 Profit (loss) of the segment 3 256 725 197 4 178 Expenditure undistributed in segments - - - - Capital investment 5 930 2 484 - 8 414 Depreciation in the fixed assets for the reporting year 3 468 2 12 3 482 Depreciation in the intangible assets for the reporting 5.9 - - 5.9 year
Secondary information – geographical segments
The Company operates in the territory of the Vladimir, Ivanovo, Kaluga, Kirov, Nizhny Novgorod, Ryazan, Tula regions, Mary-El Republic, Udmurt Republic of the Russian Federation.
140
(mln. RUR)
Vladimir region Ivanovo region Kaluga region Kirov region Nizhny Novgorod region Ryazan region Tula region Mary-El Republic Udmurt Republic Earnings of the segment 5582 1944 5073 4878 18510 4384 6353 2145 5526 Profit (loss) of the segment 390 -58 987 86 710 355 1349 36 -323 Expenditure undistributed in ------segments Capital investment 826 1711 471 341 1656 826 2195 159 769 Depreciation in the fixed assets 291 183 326 246 1253 396 401 111 275 for the reporting year Depreciation in the intangible 0.008 0.006 0.007 5.9 0.006 0.005 0.009 assets for the reporting year
3.23 Post-reporting date events.
The amount of the annual dividend per share will be approved by the Company’s General Shareholders Meeting. As of the date when the report was signed, the Board of Directors had not taken a decision on payment and amount of dividends. No other post-reporting date events, which have to be reflected in the reports for the auditable period have been identified.
141 3.24 Contingent liabilities
The Company is a respondent in a series of arbitration proceedings. During the reporting year, the Company implemented the following claim-related work in courts of general jurisdiction and arbitration:
IDGC of Center and Volga Claims prosecuted Claims prosecuted No. Region, JSC Courts of general jurisdiction by the Company by contractors against and arbitration against contractors the Company Amount mln . RUR Amount mln . RUR Year 2010 1 Total claims prosecuted, 354 4.441 69 14.939 including 1.1 Secured 338 3.573 26 1.497 1.2 Nonsuited 6 0.101 47 11 .502 1.3 Pending 10 0.766 6 1. 939
In the opinion of the Company’s top management, the results of the arbitration proceedings will not significantly influence the financial status of the Company.
Audit report The audit reports of IDGC of Center and Volga Region, JSC, for a period from 1 January 2010 to 31 December 2010 are attached to this quarterly report.
7.2. Issuer’s quarter accounting reports for the last completed reporting quarter
Form: Order No. 66n as of 02.07.2010
142
Accounting balance sheet for 3 months of 2011 codes Form No. 1 in 0710001 RCMD Date 31.03.2011 Company: Joint-Stock Company Interregional Distribution Grid Company of Center and Volga Region in RNNBO 81296703 Taxpayer Identification Number TIN 5260200603 Kind of activity: in RCEA 40.10.2 Form of incorporation/form of ownership: in RCFI/ Joint-stock company RCFO Measurement unit: mln. RUR RCMU 385 Headquarters (address): 603950 Russia, Nizhny Novgorod, Rozhdestvenskaya St., 33 Notes ASSETS Code As of the As at the end of As at the end of of reporting date the previous the reporting Index reporting period period preceding the previous one 1 2 3 4 5 6 I. NON-CURRENT ASSETS Non-material assets 1110 8 9 15 Results of investigations and designs 1120 0 0 0 Fixed assets 1130 53 628 53 737 48 969 Income yielding investments into tangible 1140 0 0 0 assets Financial investments 1150 429 429 485 Deferred tax assets 1160 102 100 83 Other non-current assets 1170 812 694 567 TOTAL for Section I 1100 54 979 54 969 50 119 II. CURRENT ASSETS Reserves 1210 1 143 870 1 029 Value added tax on acquired assets 1220 64 67 89 Accounts receivable 1230 7 627 5 984 7 392 Financial investments 1240 5 4 7 Monetary assets 1250 4 789 3 147 2 488 Other current assets 1260 438 452 397 TOTAL for section II 1200 14 066 10 524 11 402 BALANCE SHEET (assets) 1600 69 045 65 493 61 521 Notes LIABILITIES Code As of the As at the end of As at the end of of reporting date the previous the reporting Index reporting period period preceding the previous one 1 2 3 4 5 6 III. CAPITAL AND RESERVES Charter capital (pooled capital, authorized 1310 11 270 11 270 11 270 fund, partners contributions) Shares repurchased 1320 0 0 0 Re-estimated non-current assets 1340 24 605 24 607 24 630 Additional capital (without reappraisal) 1350 0 Reserve capital 1360 447 447 426 Undivided earnings (unrecovered loss) 1370 7 231 5 521 4 121 TOTAL for Section III 1300 43 553 41 845 40 447 IV. LONG-TERM LIABILITIES Debt and borrowing 1410 14 447 13 847 7 449 Deferred tax assets 1420 1 506 1 403 1 092 Reserves for contingent liabilities 1430 0 0 0 Other long-term liabilities 1450 963 1 380 980 TOTAL for section IV 1400 16 916 16 630 9 521 V. SHORT-TERM LIABILITIES Debt and borrowing 1510 1 118 1 649 5 326 143 Accounts payable 1520 7 210 5 301 5 876 Deferred revenues 1530 68 68 77 Provisions for future expenses 1540 180 0 0 Other short-term liabilities 1550 0 274 TOTAL for section V 1500 8 576 7 018 11 553 BALANCE SHEET (assets) 1700 69 045 65 493 61 521
Profit and loss account for 3 months of 2011 CODES Form No. 2 in 0710002 RCMD Date 31.03.2011 Company: Joint-Stock Company Interregional Distribution Grid Company of Center and Volga Region in RNNBO 81296703 Taxpayer Identification Number TIN 5260200603 Kind of activity: in RCEA 40.10.2 Form of incorporation/form of ownership: in RCFI/ Joint-stock company RCFO Measurement unit: mln. RUR RCMU 385 Headquarters (address): 603950 Russia, Nizhny Novgorod, Rozhdestvenskaya St., 33
Notes Title of index Code For the reporting For the previous of line period period 1 2 3 4 5 Net proceeds 2110 18 307 14 439 Prime cost 2120 -15 558 -13 272 Gross profit (loss) 2100 2 749 1 167 Commercial expenses 2210 0 0 Administrative expenses 2220 0 0 Sales profit/loss 2200 2 749 1 167 Profit from participation in other organizations 2310 0 0 Interest receivable 2320 17 12 Interest payable 2330 -262 -289 Other revenues 2340 108 472 Other expenses 2350 -327 -277 Profit (loss) before taxation 2300 2 285 1 085 Current income tax 2410 -481 -306 Including constant tax liabilities (assets) 2421 125 173 Variation of deferred tax liabilities 2430 -103 -88 Variation of deferred tax assets 2450 2 4 Others 2460 5 0 Net profit (loss) 2400 1 708 695 FOR REFERENCE ONLY: 0 0 Result from re-estimation of non-current assets not 2510 0 0 included into the net profit (loss) of the period Result from other operations not included into the net 2520 0 0 profit (loss) of the period Aggregate financial result of the period 2500 1 708 695 Basic profit (loss) per share 2900 0 0 Diluted profit (loss) per share 2910 0 0
7.3. Issuer’s consolidated accounting reports for the last completed financial year Not specified in this reporting quarter
7.4. Information on the issuer’s accounting policy The regulation on the accounting policy of the company is approved by Order of the Company No. 489 as of 31.12.2010. The Company’s accounting is based on the valid accounting and reporting rules of the Russian 144 Federation, particularly, Federal Law No. 129 “On Accounting” as of 21.11.1996, Regulation on accounting “Accounting policy of an organization” RAS 1/2008 approved by Order of the RF Ministry of Finance No. 106n as of 06.10.2008, Regulation on accounting and compiling accounting reports in the Russian Federation approved by Order of the RF Ministry of Finance No. 34n as of 29.07.1998, Regulation on accounting “Accounting reports of an organization” RAS ПБУ 4/99 approved by Order of the RF Ministry of Finance No. 43n as of 06.07.1999, and Order of the RF Ministry of Finance No. 66n as of 02.07.2010 “On forms of accounting reports in an organization”, Chart of accounts for book-keeping of the financial and economic activities, and Application instructions approved by Order of the RF Ministry of Finance No. 94n as of 31.10.2000 (as in force). The regulation on the accounting policy discloses main rules for maintenance of accounting records with the following principal tasks: - formation of complete and reliable information on economic processes and financial results of the company’s activities required for operational management and supervision; - provision of monitoring presence and flow of property, usage of physical, labour, and financial resources; - proper prevention of negative events in the financial and economic activities, recognition, and mobilization of intraeconomic reserves.
Fixed assets The fixed assets are reflected to include land plots, buildings, installations, machinery, equipment, vehicles, and other facilities with service life of over 12 months and purchase value of over RUR 20 000 per unit. The assets which meet the requirements of § 4 RAS 6/01 “Accounting of fixed assets”, and cost less than RUR 20 000 per unit, are accounted within the inventories. The fixed assets are accepted to the accounting at historical cost, which includes the amount of actual purchasing, building, and producing expenses. Varying the purchase value of the fixed assets with which these are accepted for accounting, is admitted in cases of completion, further equipping, reconstruction, partial liquidation, and re-evaluation of the fixed assets. The reports show the fixed assets on historical cost less depreciation accrued during the whole working life. The cost of the Company’s fixed assets is cleared off through a monthly-accrued depreciation by a straight-line method on the basis of useful life of these facilities.
Inventories The inventories are accepted to accounting on actual purchase cost. The implements, tools, accessories with a service life of less than one year are accounted within the inventories. The cost of tools and accessories is charged to expenses in full in case of assets transition. The special-purpose equipment and clothing, regardless of cost and useful life, are accounted within active assets. The inventories written off to production, sold to a third party, retired on other grounds, are estimated at average prime cost.
Deferred expenses Expenses born by the Company in the reporting year, but reckoned towards next reporting periods, are reflected as deferred expenses, and are subject to writing-off for the purposes intended regularly during period, which these are related to.
Accounting of reserves The Company creates a reserve for doubtful debts and a reserve for paying year-end bonuses.
145 Accounting of receivables and payables The settlements with the debtors are reflected in the accounts and reports on the basis of prices stipulated by the agreements between the Company and buyers (customers) with due regard of all the discounts and VAT offered by the Company. If acknowledged such the non-collectable debts is to be written off. The accounts payable to the suppliers and other creditors are to be calculated in the aggregate of the invoices accepted for payment and value of the accrued liabilities in accordance with the accounting documents.
Recognition of profit The proceedings from sales of goods and services are recognized as far as goods are shipped (or rendering services) and accounting documents are submitted to buyers. It is recognized in the Profit and loss report less value added tax and other similar compulsory payment. The profit from common business activities includes earnings from rendering services in power transportation and other kinds of activity.
7.5. Information on the total amount of export, and on the export share in the total amount of sales The issuer does not export products (goods, works, and services)
7.6. Information on the value of the issuer’s real estate and material changes which occurred in the structure of the issuer’s property after the date of the end of the last completed financial year Total cost of the real assets of the issuer as of the end date of the reporting quarter, RUR: 19 891 212 494.45 Amount of the accrued depreciation as of the end date of the reporting quarter, RUR: 285 439 644.83
Information on the significant changes in the structure of the issuer’s real assets taken place within 12 months prior to the end date of the reporting quarter No significant changes in the structure of the real assets within 12 months prior to the end date of the reporting quarter have taken place
Information on any other property of the issuer acquired or redeemed for any reason if the balance value of such property exceeds 5 per cent of the balance value of the issuer’s assets, as well as information on any other changes significant for the issuer taken place within the structure of the other issuer’s property after the end date of the last finished financial year prior to the end date of the reporting quarter: No changes specified have taken place
7.7. Information on participation of the issuer in litigations, if such participation may have a material effect on the issuer’s financial and economic activities The issuer has not participated in legal processes, which have influenced, or may influence upon the financial and economic activity within three years preceding the end date of the reporting quarter
VIII. Additional information on the issuer and on equity securities placed by it
8.1. Additional information on the issuer 8.1.1. Information on the amount, structure of the issuer’s charter (joint-stock) capital (share fund) Amount of the issuer’s authorized (equity) capital (unit fund) as of the end date of the last reporting quarter, RUR: 11 269 781 704.30 Ordinary shares Total nominal value: 11 269 781 704.30 Share in AC, %: 100
privileged Total nominal value: 0 Share in AC, %: 0
8.1.2. Information on change of the amount of the issuer’s charter (joint-stock) capital (share fund)
Information on the changes in the amount of the issuer’s authorized (equity) capital (unit fund) for 5 last finished financial years preceded the end date of the reporting quarter, as well as in the reporting quarter Date of changes in the AC amount : 31.03.2008
146 Amount of AC before changes (RUR): 10 000 000 AC structure before changes Ordinary shares Total nominal value: 10 000 000 Share in AC, %: 100 Privileged Total nominal value: 0 Share in AC, %: 0
AC amount after changes (RUR): 11 269 781 704.30 Name of the issuer’s management that took a decision on changes in the issuer’s authorized (equity) capital (unit fund): Extraordinary General Shareholders Meeting of IDGC of Center and Volga Region, JSC (Administration Board of RAO UES of Russia, JSC) Date of minutes compiled at the meeting (sitting) of the issuer’s management when a decision on the changes in the authorized (equity) capital (unit fund) of the issuer: 25.12.2007 Number of minutes: 1795pr/4
8.1.3. Information on formation and use of the reserve fund and other funds of the issuer FY 2007 No funds are specified
FY 2008 Information on the arrangement and use of the reserve fund, and other funds of the issuer formed out of proceeds of net income Name of the fund: Reserve fund Size of the fund defined by the foundation documents: to be created in the amount of 5 per cent of the Company’s authorized capital Size of the fund in money terms as of the end date of the reporting period, RUR: 354 485 901.21 Size of the fund as percentage of the authorized (equity) capital (unit fund): 3.15 Assignments to the fund during the reporting period: 0 Resources of the fund used during the reporting period: 0 Areas to use the resources: Money of the Reserve Fund are intended for covering losses of the Company, as well as for retiring binds of the Company and redeeming shares of the Company in case of absence of other resources, and cannot be used for other purposes.
FY 2009 Information on the arrangement and use of the reserve fund, and other funds of the issuer formed out of proceeds of net income Name of the fund: Reserve fund Size of the fund defined by the foundation documents: to be created in the amount of 5 per cent of the Company’s authorized capital Size of the fund in money terms as of the end date of the reporting period, RUR: 425 913 901.21 Size of the fund as percentage of the authorized (equity) capital (unit fund): 3.78 Assignments to the fund during the reporting period: 71 428 000 Resources of the fund used during the reporting period: 0 Areas to use the resources: Money of the Reserve Fund are intended for covering losses of the Company, as well as for retiring binds of the Company and redeeming shares of the Company in case of absence of other resources, and cannot be used for other purposes.
FY 2010 Information on the arrangement and use of the reserve fund, and other funds of the issuer formed out of proceeds of net income Name of the fund: Reserve fund Size of the fund defined by the foundation documents: to be created in the amount of 5 per cent of the Company’s authorized capital Size of the fund in money terms as of the end date of the reporting period, RUR: 447 260 901.21 Size of the fund as percentage of the authorized (equity) capital (unit fund): 3.97
147 Assignments to the fund during the reporting period: 21 347 000 Resources of the fund used during the reporting period: 0 Areas to use the resources: Money of the Reserve Fund are intended for covering losses of the Company, as well as for retiring binds of the Company and redeeming shares of the Company in case of absence of other resources, and cannot be used for other purposes.
For the reporting period Information on the arrangement and use of the reserve fund, and other funds of the issuer formed out of proceeds of net income Name of the fund: Reserve fund Size of the fund defined by the foundation documents: to be created in the amount of 5 per cent of the Company’s authorized capital Size of the fund in money terms as of the end date of the reporting period, RUR: 447 260 901.21 Size of the fund as percentage of the authorized (equity) capital (unit fund): 3.97 Assignments to the fund during the reporting period: 0 Resources of the fund used during the reporting period: 0 Areas to use the resources: Money of the Reserve Fund are intended for covering losses of the Company, as well as for retiring binds of the Company and redeeming shares of the Company in case of absence of other resources, and cannot be used for other purposes.
8.1.4. Information on the procedure of convening and carrying out of a meeting (proceedings) of the issuer’s supreme governance body
Name of the supreme managerial body of the issuer: General Shareholders Meeting Procedure of notifying shareholders (participants) on conducting a meeting (sitting) of the supreme managerial body of the issuer: Information on the conduct of the General Shareholders Meeting is published by the Company in Izvestiya socio-political newspaper, and on the website of the Company not later than 30 (thirty) days before the date of the meeting. Voting bulletins for issues of the agenda are sent by a registered mail to the address specified in the list of those entitled to participate in the General Shareholders Meeting, or handed over to each person specified in the list of those entitled to participate in the General Shareholders Meeting with written acknowledgement of receipt not later than 20 (twenty) days before the date of the General Shareholders Meeting. Each person included into the list is provided with one copy of the voting bulletin for all the issues, or with one copy of two or more voting bulletins for different issues.
Persons (authorities) which are entitled to convoke (demand to conduct) an Extraordinary meeting (sitting) of the issuer's supreme managerial body, and procedure of submitting (claiming) of such demands: Extraordinary General Shareholders Meeting of the Company is held by the decision of the Company’s Board of Directors on the basis of its own initiative, claim of the Company’s Revision Commission, Company’s Auditor, as well as shareholder (shareholders) who owns not less than 10 (ten) per cent of the Company’s voting shares as of the date of request. The request on conducting an extraordinary General Shareholders Meeting of the Company should contain statements of the issues subject to be included into the agenda of the meeting.
Persons (person) demanding to convoke an extraordinary General Shareholders Meeting of the Company have the right to submit a project of decisions of the extraordinary General Shareholders Meeting of the Company, proposal on the form of conduct of the General Shareholders Meeting. Proposal about including issues into the agenda of the General Shareholders Meeting and proposal about nominating candidates are made in writing with indication of name (title) of the applying shareholders (shareholder), amount and category (type) of the owned shares, and should be signed by these shareholders (shareholder). Proposal about including issues into the agenda of the General Shareholders Meeting should contain statement of each implied issue; and proposal about nominating candidates should reflect title and data of the identity document (serial number and (or) number of the document, date and place of issue, and issuing authority) of each proposed candidate, and name of the body for which he/she is to be elected.
Procedure to choose a date for conduct of the issuer's supreme managerial body meeting (sitting): Annual General Shareholders Meeting of the Company is held not earlier than two months and not later than 148 six months after the completion of the reporting year. Extraordinary General Shareholders Meeting should be held within 40 (forty) days from the moment of submitting a request on conduct of an extraordinary General Shareholders Meeting of the Company, except for cases when the agenda of the Extraordinary General Shareholders Meeting contains an issue on electing members of the Company’s Board of Directors. Extraordinary General Shareholders Meeting with the agenda containing an issue of electing members of the Company's Board of Directors should be held within 90 (ninety) days from the moment of submitting a request on conduct of an extraordinary General Shareholders Meeting of the Company.
Persons entitled to make suggestions to the agenda of the meeting (sitting) of the issuer’s supreme managerial body, and procedure of making such suggestions: Shareholders (shareholder) who own in aggregate not less than 2 (two) per cent of the Company's voting shares have the right to put forward proposals to the agenda of the annual General Shareholders Meeting and nominate candidate to the Company’s Board of Directors and Revision Commission in the amount that cannot exceed the membership of the relevant body. Such proposals should be delivered to the Company not later than 60 (sixty) days upon completion of the reporting year. Convocation of the extraordinary General Shareholders Meeting at the request of the Company’s Revision Commission, Company’s Auditor, or shareholders (shareholder) who own not less than 10 (ten) per cent of the Company’s voting shares is made by the Company’s Board of Directors.
Persons entitled to get familiar with the information (materials) represented for preparation and conduct of a meeting (sitting) of the issuer’s supreme managerial body, and procedure of familiarization with such information (materials): Information (materials) on the issues of the agenda to the General Shareholders Meeting should be available for those entitled to participate in the General Shareholders Meeting for the purpose of familiarization within 20 (twenty) days, and within 30 (thirty) days before the date of the General Shareholders Meeting in case the agenda of the General Shareholders Meeting to be held contains an issue of Company’s reorganization. It should be placed in the building of the Company’s executive body or in other locations with the addresses specified in the notice about conduct of the General Shareholders Meeting. The specified information (materials) should be available to the participants of the General Shareholders Meeting in the course of its conduct. The procedure of familiarizing those entitled to participate in the General Shareholders Meeting with the information (materials) on the issues of the General Shareholders Meeting agenda, and list of such information (materials) are defined by the decision of the Company’s Board of Directors.
Procedure of announcing (disseminating among the shareholders (participants) of the issuer) decisions taken by the supreme managerial body of the issuer, and vote returns: Vote returns and decisions taken by the General Shareholders Meeting of the Company can be announced at the General Shareholders Meeting of the Company. In case the vote returns and decisions taken by the General Shareholders Meeting of the Company have not been announced at the General Shareholders Meeting of the Company, the decisions taken by the General Shareholders Meeting of the Company, and the vote returns are brought to the notice of those entitled to participate in the General Shareholders Meeting of the Company in the form of vote returns report within 10 (ten) days after the date of the Minutes on the vote returns.
Decisions taken by the General Shareholders Meeting, as well as vote returns in the form of vote returns report are brought to the notice of those entitled to participate in the General Shareholders Meeting of the Company not later than 10 (ten) days after the date of the Minutes on the vote returns.
8.1.5. Information on commercial organizations, in which the issuer owns at least 5 percent of the charter (joint-stock) capital (share fund) or at least 5 percent of ordinary shares
List of commercial organizations where the issuer possesses not less than 5 per cent of the authorized (equity) capital (unit fund), or not less than 5 per cent of ordinary shares as of the end date of the last reporting quarter
Full business name: Closed Joint-Stock Company "Svet" Contracted business name: CJSC “Svet” 149 Business location 606440 Russia, 606440, Nizhny Novgorod region, Bor, Lunacharsky St., 8 TIN/INN: 5246015831 PSRN: 1025201206502 Issuer’s share in the authorized capital of the legal person, %: 100 Percentage of the legal person’s ordinary shares owned by the issuer, %: 100 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Open Joint-Stock Company "Berendeyevskoye" Contracted business name: OJSC “Berendeevskoye” Business location 606241 Russia, Nizhny Novgorod region, Lyskovsky district, s-t Berendeevka TIN/INN: 5222014807 PSRN: 1045206491384 Issuer’s share in the authorized capital of the legal person, %: 100 Percentage of the legal person’s ordinary shares owned by the issuer, %: 100 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Open Joint-Stock Company “Agricultural Enterprise “Luchinskoye”” Contracted business name: OJSC “Agricultural Enterprise “Luchinskoye”” Business location Russia, Vladimir region, Sobinsk district, s-t Luchinskoe TIN/INN: 3323007288 PSRN: 1033302602321 Issuer’s share in the authorized capital of the legal person, %: 100 Percentage of the legal person’s ordinary shares owned by the issuer, %: 100 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Open Joint-Stock Company "Motor Transport Enterprise" Contracted business name: OJSC “MTE” Business location Russia, Kirov region, Orichevsk district, s-t Orichi, Yuzhnaya St., 50 TIN/INN: 4324006553 PSRN: 1034314502771 Issuer’s share in the authorized capital of the legal person, %: 100 Percentage of the legal person’s ordinary shares owned by the issuer, %: 100 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Open Joint-Stock Company "Health Resort "Energetic"" Contracted business name: OJSC "Health Resort "Energetic"" Business location Russia, Udmurt Republic, Izhevsk, Aviatsionnaya St., 10 TIN/INN: 1835053854 PSRN: 1031801950564 Issuer’s share in the authorized capital of the legal person, %: 100 Percentage of the legal person’s ordinary shares owned by the issuer, %: 100 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Open Joint-Stock Company "Interregional Energy Service Company "Energy efficient technologies"" Contracted business name: OJSC "IESC "Energy efficient technologies"" Business location 603155, Russia, Nizhny Novgorod, Proviantskaya St., 6
150 TIN/INN: 5260292724 PSRN: 1105260018478 Issuer’s share in the authorized capital of the legal person, %: 51 Percentage of the legal person’s ordinary shares owned by the issuer, %: 51 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Open Joint-Stock Company "Tulenergocomplect" Contracted business name: OJSC "Tulenergocomplect" Business location 300600, Tula, Timiryazev St., 101 Liter A TIN/INN: 7107067346 PSRN: 1027100507356 Issuer’s share in the authorized capital of the legal person, %: 50 Percentage of the legal person’s ordinary shares owned by the issuer, %: 50 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Open Joint-Stock Company “Concern Mordvinian SDPP” Contracted business name: OJSC “Concern Mordvinian SDPP” Business location 430027, Russia, Saransk, A. Nevsky St., 64 TIN/INN: 1325128439 PSRN: 1021301113140 Issuer’s share in the authorized capital of the legal person, %: 13.95 Percentage of the legal person’s ordinary shares owned by the issuer, %: 13.95 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Open Joint-Stock Company “Nizhny Novgorod Regional Commercial Center “Myza”” Contracted business name: OJSC “NNRCC “Myza”” Business location 603109, Russia, Nizhny Novgorod, Ilyinskaya St., 48, bl. 9 TIN/INN: 5261017576 PSRN: 1025203580313 Issuer’s share in the authorized capital of the legal person, %: 9.55 Percentage of the legal person’s ordinary shares owned by the issuer, %: 9.55 Share of the person’s participation in the authorized capital of the issuer, %: 0
Percentage of the issuer’s ordinary shares owned by the person, %: 0
Full business name: Limited Liability Company “Euroasian Insurance Company” Contracted business name: LLC “Euroasian Insurance Company” Business location 426000, Russia, Udmurt Republic, Izhevsk, Klubnaya St., 46 TIN/INN: 1832008109 PSRN: 1021801447095 Issuer’s share in the authorized capital of the legal person, %: 18.68 Share of the person’s participation in the authorized capital of the issuer, %: 0 Percentage of the issuer’s ordinary shares owned by the person, %: 0
8.1.6. Information on essential transactions completed by the issuer FY 2007 Transactions specified were not concluded during this period FY 2008 151 Transactions specified were not concluded during this period FY 2009 Transactions specified were not concluded during this period FY 2010 Transactions specified were not concluded during this period For the reporting period Transactions specified were not concluded during this period
8.1.7. Information on the issuer’s credit ratings There are no credit rates known to the issuer
8.2. Information on each category (type) of the issuer’s shares Category of shares: ordinary Nominal value of each share (RUR): 0.1
Number of marketable shares (number of shares, which are not paid or abolished): 112 697 817 043 Number of additional shares under floatation (number of shares of the additional issue towards which no public registration of the issuing report): 0 Number of declared shares: 2 182 957 Number of shares included into the balance sheet of the issuer: 0 Number of additional shares, which can be placed as a result of conversion of the placed securities, convertible into shares, or as a result of implementing liabilities in the issuer’s options: 0
Issues of shares of this category (type): Date of public registration Registration number 20.08.2007 1-01-12665-Е
Rights conferred by shares to their owners: § 6.2. of the Charter stipulates as follows. Each ordinary registered share of the Company confers a shareholder, or its owner, the same scope of rights Shareholders or owners of ordinary registered shares of the Company have the following rights: 1) to personally or by attorney participate in General Shareholders Meeting of the Company with a right to vote regarding all issues within his/her competence; 2) to submit proposals to the agenda of the general meeting in accordance with the procedure stipulated by the legislation of the Russian Federation and Charter of the Company; 3) to obtain information on the Company’s business activity and examine documents of the Company in accordance with Article 91 of Federal Law “On Joint Stock Companies", other regulatory enactments and Charter of the Company;
4) to collect dividends stated by the Company; 5) to preferentially purchase additional subscribed shares and equity securities convertible into shares in the amount proportional to the amount of owned ordinary shares in cases stipulated by the legislation of the Russian Federation; 6) to get part of the Company’s property in case of the Company liquidation; 7) to exercise other rights stipulated by the legislation of the Russian Federation and Charter of the Company.
8.3. Information on the issuer’s previous equity securities, except for the issuer’s shares 8.3.1. Information on the issues, all the securities of which were canceled (annulled) No issues are specified
8.3.2. Information on the issues, the securities of which are placed No issues specified
152 8.3.3. Information on the issues, the issuer’s liabilities under the securities of which were not complied with (default) No issues specified
8.4. Information on the person (persons), who provided security for the bonds of the issue The issuer has not placed backed bonds liabilities thereon are still to be executed
8.5. Terms of security in respect of compliance with the liabilities under the bonds of the issue The issuer has not placed backed bonds which are marketable (outstanding), or liabilities thereon failed to be executed (default)
8.5.1. Terms of security in respect of compliance with liabilities under the mortgage-backed bonds The issuer has not placed mortgage-banded bonds liabilities thereon are still to be executed
8.6. Information on the entities which keep records of rights to the issuer’s equity securities Person maintaining the issue’s share register: registrar Information on the registrar Full business name: Open Joint-Stock Company “Registrar R.O.S.T.” Contracted business name: OJSC “Registrar R.O.S.T.” Business location: 107996, Moscow, Stromynka St., 18, bl. 13, p.o.box 9 TIN/INN: 7726030449 PSRN: 1027739216757
Information on the license to conduct register of security owners Number: 010-000-1-00264 Date of issue: 03.12.2002 Date of expiry: open-ended Name of license-issuing authority: Federal Commission for the Securities Market Security holding record date: 16.12.2010
8.7. Information on legal acts governing the issues of capital import and export, which may have impact on payment of dividends, interest and other payments to non-residents
1. Federal Law "On Currency Regulation and Currency Control" No. 173-FZ as of 10.12.2003; 2. Federal Law "On ratification of the Convention between the Government of the Russian Federation and Government of the Republic of Cyprus concerning Avoidance of Double Taxation with respect to Income and Capital Taxes" No. 167-FZ as of 17.07.1999; 3. Federal Law "On ratification of the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland concerning Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Income and Property Value Increment, and Convention between the Government of the United Kingdom of Great Britain and Northern Ireland as of 15.02.1994 concluded in the form of Exchange of Notes concerning Application of Separate Provisions of the Convention" No. 65-FZ as of 19.03.1997; 4. Federal Law "On ratification of the Convention between the Government of the Russian Federation and Government of the Swiss Confederation concerning Avoidance of Double Taxation with respect to Income and Capital Taxes" No. 38-FZ as of 26.02.1997; 5. Convention between the Government of the Russian Federation and the United States of America concerning Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Income and Capital Taxes (Washington, 17.06.1992); 6. Tax Code of the Russian Federation (Part II) No. 117-FZ as of 05.08.2000. 7. Guidelines of the Central Bank of the Russian Federation "On the Procedure of Submitting Documents and Information by Residents and Non-Residents to the Authorized Banks in case of Foreign Exchange Operations, and the Procedure for Accounting Foreign Exchange Operations and Issuing Transaction Passports by the Authorized Banks" No. 117-I as of 15.06.2004.
153 8.8. Description of the procedure for taxation of income per the issuer’s equity securities which were placed or are in the process of placement The income taxation procedure regarding the issuer's securities offered and to be offered is regulated by the Tax Code of the Russian Federation (hereinafter referred to as TC), and other statutory documents of the Russian Federation adopted in accordance with the Tax Code of the Russian Federation.
TAX RATES
Kind of income Legal entities Physical persons Residents Non- Residents Non-residents Income from 20% (of which 2% fall on the 20%residents 13% 30% sale of federal budget, and 18% on the securities budget of a constituent territory of the Federation) Income in the 0% (§§1 §3, Ar. 284 of the RF 15% 9% 15% form of Tax Code) and 9% (§§2 §3, Ar. dividends 284 of the RF Tax Code)
TAXATION PROCEDURE FOR PHYSICAL PERSONS
Kind of tax – income tax. Income from the sources in the Russian Federation includes as follows: - dividends and interests gained from a Russian organization, as well as interests gained from Russian individual enterpreneurs and (or) a foreign organization in the context of operations of its subdivision in the Russian Federation; - income from sales of shares or other securities, and equity stakes in the authorized capital of an organization in the Russian Federation. Taxable base. The taxpayer income gained in the form of financial benefit is financial benefit gained from purchase of securities. The taxable base is defined as excess of securities market value estimated with due regard of limits in fluctuations of the securities market over the total of the taxpayer’s actual expenditures to cover the purchase. The procedure to identify securities market and limit in fluctuations of securities market is established by a federal securities market regulating authority. When identifying taxable base for income from securities trading, it is necessary to account for income gained from the following operations: - purchase and sale of marketable securities; - purchase and sale of non-marketable securities. Income (loss) related to the purchase and sale of securities is defined as spread between the income gained from sale of securities, and documented expenditures for purchase, sale, and storage of securities actually incurred by a taxpayer, or property-related tax reliefs deducted from the purchase and sale income. Such expenditures include as follows: - amounts paid to the seller in accordance with the agreement; - payments for services rendered by the depositary; - commission payments to the professional participants of the securities market, reliefs paid (reimbursed) to the managing company of the unit investment fund in the course of sale (redemption) of an equity stake in the unit investment fund by an investor estimated in accordance with the procedure established by the legislation of the Russian Federation on investment funds; - exchange fee; - payment for registrar services; - other expenditures directly related to purchase, sale, and storage of securities incurred for services rendered by professional participants of securities market within the framework of their professional activity. Income (loss) related to the purchase and sale of marketable securities is deducted (increased) by the interest amount paid for the use of money assets attracted to settle securities purchase and sale transactions within the amounts calculated on the basis of the current refinancing rate of the Central Bank of the Russian Federation. Regarding operations with marketable, the amount of loss is defined with due regard of the limit in
154 fluctuations of securities market. Marketable securities include securities admitted to official listing by the traders licensed by the federal authority regulating securities market. Market quotation of a marketable security implies weighted average cost of securities bargained during a trading day through the trade organizer. If the same security was bargained through two or more trade organizers, a taxpayer is entitled to independently choose market quotation of a security matured with one of the trade organizers. In case the trade organizer does not calculate weighted average cost, it is taken for the half of the total of maximum and minimum costs for transactions settled during a trade day through this trade organizer. If expenditures of a taxpayer to purchase, sell, and store securities cannot be directly charged to the expenditures for purchase, sale, and storage of specific securities, these expenditures are distributed in proportion to the cost estimation of securities that cover these expenditures. The cost estimation of securities is defined as of the effective date of these expenditures. In case expenditures of a taxpayer cannot be documentarily proved, he/she has a right to use property- related tax relief stipulated by Article 220 of the Tax Code, § 1 §§ 1. Losses from marketable securities trading resulted from the result of the specified operations made in the fiscal period reduce the taxable base applicable for purchase and sale operations with securities of this category. Income from non-marketable securities trading if these met the requirements determined for marketable securities as of the date of their purchase may be reduced for the loss faced in the fiscal period as to purchase and sale operations with marketable securities. Actual income date: - income payment date, including transfer of income to the accounts of a taxpayer in banks, or by his/her order to the third-party accounts in case of cash income; - day when a taxpayer pays interests to the borrowed (credit) assets gained through purchasing goods (works, services), or purchasing securities in case of gaining income in the form of financial benefit.
The taxable base for purchase and sale of securities and operations with forward deal financial instruments is defined upon expiry of the taxation period. Tax calculation and payment is made by a fiscal agent upon expiry of the taxation period, or when paying money to the taxpayer before expiry of the taxation period. When a fiscal agent makes payments before expiry of a next taxation period, taxes are paid from a share of income corresponding the actual amount of payables. The share of income is defined as a product of a total income and a ratio of outpayments to securities cost estimate made as of the date of disburse money regarding which a fiscal agent acts as a broker. When transferring payments to a taxpayer more than once during a taxation period, the tax amount is calculated as offsettable on an accrual basis. Cost estimate of securities is defined on the basis of actually incurred and documented expenditures for their purchase. The payment means cash disbursements, transfer of money to the physical person’s bank account, or to the third-party account in accordance with the request of the physical person. In case it is impossible to withhold the assessed taxes from a taxpayer through the source of income, the fiscal agent (broker, trustee, or other person performing operations in accordance with the agency contract, commission contract, or other contract for the benefit of a taxpayer) within one month from the emergence of this obligation, notifies in writing the relevant tax authority on the impossibility of such withholding and amount of the taxpayer’s debts. In this case, taxes are paid in accordance with Article 228 of the RF Tax Code.
TAXATION PROCEDURE FOR LEGAL ENTITIES Kind of tax – income tax. Income covers the following: - proceeds from sale of property rights (trading income); - extraordinary income in the form of yield from securities and other debt obligations and/or equity participation in other organizations. Taxable base. The taxpayer's income from sale or other redemption of securities (including extinguishment) is defined on the basis of the price of sale or other redemption of a security, as well as amount of accrued interest 155 (coupon) income paid by the purchaser to the taxpayer, and amount of interest (coupon) income paid by the issuer to the taxpayer. In this case, the taxpayer's income from sale or other redemption of securities does not include interest (coupon) income accounted earlier for the purpose of taxation. The expenditure from sale (or other redemption) of securities is defined on the basis of the disposal price of security (including expenses for purchasing a security), expenditure for sale, amount of discounts from the calculated cost of the investment unit, amount of accrued interest (coupon) income paid by the taxpayer to the seller of the security. In this case, the expenditure does not include accrued interest (coupon) income accounted earlier for the purpose of taxation. Securities are deemed as marketable only if the following conditions are simultaneously observed: 1) securities are listed by at least one trade organizer entitled thereto in accordance with the national legislation; 2) information on prices (quotations) of securities is published in mass-media (including online), or can be provided by the trade organizer or other authorized person to any interested party during three years after the date of transactions with securities; 3) market quotation is calculated for securities when it is stipulated by the relevant national legislation. The market price of marketable securities for the purpose of taxation implies actual price of sale or other redemption of securities if this price falls within the minimum and maximum transaction prices (price interval) with the specified security listed by the trade organizer at the stock market as of the date of this certain transaction. In case of selling marketable securities at the price which is less than the minimum transaction price at the formal stock market when evaluating the financial return the minimum transaction price at the formal stock market is taken into account.
The accrued interest (coupon) income is understood to be part of interest (coupon) income the payment thereof is stipulated by the issuing terms of such a security to be calculated in proportion to the amount of days past from the issuing date for a security or from the date when the preceding coupon income was paid to the date of transaction (date of transfer of a security). Regarding non-marketable securities, the actual price of sale or other redemption of these securities is used for taxation if at least one of the following conditions is observed: 1) if actual price of the relevant transaction falls within the price interval for the similar (equal, homogenous) security listed by the trade organizer at the stock market as of the transaction date or as of the date of the close-in trading taken place before the date of the relevant transaction if the trading with these securities occurred at the trade organizer at least once during past 12 months; 2) if deviation of the actual price of the relevant transaction fall within 20 per cent towards increase or decrease in comparison with the weighted average price of the similar (equal, homogenous) security calculated by the trade organizer at the stock market in accordance with the established procedure, taking into account trading return as of the date of such transaction or as of the date of the close-in trading taken place before the date of the relevant transaction if the trading with these securities occurred at the trade organizer at least once during past 12 months. The taxable base related to the securities trading is defined by a taxpayer separately, except for the taxable base related to the securities trading defined by the professional participants of the stock market. Taxpayers (except for traders) define the taxable base related to the marketable securities trading separately from that related to the non-marketable securities. In case of sale or other redemption of securities, and in accordance with the accounting policy adopted for the purpose of taxation, a taxpayer independently chooses one of the following ways to write off the cost of redeemed securities: 1) in accordance with the cost of earlier purchased ones (FIFO); 2) in accordance with the cost of later purchased ones (LIFO); 3) in accordance with the unit cost. Taxpayers faced loss (losses) from securities trading in the previous fiscal period or in previous fiscal periods are entitled to reduce taxable base resulted from transactions with securities in the reporting (fiscal) period (transfer specified losses for future) in accordance with the procedure and terms prescribed by Article 283 of the Tax Code. In this case losses from the non-marketable securities trading incurred in the previous fiscal period (previous fiscal periods) can be allocated to the deduction of the taxable base related to the trading of such securities defined in the reporting (fiscal) period. The losses from the marketable securities trading incurred in the previous fiscal period (previous fiscal periods) can be allocated to the deduction of the taxable base 156 related to the sale of this category of securities. Within the fiscal period, the carry-forward of losses incurred in the corresponding reporting period from the marketable and non-marketable securities trading is made separately with these certain categories of securities and accordingly within the limits of income gained from trading of such securities. In case a fiscal agent of a foreign company pays income which, in accordance with the international agreements (conventions) is not taxable in the Russian Federation at lower rates, calculation and deduction of income tax is made by the fiscal agent at relevant lower rates provided that the foreign company submits confirmations to the fiscal agent which are stipulated by § 1 of Article 312 of the Tax Code of the Russian Federation. In this case, if income is paid by Russian banks executing transactions with foreign banks, no confirmation of the permanent presence of the foreign bank in a state which is tied by a relevant international agreement (convention) regulating issues of taxation, is required if such presence is recorded in public reference sources. With regard to the income paid by the taxpayer in the form of dividends, taxes deducted when paying income is transferred to the budget by the fiscal agent, which executed the payment within 10 days from the date of income payment.
8.9. Information on declared (accrued) and paid dividends per the issuer’s shares, and on the income per the issuer’s bonds 8.9.1. Information on declared (accrued) and paid dividends per the issuer’s shares for the last 5 completed financial years or for each completed financial year, if the issuer has been carrying its activities for less than 5 years During the specified period, no decisions on paying dividends have been taken by the issuer
8.9.2. Bond issues, in respect of which income was paid for the last 5 completed financial years prior to the date of the end of the last reporting quarter, and if the issuer has been carrying out its activities for less than 5 years – for each completed financial year prior to the date of the end of the last reporting quarter The issuer has not issued bonds
8.10. Other information In accordance with § 8.1.3 ‘Information on the formation and usage of the reserve fund, and other funds of the issuer’ Reporting period: 2008 The reserve fund in 2008 was created as a result of reorganization of IDGC of Center and Volga Region, JSC, through connecting Vladimirenergo, JSC, Ivenergo, JSC, Kalugaenergo, JSC, Kirovenergo, JSC, Merienergo, JSC, Nizhnovenergo, JSC, Ryazanenergo, JSC, Tulenergo, JSC, Udmurtenergo, JSC.
In accordance with § 3.1.6 ‘Branches and Representative Offices of the issuer’ Information on powers of attorney additionally issued to the directors of IDGC of Center and Volga Region, JSC, branches: 1. Tchizhov, S.N., the Director of Ivenergo branch, power of attorney for a period from 29.12.2010 till 31.12.2011 (additional). 2. Khapilin, A.A., the Director of Kalugaenergo branch, power of attorney for a period from 29.12.2010 till 31.12.2011 (additional). 3. Kharivsky, O.L., the Director of Kirovenergo branch, power of attorney for a period from 29.12.2010 till 31.12.2011 (additional). 4. Kotikov, V.I., the Director of Marienergo branch, power of attorney for a period from 29.12.2010 till 31.12.2011 (additional). 5. Shavin, O.B., the Director of Nizhnovenergo branch, power of attorney for a period from 29.12.2010 till 31.12.2011 (additional); power of attorney for a period from 15.02.2011 till 31.12.2011 (additional); power of attorney for a period from 23.03.2011 till 31.12.2011 (additional); 6. Skorikov, V.F., the Director of Ryazanenergo branch, power of attorney for a period from 15.12.2010 till 31.12.2011 inclusive; power of attorney for a period from 29.12.2010 till 31.12.2011 (additional). 7. Timonin, Yu.N., the Director of Tulenergo branch, power of attorney for a period from 29.12.2010 till 31.12.2011 (additional). 8. Bakulev, B.I., the Director of Udmurtenergo branch, power of attorney for a period from 29.12.2010 till 31.12.2011 (additional); power of attorney for a period from 24.01.2011 till 31.12.2011 157 (additional); power of attorney for a period from 24.01.2011 till 28.02.2011 (additional); power of attorney for a period from 01.02.2011 till 31.12.2011 (additional); power of attorney for a period from 16.03.2011 till 31.12.2011 (additional).
8.11. Information on the issuer’s presented securities and the issuer of the presented securities, the title whereto is certified by Russian depositary receipts The issuer is not an issuer of offered securities the ownership thereupon shall be approved by Russian share depositary receipts
Закрытое акционерное общество Joint-Stock Auditing Firm Акционерная Аудиторская Фирма АУДИТИНФОРМ AUDITINFORM
Россия , 107078, Москва , а/я 150 e-mail: [email protected] Телефон /факс : (495) 933-81-64 http://www.auditinform.ru (495) 933-81-65 Russia, 107078, Moscow, P.O.B. 150 Telephone/fax: (495) 933-81-64 (495) 933-81-65 /handwriting/ 28 February 2011 No. 35/6-05 AUDIT REPORT for IDGC of Center and Volga Region, JSC, for a period from 1 January 2010 to 31 December 2010
TO THE USERS OF THE ACCOUNTING (FINANCIAL) REPORTS IN ACCORDANCE WITH THE RUSSIAN LEGISLATION
Audited entity Full business name: Joint-Stock Company Interregional Distribution Grid Company of Center and Volga Region Contracted business name: IDGC of Center and Volga Region, JSC Business location: 603950, Nizhny Novgorod region, Nizhny Novgorod, Rozhdestvenskaya St., 33 State Registration Number: 1075260020043
Auditing organization Full business name: Closed Joint-Stock Company “JOINT-STOCK AUDITING FIRM AUDITINFORM” Contracted business name: CJSC “JSAF AUDITINFORM” Business name: 129164, Moscow, Yaroslavskaya St., 4 State Registration Number: 1027739185944 Belongs to SRO NCP Moscow Auditing Chamber (PNRE 10303000773)
We have audited the attached accounting reports of IDGC of Center and Volga Region, JSC, consisting of a balance sheet as of 31 December 2010, a profit and loss account, a report on changes in the assets, and a cash flow statement for the year 2010, other attachments to the balance sheet, and a profit and loss account, and notes.
Responsibility of the audited entity for the accounting reports The top management of the audited entity bears responsibility for the compilation and reliability of the specified accounting reports in accordance with the Russian regulations applied to the compilation of accounting reports and for the system of internal control required for the compilation of accounting reports free of significant distortions due to unfair actions or faults.
Responsibility of the auditor 158 Our responsibility lies in expressing an opinion on the reliability of the accounting reports on the basis of the audit carried out by us. We implemented the audit in accordance with the federal auditing standards. These standards require adherence to the applicable ethical norms, as well as planning and implementing audit in a way to ensure satisfactory confidence in the absence of significant distortions in the accounting reports. The audit included implementing auditing procedures aimed at receiving auditing evidences that confirm numerical data in the accounting reports, and disclosure of information therein. The choice of auditing procedures is the subject of our judgment, which relies on the estimation of significant distortion risk, resulted from unfair actions or faults. In the course of estimating this risk, we have examined the system of internal control that ensures compilation and reliability of the accounting reports in order to chose corresponding auditing procedures, except for expressing an opinion on the efficiency of the internal control system. The audit also included an estimation of the proper application of the accounting policy and legitimacy of the estimated figures obtained by the top management of the audited entity, as well as estimation of the accounting reports submitted in whole. We suppose that the evidences obtained in the course of the audit provide good reasons to express an opinion on the reliability of the accounting reports.
Opinion In our opinion, the accounting reports reliably reflect the financial status of IDGC of Center and Volga Region, JSC, in all significant aspects as of 31 December 2010, results of the financial and economic activities, and cash flow during 2010 in accordance with the Russian regulations for compilation of accounting reports. Appendix: Accounting reports of IDGC of Center and Volga Region, JSC, in 44 sheets. 28 February 2011 (date of audit report) Director General of CJSC “JSAF AUDITINFORM” /signature/ Borisov Vyacheslav Mikhaylovich stamp here
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