Appendices to the Annual Report JSC FGC UES Annual Report Appendices

Annual Report 2014

Contents Additional Information by Section of the Annual Report HIGHLIGHTS

Key Performance Indicators The following appendices to the Annual Report are Change 2010 2011 2012 2013 2014 submitted to shareholders as part of the materials 2014/2013

for the Annual General Meeting of Federal Grid Financial Indicators

Company and are available for all stakeholders at Revenues RUB mln 111,085 138,137 138,836 155,352 168,941 8.75%

the Company’s website www.fsk-ees.ru Total cost (including administrative costs) RUB mln 82,501 92,900 116,510 132,948 140,259 5.50%

Adjusted EBITDA RUB mln 68,301 84,683 82,809 96,296 99,603 3.43%

Profit (loss) before tax RUB mln 67,312 11,444 - 14,270 - 17,672 14,338 181.13% 3 Additional Information by Section of the Annual Report Net profit (loss) RUB mln 57,082 - 2,468 - 24,532 - 25,898 5,137 119.84% 24 JSC “FGC UES” Account Statements Prepared in Adjusted net profit (loss) RUB mln 25,702 33,687 13,383 16,758 13,831 - 17.47%

accordance with Russian Accounting Standards (RAS) For Adjusted net profit per share RUB 0.0208 0.0268 0.0106 0.0132 0.0109 17.42% the year ended 31 December 2014 Debt portfolio RUB mln 56,000 130,000 212,500 282,349 257,771 - 8.70% 52 Report on Federal Grid Company’s Compliance Market Capitalisation RUB mln 452,717 351,138 253,905 114,600 56,111 - 51.04% with the Corporate Governance Code principles and recommendations Total Shareholder Return, % 10.8 - 23.4 - 32.2 - 56.4 - 50.5 5.9 pp 62 Information on Transactions Return on equity % 3.3 4.1 1.6 2.0 1.6 - 0.4 pp

122 Information about the Actual Performance of Return on net assets % 3.8 5.4 1.7 4.0 1.6 - 2.4 pp Assignments of the President and the Government of the Financial leverage 0.14 0.22 0.32 0.44 0.44 - Russian Federation by Federal Grid Company in 2014 Non-Financial Indicators 126 Information about the Structure of the Property 1 Portfolio of Federal Grid Company and Changes to it in 2014 Number of substations units 805 854 891 919 924 0.54% 128 Information on disposal of non-core assets Length of electricity transmission lines2 thousand km 121.7 124.6 131.6 135.1 138.8 2.74% of JSC FGC UES in 2014 Transformer capacity of substations including MVA 311,008 322,533 334,797 332,009 332,412 0.12% 129 Management Report 2014 leased substations 148 IFRS Consolidated Financial Statements Declared capacity MW 91,179 90,937 90,492 91,398 90,887 - 0.56% Electricity supply to distribution grid companies, direct customers and independent energy joint mln kWh 486,364 503,948 514,057 522,711 518,093 - 0.88% stock companies, overseas power systems, net

Electricity losses within UNEG mln kWh 22,526 22,553 21,946 22,262 21,261 - 4.50%

Incident rate – number of incidents per 1,000 units 3.01 2.52 2.13 1.79 1.47 - 17.88% units in maintenance

Number of process disturbances caused by units 61 57 39 19 18 - 5.26% human errors

Actual implementation of the investment RUB bn 167.0 184.7 179.9 149.7 90.9 - 39.28% programme

Average level of customer satisfaction with points 9.0 9.3 8.9 9.3 8.6 - 0.7 point technological connection services

Accident frequency rate per 1,000 persons3 0.762 0.253 0.285 0.319 0.124 - 61.13%

Tax payments to budgets of all levels RUB mln 13,746 15,741 9,980 13,082 20,156 54.07%

Environmental costs RUB mln 186.1 155.0 142.5 206.7 225.8 9.24%

Economic effect of measures implemented within RUB mln - 4 148.1 208.5 114.5 113.6 - 0.79% the Energy Saving and Energy Efficiency Programme

1 PTLs and SSs the ownership rights to which have been duly registered for Federal Grid Company and other owners, excluding leased PTLs and SSs with 10 kW voltage and lower operating on the territory of Krasnodar Krai and the Far East Federal University on Russky Island 2 See note 1 3 including fatal and group accidents due to non-performance/poor performance of job dutiesй 4 in 2010, methodological support of operations was provided and the Energy Saving Programme was developed

2 3 JSC FGC UES Annual Report Appendices

STRATEGIC OVERVIEW Share of JSC Financial results for 2014 FGC UES in the GEOGRAPHY / SUBSIDIARIES AND ASSOCIATES Abbreviated corporate name Region of operation Main activity authorised capital of the organisation of the company as Net Revenue,RUB of 12/31/2014. profit,RUB thousand Internal documents of Federal Grid Company The main forms of interaction between the thousand that regulate the relationship with its Company and its subsidiaries and associates 5 JSC Elektrosetservis UNEG Moscow Maintenance and repairs of 100.00% 4,230,789 2,350 subsidiaries and associates Moscow Oblast electric grid facilities • Consideration by the Board of Directors of issues regarding Ryazan Oblast Novgorod Oblast • Procedure for Interaction with Subsidiaries and Associates of positions of the Company representatives on draft resolutions Novosibirsk Federal Grid Company on agenda items of General Meetings of Shareholders and Ulyanovsk Oblast meetings of Boards of Directors of subsidiaries and associates Pyatigorsk • Regulations on Managing Subsidiaries and Associates and other Yekaterinburg Entities in which Federal Grid Company has an ownership interest • Participation in drafting proposals and decision-making by Khabarovsk governing bodies of subsidiaries and associates through the Surgut • Standard for Structural Units of Federal Grid Company on Company representatives in General Meetings of Shareholders Building Positions and Instructing Representatives of the and meetings of Boards of Directors of subsidiaries and 6 Index Energetiki – FGC UES Moscow Securities transactions 100.00% 4,281 -2,486,552 Company in General Meetings of Shareholders and Boards of associates LLC Directors of Subsidiaries and Associates • Consideration by the Management Board of issues within its 7 JSC Tomsk Trunk Grids Tomsk Electricity transmission and 52.025% 218,725 40,400 • Procedure for KPI calculation and target achievement evaluation competence that relate to interaction between the Company Tomsk Oblast distribution services in Subsidiaries and Associates of Federal Grid Company and its subsidiaries and associates 8 JSC OES GruzRosenergo Georgia Electricity transmission services 50.00% 441,832 * 11,223 * • Federal Grid Company’s Order on Approval of Standards and Model In RF: Karachay- Cherkessia Regulations on Managing Subsidiaries and Associates, and other Krasnodar Krai. regulatory and administrative documents of Federal Grid Company 9 JSC Kuban Trunk Grids Krasnodar Electricity transmission and 48.999% 125,762 508,791 Krasnodar Krai distribution services Information about participation of Federal Grid Company in subsidiaries, associates, and other 10 JSC Inter RAO Moscow Electric power and heat genera- 14.0749% 32,646,668 434,170 Branches: tion organisations Ivanovo Oblast Representative Offices: Cuba, Share of JSC Financial results for 2014 Ecuador, Belgium FGC UES in the Abbreviated corporate name Region of operation Main activity authorised capital Non-core Companies of the organisation of the company as Net Revenue,RUB 11 JSC Mobile Gas-Turbin Power Moscow Electric power generation 100.00% 2,227,646 -286,939 of 12/31/2014. profit,RUB thousand Plant Moscow Oblast thousand Krasnodar Krai Tuva Republic Core Companies 12 CJSC APBE Moscow Research and analytical ser- 100.00% 55,817 -37,455 1 JSC MUS Energetiki Moscow Communication services 100.00% 1,660,394 55,009 Kazan vices in the field of forecasting Saint Petersburg electric power development Samara Yekaterinburg 13 JSC Glavsetservis UNEG Moscow December 27, 2014 record - - - Chita entered into USRLE (Unified Ulan-Ude State Register of Legal Entities) concerning liquidation of the 2 JSC R&D Centre of FGC UES Moscow R&D 100.00% 2,640,006 8,213 Company Novosibirsk 14 JSC Chitatechenergo Chita Communication services; design 100.00% 132,259 6,044 3 JSC CIUS EES Moscow Functions as the buyer and 100.00% 1,950,000 70,301 Ulan-Ude and maintenance of communi- Saint Petersburg developer in the field of capital cation lines Samara construction, reconstruction, Pyatigorsk and re-equipment of electric 15 JSC VESK Moscow Does not conduct business 100.00% - - Yekaterinburg grid facilities activities Krasnoyarsk Khabarovsk 16 JSC Nurenergo Chechen Republic Electric power sales 76.9996% 4,206,405 -1,022,208 Surgut 17 JSC GVC Energetiki Moscow Leasing out real property 50.0031% (50% plus 67,828 -22,537 4 JSC ESSK EES Moscow Acts as the procurement agent 100.00% 241,681 62,734 1 share) Saint Petersburg Yekaterinburg 18 CJSC Severovostokenergo Moscow Does not conduct business 49.00% 0 -10 Krasnoyarsk activities Samara Khabarovsk 19 JSC Energotechcomplekt Moscow Leasing out property 48.999% 10 488 - 12

20 IT Energy Service LLC Moscow Information technology services 39.999% 773,796 29,062

21 JSC ENIN Moscow R&D 38.24% 271,723 4,672

22 JSC UEUK Moscow Resolution adopted on voluntary 33.33% 0 5,881 liquidation

4 5 JSC FGC UES Annual Report Appendices

Investment Programme section 2012 2013 2014 Share of JSC Financial results for 2014 FGC UES in the Abbreviated corporate name Assets covered by Agreements with Regional Administrations Region of operation Main activity authorised capital 2.3 13,485.45 4,277.52 3,066.13 of the organisation (other than Moscow, St. Petersburg and Tyumen) of the company as Net Revenue,RUB of 12/31/2014. profit,RUB Development of backbone electric grids not covered by Agree- thousand 2.4 48,512.48 37,984.48 22,406.03 thousand ments with Regional Administrations Process management development, informatisation and ad- 23 CJSC Energorynok Moscow Printing and publishing services 8.50% - ** - ** 2.5 7,289.81 4,684.74 4,893.60 ditional target programmes 24 JSC Stend Ivanovo Oblast Installation and commission- 0.83% 0 -13,230 ing services for GTD-110 gas Assets covered by the Federal Target Programme “Economic turbine engines and modifica- 2.6 and Social Development of the Far East and Transbaikal for the 12,612.44 14,042.84 3,717.94 tions thereof; Period through 2013” Electric power generation and sales Programme to develop electric grids in the Sochi region for 2.7 the period from 2008 through 2014 to support operation of the 7,901.56 14,543.50 3,017.53 25 JSC DESP Far East Integrated design 0.0048% 543,681 42 Olympic sports sites Siberia in the energy sector (1 share) *** Assets designed to ensure reliable power supply for the 2018 2.8 0.00 0.00 5 457.16 26 JSC Tsentrenergoholding Moscow Trust property management and 0.00069% - ** - ** FIFA World Cup agency services Measures to ensure reliable operation of UES of Russia working separately from the energy systems of the Baltic States in order * – at the exchange rate of the National Bank of Georgia as at December 31 2014: RUB100 = 3.2879 Lari to compensate the effects of reduced capacity of the electri- 2.9 0.00 0.00 218.39 cal connections of IPS (Integrated Power System) Centre and ** – no financial report has been made available as of March 30, 2015 IPS North-West and change the operating modes of the BRELL *** – the remaining shares are owned by JSC R&D Centre of FGC UES fully-owned by JSC FGC UES energy ring (partly funded by the National Welfare Fund)

Development of the electrical grid infrastructure in Eastern Siberia and the Far East, including that associated with the 2.10 0.00 0.00 481.35 expansion of the capacity of BAM and the Trans-Siberian Railway PERFORMANCE RESULTS (partly funded by the National Welfare Fund) 2.11 Power supply of the Southern Federal Region 0.00 0.00 589.02

Investment Programme Capital Investment Funding Structure, RUB mln 2.12 Acquisition of assets for production purposes 397.55 167.26 8.25

2.13 Innovations and energy efficiency 4,326.79 3,696.71 1,204.03

Investment Programme section 2012 2013 2014 2.14 Other 4,356.73 5,988.93 2,008.83

1 Technical re-equipment and reconstruction 55,796.85 44,168.43 24,279.27 2.15 Design and survey works (deferred) 113.97 656.09 115.04

1.1 Power delivery assets (nuclear, hydro and thermal power plants) 378.76 1,175.80 43.07 TOTAL 179,898.88 149,695.67 90,857.03 90 857,03

Assets designed to improve reliability of power supply of Mos- 1.2 11,501.27 7,415.92 2,694.76 cow, St. Petersburg and Tyumen

Assets covered by Agreements with Regional Administrations 1.3 769.22 51.91 208.94 (other than Moscow, St. Petersburg and Tyumen)

Development of backbone electric grids not covered by Agree- 1.4 4,655.59 2,444.53 968.44 ments with Regional Administrations

1.5 Technological connection facilities 4,907.58 5,854.05 3,521.44

1.6 FGC’s Fixed Assets Renovation Programme 33,584.42 27,226.22 16,496.14

Assets designed to ensure reliable power supply for the 2018 1.7 0.00 0.00 200.13 FIFA World Cup

Measures to ensure reliable operation of UES of Russia working separately from the energy systems of the Baltic States in order to compensate the effects of reduced capacity of the electri- 1.8 0.00 0.00 15.75 cal connections of IPS (Integrated Power System) Centre and IPS North-West and change the operating modes of the BRELL energy ring (partly funded by the National Welfare Fund)

Development of the electrical grid infrastructure in Eastern Siberia and the Far East, including that associated with the 1.9 0.00 0.00 130.60 expansion of the capacity of BAM and the Trans-Siberian Railway (partly funded by the National Welfare Fund)

2 New construction projects 124,102.04 105,527.24 66,577.75

2.1 Power delivery assets (nuclear, hydro and thermal power plants) 14,190.68 14,457.81 18,474.66

Assets designed to improve reliability of power supply of Mos- 2.2 10,914.58 5,027.37 919.79 cow, St. Petersburg and Tyumen

6 7 JSC FGC UES Annual Report Appendices

INVESTMENTS AND INNOVATIVE DEVELOPMENT / INNOVATIVE DEVELOPMENT PROGRAMME

Subjects and Results of the R&D Programme in 2014

Contract start Contract/ stage # R&D Contractual results Deployment sites and uses of contractual results Effect from deployment/use of contractual results date end date

1 Creation of a smart grid 31/10/11 30/03/16 1. Concept of implementation of a smart grid in IPS East. 2. Choice SAU NRM and MASU NRM IHSSs will be used to control voltage and reactive Efficiency: Use of IHSSs to control voltage and reactive power will in IPS East during the of pilot areas and feasibility study of the use of innovative technolo- power in the Primorye and Elgaugol energy clusters, respectively. Those IHSSs reduce grid losses (by 5% of the existing level) and increase equipment period through 2014 with gies. There are plans to deploy SAU NRM and MASU NRM integrated can be used in other backbone electric grid energy clusters as well as in the utilisation rate (by 15%). Use of MASU NRM IHSS will also dramatically an outlook through 2020 hardware and software systems (IHSSs) in the Primorye and Elgaugol East backbone electric grids. The active-adaptive (smart) grid test ground, reduce the costs to deploy a smart control system on a power asset (to energy clusters, respectively (East backbone electric grids). 3. Devel- which contains, in particular, design models of IPS East, is used under contract not more than 1% of the asset value) and shorten the period of time opment of specifications for key equipment of the energy cluster pilot to debug and test SAU NRM and MASU NRM IHSS prototypes, which are under during which active and passive components are introduced to the grid areas. 4. Formation of organisational and procedural frameworks for development for the Elgaugol and Primorye energy clusters. voltage control circuit (to 1 minute). collection and analysis of functional requirements for energy cluster control systems. 5. Development of an automated control system for normal and post-emergency operation modes in the Elgaugol and Primorye energy clusters. 6. Installation of MASU NRM components on the Elgaugol energy cluster sites. 7. Installation of SAU NRM components on the Primorye energy cluster sites. 8. Scaling and development of an automated control system for normal and post-emergency operation modes in the Vanino energy cluster.

2 Development and making 25/02/13 30/11/14 Design documentation for HV cable fitting prototypes rated for The design documentation to be used to manufacture HV cable fittings Efficiency: Manufacture of end and transition joints for cables rated for voltages of high-voltage (HV) cable voltages from 110 kV to 330 kV. Prototypes. for voltages from 110 kV to 330 kV under licence agreements. from 110 kV to 330 kV in Russia will reduce both the existing dependence on fitting prototypes rated imported cable fittings and the costs to build electric grid facilities with the use for voltages from 110 kV of HV cable lines with cross-linked polyethylene insulation, shorten time to to 330 kV repair damaged joints and increase the share of Russia-made high-tech equipment both in the electric energy industry and on a national scale.

3 Creation of Phase A of a 21/06/13 30/06/15 20-kV, 50-MW A/C HTS cable line To be used in building a 20-kV, 50-MW A/C HTS cable line for the This technology helps to resolve an important environmental problem as 200-m, 20-kV, 1500-A A/C Belorussian substation. Upon completion of its pilot operation and it eliminates the need for costly magnetic field shielding since D/C power high-temperature super- system tests, the new technology is expected to be used in metropolitan transmission lines emit no magnetic field. conducting (HTS) cable distribution grids, primarily ring-radial ones, to unify power districts line and its pilot operation divided by railway infrastructure facilities and water obstacles and parts on a selected site of sectioned grids.

4 Development of a water- 14/12/12 30/06/15 Prototype of a water-mist fire extinguishing system and related Deployment site (220-kV, 250-MVA transformer) is currently being Efficiency. A water-mist fire extinguishing system will increase its utilisation rate mist fire extinguishing design documentation. selected. for extinguishing and cooling (to about 90%), resulting in a considerable (8-10- system for transformers fold) decrease in water consumption, reduction of extinction time and increase in reliability of consumer power supply, and help to prevent emergencies.

5 Development, making 01/02/13 30/11/15 Prototype of a 220-kV optical voltage transformer supporting IEC 61850- 220-kV optical transformers are designed for use at UNEG digital sub- Efficiency: Optical voltage transformers having an accuracy class of at least 0.2 and testing of a 220-kV 9.2 and related design documentation. stations under construction. within a temperature range from minus 60 ºС to plus 60 ºС are as reliable as optical voltage trans- conventional ones, but are lighter and less expensive and surpass the existing former prototype sup- voltage measuring transformers in transportability, installability and usability, porting IEC 61850-9.2 provide a reliable galvanic separation between the circuit to be measured and the recording device, and are a key component of a digital substation.

6 Development of a matrix 04/02/13 30/05/14 Application notes for a matrix design method for normal and emer- The results of this work will be used to build grid facilities and algo- Efficiency: Reduction of the risks related to the use of both existing and newly design method for normal gency operation modes of power grids of various voltage classes rithms for automated assembly of a global matrix system of equations developed automated protection, automation and control systems, resulting in and emergency operation using complete three-phase diagrams with engineering docu- simulating operation modes of power systems and to develop method- a higher reliability of grids. The newly developed active-adaptive (smart) grids modes of power grids of mentation on an integrated set of m-functions and computation ologies for field computation of impedance and admittance parameters will fully take into account the computation results for normal and emergency various voltage classes us- scenarios. Technique and software for a matrix design method for of all declared types of grid facility given their real designs. operation modes of power systems using complete three-phase diagrams. The ing complete three-phase normal and emergency operation modes of power grids of various expected economic effect will be directly related to a decrease in power losses diagrams and its related voltage classes using complete three-phase diagrams. and an increase in reliability of power generating and consumer power supply application notes systems and in fault tolerance of electric installations.

7 Development of a system 09/12/11 30/06/14 Prototype of an integrated hardware and software system for Deployment on the 330-26/27 Cherkessk-Baksan OHL. Efficiency: Reduced process violations on overhead lines (OHL) thanks to monitor ice and frost on-line monitoring of corona loss distribution and capacity along to on-line and timely discovery of ice and frost coatings on OHL wires, coatings on OHL wires in a 330-kV OHL and related design documentation. improved reliability of OHL, and reduced costs to restore OHL damaged terms of their nature and by ice and frost coatings. corona losses

8 Creation of a “hot-spots 30/01/13 30/06/14 Prototype of a “hot-spot” thermal condition monitoring system for Deployment on the Konakovo-Radischevo 220-kV OHL. Efficiency: Actual temperature monitoring system for wire/“hot spots” (compres- technical condition moni- OHL. Set of “O” design documentation and improved software upon sion-type connecting, T and repair clamps, span-wire contact joints, and welded toring system based on completion of testing. and bolted joints in anchor support loops) allows identifying urgently required temperature-current sen- repair works on OHL in real time. In fact, “hot spots” are the weakest component sors for 110-220-kV OHL of an OHL that defines its capacity. The economic effect expected from this R&D work is a reduction of traverse, inspection and repair costs to reduce electricity undersupply (less the monitoring system deployment costs) plus an increase in the capacity of OHL under control by the monitoring system sensors.

8 9 JSC FGC UES Annual Report Appendices

Contract start Contract/ stage # R&D Contractual results Deployment sites and uses of contractual results Effect from deployment/use of contractual results date end date

9 Development of a physical 26/02/13 30/11/14 Working design documentation and software for a physical condi- Deployment of five sets of such system for 220-500-kV OHL of the Cen- Efficiency: Once created, a physical condition monitoring and damage loca- condition monitoring and tion monitoring and damage location system for OHL. tral backbone electric grids. tion system for OHL will help to (1) early reveal insulation defects and other damage location system defects of OHL and timely take actions to prevent and rectify those defects, for 220-750-kV OHL thereby preventing blackouts; and (2) warn about abnormal external impacts on and natural phenomena affecting OHL (such as thunderstorm, dirt ac- cumulation, etc.) to take adequate steps to control the grid operation.

10 Development and making 03/06/11 31/05/14 Prototype of a phase-shifting device (PSD) and related design Planned to be installed on the 500-kV Voskhod substation of the Sibe- Efficiency: Installation of a PSD on the 500-kV Voskhod substation will of a phase-shifting device documentation. rian backbone electric grids. help to eliminate overload on the 220-kV Tatarskaya-Voskhod OHL and prototype for a selected control the Ural-Siberia power flow by re-distributing power among the UNEG site relevant links, with a net discounted revenue from the use of such PSD, payback period and profitability margin expected to stand at RUB290.7 mln, 8.6 years and 1.51, respectively. Power losses in the grid adjacent to the 500-kV Voskhod substation are expected to be reduced by 200-300 MVA as a result of elimination of ring power flows.

11 Setup of a Digital Substa- 13/09/10 30/06/14 Russia’s first digital substation (DS) has been setup to simultane- Deployed on FGC’s Digital Substation test ground Efficiency: The DS test ground allows (1) testing next-generation digital tion test ground, and ously serve as a test ground for developing and testing innovative monitoring, protection and control devices based on IEC 61850-9.2 and IEC development and testing solutions in this field. 61850-8.1, developing and testing the optimum structure of a “process bus” of a Digital Substation based on IEC 61850-9.2, comprehensively test DS facilities in normal and IHSS prototype emergency operation modes and the simulated grid, developing design recommendations for both individual components of the Digital Substation IHSS and the Digital Substation IHSS as a whole, and improving the monitoring and control of the substation’s electric equipment; and (2) improving the reliability of grids and facilitating migration to “unattended” substations.

12 Creation of a 20-kV, 13/09/10 31/03/15 1,500-m, 20-kV, 2,500-A D/C HTS cable line, including converters. A 20-kV, 50-MW D/C HTS cable line from the 330-kB Central substa- Efficiency: Reduced power losses in cabling. Short-circuit current limitation. 2,500-A D/C HTS cable tion to the RP9 substation in St. Petersburg has been reviewed by FGC’s Improved transmission flexibility and controlability. Upon completion of its line having a length of up Engineering Board (as evidenced by Meeting Minutes No. 15 dated 22 pilot operation and system tests, this technology is expected to be used in to 2,500 m December 13), included into FGC’s Investment Programme and is cur- metropolitan distribution grids, primarily ring-radial ones, to unify power rently under construction, with 860 meters of HTS cable manufactured. districts divided by railway infrastructure facilities and water obstacles and parts of sectioned grids previously separated based on short-circuit current limitation conditions. This technology helps to resolve an important environmental problem as it eliminates the need for costly magnetic field shielding since D/C power transmission lines emit no magnetic field.

13 Development and making 31/10/11 30/06/15 Prototype of a high-voltage, resonance-type mobile diagnostic The MRIU to be used to test substation equipment in the North-West Efficiency: Improved reliability of UNEG facilities and reduced process of a mobile diagnostic system (MRIU) designed to test transformers, gas-insulated backbone electric grids. violations and economic damage. Use. Testing of transformers, GISs and system prototype for switchgears (GISs) and cable lines rated for up to 500 kV on site in cable lines rated for up to 500 kV on UNEG substations in accordance substation equipment accordance with IEC 60060-3. with IEC 60060-3 in the course of installation and under operation. and cable lines.

14 Development and making 02/11/11 30/11/15 Prototype of a 220-kV double-break vacuum circuit breaker and Deployment site is currently being selected. Efficiency: Reduced costs to build and operate substations. Extended of a double-break vacuum related design documentation. switching life (30,000 to 50,000 switches). Usability at low temperatures circuit breaker prototype without heating. No toxic products emitted during decomposition of insulat- rated for 220 kV ing gas.

15 Development and making 01/10/11 31/06/14 Prototype of a 220-kV, 63-MVA gas-insulated power transformer Deployment site is currently being selected. Efficiency: Improved reliability and fire safety of substations. Usability in of a gas-insulated power and related design documentation. construction of covered substations and manufacture of gas-insulated transformer prototype transformers. rated for 220 kV and 63 MVA

16 Development and making 01/10/11 22/08/16 Prototype of a controllable series compensator for the 500-kV Prototype of a controllable series compensator for the 500-kV OHL from Efficiency: Once installed on the 500-kV OHL from the Sayano-Shush- of a controllable series OHL and related design documentation. the Sayano-Shushenskaya HPP to the 500-kV Novokuznetskaya substation. enskaya HPP to the 500-kV Novokuznetskaya substation, a series compensator prototype for compensator having a compensation ratio of 30% and rated for 2*210 to the 500-kV OHL from the 2*350 MVA will help to increase the maximum permissible power flow Sayano-Shushenskaya HPP between Krasnoyarsk, Khakassia and West by 290 MW to 610 MW and to the 500-kV Novokuznets- the maximum permissible load on the Sayano-Shushenskaya HPP by kaya substation 140 MW to 310 MW.

17 Development of ultrastrong 31/10/11 15/11/15 Pilot batch of composite aluminium wiring featuring improved Efficiency: Reduced costs to build OHL by using aluminium wiring composite aluminium mechanical and electric-conductivity characteristics using nano featuring improved mechanical and electric-conductivity characteristics wiring featuring improved composites based on multi-layer carbon nano tubes using nano composites based on multi-layer carbon nano tubes. mechanical and electric- conductivity characteristics using nano composites based on multi-layer carbon nano tubes

18 Development of grid 31/10/11 20/11/14 Set of design documentation for a grid energy accumulator (GEA) Prototype of a GEA on FGC’s Digital Substation test ground. Efficiency: Equalised power system load curves, stabilised power energy accumulators for prototype. Set of design documentation for an integrated stand for delivery curves, consumer power supply backup, improved capacity of UNEG based on traction developing a GEA prototype. intersystem links, improved static/dynamic stability of power systems, ultracapacitors and improved operation reliability of power systems. The work results will be used to develop and manufacture GEAs rated for 1 MW to 50 MW.

10 11 JSC FGC UES Annual Report Appendices

Contract start Contract/ stage # R&D Contractual results Deployment sites and uses of contractual results Effect from deployment/use of contractual results date end date

19 Expert examination of 28/12/13 15/11/15 Technical part of tender documentation for competitive biddings Technical part of tender documentation for competitive biddings to The results achieved have been used to develop FGC’s R&D Programme FGC’s R&D projects to to award R&D contracts covered by FGC’s R&D Programme for award R&D contracts covered by FGC’s R&D Programme for 2014-2018. for 2014-2017, hold competitive biddings to award R&D contracts, and create active-adaptive 2014-2018. Statements of works for the works covered by FGC’s Statements of works for the works covered by FGC’s R&D Programme review and accept the R&D works performed by the contractors. (smart) grids R&D Programme for 2014-2018. Expert opinions on the phased for 2014-2018. Expert opinions on the phased results of the R&D con- results of the R&D contracts performed in 2014-2015 under FGC’s tracts performed in 2014-2015 under FGC’s R&D Programme. Patents R&D Programme. Nos. 103679, 106807, 107189, 107191, 107414, 108235 and 113430 dated 10 February 2012 and Nos. 2449446 and 2475911 dated 20 February 2013. Three German patents (based on Russian patents Nos. 107189, 107414 and 113430).

20 Research and bringing 25/02/14 30/11/15 Goodwill acquired under R&D contracts. Invention and utility model applications submitted by FGC to Rospatent. The results achieved will be used by FGC to build up its intellectual R&D results to a legally Software and database registration applications submitted by FGC to properties portfolio and create goodwill, in particular when including its protectable level with draft- Rospatent. R&D costs for bookkeeping and tax accounting purposes. ing materials required to International patent applications submitted by FGC. protect FGC’s intellectual Russian invention and utility model patents obtained by FGC. property rights by exclusive Rospatent registration certificates for computer software and databases. title registrations in Russia WIPO reports on international patent searches. Published international and abroad applications. Foreign patent documents issued to FGC.

21 Development, making 31/10/11 30/11/15 110 kV GIS prototyps with vacuum circuit breakers for outdoor To be used on UNEG substations. Deployment site is currently being Efficiency: Reduced costs to build and operate substations: no need to build and testing of 110-220 applications and related design documentation. selected. covered premises to accommodate 110-220 kV GISs, 80% less need to use kV GIS prototypes with insulating gas, and extended switching life (30,000 to 50,000 switches). vacuum circuit breakers Usability at low temperatures without heating. No toxic products emitted for outdoor applications during decomposition of insulating gas. Usable to build UNEG substations. The long switching life of the vacuum arc-quenching chambers (VAQC) comprising a GIS make it possible to build a completely unattended substation. The digital current and voltage transformers and control cabinet supporting IEC 61850 data exchange comprising a GIS make it possible to build a digital unattended substation for outdoor applications in a wide range of temperatures in almost any climatic zone of Russia.

22 Development of a 110-kV 31/10/11 30/06/14 Design documentation for a 110-kV SSCCL prototype To be used on UNEG substations. Deployment site is currently being Efficiency: Use of a switching SSCCL where a high-speed vacuum circuit superconductor short- selected. breaker is connected in series with a resistive SSCCL matrix will shorten the in- circuit current limiter teraction duration of a single short circuit to 10 ms to ms – ten times as less as (SSCCL) prototype compared to a conventional resistive SSCCL diagram, resulting in lower power losses in rated operating conditions and better reliability and safety of electric equipment, saved power and improved stability of power system.

23 Design of aesthetic single- 05/09/11 02/06/14 Sets of working design documentation on “Aesthetic Twin-circuit Once a licence agreement is executed, those sets of working design Efficiency: Improved aesthetic appearance of the 220-kV OHL designed circuit and twin-circuit Support for a 220-kV OHL” and “Aesthetic Twin-circuit Support documentation will be used by manufacturers to set up the production of to be installed in metropolitan centres, in park areas, at entrances to supports for 220-kV OHL Anchor and Angle Tension Support for a 220-kV OHL” products, their delivery by the Customer and their sale to third parties. cities and towns, along ring and bypass roads, and at approaches to substations within the precincts of cities and towns.

24 Study and review of the 29/04/14 14/11/14 Methodical guidelines for developing circuit designs for RPAS The developed guidelines for implementing circuit designs and for setting Study and review of the causes for process violations caused by incor- causes for process viola- microprocessor devices. Methodical guidelines for setting up and up and configuring RPAS microprocessor devices are to be used to design rect functioning of RPASs will make it possible to adjust either the tions caused by incorrect configuring RPAS microprocessor devices. Methodical guidelines and operate RPAS microprocessor devices on the Customer’s sites. circuit designs of the relevant terminals or their algorithms to prevent functioning of relay pro- for developing software for RPAS microprocessor devices. or at least minimise such accidents, thereby improving their reliability. tection and automation system (RPAS) devices by using the RTDS IHSS

25 Development and making 02/06/14 31/03/16 Engineering tools and methodological frameworks for metrologi- To be used: by the Customer to certify, metrologically serve and operate Developed as part of the R&D works, the set of guidelines and the of engineering tools and cal support of digital substations digital substation measurement systems (DSMSs) and their components; by reference equipment kit designed for carrying out metrological works methodological frameworks the Contractor (under a licence contract) to manufacture and supply verifying will make it possible to build and operate a complete digital substation for metrological support of systems; and by the Customer, the Contractor or any other entities to metro- solution that will help to improve the economic efficiency of a project digital substations logically control and supervise over DSMSs and their components. throughout its life.

26 Development, making 18/06/14 18/06/15 Design documents, full-scale mock-up of a product, experimental To be used by the Customer for the purposes of certification of the The economic efficiency of operation depends on the savings on fault and testing of a full-scale data on breakdown indicator triggering at various voltages, forms breakdown indicator and its pilot operation on the Customer’s over- location and defectoscopic costs, reduction of the OHL disconnection mock-up of a breakdown and exposure durations of a test pulse. head lines when exploring the possibility to replace glass and porcelain time and an increase in the reliability of power supply. indicator for line polymer insulators with polymer ones with such breakdown indicators and the insulators for 110-220-kV usability of such breakdown indicator as a dirt indicator for a string of OHL glass, porcelain and polymer insulators.

27 Exploration of the possibil- 31/12/14 31/12/14 Assessment of the potential for reducing power losses in UNEG and Upon completion of the work, promising technologies that can hep to Reduction of technical power losses across FGC’s branches as a result ity to reduce technical pow- determination of whether it would be reasonable to take any corrective reduce power losses will be identified, reviewed and ranked and recom- of the corrective actions taken. er losses observed when actions to reduce such power losses in the context of FGC’s branches. mendations given on how to improve FGC’s regulatory and procedural electricity is transmitted via Substantiation of corrective actions to reduce power losses in UNEG frameworks to the extent the deployment of such technologies and its UNEG and determination in the context of FGC’s branches by optimising the operation modes efficiency assessment are concerned. of the potential for such of UES of Russia in terms of reactive power and voltage level and by reduction reducing power consumption to meet substations’ own needs.

12 13 JSC FGC UES Annual Report Appendices

PERFORMANCE RESULTS MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) / DEBT PORTFOLIO

Management’s Discussion and wholesale market for electric energy • RF Government Resolution «On Information on outstanding bonds issued by JSC FGC UES Analysis / Tariff Regulation and power” No. 1172 dated December investment programmes of subjects of 27, 2010 electricity industry» No. 977dated 01 • Federal Law “On electric energy” No. December 2009 Series 6 7 8 9 35-FL dated March 26, 2003 • RF Government Resolution «On ratification of the Rules for non- • FTS (Federal Tariff Service) of Russia Non-convertible interest-bearing certificated bearer bonds with mandatory centralised custody and Type of securities • RF Government Resolution “On pricing discriminatory access to electricity Decree “On ratification of the guidelines the option of early redemption at the request of the bondholders or at the discretion of the issuer in regulated areas (tariffs) in the transmission services and provision for calculation of tariffs for electricity electric energy sector” No. 1178 dated thereof, the Rules for non- transmission through the Unified 4-06-65018-D dated 4-07-65018-D dated 4-08-65018-D dated 4-09-65018-D dated Registration number December 29, 2011 discriminatory access to services on National (All-Russia) Electric Grid” No. 05.11.2009 05.11.2009 05.11.2009 05.11.2009 operational dispatch management 56-e/1 dated March 21, 2006 • RF Government Resolution “On defining in electric power industry and Issuance volume, RUB 10 billion 5 billion 10 billion 5 billion the applicable indicators of reliability and provision thereof, the Rules for non- • FTS of Russia Decree “On ratification Face value, RUB 1,000 1,000 1,000 1,000 quality of goods and services provided in discriminatory access to services of the Guidelines on tariff regulation establishing long-term tariffs” No. 1220 of wholesale market administrator using the method of return on invested Term 10 years 10 years 10 years 10 years dated December 31, 2009 and provision thereof, the Rules for capital” No. 228-e dated March 30, 2012 technological connection of power Issue date 28.09.2010 29.10.2010 28.09.2010 29.10.2010 • RF Government Resolution “On receivers of electricity consumers, • FTS of Russia Decree «On ratification Rate 8.25% 7.5% 8.25% 7.99% ratification of the Rules for the power generating facilities, and of the Procedure for preparing Wholesale Electric Energy and Power electric grid facilities owned by grid consolidated balance forecast for Date of tender/maturity -/15.09.2020 27.10.2015/16.10.2020 -/15.09.2020 24.10.2017/16.10.2020 Market and amendment of certain organisations and other entities, electricity (capacity) generation and acts of the RF Government related to electric grids» No. 861 dated 27 sales» No. 53-e/1 dated 12 April 2012 Exchange MICEX MICEX MICEX MICEX to organising the functioning of the December 2004 Quotation List Second Level Second Level Second Level Second Level

Obligations Obligations Obligations Obligations Lombard list of the Bank of Russia are included are included are included are included Type of standard tariff rate R1 approved by FTS for 2014-2015 Volume outstanding as of December 31, 7,535 billion 5 billion 7,315 billion 5 billion 2014, RUB Type of standard tariff rate 2014 2015

Rate to cover the costs for technological connection be activities, in line item 16 (except line sub-items “b” 27.56 28.61 and “c”) – R1, including:

arranging technical conditions for the Applicant by the grid company (hereinafter, “TC”), RUB/kW 22.08 Series 10 11 12 13

verification by the grid company of the Applicant’s compliance with TC, RUB/kW 4.92 Non-convertible interest-bearing certificated bearer bonds with mandatory centralised custody and Type of securities the option of early redemption at the request of the bondholders or at the discretion of the issuer participating in the evaluation (examination) by an official from the federal state energy supervision 27.56 0.58 authority of the Devices connected, RUB/kW 4-10-65018-D dated 4-11-65018-D от 4-12-65018-D от 4-13-65018-D от Registration number 05.11.2009 05.11.2009 07.06.2011 07.06.2011 the grid company actually connecting the facilities of the Applicant to the electric grids and turning the 1.03 switchgear into “on” position, RUB/kW Issuance volume, RUB 10 billion 10 billion 10 billion 10 billion

Rate to cover the costs of the grid company to build the overhead power lines – R2, RUB/km Face value, RUB 1,000 1,000 1,000 1,000

Rate to cover the costs of the grid company to build the electric cable lines – R3, RUB/km not set not set Term 10 years 10 years 7 years 10 years

Rate to cover the costs of the grid company to build the substations - R4, RUB/kW Issue date 28.09.2010 29.10.2010 27.04.2012 05.07.2011

Rate 7.75% 7,99% 8,1% 8,5%

Date of tender/maturity 24.09.2015/15.09.2020 24.10.2017/16.10.2020 28.04.2016/ 19.04.2019 -/22.06.2021

Exchange MICEX MICEX MICEX MICEX

Quotation List Second Level Second Level Second Level Second Level

Obligations Obligations Obligations Obligations Lombard list of the Bank of Russia are included are included are included are included

Volume outstanding as of December 31, 10 billion 10 billion 10 billion 10 billion 2014, RUB

14 15 JSC FGC UES Annual Report Appendices

Information on outstanding infrastructure bonds issued by JSC FGC UES Series 15 18 19 21

4-15-65018-D dated 4-18-65018-D dated 4-19-65018-D dated 4-21-65018-D dated Non-convertible interest-bearing certificated bearer bonds with mandatory centralised custody and Registration number Type of securities 07.06.2011 07.06.2011 07.06.2011 21.06.2012 the option of early redemption at the request of the bondholders or at the discretion of the issuer

Issuance volume, RUB 10 billion 15 billion 20 billion 10 billion 4-23-65018-D dated 4-26-65018-D dated 4-27-65018-D dated 4-28-65018-D dated Registration number 21.06.2012 21.06.2012 21.06.2012 21.06.2012 Face value, RUB 1,000 1,000 1,000 1,000 Issuance volume, RUB 10 billion 15 billion 15 billion 20 billion. Term 12 years 12 years 12 years 15 years Face value, RUB 1,000 1,000 1,000 1,000 Issue date 27.10.2011 12.12.2011 21.07.2011 24.10.2012 Term 35 years 35 years 35 years 35 years Rate 8.75% 8.5% 7.95% 8.75% Issue date 10.06.2013 13.08.2013 13.08.2013 10.06.2013 Date of tender/maturity 28.10.2014/ 12.10.2023 17.06.2014/ 27.11.2023 18.07.2018/ 06.07.2023 26.04.2017/ 06.10.2027 1st coupon – 8.4%, cou- 1st coupon – 7.5%, cou- 1st coupon – 7.5%, cou- 1st coupon – 8.4%, Exchange MICEX MICEX MICEX MICEX pons 2-140 calculated pons 2-136 calculated pons 2-136 calculated coupons 2-140 calculated Rate based on a formula: Кi based on a formula: Кi based on a formula: Кi based on a formula: Кi = Quotation List Second Level Second Level Second Level Second Level = (CPI – 100%) + 1% = (CPI – 100%) + 1% = (CPI – 100%) + 1% (CPI – 100%) + 1% Obligations Obligations Obligations Obligations Lombard list of the Bank of Russia Date of tender/maturity -/27.04.2048 09.07.2047 /30.06.2048 09.07.2047 /30.06.2048 -/27.04.2048 are included are included are included are included Exchange MICEX MICEX MICEX MICEX Volume outstanding as of December 31, 10 billion 15 billion 20 billion 10 billion 2014, RUB Unlisted securities register Third Level Third Level Third Level Third Level

Volume outstanding as of December 31, 10 billion 15 billion 11 billion 20 billion. 2014, RUB

Series 22 25 BО-01 24

Non-convertible interest-bearing certificated bearer bonds with mandatory centralised custody and Type of securities the option of early redemption at the request of the bondholders or at the discretion of the issuer series 29 30 34 4-22-65018-D dated 4-25-65018-D dated 4В02-01-65018-D 4-24-65018-D dated Registration number Non-convertible interest-bearing certificated bearer bonds with mandatory centralised custody and 21.06.2012 21.06.2012 dated 06.06.2012 21.06.2012 Type of securities the option of early redemption at the request of the bondholders or at the discretion of the issuer Issuance volume, RUB 10 billion 15 billion 10 billion 10 billion. 4-30-65018-D dated 4-34-65018-D dated Registration number 4-29-65018-D dated 21.06.2012 14.11.2013 14.11.2013 Face value, RUB 1,000 1,000 1,000 1,000 Issuance volume, RUB 20 billion 10 billion 15 billion Term 15 years 15 years 3 years 15 years Face value, RUB 1,000 1,000 1,000 Issue date 08.08.2012 02.10.2012 24.10.2012 25.01.2013 Term 35 years 35 years 35 years 1-2 coupons at 9%, coupons 2-20 calculat- Rate 8.6% 8.1% 8% Issue date 21.10.2013 13.12.2013 13.12.2013 ed based on a formula: Кi=(CPI – 100%) + 2.5% 1st coupon – 7.5%, coupons 1st coupon – 7.5%, coupons 1st coupon – 7.1%, coupons 2-132 2-132 calculated based on a 2-136 calculated based on a Date of tender/maturity 03.08.2022/ 21.07.2027 04.10.2016/ 14.09.2027 29.04.2015/24.10.2015 24.01.2020/07.01.2028 Rate calculated based on a formula: Кi = formula: Кi = (CPI – 100%) + formula: Кi = (CPI – 100%) + (CPI – 100%) + 1% 1% 1% Exchange MICEX MICEX MICEX MICEX Date of tender/maturity 17.09.2046 /07.09.2048 08.11.2046 /30.10.2048 07.11.2047/30.10.2048 Quotation List Second Level Second Level Second Level Second Level Exchange MICEX MICEX MICEX Obligations Obligations Obligations Obligations Lombard list of the Bank of Russia are included are included are included are included Unlisted securities register Third Level Third Level Third Level Volume outstanding as of December 31, 10 billion 15 billion 10 billion 10 billion Volume outstanding as of December 31, 2014, RUB 20 billion 10 billion 14 billion 2014, RUB

16 17 JSC FGC UES Annual Report Appendices

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) / CREDIT RATINGS SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT HR POLICY / PERSONNEL TRAINING AND DEVELOPMENT Information on Credit Ratings of Federal Grid for the period 2012-2014 and in the 1st quarter of 2015 Information on the training and retraining of Federal Grid employees in 2014 2012 2014 2015 Funding for Funding for 23 November / Moody’s 30 December / Standard & Poor’s 26 February / Moody’s Number of Federal Grid Number of Federal Grid Federal Grid employee Federal Grid employee Federal Grid’s ratings have been put Upon completion of the review period INN of Higher INN of Higher Education employees training employees retraining Federal Grid’s rating on the international under review for downgrade following the initiated by the rating agency due to Originator Education Originator Institution undergoing at the undergoing at the scale downgraded from Baa2 to Baa3 downgrade of the Russian Federation, deterioration in the macroeconomic and Institution training at the institution retraining at institution (outlook: Stable) due to changes in which is due to a rapid decline in the financial climate in Russia, Federal Grid institution. (RUB the institution. (RUB the ownership structure relating to country’s flexibility in terms of its lending Company’s credit rating was affirmed at thousand) thousand) contribution to the share capital of a and monetary policy and with the impact Ba1 (outlook: Negative) newly created company, JSC Rosseti, of the weakening of the economy on the Yeltsin Ural Federal JSC FGC UES 4716016979 6660003190 64 1792.000 0 0 of the state-held share in Federal Grid; financial system. 4 February / Standard & Poor’s University assessment of Federal Grid’s financial Following the change of the sovereign position did not change. 23 December / Moody’s rating of the Russian Federation, Federal Moscow Power Federal Grid’s ratings have been placed for Grid was downgraded to BВ+ (outlook: Engineering Institute JSC FGC UES 4716016979 7722019652 11 310.000 0 0 On the national scale the Company’s rating review for downgrade due to similar actions Negative). (National Research was confirmed at the level of Aaa.ru. in respect of Russia’s sovereign rating. University) 20 января / Moody’s 21 октября / Moody’s Federal Grid’s credit rating downgraded National Research JSC FGC UES 4716016979 7724068140 164 3560.000 0 0 2013 Long-term Federal Grid’s rating under the from Baa3 (outlook: Negative) to Ba1 Nuclear University global scale was confirmed at Baa3: by (currently under review for downgrade) 25 October / Fitch Ratings credit quality the company belongs to the due to the change of the sovereign rating of Russian Presidential Long-term default rating of Federal investment category, which attests to the the Russian Federation. Academy of National JSC FGC UES 4716016979 7729050901 0 0 1 100.000 Grid was established at the level of BBB stability of its key areas of operations and Economy and Public (outlook: Stable), on the national scale, at high financial stability as macroeconomic 9 January / Fitch Ratings Administration the level of AAA(rus). factors and market environment Due to the review of the sovereign rating of deteriorate. the Russian Federation, long-term Federal Higher School of 17 October / Standard & Poor’s Grid default ratings in foreign and national JSC FGC UES 4716016979 Economics (National 7714030726 3 26.250 0 0 Long-term credit rating of Federal Grid on 1 July / Moody’s currencies have been decreased from ВВВ Research University) the international scale has been confirmed Rating agency Moody’s confirmed Federal to ВВВ- (outlook: Negative). at BBB (outlook: Stable), on the national Grid’s rating, Baa3 on the global scale and Russian State Academy JSC FGC UES 4716016979 7703108441 0 0 2 77.000 scale, at the level of ruAAA. Aaa.ru on the national scale. of Intellectual Property Assessment of Federal Grid’s credit 28 April / Standard & Poor’s Lomonosov Moscow by both agencies is based on similar Federal Grid’s long-term rating in foreign JSC FGC UES 4716016979 7729082090 1 0 0 0 State University factors. Long-term default BBB ratings currency has been decreased by one notch are two notches higher than Federal from ВВВ to BBB- (outlook: Negative) due Grid’s stand-alone credit taking into to the decrease of the sovereign rating of MES Ural account moderately strong connections the Russian Federation in foreign currency with the Company’s indirect shareholder, from BBB to BBB- (outlook: Negative), in State University on JSC FGC UES' Land Use Planning the Russian Federation (BBB / outlook: the national currency, from ВВВ+ to BBB. branch – MES 4716016979 7701113654 1 30 0 0 (Marketing Depart- Stable) via JSC Rosseti. Assessment of Ural Federal Grid’s stand-alone credit at the 3 April / Moody’s ment), Moscow level of BB+ as a positive factor takes placed ratings of Federal Grid under into account the Company’s position as review for downgrade due to the potential JSC FGC UES' Povolzhsky State Uni- the owner and monopoly operator of the downgrade of the sovereign. 1 July 2014 branch – MES 4716016979 versity of Telecommuni- 6317017702 2 30,4 0 0 national electricity transmission grid and the Company’s credit rating on the global Ural cations and Informatics its high level of profitability and liquidity. scale was confirmed at the previous level At the same time, the rating agencies of Baa3 (so called investment category) MES Western Siberia point to the following factors as negatives: with a negative outlook. instability of the regulatory environment JSC FGC UES' Omsk Institute of Water and financial risks that may relate to 27 March / Standard&Poor’s branch» - Cen- 4716016979 5407121512 1 14 0 0 Transport (branch) the implementation of a large-scale 26 March / Fitch Ratings tralnaya PMES investment programme. Outlook for Federal Grid was changed from stable to negative, at the same time the JSC FGC UES' Tyumen State Oil and Company’s long-term ratings in foreign an branch – Yuzh- 4716016979 7202028202 0 0 5 41 Gas University national currencies – BBB – were confirmed. noe PMES

JSC FGC UES' Branch of Tyumen State branch – Yam- 4716016979 Oil and Gas University, 7202028202 18 62.03 0 0 alo-Nenetskoe Noyabrsk PMES

18 19 JSC FGC UES Annual Report Appendices

Funding for Funding for Funding for Funding for Number of Federal Grid Number of Federal Grid Number of Federal Grid Number of Federal Grid Federal Grid employee Federal Grid employee Federal Grid employee Federal Grid employee INN of Higher INN of Higher INN of Higher Education employees training employees retraining INN of Higher Education employees training employees retraining Originator Education Originator Education Originator Institution undergoing at the undergoing at the Originator Institution undergoing at the undergoing at the Institution Institution training at the institution retraining at institution training at the institution retraining at institution institution. (RUB the institution. (RUB institution. (RUB the institution. (RUB thousand) thousand) thousand) thousand)

MES North-West JSC FGC UES' Voronezh State Univer- branch - Volga- 4716016979 3666029505 1 15.00 0 0 sity, Voronezh Okskoe PMES JSC FGC UES' Saint Petersburg State branch – MES 4716016979 7804040077 21 316.800 0 0 Polytechnical University North-West JSC FGC UES' South-West State Uni- branch - Volga- 4716016979 4629029058 2 56.00 0 0 versity, Kursk Okskoe PMES MES East

JSC FGC UES' Ivanovo State Power Khabarovsk Institute branch - Mosko- 3731000308 1 17.69 8 274.188 of Infocommunications University, Ivanovo JSC FGC UES' vskoe PMES (branch of Sibe- branch – 4716016979 rian State University of 5405101327 10 250.000 0 0 Khabarovskoe Telecommunications MES Siberia PMES and Informatics), Khabarovsk JSC FGC UES' Siberian State Univer- 4716016979 2463011853 15 113.500 0 0 branch sity JSC FGC UES' Amur State University, branch - Pri- 4716016979 2801027174 20 240.000 0 0 Blagoveschensk East-Siberia State Uni- morskoe PMES JSC FGC UES' 4716016979 versity of Technology 323060215 6 30.000 0 0 branch and Management Russian Presidential JSC FGC UES' Academy of National TOTAL 354 6977.86 29 917.47 branch – MES 4716016979 Economy and Pub- 7729050901 0 0,000 1 44.700 East lic Administration, Khabarovsk

JSC FGC UES' Saint Petersburg Law branch - MES 4716016979 Academy, Saint Peters- 7825379294 3 0,000 0 0 East burg

JSC FGC UES' Khabarovsk State Acad- branch - MES 4716016979 emy of Economy and 2725006638 3 13.500 0 0 East Law, Khabarovsk

MES Centre

JSC FGC UES' South-West State Uni- branch - Valday- 4716016979 4629029058 2 56.00 0 0 versity, Kursk skoe PMES

JSC FGC UES' Ivanovo State Power branch - Valday- 4716016979 3731000308 1 17.69 8 274.188 University, Ivanovo skoe PMES

JSC FGC UES' Vologda State Technical branch - Valday- 4716016979 3525027110 2 9,00 0 0 University skoe PMES

State Academy for Advanced Training and JSC FGC UES' Retraining of staff for branch - Up- 4716016979 7718193111 1 18.00 0 0 Construction and Hous- per-Don PMES ing Utilities Complex of Russia , Moscow

Moscow Power JSC FGC UES' Engineering Institute branch - MES 4716016979 7722019652 1 0 0 0 (National Research Centre University)

JSC FGC UES' Tver State Technical branch - Volga- 4716016979 6902010135 0 0 4 106.39 University Don PMES

20 21 JSC FGC UES Annual Report Appendices

CORPORATE GOVERNANCE SHARE CAPITAL / SHARE CAPITAL STRUCTURE

Information on the registered issues of shares in JSC FGC UES

State registration number of the 1-01-65018-D 1-01-65018-D-001D 1-01-65018-D-002D 1-01-65018-D-002D 1-01-65018-D-098D 1-01-65018-D-101D 1-01-65018-D-102D 1-01-65018-D-103D 1-01-65018-D-104D 1-01-65018 issue

common regis- Type and category (class) of common registered uncertificated common registered common registered common registered common registered common registered common registered common registered common registered un- tered uncertifi- securities shares uncertificated shares uncertificated shares uncertificated shares uncertificated shares uncertificated shares uncertificated shares uncertificated shares certificated shares cated shares

Date of state registration of the 10.09.2002 21.03.2006 23.08.2007 03.06.2008 03.06.2008 25.12.2008 12.08.2010 08.09.2011 03.12.2012 21.11.2013 securities issue

Registration authority that performed the State registration of FCSM of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia Bank of Russia the securities issue

Nominal value of each instrument 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 in the issue (RUB)

Placement procedure for the merger share conver- merger share conver- public subscrip- placement with the founders private subscription private subscription public subscription public subscription public subscription public subscription securities issued sion sion tion

Number of securities to be placed in accordance with the registered 254,000,000,000 160,000,000,000 120,000,000,000 737,588,851,876 34,154,866,389 146,500,000,000 28,288,776,589 10,321,601,853 8,164,069,983 9,431,399,773 resolution on the issuance of securities (pieces)

Number of securities placed in accordance with the registered re- 254,000,000,000 118,167,724,361 114,965,254,235 737,588,491,911 34,154,626,385 80,047,137,190 22,386,794,841 4,438,530,347 6,754,357,256 7,524,307,067 port on the results of the issuance of securities (pieces)

Date of the state registration of the report on the results of the 10.09.2002 15.05.2007 18.04.2008 12.08.2008 12.08.2008 26.01.2010 01.03.2011 22.03.2012 18.04.2013 19.03.2014 issuance of securities

shares outstanding: 34,526,955,148 (part of the main shares outstanding: issue) redeemed: 229,076,398,557 (excluding the ad- shares outstand- shares outstanding 80,438,299,087 (re- shares outstanding shares outstanding shares outstanding shares outstanding shares outstanding shares outstanding (part Status of the securities issued ditional issues the individual num- ing (part of the (part of the main issue) deemed prior to the (part of the main issue) (part of the main issue) (part of the main issue) (part of the main issue) (part of the main issue) of the main issue) bers (codes) whereof were remain issue) date of revocation of voked) redeemed: 24,923,601,443 the individual number (code) of the additional securities issue)

If, with respect to the additional issue, the three month term has expired from the date of state registration of the report on the results of the additional issue of - securities and the registration authority has decided to revoke the individual number (code) of such additional issue

Individual number (code) of the - 001D 002D 097D 098D 101D 102D 103D 104D additional issue of securities

Date of revocation of the code - 28.08.2007 22.07.2008 18.11.2008 18.11.2008 06.05.2010 21.06.2011 26.06.2012 25.07.2013

Authority making the decision to revoke the individual number - FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia FFMS of Russia (code) of the additional issue of securities

22 23 JSC FGC UES Annual Report Appendices

JSC “FGC UES” Account Statements Prepared in accordance with Russian Accounting Standards (RAS) For the year ended 31 December 2014

RSM assessment of the risk of material misstatement of the accounts, whether due to fraud or error. In Audit Tax Advisory making this risk assessment, we considered the internal control system relevant to the RSM RUS LLC preparation and fair presentation of the accounts in order to design audit procedures that are 4, Pudovkin Str., Moscow, Russia 119285 appropriate in the circumstances, but not for the purpose of expressing an opinion on the Phone: +7 (495) 363-28-48 Fax: +7 (495) 981-41-21 effectiveness of the internal control system. E-mail: [email protected] www.rsmrus.ru The audit also included evaluating the appropriateness of the accounting policy used and the March 23, 2015 reasonableness of the accounting estimates made by the audited entity’s management, as well as No. RSM-1014 evaluating the overall presentation of the accounts. Auditors’ Report We believe that the audit evidence we have obtained is sufficient and appropriate to express an on 2014 Accounts opinion on the fair presentation of the accounts. To the Shareholders of JSC FGC UES Opinion Audited entity: In our opinion, the accounts present fairly, in all material respects, the financial position of JSC Joint-Stock Company Federal Grid Company of Unified Energy System (abbreviated name FGC UES as of December 31, 2014, and its financial performance and cash flows for 2014 in JSC FGC UES). accordance with the Russian Accounting Standards. Location: 5a, Akademika Chelomeya Street, Moscow 117630, Russia. Chairman of the Management Board /Signed/ N.A. Dantser Primary state registration number: 1024701893336. Auditor Qualification Certificate No. 05-000015 is issued pursuant to the resolution of the self-regulatory organization of auditors Auditor: Non-Profit Partnership “Russian Collegium of Auditors” No. 24 dated November 15, 2011 for an indefinite period. RSM RUS Limited Liability Company. PNRE in the Register of Auditors and Audit Organizations: Location: 4, Pudovkin Str., Moscow, Russia 119285. 29605011647. Phone: +7 (495) 363-28-48; fax: +7 (495) 981-41-21. Primary state registration number: 1027700257540. Audit Team Head /Signed/ N.N. Usanova Auditor Qualification Certificate No. 05-000030 is issued pursuant RSM RUS Limited Liability Company is a member of the self-regulatory organization of to the resolution of the self-regulatory organization of auditors Non-Profit Partnership “Russian Collegium of Auditors” No. 25 auditors Non-Profit Partnership “Auditing Association Sodruzhestvo” (membership certificate dated November 30, 2011 for an indefinite period. No. 6938, PNRE 11306030308), location: 21, bld. 4, Michurinsky Prospect, Moscow 119192. PNRE in the Register of Auditors and Audit Organizations: 21005008593. We have audited the accompanying accounts of JSC FGC UES, which comprise the balance sheet as of December 31, 2014, statement of financial performance, statement of changes in Round seal: RSM RUS Limited Liability Company * Moscow * OGRN 1027700257540. equity and cash flow statement for 2014, as well as the written appendices to the annual

accounts. Responsibility of the audited entity for the accounts JSC FGC UES’ management is responsible for the preparation and fair presentation of the accounts in accordance with the Russian Accounting Standards, and for internal control system necessary to enable preparation of the accounts that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on the fair presentation of these accounts based on our audit. We conducted our audit in accordance with the federal auditing standards. Those standards require that we comply with the applicable ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the accounts are free from material misstatement. The audit involved performing procedures to obtain audit evidence about the amounts and disclosures in the accounts. The procedures selected depend on our judgment based on the

24 25 JSC FGC UES Annual Report Appendices

Annex to Order of the Russian Ministry of Finance No. 66n Indicator As of December 31, As of December 31, As of December 31, dated July 2, 2010 (as revised by LIABILITY Order of the Russian Ministry of code 2014 2013 2012 Finance No. 124n dated October BALANCE SHEET 5, 2011) 1 2 3 4 4 as of December 31 20 14 III. CAPITAL and RESERVES CODES Share capital (contributed capital, authorized fund, OKUD Form No. 1 0710001 1310 637 332 662 633 570 508 630 193 329 S.3.1 of Annexes** contributions of partners) Date (year, month, day) 2014 12 31 Shares repurchased 1320 - - - Joint-Stock Company “Federal Grid Company of Revaluation of non-current assets 1340 235 563 921 233 001 961 217 604 452 Company as per OKPO 56947007 Unified Energy System” S.3.1 of Annexes** Additional capital (without revaluation) 1350 31 867 163 31 867 163 31 867 163 Reserve capital 1360 13 038 463 13 038 463 13 038 463 Tax identification code INN 4716016979 Undistributed profit (uncovered loss), including: 1370 ( 63 312 639 ) ( 68 502 921 ) ( 43 578 442 ) Activity power transmission as per OKVED 40.12 Form of corporate entity’s incorporation/ form of ownership Uncovered loss of past years 1371 ( 68 012 579 ) ( 68 502 921 ) ( 43 578 442 ) 47 41 open joint-stock company/mixed Russian assets with a federal share as per OKOPF/OKFS Undistributed profit of past years 1372 - - - Undistributed profit of the reporting year 1373 4 699 940 - - Unit: RUB thousand as per OKEI 384 Uncovered loss of the reporting year 1374 - 0 - Location (address) 5A Akademika Chelomeya Street, Moscow, Russia, 117630 TOTAL for Section III 1300 854 489 570 842 975 174 849 124 965 Approval date IV. LONG-TERM LIABILITIES Mailing (acceptance) date S.3.12 of Annexes** Borrowed assets 1410 232 771 196 257 349 473 192 500 000 Indicator As of December 31, As of December 31, As of December 31, Notes ASSET Deferred tax liabilities 1420 34 211 465 25 028 416 16 827 826 code 2014 2013 2012 Estimated liabilities 1430 - - - 1 2 3 4 5 Other liabilities 1450 453 029 51 434 33 473 I. NON-CURRENT ASSETS TOTAL for Section IV 1400 267 435 690 282 429 323 209 361 299 S.1 of Notes* Intangible assets 1110 3 265 522 1 258 891 1 292 900 S.3.2 of Annexes** V. SHORT-TERM LIABILITIES Borrowed assets 1510 29 544 812 29 488 107 23 089 798 S.1 of Notes* Research and development results 1120 324 255 293 213 57 172 S.3.6 of Annexes** S.5.3 of Notes* S.3.13 of Annexes** Accounts payable, including: 1520 77 550 930 58 051 033 40 016 902 S.2 of Notes* Fixed assets, including: 1130 788 861 095 715 008 677 594 542 847 S.3.3 of Annexes** suppliers and contractors 1521 67 205 391 41 424 439 19 675 908 land plots and natural resources 1131 1 631 794 1 547 211 1 102 621 amounts owed to the company staff 1522 221 038 204 732 211 572 buildings, machines and equipment, structures 1132 782 636 932 708 271 656 588 726 129 amounts owed to state non-budgetary funds 1523 84 162 54 719 103 689 other fixed assets 1133 4 592 369 5 189 810 4 714 097 Income-bearing investments in tangible assets 1140 - - - taxes and fees payable 1524 1 326 189 961 610 543 947 S.3 of Notes* advances received 1525 6 085 001 8 497 875 11 481 086 S.3.7 of Annexes** Financial investments 1150 25 764 856 30 405 661 52 802 915 other creditors 1526 2 619 738 6 895 025 7 989 434 Deferred tax assets 1160 - - - S.2 of Notes* Other fixed assets, including: 1170 299 704 867 345 662 295 362 970 976 payables to members (founders) 1527 9 411 12 633 11 266 equipment for installation 1171 33 218 459 35 196 369 30 150 753 Deferred income 1530 760 936 - 275 041 S.3.4 of Annexes** investments in fixed assets 1172 226 376 514 252 700 001 266 311 382 S.5.1 of Notes* S.7 of Notes* Estimated liabilities 1540 1 435 028 1 347 456 1 127 313 S.3.9 of Annexes** advance on fixed assets 1173 39 761 614 56 921 125 65 670 208 Other liabilities 1550 - - - S.3.11 of Annexes** other fixed assets 1174 348 280 844 800 838 633 TOTAL for Section V 1500 109 291 706 88 886 596 64 509 054 TOTAL for Section I 1100 1 117 920 595 1 092 628 737 1 011 666 810 BALANCE 1700 1 231 216 966 1 214 291 093 1 122 995 318 II. CURRENT ASSETS * - Explanatory Notes to the Balance Sheet and Profit and Loss Statement for 2014.

S.4 of Notes* ** - Annexes to the annual 2014 Financial Statements. S.3.10 of Annexes** Inventory, including: 1210 9 635 100 8 802 454 6 655 077 raw materials, materials and other similar assets 1211 9 635 083 8 581 729 6 625 091 finished goods and goods for sale 1212 17 29 986 29 986 WIP on core services to third parties 1213 - 190 739 - Value added tax on purchased assets 1220 1 146 693 1 548 763 1 954 497

S.5 of Notes* S.3.9 of Annexes** Accounts receivable, including: 1230 60 162 888 53 842 100 61 253 854 Chief Executive V.A. Goncharov Chief Accountant A.P. Noskov (signature) (print name) (signature) (print name) Accounts receivable (payments are expected over more than 12 months 1231 1 110 748 1 709 965 6 176 698 upon the balance sheet date), including:

customers and consumers 1232 4 877 4 851 3 669 502 “ 23 “ March 20 15 advance payments made 1233 - - - other debtors 1234 1 105 871 1 705 114 2 507 196 Accounts receivable (payments are expected within 12 months from the 1235 59 052 140 52 132 135 55 077 156 balance sheet date), including: customers and consumers 1236 37 501 050 22 061 069 18 441 861 amounts owed by members (founders) as share capital 1237 - - - payments advance payments made 1238 1 559 543 1 932 565 1 695 610 other debtors 1239 19 991 547 28 138 501 34 939 685

S.3 of Notes* Financial investments (except cash equivalents) 1240 2 762 466 39 997 563 20 803 449 S.3.8 of Annexes** S.3.19 of Annexes** Cash and cash equivalents 1250 39 480 358 17 331 698 20 527 592 S.3.11 of Annexes** Other current assets 1260 108 866 139 778 134 039 TOTAL for Section II 1200 113 296 371 121 662 356 111 328 508 BALANCE 1600 1 231 216 966 1 214 291 093 1 122 995 318

26 27 JSC FGC UES Annual Report Appendices

Annex Form 0710002 p. 2 to Order of the Russian Ministry of Finance No. 66n dated July 2, 2010 (as revised by Indicator name As of December As of December Order of the Russian Ministry of Notes Finance No. 124n dated October 5, 2014 2013 STATEMENT OF FINANCIAL PERFORMANCE FOR REFERENCE for 2014 Result of the fixed assets revaluation, not included in the net income (loss) for Р.3.3 of Annexes** 3 052 302 16 370 551 CODES the period OKUD Form No.2 0710002 Date (year, month, day) 2014 12 31 Result of the other transactions, not included in the net income (loss) for the period Joint-Stock Company “Federal Grid Company Company as per OKPO 56947007 of Unified Energy System” Total profit or loss for the period 5 136 743 ( 25 897 521 )

Tax identification code INN 4716016979 Р.3.16 of Annexes** Basic earning (loss) per share 0,00404 ( 0,02048 ) Activity power transmission as per OKVED 40.12 Diluted earning (loss) per share Form of corporate entity’s incorporation/ form of ownership * - Explanatory Notes to the Balance Sheet and Profit and Loss Statement for 2014. 47 41 open joint-stock company/mixed Russian assets with a federal share as per OKOPF/OKFS ** - Annexes to the annual 2014 Financial Statements. Unit: RUB thousand as per OKEI 384

Indicator For the reporting For the same period of Chief Executive V.A. Goncharov Chief Accountant A.P. Noskov Notes Description Code period the last year (signature) (print name) (signature) 1 2 3 4 General income and expenses “ 23 “ March 2015 Net proceeds from sale of goods, products and services (net of VAT, 2110 168 940 833 155 351 563 excise duties and other similar compulsory payments), including:

services for electric power transmission 2111 159 881 063 152 709 376 other activity 2112 9 059 770 2 642 187

S.6 of Notes* Production cost of goods, products and services sold, including: 2120 ( 126 305 376 ) ( 120 724 968 )

services for electric power transmission 2121 ( 124 811 735 ) ( 119 467 823 ) other activity 2122 ( 1 493 641 ) ( 1 257 145 ) Gross earnings (2110 + 2120) 2100 42 635 457 34 626 595 Commercial expenses 2210 - - S.6 of Notes* Management expenses 2220 ( 13 953 792 ) ( 12 223 362 ) Profit (loss) from sales (2100 + 2210 + 2220) 2200 28 681 665 22 403 233 Participation capital 2310 294 682 118 193 Interest receivable 2320 5 995 148 4 999 637 Interest payable 2330 ( 5 543 701 ) ( 1 448 343 ) S.3.15 of Annexes** Miscellaneous income 2340 28 768 390 56 007 477 S.3.15 of Annexes** Miscellaneous expenses 2350 ( 43 857 961 ) ( 99 751 745 ) Profit (loss) before tax (2200 +2310 + 2320 + 2330 + 2340 + 2300 14 338 223 ( 17 671 548 ) 2350)

S.3.5 of Annexes** Current income tax, including: 2410 - - constant tax liabilities 2411 ( 6 315 404 ) ( 11 734 900 ) S.3.5 of Annexes** Deferred tax liabilities changes 2430 ( 8 366 583 ) ( 9 976 926 ) S.3.5 of Annexes** Deferred tax assets changes 2450 ( 816 466 ) 1 776 336 Other, including: 2460 ( 18 431 ) ( 25 383 ) Other similar compulsory payments 2461 ( 18 227 ) ( 5 234 ) Income tax correction for the previous periods 2462 ( 204 ) ( 20 149 )

Net income (loss) for the reporting period 2400 5 136 743 ( 25 897 521 )

28 29 JSC FGC UES Annual Report Appendices

Annex No. 2 Form 0710023 p. 3 to Order of the Russian Ministry of Finance 2. Corrections due to changes in the accounting policy and errors elimination No. 66n dated July 2, 2010 (as revised by Order of the Russian Ministry of Finance 2 As of December 31, Changes in equity for 20 13 As of December 31, No. 124n dated October 5, 2011) Indicator name Code 1 2 20 12 due to net profit due to other factors 20 13 (loss) Equity - total Statement of Сhanges in Equity before corrections 3400 - - - - for 20 14 Codes correction due to: OKUD Form 0710003 Date (day, month, year) 31 12 2014 changes in the accounting policy 3410 - - - - errors elimination 3420 - - - - Joint-Stock Company “Federal Grid Company of Unified after corrections 3500 - - - - including: Company Energy System” as per OKPO 56947007 Tax identification code INN 4716016979 retained earnings (uncovered loss): Economic before corrections 3401 - - - - activity power transmission as per OKVED 40.12 correction due to: Form of legal entity’s incorporation / form of ownership changes in the accounting policy 3411 - - - -

open joint-stock company / mixed Russian assets with a federal share as per OKOPF/OKFS 47 41 errors elimination 3421 - - - - Unit of measure: thousand RUR (million RUR) as per OKEI 384 after corrections 3501 - - - -

1. Changes in equity other capital items Treasury shares Additional Reserve Undistributed profits subject to corrections: Indicator name Code Charter capital repurchased Total capital capital (uncovered loss) (per items) from shareholders 1 before corrections 3402 - - - - Capital value as of December 31, 20 12 3100 630 193 329 - 249 471 615 13 038 463 ( 43 578 442 ) 849 124 965 For 20 13 2 correction due to: Increase in capital value - total: 3210 3 377 179 - 16 370 551 - - 19 747 730 changes in the accounting policy 3412 - - - - including: errors elimination 3422 - - - - net profit 3211 х х х х - - property revaluation 3212 х х 16 370 551 х - 16 370 551 after corrections 3502 - - - - income relating directly to the increase in capital value 3213 х х - х - - additional issue of shares 3214 3 377 179 - - х х 3 377 179

increase of share denomination 3215 - - - х - х reorganization of legal entity 3216 ------other 3217 ------3. Net assets Form 0710023 p. 2 Treasury shares Undistributed profits Indicator name Code Charter capital repurchased Additional capital Reserve capital Total As of December 31, As of December 31, As of December 31, (uncovered loss) from shareholders Indicator name Code 20 14 3 20 13 2 20 12 1 Reduction of capital value - total: 3220 - - - - ( 25 897 521 ) ( 25 897 521 ) including: loss 3221 х х х х ( 25 897 521 ) ( 25 897 521 ) property revaluation 3222 х х - х - - Net assets 3600 expenses relating directly to the reduction of 855 250 506 842 975 174 849 400 006 capital value 3223 х х - х - -

decrease of share denomination 3224 - - - х - - reduction of shares quantity 3225 - - - х - - Chief reorganization of legal entity 3226 ------Chief Executive V.A. Goncharov Accountant A.P. Noskov dividends 3227 х х х х - - (signature) (print name) (signature) (print name) Changes in the additional capital 3230 х х ( 973 042 ) - 973 042 х Changes in the reserve capital 3240 х х х - - х 2 Capital value as of December 31, 20 13 3200 633 570 508 - 264 869 124 13 038 463 ( 68 502 921 ) 842 975 174 “ 23 “ March 20 15 For 20 14 3 Increase in capital value - total: 3310 3 762 154 - 3 052 302 - 5 136 743 11 951 199 Notes: including: 1. The year preceding the previous year is indicated. net profit 3311 х х х х 5 136 743 5 136 743 property revaluation 3312 х х 3 052 302 х - 3 052 302 2. The previous year is indicated. income relating directly to the increase in 3. The reporting year is indicated. capital value 3313 х х - х - - additional issue of shares 3314 3 762 154 - - х х 3 762 154

increase of share denomination 3315 - - - х - х reorganization of legal entity 3316 ------Reduction of capital value - total: 3320 - - - - ( 436 803 ) ( 436 803 ) including: loss 3321 х х х х - - property revaluation 3322 х х - х - - expenses relating directly to the reduction of capital value 3323 х х - х - -

decrease of share denomination 3324 - - - х - - reduction of shares quantity 3325 - - - х - - reorganization of legal entity 3326 ------dividends 3327 х х х х ( 436 803 ) ( 436 803 ) other 3328 ------Changes in the additional capital 3330 х х ( 490 342 ) - 490 342 х Changes in the reserve capital 3340 х х х - - х 3 Capital value as of December 31, 20 14 3300 637 332 662 - 267 431 084 13 038 463 ( 63 312 639 ) 854 489 570

30 31 JSC FGC UES Annual Report Appendices

Annex to Order of the Russian Ministry of Finance No. 66n 1 2 3 3 dated July 2, 2010 (as revised by Order of the Russian Cash flows from CASH FLOW STATEMENT financial transactions Receipts - total, including: 4310 21 113 751 420 For 2014 obtaining of credits and loans 4311 - - Codes OKUD Form 0710004 monetary contributions of owners (members) 4312 21 3 765 170 Date (day, month, year) 31 12 2014 from issue of shares, participatory interest increase 4313 - - from issue of bonds, promissory notes and other debt Joint-Stock Company “Federal Grid Company of as per OKPO securities 4314 - 109 986 250 Unified Energy System” Company 56947007 other receipts 4319 - - Tax identification code INN 4716016979 Payments - total, including: 4320 ( 25 015 080 ) ( 40 150 527 ) power transmission as per OKVED to owners (members) due to repurchase of shares Activity 40.12 (participatory interest) of their organization or their cessation of Form of legal entity’s incorporation / form of ownership membership 4321 - - open joint-stock company/mixed Russian assets as per OKOPF/OKFS with a federal share for payment of dividends and other distribution payments 47 41 profit to owners (members) 4322 ( 436 803 ) - Unit of measure: thousand RUR as per OKEI 384 due to the payment of promissory notes and other debt securities, repayment of credits and loans 4323 ( 24 578 277 ) ( 40 150 527 ) За For other payments 4329 - - Indicator name Code 2014 2013 Cash flow balance from financial operations 4300 ( 25 015 059 ) 73 600 893 1 2 3 4 Cash flow balance for the reporting period 4400 22 148 734 ( 3 195 991 ) Cash flows from current transactions Cash and cash equivalents balance as of the beginning of Receipts - total 4110 170 786 303 152 289 140 the reporting year 4450 17 331 599 20 527 590 including: Cash and cash equivalents balance as of the end of the from sale of products, goods, work and services 4111 156 512 674 144 934 906 reporting year 4500 39 480 333 17 331 599 lease payments, license fees, royalties, commission charges and other similar payments 4112 973 585 653 952 Influence of foreign currency change versus RUR 4490 from resale of financial investments 4113 - - other receipts 4119 13 300 044 6 700 282 Payments - total, including: 4120 ( 64 287 145 ) ( 65 600 976 ) to suppliers (contractors) for raw materials, materials, work and Chief Executive V.A. Goncharov Chief Accountant A.P. Noskov services 4121 ( 31 692 812 ) ( 33 375 546 ) (signature) (print name) (signature) (print name) remuneration of labor 4122 ( 16 341 345 ) ( 16 380 422 ) debenture interest 4123 - - “ 23 “ March 20 15 corporate tax 4124 510 624 ( 69 871 ) other payments 4129 ( 16 763 612 ) ( 15 775 137 ) Balance of cash flows from current transactions 4100 106 499 158 86 688 164 Cash flows from investment transactions Receipts - total, including: 4210 43 053 184 19 640 748

from sale of fixed assets (except financial investments) 4211 32 499 1 201 from sale of other companies’ shares (participatory interest) 4212 - -

from repayment of granted loans, from sale of debt securities (claims for cash against third parties) 4213 39 346 547 18 502 409

dividends, interest on debt financial investments and other similar income from participatory interest in other companies 4214 2 778 546 1 137 138 budget subsidy 4218 895 592 - other receipts 4219 - - Payments - total, including: 4220 ( 102 388 549 ) ( 183 125 796 ) payments associated with the acquisition, establishment, upgrading, reconstruction and preparation for the use of fixed assets 4221 ( 77 197 748 ) ( 127 899 633 ) from purchase of other companies’ shares (participatory interest) 4222 - -

from purchase of debt securities (claims for cash against third parties), granting loans to third parties 4223 ( 2 110 500 ) ( 37 997 500 )

debenture interest included in the investment asset value 4224 ( 22 320 523 ) ( 17 225 832 ) from budget subsidy 4228 ( 758 976 ) - other payments 4229 ( 802 ) ( 2 831 ) Balance of cash flows from investment transactions 4200 ( 59 335 365 ) ( 163 485 048 )

32 33 JSC FGC UES Annual Report Appendices

34 35 JSC FGC UES Annual Report Appendices

1.3. Totally redeemed intangible assets

As of December 31, As of December 31, As of December 31, Indicator name Code 2014 2013 2012 1 2 3 4 5 Total 5130 4 090 740 2 353 466 1 805 455 including Other 5131 4 090 740 2 353 466 1 805 455

1.4. Availability and changes in R&D results

As of the beginning of year Changes for the period As of the end of period Withdrawn part of cost Indicator name Code Period part of cost Received part of cost expensed as part of cost initial/current market initial/current initial/current expensed as expensed as incurred expensed as value market value market value incurred incurred incurred 1 2 3 4 5 6 7 8 9 10 11 5140 for 2014 298 153 (4 940) 105 818 - - (74 776) 403 971 (79 716) R&D - total 5150 for 2013 429 457 (372 285) 297 203 (428 507) 428 507 (61 162) 298 153 (4 940) including: Creation of the general information model of UES 5141 for 2014 - - 65 811 - - (9 872) 65 811 (9 872) based on IEC standards 5151 for 2013 ------5142 for 2014 80 007 (1 333) - - - (16 002) 80 007 (17 335) AAS concept development 5152 for 2013 - - 80 007 - - (1 333) 80 007 (1 333) UNEG of Russia modernization program for the 5143 for 2014 84 955 (1 416) - - - (16 991) 84 955 (18 407) period till 2020, with perspective till 2030 5153 for 2013 - - 84 955 - - (1 416) 84 955 (1 416) Program of innovative development of JSC FGC 5144 for 2014 60 819 (1 014) - - - (12 164) 60 819 (13 178) UES till 2020 5154 for 2013 - - 60 819 - - (1 014) 60 819 (1 014) 5145 for 2014 72 372 (1 177) 40 007 - - (19 747) 112 379 (20 924) Other 5155 for 2013 429 457 (372 285) 71 422 (428 507) 428 507 (57 399) 72 372 (1 177)

36 37 JSC FGC UES Annual Report Appendices

1.5. Unfinished R&D and unfinished transactions on intangible assets acquisition

Changes for the period Indicator name Code Period As of the beginning expenses for the expenses accounted as As of the end of of year period withdrawn as non- intangible assets period effective or R&D*

1 2 3 4 5 6 7 8 Expenses for unfinished R&D - total 5160 for 2014 5 797 989 672 012 (148 212) (1 932 556) 4 389 233 5170 for 2013 4 829 972 1 691 006 - (722 989) 5 797 989 including: Development of technical requirements, design, 5161 for 2014 658 267 211 905 - (5 995) 864 177 manufacturing and testing of high-temperature 5171 for 2013 - 658 267 - - 658 267 Pilot operation of MCIA at 220 kV HV line with 5162 for 2014 457 000 - - (457 000) - instrumental control 5172 for 2013 404 300 52 700 - - 457 000 Development and manufacture of the production 5163 for 2014 54 218 101 050 - - 155 268 prototype for 500 kV HV line of Sayano- Shushenskaya HPP 5173 for 2013 20 618 33 600 - - 54 218 5164 for 2014 4 628 504 359 057 (148 212) (1 469 561) 3 369 788 Other 5174 for 2013 4 405 054 946 439 - (722 989) 4 628 504 Unfinished operations on intangible assets 5180 for 2014 5 448 450 493 706 (78 308) (4 194 617) 1 669 231 acquisition - total 5190 for 2013 4 795 620 793 786 (1 916) (139 040) 5 448 450 including: Creation of the integrated hardware/software and 5181 for 2014 67 985 120 469 - - 188 454 technological solution “GCM” 5191 for 2013 - 67 985 - - 67 985 5182 for 2014 - 60 001 - - 60 001 Change in computation of time АMIS EPFA 5192 for 2013 - - - - - 5183 for 2014 - 55 475 - - 55 475 Creation of OSNBS of electrical grid facilities 5193 for 2013 - - - - - Automated system “Register of JSC FGC UES’ 5184 for 2014 675 566 - - (675 566) - assets” 5194 for 2013 - 675 566 - - 675 566 5185 for 2014 464 138 - - (464 138) - Inspection of 220 and 500 kV HV lines 5195 for 2013 - 464 138 - - 464 138 Creation of 220 kV HV line database within 5186 for 2014 292 373 - - (292 373) - KSUPR ‘JSC FGC UES’ 5196 for 2013 - 292 373 - - 292 373 5188 for 2014 3 948 388 257 761 (78 308) (2 762 540) 1 365 301 Other 5198 for 2013 4 795 620 (706 276) (1 916) (139 040) 3 948 388 * 5160 line reflects reclassification to fixed assets

2. Fixed assets 2.1. Availability and changes in fixed assets

As of the beginning of year Changes for the period As of the end of period received objects withdrawn revaluation Indicator name Code Period accumulated accumulated accumulated accumulated accumulated accumulated initial cost initial cost initial cost initial cost initial cost depreciation depreciation depreciation depreciation depreciation depreciation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Fixed assets (excluding income-bearing 5200 for 2014 1 222 060 418 (507 051 741) 151 476 121 (71 969) (3 745 716) 2 167 967 (76 703 340) 916 465 (187 110) 1 370 707 288 (581 846 193) investments in tangible assets) - total 5210 for 2013 1 020 367 439 (425 824 592) 176 237 739 (135 016) (5 160 872) 3 918 961 (70 264 278) 30 616 112 (14 746 816) 1 222 060 418 (507 051 741) including: 5201 for 2014 68 563 685 (13 914 108) 7 239 178 (3 720) (146 284) 64 799 (2 668 442) 580 208 (224 210) 76 236 787 (16 745 681) Buildings 5211 for 2013 56 578 068 (10 777 702) 9 622 109 (310) (263 710) 56 581 (2 217 296) 2 627 218 (975 381) 68 563 685 (13 914 108) 5202 for 2014 743 081 056 (337 454 887) 98 544 099 (5 051) (696 272) 435 497 (38 064 500) (2 085 132) 733 333 838 843 751 (374 355 608) Constructions and transfer mechanisms 5212 for 2013 619 745 096 (287 270 921) 96 514 411 (21 904) (481 201) 314 167 (36 472 257) 27 302 750 (14 003 972) 743 081 056 (337 454 887) 5203 for 2014 398 392 609 (150 396 699) 44 745 186 (3 162) (2 724 027) 1 510 381 (34 591 412) 2 421 021 (696 214) 442 834 789 (184 177 106) Machinery and equipment 5213 for 2013 334 078 977 (123 627 389) 67 801 643 (97 592) (4 169 823) 3 310 677 (30 215 311) 681 812 232 916 398 392 609 (150 396 699) 5204 for 2014 7 678 786 (3 343 296) 296 844 (10 914) (113 000) 101 474 (1 101 927) - - 7 862 630 (4 354 663) Transport vehicles 5214 for 2013 6 266 995 (2 388 506) 1 449 720 (7 409) (37 929) 37 655 (985 036) - - 7 678 786 (3 343 296) 5205 for 2014 2 345 865 (1 664 330) 479 836 (30 643) (61 856) 53 094 (235 544) 1 (1) 2 763 846 (1 877 424) Production and household stock 5215 for 2013 2 074 816 (1 435 610) 377 145 (7 252) (106 107) 104 902 (326 359) 11 (11) 2 345 865 (1 664 330) 5206 for 2014 451 206 (278 421) 86 395 (18 479) (4 277) 2 722 (41 515) 367 (18) 533 691 (335 711) Other types of fixed assets 5216 for 2013 520 866 (324 464) 28 121 (549) (102 102) 94 979 (48 019) 4 321 (368) 451 206 (278 421) 5207 for 2014 1 547 211 - 84 583 ------1 631 794 - Land plots and natural resources sites 5217 for 2013 1 102 621 - 444 590 ------1 547 211 -

38 39 JSC FGC UES Annual Report Appendices

2.2. Incomplete capital investments

Changes for the period accounted as fixed 2.4. Other use of fixed assets As of the beginning expenses for the assets or the value As of the end of Indicator name Code Period withdrawn of year period* is increased period 1 2 3 4 5 6 7 8 As of December As of December As of December Construction in progress and incomplete 5250 for 2014 287 896 370 144 292 523 (21 341 344) (151 252 576) 259 594 973 Indicator name Code operations on purchase, modernization etc. of fixed 31, 2014 31, 2013 31, 2012 assets - total 5240 for 2013 296 462 135 181 600 797 (14 279 448) (175 887 114) 287 896 370 1 2 3 4 5 including: 5251 for 2014 137 603 074 89 638 853 (1 020 957) (114 564 348) 111 656 622 111 656 622 new construction Rented fixed assets on the balance sheet 5241 for 2013 143 569 533 99 492 269 (158 167) (105 300 561) 137 603 074 5252 for 2014 99 200 621 38 749 089 (167 958) (32 766 517) 105 015 235 5280 5 818 381 5 980 387 3 331 211 modernization and reconstruction 5242 for 2013 108 755 864 54 446 485 (171 271) (63 830 457) 99 200 621 Rented fixed assets out of the balance sheet 5281 5253 for 2014 905 200 3 084 453 (133 063) (3 437 064) 419 526 acquisition of fixed asset items 5243 for 2013 406 781 7 389 986 (135 471) (6 756 096) 905 200 - - 68 638 5254 for 2014 5 797 989 672 012 (1 596 121) (484 647) 4 389 233 R&D objects 5244 for 2013 4 829 972 1 691 006 (722 989) - 5 797 989 Leased fixed assets on the balance sheet 5255 for 2014 5 448 450 493 706 (4 272 925) - 1 669 231 creation of intangible assets 5282 - - - 5245 for 2013 4 795 620 793 786 (140 956) - 5 448 450 5256 for 2014 3 744 667 637 443 (1 155 443) - 3 226 667 Leased fixed assets out of the balance sheet DEW non-completed 5246 for 2013 3 953 612 1 105 858 (1 314 803) - 3 744 667 5283 29 613 882 22 037 467 18 426 496 5257 for 2014 - - - - - other** 5247 for 2013 - - - - - Real assets accepted into operation and 5284 5258 for 2014 35 196 369 11 016 967 (12 994 877) - 33 218 459 equipment for installation 5248 for 2013 30 150 753 16 681 407 (11 635 791) - 35 196 369 actually used, being in the process of state registration 183 302 369 155 135 099 86 277 438 * adjusted for updates and reclassification Isolated fixed assets 5285 91 045 252 796 26 191 ** line other 5247 (% CCD) is distributed between new construction and modernization and reconstruction Other use of fixed assets (pledge, etc.) 5286 - - -

2.3. Change in the cost of fixed assets as a consequence of further construction, further equipment, reconstruction and partial liquidation

Indicator name for 2014 for 2013 1 2 Increase in the cost of fixed assets as a consequence of further construction, further equipment, reconstruction - total 5260 27 599 059 21 491 595 including: Buildings 5261 1 705 819 1 010 340 Constructions and transfer mechanisms 5262 22 808 366 16 146 073 Machinery and equipment 5263 3 083 988 4 303 901 Transport vehicles 5264 116 1 590 Production and household stock 5265 686 1 788 Other 5266 84 27 903 Decrease in the cost of fixed assets as a consequence of partial liquidation - total: 5270 (71 729) (454 902) including: Buildings 5271 (149) (2 858) Constructions and transfer mechanisms 5272 (59 939) (430 405) Machinery and equipment 5273 (11 641) (21 529) Transport vehicles 5274 - (110) Production and household stock 5275 - -

40 41 JSC FGC UES Annual Report Appendices

3. Financial investments

3.1. Availability and changes in financial investments

As of the beginning of year Changes for the period As of the end of period Received Withdrawn (repaid) accrual of interest current market (including value accumulated accumulated accumulated adjustment of (impairment loss) accumulated Indicator name Code Period initial cost initial cost initial cost initial cost correction correction correction initial value to correction nominal one)

1 2 3 4 5 6 7 8 9 10 11 12 13 5301 for 2014 102 615 889 (72 210 228) - - (2 900) - - (4 637 905) 102 612 989 (76 848 133) Long-term - total 5321 for 2013 114 901 143 (62 098 228) 18 - (12 078 121) - (207 151) (10 112 000) 102 615 889 (72 210 228) including: Investment into charter capitals of other 5302 for 2014 78 616 955 (63 933 922) - - - - - (4 467 036) 78 616 955 (68 400 958) companies 5322 for 2013 78 616 937 (41 854 429) 18 - - - - (22 079 493) 78 616 955 (63 933 922) Investment into charter capitals of subsidiaries and 5303 for 2014 23 992 914 (8 276 306) - - (1 000) - - (170 869) 23 991 914 (8 447 175) affiliates 5323 for 2013 24 047 985 (8 014 549) - - (55 071) - - (261 757) 23 992 914 (8 276 306) 5304 for 2014 ------Securities (promissory notes) 5324 for 2013 12 229 250 (12 229 250) - - (12 022 099) - (207 151) 12 229 250 - - 5305 for 2014 2 851 - - - (1 900) - - - 951 - Loans extended 5325 for 2013 3 802 - - - (951) - - - 2 851 - 5306 for 2014 ------Deposits 5326 for 2013 ------5307 for 2014 3 169 ------3 169 - Other 5327 for 2013 3 169 ------3 169 - 5308 for 2014 53 156 583 (13 159 020) 2 111 688 - (39 703 245) - 1 939 185 288 199 15 633 287 (12 870 821) Short-term - total 5328 for 2013 21 364 749 (561 300) 76 819 599 - (45 308 781) - 609 430 (12 597 720) 53 156 583 (13 159 020) including: Investment into charter capitals of other 5309 for 2014 ------companies 5329 for 2013 ------Investment into charter capitals of subsidiaries and 5310 for 2014 ------affiliates 5330 for 2013 ------5311 for 2014 14 006 767 (12 657 720) - - (1 705 507) - 68 261 288 199 12 369 521 (12 369 521) Securities (promissory notes) 5331 for 2013 20 117 058 (60 000) 38 822 099 - (45 213 406) - 281 016 (12 597 720) 14 006 767 (12 657 720) 5312 for 2014 1 143 596 (501 300) 2 111 688 - (238) - - - 3 255 046 (501 300) Loans extended 5332 for 2013 1 238 971 (501 300) - - (95 375) - - - 1 143 596 (501 300) 5313 for 2014 37 997 500 - - - (37 997 500) - 1 870 924 - - - Deposits 5333 for 2013 - - 37 997 500 - - - 328 414 - 37 997 500 - 5314 for 2014 8 720 ------8 720 - Other 5334 for 2013 8 720 ------8 720 - 5300 for 2014 155 772 472 (85 369 248) 2 111 688 - (39 706 145) - 1 939 185 (4 349 706) 118 246 276 (89 718 954) Financial investments - total 5320 for 2013 136 265 892 (62 659 528) 76 819 617 - (57 386 902) - 402 279 (22 709 720) 155 772 472 (85 369 248) *interest on deposits does not fall within “Short-Term Financial Investments” balance sheet line code

As of December 31, As of December 31, As of December 31, Indicator name Code 2014 2013 2012 1 2 3 4 5 Financial investments received as pledge - total 53200 - - - Financial investments transferred to third parties (except sale) - total 53205 - - - Other use of financial investments 53209 - - -

42 43 JSC FGC UES Annual Report Appendices

4. Inventory 4.1. Availability and changes in inventories

As of the beginning of year Changes for the period As of the end of period Withdrawn (repaid) revenues and loss from inventory provision for cost reduction expenditures deterioration in turnover between cost reduction Indicator name Code Period production cost production cost deterioration in production cost reserve amount value their groups reserve amount value (types) 1 2 3 4 5 6 7 8 9 10 11 12 5400 for 2014 8 802 454 - 6 232 108 (5 399 462) - - - 9 635 100 - Inventories - total 5420 for 2013 6 655 077 - 6 145 854 (3 998 477) - - - 8 802 454 - 5401 for 2014 8 581 729 - 6 050 775 (4 997 421) - - - 9 635 083 - Raw materials, materials and other valuables 5421 for 2013 6 625 091 - 5 921 407 (3 964 769) - - - 8 581 729 - 5402 for 2014 29 986 - 1 766 (31 735) - - - 17 - finished goods and goods for re-sale 5422 for 2013 29 986 - 33 708 (33 708) - - - 29 986 - 5403 for 2014 190 739 - 179 567 (370 306) - - - - - WIP on core services to third parties 5423 for 2013 - - 190 739 - - - - 190 739 -

4.2. Pledged inventory

As of December 31, As of December 31, As of December 31, Indicator name Code 2014 2013 2012 1 2 3 4 5 Inventory not paid as of the reporting date - total 5440 - - - Pledged inventory by contracts - total 5445 - - -

44 45 JSC FGC UES Annual Report Appendices

5. Receivables and payables 5.1. Availability and changes in accounts receivable

As of the beginning of year Changes for the period As of the end of period received disposals as a result of business interest, fines and writing-off allowance recovery writing off at the transfer from long- Indicator name Code Period by contract terms bad debt provision activities (transaction other accruals due repayment expense of term to short-term by contract terms bad debt provision debt) provision funds debt 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Long-term accounts receivable - 5501 for 2014 1 883 956 (173 991) 152 376 - (925 496) - 173 903 - - 1 110 836 (88) total 5521 for 2013 10 798 242 (4 621 544) (3 639 828) - (1 607 500) - 4 447 553 - (3 666 958) 1 883 956 (173 991) including: 5502 for 2014 4 851 - 633 - (607) - - - - 4 877 - customers and consumers 5522 for 2013 3 669 502 - 921 056 - (918 749) - - - (3 666 958) 4 851 - 5503 for 2014 88 (88) 15 - (15) - - - - 88 (88) advance payments made 5523 for 2013 88 (88) 173 - (173) - - - - 88 (88) 5504 for 2014 1 879 017 (173 903) 151 728 - (924 874) - 173 903 - - 1 105 871 - other debtors 5524 for 2013 7 128 652 (4 621 456) (4 561 057) - (688 578) - 4 447 553 - - 1 879 017 (173 903) 5510 for 2014 107 266 372 (55 134 237) 521 779 203 1 707 956 (516 038 653) (28 545) (499 956) 772 920 - 113 913 413 (54 861 273) Short-term accounts receivable - total 5530 for 2013 85 975 958 (30 898 802) 656 333 969 625 689 (639 329 921) (5 103) (24 236 613) 1 178 3 666 958 107 266 372 (55 134 237) including: 5511 for 2014 34 086 184 (12 025 115) 204 838 238 - (193 534 520) - 4 136 263 702 346 - 44 687 556 (7 186 506) buyers and consumers 5531 for 2013 22 852 101 (4 410 240) 186 677 303 - (179 110 148) - (7 614 905) 30 3 666 958 34 086 184 (12 025 115) amounts owed by members (founders) as share capital 5512 for 2014 ------payments 5532 for 2013 ------5513 for 2014 3 910 100 (1 977 535) 73 172 011 - (73 540 659) (161) (4 213) 785 - 3 540 506 (1 980 963) advance payments made 5533 for 2013 3 673 821 (1 978 211) 75 752 452 - (75 515 045) - (452) 1 128 - 3 910 100 (1 977 535) 5514 for 2014 69 270 088 (41 131 587) 243 768 954 1 707 956 (248 963 474) (28 384) (4 632 006) 69 789 - 65 685 351 (45 693 804) other debtors 5534 for 2013 59 450 036 (24 510 351) 393 904 214 625 689 (384 704 728) (5 103) (16 621 256) 20 - 69 270 088 (41 131 587) Advance payments under non-current assets (balance 5515 for 2014 57 105 643 (184 518) 226 638 302 - (242 102 580) - (1 695 233) 32 213 - 41 609 152 (1 847 538) line 1173) 5535 for 2013 66 209 611 (539 403) 285 601 753 - (294 695 158) - 344 322 10 563 - 57 105 643 (184 518) 5500 for 2014 166 255 971 (55 492 746) 748 569 881 1 707 956 (759 066 729) (28 545) (2 021 286) 805 133 - 156 633 401 (56 708 899) Total 5520 for 2013 162 983 811 (36 059 749) 938 295 894 625 689 (935 632 579) (5 103) (19 444 738) 11 741 - 166 255 971 (55 492 746) 5.2. Overdue accounts receivable

As of December 31, 2014 As of December 31, 2013 As of December 31, 2012 Indicator name Code balance value (less balance value (less balance value (less by contract terms provision for doubtful by contract terms provision for doubtful by contract terms provision for doubtful debts) debts) debts) 1 2 3 4 5 6 Total 5540 25 260 346 16 074 584 17 457 757 5 165 647 9 076 578 3 551 767 including: Customers and consumers 5541 20 076 480 12 889 974 14 652 729 2 627 614 5 088 252 678 012 Advance payments made 5542 2 335 - 1 829 - 1 929 - Other debtors 5543 149 383 - 80 648 - 573 239 - Advance payments under non-current assets (balance 5544 line 1173) 5 032 148 3 184 610 2 722 551 2 538 033 3 413 158 2 873 755

46 47 JSC FGC UES Annual Report Appendices

5.3. Availability and changes in accounts payable

Changes for the period received disposals as a result of business interest, fines and transfer from long- As of the beginning of Indicator name Code Period activities (transaction other accruals due repayment writing-off term to short-term As of the end of period year debt) debt 1 2 3 4 5 6 7 8 9 10

Long-term accounts payable - total 5551 for 2014 51 434 407 251 - (5 656) - - 453 029 5571 for 2013 33 473 19 970 - (2 009) - - 51 434

Short-term accounts payable - total 5560 for 2014 58 051 033 629 623 531 69 900 (610 147 812) (45 722) - 77 550 930 5580 for 2013 40 016 902 762 900 470 60 745 (744 923 654) (3 430) - 58 051 033 including: 5561 for 2014 41 424 439 210 095 071 123 (184 272 110) (42 132) - 67 205 391 suppliers and contractors 5581 for 2013 19 675 908 241 967 758 2 476 (220 218 869) (2 834) - 41 424 439

Amounts owed to the company staff 5562 for 2014 204 732 19 881 587 - (19 865 281) - - 221 038 5582 for 2013 211 572 19 677 200 - (19 684 040) - - 204 732 5563 for 2014 54 719 4 747 898 - (4 718 455) - - 84 162 Amounts owed to state non-budget funds 5583 for 2013 103 689 4 573 095 - (4 622 065) - - 54 719 5564 for 2014 961 610 6 810 690 7 021 (6 453 132) - - 1 326 189 Taxes and fees payables 5584 for 2013 543 947 6 646 592 8 174 (6 237 103) - - 961 610 5565 for 2014 8 497 875 234 099 018 - (236 511 220) (672) - 6 085 001 Advances received 5585 for 2013 11 481 086 203 106 083 - (206 089 294) - 8 497 875 5566 for 2014 6 895 025 153 552 395 62 756 (157 887 520) (2 918) - 2 619 738 Other creditors 5586 for 2013 7 989 434 286 928 375 50 095 (288 072 283) (596) - 6 895 025

Payables to members (founders) 5567 for 2014 12 633 436 872 - (440 094) - - 9 411 5587 for 2013 11 266 1 367 - - - - 12 633 5550 for 2014 58 102 467 630 030 782 69 900 (610 153 468) (45 722) - 78 003 959 Total 5570 for 2013 40 050 375 762 920 440 60 745 (744 925 663) (3 430) - 58 102 467

5.4. Overdue accounts payable

As of December 31, As of December 31, As of December 31, Indicator name Code 2014 2013 2012 1 2 3 4 5 Total 5590 59 680 1 140 769 including: Suppliers and contractors 5591 24 928 1 140 269 Advances received 5592 34 752 - - Other creditors 5593 - - 500

48 49 JSC FGC UES Annual Report Appendices

6. Production costs 8. Securing Liabilities

Indicator name Code for 2014 for 2013 As of December 31, As of December 31, As of December 31, Indicator name Code 1 2 3 4 2014 2013 2012 Material expenses 5610 21 589 555 23 481 592 1 2 3 4 5 Labor costs 5620 19 106 688 19 536 995 Received - total 5800 67 459 319 97 191 373 96 180 168 Fringe benefit expenses 5630 4 061 480 4 061 016 including: Depreciation 5640 78 000 096 70 844 911 Banking guarantees 5801 67 131 149 96 906 591 96 107 362 Other expenses 5650 17 501 349 15 214 555 Property pledge contract 5802 209 059 141 369 52 643 Total by cost category 5660 140 259 168 133 139 069 Other 5803 119 111 143 413 20 163 Change in balance (growth [-], loss [+]): - (190 739) Issued under own obligations - total 5810 171 537 170 963 109 705 5670 - (190 739) work in progress, finished goods, etc. (growth [-]) including: work in progress, finished goods, etc. (loss [+]) 5680 - - Surety 5811 171 537 170 963 109 705 Total costs for common activities 5600 140 259 168 132 948 330

7. Provisions for contingent liabilities

Indicator As of the beginning of Item Code Period Accrued Use Restored As of the end of period year 1 2 3 4 5 6 7 9. Government aid 5700 for 2013 1 347 456 2 802 146 (2 689 617) (24 957) 1 435 028 Contingent liabilities for 2012 1 127 313 2 751 574 (2 531 431) - 1 347 456 Indicator name Code For 2014 For 2013 including: 1 2 3 4 Estimated liabilities on unutilized vacation for 2014 690 159 2 111 923 (2 050 576) - 751 506 5701 for 2013 530 463 2 094 277 (1 934 581) - 690 159 Budget funds received in the reporting period – total 5900 895 592 - Estimated liabilities on prior period payments for 2014 657 297 690 223 (639 041) (24 957) 683 522 5702 for 2013 596 850 657 297 (596 850) - 657 297 including: investments into non-current assets 5901 895 592 -

Chief Executive ______V.A. Goncharov Chief Accountant ______A.P. Noskov_ [signature] [print name] [signature] [print name]

March 23, 2015

50 51 JSC FGC UES Annual Report Appendices

Report on Federal Grid Company’s Compliance with the Corporate Governance Code principles and recommendations The Corporate Governance Code was approved by the Board of Directors of the Bank of Russia on 21 March 2014, and recommended for application by the Bank of Russia (Letter of the Bank of Russia No. 06-52/2463 dated 10 April 2014) 1

Explanation of the main reasons, Explanation of the main reasons, factors and circumstances due factors and circumstances due Brief description of non- Brief description of non- to which the principle or key Actions and measures to be to which the principle or key Actions and measures to be Corporate governance principle compliance/partial compliance Corporate governance principle compliance/partial compliance provision is not fully or partially implemented to improve the provision is not fully or partially implemented to improve the (principles) or key provision with the principle or key (principles) or key provision with the principle or key complied with, description corporate governance model complied with, description corporate governance model (recommendation) provision (recommendation) provision of alternative corporate and practice of alternative corporate and practice (as of 2014) (as of 2014) governance mechanisms and governance mechanisms and tools applied tools applied

I. Shareholder rights and equal treatment of shareholders exercising their rights 1.1.2. The company has committed to provide Partially compliant In accordance with the provisions Amendments are expected to the shareholders with an opportunity to Shareholders may address the of the Federal Law On Joint Stock be made to the Regulations on 1.1. The company shall ensure equal and fair treatment of all shareholders exercising their right to participate in the governance of the company. The pose questions on the company’s activities above mentioned persons by Companies, agenda of an annual the Procedure for Prepar- corporate governance system and practices shall guarantee equal conditions for all shareholders owning shares of the same category (type), to members of the governing and control contacting the Company’s struc- general meeting of shareholding and Holding the General including minority shareholders and foreign shareholders, and the company’s equal treatment of them. bodies, the audit committee members, the tural unit (Corporate Governance ers shall include the approval Meeting of Shareholders to chief accountant, the company’s auditors, Department). of the company’s annual report provide for the obligation to 1.1.1. The company has an internal document that Partially compliant Federal Grid Company did not The Action Plan (‘road map’) as well as candidates to the governing and Contacts for shareholders and annual financial statements, send invitations to the said determines the main procedures for prepar- The Annual General Meeting of fully comply with the recommen- for introducing the Corporate control bodies, during the preparation for are available on the corporate therefore the Company’s CEO and persons. ing, calling and holding a general meeting Shareholders of Federal Grid Com- dations due to the absence of the Governance Code provisions and holding of the general meeting. The website: Chief Accountant have to partici- of shareholders in compliance with the Cor- pany held on 29 June 2010 (Minutes relevant provisions in the legisla- in the Company’s practice commitments are stipulated in the com- Phone: 8 (800) 200-18-81 pate in the General Meeting of porate Governance Code recommendations, No.9) approved the Regulations on tion of the Russian Federation. approved by the Board of pany’s Articles of Association or internal (ext.90-28, ext.91-68, ext.25-53, Shareholders. including the company’s commitment: the Procedure for Preparing and Directors on 12 March 2015 documents. ext.22-15). Members of the Board of Direc- 1) to notify its shareholders on a forthcom- Holding the General Meeting of (Minutes No. 255) provides tors and the Audit Committee ing general meeting of shareholders and Shareholders that cover matters of for the relevant amendments In addition, shareholders may (pursuant to paragraph 5.3 of the to provide access to materials, including by convening, preparing and holding to the Articles of Association send their requests by post, fax Regulations on the Audit Com- placing a notification and the materials on the General Meeting. and the Regulations on the or e-mail to the Company’s ad- mittee) are actually invited to the the corporate website not later than 30 days 1. Pursuant to paragraph 11.4 of Procedure for Preparing and dress that is also available on the General Meeting of Shareholders. prior to the date of the meeting (unless the Article 11 of the Articles of As- Holding the General Meeting website: Russian legislation provides for a longer sociation, the Company notifies of Shareholders. Federal Grid Company period); its shareholders on the general Corporate Governance Depart- 2) to disclose information on the date meeting at least 30 days prior to ment of drawing up a list of persons entitled the date of the meeting. Pursu- 5A, Akademika Chelomeya str., to participate in the general meeting of ant to paragraph 11.5 of Article Moscow 117630 shareholders not later than 7 days prior to 15 of the Articles of Association, fax: +7 (495) 710-96-41 the said date; materials for the general meeting e-mail: [email protected] 3) to provide additional information and of shareholders shall be available materials on all items of the agenda of the on the Company’s website within The current internal documents general meeting in accordance with the 20 days prior to the eneral meeting, do not provide for the Com- Corporate Governance Code recommenda- and within 30 days prior to the pany’s obligation to invite the tions. general meeting in case its agenda said persons in accordance with includes an item on the Company’s the Corporate Governance Code reorganisation. recommendations. 2. The Company discloses information on the date of drawing up a list 1.1.3. The company has committed to the Non-compliant No measures are expected in of persons entitled to participate in principle of prohibition of actions that The Federal Grid’s quasi-treasury respect of this matter with a the general meeting of sharehold- may result in artificial redistribution of shares are involved in voting at the view to serve the interests of ers in accordance with paragraph corporate control (for example, voting by general meeting of shareholders, all shareholders. 6.2.1.1. of the Regulations on “quasi-treasury” shares, making decision including on matters of the ap- Disclosure of Information by Issu- to pay dividends on preferred shares under proval of related-party transac- ers of Securities approved by the limited financial resources, or to pay no tions when the major shareholder Resolution of the FFMS of Russia dividends on preferred shares determined (JSC Rosseti) is recognised to be a No. 11-46/pz -n2 dated 4 October in the company’s Articles of Association related party. 2011, and the Order of Federal Grid when sufficient sources for their payment Company No. 215 dated 25 April are available). The above commitments 2012 «On Interaction of Structural are stipulated in the company’s Articles of Units of Federal Grid Headquar- Association or internal documents. ters in the course of Information Disclosure». 3. The list of additional information (materials) for the general meeting of shareholders is provided for, among others, by the Regulations on the Procedure for Preparing and Holding the General Meeting of Shareholders.

1 The Report was written using the format recommended by the Moscow Exchange for joint stock companies whose securities are admitted to trading on CJSC MICEX Stock Exchange (Information Letter No. 31-14/236 dated 13 March 2015).

2 Ceased to be in force upon the new Regulations on Disclosure of Information by Issuers of Securities No. 454-P dated 30 December 2014 has come into force on 17 February 2015.

52 53 JSC FGC UES Annual Report Appendices

1.2 Shareholders should have equal and fair opportunity to participate in the company’s profits by means of receiving dividends 2.2. The board of directors should be an efficient and professional governing body of the company capable of making objective and independent judg- ments and taking decisions in the best interests of the company and its shareholders. The chairman of the board should contribute to the board 1.2.1. The company has adopted an internal Partially compliant The Company’s internal docu- The Regulations on Dividend effectiveness on all aspects of its role. Meetings of the board of directors, preparation for them, and participation of board members therein should document that determines the company’s The Regulations on Dividend ments do not fully comply with Policy will be amended with ensure the effective performance of the board dividend policy in compliance with the Policy of Federal Grid Company the recommendations of para- regard to the provisions in- Corporate Governance Code and estab- was approved by the Company’s graph 1 of the above provision consistent with the Corporate 2.2.1. The chairman of the board of directors shall Non-compliant 1. In accordance with the assign- The Company does not plan to lishes, inter alia: Board of Directors on 16 Decem- because of the following reasons: Governance Code recommen- be an independent director; or a senior inde- 1. The Chairman of the Company’s ments of the RF President and implement these recommen- 1) the procedure for determining a portion ber 2010 (Minutes No. 120) 1) Federal Grid Company is a dations if the relevant amend- pendent director shall be appointed among Board of Directors, Oleg Budargin the RF Government, chairmen of dations. of the company’s net profit that will be 1. The Regulations on Dividend state-owned company (80.7% ments are introduced to the the company’s independent directors to (the General Director of JSC Rus- boards of SOEs are elected among allocated for dividend payment (for com- Policy establishes a procedure of the share capital is indirectly Russian legislation. coordinate work of the independent directors sian Grids, the major shareholder professional attorneys. panies that prepare consolidated financial for determining a portion of the owned by the State) with a special and to liaise with the chairman of the board. of the Company) is a professional 2. The Russian law does not statements – the minimum part (share) company’s net profit that will be regulation for making decision on attorney and does not meet the regulate the concept of ‘senior of consolidated net profit), the conditions allocated for dividend payment. dividend payment; independence criteria of the independent director’, and it has under which dividends are declared; The Regulations contain no provi- 2) when making decision on the Corporate Governance Code and been deemed unreasonable to 2) the minimum amount of dividends on sions regarding consolidated net amount of dividends and the source of the Listing Rules of CJSC MICEX introduce it into the Company’s the company’s shares of different catego- profit. financing, the provisions are consid- Stock Exchange. practice. ries (types); 2. Is provided in Article 4 of the ered of the RF Government Resolu- 2. The Company does not have a 3. The Company’s Article of As- 3) the obligation to disclose the document Regulations on Dividend Policy. tion No. 774-r dated 29 May 2006 «On senior independent director, nor sociation and internal documents that determines the company’s dividend 3. In accordance with Article 9 Building Positions of a Shareholder do the Company’s internal docu- provide for the appointment of a policy on the company’s website. of the Regulations on Dividend – Russian Federation – in Joint Stock ments contain this definition. Deputy Chairman of the Board of Policy, the document is disclosed Companies whose Shares are in the Directors. on the Company’s website. Federal Ownership»; 3) a decision on dividend payment 2.2.2. The company’s internal documents Partially compliant Taking into account that the is made on the basis of directives establish the procedure for preparing and The Company does not comply provision specified in para- issued by the RF Government. holding meetings of the board of directors, with the provision specified in graph 3 is fully complied with, enabling the board members to prepare paragraph 4. no measures are expected to II. The Company’s Board of Directors for the meetings properly and setting, in implement the recommenda- particular: tion specified in paragraph 4. 2.1 The board of directors determines main strategic objectives of the company’s activity for a long-term perspective, key performance indicators, is 1) a timeframe for notifying the board responsible for the strategic management of the company, determines principles of and approaches to the organisation of the company’s risk manage- members about upcoming meeting; ment and internal control system, exercises control over the activity of the company’s executive bodies, determines the company’s policy on remunera- 2) a timeframe for sending papers (ballots) tion of members of the board of directors and executive bodies, and performs other key functions. for voting and receiving completed voting papers (ballots) when holding meetings in 2.1.1. The company has established a board of Partially compliant The Company did not fully comply When implementing the absentia; directors which: Matters under paragraph 1 are with the recommendations Road Map, amendments are 3) an opportunity to send and take into 1) determines main strategic objectives covered by paragraphs 1 and 32 of because of the absence of the rel- expected to me made to the account written opinions on agenda items of the company’s activity for a long-term Article 15 of the Company’s Articles evant provisions in the legislation Articles of Association and of those board members who are absent at perspective, key performance indicators; of Association (Matters reserved to of the Russian Federation. Regulations on the Board of the meeting held in person; 2) exercises control over the activity of the the Board of Directors): Federal Grid does not have the Directors to take into account 4) an opportunity to participate in discuss- company’s executive bodies; - identifying priorities for the Company’s definition of ‘key managers’. the said recommendations. ing and voting by means of conference and 3) determines principles of and approaches activity, approving long-term develop- At the same time, the Board of No measures are expected video-conference calls. to the organisation of the company’s risk ment programs (including approval of Directors has approved the Regula- with respect to the definition management and internal control system; the Company’s investment program); tions on Terms and Conditions ‘key managers’. 2.2.3. The most important issues shall be decided Соблюдается частично No amendments to the corpo- 4) determines the company’s policy on - approving target values (adjusted of Employment Agreements and at the board meetings held in person. The list Some issues are actually consid- rate documents are expected remuneration of board members, mem- values) for the Company’s key Determination of Remuneration of such issues complies with the Corporate ered at the meetings in person. in respect of this matter as bers of the executive bodies and other key performance indicators (KPI) and and Compensation for Senior Governance Code recommendations3. No regulations on this matter they do not seem expedient. managers. reports on their fulfillment. Managers (Minutes No.105 dated are provided in the Company’s Matters under paragraph 2 are 18 June 2010) that includes the internal documents. covered by Article 15 of the Com- definition of ‘senior managers’ who pany’s Articles of Association. actually perform key management 2.3. The board of directors should include a sufficient number of independent directors Matters under paragraph 3 are not functions covered by the Company’s Articles 2.3.1. At least one third of the board of directors Non-compliant The provision is expected to of Association. shall be independent directors. The Federal Grid’s Board of Direc- be included in the Regulations Matters under paragraph 4 are cov- tors shall include 11 persons. on the Board of Directors in ered by paragraph 37 of Article 15 of Thus, in order to comply with the accordance with the require- the Company’s Articles of Association: Corporate Governance Code rec- ments of CJSC MICEX Stock - approving terms and conditions of ommendations, the Board should Exchange for the issuers the agreement, entered into with the include 3 independent directors. whose securities are included Chairman of the Company’s Manage- in the Level 1 Quotation list. ment Board and other members of the Management Board, setting 2.3.2. Independent directors shall meet in full the Non-compliant Taking into account that securi- Provisions of the Federal remuneration and compensations to independence criteria recommended by The independence criteria for ties of Federal Grid Company are Grid’s Corporate Governance be paid to the Chairman of the Com- the Corporate Governance Code. members of the Company’s Board included in Level 1 Quotation list, Code will be amended for the pany’s Management Board and other of Directors are set in paragraph our directors shall be deemed purpose of harmonisation members of the Management Board 4.1.3 of the Federal Grid’s Corpo- independent if they meet the in- with the requirements of the or appointing a person authorised rate Governance Code approved dependence requirements set by Corporate Governance Code to approve terms and conditions of by the Board of Directors (Minutes CJSC MICEX Stock Exchange. and the Listing Rules of CJSC the agreement entered into with the No. 182 dated 30 November 2012), MICEX Stock Exchange. Company’s Chairman of the Manage- though they do not fully comply ment Board and other members of with the Russian Corporate Gov- the Management Board, to set remu- ernance Code. neration and compensation to be paid

to the Chairman of the Company’s 3 Management Board and members of As specified in paragraph 168 of Part B of the Corporate Governance Code. the Management Board. The remuneration policy with regard to the Board members is determined by the General Meeting of Shareholders.

54 55 JSC FGC UES Annual Report Appendices

2.3.3. The board of directors (nomination (HR) com- Non-compliant According to the law, shareholders No measures are expected IV. The remuneration system of members of the board of directors, executive bodies and other key managers of the company mittee) shall evaluate whether candidates holding at least 2% of the Com- with respect to this recom- to the board of directors meet the independ- pany’s voting shares are entitled to mendation. 4.1. IV. The remuneration system of members of the board of directors, executive bodies and other key managers of the company ence criteria. nominate candidates to the Board of Directors. Such nominations 4.1.1. All payments, bonuses and benefits provided to Compliant For information on ‘other key managers’, see paragraph 2.1.1. shall be made with consideration the board members, members of the executive Procedures for determining remu- of the Report. of the independence requirements bodies and other key managers of the company neration of members of the Board of of CJSC MICEX Stock Exchange are regulated. Directors are set by the Regulations on and the provisions of the RF Gov- Remuneration and provide details of ernment Resolution No. 738 dated the level and structure of remuneration 3 December 2004. packages of the Board members. Remuneration of senior managers and 2.4. The board of directors should establish committees for preliminary consideration of the most important issues of the company’s activities the Company’s CEO is performance- based; the list of key performance 2.4.1. The board of directors has established an indicators and the methodology for audit committee composed of independent their calculating are approved by the directors; its functions are set in the internal Company’s Board of Directors. documents and comply with the Corporate Governance Code recommendations4. 4.2. The remuneration system of board members should ensure aligning of the directors’ financial interests with the long-term financial interests of shareholders

2.4.2. The board of directors has established The Audit/HR and Remuneration 4.2.1. The company shall not apply any other forms Compliant Partially compliant a remuneration committee (may be Committee should be composed Recommendations will be of monetary remuneration of members of the The procedure for determining Recommendations with respect to combined with nomination (HR) commit- with due regard to the require- fully complied with, provided board of directors apart from a fixed annual fee. the amount and payment of an- the composition of the committees tee) composed of independent directors; ments of CJSC MICEX Stock that a sufficient number of nual remuneration is set by the are not complied with due to the its functions comply with the Corporate Exchange for companies whose independent directors are 4.2.2. The company’s board members are not offered Regulations on Remuneration reasons specified in paragraph Governance Code recommendations5. shares are included in the 1 Level elected (at least 3). an opportunity to participate in stock options approved by the resolution No. 12 2.3.1 of this Report. Quotation list. plans; and their right to dispose of the com- of the Annual General Meeting of 2.4.3. The board of directors has established a pany’ shares is not determined by the achieve- Shareholders dated 29 June 2012. nomination committee (may be combined ment of certain performance results. with remuneration committee) with a majority of members being independent directors; 4.3. The system of remuneration due to members of the executive bodies and other key managers of the company should provide that their remunera- its functions comply with the Corporate tion is dependent on the company’s performance results and their personal contributions to the achievement thereof Governance Code recommendations6. 4.3.1. The company has put in place a long-term Partially compliant In compliance with the assignments 2.5. The Board of Directors should ensure evaluation of its own performance, and that of its committees and individual directors incentive programme for members of the of the RF President and the RF Gov- company’s executive bodies and other key ernment, and according to the guide- 2.5.1. Evaluation of the board performance is Non-compliant As provided for by Clause 2 of managers. lines of the RF Ministry of Economic conducted on a regular basis, at least an- Section 4 of the ‘road map’ on Development, Federal Grid Company nually, and is externally facilitated at least implementing the Corporate has developed a Long-Term Develop- every three years. Governance Code, Federal Grid ment Programme that includes a list Company plans to conduct of long-term key performance indica- performance evaluation of the tors determined in consideration of Board of Directors and its Com- the indicators set by the Methodology mittees with the involvement for Calculating and Measuring Key of an independent external Performance Indicators for Federal organisation (consultant). Grid’s Senior Management approved by the Company’s Board of Directors III. The Company’s Corporate Secretary on 15 April 2014 (Minutes No. 217) and previously approved by the RF 3.1 Efficient shareholder engagement, coordination of activities aimed at protecting shareholders rights and interests, support for the effective work of Ministry of Energy. the board of directors are ensured by the corporate secretary (a special structural unit headed by the corporate secretary) Achievement of the performance targets has a direct impact on 3.1.1. The corporate secretary shall report remuneration of the Company’s directly to the board of directors, be ap- management. pointed and removed by the decision or For information on ‘other key with the consent of the board of directors. managers’, see paragraph 2.1.1. When implementing the Road 3.1.2. The company has an internal document Map, it is expected to intro- V. Risk Management and Internal Control System that determines rights and duties of the duce a position of Corporate corporate secretary (Terms of Reference for Secretary in the Company Position of Corporate Secretary 5.1. The company should have a sound risk management and internal control system aimed at providing reasonable assurance that the company’s the corporate secretary) and complies with and to approve the Terms of Non-compliant has not been created in the objectives will be achieved the Corporate Governance Code recom- Reference for the Corporate 7 Company. mendations . Secretary in order to take into 5.1.1. The board of directors has determined the Compliant account the relevant recom- principles of and approaches to the estab- The Company has approved an In- 3.1.3. The corporate secretary holds no concur- mendations of the Corporate lishment of the company’s risk manage- ternal Control and Risk Manage- rent positions, his role and responsibilities Governance Code. ment and internal control system. ment Policy. comply with the Corporate Governance 8 Code recommendations . The corporate 5.1.2. The company has created a separate Compliant secretary has sufficient resources to per- structural unit for risk management and The Company has a structural form his/her functions. internal control. unit – the Internal Control and Risk Management Department. 4 As specified in paragraph 172 of Part B of the Corporate Governance Code. 5.1.3. The company has approved an anti-corruption Compliant 5 As specified in paragraph 180 of Part B of the Corporate Governance Code. policy setting forth measures aimed at develop- The Board of Directors has ap- ing elements of corporate culture, organisa- proved an Anti-Corruption Policy. 6 As specified in paragraph 186 of Part B of the Corporate Governance Code. tional structure, as well as rules and procedures 7 As specified in paragraph 217 of Part B of the Corporate Governance Code. for ensuring zero tolerance for corruption. 8 As specified in paragraph 218 of Part B of the Corporate Governance Code.

56 57 JSC FGC UES Annual Report Appendices

5.2. For regular independent evaluation of reliability and effectiveness of the risk management and internal control system and corporate governance 6.2. The company should disclose, on a timely basis, full, updated and reliable information about itself so as to enable its shareholders and investors to practices, the company should arrange for internal audits make informed decisions

5.2.1. The company has a separate structural unit 6.2.1. If foreign investors hold a material share in the Compliant that performs internal audit functions and company’s capital, the company shall, along with reports functionally to the board of directors. disclosure of information in Russian, disclose The roles and responsibilities of the above unit most important information about itself (includ- comply with the Corporate Governance Code ing an announcement of a general meeting to be recommendations and in particular include: held, its annual report and accounting (financial) • evaluation of the effectiveness of the inter- When implementing the statements) in a foreign language that is com- Partially compliant nal control system; Road Map, amendments are monly used at the financial market. The Company does not have an In accordance with the Company’s • evaluation of the effectiveness of the risk expected to me made to the internal audit unit that meets the organisational structure, the management system; Company’s Articles of Associ- 6.2.2. The company shall disclose information Not applicable The recommendation has not requirements of the Corporate internal audit function is under • evaluation of corporate governance (if a ation, internal documents and not only about itself but also about any The Company does not com- been applied due to the following: Governance Code, including with the responsibility of the Internal corporate governance committee has not the organisational structure legal entities which are controlled by and ply with the recommendation 1. In accordance with the Cor- respect to its head’s account- Control and Risk Management been established). in order to comply with the are material to the company. because it does not have legal porate Governance Code, legal ability to the Company’s Board of Department. Corporate Governance Code entities under control which are entities controlled by and material Directors. 5.2.2. The head of the internal audit unit shall report recommendations. material to it. to the Company shall mean any to the board of directors, is appointed and re- entities controlled by the Company moved by the decision of the board of directors. each of which accounts for at least five percent of the total 5.2.3. The company has approved an internal audit value of its consolidated assets policy (Regulations on Internal Audit) determining or at least five percent of the total the internal audit objectives, tasks and functions. consolidated income, as per the most recent consolidated financial VI. Disclosure of Information about the Company, the Company’s Information Policy statements of the Company, as well as other entities controlled by 6.1. The company and its activities should be transparent for its shareholders, investors and other stakeholders the Company that, in the opinion of the Company, have a material 6.1.1. The company has approved an internal Compliant The current version of the impact on the financial condition, document that determines the company’s in- Regulations on Information Policy financial performance results and formation policy in compliance with the Cor- provides for the disclosure of a changes in the financial position porate Governance Code recommendations. calendar of the Company’s corpo- of the group of entities to which The company’s information policy provides rate events (paragraph 5.2.1.12), the Company and legal entities for the following means of communication and the Federal Grid’s website controlled thereby belong. with investors and other stakeholders: contains a regularly updated 2. According to the data from 1) setting up a special page on the company’s investor calendar. the most recent consolidated website to place answers to frequently asked It does not seem possible to financial statements, Federal Grid questions from shareholders and investors, a forecast exact dates for corporate Company does not have any con- regularly updated calendar of the company’s events even if taking into account trolled legal entities that comply corporate events, and other information as may the approved work plans of the with the above materiality criteria be useful for its shareholders and investors; governing bodies. determined by the Code. 2) holding regular meetings of members of At the same time, the Company At the same time, Federal Grid the company’s executive bodies and other disclose information on its corpo- Company discloses information key managers with analysts; rate events in the form of notices on its subsidiaries and associates 3) organising regular presentations (including in of material facts in accordance in which it holds not less than 5 the form of conference calls and webcasts) and with the legislation (Article 30 of percent of authorised (contribut- meetings with members of the governing bodies the Federal Law on Securities ed) capital (unit fund) or not less and other key managers of the company, includ- Market). than 5 percent of ordinary shares. ing those in connection with disclosure of the company’s accounting (financial) statements or 6.2.3. The company shall disclose annual and interim Compliant in relation to major investment projects or plans (for the period of six months) consolidated or for strategic development of the company. individual financial statements prepared in accordance with the International Financial 6.1.2. The company’s executive bodies shall be Compliant Reporting Standards (IFRS). The annual responsible for implementing its informa- consolidated or individual financial statements tion policy. The board of directors shall shall be disclosed together with an auditor’s monitor proper disclosure practices and report thereon, while the interim consolidated compliance with the information policy. or individual financial statements shall be disclosed together with a report on the results 6.1.3. The company has determined procedures Compliant In order to bring the Company’s of an auditor’s review or an auditor’s report. ensuring coordination of efforts of all its The procedures ensuring coordi- internal documents into conform- structural units and departments which nation of efforts of all structural ity with the Corporate Governance 6.2.4. The company has disclosed a special mem- Non-compliant Drawing up of such a memorandum are involved in disclosure of information units and departments of Federal Code recommendations and the orandum containing any plans of a person There is no such memorandum in is an expression of the will of the or whose activities may lead to the need to Grid Company which are involved requirements of the Regulations that controls the company in respect of the respect of the Company. major shareholder and is beyond disclose information. in disclosure of information or on Disclosure of Information by latter. The above memorandum has been the Company’s control. If such whose activities may lead to the Issuers of Securities approved drawn up in accordance with the Corporate memorandum is available, the need to disclose information are by the Bank of Russia on 30 Governance Code recommendations9. Company commits to disclose it. determined in the Regulations on December 2014 No. 454-P, it is Information Policy approved by expected to approve a new version 6.2.5. The company ensures the disclosure of Compliant the Board of Directors. of the Regulations on Information detailed biographical data of members of The above information is disclosed Policy and the Regulations on the board of directors, including information in annual and quarterly reports of coordination between structural about whether they are independent direc- the Company and on its corporate units of the Corporate Headquar- tors, as well as immediate disclosure of website. ters when disclosing information information on the loss by a board member in accordance with the Russian of his/her status of an independent director. corporate and securities laws and the applicable UK securities laws. 9 As specified in paragraph 279 of Part B of the Corporate Governance Code.

58 59 JSC FGC UES Annual Report Appendices

6.2.6. The Company shall disclose information Compliant VII. Significant Corporate Actions on its capital structure in accordance The above information is disclosed in with the Corporate Governance Code annual and quarterly reports of the 7.1. Any actions which have or may have a significant impact on the company’s share capital structure and its financial position and, accordingly, on the recommendations. Company and on its corporate website. position of its shareholders (‘significant corporate actions’) should be taken on fair terms and conditions ensuring that the rights and interests of the shareholders as well as other stakeholders are observed 6.2.7. The company’s annual report contains ad- Partially compliant The Company does not comply Amendments are expected to ditional information recommended by the The Company complies with rec- with recommendations specified be made to the Regulations on 7.1.1. The company’s articles of association Partially compliant Recommendations are not Corporate Governance Code: ommendations specified in items in item 4 due to the specific na- Information Policy. determine the list (criteria) of transactions complied with in respect of issues 1) a summary of most significant transac- 1, 3 and 7. ture of the Company’s activities. or other actions being significant corporate that are referred to the compe- tions, including related transactions, Recommendations specified in In accordance with the Federal The Company does not plan actions, the consideration of which is re- tence of the General Meeting of entered into by the company and legal enti- item 2 are partially complied with: Law No. 35-FZ dated 26 March to consider recommendations ferred to the competence of the company’s Shareholders in accordance with ties controlled thereby in the last year; there is no description of the 2003 “On Electric Power Indus- specified in items 2 and 4. board of directors, including: the Federal Law On Joint-Stock 2) a report of the board of directors (including most complex issues discussed try”, Federal Grid Company is an 1) reorganisation of the company, acquisition Companies and the Company’s reports by its committees) for the year that at the meetings of the Board of organisation designed to manage As to item 5, if remuneration of 30 or more percent of its voting shares Articles of Association. in particular includes information about the Directors. UNEG, thus being a natural is paid to the Board members, (takeover), increase or decrease of its share number of boards meetings held in person/ The Company does not comply monopoly entity and having no the Company will disclosed capital, listing and delisting of its shares; in absentia and about attendance of each with recommendations specified competitors on internal and ex- the relevant information in 2) transactions on sale of shares (interests) board member at the meetings, a description in item 4, and partially complies ternal markets. Causes of conflict accordance with paragraph in any legal entity controlled by the company of most significant and most complex issues with recommendations specified of interest do not practically exist. 70.3 of Section 70 of the which is significant to the latter, where, as which were discussed at the meetings of the in items 5 and 6. If any conflict of interest occurs, Regulations on Disclosure of a result of such transaction, the company board of directors and its committees, and information will be disclosed. Information by Issuers of Se- would lose control over such legal entity; main recommendations made by the com- curities approved by the Bank 3) transactions with property of the committees to the board of directors; As to item 5, remuneration to of Russia on 30 December pany or any legal entity controlled thereby 3) Information about any shares in the com- the Board members is paid in 2014 No. 454-P. (including related transactions) whose pany which are owned, directly or indirectly, accordance with the Regulations value exceeds a threshold amount speci- by members of the board of directors and/or approved by the General Meeting fied in the company’s articles of associa- executive bodies of the company; of Shareholders and providing tion or which is material to the company’s 4) information on whether any members that there is net profit at the end business operations; of the board of directors and the executive of financial year. No remu- 4) establishment of a legal entity controlled bodies have conflicts of interest (including neration was paid to members by the company and being material to the those associated with their participation in of the Board of Directors in prior latter’s business; the governing bodies of any competitors of years, as the Company had no 5) a disposal of treasury or quasi-treasury the company); profit, and the General Meeting of shares by the company. 5) a description of the system of remu- Shareholders made decisions not neration of board members, including the to pay remuneration to the Board 7.2. The company should have in place such a procedure for taking any significant corporate actions that would enable its shareholders to receive amount of individual remuneration payable members (for example, AGM full information about such actions in time and influence them, and that would also guarantee that the shareholder rights are observed and duly upon the results of the year to each board resolutions dated 27 June 2013 protected in the course of taking such actions member (broken down by basic fee, addi- and 27 June 2014). tional fee for the chairmanship in the board 7.2.1. The company’s internal documents have set a Partially compliant The Company does not comply of directors and for the chairmanship/mem- As to item 6, the current version principle of equal conditions for all sharehold- The Company’s internal docu- with the recommendation due to bership in committees of the board of direc- of the Regulations on Information ers when taking significant corporate actions ments do not include measures the absence of relevant require- tors, the amount of participation in the long- Policy does not provide for disclo- that would affect rights and legitimate interests specified in items 1-3. ments in the current legislation. term incentive programme, the amount sure of such information. of the company’s shareholders, as well as addi- The Company retains an inde- of participation of each board member in tional measures aimed at protecting the rights pendent appraiser as provided for an option plan, if any), reimbursement of and legitimate interests of the company’s by applicable law. expenses associated with their participation shareholders provided for by the Corporate in the board of directors, and costs incurred Governance Code, including: by the company in connection with liability 1) retaining an independent appraiser with an insurance for its directors as members of impeccable business reputation in the market the company’s governing bodies; and appraisal experience in the respective 6) information on the total remuneration area, or providing a reason for not doing so, for the year: when determining the value of property to be а) in respect of a group of at least five most acquired or disposed of under a major transac- highly-paid members of the executive tion or an interested party transaction; bodies and other key managers of the 2) determining a price of the company’s shares, company, broken down by type of remu- repurchased or redeemed, by an independent neration; appraiser with an established impeccable repu- б) in respect of all members of the execu- tation in the market and appraisal experience tive bodies and other key managers of the in the respective area, with the account of the company who are subject to the company’s weighted average price of the shares over a rea- remuneration policy, broken down by type sonable period of time, without considering the of remuneration; effect of a respective transaction to be entered 7) information on the remuneration of the into by the company (including without con- company’s chief executive officer for the sidering any change in the price of the shares year, which he/she has received or is to following the dissemination of information on receive from the company (or a legal entity the company’s entering into the transaction), from a group of organisations whereof the and without considering a discount for disposing company is a part) with a breakdown by shares as part of a minority holding; type of remuneration, both for carrying out 3) expanding a list of grounds on which his/her duties of the chief executive officer members of the company’s board of directors, and otherwise. as well as other persons referred to in the legislation, are deemed to be interested in the 6.3. The company should provide information and documents requested by its shareholders in accordance with the principle of equal and convenient access company’s transactions in order to evaluate actual relatedness of the relevant persons. 6.3.1. In accordance with the company’s information Compliant policy, shareholders holding equal number of Stipulated in paragraph 7 of the voting shares are provided with equal access Regulations on Information Policy. to company’s information and documents.

60 61 JSC FGC UES Annual Report Appendices

Information on Transactions Major Transactions In 2014, the Company did not enter into any as major transactions, as well as other approval procedure applies pursuant to MATERIAL TRANSACTIONS ENTERED INTO BY JSC FGC UES AND LEGAL transactions recognised by the RF laws transactions to which major transaction the Federal Grid’s Articles of Association. ENTITIES CONTROLLED THEREBY Information on transactions made by JSC Federal Grid Company of Unified Energy System (JSC In accordance with the recommendations 2.2. Transactions (including several representing fixed assets, intangible FGC UES) in 2014 that are recognised as related party transactions under the Russian laws, and of the Corporate Governance Code related transactions) involving the assets, and construction in progress are subject to approval by the Company’s authorised governing bodies approved by the Board of Directors of the disposal of or the potential disposal intended for producing, transmitting, Bank of Russia on 21 March 2014, Federal of property comprising fixed assets, dispatching and distributing electricity Grid Company considers the following intangible assets and construction and heat, with a book or market value Governing body that made a decision on transactions as material: in progress intended for producing, exceeding RUR15 million; Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval transmitting, dispatching and description in the transactions 1. Sale of shares (interests) in any legal distributing electricity and heat, with a 2.6. Transactions of subsidiaries (minutes' date and number) entity controlled by JSC FGC UES which is book value exceeding RUB75 million; and associates (including several material to the latter, where, as a result of related transactions) involving the 1. Agreement on ap- JSC FGC UES and In cooperation and per- Not provided (the The Company's Board Shareholder who such transaction, JSC FGC UES would lose 2.3. Transactions (including several disposal of or the potential disposal of plication of national JSC SO UES forming their functions, Agreement does of Directors (minutes holds more than 20% control over such legal entity related transactions) involving the property, representing fixed assets, standards Parties follow national not and cannot No. 210 of 17.01.2014) of shares of JSC FGC disposal of or the potential disposal intangible assets, and construction in standards’ requirements implicate monetary UES - JSC “Ros- which are obligatory for obligations and seti”, members of 2. Transactions with property of JSC of property comprising fixed assets, progress not intended for producing, each Party in performing is not related to the Company's The FGC UES or any legal entities controlled intangible assets and construction transmitting, dispatching and their activities. property / property Board of Directors thereby (including related transactions, in progress intended for producing, distributing electricity and heat, with rights transfer) V.M. Kravchenko, if any, entered into by JSC FGC UES and transmitting, dispatching and a book or market value exceeding who is a member of one and/or more legal entities controlled distributing electricity and heat, with a RUR30 million; the Board of Direc- thereby) whose value exceeds a threshold book value exceeding RUB150 million; tors of a party to the amount specified in the Company’s Articles 3.Establishment of a legal entity controlled transaction , and N.G. Shulginov, who is the of Association or which is material to the 2.4. Major transactions entered into by by JSC FGC UES and being material to the First Deputy Chairman Company’s business operations: subsidiaries and associates Company’s operations. of the Management of JSC FGC UES; Board of a party to the 2.1. Transactions in which the subject of the transaction transaction is the Company’s non-current 2.5. Transactions of subsidiaries and 2. Agreement on de- JSC FGC UES and Defining shares in the Transaction price The Company's Board Shareholder who assets exceeding 10 percent of the book associates (including several related fining shares in the JSC “Kuban Trunk common ownership is equal to the total of Directors (minutes holds more than 20% value of said assets as of the date of making transactions) involving the disposal of common ownership Grids” interest for a power grid expenses of JSC No. 210 of 17.01.2014) of shares of JSC FGC a decision on entering into said transaction; or the potential disposal of property, interest for a power facility FGC UES accrued to UES - JSC “Rosseti” grid facility under the power grid facil- the Agreement on ity in the amount of JSC FGC UES did not enter into any material transactions in 2014. the use of electric RUB 1,470,000,000, grid facilities dated excluding VAT, and 30.12.2005 No. DI- value of fixed as- 73/107/30-49 sets reconstructed and accounted Material transactions entered into in 2014 by legal entities controlled by JSC FGC UES at JSC “Kuban Trunk Grids” in the amount of Governing body which RUB 250,000,000, Transaction Transaction made a decision on excluding VAT № Transaction subject Transaction price description parties transaction approval 3. Compensation JSC FGC UES and Compensation of ex- Agreement The Company's Board Shareholder who (minutes date and number) agreement within JSC “Kuban Trunk pense to the owner (JSC price: RUB of Directors (minutes holds more than 20% 1 Supplementary JSC FGC UES Amendments to the condi- The service price according Company’s The Board of a title “220 kV OHL Grids” “Kuban Trunk Grids”) 1,318,703,996.80, No. 210 of 17.01.2014) of shares of JSC FGC agreement No. 13 to JSC CIUS UES tions of the Agreement dated to the Supplementary agree- Directors (minutes No. 220 for power delivery for implementation of including VAT (18%) UES - JSC “Rosseti” the Agreement dated 01.04.2008 No. Ts/01, including ment for the period from of 02.06.2014), of Dzhugbinskaya measures in the inter- 01.04.2008 No. Ts/01 the amount of remuneration for 01.01.2014 to 31.12.2014 EGSM of JSC CIUS – Man- CHPP” ests of and in relation to for performing Owner/ Owner/Developer services shall not exceed RUB agement Board of JSC FGC the Company’s activities Developer functions 2,005,115,000 (Two billion UES (minutes No. 1240/1 of on construction of the five million one hundred 09.06.2014) facility under the Title and fifteen thousand only), “220 kV OHL for power including VAT (18%) delivery of Dzhugbins- kaya CHPP” 2 Supplementary JSC FGC UES Amendments to the condi- The service price according to Company’s The Board of agreement No. 15 to JSC CIUS UES tions of the Agreement dated the Supplementary agree- Directors (minutes No. 245 4. Agency agreement JSC FGC UES and Principal (JSC “Kuban Agency agree- The Company's Board Shareholder who the Agreement dated 01.04.2008 No. Ts/01, includ- ment for the period from of 31.12.2014); for effecting legal JSC “Kuban Trunk Trunk Grids”) entrusts, ment price: Cost of Directors (minutes holds more than 20% 01.04.2008 No. Ts/01 ing remuneration amount for 01.01.2014 to 31.12.2014 shall EGSM of JSC CIUS – Man- and practical steps Grids” and Agent (JSC FGC of works does No. 210 of 17.01.2014) of shares of JSC FGC for performing Owner/ Owner-Developer services not exceed RUB 2,301,000,000 agement Board of JSC FGC on facilities' re- UES) effects in a manner not exceed RUB UES - JSC “Rosseti” Developer functions (Two billion three hundred UES (minutes No. 1287/6 of construction within and in terms provided in 1,315,871,996.80, and one million only), includ- 30.01.2015) the scope of the the Agreement, on his including VAT ing VAT (18%) approved project own behalf but at the (18%). Agency fee “220 kV OHL for expense of the Princi- is RUB 118,000, power delivery of pal, legal and practical including VAT (18%) Dzhugbinskaya steps on reconstruction CHPP” of facilities owned by the Principal, within the scope of the approved project “220 kV OHL for power delivery for Dzhugbinskaya CHPP”

62 63 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 5. Supplementary JSC FGC UES and Amendments to the list Rental rate is RUB The Company's Board Shareholder who 14. Supplementary JSC FGC UES and Change in rental pay- Total cost of rental The Company's Board Shareholder who agreement No. 4 to JSC IDGS of Siberia of real estate leased and 130,722.25 per of Directors (minutes holds more than 20% agreement No. 2 JSC “Electrosetser- ment payment according of Directors (minutes holds more than 20% real estate rental rental rate amount month, including No. 210 of 17.01.2014) of shares of JSC FGC to the Real estate vice UNEG” to the rental agree- No. 210 of 17.01.2014) of shares of JSC FGC agreement dated VAT (18 %) UES - JSC “Rosseti” rental agreement ment is defined UES - JSC “Rosseti” 03.09.2010 No. dated 14.06.2011 in the amount of 05.42.592.10 No.178 RUB 38,140,424.99, including VAT (18%) 6. Agreement on JSC FGC UES and Transfer of the rights From 01.06.2013 to The Company's Board Shareholder who transfer of rights JSC “Tuymenenergo” and duties on land lease 25.02.2016, lease of Directors (minutes holds more than 20% 15. Supplementary JSC FGC UES and Change in rental pay- Total cost of rental The Company's Board Shareholder who and duties on land agreement payment is RUB No. 210 of 17.01.2014) of shares of JSC FGC agreement No. 1 JSC “Electrosetser- ment payment according of Directors (minutes holds more than 20% lease agreement 3,603,348.29, exclud- UES - JSC “Rosseti” to the Real estate vice UNEG” to the rental agree- No. 210 of 17.01.2014) of shares of JSC FGC dated 28.02.2013 ing VAT rental agreement ment is defined UES - JSC “Rosseti” No. 166 dated 03.02.2011 in the amount of No.04-12/01-11 RUB 4,397,121.68, 7. Real estate rental JSC FGC UES and Real estate rent Rental payment for The Company's Board Shareholder who including VAT (18%) agreement JSC NIC of Siberia premises per 11 of Directors (minutes holds more than 20% month will be RUB No. 210 of 17.01.2014) of shares of JSC FGC 16. Supplementary JSC FGC UES and Amendments to the list Price is not defined. The Company's Board Shareholder who 657,993.60, includ- UES - JSC “Rosseti” agreement to the JSC IDGS of Centre of facilities being leased Entering into the of Directors (minutes holds more than 20% ing VAT (18%) Agreement on and Privolzhie according to the agree- Supplementary No. 210 of 17.01.2014) of shares of JSC FGC lease of electric ment agreement does UES - JSC “Rosseti” 8. Supplementary JSC FGC UES and Amendments to the con- Supplementary The Company's Board Shareholder who grid facilities not entail monetary agreement No. 1 JSC CIUS UES ditions of the real estate agreement price of Directors (minutes holds more than 20% No. PM-21 of obligations. to Real estate sub- sub-rental agreement is provided in the No. 210 of 17.01.2014) of shares of JSC FGC 10.07.2013 rent agreement amount of RUB UES - JSC “Rosseti”; dated 17.12.2012 139,841,449.76, fur- member of the Com- 17. Supplemen- JSC FGC UES and Amendments to the list Price is not defined. The Company's Board Shareholder who No. A/CIUS/1 thermore, VAT 18% pany’s Management tary agreement JSC IDGS of Centre of facilities being leased Entering into the of Directors (minutes holds more than 20% is paid for the peri- Board L.V. Mazo, who to the Agree- according to the agree- Supplementary No. 210 of 17.01.2014) of shares of JSC FGC od from 01.06.2012 is simultaneously a ment on lease ment agreement does UES - JSC “Rosseti”; to 30.03.2014. General Director of the of electric grid not entail monetary member of the Com- Party in the transaction facilities No. PM- obligations. pany’s Management 25/7700/00386/13 Board V.A. Goncharov 9. Supplementary JSC FGC UES and Increase in rental pay- Agreement price The Company's Board Shareholder who of 17.07.2013 who is simultaneously agreement No. 2 to JSC CIUS UES ment since October 01, considering ad- of Directors (minutes holds more than 20% a member of the Board Real estate rental 2013. ditional agree- No. 210 of 17.01.2014) of shares of JSC FGC of Directors of a party agreement dated ments No. 1 and UES - JSC “Rosseti”; to the transaction 02.07.2012 No. No. 2 is defined member of the Com- 200904 in the amount of pany’s Management 18. Supplementary JSC FGC UES and Amendments to the list Price is not defined. The Company's Board Shareholder who RUB 4,231,292.10 Board L.V. Mazo who agreement to the JSC IDGS of Centre of facilities being leased Entering into the of Directors (minutes holds more than 20% including VAT (18%) is simultaneously a Agreement on and Privolzhie according to the agree- Supplementary No. 210 of 17.01.2014) of shares of JSC FGC for the whole rental General Director of the lease of electric ment agreement does UES - JSC “Rosseti” period. Monthly Party in the transac- grid facilities not entail monetary rental payment for tion No. PM-20 of obligations. non-residential 10.07.2013 premises is RUB 846,258.42 includ- 19. Supplementary JSC FGC UES and Termination of the Rental payment for The Company's Board Shareholder who ing VAT (18%) agreement to the JSC IDGS of North- Agreement the period of actual of Directors (minutes holds more than 20% Agreement on West temporary pos- No. 210 of 17.01.2014) of shares of JSC FGC 10. Real estate rental JSC FGC UES and Real estate rent Real estate rental The Company's Board Shareholder who lease of electric session and use is UES - JSC “Rosseti”; agreement JSC “Chitaenergo” agreement price of Directors (minutes holds more than 20% grid facilities RUB 1,891,486.69, member of the Com- is defined in the No. 210 of 17.01.2014) of shares of JSC FGC No. PM-12 of including VAT (18%) pany's Management amount of RUB UES - JSC “Rosseti” 27.07.2013 Board A.E. Murov who 69,622.30, including is simultaneously a VAT (18%) member of the Board of Directors of a party 11. Real estate rental JSC FGC UES and Real estate rent Real estate rental The Company's Board Shareholder who to the transaction agreement JSC “Chitaenergo” agreement price of Directors (minutes holds more than 20% is defined in the No. 210 of 17.01.2014) of shares of JSC FGC 20. Supplementary JSC FGC UES and Amendments to the list Rental payment The Company's Board Shareholder who amount of RUB UES - JSC “Rosseti” agreement to the JSC IDGS of North- of facilities leased ac- for the period of of Directors (minutes holds more than 20% 69,263.48, including Agreement on West cording to the agreement using the facilities No. 210 of 17.01.2014) of shares of JSC FGC VAT (18%) lease of electric and amount of rental from 01.01.2013 to UES - JSC “Rosseti”; grid facilities payment 30.06.2013 is RUB member of the Com- 12. Supplementary JSC FGC UES and- Change in rental pay- Supplementary The Company's Board Shareholder who No. PM-15 of 91,948.74, including pany's Management agreement No. 4 JSC “MUS Energetiki ment agreement price of Directors (minutes holds more than 20% 25.07.2013 VAT (18%); Rental Board A.E. Murov who to the real estate is established in No. 210 of 17.01.2014) of shares of JSC FGC payment for using is simultaneously a rental agreement the amount of RUB UES - JSC “Rosseti” the facilities from member of the Board dated 25.11.2010 46,446.30, includ- 01.07.2013 will be of Directors of a party No. 140169 ing VAT (18%), for RUB 140,799.43, to the transaction the period from excluding VAT (18%) 01.10.2013 to 31.08.2014 21. Supplementary JSC FGC UES and- Amendments to the list Parties settled rental The Company's Board Shareholder who agreement to the JSC IDGS of Centre of facilities leased ac- fee for facilities use of Directors (minutes holds more than 20% 13. Supplementary JSC FGC UES and Change in rental pay- The total cost of The Company's Board Shareholder who Agreement on lease and Privolzhie cording to the agreement since 01.07.2013 in No. 210 of 17.01.2014) of shares of JSC FGC agreement No.1 to JSC “Electrosetser- ment rental payment of Directors (minutes holds more than 20% of electric grid and rental fee amount the amount of RUB UES - JSC “Rosseti” the Movable assets vice UNEG” according to the No. 210 of 17.01.2014) of shares of JSC FGC facilities No. PM-22 661,501.58 per 360 rental agreement rental agreement UES - JSC “Rosseti” of 10.07.2013 calendar days, ex- dated 28.10.2011 is defined in the cluding VAT (18%) No. 385 amount of RUB 6,013,606.42, including VAT (18%)

64 65 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 22. Paid services JSC FGC UES and The Customer (JSC FGC 1. Cost of services The Company’s Board Shareholder who 26. Agreement for UES and JSC IDGC The Guarantee Supplier Agreement price The Company's Board Shareholder who agreement on pro- JSC “Rosseti” UES) entrusts and the of JSC “Rosseti” of Directors (minutes holds more than 20% providing power of Centre (JSC IDGC of Centre) is is determined ap- of Directors (minutes holds more than 20% viding engineering Contractor (JSC “Ros- according to the No. 211 of 31.01.2014) of shares of JSC FGC supply for the obliged to sell electric- proximately based No. 212 of 28.02.2014) of shares of JSC FGC supervision seti”) accepts to perform Agreement is UES - JSC “Rosseti”, building of op- ity (capacity), as well as on non-governed UES - JSC “Rosseti”, engineering supervision defined in 2014 in members of the The erations and repair render, by himself or via electric power member of the Com- services. the amount of RUB Company’s Board of facilities of JSC third persons, power rates for 2013 in pany's Management 40,652,085.60, in- Directors: G.V. Boos, FGC UES branch – transmission services, the amount of RUB Board V.A. Goncharov, cluding VAT (18%). V.M. Kravchenko, E. Valdayskoe PMES, as well as services which 749,941.38, exclud- who is a member of 2. Cost of services Ferlengi, S.I. Shmatko, address: Tver city, are integral part of the ing VAT (18%) the Board of Direc- of JSC FGC UES O.M. Budarginn, А.V. Kalinin av., 55 process of electric power tors of a party to the according to the Murov, who are mem- supply to the Customer transaction Agreement is bers of the Party’s The (JSC FGC UES), and the defined in 2014 in Board of Directors in Customer is obliged to the amount of RUB the deal pay for the purchased 1,200,000 maximum, electricity (capacity) and including VAT (18%). services rendered. Total services cost according to the 27. Agreement for JSC FGC UES and Granting to JSC “TGK-1” Agreement price The Company's Board Shareholder who agreement may not granting a right for JSC “TGK-1” a right of temporary use is defined in the of Directors (minutes holds more than 20% exceed 2 or more temporary use 1 of 1 sq.m for the purpose amount of RUB No. 212 of 28.02.2014) of shares of JSC FGC percent of JSC FGC sq.m in substation of placement of equip- 121,551, except for UES - JSC “Rosseti”, UES balance sheet control building ment of JSC FGC UES VAT (18 %) member of the Com- assets based on its at SWYD 220 kV on remuneration basis pany's Board of Direc- accounting reports for the purpose of tors D.V. Fyodorov, on the latest date. placing equipment who is a member of of JSC FGC UES the Board of Direc- 23. Agreement for pro- UES and JSC IDGC The Guarantee Supplier Agreement price The Company's Board Shareholder who tors of a party to the viding power supply of Centre (JSC IDGC of Centre) is is determined ap- of Directors (minutes holds more than 20% transaction for lighting long- obliged to sell electric- proximately based No. 212 of 28.02.2014) of shares of JSC FGC span supports No. ity (capacity), as well as on non-governed UES - JSC “Rosseti”, 28. Agreement for per- JSC FGC UES and The Contractor (JSC Work cost under The Company's Board Shareholder who 421 and 422, 750 kV render, by himself or via electric power member of the Com- forming research, JSC R&D Centre of R&D Centre of FGC UES) agreement is de- of Directors (minutes holds more than 20% Kalininskaya NPS third persons, power tariffs for 2013 in pany's Management development and FGC UES performs research, defined in the amount No. 212 of 28.02.2014) of shares of JSC FGC – Vladimirskaya transmission services, the amount of RUB Board V.A. Goncharov, process works on velopment and process of RUB 18,540,000, UES - JSC “Rosseti” OHL, and amplify- as well as services which 29,266.74, except who is a member of the topic: “R&D works on the topic: “R&D including VAT (18%) ing point in Yurkino are integral part of the for VAT (18%) the Board of Direc- results evaluation results evaluation and village, Tverskaya process of electricity tors of a party to the and improvement improvement to the level region supply to the Customer transaction to the level capable capable to legal protec- (JSC FGC UES), and the to legal protection, tion, with preparation of Customer is obliged to with preparation of materials for JSC FGC pay for the purchased materials for JSC UES intellectual property electricity (capacity) and FGC UES intellec- protection by exclusive services rendered. tual property pro- right registration docu- tection by exclusive ments in Russian Fed- 24. Agreement for UES and JSC IDGC The Guarantee Supplier Agreement price The Company's Board Shareholder who right registration eration and abroad” providing power of Centre (JSC IDGC of Centre) is is determined ap- of Directors (minutes holds more than 20% documents in Rus- supply for lighting obliged to sell electric- proximately based No. 212 of 28.02.2014) of shares of JSC FGC sian Federation and long-span supports ity (capacity), as well as on non-governed UES - JSC “Rosseti”, abroad” No. 1054, 750 kV render, by himself or via electric power member of the Com- Kalininskaya NPS third persons, power tariffs for 2013 in pany's Management 29. Agreement for pro- JSC FGC UES and The Contractor (JSC Agreement price The Company's Board Shareholder who – Opytnaya OHL, transmission services, the amount of RUB Board V.A. Goncharov, viding services of JSC “MUS Energe- R&D Centre of FGC UES) is defined in the of Directors (minutes holds more than 20% Konakovo town as well as services which 16,277.53, exclud- who is a member of operation control of tiki” provides complete ser- amount of RUB No. 212 of 28.02.2014) of shares of JSC FGC are integral part of the ing VAT (18%) the Board of Direc- DCCS and commu- vices of operation control 12,042,276.96 max., UES - JSC “Rosseti” process of electric power tors of a party to the nication systems of DCCS and communi- including VAT (18%) supply to the Customer transaction cation systems (JSC FGC UES), and the 30. Equipment place- JSC FGC UES and Rendering services to Agreement price The Company's Board Shareholder who Customer is obliged to ment agreement JSC IDGS of Volga the Customer (JSC IDGS is defined in the of Directors (minutes holds more than 20% pay for the purchased of Volga) on providing amount of RUB No. 212 of 28.02.2014) of shares of JSC FGC electricity (capacity) and places for Customer’s 1,285,635.12, in- UES - JSC “Rosseti” services rendered. equipment and its cluding VAT (18%) 25. Agreement for UES and JSC IDGC The Guarantee Supplier Agreement price The Company's Board Shareholder who safeguarding at the Con- providing power of Centre (JSC IDGC of Centre) is is determined ap- of Directors (minutes holds more than 20% tractor’s (JSC FGC UES) supply for lighting obliged to sell electric- proximately based No. 212 of 28.02.2014) of shares of JSC FGC facilities long-span supports ity (capacity), as well as on non-governed UES - JSC “Rosseti”, 31. Additional agree- JSC FGC UES and Amendments to the Lease payment, ac- The Company's Board Shareholder who No. 1053, 750 kV render, by himself or via electric power member of the Com- ment No. 1 to JSC “MUS Energetiki” terms and conditions of cording to additional of Directors (minutes holds more than 20% Kalininskaya NPS third persons, power tariffs for 2013 in pany's Management optic fibres lease the agreement and lease agreementNo. 1 to No. 212 of 28.02.2014) of shares of JSC FGC – Opytnaya OHL, transmission services, the amount of RUB Board V.A. Goncharov, agreement dated payment optic fibres lease UES - JSC “Rosseti” Glinniki village as well as services which 12,301.45, exclud- who is a member of 13.01.2012 No. 038 dated 13.01.2012 are integral part of the ing VAT (18%) the Board of Direc- No. 038, is defined process of electric power tors of a party to the in the amount RUB supply to the Customer transaction 164,268.67, includ- (JSC FGC UES), and the ing VAT (18%) Customer is obliged to pay for the purchased electricity (capacity) and services rendered.

66 67 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 32. Agreement on JSC FGC UES and The Contractor (JSC FGC Agreement price The Company's Board Shareholder who 38. Agreement for JSC FGC UES and The Contractor (JSC “Chi- Agreement price The Company's Board Shareholder who providing places JSC IDGS of Volga UES) renders services on is defined in the of Directors (minutes holds more than 20% FOCL accessories JSC “Chitaenergo” taenergo”) replaces FOCL is defined in the of Directors (minutes holds more than 20% for equipment providing places for the amount of RUB No. 212 of 28.02.2014) of shares of JSC FGC replacement accessories replacement amount of RUB No. 213 of 14.03.2014) of shares of JSC FGC equipment and its safe- 538,061.48, includ- UES - JSC “Rosseti” at the section pole No. 133,175.47, includ- UES - JSC “Rosseti” guarding at the facility – ing VAT (18%) 182 – pole No. 218 220 kV ing VAT (18 %) 220/110/35/6kV Orenburg- Mysovaya – GO GRES OHL skaya SS (MG-251, 252) 33. Agreement for the JSC FGC UES and The Contractor (JSC Agreement price The Company's Board Shareholder who 39. Road transport JSC FGC UES and The Customer (JSC FGC Road transport ser- The Company's Board Shareholder who work “Development JSC “APBE” APBE) shall formulate is defined in the of Directors (minutes holds more than 20% services agreement JSC IDGS of Urals UES) renders services vices cost is defined of Directors (minutes holds more than 20% of Electric power variant forecast of electric amount of RUB No. 212 of 28.02.2014) of shares of JSC FGC on paid temporary use of in the amount RUB No. 213 of 14.03.2014) of shares of JSC FGC sector forecast bal- power facilities devel- 27,848,000, includ- UES - JSC “Rosseti” vehicles and implemen- 1,100,000 max., UES - JSC “Rosseti” ance for 2013-2020 opment through 2030 ing VAT (18%) tation by the Contractor including VAT (18%) with a prospect considering actualised (JSC IDGS of Urals) of ve- through 2030” parameters of electric hicles operation manage- power sector development and maintenance to ment, including genera- ensure transport support tion facilities. for Customer’s (JSC FGC UES) business 34. Agreement for wa- JSC FGC UES and Water supply from 500 Agreement price The Company's Board Shareholder who ter supply from 500 JSC MOESK kV Ochakovo substation is defined in the of Directors (minutes holds more than 20% 40. Supplementary JSC FGC UES and Prolongation of services Supplementary The Company's Board Shareholder who kV Ochakovo sub- water supply system to amount of RUB No. 212 of 28.02.2014) of shares of JSC FGC agreement on pro- JSC “MUS Energe- rendered by the Contrac- agreement price of Directors (minutes holds more than 20% station water supply 110 kV Novo-Kuntsevo 10,473.64, including UES - JSC “Rosseti”; longation of the tiki” tor (JSC “MUS Energe- is defined in the No. 213 of 14.03.2014) of shares of JSC FGC system to 110 kV SS and accepting grey VAT (18%) member of the Com- Agreement dated tik”) on maintenance amount of RUB UES - JSC “Rosseti” Novo-Kuntsevo SS waters into 500 kV pany's Management 21.05.2012 No. 503 and emergency recovery 4,963,080, including and accepting grey Ochakovo SS sewer- Board A.V. Kazachen- work (ERW) of hardware VAT (18%) waters into 500 age system from 110 kV kov who is a member and software suite (HSS) kV Ochakovo SS Novo-Kuntsevo SS of the Board of Direc- PSIcontrol and GCU S sewerage system tors of a party to the engineering networks from 110 kV Novo- transaction till30.09.2013. Kuntsevo SS 41. Paid services agree- JSC FGC UES and The Contractor (JSC Agreement price The Company's Board Shareholder who 35. Agreement for reg- JSC FGC UES and JSC FGC UES performs Cost of works is The Company's Board Shareholder who ment for snow re- JSC IDGS of North- IGDS of North-West) is defined in the of Directors (minutes holds more than 20% ular and unsched- JSC “Kubanenergo” works on regular and defined according of Directors (minutes holds more than 20% moval from grounds West exercises SS-204 of JSC amount of RUB No. 213 of 14.03.2014) of shares of JSC FGC uled maintenance unscheduled mainte- to the Method of No. 212 of 28.02.2014) of shares of JSC FGC of SS-204 of JSC FGC UES branch – Kare- 42,480 max., in- UES - JSC “Rosseti”; and repair at the nance and repair at the work cost calcula- UES - JSC “Rosseti” FGC UES branch lian MES facilities, based cluding VAT (18%) member of the Com- facilities facilities tion issued by JSC – Karelian MES on single requests pany's Management Rosseti to provide facilities, based on Board A.E. Murov who reliable operation of one-time requests is a member of the Sochi power district Board of Directors of a grid facilities within party to the transac- Kuban power sup- tion ply system JSC “Kubanenergo” 42. Agreement for JSC FGC UES and The Contractor (JSC Agreement price The Company's Board Shareholder who and JSC FGC UES maintenance, JSC “Electrosetser- “Electrosetservice is defined in the of Directors (minutes holds more than 20% branch – MES South repair and diagnos- vice UNEG” UNEG”) performs amount of RUB No. 213 of 14.03.2014) of shares of JSC FGC during preparation tics of electric grid maintenance, repair and 45,538,398.34 max., UES - JSC “Rosseti” and conducting of facilities diagnostics of power grid including VAT (18%) ХХII Winter Olympic facilities, using both own Games and ХI and handout materials Winter Paralympic according to Customer’s Games in 2014 in specifications require- Sochi, and cannot ments (JSC FGC UES) be equal or exceed 43. Agreement of JSC FGC UES and Granting to a subtenant Agreement price The Company's Board Shareholder who 2% of JSC FGC sublease of a land JSC “Lenenergo” (JSC FGC UES) a part of is defined in the of Directors (minutes holds more than 20% UES balance sheet plot part land plot for temporary amount of RUB No. 213 of 14.04.2014) of shares of JSC FGC assets based on its possession and use for a 625113.56, includ- UES - JSC “Rosseti” accounting reports fee, total area 49,145.70 ing VAT (18%) on the latest date sq.m, located at the ad- before making the dress: 46 Poliustrovsky Agreement. av., St.-Petersburg. 36. Supplementary JSC FGC UES and Amendments to the fixed Price of Supple- The Company's Board Shareholder who 44. Agreement for JSC FGC UES and The Contractor (JSC Services price The Company's Board Shareholder who agreement to the JSC “Tomsk Trunk and movable assets lists mentary agreement of Directors (minutes holds more than 20% communication JSC “MUS Energetiki” “MUS Energetiki”) shall according to the of Directors (minutes holds more than 20% Agreement on the Grids” and rental fees. is defined in the No. 213 of 14.03.2014) of shares of JSC FGC lines operational perform operational agreement is de- No. 215 of 14.04.2014) of shares of JSC FGC use of electric grid amount of RUB UES - JSC “Rosseti” maintenance maintenance of fibre- fined in the amount UES - JSC “Rosseti” facilities No. DI-8 of 158,634,480, includ- optic communication of RUB 238,449,091 28.03.2005 ing VAT (18%) lines. The Contractor max., including VAT 37. Agreement for JSC FGC UES and Rendering comprehensive Services price The Company's Board Shareholder who shall maintain the whole in the amount of operation and JSC “MUS Energetiki” services on operation according to the of Directors (minutes holds more than 20% communication line RUB 36,373,590.15 maintenance of and maintenance of data agreement is No. 213 of 14.03.2014) of shares of JSC FGC between Customer’s max. DTCN equipment transmission central net- defined in the UES - JSC “Rosseti” (JSC FGC UES) station of ESUPCN of JSC work (DTSN) of the Energy amount of RUB equipment. FGC UES System’s Unified Process 1,313,040,640 max., Communications Network including VAT (18%) (ESUPCN) of JSC FGC UES.

68 69 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 45. Agreement for JSC STC FGC UES The Contractor (JSC Agreement price The Company's Board Shareholder who 51. Lease agreement JSC FGC UES and The Lesser (JSC FGC Lease agreement The Company’s Board Shareholder who engineering survey, and JSC FGC UES FGC UES) shall perform is defined in the of Directors (minutes holds more than 20% JSC “Rosseti” UES) is obliged to lend price is defined of Directors (minutes holds more than 20% development of works on engineering amount of RUB No. 215 of 14.04.2014) of shares of JSC FGC to the Lessee (JSC “Ros- as consisting of a No. 220 of 02.06.2014) of shares of JSC FGC design and tender survey, development of 116,840,000 max., UES - JSC “Rosseti” seti”) residential prem- fixed and variable of UES - JSC “Rosseti”; documents under design and procurement including VAT (18%) ises/apartments listed in rental fee, namely: members of the the title “Testing documentation. the Agreement, for a fee 1. Total amount of Company’s Board centre in Saint- and against transfer and fixed and variable of Directors: V.M. Petersburg (PIR)” acceptance statement. parts of the rental Kravchenko, E. Fer- of JSC FGC UES fee for the whole lengi, S.I. Shmatko, branch – MES period of Agree- O.M. Budargin, A.E> North-West” ment term is Murov, who are mem- defined as RUB bers of the Board of 46. Supplementary JSC FGC UES and Amendments to p. 1. The Supplemen- The Company's Board Shareholder who 12,700,000 max., Directors of a party to agreement No. 1 JSC STC FGC UES 3.1.1. of the Agree- tary agreement of Directors (minutes holds more than 20% including VAT 18%. the transaction to the Agreement ment as related to work does not and cannot No. 215 of 14.04.2014) of shares of JSC FGC 2. Fixed rental fee dated 01.10.2012 cost (Appendix 1 to the implicate monetary UES - JSC “Rosseti” amount per month: No. I-75-10-10/12 Agreement) and work obligations and  from 01.01.2014 “Development of schedule (Appendix 2 to is not related to to 31.01.2014 – RUB standard technical the Agreement) property / property 652,000, VAT free; requirements for rights transfer.  from 01.02.2014 equipment, materi- 2. Price of the to 28.02.2014 – RUB als and systems Agreement dated 717,243.36, VAT free; certification” 01.10.2012 No.  from 01.03.2014 I-75-10-10/12, con- to 31.03.2014 – RUB sidering Additional 652,000, VAT free; agreements, is de-  from 01.04.2014 fined in the amount to 30.04.2014 - RUB of RUB 21,299,000, 652,000, VAT free; including VAT (18%) 3. Amount of the 47. Agreement for JSC FGC UES and The lesser (JSC FGC Rental fee amount The Company's Board Shareholder who variable part of lease of wheel- JSC “Kubanenergo” UES) transfers to the les- for 7 month is de- of Directors (minutes holds more than 20% rental fee is defined, based container- see (JSC”Kubanenergo) fined, according to No. 215 of 14.04.2014) of shares of JSC FGC according to the ised diesel-gener- 15 wheel-based contain- Lease agreement, in UES - JSC “Rosseti” Agreement, equal ator units, made erised diesel-generator the amount of RUB to the Lesser’s for the purpose of units for temporary 2,909,515, including expenses related risk minimisation possession and use. VAT (18%) to operation and on JSC “Kubanen- maintenance of the ergo” grids in Sochi leased facilities and power district rendering services on repair and trans- 48. On approval of a In accordance with the decision of the Board of Directors made pursuant to The Company's Board Shareholder who port provision related party trans- para. 6.2.2.8 of the Regulation on Information Disclosure by the Issuers of of Directors (minutes holds more than 20% action Securities approved by the Order of the Federal Financial Market Service No. 216 of 17.04.2014) of shares of JSC FGC 52. Supplementary JSC FGC UES Amendments to condi- Services price The Company’s Board Shareholder who dated 04.10.2011 No. 11-46/pz-n, information about the parties and ben- UES - JSC “Rosseti” agreement No. 13 JSC CIUS UES tions of the Agree- according to Sup- of Directors (minutes holds more than 20% eficiaries, essential terms and conditions, as well as the transaction prices to the Agreement ment dated 01.04.2008 plementary agree- No. 220 of 02.06.2014) of shares of JSC FGC shall not be disclosed. dated 01.04.2008 No. Ts/01, including ment for the period UES - JSC “Rosseti”; No. Ts/01 for remuneration amount from 01.01.2014 to member of the Com- 49. On approval of a In accordance with the decision of the Board of Directors made pursuant The Company's Board Shareholder who Owner-developer for Owner-developer 31.12.2014 shall pany’s Management related party trans- to para. 6.2.2.8 of the Regulation on Information Disclosure by Issuers of of Directors (minutes holds more than 20% functions imple- services not exceed RUB Board L.V. Mazo who action. Securities approved by the Order of the Federal Financial Market Service No. 216 of 17.03.2014) of shares of JSC FGC mentation 2,005,115,000, in- is a General Direc- dated 04.10.2011 No. 11-46/pz-n, information about the parties and ben- UES - JSC “Rosseti” cluding VAT (18%). tor of a party to the eficiaries, essential terms and conditions, as well as the transaction prices At that remunera- transaction shall not be disclosed. tion amount for owner-developer 50. Agreement dated JSC FGC UES and The Customer (JSC FGC Work price on the The Company's Board Shareholder who services con- 12.12.2013 No. JSC “APBE” UES) assigns and pays Agreement is de- of Directors (minutes holds more than 20% sists of the fixed 299951 for works and the Contractor (JSC fined in the amount No. 216 of 17.04.2014) of shares of JSC FGC part that is RUB on the topic: “De- “APBE”) assumes obli- of RUB 27,848,000, UES - JSC “Rosseti” 1,830,475,000, in- velopment of Elec- gation to perform work including VAT (18%) cluding VAT (18%). tric power sector on the topic: “Develop- forecast balance ment of Electric power 53. Supplementary JSC FGC UES JSC Making amendments to Supplemen- The Company's Board Shareholder who for 2013-2020 with sector forecast balance agreement No. 16 “Kuban Trunk Grids” Agency the agreement tary agreement of Directors (minutes holds more than 20% a prospect through for 2013-2020 with a to the Agency dated 29.05.2006 No. 69 price is defined No. 220 of 02.06.2014) of shares of JSC FGC 2030” prospect through 2030” agreement dated as related to defining in the amount UES - JSC “Rosseti” 29.05.2006 No. 69 scope of financing JSC RUB 75,000,000 on implement- "Kuban Trunk Grids" max.,including VAT ing investment electric grid facilities (18%) program of JSC reconstruction and tech- "Kuban Trunk nical upgrade in 2014. Grids" on electric grid facilities reconstruction and technical upgrade

70 71 JSC FGC UES Annual Report Appendices

72 73 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 62. Agreement dated JSC FGC UES and The Contractor (JSC STC Work price The Company's Board Shareholder who 66. Agreement JSC FGC UES and The Contractor (LLC IT Work price accord- The Company's Board Shareholder who 28.06.2013 No. JSC STC FGC UES FGC UES) shall perform according to of Directors (minutes holds more than 20% No. 299669 of LLC IT Energy Energy Service) shall ing to the Agree- of Directors (minutes holds more than 20% 29-3/080-GSiRPIR complete works on: Agreement dated No. 220 of 02.06.2014) of shares of JSC FGC 28.11.2013 for IT Service render complete services ment No. 299669 No. 221 of 26.06.2014) of shares of JSC FGC for works on design - engineering survey; 28.06.2013 No. UES - JSC “Rosseti” systems mainte- on Customer’s (JSC FGC of 28.11.2013 is de- UES - JSC “Rosseti” documents devel- - developing concepts of 29-3/080-GSiRPIR nance and technical UES) CIMS maintenance fined in the amount opment under the design for the designing is defined in the support services and technical support of RUB 14,600,000, title: “Reconstruc- object and their agree- amount of RUB including VAT (18%) tion of 110 (220) kV ment to the Customer; 10,036,199.86 max., CGTP11 (Oleniya) - design documents including VAT (18%) 67. An Agreement that JSC FGC UES and The Organiser (JSC FGC Services price The Company's Board Shareholder who -Yamburg 1st OHL development; is a related party JSC IDGS of Centre UES) shall render to the according to the of Directors (minutes holds more than 20% chain. Tower sup- - State or independent transaction Participant (JSC IDGS agreement is defined No. 221 of 26.06.2014) of shares of JSC FGC ports installation expert assessment (if of Centre) services on in the amount of UES - JSC “Rosseti” onto new funda- necessary); generation and issuing RUB 96,884.06 max., mentals” - procurement docu- digital signature keys including VAT (18%), ments development and digital signature at that total cost verification key certifi- of services for the 63. Agreement dated JSC FGC UES and The Contractor (JSC STC Work price ac- The Company's Board Shareholder who cates. whole Agreement va- 04.07.2013 No. JSC DESP FGC UES) shall perform cording to the of Directors (minutes holds more than 20% lidity period shall not 3967 on developing complete works in the Agreement dated No. 220 of 02.06.2014) of shares of JSC FGC comprise or exceed technical solutions, following stages: 04.07.2013 No. UES - JSC “Rosseti” 2 percent of JSC FGC design and working I stage – development 3967 is defined in UES balance sheet documents, as well and justification of basic the amount of RUB assets based on its as technical part of technical solutions on 638,195,776.04 accounting reports tender documenta- the construction object max., including VAT on the latest date. tion under the title (including engineering (18%) “500 kV Ust-Kut – survey), their agreement 68. Supplementary JSC FGC UES and Termination of the Real Supplementary The Company's Board Shareholder who Nizhneangarskaya with the Customer (JSC agreement to the JSC Chitaenergo estate lease agreement agreement price of Directors (minutes holds more than 20% OHL with 500 kV FGC UES), JSC SO UES Real estate lease No. 31-05/10 of 09.12.2009 is not defined No. 221 of 26.06.2014) of shares of JSC FGC Nixhneangarskaya and other participants of agreement No. 31- since 28.02.2014. because the UES - JSC “Rosseti” SS with approaches the construction; 05/10 of 09.12.2009. 2. Obligations on rental Supplementary 220 kV OHL” II stage – development of fee payment which arose agreement to Real technical part of tender until 28.02.2014 (inclu- estate lease agree- documentation; sively) are discharged ment No. 31-05/10 III stage – development, from the moment of of 09.12.2009 does agreement and expert complete repayment of not and cannot assessment of design an existing debt by the implicate monetary documentation accord- Lessee (JSC Chitaenergo) obligations. ing to technical guidance 69. Agreement JSC FGC UES and The Organizer (JSC Services price The Company's Board Shareholder who documents requirements; No. 299918 of JSC IDGS Yugra FGC UES) shall render according to the of Directors (minutes holds more than 20% IV stage – working docu- 13.09.2013 to the Participant (JSC agreement is defined No. 221 of 26.06.2014) of shares of JSC FGC ments development. IDGS Yugra) services in the amount of UES - JSC “Rosseti” 64. Agreement No. JSC FGC UES and The Contractor (JSC Work price accord- The Company's Board Shareholder who on arranging access to RUB 11,178.93 max., 3854/1 of 03.09.2013 JSC DESP DESP) shall perform ing to the Agree- of Directors (minutes holds more than 20% electronic document flow including VAT (18%), for design and sur- complete works on: ment No. 3854/1 No. 220 of 02.06.2014) of shares of JSC FGC system within Corporate at that total cost vey work according - engineering survey; of 03.09.2013 is UES - JSC “Rosseti” information system of of services for the to adjusting addition - design documents defined in the digital signatures certify- whole Agreement va- to the assignment development ; amount of RUB ing centre of JSC FGC lidity period shall not for designing “PTL - procurement docu- 8,900,800.18 max., UES comprise or exceed 220 kV Shirokaya ments development. including VAT (18%) 2 percent of JSC FGC – Lozovaya with UES balance sheet side-mpunted assets based on its switchgear 220 kV accounting reports SS Nakhodka” on the latest date. 65. Agreement dated JSC FGC UES and The Contractor (JSC STC Work price ac- The Company's Board Shareholder who 70. Agreement for edu- JSC FGC UES and The Contractor (NPEI Educational ser- The Company's Board Shareholder who 28.06.2013 No. JSC STC FGC UES FGC UES) shall perform cording to the of Directors (minutes holds more than 20% cational services NPEI “EC JSC IDGS “EC JSC IDGS of Urals”) vices agreement of Directors (minutes holds more than 20% 29-3/081-GSiRPIR complete works on: Agreement dated No. 220 of 02.06.2014) of shares of JSC FGC of Urals” shall, according to the price is defined in No. 221 of 26.06.2014) of shares of JSC FGC for works on design - engineering survey; 28.06.2013 No. UES - JSC “Rosseti” Customer’s (JSC FGC the amount of RUB UES - JSC “Rosseti” documents devel- - developing concepts of 29-3/081-GSiRPIR UES) assignment, render 543,290, including opment under the design for the designing is defined in the services according to ap- VAT (18%) title: “Reconstruc- object and their agree- amount of RUB proved Staff professional tion of 110 (220) kV ment to the Customer; 3,009,412.56 max., education and training CGTP11 (Oleniya) - design documents including VAT (18%) program -Yamburg OHL 2nd development; 71. Agreement for JSC FGC UES and The Contractor (LLC IT Services price The Company's Board Shareholder who chain. Tower sup- - State or independent complete services LLC IT Energy Energy Service) shall according to the of Directors (minutes holds more than 20% ports installation expert assessment (if for system mainte- Service render complete services Agreement is de- No. 221 of 26.06.2014) of shares of JSC FGC onto new funda- necessary); nance and personal- on system maintenance fined in the amount UES - JSC “Rosseti” mentals” - procurement docu- ised support in IT and personalised sup- of RUB 82,925,500, ments development. and computer com- port in IT and computer including VAT (18%) munications area communications area

74 75 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 72. Supplementary JSC FGC UES and Amendments to the Services price The Company's Board Shareholder who 76. Agreement for JSC FGC UES and The Customer (JSC FGC Work price accord- The Company's Board Shareholder who agreement No. 1 JSC IDGS of Urals Agreement according to the of Directors (minutes holds more than 20% development of JSC STC FGC UES UES) assigns and pays, ing to the agree- of Directors (minutes holds more than 20% of 10.12.2013 to Supplemen- No. 221 of 26.06.2014) of shares of JSC FGC computerised and the Contractor (JSC ment is defined in No. 221 of 26.06.2014) of shares of JSC FGC the Agreement No. tary agreement No. UES - JSC “Rosseti” simulator complex STC FGC UES) assumes the amount of RUB UES - JSC “Rosseti” 1122 of 14.12.2011 1 of 10.12.2013 to for implement- obligations to develop 7,030,000, including on recovery of ex- the Agreement No. ing network-wide computerised simulator VAT (18%) penses for potable 1122 of 14.12.2011 is training on Sochi complex for implementing water release (ob- not defined, because Olympic Sites network-wide training on taining) and waste the Supplemen- power supply Sochi Olympic Sites power water acceptance tary agreement No. supply (discharge) 1 of 10.12.2013 to the Agreement No. 1122 77. Supplementary JSC FGC UES and JSC Supplementing the Work price accord- The Company's Board Shareholder who of 14.12.2011 does agreement No. 5 to “Chitaenergo” Agreement No. 0817/10- ing to the Supple- of Directors (minutes holds more than 20% not change service the Agreement No. V of 01.01.2011 with mentary agreement No. 222 of 30.06.2014) of shares of JSC FGC price provided in the 0817/10-V of Appendix No. 7.3 to No. 5 to the Agree- UES - JSC “Rosseti” Agreement No. 1122 01.01.2011 for opera- “Annual work schedule ment No. 0817/10- of 14.12.2011. tional maintenance on FOCL-OHL, section V of 01.01.2011 and repair of ground “BAM distribution zone” is defined in the 73. Supplementary JSC FGC UES, JSC Amendments to the Services price The Company's Board Shareholder who wire (OPGW) at the for the year 2014” amount RUB agreement No. 1 Elektrosetservice Agreement according to the of Directors (minutes holds more than 20% section between 5,648,000, including of 23.09.2013 to UNEG” and JSC Supplementary No. 221 of 26.06.2014) of shares of JSC FGC tower No. 1 OHL-220 VAT (18 %) the Agreement No. Electrozavod agreement No. 1 UES - JSC “Rosseti” kV KS-33, UD-32 and 56/13 of 15.05.2013 of 23.09.2013 to tower No. 252 OHL- for electric equip- the Agreement No. 220 kV BD-75 ment service and 56/13 of 15.05.2013 maintenance is not defined, be- 78. Agreement JSC FGC UES and JSC The Contractor (JSC Work price accord- The Company's Board Shareholder who cause the Supple- No. 14/2014 of “MUS Energetiki” “MUS Energetiki”) ing to the agree- of Directors (minutes holds more than 20% mentary agreement 17.01.2014 for renders to the Customer ment is defined No. 222 of 30.06.2014) of shares of JSC FGC No. 1 of 23.09.2013 services on control (KSC FGC UES) complete in the amount of UES - JSC “Rosseti” to the Agree- and monitoring of services on control and RUB 15,126,232.32, ment No. 56/13 of telecommunication monitoring of telecom- including VAT (18%) 15.05.2013 does network of MES munication network of not change service Volga MES Volga price provided in 79. Agreement for JSC FGC UES and JSC The Customer (JSC FGC Work price accord- The Company's Board Shareholder who the Agreement No. services “VC and “MUS Energetiki” UES) assigns and the ing to the agree- of Directors (minutes holds more than 20% 56/13 of 15.05.2013 teleconferencing Contractor (JSC “MUS En- ment is defined No. 222 of 30.06.2014) of shares of JSC FGC 74. Agreement dated JSC FGC UES and The Contractor (JSC STC Work price ac- The Company's Board Shareholder who support” ergetiki”) assumes obliga- in the amount of UES - JSC “Rosseti” 19.07.2013 No. 29- JSC STC FGC UES FGC UES) shall perform cording to the of Directors (minutes holds more than 20% tions to render services on RUB 12,887,526.63, 3/082 - GSiRPIR for complete works on: Agreement dated No. 221 of 26.06.2014) of shares of JSC FGC VC and teleconferencing including VAT (18%) developing design - design documents 19.07.2013 No. UES - JSC “Rosseti” support by his own forces and procurement development; 29-3/082 – GSiRPIR 80. Agreement for JSC FGC UES and JSC The Contractor (JSC Work price accord- The Company's Board Shareholder who documentation - procurement docu- is defined in the operational main- “MUS Energetiki” “MUS Energetiki”) as- ing to the agree- of Directors (minutes holds more than 20% under the title: ments development. amount of RUB tenance of SCS and sumes the following ment is defined in No. 222 of 30.06.2014) of shares of JSC FGC “SS-500/220/110/10 495,950 max., in- ACS equipment at obligations: the amount of RUB UES - JSC “Rosseti” kV Magistralnaya. cluding VAT (18%) FGC facilities in the - rendering services on 253,848,716.85 Reconstruction MV area of operational operational maintenance max, including VAT 0.4 kV in the SCB. responsibility and repair of dispatch (18%) (Agreement No. 565/ of JSC FGC UES and process control aids, STP-М8 on making branch – Orenburg- as well as automated utility connection)” skoye PMES control system of unified 75. Agreement dated JSC FGC UES and The Contractor (JSC STC Work price ac- The Company's Board Shareholder who national (all-Russian) 19.07.2013 No. 29- JSC STC FGC UES FGC UES) shall perform cording to the of Directors (minutes holds more than 20% electric grid facilities in 3/088 - GSiRPIR for complete works on: Agreement dated No. 221 of 26.06.2014) of shares of JSC FGC the area of operational developing design - design documents 19.07.2013 No. UES - JSC “Rosseti” responsibility of JSC FGC and procurement development; 29-3/088 – GSiRPIR UES branch – Orenburg- documentation - procurement docu- is defined in the skoye PMES under the title: ments development. amount of RUB 81. Agreement JSC FGC UES and JSC The Contractor (JSC “MUS Work price accord- The Company's Board Shareholder who “SS-500/220/110/10 495,950 max., in- No. 15/2014 of “MUS Energetiki” Energetiki”) assumes ing to the agree- of Directors (minutes holds more than 20% kV Sibirskaya. cluding VAT (18%) 14.01.2014 on dis- obligations to perform ment No. 15/2014 No. 222 of 30.06.2014) of shares of JSC FGC Reconstruction of patch and process operational maintenance of 14.01.2014 is de- UES - JSC “Rosseti” auxiliaries board 0.4 control aids opera- of dispatch and process fined in the amount kV in SCB-2. (Agree- tional maintenance control aids on electric grid RUB 9,349,953.49, ment No. 570/TP-М8 for 2014 facilities according to the including VAT (18%) on making utility Customer’s (JSC FGC UES) connection)” technical assignment

76 77 JSC FGC UES Annual Report Appendices

78 79 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 89. Agreement for JSC FGC UES and JSC The Contractor (JSC Services price The Company's Board Shareholder who 93. Agreement for JSC GHC UES and The Contractor (JSC Work price accord- The Company's Board Shareholder who glaze ice melting “MUS Energetiki” “MUS Energetiki”) shall according to the of Directors (minutes holds more than 20% complete works JSC “Electrosetser- “Electrosetservice UNEG”) ing to the agree- of Directors (minutes holds more than 20% system mainte- render services on glaze Agreement is de- No. 222 of 30.06.2014) of shares of JSC FGC on replacing vice UNEG” shall perform works ment is defined No. 222 of 30.06.2014) of shares of JSC FGC nance and fibre ice melting system fined in the Amount UES - JSC “Rosseti” reinforced concrete on replacing reinforced in the amount of UES - JSC “Rosseti”; optic condition maintenance as related of RUB 16,773,480, supports with simi- concrete supports with RUB 5,319,416.40, member of the Com- monitoring to ETS and CS equipment, including VAT (18%) lar ones similar ones according including VAT (18%) pany's Management and on fibre optic condi- to Technical assignment Board V.P. Dikoy, who tion monitoring using for complete works on is a member of the optic fibres temperature major overhaul of 220 kV Board of Directors of distributed monitoring Amurskaya - Koroli/t OHL, a party to the trans- system, including: supports 40,51,52,54,76,77 action - glaze ice melting system replacement of reinforced maintenance as related to concrete supports with ETS and CS equipment; similar ones, as well as for - supporting glaze ice major overhaul of 220 kV melting system equip- Mukhinskaya/t – Shi- ment operation on 220 kV manovsk OHL, supports Bugulma - Severnaya, OHL 132,152,157, replacement 220 kV Bugulma – Tuimazy of reinforced concrete sup- OHL, as well as tempera- ports with similar ones ture and reflectometric monitoring of FOCL-OHL 94. Liability insurance 1. JSC FGC The Insurer shall, for a fee Contract price Annual general meet- Shareholder who on 220 kV Bugulma – Sev- contract for mem- UES(Insurant) stipulated in the agree- is defined in the ing of shareholders holds more than 20% ernaya OHL and FOCL- bers of the Board of 2. Winner of the open ment (insurance premium), amount of RUB (minutes No. 15 of of shares of JSC FGC OHL on 220 kV Bugulma Directors and Man- tender procurement and in case of occurrence 15,000,000 only 30.06.2014) UES - JSC “Rosseti”, OHL using temperature agement Board, procedure of an event stipulated in max. (VAT free). all members of the distributed monitoring sys- Chairman and (Insurer) the Agreement (insurance Company's Board tem and determining their Deputy Chairmen 3. Members of the event) compensate within of Directors and the further serviceability of the Management Board of Directors the amount insured losses Management Board, Board, and Chief and Management to third persons and/or In- Chief Accountant of 90. Agreement for JSC FGC UES and The Contractor (JSC Work price is The Company's Board Shareholder who Accountant of JSC Board, Chairman and surant resulted from wrong the Company, who are replacement of 220 JSC “Electrosetser- “Electrosetservice defined in the of Directors (minutes holds more than 20% FGC UES Deputy Chairmen actions taken by Insured beneficiaries in the kV oil switch with vice UNEG” UNEG”) shall perform amount of RUB No. 222 of 30.06.2014) of shares of JSC FGC of the Management persons within the scope transaction. SF6 switch at SS complete works on: 5,490,019.62 max., UES - JSC “Rosseti”; Board, and Chief of their functional (official) 220 Ussuriisk-2 - design and work docu- including VAT (18%) member of the Com- Accountant of JSC duties. mentation development; pany's Management FGC UES - design supervision Board V.P. Dikoy, who (Beneficiaries) organisation; is a member of the - reconstruction; Board of Directors of 95. Termination of a JSC FGC UES and Termination of a con- Is not determined The Company's Board Shareholder who - and ensure site stuffing a party to the trans- contractor agree- JSC “Stroitechkon- tractor agreement No. based on the trans- of Directors (minutes holds more than 20% with materials, equip- action ment No. 88 of takt””. 88 of 13.08.2008 action nature No. 224 of 18.08.2014) of shares of JSC FGC ment and spare parts for 13.08.2008 UES - JSC “Rosseti” equipment 96. Real estate lease JSC FGC UES and The Lesser (JSC FGC Rental fee is RUB The Company's Board Shareholder who 91. Agreement for JSC FGC UES and The Contractor (JSC Work price accord- The Company's Board Shareholder who agreement JSC CIUS UES UES) lends to the Les- 5,341.21, includ- of Directors (minutes holds more than 20% emergency recov- JSC “Electrosetser- “Electrosetservice ing to the agree- of Directors (minutes holds more than 20% see (JSC CIUS UES) a ing VAT (18%) per No. 224 of 18.08.2014) of shares of JSC FGC ery work on 220 vice UNEG” UNEG”) shall perform ment is defined in No. 222 of 30.06.2014) of shares of JSC FGC non-residential premises month, but no UES - JSC “Rosseti”; kV AT-1 SS 500 emergency recovery the amount of RUB UES - JSC “Rosseti”; for temporary posses- more than RUB member of the Com- kV “Borino” OHL work on OHL-220 kV 552,832.57, includ- member of the Com- sion and use for a fee, 58,753.31, includ- pany's Management at JSC FGC UES AT-1 SS 500 kV “Borino” ing VAT (18 %) pany's Management against transfer and ing VAT (18%), for Board, L.V. Mazo, who branch – Upper- at JSC FGC UES branch Board V.P. Dikoy, who is acceptance statement the period from is a General Director Don PMES – Upper-Don PMES ac- a member of the Board 01.04.2014 to and a member of the cording to defects list of Directors of a party 01.03.2015 Board of Directors of to the transaction a party to the transaction , member of 92. Agreement dated JSC FGC UES and The Organizer (JSC FGC Services price The Company's Board Shareholder who the Company's Man- 28.10.2013 No. JSC IDGS of Siberia UES) shall render to the according to the of Directors (minutes holds more than 20% agement Board, D.L. 18.4000.576.13 Participant (JSC IDGS Agreement dated No. 222 of 30.06.2014) of shares of JSC FGC Shishkin, who is a of Siberia) services on 28.10.2013 No. UES - JSC “Rosseti” member of the Board arranging access to 18.4000.576.13 of Directors of a party electronic document flow is defined in the to the transaction system within Corporate amount of RUB information system of 132,550.50, includ- 97. Agreement No. 1 to JSC FGC UES and Amendments to the Monthly rental The Company's Board Shareholder who digital signatures certifying VAT (18%), at Real estate lease JSC “MUS Energe- conditions of real estate payment is RUB of Directors (minutes holds more than 20% ing centre of JSC FGC that total cost of agreement dated tiki” lease agreement (dated 8304.85, excluding No. 224 of 18.08.2014) of shares of JSC FGC UES, established and services for the 03.09.2012 3.09.2012), including VAT, VAT amount is UES - JSC “Rosseti” implemented according whole Agreement rental fee amount RUB 1494.87, and to Procedure of digital validity period shall total amount is RUB signature use in JSC FGC not comprise or 9799.72. UES and Procedure of exceed 2 percent cryptographic information of JSC FGC UES protection in electronic balance sheet as- document flow system of sets based on its JSC GHC UES, approved by accounting reports the Order of JSC GHC UES on the latest date. dated 27.12.2011 No. 800.

80 81 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 98. Supplementary JSC FGC UES and Amendments to the con- Monthly fee for fa- The Company's Board Shareholder who 104. Supplementary JSC FGC UES and JSC Amendments to the The Parties agreed The Company's Board Shareholder who agreement to the JSC CIUS UES ditions of the real estate cilities lease is RUB of Directors (minutes holds more than 20% agreement No. 3 to “Tyumenenergo” conditions of the Prop- rental fee amount of Directors (minutes holds more than 20% Real estate lease lease agreement No. 1 88,855.69, including No. 224 of 18.08.2014) of shares of JSC FGC the Property lease erty lease agreement for 11 month period No. 224 of 18.08.2014) of shares of JSC FGC agreement No. 1 dated 02.09.2012, includ- VAT (18 %) UES - JSC “Rosseti”; agreement dated dated 05.02.2009 No. as RUB 293,764.89, UES - JSC “Ros- dated 02.09.2012 ing rental fee amount member of the Com- 05.02.2009 No. 3.3- 3.3-25/09/29, including including VAT seti”; member of the pany's Management 25/09/29 rental fee amount (18 %) Company's Board of Board L.V. Mazo, who Directors A.A. Demin, is a General Director who is a member of and a member of the the Board of Direc- Board of Directors of a tors of a party to the party to the transaction transaction , member of the Com- pany's Management 105. Supplementary JSC FGC UES and JSC Amendments to the con- The Parties agreed The Company's Board Shareholder who Board D.L. Shishkin, agreement No. 4 to “Tyumenenergo” ditions of the Property rental fee amount of Directors (minutes holds more than 20% who is a member of the Property lease lease agreement dated for 11 month period No. 224 of 18.08.2014) of shares of JSC FGC the Board of Direc- agreement dated 01.12.2006 No. 03-3/9- as RUB 4,011.15, UES - JSC “Ros- tors of the Party to the 01.12.2006 No. 03- 1а, including rental fee including VAT (18 seti”; member of the transaction 3/9-1а amount %) Company's Board of Directors A.A. Demin, 99. Agreement No. JSC FGC UES and The Contractor (JSC “Elec- Work price ac- The Company's Board Shareholder who who is a member of 290 of 31.07.2013 JSC “Electrosetser- trosetservice UNEG”) shall cording to the of Directors (minutes holds more than 20% the Board of Direc- for design works, vice UNEG” perform complete works Agreement is RUB No. 224 of 18.08.2014) of shares of JSC FGC tors of a party to the equipment supply, and deliver work results 10,201,915.80 max., UES - JSC “Rosseti”; transaction construction and to the Customer (JSC FGC including VAT (18%) member of the Com- installation, start-up UES), and the Customer pany's Management 106. Supplementary JSC FGC UES and JSC Amendments to the con- The Parties agreed The Company's Board Shareholder who and commission- shall accept work results Board V.P. Dikoy, who is agreement No. 1 “Tyumenenergo” ditions of the Agreement services price for of Directors (minutes holds more than 20% ing of automated and pay the agreed price as a member of the Board to the Agreement on equipment place- 11 month period in No. 224 of 18.08.2014) of shares of JSC FGC diagnosis systems stipulated in the Agreement of Directors of a party on equipment ment services dated the amount of RUB UES - JSC “Ros- for JSC FGC UES to the transaction placement services 19.06.2012 No. 3.3- 36,300, including seti”; member of the branch – MES East dated 19.06.2012 25/12/15, including the VAT (18 %) Company's Board of No. 3.3-25/12/15 agreed services price Directors A.A. Demin, 100. Supplementary JSC FGC UES and Amendments to the Ceiling price of The Company's Board Shareholder who who is a member of agreement dated JSC “Electrosetser- conditions of the Agree- the whole Agree- of Directors (minutes holds more than 20% the Board of Direc- 27.03.2014 No. 5 to vice UNEG” ment dated 11.03.2013 ment is RUB No. 224 of 18.08.2014) of shares of JSC FGC tors of a party to the the Agreement dat- No. 04/13, including the 1,213,583,130.20, UES - JSC “Rosseti”; transaction ed 11.03.2013 No. Agreement price including VAT (18%) member of the Com- 04/13 for electric pany's Management 107. Supplementary JSC FGC UES and JSC Amendments to the con- The Parties agreed The Company's Board Shareholder who grid facilities repair, Board V.P. Dikoy, who is agreement No. 1 “Tyumenenergo” ditions of the Agreement services price for of Directors (minutes holds more than 20% maintenance and a member of the Board to the Agreement on equipment place- 11 month period in No. 224 of 18.08.2014) of shares of JSC FGC diagnostic survey of Directors of a party on equipment ment services dated the amount of RUB UES - JSC “Ros- to the transaction placement services 19.06.2012 No. 3.3- 528,528, including seti”; member of the dated 19.06.2012 25/12/14, including the VAT (18 %) Company's Board of 101. Supplementary JSC FGC UES and Amendments to the Work price defined The Company's Board Shareholder who No. 3.3-25/12/14 agreed services price Directors A.A. Demin, agreement No. 2 JSC “Electrosetser- conditions of the Agree- in the Supplemen- of Directors (minutes holds more than 20% who is a member of to the Agreement vice UNEG” ment dated 08.07.2013 tary agreement is No. 224 of 18.08.2014) of shares of JSC FGC the Board of Direc- dated 08.07.2013 No. 26/13, including the RUB 177,615,257.90 UES - JSC “Rosseti”; tors of a party to the No. 26/13 for ABB Agreement price max., including VAT member of the Com- transaction electric equip- (18%) pany's Management ment servicing Board V.P. Dikoy, who is 108. Agreement No. JSC FGC UES and The Contractor (JSC “Elec- Work price ac- The Company's Board Shareholder who and maintenance a member of the Board 291 of 31.07.2013 JSC “Electrosetser- trosetservice UNEG”) shall cording to the of Directors (minutes holds more than 20% (long-term) of Directors of a party for design works, vice UNEG” perform complete works Agreement is RUB No. 224 of 18.08.2014) of shares of JSC FGC to the transaction equipment supply, and deliver work results 21,570,330.14 max., UES - JSC “Rosseti”; construction and to the Customer (JSC FGC including VAT (18%) member of the Com- 102. Supplementary JSC FGC UES and Amendments to the con- Work price defined The Company's Board Shareholder who installation, start-up UES), and the Customer pany's Management agreement No. 2 to JSC “Electrosetser- ditions of the Agreement in the Supplemen- of Directors (minutes holds more than 20% and commissioning shall accept work results Board V.P. Dikoy, who the Agreement No. vice UNEG” No. 07/13 of 13.03.2013, tary agreement is No. 224 of 18.08.2014) of shares of JSC FGC of CF6 GIS automat- and pay the agreed price is a member of the 07/13 of 13.03.2013 including the Agreement RUB 308,371,143.10 UES - JSC “Rosseti”; ic diagnosis systems as stipulated in the Agree- Board of Directors of for electric grid price max., including VAT member of the Com- for the needs of JSC ment a party to the trans- facilities repair, (18%) pany's Management FGC UES branch – action maintenance and di- Board V.P. Dikoy, who is MES East agnostic inspection a member of the Board of Directors of a party 109. Agreement on JSC FGC UES; JSC Interaction between The Agreement The Company's Board Shareholder who to the transaction establishment of an “MUEGC”. Parties in designing, does not provide of Directors (minutes holds more than 20% intellectual distribu- construction and com- obligations of No. 224 of 18.08.2014) of shares of JSC FGC 103. Supplementary JSC FGC UES JSC Amendments to the Work price defined The Company's Board Shareholder who tion grid 20/0.4 kV at missioning of 20/0.4 kV monetary nature, UES - JSC “Rosseti”; agreement No. 1 “Electrosetservice conditions of the Agree- in the Supplemen- of Directors (minutes holds more than 20% IC “Skolkovo” site distribution grid at IC and is not related to members of BD of to the Agreement UNEG” JSC “Electro- ment dated 15.05.2013 tary agreement No. No. 224 of 18.08.2014) of shares of JSC FGC “Skolkovo” property or property JSC FGC UES O.M. dated 15.05.2013 zavod” No. 57/13, including the 1 to the Agreement UES - JSC “Rosseti”; rights transfer Budargin, A.A. Demin, No. 57/13 for Agreement price dated 15.05.2013 member of the Com- and V.M. Kravchenko, electrical equip- No. 57/13 is RUB pany's Management who are members of ment servicing and 45,865,383.00 max., Board V.P. Dikoy, who the Board of Direcors maintenance including VAT (18 %) is a member of the of a party to the Board of Directors of transaction a party to the transaction (JSC “Electro- setservice UNEG”)

82 83 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 110. Supplementary JSC FGC UES and Amendments to the con- Price of work defined The Company's Board Shareholder who 115. Agreement be- JSC FGC UES and The Organizer (JSC FGC Work price accord- The Company's Board Shareholder who agreement No. 1 JSC “Electrosetser- ditions of the Agreement in the Supplemen- of Directors (minutes holds more than 20% tween JSC FGC JSC “VNIPIenergo- UES) shall render to the ing to the Agree- of Directors (minutes holds more than 20% to the Agreement vice UNEG” No. 1 dated 29.04.2011, tary agreement is No. 224 of 18.08.2014) of shares of JSC FGC UES and JSC prom” Participant (JSC “VNIPI- ment is RUB 11,178 No. 224 of 18.08.2014) of shares of JSC FGC No. 1 of 29.04.2011 including the agreed RUB 262,460,000 UES - JSC “Rosseti”; “VNIPIenergoprom” energoprom”) services (eleven thousand UES - JSC “Rosseti” for developing services price only (Two hundred member of the Com- on arranging access to one hundred and design, working and sixty two million four pany's Management electronic document flow seventy eight) 93 procurement docu- hundred and sixty Board V.P. Dikoy, who system within Corporate kopeks max., in- mentation for the thousand), including is a member of the information system of dig- cluding VAT (18%) program “Replace- VAT (18%) Board of Directors of ital signatures certifying ment of 330 – 750 kV a party to the trans- centre of JSC FGC UES air switches at JSC action FGC UES facilities” 116. Agreement be- JSC FGC UES and The Organizer (JSC FGC Work price ac- The Company's Board Shareholder who tween JSC FGC JSC IDGS of North- UES) shall render to the cording to the of Directors (minutes holds more than 20% 111. Agreement for JSC FGC UES and JSC The Contractor (JSC Work price ac- The Company's Board Shareholder who UES and JSC IDGS ern Caucasus Participant (JSC IDGS Agreement is No. 224 of 18.08.2014) of shares of JSC FGC electric grid fa- “MUS Energetiki” “MUS Energetiki”) shall cording to the of Directors (minutes holds more than 20% of Northern Cau- of Northern Caucasus) RUB 300,000 UES - JSC “Rosseti”; cilities operational perform electric grid Agreement is No. 224 of 18.08.2014) of shares of JSC FGC casus services on arranging (Three hundred member of the Com- maintenance facilities operational RUB 1,543,787 UES - JSC “Rosseti” access to electronic thousands) max., pany's Management maintenance according to (One million five document flow system including VAT (18%) Board V.S. Shukshin, the Customer’s (JSC FGC hundred forty-three within Corporate infor- who is a member of UES) technical assign- thousand seven mation system of digital the Board of Direc- ment, and the Customer hundred and eighty signatures certifying tors of a party to the shall accept work result seven) and 88 centre of JSC FGC UES transaction and pay for it. kopeks, including VAT (18%) 117. Agency agreement JSC FGC UES and JSC “RusHydro” (The The Agreement The Company's Board Shareholder who on design develop- JSC “RusHydro” Principal) assigns, and JSC price is RUB of Directors (minutes holds more than 20% 112. Agreement No. JSC FGC UES and JSC The Contractor (JSC Work price ac- The Company's Board Shareholder who ment and work FGC UES (The Agent) takes 18,075,736 (Eight- No. 224 of 18.08.2014) of shares of JSC FGC 36-7/14-18 of “MUS Energetiki” “MUS Energetiki”) shall cording to the of Directors (minutes holds more than 20% performance on obligation to perform, for een million seven- UES - JSC “Rosseti”; 19.02.2014 for perform dispatcher Agreement is RUB No. 224 of 18.08.2014) of shares of JSC FGC reconstruction of a fee, on its own behalf ty-five thousand members of the Com- dispatcher process process control aids 5,512,320 (Five UES - JSC “Rosseti” electric protections but for Principal’s account, seven hundred and pany's Board of Di- control aids main- maintenance and repair million five hundred at switchyard-220 legal and other actions thirty-six) and 78 rectors M.S. Bystrov tenance and repair according to the Cus- and twelve thou- of Mainskaya HPS related to equipment kopeks, including and V.M. Kravchenko, tomer’s (JSC FGC UES) sand three hundred supply and execution of VAT (18%) who are members of technical assignment, and and twenty) only, complete works on design the Board of Direc- the Customer shall accept including VAT (18 %) development and work tors of a party to the work result and pay for it. performance on recon- transaction struction of electric protec- 113. Supplemen- JSC FGC UES and Diagnostic inspection of Work price according The Company's Board Shareholder who tions at switchyard-220 of tary agreement No. JSC “Electrosetser- all equipment, electric to the Supplemen- of Directors (minutes holds more than 20% Mainskaya HPS, defined 3 to the Agreement vice UNEG” equipment repair tary agreement No. No. 224 of 18.08.2014) of shares of JSC FGC in an attachment to the dated 10.11.2012 No. 3 to the Agreement UES - JSC “Rosseti”; Agreement 195/12 for service dated 10.11.2012 member of the Com- maintenance of No. 195/12 is RUB pany's Management 118. Agreement for JSC FGC UES and LLC “IT Energy Service” Services price The Company's Board Shareholder who equipment of explo- 70,820,842 (Seventy Board V.P. Dikoy, who rendering complete LLC “IT Energy ((the Contractor) shall according to the of Directors (minutes holds more than 20% sion and fire preven- million eight hun- is a member of the services on system Service” render on system techni- Agreement is No. 224 of 18.08.2014) of shares of JSC FGC tion systems on oil- dred and twenty Board of Directors of technical mainte- cal maintenance and per- RUB 8,240,000 UES - JSC “Rosseti” filled transformers thousand eight hun- a party to the trans- nance and person- sonalised servicing in IT (Eight million two (TransformerProtec- dred and forty-two) action alised servicing in IT and computer communi- hundred and forty tor (ТР) model) and 27 kopeks max., and computer com- cations area, and JSC FGC thousand) only, including VAT (18%) munications area for UES (the Customer) shall including VAT (18%) JSC FGC UES pay for these services 114. Supplementary JSC FGC UES and Amendments to the Work price according The Company's Board Shareholder who agreement No. 2 JSC “Electrosetser- conditions of the Agree- to the Supplemen- of Directors (minutes holds more than 119. Supplementary JSC FGC UES and Amendments to the The Supplemen- The Company's Board Shareholder who to the Agreement vice UNEG” ment No. 08/13 dated tary agreement No. 224 of 18.08.2014) 20% of shares of agreement No. 1 JSC “ELectrosetser- conditions of the Agree- tary agreement of Directors (minutes holds more than 20% dated 15.02.2013 29.04.2011, including the No. 2 of 16.12.2013 JSC FGC UES - JSC to the Agreement vice UNEG” ment dated 08.07.2013 does not change No. 225 of 22.08.2014) of shares of JSC FGC No. 08/13 for elec- agreed work price to the Agreement “Rosseti”;member of dated 08.07.2013 No. 26/13 total price of the UES - JSC “Rosseti”; tric grid facilities dated 15.02.2013 the Company's Man- No. 26/13for ABB Agreement dated member of the Com- repair, maintenance No. 08/13 is RUB agement Board V.P. electrical equip- 08.07.2013 No. pany's Management and diagnostic 204,432,335 (two Dikoy, who is a mem- ment service 26/13 Board V.P. Dikoy, who is inspection hundred and four ber of the Board of maintenance a member of the Board million four hundred Directors of a party (long-term) of Directors of a party thirty-two thousand to the transaction to the transaction three hundred and thirty-five) 85 kopeks, 120. Supplementary JSC FGC UES and Amendments to the The Supplemen- The Company's Board Shareholder who including VAT (18 %), agreement No. 2 JSC “ELectrosetser- conditions of the Agree- tary agreement of Directors (minutes holds more than 20% at that total work to the Agreement vice UNEG” ment dated 10.11.2012 does not change No. 225 of 22.08.2014) of shares of JSC FGC price according to dated 10.11.2012 No. 195/12 total price of the UES - JSC “Rosseti”; the Agreement dated No. 195/12 for ser- Agreement dated member of the Com- 15.02.2013 No. 08/13, vice maintenance 10.11.2012 No. pany's Management considering Supple- of equipment of 195/12 Board V.P. Dikoy, who mentary agreement explosion and fire is a member of the No. 2 of 16.12.2013, prevention systems Board of Directors of does not exceed RUB on oil-filled trans- a party to the trans- 917,231,415 (nine formers, Trans- action hundred seventeen former Proteсtor million two hundred (ТР) model thirty-one thousand four hundred and fifteen) 65 kopeks, including VAT (18%)

84 85 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 121. Supplementary JSC FGC UES and Amendments to the con- Price of the Agree- The Company's Board Shareholder who 126. Agreement for sup- JSC FGC UES and JSC FGC UES (the Services price The Company's Board Shareholder who agreement No. 1 JSC SO UES” ditions of the Agreement ment on rendering of Directors (minutes holds more than 20% porting database in JSC “Engineering Customer) assigns and according to the of Directors (minutes holds more than 20% to the Agreement on rendering services of services of equip- No. 225 of 22.08.2014) of shares of JSC FGC automated system centre of Ural power pays, and JSC “Engineer- Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC on rendering ser- equipment placement ment placement and UES - JSC “Rosseti”; of accounting industry” ing center of Ural power 11,800 (eleven UES - JSC “Rosseti” vices of equipment and functioning support functioning support members of the Com- current norma- industry” (the Contractor) thousand eight placement and dated 01.01.2012 No. dated 01.01.2012 pany's Board of Di- tive documents for shall render services on hundred), including functioning support 2623, including enhance- No. 2623, consider- rectors M.S. Bystrov power supplying supporting database in VAT (18%) dated 01.01.2012 ment of the list of user’s ing Supplemen- and N.G. Shoulginov, companies’ met- automated system of ac- No. 2623 equipment installed at tary agreement who are members of rological services counting current norma- communication node 500 No. 1, is defined the Board of Direc- (ACS “ND-Metrol- tive documents for power kV “Shagol” SS in the amount of tors of a party to the ogy”) supplying companies’ RUB 276,120 (Two transaction metrological services hundred seventy- (ACS “ND-Metrology”) six thousand one hundred and twenty), 127. Supplemen- JSC FGC UES and JSC Amendments to the Price of the Supple- The Company's Board Shareholder who including VAT (18%) tary agreement “MUS Energetiki” conditions of the Agree- mentary agreement of Directors (minutes holds more than 20% No. 1/292776 of ment No. 479/267607 of No. 1/292776 of No. 225 of 22.08.2014) of shares of JSC FGC 122. Agreement No. JSC FGC UES and JSC FGC UES (the Price of the Agree- The Company's Board Shareholder who 30.07.2013 to the 22.03.2013 30.03.2013 is not UES - JSC “Rosseti” 144/13 for op- JSC “Lenenergo” Contractor) renders to ment No. 144/13 of Directors (minutes holds more than 20% Agreement No. defined because erational service JSC “Lenenergo” (the is RUB 316,626 No. 225 of 22.08.2014) of shares of JSC FGC 479/267607 of making the Sup- and maintenance Customer) services on (Three hundred UES 22.03.2013 for plementary agree- of equipment operative service and sixteen thousand communication ment No. 1/292776 installed at 220 kV maintenance of equip- six hundred and systems mainte- of 30.07.2013 to No. 112 Pikalyovs- ment installed at 220 twenty-six) 24 nance and repair the Agreement kaya SS kV “Pikalyovskaya” SS, kopeks, including No. 479/267607 of and JSC “Lenenergo” VAT (18%) 22.03.2013 does not (the Customer) shall pay and cannot entail for JSC FGC UES (the obligations of mon- Contractor) services as etary nature stipulated in the Agree- ment 128. Service agreement JSC FGC UES and The Organiser (JSC Services price The Company's Board Shareholder who JSC “Rosseti” FGC UES) shall render according to the of Directors (minutes holds more than 20% 123. Agreement No. JSC FGC UES and JSC FGC UES (the Contrac- Price of the Agree- The Company's Board Shareholder who to the Participant (JSC Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC 145/13 for op- JSC “Lenenergo” tor) renders to JSC “Len- ment No. 145/13 is of Directors (minutes holds more than 20% “Rosseti”) services on 3,800,000 (Three UES - JSC “Rosseti”, erational service energo” (the Customer) RUB 309,621 (Three No. 225 of 22.08.2014) of shares of JSC FGC generation and issuing million and eight members of the Com- and maintenance services on operative hundred nine thou- UES digital signature keys hundred thousand) pany's Board of Direc- of equipment service and maintenance sand six hundred verification certificates max., including VAT tors A.E. Murov, O.V. installed at 330 kV of equipment installed at and twenty-one), (18%) Budargin, A.A. Demin, Tikhvin-Liteiny SS 330 kV Tikhvin-Liteiny SS, including VAT (18%) S.N. Mirosetsky, S.N. and JSC “Lenenergo” (the Shmatko, who are Customer) shall pay for members of the Board JSC FGC UES (the Contrac- of Directors of a party tor) services as stipulated to the transaction in the Agreement 129. Agreement for JSC FGC UES and JSC JSC “MUS Energe- Services price The Company's Board Shareholder who 124. Agreement No. JSC FGC UES and JSC FGC UES (the Price of the Agree- The Company's Board Shareholder who operation moni- “MUS Energetiki” tiki” (the Contractor) according to the of Directors (minutes holds more than 20% 147/13 for services JSC “Lenenergo” Contractor) renders to ment No. 147/13 of Directors (minutes holds more than 20% toring of SCS and performs operation Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC on communication JSC “Lenenergo” (the is RUB 4,579,200 No. 225 of 22.08.2014) of shares of JSC FGC communication monitoring of SCS and 11,401,739 (Eleven UES - JSC “Rosseti” process equipment Customer) services on (Four million five UES - JSC “Rosseti” systems at Sochin- communication systems million four hundred installation on non- communication process hundred seventy- sky PMES at Sochinsky PMES and one thousand residential facilities equipment installation on nine thousand seven hundred and owned by JSC FGC non-residential facilities and two hundred), thirty-nine) and 52 UES, without leas- owned by JSC FGC UES, including VAT (18%) kopeks, including ing these facilities without leasing these VAT (18%) facilities, and JSC “Lenen- ergo” (the Customer) shall 130. Agreement JSC FGC UES and The Organizer (JSC Services price The Company's Board Shareholder who pay for JSC FGC UES (the No. 303898 of JSC “Lenenergo” FGC UES) shall render according to the of Directors (minutes holds more than 20% Contractor) services as 08.10.2013 to the Participant (JSC Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC stipulated in the Agree- “Lenenergo”) services 37,263 (Thirty UES - JSC “Rosseti” ment on arranging access to seven thousand electronic document flow two hundred and 125. Agreement No. JSC FGC UES and JSC FGC UES (the Price of the Agree- The Company's Board Shareholder who system within Corporate sixty-three) and 10 152/13 for services JSC “Lenenergo” Contractor) renders to ment No. 152/13 of Directors (minutes holds more than 20% information system of dig- kopeks, including on communication JSC “Lenenergo” (the is RUB 2,246,400 No. 225 of 22.08.2014) of shares of JSC FGC ital signatures certifying VAT (18%) process equipment Customer) services on (Two million two UES - JSC “Rosseti” centre of JSC FGC UES installation on non- communication process hundred forty-six residential facilities equipment installation on thousand and four 131. Agreement No. JSC FGC UES and JSC The Organizer (JSC Services price The Company's Board Shareholder who owned by JSC FGC non-residential facilities hundred), including 22/60 of 01.07.2013 “Tyumenenergo” FGC UES) shall render according to the of Directors (minutes holds more than 20% UES, without leas- owned by JSC FGC UES, VAT (18%) to the Participant (JSC Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC ing these facilities without leasing these “Tyumenenergo”) services 14,905 (Fourteen UES - JSC “Rosseti”, facilities, and JSC “Len- on arranging access to thousand nine hun- and member of the energo” (the Customer) electronic document flow dred and five) and Company's Board of shall pay for JSC FGC system within Corporate 24 kopeks, includ- Directors A.A. Demin, UES (the Contractor) information system of dig- ing VAT (18%) who is an interested services as stipulated in ital signatures certifying director the Agreement centre of JSC FGC UES

86 87 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 132. Agreement JSC FGC UES and JSC JSC “MUS Energetiki” (the Work price ac- The Company's Board Shareholder who 138. Agreement for SCS JSC FGC UES and JSC “MUS Energetiki” Services price The Company's Board Shareholder who No. 30/2014 of “MUS Energetiki” Contractor) shall perform cording to the of Directors (minutes holds more than 20% and communication JSC “MUS Energe- (the Contractor) shall according to the of Directors (minutes holds more than 20% 07.02.2014 for repair and maintenance of Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC system operation tiki” render to JSC FGC UES Agreement shall No. 225 of 22.08.2014) of shares of JSC FGC repair and mainte- communication equipment, 10,701,640 (Ten UES - JSC “Rosseti” monitoring services (the Customer) complete not exceed RUB UES - JSC “Rosseti” nance works TM- and HF-equipment (SS million seven hun- services on provision of 46,619,764 (Forty six 330 kV Vykhodnoy, Olene- dred and one thou- SCS and communication million six hundred gorsk, Titan, Monchegorsk, sand six hundred system operation moni- nineteen thousand Knyazhegubskaya) and and forty), including toring according to the seven hundred and ACS aids repair at all SS of VAT (18%) Agreement conditions sixty-four) and 477 Karelskoye PMES accord- kopeks, including ing to technical assignment VAT (18%) from JSC FGC UES (the Customer), who shall ac- 139. Supplementary JSC FGC UES and Amendments to the Work price defined The Company's Board Shareholder who cept work result agreement No. 3 to JSC “Electrosetser- conditions of the Agree- in the Supplemen- of Directors (minutes holds more than 20% and pay for it. the Agreement No. vice UNEG” ment No. 08/13 of tary agreement No. No. 225 of 22.08.2014) of shares of JSC FGC 08/13 of 15.02.2013 15.02.2013, including 3 to the Agree- UES - JSC “Rosseti”; 133. Agreement for JSC FGC UES and JSC “ELectrosetservice Work price ac- The Company's Board Shareholder who for electric grid work price according to ment No. 08/13 of member of the Com- diagnosing under- JSC “ELectrosetser- UNEG” (the Contractor) cording to the of Directors (minutes holds more than 20% facilities repair, the Agreement No. 08/13 15.02.2013 shall pany's Management ground anchors vice UNEG” shall perform diagnostics Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC maintenance, and of 15.02.2013 not exceed RUB Board V.P. Dikoy, who for intermediate of underground anchors for 890,428 (Eight hun- UES - JSC “Rosseti”; diagnostic inspection 843,065,886 (Eight is a member of the towers stay-guys intermediate towers stay- dred ninety thou- member of the Com- hundred forty-three Board of Directors of at 500 kV “Zarya— guys at 500 kV “Zarya— sand four hundred pany's Management million sixty-five a party to the trans- Barabinskaya OHL” Barabinskaya OHL” (OHL- and twenty-eight), Board V.P. Dikoy, who thousand eight action (OHL-532) 532) according to technical including VAT (18%) is a member of the hundred and eighty- assignment from JSC FGC Board of Directors of six) and 34 kopeks, UES (the Customer), who a party to the trans- including VAT (18%) shall accept work result action and pay for it. 140. Supplementary JSC FGC UES and Amendments to the Work price defined in The Company's Board Shareholder who agreement No. 3 of JSC “Electrosetser- conditions of the Agree- the Supplementary of Directors (minutes holds more than 20% 134. Contractor’s agree- JSC FGC UES and JSC “Electrosetservice Work price according The Company's Board Shareholder who 11.03.2014 to the vice UNEG” ment No. 02/13 of agreement shall not No. 225 of 22.08.2014) of shares of JSC FGC ment No. 47/13 of JSC “ELectrosetser- UNEG” (the Contractor) to the Agreement of Directors (minutes holds more than 20% Agreement dated 15.02.2013, including exceed 1,162,340,910 UES - JSC “Rosseti”; 10.07.2013 for com- vice UNEG” shall perform complete shall not exceed No. 225 of 22.08.2014) of shares of JSC FGC 15.02.2013 No. work price according to (One billion one member of the Com- plete works under works according to the RUB 188,745,427 UES - JSC “Rosseti”; 02/13 the Agreement No. 02/13 hundred sixty-two pany's Management the title: Program of Agreement conditions, (One hundred member of the Com- of 15.02.2013 million three hun- Board V.P. Dikoy, who replacing 330-750 including reconstruction of eighty-eight million pany's Management dred forty thousand is a member of the kV OHL. SS 500 500 kV “Barnaulskaya SS” seven hundred Board V.P. Dikoy, who nine hundred and Board of Directors of kV Barnaulskaya. forty-five thousand is a member of the nine) and 60 kopeks, a party to the trans- Replacing VS-500 four hundred and Board of Directors of including VAT (18%) action 10 pcs.” twenty-seven) and a party to the trans- 29 kopeks, including action 141. Transformer oil JSC FGC UES and JSC “Electrosetservice Services price The Company's Board Shareholder who VAT (18%) testing services JSC “Electrosetser- UNEG” (the Contractor) according to the of Directors (minutes holds more than 20% agreement vice UNEG” shall render complete Agreement shall not No. 225 of 22.08.2014) of shares of JSC FGC 135. Contractor’s agree- JSC FGC UES and JSC “Electrosetservice Work price ac- The Company's Board Shareholder who services on testing trans- exceed RUB 471,974 UES - JSC “Rosseti”; ment No. 46/13 of JSC “Electrosetser- UNEG” (the Contractor) cording to the of Directors (minutes holds more than 20% former oil for equipment (Four hundred sev- member of the Com- 09.07.2013 for com- vice UNEG” shall perform complete Agreement shall No. 225 of 22.08.2014) of shares of JSC FGC of JSC FGC UES (the Cus- enty-one thousand pany's Management plete works under works according to the not exceed RUB UES - JSC “Rosseti”; tomer), and the Customer nine hundred and Board V.P. Dikoy, who the title: Program Agreement conditions, 70,958,699 (Sev- member of the Com- shall accept the result of seventy-four) and is a member of the of replacing 330- including reconstruction enty million nine pany's Management services rendering and 73 kopeks, including Board of Directors of 750 kV OHL. 500 of 500 kV “Tomskaya” SS hundred fifty-eight Board V.P. Dikoy, who pay for it. VAT (18%) a party to the trans- kV Tomskaya SS. thousand six is a member of the action Replacing VS-500 hundred and ninety- Board of Directors of 4 pcs.” nine), including VAT a party to the trans- 142. Supplementary JSC FGC UES and Amendments to the con- Work price defined The Company's Board Shareholder who (18%) action agreement No. 4 to JSC “Electrosetser- ditions of the Agreement in the Supplemen- of Directors (minutes holds more than 20% the Agreement No. vice UNEG” No. 05/13 of 05.03.2013 tary agreement No. No. 225 of 22.08.2014) of shares of JSC FGC 136. Service agreement JSC FGC UES and LLC “IT Energy Ser- Services price The Company's Board Shareholder who 05/13 of 05.03.2013 4 shall not exceed UES - JSC “Rosseti”; for JSC FGC UES LLC “IT Energy vice” (the Contractor) according to the of Directors (minutes holds more than 20% for electric grid 1,251,317,735 (One member of the Com- Internet-Resource Service” shall render complete Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC facilities repair, billion two hundred pany's Management support services on JSC FGC 403,560 (Four hun- UES - JSC “Rosseti” maintenance, and fifty0one million Board V.P. Dikoy, who UES Internet-Resource dred three thou- diagnostic inspec- three hundred is a member of the support according to the sand five hundred tion seventeen thousand Board of Directors of Agreement conditions, and sixty), including seven hundred thirty- a party to the trans- and JSC FGC UES (the VAT (18%) five) and 95 kopeks, action Customer) shall pay for including VAT (18%) these services 143. Agreement No. JSC FGC UES and JSC “Electrosetservice Work price ac- The Company's Board Shareholder who 137. Communication JSC FGC UES and JSC “MUS Energetiki” Work price accord- The Company's Board Shareholder who 24/18 of 11.11.2013 JSC “Electrosetser- UNEG” (the Contractor) cording to the of Directors (minutes holds more than 20% services agree- JSC “MUS Energe- (the Contractor) renders ing to the Agree- of Directors (minutes holds more than 20% for a set of works vice UNEG” shall perform complete Agreement is RUB No. 225 of 22.08.2014) of shares of JSC FGC ment No. 1/2014 of tiki” communication services ment shall not ex- No. 225 of 22.08.2014) of shares of JSC FGC on straighten- works on straightening 5,031,981 (Five UES - JSC “Rosseti”; 10.01.2014 to JSC FGC UES (the ceed RUB 6,829,373 UES - JSC “Rosseti” ing intermediate intermediate reinforced million thirty-one member of the Com- Customer) according to (Six million eight reinforced concrete concrete supports ac- thousand nine hun- pany's Management the Agreement conditions hundred twenty- supports cording to the Agreement dred and eighty- Board V.P. Dikoy, who and against orders, and nine thousand conditions, and JSC FGC one), including VAT is a member of the JSC FGC UES (the Cus- three hundred and UES (the Customer) shall (18%) Board of Directors of tomers) accepts and pays seventy-three) and accept work result and a party to the trans- for these services. 52 kopeks, includ- pay for it. action ing VAT (18%)

88 89 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 144. Real estate lease JSC IDGS of Centre JSC IDGS of Centre and Rental fee amount The Company's Board Shareholder who 149. Agreement No. JSC FGC UES and LLC “IT Energy Service” Services price The Company's Board Shareholder who agreement and Privolzhie, JSC Privolzhie (the Lesser) according to the of Directors (minutes holds more than 20% 52/2013-02 of LLC “IT Energy (the Contractor) shall according to the of Directors (minutes holds more than 20% FGC UES conveys and JSC FGC Agreement for 11 No. 225 of 22.08.2014) of shares of JSC FGC 11.09.2013 for IT- Service” render complete ser- Agreement is RUB No. 226 of 29.08.2014) of shares of JSC FGC UES (the Lessee) ac- month period is UES - JSC “Rosseti” services on opera- vices on operation and 33,097,912 (Thirty- UES - JSC “Rosseti” cepts a part of material RUB 78,916 (seventy tion and enhanced enhanced technical sup- three million ninety warehouse building for eight thousand nine technical support port of terminal access even thousand nine temporary possession hundred and six- of terminal access platform to corporate hundred and twelve), and use teen) and 20 kopeks, platform to corpo- applications based on including VAT (18%) including VAT (18%) rate applications Citrix SW at JSC FGC based on Citrix SW UES, and JSC FGC UES 145. Real estate lease JSC FGC UES and JSC FGC UES (the Rental fee amount The Company's Board Shareholder who at JSC FGC (the Customer) shall pay agreement JSC CIUS UES Lesser) conveys and JSC according to the of Directors (minutes holds more than 20% for these services. CIUS UES (the Lessee) Agreement shall No. 225 of 22.08.2014) of shares of JSC FGC accepts non-residential not exceed RUB UES - JSC “Rosseti”; 150. Service agreement JSC FGC UES and The Organizer (JSC FGC Services price The Company's Board Shareholder who premises for temporary 4,122,310 (four mil- member of the Com- JSC “EEnS” UES) shall render to the according to the of Directors (minutes holds more than 20% possession and use lion one hundred pany's Management Participant (JSC “EEnS”) Agreement is RUB No. 226 of 29.08.2014) of shares of JSC FGC according to the Agree- twenty-two thou- Board L.V. Mazo who services on arranging 22,000 (Twenty-two UES - JSC “Rosseti” ment conditions sand three hundred is a General Director access to electronic thousand) max., and ten) and 22 and a member of the document flow system including VAT (18%) kopeks, including Board of Directors of a within Corporate infor- VAT (18 %) party to the transaction mation system of digital , member of the Com- signatures certifying pany's Management centre of JSC FGC UES Board D.L. Shishkin, who is a member of the 151. Service agreement JSC FGC UES and The Organizer (JSC Services price The Company's Board Shareholder who Board of Directors of a JSC “MUEGC” FGC UES) shall render according to the of Directors (minutes holds more than 20% party to the transaction to the Participant (JSC Agreement shall No. 226 of 29.08.2014) of shares of JSC FGC “MUEGC”) services on not exceed RUB UES - JSC “Ros- 146. Supplementary JSC FGC UES and Amendments to the Total services cost The Company's Board Shareholder who arranging access to 37,263 (Thirty seven seti”; members of agreement No. 4 to JSC IDGS of Siberia conditions of the Con- defined in the Sup- of Directors (minutes holds more than 20% electronic document flow thousand two hun- the Company's Board the service contract tract No. 18.75.3253.10 plementary agree- No. 225 of 22.08.2014) of shares of JSC FGC system within Corporate dred and sixty) and of Directors O.M. No. 18.75.3253.10 of 12.08.2010, including ment No. 4 to the UES - JSC “Ros- information system of 10 kopeks, includ- Budargin, A.A. Demin, of 12.08.2010 service price Agreement dated seti”, member of the digital signatures certifying VAT (18%) and V.N. Kravchenko, 12.08.2010 No. Company's Board of ing centre of JSC FGC who are members of 18.75.3253.10 shall Directors S.N. Mi- UES the Board of Direc- not exceed RUB ronosetsky, who is a tors of a party to the 601,713 (Six hun- member of the Board transaction dred and one thou- of Directors of a party sand seven hundred to the transaction 152. Supply agreement JSC FGC UES and LLC “IT Energy Service” Cost of com- The Company's Board Shareholder who and thirteen) and 32 between JSC FGC LLC “IT Energy (the Supplier) shall, pur- modities purchased of Directors (minutes holds more than 20% kopeks, including UES and LLC “IT Service” suant to the agreement according to the No. 226 of 29.08.2014) of shares of JSC FGC VAT (18%) Energy Service” terms, transfer to JSC Agreement is UES - JSC “Rosseti” FGC UES (the Purchaser) RUB 284,800 (Two 147. Supplementary JSC FGC UES and Amendments to the con- Work price defined in The Company's Board Shareholder who power storage batteries hundred eighty-for agreement No. 3 to JSC “Electrosetser- ditions of the Agreement the Supplementary of Directors (minutes holds more than 20% Yuasa SWL750, and JSC thousand and eight the Agreement No. vice UNEG” No. 03/13 of 15.02.2013, agreement No. 3 to No. 225 of 22.08.2014) of shares of JSC FGC FGC UES (the Purchaser) hundred) and 08 03/13 of 15.02.2013 including work price the Agreement No. UES - JSC “Rosseti”; shall accept the Com- kopeks, including for electric grid 03/13 of 15.02.2013 member of the Com- modity and pay for it. VAT (18%) facilities repair and shall not exceed pany's Management diagnostic inspec- RUB 1,140,383,664 Board V.P. Dikoy, who 153. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who tion (on purpose- (One billion one is a member of the agreement No. 2 JSC “MUS Energe- conditions of non-resi- according to the of Directors (minutes holds more than 20% oriented programs hundred forty million Board of Directors of to non-residential tiki” dential premises lease Supplementary No. 226 of 29.08.2014) of shares of JSC FGC financed within three hundred eighty a party to the trans- premises lease agreement No. 150 of agreement No. 2 UES - JSC “Rosseti” the scope of core three thousand six action agreement No. 150 27.07.2012, including to non-residential activities) hundred and sixty- of 27.07.2012 rental fee amount premise lease four) and 22 kopeks, agreement No. including VAT (18%) 150 of 27.07.2012 is RUB 18,828 148. Agreement JSC FGC UES and JSC FGC UES (Sub-lessee Agreement price The Company's Board Shareholder who (Eighteen thousand dated 10.09.2013 JSC “Mobile GTPP” 1) transfers to JSC “Mo- is not determined of Directors (minutes holds more than 20% eight hundred and (numberless) bile GTPP” (Sub-lessee 2), because the Agree- No. 225 of 22.08.2014) of shares of JSC FGC twenty-eight) and on replacement and JSC “Mobile GTPP” ment does not and UES - JSC “Rosseti”; 49 kopeks, includ- of a party in the (Sub-lessee 2) accepts cannot entail obli- member of the Com- ing VAT (18%) per land sublease rights and duties from gations of monetary pany's Management month, but no more Agreement dated JSC FGC UES (Sub-lessee nature Board V.P. Dikoy, who than RUB 207,113 20.10.2008 No. 1) according to the land is a member of the (Two hundred and 07/5-30 and sublease agreement Board of Directors of seven thousand one termination of sub- dated 20.10.2008 No. a party to the trans- hundred and thir- sequent land sub- 07/5-30. Subsequent action teen) and 39 kopeks, lease agreement land sublease agreement including VAT (18 %), dated 27.08.2012 dated 27.08.2012 No. 164 for 11 month No. 164 made between JSC FGC UES and JSC “Mobile GTPP” shall terminate on 01.01.2013.

90 91 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 154. Supplemen- JSC FGC UES and Prolongation of lease Rental fee amount The Company's Board Shareholder who 158. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who tary agreement JSC “IDGS of Siberia” period and Lease agree- obtained by JSC FGC of Directors (minutes holds more than 20% agreement to the JSC “Kuban Trunk conditions of the Agree- for 360 calendar of Directors (minutes holds more than 20% No. 3 to the Lease ment No. 44.1900.587.11 UES (the Lesser) ac- No. 226 of 29.08.2014) of shares of JSC FGC agreement on the Grids” ment on the use of days according to No. 226 of 29.08.2014) of shares of JSC FGC agreement No. of 27.09.2011 validity cording to the Sup- UES - JSC “Rosseti”, use of electric grid electric grid facilities the Agreement UES - JSC “Rosseti” 44.1900.587.11 of period from 01.06.2014 plementary agree- a member of the facilities dated dated 30.12.2005 No. dated 30.12.2005 No. 27.09.2011 to 30.04.2015 on the ment No. 3 to the Company's Board of 30.12.2005 No. DI- DI-73/107/30-49, includ- DI-73/107/30-49, same term Lease agreement Directors O.M. S.N. 73/107/30-49 ing rental fee amount considering the Ad- No. 44.1900.587.11 Mironosetsky, who provided in the Agree- ditional agreement, of 27.09.2011 is is a member of the ment dated 30.12.2005 is RUB 212,935,720 RUB 45,329 (Forty Board of Directors of No. DI-73/107/30-49 (Two hundred and five thousand three a party to the trans- twelve million nine hundred and twenty- action hundred and thirty- nine) and 48 kopeks, five thousand seven including VAT (18%) hundred and twenty), including VAT (18%) 155. Supplementary JSC FGC UES and JSC Amendments to the Services price The Company's Board Shareholder who agreement No. 1 “MUS Energetiki” conditions of the Agree- according to the of Directors (minutes holds more than 20% 159. Supplementary JSC FGC UES, JSC Amendments to the con- Work price defined in The Company's Board Shareholder who of 18.02.2014 to ment No. 14/2014 of Supplementary No. 226 of 29.08.2014) of shares of JSC FGC agreement No. 1 “Electrosetservice ditions of the Agreement the Supplementary of Directors (minutes holds more than 20% the Agreement 17.01.2014, including agreement No. 1 UES - JSC “Rosseti” to the tripartite UNEG”, and JSC dated 15.05.2013 No. agreement No. 1 No. 226 of 29.08.2014) of shares of JSC FGC No. 14/2014 of Agreement price of 18.02.2014 to Agreement dated “Electrozavod” 55/13, including work to the Agreement UES - JSC “Rosseti”; 17.01.2014 for con- the Agreement 15.05.2013 No. price dated 15.05.2013 No. member of the Com- trol and monitoring No. 14/2014 of 55/13 for electrical 55/13 for electrical pany's Management of the telecommu- 17.01.2014 is RUB equipment servic- equipment servicing Board V.P. Dikoy, who nication network 14,666,242.08 ing maintenance maintenance shall is a member of the ofMES Volga (Fourteen million six not exceed RUB Board of Directors of hundred and sixty- 8,329,867 (Eight mil- a party to the trans- six thousand two lion three hundred action (JSC “Electro- hundred and forty- twenty-nine thou- setservice UNEG”) two and 08/100), sand eight hundred including VAT (18%) and sixty-seven) and 80 kopeks, including 156. Supplementary JSC FGC UES and Amendments to the con- Price of the Supple- The Company's Board Shareholder who VAT (18%) agreement No. 2 to JSC “DESP” ditions of the Agreement mentary agreement of Directors (minutes holds more than 20% the Agreement No. No. 3842 of 03.12.2010, No. 2 to the Agree- No. 226 of 29.08.2014) of shares of JSC FGC 160. Supplementary JSC FGC UES, JSC Amendments to the con- Work price defined The Company's Board Shareholder who 3842 of 03.12.2010 including the Agreement ment No. 3842 of UES - JSC “Rosseti”; agreement No. 1 “Electrosetservice ditions of the Agreement in the Supple- of Directors (minutes holds more than for developing price 03.12.2010 shall not member of the Com- to the tripartite UNEG”, and JSC dated 14.06.2013 No. mentary agree- No. 226 of 29.08.2014) 20% of shares of design and work exceed 25,504,434 pany's Management Agreement dated “Electrozavod” 51/13, including work ment No. 1 to the JSC FGC UES - JSC documentation (Twenty-five million Board V.P. Dikoy, who 14.06.2013 No. price Agreement dated “Rosseti”; a member under the title: five hundred and is a member of the 51/13 for electrical 14.06.2013 No. of the Company's “Comprehensive four thousand four Board of Directors of equipment servic- 51/13 for electrical Management Board reconstruction of hundred and thirty) a party to the trans- ing maintenance equipment servic- V.P. Dikoy, who is a 220 kV Polotskaya and 05 kopeks, action ing maintenance member of the Board SS” including VAT (18%) shall not exceed of Directors of a party RUB 115,955,072 to the transaction 157. Contractor agree- JSC FGC UES and JSC “Electrosetservice Work price accord- The Company's Board Shareholder who (One hundred (JSC “Electrosetser- ment for developing JSC “Electrosetser- UNEG” (the Contrac- ing to the Agree- of Directors (minutes holds more than 20% fifteen million nine vice UNEG”) work documen- vice UNEG” tor) shall perform ment shall not ex- No. 226 of 29.08.2014) of shares of JSC FGC hundred fifty-five tation, material complete work on 500 ceed RUB 3,347,103 UES - JSC “Rosseti”; thousand and resources supply, kV Magistralnaya SS (Three million three member of the Com- seventy-two) and 27 construction, instal- reconstruction according hundred forty- pany's Management kopeks, including lation and com- to the Agreement terms, seven thousand one Board V.P. Dikoy, who VAT (18%) missioning works and JSC FGC UES (the hundred and three) is a member of the under the title: Customer) shall accept and 12 kopeks, Board of Directors of 161. Supplementary JSC FGC UES, JSC Amendments to the con- Work price defined in The Company's Board Shareholder who 500/220/110/10 kV work results and pay the including VAT (18%) a party to the trans- agreement No. 2 “Electrosetservice ditions of the Agreement the Supplementary of Directors (minutes holds more than Magistralnaya SS. agreed price according action to the tripartite UNEG”, and JSC dated 01.05.2013 No. agreement No. 2 to No. 226 of 29.08.2014) 20% of shares of Reconstruction of to the agreed procedure. Agreement dated “Electrozavod” 53/13, including work the Agreement No. JSC FGC UES - JSC MV 0.4 kV in SCB. 01.05.2013 No. price 53/13 of 01.05.2013 “Rosseti”; a member (Agreement No. 53/13 for electrical shall not exceed of the Company's 565/STP-M8 on equipment servic- RUB 32,388,106 Management Board procedure of parties ing maintenance (Thirty-two million V.P. Dikoy, who is a interaction before three hundred eighty- member of the Board making a contract eight thousand one of Directors of a party on technological hundred and six) and to the transaction connection based 64 kopeks, including (JSC “Electrosetser- on custom design) VAT (18%) vice UNEG”)

92 93 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 162. Supplementary JSC FGC UES, JSC Amendments to the Work price defined in The Company's Board Shareholder who 168. Supplementary JSC “Yantarenergo” Amendments to the Fee for facilities The Company's Board Shareholder who agreement No. 1 “Electrosetservice conditions of the Agree- the Supplementary of Directors (minutes holds more than agreement No. 7 and JSC FGC UES conditions of the Agree- use defined by the of Directors (minutes holds more than 20% to the tripartite UNEG”, and JSC ment dated 15.05.2013 agreement No. 1 to No. 226 of 29.08.2014) 20% of shares of to the Agreement ment dated 04.02.2004 Supplementary No. 226 of 29.08.2014) of shares of JSC FGC Agreement dated “Electrozavod” No. 58/13 for electrical the Agreement dated JSC FGC UES - JSC for electric grid No. 1058, including the agreement No. 7 to UES - JSC “Rosseti” 15.05.2013 No. equipment servicing 15.05.2013 No. 58/13 “Rosseti”; a member facilities use dated Agreement price Electric grid facili- 58/13 for electrical maintenance shall not exceed of the Company's 04.02.2004 No. ties use agreement equipment servic- RUB 19,014,059 Management Board 1058 dated 04.02.2004 ing maintenance (Nineteen million V.P. Dikoy, who is a No. 1058 is RUB forteen thousand member of the Board 2,815,002 (Two mil- and fifty-nine) and of Directors of a party lion eight hundred 45 kopeks, including to the transaction fifteen thousand and VAT (18%) (JSC “Electrosetser- two) and 74 kopeks, vice UNEG”) including VAT (18%) 163. Agreement for JSC FGC UES and JSC “Electrosetservice Work price ac- The Company's Board Shareholder who 169. Lease agreement JSC “Yantarenergo” JSC FGC UES (the Rental fee amount The Company's Board Shareholder who repairing 220 JSC “Electrosetser- UNEG” (the Contractor) cording to the of Directors (minutes holds more than between JSC FGC and JSC FGC UES Lesser) shall lend to according to Lease of Directors (minutes holds more than 20% kV disconnect- vice UNEG” shall repair disconnecting Agreement shall No. 226 of 29.08.2014) 20% of shares of UES and JSC “Yan- JSC “Yantarenergo” agreement between No. 226 of 29.08.2014) of shares of JSC FGC ing switches at switches at substations not exceed RUB JSC FGC UES - JSC tarenergo” (the Lessee) immovable JSC FGC UES and UES - JSC “Rosseti” substations Syas, Syas, Tikhvin-Liteiny, 1,630,372 (One “Rosseti”; a member and movable assets for JSC “Yantarenergo” Tikhvin-Liteiny, Lodeynopolskaya, belong- million six hundred of the Company's temporary use, against is RUB 13,781,198 Lodeynopolskaya, ing to JSC FGC UES branch thirty thousand Management Board transfer and accept- (Thirteen million sev- belonging to JSC – Vyborgskoye PMES, ac- three hundred and V.P. Dikoy, who is a ance statement and for en hundred eighty- FGC UES branch – cording to the Agreement seventy-two) and 94 member of the Board a fee, according to the one thousand one Vyborgskoye PMES terms, and JSC FGC UES kopeks, including of Directors of a party Agreement conditions, hundred and eighty- (the Customer) shall accept VAT (18%) to the transaction and JSC “YAntarenergo" nine), including VAT work result and pay for it (the Lessee) shall timely (18%), per month, but make rent payments and no more than RUB 164. Supplementary JSC FGC UES and Amendments to the con- This Supplementa- The Company's Board Shareholder who return the assets to JSC 179,155,574 (One agreement No. 3 to JSC “Electrosetser- ditions of the Agreement ry agreement does of Directors (minutes holds more than 20% FGC UES (the Lesser) hundred seventy- the Agreement No. vice UNEG” No. 07/13 of 13.03.2013, not change work No. 226 of 29.08.2014) of shares of JSC FGC after Agreement expira- nine million one 07/13 of 13.03.2013 including payment terms price provided in UES - JSC “Rosseti”; a tion in good condition hundred fifty-five the Agreement No. member of the Com- (considering natural thousand five hun- 07/13 of 13.03.2013 pany's Management wear and tear) dred and seventy- Board V.P. Dikoy, who is four), including VAT a member of the Board (18%) of Directors of a party to the transaction 170. Real estate JSC FGC UES and JSC FGC UES (the Lesser) Rental fee amount The Company's Board Shareholder who lease agreement JSC “Electrosetser- shall lend to JSC “Elec- according to Real of Directors (minutes holds more than 165. Supplementary JSC FGC UES and Amendments to the con- This Supplementary The Company's Board Shareholder who between JSC FGC vice UNEG” trosetservice UNEG” (the estate lease agree- No. 226 of 29.08.2014) 20% of shares of agreement No. 1 JSC “Electrosetser- ditions of the Agreement agreement No. 1 of Directors (minutes holds more than UES and JSC Lessee) non-residential ment between JSC JSC FGC UES - JSC to the Agreement vice UNEG” dated 28.12.2012 does not change No. 226 of 29.08.2014) 20% of shares of “Electrosetservice premises for temporary FGC UES and JSC “Rosseti”; a member dated 28.12.2012 No. 10/13, including pay- the total price of JSC FGC UES - JSC UNEG” use, against transfer and “Electrosetservice of the Company's No. 10/13 for ac- ment terms the Agreement of “Rosseti”; a member acceptance statement and UNEG” is RUB 21,952 Management Board cident recovery and 28.12.2012 No. 10/13 of the Company's for a fee, according to the (Twenty-one thou- V.P. Dikoy, who is a emergency works for accident recovery Management Board Agreement conditions, sand nine hundred member of the Board and emergency V.P. Dikoy, who is a and JSC “Electrosetser- and fifty-two) and 40 of Directors of a party works between JSC member of the Board vice UNEG” (the Lessee) kopeks, including VAT to the transaction FGC UES and JSC of Directors of a party shall timely make rent (18%), per month, but “Electrosetservice to the transaction payments and return the no more than 241,476 UNEG” assets to JSC FGC UES (the (Two hundred forty- 166. Vehicle and crew JSC FGC UES and JSC JSC “IDGS of Siberia” Rental fee amount The Company's Board Shareholder who Lesser) after Agreement one thousand four lease agreement “IDGS of Siberia” (the Lesser) shall provide and cost services on of Directors (minutes holds more than 20% expiration in good condition hundred and seventy- to JSC FGC UES (the vehicles operation No. 226 of 29.08.2014) of shares of JSC FGC (considering natural wear six) and 40 kopeks, Lessee) vehicles for and maintenance, UES - JSC “Rosseti”, and tear) including VAT (18%) temporary use, as well as according to the a member of the 171. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who render, by his own forces, Vehicles and crew Company's Board of agreement No. 1 JSC “MUS Energe- conditions of the real according to the of Directors (minutes holds more than 20% services on their op- lease agreement, is Directors O.M. S.N. to the real estate tiki” estate lease agreement Supplementary No. 226 of 29.08.2014) of shares of JSC FGC eration and maintenance RUB 1,262,790 (One Mironosetsky, who lease agreement No. 1615 of 01.07.2012, agreement No. 1 UES - JSC “Rosseti” during accident recovery million two hundred is a member of the No. 1615 of including rental services to the Real estate at the power facilities of sixty-two thousand Board of Directors of 01.07.2012 payment conditions lease agree- JSC FGC UES (the Les- seven hundred a party to the trans- ment No. 1615 of see), following equipment and ninety) and 38 action 01.07.2012 is RUB damage due to natural kopeks, including 4,489 (Four thou- disasters VAT (18%) sand four hundred 167. Agreement for JSC FGC UES and JSC “Electrosetservice Work price accord- The Company's Board Shareholder who and eighty-nine) emergency re- JSC “Electrosetser- UNEG” (the Contractor) ing to the Agree- of Directors (minutes holds more than and 99 kopeks per covery works on vice UNEG” shall perform emergency ment shall not ex- No. 226 of 29.08.2014) 20% of shares of month, including replacing dam- recovery works on replac- ceed RUB 4,599,098 JSC FGC UES - JSC VAT (18%) aged f.V R-1 500 kV ing damaged f.V R-1 SS (Four million five “Rosseti”; a member Borino SSnat JSC 500 kV Borino at JSC FGC hundred ninety- of the Company's FGC UES branch – UES branch – Upper-Don nine thousand and Management Board Upper-Don PMES PMES according to the ninety-eight) and 99 V.P. Dikoy, who is a Agreement terms, and kopeks, including member of the Board JSC FGC UES (the Cus- VAT (18 %) of Directors of a party tomer) shall accept work to the transaction result and pay for it

94 95 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 172. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who 178. Supplementary JSC FGC UES and Amendments to the Price of the Supple- The Company's Board Shareholder who agreement No. 1 to JSC CIUS UES conditions of the Lease according to the of Directors (minutes holds more than 20% agreement No. 2 JSC “Mobile GTPP” conditions of Property mentary agreement of Directors (minutes holds more than 20% the Lease agree- agreement No. 3135 of Supplementary No. 226 of 29.08.2014) of shares of JSC FGC to the Agreement lease agreement dated No. 2 to Property No. 228 of 12.09.2014) of shares of JSC FGC ment No. 3135 of 18.06.2013, including agreement No. 1 to UES - JSC “Rosseti”; a of property lease 07.07.2010 No. 116, lease agreement UES - JSC “Rosseti”; 18.06.2013 rental fee amount the Lease agree- member of the Com- dated 07.07.2010 including rental fee dated 07.07.2010 member of the Com- ment No. 3135 of pany's Management No. 116 amount No. 116 is RUB pany's Management 18.06.2013 is RUB Board L.V. Mazo, who 2,489,883 (Two mil- Board V.P. Dikoy, who 33,147 (thirty- is a General Director, a lion four hundred is a member of the three thousand member of the Board eighty-nine thou- Board of Directors of one hundred and of Directors of a party sand eight hundred a party to the trans- forty-seven) and 34 to the transaction ; a and eighty-three) action kopeks per month, member of the Com- and 11 kopeks, including VAT (18%) pany's Management including VAT (18%) Board D.L. Shishkin, who is a member of the 179. Supplementary JSC FGC UES and JSC FGC UES (the Rental fee ac- The Company's Board Shareholder who Board of Directors of a agreement No. 1 to JSC CIUS UES Lesser) lends to JSC cording to the of Directors (minutes holds more than 20% party to the transaction the non-residential CIUS UES (the Lessee) Supplementary No. 228 of 12.09.2014) of shares of JSC FGC premises lease non-residential premises agreement No. 1 UES - JSC “Rosseti”; 173. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who agreement dated with total area 421.4 to the Agreement member of the Com- agreement No.1 of JSC “MUS Energe- conditions of the Lease according to the of Directors (minutes holds more than 20% 01.06.2012 No. sq.m for rent for the dated 01.06.2012 pany's Management 19.07.2013 to the tiki” agreement No. 25 of Supplementary No. 226 of 29.08.2014) of shares of JSC FGC 93-2012 purpose of JSC CIUS No. 93-2012 is Board L.V. Mazo, who real estate lease 30.01.2013, including agreement No. 1 of UES - JSC “Rosseti” UES (the Lessee) offices RUB 1,616,161 (One is a General Director, a agreement No. 25 rental fee amount 19.07.2013 to the accommodation million six hundred member of the Board of 30.01.2013 Real estate lease and sixteen thou- of Directors of a party agreement No. 25 sand one hundred to the transaction ; a of 30.01.2013 is and sixty-one) and member of the Com- RUB 33,648 (thirty- 36 kopeks for 11 pany's Management three thousand six month, including Board D.L. Shishkin, hundred and forty- VAT (18 %) who is a member of the eight) and 96 ko- Board of Directors of a peks, including VAT party to the transaction (18%), per month since 01.08.2013, 180. Real estate lease JSC FGC UES and JSC FGC UES (the Monthly rental The Company's Board Shareholder who agreement No. JSC CIUS UES Lesser) shall lend to JSC fee for the part of of Directors (minutes holds more than 20% 174. Agreement for JSC FGC UES and JSC “MUEGC” (the Work price ac- The Company's Board Shareholder who 4055 CIUS UES (the Lessee) non-residential No. 228 of 12.09.2014) of shares of JSC FGC emergency recovery JSC “MUEGC” Contractor) shall, cording to the of Directors (minutes holds more than 20% a part of non-residential premise, according UES - JSC “Rosseti”; works on support- after JSC FGC UES (the Agreement is RUB No. 226 of 29.08.2014) of shares of JSC FGC premise with total area to conditions of the member of the Com- brestoration at 750 Customer) assignment, 856,523 (Eight hun- UES - JSC “Rosseti”; 10.6 sq.m according to Real estate lease pany's Management kV KAPP – Novobry- perform works on sup- dred fifty-six thou- members of the conditions of the Real agreement No. Board L.V. Mazo, who anskaya OHL port restoration at 750 kV sand five hundred Company's Board of estate lease agreement 4055 is RUB 11,519 is a General Director, a KAPP – Novobryanskaya and twenty-three) Directors O.M. Budar- No. 4055 (Eleven thousand member of the Board OHL, and JSC FGC UES and 49 kopeks, gin, A.A. Demin, V.M. five hundred and of Directors of a party (the Customer) shall pay including VAT (18%) Kravchenko, who are nineteen) and 87 to the transaction ; a for this work the agreed members of the Board kopeks, including member of the Com- amount, as stipulated in of Directors of a party VAT (18 %) pany's Management the Agreement to the transaction Board D.L. Shishkin, who is a member of the 175. Agreement on JSC FGC UES and Termination of the Is not defined due The Company's Board Shareholder who Board of Directors of a termination of the JSC “IDGS of Urals” Electric grid facili- to the nature of the of Directors (minutes holds more than 20% party to the transaction electric grid fa- ties lease agreement transaction No. 226 of 29.08.2014) of shares of JSC FGC cilities lease agree- No. 596/2011/SE of UES - JSC “Rosseti” 181. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who ment No. 596/2011/ 27.12.2011 agreement No. 1 JSC “MUS Energe- conditions of the Real according to the of Directors (minutes holds more than 20% SE of 27.12.2011 to the Real estate tiki” estate lease agreement Supplemen- No. 228 of 12.09.2014) of shares of JSC FGC lease agreement dated 14.12.2012 No. tary agreement No. UES - JSC “Rosseti” 176. Supplementary JSC FGC UES and Amendments to the Making the Supple- The Company's Board Shareholder who dated 14.12.2012 173/12, including rental 1 to the Real estate agreement No. 1 JSC “MUS Energe- conditions of the Agree- mentary agreement of Directors (minutes holds more than 20% No. 173/12 fee amount lease agreement of 22.07.2013 to tiki” ment No. 264515/486 of No. 1 of 22.07.2013 No. 226 of 29.08.2014) of shares of JSC FGC dated 14.12.2012 the Agreement 22.03.2013 to the Agreement UES - JSC “Rosseti” No. 173/12 is RUB No. 264515/486 No. 264515/486 of 71,223 (Seventy- of 22.03.2013 for 22.03.2013 entails one thousand two communication no obligations of hundred and twenty- systems mainte- monetary nature, three) and 68 kopeks, nance and repair price of this Sup- including VAT (18%) at JSC FGC UES plementary agree- branch – Kuz- ment is not defined 182. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who basskoe PMES agreement to the JSC “MUS Energe- conditions of the Real for 11 month accord- of Directors (minutes holds more than 20% Real estate lease tiki” estate lease agreement ing to the Supple- No. 228 of 12.09.2014) of shares of JSC FGC 177. Supplementary JEC FGC UES; Amendments to the condi- This Supplementary The Company's Board Shareholder who agreement dated dated 01.10.2012 No. mentary agreement UES - JSC “Rosseti” agreement No. 2 JSC “IDGS of Urals” tions of the Agreement No. agreement does not of Directors (minutes holds more than 20% 01.10.2012 No. 3.3- 3.3-25/12/21, including to the Real estate to the Agreement 6000002323 of 15.02.2012, imply obligations of No. 226 of 29.08.2014) of shares of JSC FGC 25/12/21 rental fee amount lease agreement No. 6000002323 including procedure of monetary nature, UES - JSC “Rosseti” dated 01.10.2012 No. of 15.02.2012 on compensation for demoli- price of the Supple- 3.3-25/12/21 is RUB compensation for tion and rearrangement of mentary agreement 68,539.24 (Sixty- demolition and power transmission line No. 2 is not defined eight thousand five rearrangement of sections, between hundred and thirty- power transmis- JEC FGC UES and JSC nine) and 24 kopeks, sion line sections “IDGS of Ural” including VAT (18%)

96 97 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 183. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who 187. Supplementary JSC “Tyumenenergo” Renewal of Real estate Rental fee amount The Company's Board Shareholder who agreement to the JSC “MUS Energetiki conditions of the Non- for 11 month accord- of Directors (minutes holds more than 20% agreement to the and JSC FGC UES lease agreement dated for the period of Directors (minutes holds more than 20% Non-residential residential premise ing to the Supple- No. 228 of 12.09.2014) of shares of JSC FGC Real estate lease 13.06.2012 No. 8/06- from 01.03.2014 to No. 228 of 12.09.2014) of shares of JSC FGC premise lease lease agreement dated mentary agreement UES - JSC “Rosseti” agreement dated 12 for a period from 31.01.2015 accord- UES - JSC “Rosseti”, agreement dated 09.12.2010 No. 3.3- to the Non-res- 13.06.2012 No. 01.03.2014 to 31.01.2015 ing to the Supple- and a member of the 09.12.2010 No. 3.3- 25/10/34, including idential premise 8/06-12 mentary agreement Company's Board of 25/10/34 rental fee amount lease agreement to the Real estate Directors A.A. Demin, dated 09.12.2010 lease agreement who is an interested No. 3.3-25/10/34 dated 13.06.2012 director is RUB 215,683.82 No. 8/06-12 is (Two hundred and RUB 217,515 (Two fifteen thousand hundred and seven- six hundred and teen thousand five eighty-three) and 82 hundred and fifteen) kopeks, including and 43 kopeks, VAT (18%) including VAT (18%) 184. Real estate lease JSC FGC UES and JSC FGC UES (the Price of the Real The Company's Board Shareholder who 188. Supplemen- JSC FGC UES and JSC Termination of the Real Is not defined due The Company's Board Shareholder who agreement JSC “Electrosetser- Lesser) shall lend to estate lease agree- of Directors (minutes holds more than tary agreement “Chitaenergo” estate lease agree- to transaction of Directors (minutes holds more than 20% vice UNEG” JSC “Electrosetservice ment between JSC No. 228 of 12.09.2014) 20% of shares of to the Real estate ment No. 17.11.11 of nature No. 228 of 12.09.2014) of shares of JSC FGC UNEG” (the Lessee) real FGC UES and JSC JSC FGC UES - JSC lease agreement 17.11.2011 UES - JSC “Rosseti” estate for temporary pos- “Electrosetser- “Rosseti”;member No. 17.11.11 of session and use, against vice UNEG” shall of the Company's 17.11.2011 handover statement and not exceed RUB Management Board for a fee, and JSC “Elec- 1,179,221 (One mil- V.P. Dikoy, who is a 189. Supplementary JSC FGC UES and Amendments to the con- Price of the Sup- The Company's Board Shareholder who trosetservice UNEG” lion one hundred member of the Board agreement No. 2 to JSC “Electrosetser- ditions of the Premise plementary agree- of Directors (minutes holds more than 20% (the Lessee) shall timely and seventy-nine of Directors of a party Premise sub-lease vice UNEG” sub-lease agreement ment No. 2 to the No. 228 of 12.09.2014) of shares of JSC FGC make rent payments and thousand two hun- to the transaction agreement dated dated 01.06.2008 No. Premise sub-lease UES - JSC “Rosseti”; return the assets to JSC dred and twenty- 01.06.2008 No. Sap/ Sap/ESS/1, including the agreement dated member of the Com- FGC UES (the Lesser) af- one) and 29 kopeks ESS/1 Agreement price 01.06.2008 No. pany's Management ter Agreement expiration per month, includ- Sap/ESS/1 is RUB Board V.P. Dikoy, who in good condition ing VAT (18%) 29,782,554 (Twenty- is a member of the nine million seven Board of Directors of 185. Supplementary JSC FGC UES and Amendments to the Rental fee amount The Company's Board Shareholder who hundred and eighty- a party to the trans- agreement No. 2 to JSC CIUS UES conditions of the Non- according to the of Directors (minutes holds more than 20% two thousand five action the Non-residential residential premise Supplementary No. 228 of 12.09.2014) of shares of JSC FGC hundred and fifty- premise lease lease agreement dated agreement No. 2 to UES - JSC “Rosseti”; four) and 87 kopeks, agreement dated 01.06.2012 No. 93-2012, the Non-residential member of the Com- including VAT (18%) 01.06.2012 No. including rental fee premise lease pany's Management 93-2012 amount agreement dated Board L.V. Mazo, who 190. Supplementary JSC FGC UES and Amendments to the con- Price of the Supple- The Company's Board Shareholder who 01.06.2012 No. is a General Director, a agreement No. 4 to JSC “Electrosetser- ditions of the Property mentary agreement of Directors (minutes holds more than 93-2012 is RUB member of the Board the Property lease vice UNEG” lease agreement dated No. 4 to the Property No. 228 of 12.09.2014) 20% of shares of 1,346,970 (One mil- of Directors of a party agreement dated 01.05.2008 No. AKR/ lease agreement JSC FGC UES - JSC lion three hundred to the transaction ; a 01.05.2008 No. ESS/1, including rental dated 01.05.2008 “Rosseti”; a member and forty-six thou- member of the Com- AKR/ESS/1 fee amount No. AKR/ESS/1 is of the Company's sand nine hundred pany's Management RUB 39,442,925 Management Board and seventy) and Board D.L. Shishkin, (Thirty-nine million V.P. Dikoy, who is a 68 kopeks for 11 who is a member of the four hundred and member of the Board month, including Board of Directors of a forty-two thousand of Directors of a party VAT (18%) party to the transaction nine hundred and to the transaction twenty-five) and 10 186. Real estate lease JSC “Tyumenenergo” JSC “Tyumenenergo” Rental fee amount The Company's Board Shareholder who kopeks, includ- agreement and JSC FGC UES (the Lesser) shall lend for 11 month, of Directors (minutes holds more than 20% ing VAT (18%), for to JSC FGC UES (the according to Real No. 228 of 12.09.2014) of shares of JSC FGC the period from Lessee) its fully owned estate lease agree- UES - JSC “Rosseti”, 01.01.2012 to real estate for tempo- ment conditions, and a member of the 31.12.2014. rary possession and is RUB 1,411,867 Company's Board of use according to Real (One million four Directors A.A. Demin, 191. Agreement dated JSC FGC UES and JSC STC FGC UES (the Work price ac- The Company's Board Shareholder who estate lease agreement hundred and who is an interested 23.03.2014 No. JSC STC FGC UES Contractor) shall perform cording to the of Directors (minutes holds more than 20% conditions eleven thousand director 29-3/115-GSiRPIR a set of works, in particular, Agreement dated No. 228 of 12.09.2014) of shares of JSC FGC eight hundred and for developing on developing and agreeing 23.03.2014 No. UES - JSC “Rosseti” sixty-seven) and 05 design and procure- with JSC FGC UES (the 29-3/115-GSiRPIR kopeks, including ment documenta- Customer) main design shall not exceed VAT (18%) tion under the title: solutions, and JSC FGC UES RUB 2,935,000 (Two “Reconstruction of (the Customer) shall accept million nine hun- 220 kV Urengoy – work result and pay for it as dred and thirty-five CGTP-11 (Olenya) provided in the Agreement thousand), includ- OHL 1 chain. Tower ing VAT (18%) installation onto new foundation”

98 99 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 192. Agreement dated JSC FGC UES and JSC STC FGC UES (the Work price ac- The Company's Board Shareholder who 198. Supplementary JSC FGC UES and Amendments to the Work price defined The Company's Board Shareholder who 23.03.2014 No. JSC STC FGC UES Contractor) shall perform cording to the of Directors (minutes holds more than 20% agreement No. 2 JSC “Electrosetser- Agreement in the Supple- of Directors (minutes holds more than 20% 29-3/118-GSiRPIR complete works, in par- Agreement dated No. 228 of 12.09.2014) of shares of JSC FGC of 23.05.2014 to vice UNEG” mentary agree- No. 230 of 03.10.2014) of shares of JSC FGC for developing de- ticular, on developing and 23.03.2014 No. UES - JSC “Rosseti” the Agreement No. ment is RUB UES - JSC “Rosseti”; sign and procure- agreeing with JSC FGC 29-3/118-GSiRPIR 01/13 of 15.02.2013 3,224,642,445.22, member of the Com- ment documenta- UES (the Customer) main shall not exceed including VAT (18%) pany's Management tion under the title: design solutions, and JSC RUB 2,707,200 Board V.P. Dikoy, who is “Reconstruction FGC UES (the Customer) (Two million seven a member of the Board of 220 kV Urengoy shall accept work result hundred and seven of Directors of a party – Pangody OHL. and pay for it as provided thousand and two to the transaction Tower installation in the Agreement hundred), including onto new founda- VAT (18%) 199. Supplementary JSC FGC UES and Amendments to the Price defined in The Company's Board Shareholder who tion” agreement No. 11 JSC “Tomsk Trunk Agreement on imple- the Supplementary of Directors (minutes holds more than 20% to the Agency Grids” mentation of JSC “Tomsk agreement includes No. 230 of 03.10.2014) of shares of JSC FGC 193. Agreement dated JSC FGC UES and JSC STC FGC UES (the Work price ac- The Company's Board Shareholder who agreement No. Trunk Grids” investment cost of both work UES - JSC “Rosseti”; 23.03.2014 No. JSC STC FGC UES Contractor) shall per- cording to the of Directors (minutes holds more than 20% 29/08-AD of program on electric and agency fee for member of the Com- 29-3/116-GSiRPIR form complete works, in Agreement shall No. 228 of 12.09.2014) of shares of JSC FGC 21.11.2008 on in- grid facilities construc- 2013 and is RUB pany's Management for developing de- particular, on developing not exceed RUB UES - JSC “Rosseti” vestment program tion, reconstruction and 507,401,739.71 BoardV.P. Dikoy, who is sign and procure- and agreeing with JSC 2,426,200 (Two mil- implementation technical upgrade max., including VAT a member of the Board ment documenta- FGC UES (the Customer) lion four hundred (18 %) of Directors of a party tion under the title: main design solutions, and twenty-six to the transaction “Reconstruction of and JSC FGC UES (the thousand and two 220 kV Urengoy – Customer) shall accept hundred), including 200. Contractor agree- JSC FGC UES and The Contractor (JSC RUB 16,916,284.00, The Company's Board Shareholder who CGTP-11 (Olenya) work result and pay for it VAT (18%) ments JSC “Electrosetser- “Electrosetservice including VAT (18%) of Directors (minutes holds more than 20% OHL 2 chain. Tower as provided in the Agree- vice UNEG” UNEG”) shall replace No. 230 of 03.10.2014) of shares of JSC FGC installation onto ment soiled glass isolators UES - JSC “Rosseti”; new foundation” member of the Com- pany's Management 194. Supplementary JSC FGC UES and Amendments to the condi- Pension contribu- The Company's Board Shareholder who BoardV.P. Dikoy, who is agreement No. 13 JSC “NPF of Power tions of the Agreement No. tion amount for of Directors (minutes holds more than 20% a member of the Board to the Agree- Industry” 132 of 28.10.2004 on non- 2014, defined by No. 228 of 12.09.2014) of shares of JSC FGC of Directors of a party ment No. 132 of state pension provision, the Supplementary UES - JSC “Rosseti”, to the transaction 28.10.2004 on including establishment agreement No. 13 to and a member of the non-state pension of pension contribution the Agreement No. Company's Board of 201. Supplementary JSC FGC UES and Amending the Agree- Price is not defined The Company's Board Shareholder who provision amount for 2014 132 of 28.10.2004 Directors A.V. Ka- agreement No. 3 JSC “Electrosetser- ment for equipment because the agreed of Directors (minutes holds more than 20% on non-state pen- zachenkov, who is a of 24.12.2013 to vice UNEG” repair and diagnosis, work price does not No. 230 of 03.10.2014) of shares of JSC FGC sion provision, is member of the Board the Agreement No. and implementation of change UES - JSC “Rosseti”; RUB 327,335,413 of Directors of a party 06/13 of 18.02.2013 purpose-oriented pro- member of the Com- (Three hundred and to the transaction for equipment repair grams at SSs and OHLs pany's Management twenty-seven million and diagnosis, and at MES West Siberia Board V.P. Dikoy, who three hundred and implementation of is a member of the thirty-five thousand purpose-oriented Board of Directors of four hundred and programs at SSs and a party to the trans- thirteen) OHLs action 195. Agreement for JSC FGC UES and Foundation repair using RUB 1,444,800 only, The Company's Board Shareholder who 202. Supplementary JSC FGC UES and Amending the Agree- Services price The Company's Board Shareholder who foundation repair JSC “Electrosetser- protector method at including VAT (18%) of Directors (minutes holds more than 20% agreement No. 2 to JSC “MUS Energetiki ment for communication defined in the of Directors (minutes holds more than 20% using protector vice UNEG” 500 kV OHL according to No. 230 of 03.10.2014) of shares of JSC FGC the Agreement No. systems maintenance Supplementary No. 230 of 03.10.2014) of shares of JSC FGC method at 500 kV the Customer’s (JSC FGC UES - JSC “Rosseti”; 264515/486 of and repair agreement is RUB UES - JSC “Rosseti” OHL UES) technical assign- member of the Com- 22.03.2013 for com- 161,613,747.24 ment pany's Management munication systems max., including VAT Board V.P. Dikoy, who is maintenance and (18%) a member of the Board repair of Directors of a party 203. Agreement No. JSC FGC UES and The Contractor (JSC Work price is RUB The Company's Board Shareholder who to the transaction 112/2014 of JSC “Electrosetser- “Electrosetservice UNEG”) 2,553.38, including of Directors (minutes holds more than 20% 196. Agreement on JSC FGC UES and Agreement termination Is not defined, be- The Company's Board Shareholder who holds 07.05.2014 for por- vice UNEG” shall perform major repair VAT (18%) No. 230 of 03.10.2014) of shares of JSC FGC termination of the JSC “MUEGC” cause Agreement of Directors (minutes more than 20% of tals major repair of portals at switchyard UES - JSC “Rosseti”; Agreement No. termination does No. 230 of 03.10.2014) shares of JSC FGC UES 330 kV Monchegorsk SS member of the Com- АО-2-10/539М of not and cannot - JSC “Rosseti”; mem- at JSC FGC UES branch – pany's Management 01.11.2010 entail obligations of bers of the Company's Karelskoye PMES Board V.P. Dikoy, who is monetary nature Board of Directors O.M. a member of the Board Budargin, A.A. Demin, of Directors of a party V.M. Kravchenko, who to the transaction are members of the 204. Contractor’s agree- JSC FGC UES and The Contractor (JSC Work price is RUB The Company's Board Shareholder who Board if Directors of a ment JSC “Electrosetser- “Electrosetservice 1,821,831.50, in- of Directors (minutes holds more than 20% party to the transaction vice UNEG” UNEG”) shall perform cluding VAT (18%) No. 230 of 03.10.2014) of shares of JSC FGC 197. Contractor agree- JSC FGC UES and Emergency recovery Work price is RUB The Company's Board Shareholder who OHL ground wire re- UES - JSC “Rosseti”; ment for emergen- JSC IDGS of the and repair works for 374,369.44, includ- of Directors (minutes holds more than 20% placement member of the Com- cy recovery work Centre accidents recovery at the ing VAT (18 %) No. 230 of 03.10.2014) of shares of JSC FGC pany's Management electric grid facilities of UES - JSC “Rosseti” Board V.P. Dikoy, who is the Customer’s branch a member of the Board (JSC IDGS of the Centre) of Directors of a party to the transaction

100 101 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 205. Agreement No. JSC FGC UES and The Contractor (JSC Services price is The Company's Board Shareholder who 214. Agreement for JSC FGC UES and The Contractor (JSC Works (services) The Company's Board Shareholder who 159/2013 of JSC “MUS Energetiki “MUS Energetiki”) RUB 490,737.23 of Directors (minutes holds more than 20% electric grid JSC “Yantarenergo” “Yyntarenergo”) performs price shall not ex- of Directors (minutes holds more than 20% 01.11.2013 for com- renders communication max., including VAT No. 230 of 03.10.2014) of shares of JSC FGC facilities operation repair works and renders ceed RUB 4,130,979 No. 231 of 16.10.2014) of shares of JSC FGC munication services services according to the (18%) UES - JSC “Rosseti” service and repair services on operational (Four million UES - JSC “Rosseti” as revised by the Agreement conditions maintenance and service one hundred and Supplementary and against orders of power transmission thirty thousand agreement No. 1 of lines possessed by the nine hundred and 01.12.2013 Customer based on the seventy-nine) and right of ownership or on 40 kopeks, includ- 206. Real estate lease JSC FGC UES and JSC Real estate lease Agreement price is The Company's Board Shareholder who any other legal title ing VAT (18%) agreement “Tyumenenergo” RUB 2,119,893.60, of Directors (minutes holds more than 20% including VAT (18%) No. 230 of 03.10.2014) of shares of JSC FGC 215. Agreement for JSC FGC UES and The Contractor (JSC Work price is RUB The Company's Board Shareholder who UES - JSC “Rosseti”, calculation of the JSC ENIN “ENIN”) shall calculate 6,466,400.00, in- of Directors (minutes holds more than 20% and a member of the Company’s staffing the Company’s staffing cluding VAT (18%) No. 231 of 16.10.2014) of shares of JSC FGC Company's Board of levels for 2015 levels for 2015 by activ- UES - JSC “Rosseti” Directors A.A. Demin, by activity types, ity types, considering who is an interested considering com- commissioning of JSC director missioning of JSC FGC UES facilities in FGC UES facilities 2014-2018 207. Supplementary JSC FGC UES and Amendments to the Services price The Company's Board Shareholder who in 2014-2018 agreement No. 1 to JSC “MUS Energetiki Agreement defined in the of Directors (minutes holds more than 20% the Agreement No. Supplementary No. 230 of 03.10.2014) of shares of JSC FGC 216. Agreement for JSC FGC UES and JSC The Contractor (JSC Services price is The Company's Board Shareholder who 76/13 of 29.12.2012 agreement is RUB UES - JSC “Rosseti” equipment place- “Chitaenergo” “Chitaenergo”) shall RUB 79,000.00 per of Directors (minutes holds more than 20% 1,344,437.19, in- ment services render services on plac- month, including No. 231 of 16.10.2014) of shares of JSC FGC cluding VAT (18%) ing in his process rooms VAT (18%) UES - JSC “Rosseti” equipment of the Cus- 208. Supplementary JSC FGC UES, JSC Amendments to the Work price defined The Company's Board Shareholder who tomer’s (JSC FGC UES) agreement No. 1 to “Electrosetservice Agreement, including the in the Supplemen- of Directors (minutes holds more than 20% Unified Digital Network the Agreement No. UNEG”, and JSC agreement price tary agreement is No. 230 of 03.10.2014) of shares of JSC FGC of Power Industry 53/13 of 01.05.2013 “Electrozavod” RUB 35,462,406.66 UES - JSC “Rosseti”; for electrical max., including VAT member of the Com- 217. Supplementary JSC FGC UES and Amendments to the Price is not defined The Company's Board Shareholder who equipment service (18%) pany's Management agreement No. 3 to JSC “Electrosetser- Agreement, including because the of Directors (minutes holds more than 20% maintenance Board V.P. Dikoy, who is the Agreement No. vice UNEG” work schedule Supplementary No. 231 of 16.10.2014) of shares of JSC FGC a member of the Board 05/13 of 05.03.2013 agreement does UES - JSC “Rosseti”; of Directors of a party to for electric grid not change work member of the Com- the transaction facilities repair, price provided in pany's Management maintenance and the Agreement Board V.P. Dikoy, who is 209. Supplementary JSC FGC UES and Amendments to the Price is not defined The Company's Board Shareholder who diagnostic inspec- a member of the Board agreement No. 2 JSC “Electrosetser- Agreement due to the because the of Directors (minutes holds more than 20% tion of Directors of a party of 02.08.2013 to vice UNEG” Customer’s (JSC FGC Supplementary No. 231 of 16.10.2014) of shares of JSC FGC to the transaction the Agreement No. UES) operational pro- agreement does UES - JSC “Rosseti”; 05/13 of 05.03.2013 gram amendment not change work member of the Com- 218. Agreement No. JSC FGC UES and The Contractor (JSC STC Work price is RUB The Company's Board Shareholder who for electric grid price provided in pany's Management 29-3/112 - GSiRPIR JSC STC FGC UES FGC UES) shall perform 8,278,200.00 max., of Directors (minutes holds more than 20% facilities repair, the Agreement Board V.P. Dikoy, who is of 24.10.2013 for complete works on the including VAT (18%) No. 231 of 16.10.2014) of shares of JSC FGC maintenance and di- a member of the Board developing design following: UES - JSC “Rosseti” agnostic inspection of Directors of a party to and procurement - engineering survey; the transaction documentation - design documentation under the title development and approval; 210. Supplementary JSC FGC UES and Amendments to the Services price The Company's Board Shareholder who “Reconstruction of - procurement documen- agreement No. 2 JSC “MUS Energetiki Agreement, including defined in the of Directors (minutes holds more than 20% 110 (220) kV Nadym tation development and to the Agreement reducing services cost Supplementary No. 231 of 16.10.2014) of shares of JSC FGC – Sosnovka OHL. approval; No. 479/267607 with the same physical agreement is RUB UES - JSC “Rosseti” Towers installation - design and estimate of 22.03.2013 for quantity 5,905,908.39, in- onto new founda- documentation expert communication cluding VAT (18%) tion” examination. systems maintenance and repair 219. Agreement dated JSC FGC UES and The Contractor (JSC STC Work price is RUB The Company's Board Shareholder who 24.10.2013 No. 29- JSC STC FGC UES FGC UES) shall perform 9,446,400.00 max., of Directors (minutes holds more than 20% 211. Contractor’s agree- JSC FGC UES and The Contractor (JSC Work price ac- The Company's Board Shareholder who holds 3/110- GSiRPIR for complete works on the including VAT (18%) No. 231 of 16.10.2014) of shares of JSC FGC ment JSC “MUS Energetiki “MUS Energetiki”) shall cording to the of Directors (minutes more than 20% of developing design following: UES - JSC “Rosseti” perform repair works Agreement is RUB No. 231 of 16.10.2014) shares of JSC FGC UES and procurement - engineering survey; 93,240.00, including - JSC “Rosseti” documentation - design documentation VAT (18%) under the title development and approval; 212. Supplementary JSC FGC UES and Amendments to the Services price de- The Company's Board Shareholder who holds “Reconstruction of - procurement documen- agreement No. 4 to JSC IDGS of Volga Agreement, including fined in the Supple- of Directors (minutes more than 20% of 220 kV Kholmogo- tation development and the Agreement No. amendments to monthly mentary agreement No. 231 of 16.10.2014) shares of JSC FGC UES rskaya – Kogalym approval; 80326 of 01.04.2008 price of services is RUB 43,046.49, - JSC “Rosseti” – Kirillovskaya OHL. - design and estimate including VAT (18%) Towers installation documentation expert onto new founda- examination. 213. Agreement for JSC FGC UES and The Contractor (JSC IDGS Services price is The Company's Board Shareholder who tion” power grid equip- JSC IDGS of Centre of Centre) shall perform RUB 85,537.00 per of Directors (minutes holds more than 20% ment operative operative maintenance at month, including No. 231 of 16.10.2014) of shares of JSC FGC maintenance power grid site 110/35/10 VAT (18 %), but no UES - JSC “Rosseti” kV Rudnia SS possessed more than RUB by the Customer (JSC 1,026,444.00, in- FGC UES) cluding VAT (18%), for 12 month

102 103 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 220. Supplementary JSC FGC UES and Amendments to the Work price: for The Company's Board Shareholder who 226. Supplementary JSC FGC UES JSC Amending Non-resi- Rental fee accord- The Company's Board Shareholder who agreement No. 2 to JSC “Electrosetser- Agreement in relation the first calendar of Directors (minutes holds more than 20% agreement No. 1 «MUS Energetiki» dential premise lease ing to the Supple- of Directors (minutes holds more than 20% the Agreement No. vice UNEG” to work cost limit. At year (2013) - RUB No. 231 of 16.10.2014) of shares of JSC FGC to Non-residential agreement as related to mentary agreement No. 233 of 27.10.2014) of shares of JSC FGC 10/13 of 28.12.2012 that this Supplemen- 105,198,465.00 UES - JSC “Rosseti”; premise lease rental fee amount No. 1 to Non- UES - JSC “Rosseti” for emergency tary agreement does not max., including member of the Com- agreement No. 1 of residential premise recovery works change the total work VAT (18%), for the pany's Management 18.10.2010 lease agreement price on the Agreement. second calendar Board V.P. Dikoy, who is No. 1 of 18.10.2010 year (2014) – RUB a member of the Board is RUB 98,553.51 82,600,000.00 max., of Directors of a party for 11 month, in- including VAT (18%) to the transaction cluding VAT (18%) 221. Agreement No. 68/13 JSC FGC UES and The Contractor (JSC Work price is The Company's Board Shareholder who 227. Compensation JSC FGC UES and JSC Compensation from JSC Agreement price is The Company's Board Shareholder who of 24.09.2013 for JSC “Electrosetser- “Electrosetservice 5,388,919.58, in- of Directors (minutes holds more than 20% agreement “Tyumenenergo” FGC UES to the Owner RUB 33,176,200.00 of Directors (minutes holds more than 20% monitoring system vice UNEG” UNEG”) shall perform cluding VAT (18%) No. 231 of 16.10.2014) of shares of JSC FGC (JSC “Tyumenenrgo”) of max., including VAT No. 233 of 27.10.2014) of shares of JSC FGC operability restora- works on gas and hu- UES - JSC “Rosseti”; residual value of a part (18%) UES - JSC “Rosseti” tion for needs of JSC midity content analysers member of the Com- of electric grid facilities FGC UES branch – and coil temperature pany's Management being dismounted Omskoye PMES indicator operability Board V.P. Dikoy, who is restoration a member of the Board 228. Supplementary JSC FGC UES and Amendments to the Services price The Company's Board Shareholder who of Directors of a party agreement No. 1 JSC STC FGC UES Agreement, including according to the of Directors (minutes holds more than 20% to the transaction to the Agreement the ceiling price of the Supplementary No. 233 of 27.10.2014) of shares of JSC FGC dated 27.11.2013 Agreement agreement is RUB UES - JSC “Rosseti” 222. Agreement JSC FGC UES and The Contractor (JSC Work price is RUB The Company's Board Shareholder who No. 290475 for in- 2,640,000 max., in- No. 290511 of JSC STC FGC UES STC FGC UES) performs 3,200,829.00, in- of Directors (minutes holds more than 20% formation systems cluding VAT (18 %) 28.08.2013 for works on digital carto- cluding VAT (18%) No. 231 of 16.10.2014) of shares of JSC FGC maintenance and works on digital graphic layers creation UES - JSC “Rosseti” technical support cartographic layers for JSC FGC UES facilities creation being constructed and 229. Supplementary JSC FGC UES and Amending the Agree- Services price The Company's Board Shareholder who planned for construc- agreement No. 1 JSC STC FGC UES ment, including the according to the of Directors (minutes holds more than 20% tion within area planning to the Agreement ceiling price of the Supplementary No. 233 of 27.10.2014) of shares of JSC FGC schemes of the Russian dated 27.11.2013 Agreement agreement is RUB UES - JSC “Rosseti” Federation in the electric No. 290546 for in- 5,860,000.00 max., power industry formation systems including VAT (18 %) maintenance and 223. Supplementary JSC FGC UES and Amending the Agree- Price defined in The Company's Board Shareholder who technical support agreement No. 12 JSC “Tomsk Trunk ment No. 29/08-AD of the Supplementary of Directors (minutes holds more than 20% to the Agency Grids” 21.11.2008 on imple- agreement includes No. 231 of 16.10.2014) of shares of JSC FGC 230. Additional agree- JSC «ФСК ЕЭС» JSC Amending the Agree- Work price defined The Company's Board Shareholder who agreement No. mentation of JSC “Tomsk cost of both work UES - JSC “Rosseti”; mentNo. 6 to the «Electrosetservice ment, including the price in the Supple- of Directors (minutes holds more than 20% 29/08-AD of Trunk Grids” investment and agency fee for member of the Com- Agreement dated UNEG» of the Agreement mentary agree- No. 233 of 27.10.2014) of shares of JSC FGC 21.11.2008 on JSC program on electric 2013 and is RUB pany's Management 11.03.2013 No. ment is RUB UES - JSC “Rosseti”; “Tomsk Trunk grid facilities construc- 257,765,000.00 max., Board V.P. Dikoy, who is 04/13 for electric 1,265,405,743.95 member of the Com- Grids” investment tion, reconstruction and including VAT (18 %) a member of the Board grid facilities repair, max., including VAT pany's Management program imple- technical upgrade of Directors of a party maintenance and di- (18%) Board V.P. Dikoy, who is mentation to the transaction agnostic inspection a member of the Board of Directors of a party 224. Agency agreement JSC FGC UES and The Principal (JSC FGC Agent’s (JSC The Company's Board Shareholder who to the transaction GSC “Mobile GTPP” UES) assigns, and the (“Mobile GTPP”) of Directors (minutes holds more than 20% Agent (JSC “Mobile GTPP”) fee according to No. 231 of 16.10.2014) of shares of JSC FGC 231. Agreement for JSC FGC UES and The Contractor (JSC STC Work price ac- The Company's Board Shareholder who takes the obligation to Agent’s agreement UES - JSC “Rosseti”; regulatory and JSC STC FGC UES FGC UES) shall develop cording to the of Directors (minutes holds more than 20% perform legal and other is 5% of the amount member of the Com- technical documen- a standard of JSC FGC Agreement is RUB No. 233 of 27.10.2014) of shares of JSC FGC actions from behalf of of expenses born pany's Management tation development UES “Electric grid 2,179,277.10, in- UES - JSC “Rosseti” the Principal and for his by the Agent for Board V.P. Dikoy, who facilities environmental cluding VAT (18%) account, namely – to make the purpose of the is a member of the safety. Requirements to contracts on Principal’s Agreement execu- Board of Directors of maintenance and repair” behalf on gratuitous tion a party to the trans- 232. Supplementary JSC FGC UES JSC Amendments to the list Rental fee amount The Company's Board Shareholder who transfer of property owned action agreement No. 2 to “Electrosetservice of rented assets and defined in the of Directors (minutes holds more than 20% by the Principal Lease agreement UNEG” rental fee Supplementary No. 233 of 27.10.2014) of shares of JSC FGC 225. Agreement on JSC “Rosseti”; Synchronisation of Price is not defined The Company's Board Shareholder who No. 22-07/12 of agreement is RUB UES - JSC “Rosseti”; coordination and JSC FGC UES; work on developing and because the Agree- of Directors (minutes holds more than 20% 19.04.2012 870,533.29 per member of the Com- development JSC IGDS of Centre; revising technical and ment does not No. 231 of 16.10.2014) of shares of JSC FGC month, including pany's Management of a regulatory JSC IGDS of North- regulatory documents entail obligations of UES - JSC “Rosseti”; VAT (18 %) Board V.P. Dikoy, who is and engineering West; in technical regulation monetary nature members of the Com- a member of the Board provision system JSC IGDS of Centre and standardisation field pany’s Board of Direc- of Directors of a party in power grid and Privolzie; (hereinafter – TRD), as tors O.M. Budargin, to the transaction complex between JSC IGDS of Volga; well as enhancement of A.E. Murov, 233. Supplementary JSC «FGC UES JSC Amendments to the list Rental fee amount The Company's Board Shareholder who JSC “Rosseti” and JSC IGDS of Urals; TRD exhaustive expert A.A. Demin, A.M. agreement No. 3 to “Electrosetservice of rented assets and defined in the of Directors (minutes holds more than 20% its subsidiaries and JSC IGDS of Siberia; examination practice Kravchenko, S.N. Lease agreement UNEG” rental fee Supplementary No. 233 of 27.10.2014) of shares of JSC FGC associates JSC IGDS of South; Mironosetsky, and No. 22-07/16 of agreement is RUB UES - JSC “Rosseti”; JSC “Kubanenergo; S.I. Shmatko,who 03.07.2012 16,245.56 per month, member of the Com- JSC IGDS of North are members of the including VAT (18%) pany's Management Caucasus; Board of Directors of Board V.P. Dikoy, who is JSC “Tyumenenrgo”; a party to the trans- a member of the Board JSC “Lenenergo; action ; of Directors of a party JSC “MUEGC”; to the transaction JSC “Yantarenergo; JSC TRK.

104 105 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 234. Real estate lease JSC FGC UES JSC The Lesser (JSC FGC Rental fee amount The Company's Board Shareholder who 240. Supplementary JSC FGC UES JSC Amendments to the Works price The Company's Board Shareholder who agreement “Electrosetservice UES) lends to the Lessee defined in the of Directors (minutes holds more than 20% agreement dated “Electrosetservice Agreement, including defined in the of Directors (minutes holds more than 20% UNEG” (JSC “Electrosetservice Supplementary No. 233 of 27.10.2014) of shares of JSC FGC 02.09.2013 No. 2 UNEG” price Supplementary No. 234 of 29.10.2014) of shares of JSC FGC UNEG”) real estate for agreement is RUB UES - JSC “Rosseti”; to the Agreement agreement is RUB UES - JSC “Rosseti”; temporary possession 99,239.63 per member of the Com- dated 18.02.2013 2,802,414,090.72 member of the Com- and use for a fee and month, including pany's Management No. 06/13 for max., including VAT pany's Management against transfer and ac- VAT (18 %) Board V.P. Dikoy, who is equipment repair (18 %) Board V.P. Dikoy, who ceptance statement a member of the Board and diagnostics, as is a member of the of Directors of a party well as works on Board of Directors of to the transaction purpose-oriented a party to the trans- programs on SSs action 235. Property lease JSC FGC UES JSC The Lesser (JSC FGC Amount of the fixed The Company's Board Shareholder who and OHLs of MES agreement ESSK UES UES) lends to the Lessee part of rental fee is of Directors (minutes holds more than 20% Western Siberia (JSC ESSK UES) real RUB 1,227,157.70 No. 233 of 27.10.2014) of shares of JSC FGC estate for temporary pos- per month, includ- UES - JSC “Rosseti” 241. Agreement for JSC FGC and JSC The Contractor (JSC Service price The Company's Board Shareholder who session and use for a fee ing VAT (18%); comprehensive “MUS Energetiki” «MUS Energetiki») according to the of Directors (minutes holds more than 20% and against transfer and amount of the vari- services on video renders comprehen- Agreement is RUB No. 234 of 29.10.2014) of shares of JSC FGC acceptancer statement able part of rental surveillance, wire- sive service on video 1,979,485.20, in- UES - JSC “Rosseti” fee is equal to JSC less LAN, videocon- surveillance, wireless cluding VAT (18%) FGC UES expenses ferencing, SCS, and LAN, videoconferencing, for services pay- PBX services SCS, and PBX services ment according to in apartments No. 105 the Lease agree- - 119 using his own ment equipment 236. Agency agreement JSC FGC UES and The Principal (JSC IGDS The Agency agree- The Company's Board Shareholder who 242. Supplementary JSC FGC UESmJSC Amending the agree- Work price is The Company's Board Shareholder who JSC IGDS of North of North Caucasus) ment price is equal of Directors (minutes holds more than 20% agreement No. 1 to DESP ment No. 3967 of not defined with of Directors (minutes holds more than Caucasus assigns, and the Agent to the cost of works No. 233 of 27.10.2014) of shares of JSC FGC the Agreement No. 04.07.2013 for devel- consideration of the No. 234 of 29.10.2014) 20% of shares of (JSC FGC UES) organ- assigned ti JSC FGC UES - JSC “Rosseti” 3967 of 04.07.2013 oping main designing Additional agree- JSC FGC UES - JSC ises, subject to terms UES by JSC IGDS of for developing main solutions, design and ment, because “Rosseti”;m member and conditions set forth North Caucasus, in designing solu- work documentation, the price remains of the Company's in the Agreement, on his the amount of RUB tions, design and and technical part of unchanged Management Board own behalf, but for Prin- 49,520,163.20 коп., work documenta- tender documentation V.P. Dikoy, who is a cipals account, recon- including VAT (18%), tion, and techni- under the title: “500 kV member of the Board struction of line facilities and includes agency cal part of tender Ust-Kut – Nizhneangar- of Directors of a party owned by the Principal fee in the amount documentation skaya OHL with 500 kV to the transaction of RUB 118,000, Nizhneangarskaya SS including VAT (18 %) with approaches of 220 kV OHL” 237. Property lease JSC FGC UES JSC The Lesser (JSC FGC Amount of the fixed The Company's Board Shareholder who agreement No. B-2 “Mobile GTPP” UES) lends to the Lessee part of rental fee is of Directors (minutes holds more than 20% 243. Supplementary JSC FGC UES and Amending the Agree- Work price defined The Company's Board Shareholder who (JSC “Mobile GTPP) real RUB 3,538,933.66 No. 234 of 29.10.2014) of shares of JSC FGC agreement dated JSC “Electrosetser- ment dated 18.02.2013 by the Supple- of Directors (minutes holds more than 20% estate for temporary per month, includ- UES - JSC “Rosseti”; 28.03.2014 No. 4 vice UNEG” No. 06/13 for equipment mentary agree- No. 234 of 29.10.2014) of shares of JSC FGC possession and use for a ing VAT (18%); member of the Com- to the Agreement repair and diagnostics, ment is RUB UES - JSC “Rosseti”; fee against transfer and amount of the vari- pany's Management dated 18.02.2013 as well as works on pur- 2,170,348,490.95 member of the Com- acceptance statement able part of rental Board V.P. Dikoy, who No. 06/13 for pose-oriented programs max., including VAT pany's Management fee is equal to JSC is a member of the equipment repair on SSs and OHLs of MES (18%) Board V.P. Dikoy, who FGC UES expenses Board of Directors of and diagnostics, as Western Siberia is a member of the for services pay- a party to the trans- well as works on Board of Directors of ment according to action purpose-oriented a party to the trans- the Lease agree- programs on SSs action ment and OHLs of MES Western Siberia 238. Agreement on JSC FGC UES JSC The Contractor (JSC Services price is The Company's Board Shareholder who communication “MUS Energetiki” “MUS Energetiki”) RUB 1,943,101.08, of Directors (minutes holds more than 20% 244. Agreement for JSC FGC UES JSC The Contractor (JSC STC Work price ac- The Company's Board Shareholder who channels assign- renders to the Customer including VAT (18 No. 234 of 29.10.2014) of shares of JSC FGC developing design STC FGC UES FGC UES) shall perform a cording to the of Directors (minutes holds more than 20% ment services (JSC FGC UES) services %) UES - JSC “Rosseti” documents, as well set of works on the follow- Agreement is RUB No. 234 of 29.10.2014) of shares of JSC FGC on digital communication as technical part of ing: - engineering survey; 2,925,600 max., UES - JSC “Rosseti” channels assignment tender documenta- - design documentation including VAT (18%) according to technical tion under the title: development and obtain- specification “Reconstruction of ing positive expert opinion; 220 kV Petrovsk- - development of tender 239. Supplementary JSC FGC UES JSC Amendments to the Services price de- The Company's Board Shareholder who Zabaikalsky SS. documentation techni- agreement No. 5 to IGDS of Volga Agreement in relation to fined in the Supple- of Directors (minutes holds more than 20% Installation of CSR cal part the Agreement No. the equipment list, and mentary agreement No. 234 of 29.10.2014) of shares of JSC FGC 35 kV 80327 of 01.04.2008 price is RUB 32,284.87 UES - JSC “Rosseti” on SCS equipment per month, includ- 245. Agreement for JSC FGC UES JSC The Contractor (JSC STC Work price ac- The Company's Board Shareholder who placement ing VAT (18%) developing design STC FGC UES FGC UES) shall perform cording to the of Directors (minutes holds more than 20% documents, as well complete works on the Agreement is RUB No. 234 of 29.10.2014) of shares of JSC FGC as technical part of following: 2,982,800 max., UES - JSC “Rosseti” tender documenta- - engineering survey; including VAT (18%) tion under the title: - design documentation “Reconstruction of development and obtain- 220 kV Zhireken SS. ing positive expert opinion; Installation of CSR - development of tender documentation technical part

106 107 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 246. Supplementary JSC FGC UES, JSC Electrical equipment Work (services) The Company's Board Shareholder who 252. Agreement dated JSC FGC UES JSC Implementation of a set of Price of work shall The Company's Board Shareholder who agreement No. 1 “Electrosetservice service maintenance price is RUB of Directors (minutes holds more than 20% 17.10.2013 No. “Electrosetservice works (design and survey, not exceed RUB of Directors (minutes holds more than 20% to the tripartite UNEG”, and JSC 22,215,080 max., No. 235 of 10.11.2014) of shares of JSC FGC 232 for work UNEG” work documents, con- 526,300,000, in- No. 235 of 10.11.2014) of shares of JSC FGC Agreement No. “Electrozavod” including VAT (18 UES - JSC “Rosseti”; (design and survey, struction, installation, and cluding VAT (18%) UES - JSC “Rosseti”; 52/13 of 15.05.2013 %) member of the Com- work documents, commissioning, equip- member of the Com- for electrical pany's Management construction, ment) under the title: pany's Management equipment service Board V.P. Dikoy, who installation, and “Organisation of glass ice Board V.P. Dikoy, who is maintenance is a member of the commissioning, melting at Sochi Region of a member of the Board Board of Directors of equipment). JSC FGC UES facilities for of Directors of a party to a party to the trans- needs of JSC FGC UES the transaction action branch – MES South 247. Supplementary JSC FGC UES, JSC Services on provision of Work (services) The Company's Board Shareholder who 253. Agreement dated JSC FGC UES JSC Design and survey, work Work price is RUB The Company's Board Shareholder who agreement No. 1 «MUS Energetiki» communication channels price is RUB of Directors (minutes holds more than 20% 07.11.2013 No. 381 “Electrosetservice documents development, 29,351,873.66 max., of Directors (minutes holds more than 20% of 18.02.2014 to 266,834.93, includ- No. 235 of 10.11.2014) of shares of JSC FGC UNEG” construction, installation, including VAT (18%) No. 235 of 10.11.2014) of shares of JSC FGC the Agreement ing VAT (18 %) UES - JSC “Rosseti” and commissioning, and UES - JSC “Rosseti”; a No. 1/2014 of equipment supply for 220 member of the Com- 10.01.2014 for pro- kV: Prizeyskaya – Tungala pany's Management viding communica- OHL (105,106), Fevralskaya BoardV.P. Dikoy, who is tion services – Eterkan (25-26, 262-263), a member of the Board Arkhara – Obluchie (153- of Directors of a party to 248. Lease agreement JSC FGC UES, JSC Real estate lease Rental fee amount The Company's Board Shareholder who 154, 205-206), additional the transaction made for a new IGDS of Siberia is RUB 39,253.92, of Directors (minutes holds more than 20% supports installation period on terms including VAT (18%) No. 235 of 10.11.2014) of shares of JSC FGC and conditions UES - JSC “Rosseti” 254. Real estate sale JSC IGDS of Centre Real estate sale and Real estate price The Company's Board Shareholder who defined by the Lease and purchase JSC FGC UES purchase is RUB 259,600.00 of Directors (minutes holds more than 20% agreement between agreement including VAT (18%) No. 235 of 10.11.2014) of shares of JSC FGC JSC FGC UES and UES - JSC “Rosseti” JSC IGDS of Siberia dated 11.03.2009 255. Contractor agree- JSC FGC UES JSC Material resources supply, Work price ac- The Company's Board Shareholder who No. 04.03.420.09 ment No. 86-13/GP “Electrosetservice performing construction, cording to the of Directors (minutes holds more than 20% as revised in the of 22.10.2013 UNEG” installation, and com- Agreement is RUB No. 235 of 10.11.2014) of shares of JSC FGC Supplementary missioning works under 13,692,140.00 max., UES - JSC “Rosseti”; agreement dated the title: “PSP equipment including VAT (18%) member of the Com- 30.09.2011 No. reconstruction at OV-220, pany's Management 04.03.420.09ds1. 110 SS 220 kV Polots- Board V.P. Dikoy, who is kaya, Mirazh, Urievskaya, a member of the Board 249. Agreement dated JSC FGC UES JSC Development of design Work price is RUB The Company's Board Shareholder who Krasnoleninskaya” for the of Directors of a party to 24.09.2013 No. STC FGC UES and working documen- 2,022,071.26 max., of Directors (minutes holds more than 20% needs of JSC FGC UES the transaction 3376 tation under the title: including VAT (18%) No. 235 of 10.11.2014) of shares of JSC FGC branch – MES Western “Security system at 220 UES - JSC “Rosseti” Siberia kV Variegan SS” 256. Agency agreement JSC FGC UES JSC Legal and other actions Agency agree- The Company's Board Shareholder who 250. Supplementary JSC «ФСК ЕЭС»JSC Extension of Agreement Rental fee is RUB The Company's Board Shareholder who holds IGDS of Siberia related to work on rear- ment price: Cost of Directors (minutes holds more than 20% agreement No. 5 to «MUEGC» of dispatch and process 22,517.00 per of Directors (minutes more than 20% of rangement (transfer) of of all works and No. 235 of 10.11.2014) of shares of JSC FGC the Agreement of control aids for JSC FGC month, including No. 235 of 10.11.2014) shares of JSC FGC UES facilities, that became services performed UES - JSC “Rosseti” dispatch and process UES branch – Mosko- VAT (18%), and - JSC “Rosseti”; mem- necessary upon clearing by Contractors and control aids for JSC vskoye PMES, No. 58- annual amount is bers of the Company’s the area for construction Suppliers accord- FGC UES branch – 10/436m of 31.01.2010 RUB 270,204.00, Board of Directors O.M. and creating conditions ing to agreements Moskovskoye PMES, till 31.12.2014 including VAT (18%) Budargin, A.A. Demin, for the commissioning of with JSC FGC UES, No. 58-10/436m of and A.M. Kravchenko, JSC FGC UES facilities shall not exceed 31.01.2010 who are members of according to design and RUB 58,808,499.89, the Board of Direc- working documents including VAT tors of a party to the under the title: “500 kV (18%) Agency fee is transaction No. 2 SS Aluminievaya 2.14% of the total OHL – Abakanskaya cost of works and 251. Movable assets JSC FGC UES JSC Purchase and sale of Assets price is The Company's Board Shareholder who SS – Itatskaya SS, with services performed purchase and sale “MUEGC” movable assets RUB 6,661,100.00, of Directors (minutes holds more than 20% reconstruction of 500 by Contractors and agreement including VAT (18%) No. 235 of 10.11.2014) of shares of JSC FGC kV Abakanskaya SS and Suppliers accord- UES - JSC “Rosseti”; 1150 kV Itatskaya SS” ing to agreements members of the Com- with JSC FGC UES, pany’s Board of Direc- but shall not exceed tors D O.M. Budargin, RUB 1,258,501.90, A.A. Demin, and A.M. including VAT (18%) Kravchenko, who are members of the Board of Directors of a party to the transaction

108 109 JSC FGC UES Annual Report Appendices

110 111 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 264. Real estate lease JSC FGC UES JSC Real estate lease Total amount of The Company's Board Shareholder who 271. Supplementary JSC FGC UES JSC Amendments to the Services price The Company's Board Shareholder who agreement IGDS of Centre and rental fee for 11 of Directors (minutes holds more than 20% agreement No. 8 to “MUS Energetiki” Agreement No. 96/09 of is not defined of Directors (minutes holds more than 20% Privolzhie month is RUB No. 236 of 14.11.2014) of shares of JSC FGC the Agreement No. 01.03.2009 on communi- because the No. 238 of 17.11.2014) of shares of JSC FGC 240,503.23, includ- UES - JSC “Rosseti” 96/09 of 01.03.2009 cation services provision Supplementary UES - JSC “Rosseti” ing VAT, excluding on communication as related to updating of agreement No. 8 to variable part, but services provision phone numbers provided the Agreement No. no more than RUB for use, as well as ser- 96/09 of 01.03.2009 306,503.23, includ- vice parameters on communication ing VAT (18%) and services provision variable part between JSC FGC UES and JSC “MUS 265. Supplementary JSC FGC UES Amendments to the Real Monthly rental fee The Company’s Board Shareholder who Energetiki’ does agreement No. 2 to estate lease agree- is RUB 195,481.63, of Directors (minutes holds more than 20% not change the the Lease agreement No. 22-07/13 of excluding VAT (18%) No. 236 of 14.11.2014) of shares of JSC FGC price set forth by ment No. 22-07/13 19.04.2012 between JSC UES - JSC “Rosseti”; the Agreement No. of 19.04.2012 FGC UES and JSC “Elec- member of the Com- 96/09 of 01.03.2009. trosetservice UNEG” pany’s Management Board V.P. Dikoy, who is 272. Supplementary JSC FGC UES JSC Amendments to the Services price is The Company's Board Shareholder who a member of the Board agreement No. 4 IGDS of Volga Agreement dated RUB 28,948.76 per of Directors (minutes holds more than 20% of Directors of a party to to the Agreement 01.04.2008 No. 106/08 as month, including No. 238 of 17.11.2014) of shares of JSC FGC the transaction dated 01.04.2008 related to services price VAT (18%) UES - JSC “Rosseti” No. 106/08 266. Real estate lease JSC FGC UES JSC The Lessee accepts real Rental fee amount The Company's Board Shareholder who agreement No. IGDS of Urals estate of total area of according to the of Directors (minutes holds more than 20% 273. Supplementary JSC FGC UES JSC Amendments to the Rental price The Company's Board Shareholder who 9/2014/SE/9/ 203.48 sq.m for tempo- Agreement is RUB No. 236 of 14.11.2014) of shares of JSC FGC agreement No. 1 CIUS UES premises lease agree- amount is RUB of Directors (minutes holds more than ООEZeСS2014 rary possession and use 73.20 per month, UES - JSC “Rosseti” of 31.03.2014 to ment No. 1986/С of 731,340.54 per No. 238 of 17.11.2014) 20% of shares of including VAT (18%) the premises 23.05.2012 as related to month, including JSC FGC UES - JSC lease agreement leased property (non- VAT (18%) “Rosseti”; member 267. Land sub-lease JSC FGC UES JSC The Lessee shall lend Rental fee amount The Company's Board Shareholder who holds No. 1986/С of residential premises) of the Company's agreement “MUEGC” to Sub-lessee a part according to the of Directors (minutes more than 20% of 23.05.2012 structure alteration and Management Board of a land plot with Agreement is RUB No. 238 of 17.11.2014) shares of JSC FGC UES amount of rental price N.I. Pozdnyakov who cadastral number 5,450.30 per quar- - JSC “Rosseti”; mem- is a member of the 50:20:0071002:108 and ter, including VAT bers of Company’s Board of Directors area of 386 sq.m for (18%) Board of Directors O.M. and a General Direc- temporary possession Budargin, A.A. Demin, tor of a party to the and use against transfer and A.M. Kravchenko, transaction ; member and acceptancer state- who are members of of the Company’s ment. the Board of Direc- Management Board tors of a party to the D.L. Shishkin who is a transaction member of the Board 268. Work contract for JSC FG UES JSC Performing status as- Work price ac- The Company's Board Shareholder who of Dircetors of a party status assessment “Electrosetservice sessment of OHL towers cording to the of Directors (minutes holds more than 20% to the transaction . of OHL towers UNEG” bodies and footings at contract is RUB No. 238 of 17.11.2014) of shares of JSC FGC 274. Agreement for JSC FGC UES JSC Rendering services Services price The Company's Board Shareholder who bodies and footings JSC FGC UES branch – 18,246,769.52, in- UES - JSC “Rosseti”; maintenance of IGDS of Centre and on SCS equipment according to the of Directors (minutes holds more than 20% at JSC FGC UES MES East cluding VAT (18%) member of the Com- SCS equipment Privolzhie maintenance at Tulsky Agreement is RUB No. 238 of 17.11.2014) of shares of JSC FGC branch – MES East pany's Management of SCS at Tulsky RMES area of JSC FGC 1,055,571.36, in- UES - JSC “Rosseti” Board V.P. Dikoy, who is RMES area of JSC UES branch – Priokskoye cluding VAT (18 %) a member of the Board FGC UES branch – PMES of Directors of a party to Priokskoye PMES the transaction 275. Agreement for JSC FGC UES JSC Maintenance of SCS Work price is RUB The Company's Board Shareholder who 269. Work contract JSC FGC UES JSC Execution of the follow- Work price ac- The Company's Board Member of the maintenance of IGDS of Centre and equipment 23,364.00 per of Directors (minutes holds more than 20% OGK-2 ing works: operating cording to the of Directors (minutes Company's Board of SCS equipment Privolzhie month, including No. 238 of 17.11.2014) of shares of JSC FGC maintenance of the cell Agreement is RUB No. 238 of 17.11.2014) Dircetors D.V. Fyo- VAT (18%). Total UES - JSC “Rosseti” No. 6 (330 kV Pskovskaya 295,592.32, includ- dorov who is a mem- work cost according GRES-Starorusskaya ing VAT (18%) ber of the Board of to the Agreement OHL), installed in SWYD Directors to the Party is RUB 280,368.00, 330 kV of JSC OGK-2 of the transaction including VAT (18%) branch – Pskovskaya GRES, and cell No. 14 276. Agreement for JSC FGC UES JSC Maintenance of SCS Work price ac- The Company's Board Shareholder who (R-110), installed in maintenance of IGDS of Centre and equipment cording to the of Directors (minutes holds more than 20% SWYD-110 kV of JSC SCS equipment Privolzhie Agreement is RUB No. 238 of 17.11.2014) of shares of JSC FGC OGK-2 branch – Pskovs- 23,267.24 per UES - JSC “Rosseti” kaya GRES month, including VAT (18%). Total 270. Supplementary JSC FGC UES JSC Amendments to the Price shall not The Company's Board Shareholder who work cost according agreement No. 7 of “MUS Energetiki” agreement price follow- exceed RUB of Directors (minutes holds more than 20% to the Agreement 18.02.2014 to the ing the decision of the 1,655,129.52, in- No. 238 of 17.11.2014) of shares of JSC FGC is RUB 279,206.88, Agreement No.№ Committee on operation cluding VAT (18%), UES - JSC “Rosseti” including VAT (18%) 96/09 of 01.03.2009 efficiency improvement for the period on communication of JSC FGC UES that from 01.01.2014 to services provision determines cost reduction 31.12.2014. targets in communications and IT area for 2014.

112 113 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 277. Agreement for JSC FGC UES JSC Performing works (work Work price is RUB The Company's Board Shareholder who 283. Supplementary JSC FGC UES JSC Amendments to rental Rental fee amount The Company's Board Shareholder who performing a set of “MUS Energetiki” documents, construc- 80,300,000.00 max., of Directors (minutes holds more than 20% agreement No. 2 to “Electrosetservice price set forth in the is RUB 204,668.01 of Directors (minutes holds more than 20% works (work docu- tion, maintenance and including VAT (18%) No. 238 of 17.11.2014) of shares of JSC FGC the Lease agree- UNEG” Lease agreement No. per month, includ- No. 240 of 15.12.2014) of shares of JSC FGC ments, construction, commissioning, and UES - JSC “Rosseti” ment No. 22-07/14 22-07/14 of 24.04.2012 ing VAT (18%) UES - JSC “Rosseti”; maintenance and equipment supply) to of 24.04.2012 member of the Com- commissioning, and enhance communication pany's Management equipment supply) systems at substations Board V.P. Dikoy, who to enhance commu- 330 and 220 kV within a is a member of the nication systems at title: “Comprehensive Board of Directors of substations 330 and reconstruction and a party to the trans- 220 kV within a title: technical upgrade of SS action “Comprehensive 220 kV “Zavod Ilyicha” at reconstruction and St/-Petersburg” 284. Supplementary JSC FGC UES JSC Amendments to the Work price is not The Company's Board Shareholder who technical upgrade agreement No. 13 CIUS UES Agreement dated defined because of Directors (minutes holds more than of SS 220 kV “Zavod to the Agreement 01.04.2008 No. Ts/01 the Supplementary No. 240 of 15.12.2014) 20% of shares of Ilyicha” at St/- dated 01.04.2008 agreement No. 14 JSC FGC UES - JSC Petersburg” No. Ts/01 for to the Agreement “Rosseti”; member Owner-developer dated 01.04.2008 of the Company's 278. Agreement for JSC FGC UES JSC Performing repair Work price is RUB The Company's Board Shareholder who functions imple- No. Ts/01 for Management Board electric grid “Yantarenergo” works and rendering 24,571.64 max., of Directors (minutes holds more than 20% mentation Owner-developer N.I. Pozdnyakov who facilities repair and services on current and including VAT (18%) No. 240 of 15.12.2014) of shares of JSC FGC functions imple- is a member of the operative mainte- operative maintenance UES - JSC “Rosseti” mentation between Board of Directors nance of power transmission JSC FGC UES and and a General Direc- lines, including related: JSC CIUS UES, that tor of a party to the equipment, structures, is an interested transaction ; member land plots and other party transaction, of the Company’s property ensuring does not set forth Management Board stability of established additional works D.L. Shishkin who is a power transmission line on the Agreement member of the Board parameters dated 01.04.2008 of Dircetors of a party No. Ts/01 to the transaction . 279. Work contract JSC FGC UES JSC Performing works under Work price ac- The Company's Board Shareholder who under the title:: “Electrosetservice the title:: “Emergency cording to the of Directors (minutes holds more than 20% 285. Agreement for JSC FGC UES JSC Developing a standard of Work price ac- The Company's Board Shareholder who “Emergency recov- UNEG” recovery work at SS 220 Contract is RUB No. 240 of 15.12.2014) of shares of JSC FGC technical regula- STC FGC UES JSC FGC UES “Electric cording to the of Directors (minutes holds more than 20% ery work at SS 220 kV Alexandrov for T-3 26,068,021.84 max., UES - JSC “Rosseti”; tory documentation grid facilities environ- Agreement is RUB No. 240 of 15.12.2014) of shares of JSC FGC kV Alexandrov for transformer replace- including VAT (18 %) member of the Com- development mental safety. Require- 2,771,554.50, in- UES - JSC “Rosseti” T-3 transformer ment” pany's Management ments for design, concluding VAT (18%) replacement” Board V.P. Dikoy, who is struction, reconstruction a member of the Board and removal” of Directors of a party to the transaction 286. Agreement JSC FGC UES JSC Developing design, work Work price is RUB The Company's Board Shareholder who No. 132207 of STC FGC UES and procurement docu- 80,200,000.00 max., of Directors (minutes holds more than 20% 280. Work contract JSC FGC UES JSC Performing works under Work price ac- The Company's Board Shareholder who 23.07.2013 mentation: “Construc- including VAT (18%) No. 240 of 15.12.2014) of shares of JSC FGC under the project: “Electrosetservice the project: “Emergency cording to the of Directors (minutes holds more than 20% tion of high-temperature UES - JSC “Rosseti” “Emergency re- UNEG” recovery work at SS 220 Contract is RUB No. 240 of 15.12.2014) of shares of JSC FGC superconducting (HTSC) covery work at SS kV Chyorny Yar. AT-1 23,580,518.20 max., UES - JSC “Rosseti”; 20 kV DC cable line Cen- 220 kV Chyorny Yar. transformer replace- including VAT (18%) member of the Com- tralnaya – RP-9” AT-1 transformer ment” pany's Management replacement” Board V.P. Dikoy, who is 287. Agreement for JSC FGC UES JSC OHL rights-of-way Work price is RUB The Company's Board Shareholder who a member of the Board OHL rights-of-way “Sibirelectrosetser- clearing from trees and 2,272,145.15 max., of Directors (minutes holds more than 20% of Directors of a party clearing from trees vice” shrubs including VAT (18 %) No. 240 of 15.12.2014) of shares of JSC FGC to the transaction and shrubs UES - JSC “Rosseti” 281. Contractor’s agree- JSC FGC UES JSC Performing construction, Work price ac- The Company's Board Shareholder who 288. Agreement for JSC FGC UES JSC OHL rights-of-way Work price is RUB The Company's Board Shareholder who ment for construc- “Electrosetservice installation and commis- cording to the of Directors (minutes holds more than 20% OHL rights-of-way “Sibirelectrosetser- clearing from trees and 4,339,394.21 max., of Directors (minutes holds more than 20% tion, installation and UNEG” sioning, and materials Agreement is RUB No. 240 of 15.12.2014) of shares of JSC FGC clearing from trees vice” shrubs including VAT (18 %) No. 240 of 15.12.2014) of shares of JSC FGC commissioning, and supply (except HV inputs 18,477,600.00 max., UES - JSC “Rosseti”; and shrubs UES - JSC “Rosseti” materials supply supply) according to the including VAT (18%) member of the Com- 289. Agreement for JSC FGC UES JSC The Contractor (JSC STC Work price is RUB The Company's Board Shareholder who (except HV inputs Program of increasing pany's Management developing design STC FGC UES FGC UES) shall perform a 471,168.00 max., of Directors (minutes holds more than 20% supply) according reliability of main equip- Board V.P. Dikoy, who and procurement set of works, including: including VAT (18%) No. 241 of 19.12.2014) of shares of JSC FGC to the Program of ment at JSC FGC UES is a member of the documentation - design documentation UES - JSC “Rosseti” increasing reliability SSs and OHLs (HV inputs Board of Directors of under the title: development and approval of main equipment replacement) a party to the trans- “Reconstruction with the Customer (JSC at JSC FGC UES SSs action of 500 kV Pyt-Yakh FGC UES); and OHLs (HV inputs SS (for SS of power - procurement docu- replacement) plants of JSC “Ty- mentation development 282. Supplemen- JSC FGC UES JSC Amendments to rental Rental price The Company's Board Shareholder who umenenrgo”) and approval with the tary agreement “MUS Energetiki” price set forth in the amount is RUB of Directors (minutes holds more than 20% Customer No. 3 to the Lease Lease agreement dated 21,394.78 per No. 240 of 15.12.2014) of shares of JSC FGC agreement dated 23.11.2010 No. 22-07/07 month., including UES - JSC “Rosseti” 23.11.2010 No. 22- VAT (18%) 07/07

114 115 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 290. Contractor’s agree- JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who 297. Paid services JSC FGC UES JSC The Contractor (JSC Services price is The Company's Board Shareholder who ment for construc- “Electrosetservice “Electrosetservice 2,990,528.00 max., of Directors (minutes holds more than 20% agreement IGDS of Siberia FGC UES ) shall render RUB 41,666.66, of Directors (minutes holds more than 20% tion and installa- UNEG” UNEG”) shall perform a including VAT (18%) No. 241 of 19.12.2014) of shares of JSC FGC the following services: including VAT (18%) No. 241 of 19.12.2014) of shares of JSC FGC tion works on HV set of works under the UES - JSC “Rosseti”; installation and provi- UES - JSC “Rosseti”; inputs replacement title: “construction and in- member of the Com- sion of operation of the member of Company’s (except inputs pro- stallation works on HV in- pany's Management Customer’s (JSC IGDS of Board of Directors curement) SS 330 puts replacement (except Board V.P. Dikoy, who Siberia) telecommunica- S.N. Mironosetsky, kV Olenegorsk, 330 inputs procurement) SS is a member of the tion equipment in the who is a member of kV Titan SS 330 kV Olenegorsk, 330 Board of Directors of a following premises the Board of Direc- kV Titan SS” for the needs party to the transac- - line equipment room tors of a party to the of JSC FGC UES branch – tion (LER) of 220 kV Shush- transaction Karelskye PMES” enskaya-opornaya SS (Krasnoyarsky territory, 291. Agreement for de- JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who Shushenskoye village); veloping work docu- “Electrosetservice “Electrosetservice 20,529,353 and 15 of Directors (minutes holds more than 20% - LER 220 kV Minusin- ments, performing UNEG” UNEG”) shall perform a kop, including VAT No. 241 of 19.12.2014) of shares of JSC FGC skaya-opornaya SS construction, instal- set of works, including: (18%) UES - JSC “Rosseti”; (Krasnoyarsky territory, lation, and com- - developing work docu- member of the Com- Minousinsk city) missioning work on mentation containing pany’s Management power transformers approvals package; Board V.P. Dikoy, who is 298. Agreement No. JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who technical upgrade - reconstruction; a member of the Board 110/2013-519 of “MUS Energetiki” “MUS Energetiki”) shall 2,110,694.00, in- of Directors (minutes holds more than 20% at 220 kV SS of MES - ensuring facility provi- of Directors of a party 26.06.2013 for perform maintenance cluding VAT (18%) No. 241 of 19.12.2014) of shares of JSC FGC East sion with materials, to the transaction TETRA equipment of TETRA equipment UES - JSC “Rosseti” equipment, and spare maintenance (Nizhegorodskaya Oblat) parts for equipment according to the techni- according to design and cal assignment work documentation 299. Agreements for JSC FGC UES JSC “Electrosetservice Total price of the The Company's Board Shareholder who 292. Agreement JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who holds emergency recov- “Electrosetservice UNEG”) shall perform Agreements is of Directors (minutes holds more than 20% No. 4/98040 of “Electrosetservice “Electrosetservice 1,888,020.00, in- of Directors (minutes more than 20% of shares ery works that are UNEG” emergency recovery RUB 7,443,730.00, No. 242 of 19.12.2014) of shares of JSC FGC 02.10.2013 for elec- UNEG” UNEG”) shall replace cluding VAT (18%) No. 241 of 19.12.2014) of JSC FGC UES - JSC related transac- works under the follow- including VAT (18%) UES - JSC “Rosseti”; tric grid facilities 332 vibration dampers “Rosseti”; member of tions ing titles: member of the Com- repair on grounding wire at 500 the Company's Manage- “500 kV Buddyonovsk SS pany's Management kV OHL Cheboksarskaya ment Board V.P. Dikoy, (ERW on replacing OVL Board V.P. Dikoy, who is HPP – Nizhegorodskaya who is a member of the AT–502)”, “500 kV Bud- a member of the Board according to the techni- Board of Directors of a dyonovsk SS (ERW on re- of Directors of a party cal assignment party to the transaction placing phase of the re- to the transaction actor RODC-60000/500)”, 293. Agreement for JSC FGC UES JSC The Contractor (JSC Work price shall The Company's Board Shareholder who “500 kV Buddyonovsk SS developing design STC FGC UES STC FGC UES) shall not exceed RUB of Directors (minutes holds more than 20% (ERW on replacing MV-35 and procurement perform a set of works, 494,466 (Four No. 241 of 19.12.2014) of shares of JSC FGC (VPG-101) at EV VGT-35)” documentation including: hundred ninety- UES - JSC “Rosseti” under the title: - design documenta- four thousand four 300. Electric grid JSC FGC UES JSC JSC FGC UES trans- Rental fee amount The Company's Board Shareholder who “Reconstruction of tion development and hundred and sixty- facilities lease IGDS of Ural fers, and the User (JSC for 360 calen- of Directors (minutes holds more than 20% SS 220 kV Vyngapur approval with the Cus- six) and 94 kopeks, agreement IGDS of Urals) accepts dar days is RUB No. 242 of 19.12.2014) of shares of JSC FGC and SS 220 kV tomer (JSC FGC UES); including VAT (18%) for temporary posses- 137,184.44, includ- UES - JSC “Rosseti” Yanga-Yakha (for - procurement docu- sion and use for a fee ing VAT (18%) SS of power plants mentation development electric grid facilities of JSC “Tyumenen- and approval with the beneficially owned by rgo”)” Customer JSC FGC UES, for the purpose of rendering 294. Non-residential JSC FGC UES JSC Non-residential prem- Rental fee amount The Company's Board Shareholder who services of electric premises lease IGDS of Volga ises lease is RUB 33,198.04 of Directors (minutes holds more than 20% power transmission to agreement per month, includ- No. 241 of 19.12.2014) of shares of JSC FGC ultimate consumers ing VAT (18%) UES - JSC “Rosseti” 301. Agreements for JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board 295. Supplementary JSC FGC UES JSC Amendments to the Work price defined The Company's Board Shareholder who emergency recov- “Electrosetservice “Electrosetservice 1,442,853.00 max., of Directors (minutes agreement No. 5 to “Electrosetservice Agreement, including in the Supplemen- of Directors (minutes holds more than 20% ery works UNEG" UNEG”) shall perform including VAT (18%) No. 242 of 19.12.2014) the Agreement No. UNEG” work scope and price tary agreement is No. 241 of 19.12.2014) of shares of JSC FGC emergency recovery 15/12 of 20.01.2012 RUB 229,951,406.14 UES - JSC “Rosseti”; works for electric grid max., including VAT facilities repair and (18 %) 302. Losses compensa- JSC FGC UES JSC Compensation to the Compensation The Company's Board Shareholder who diagnostic inspection agreement IGDS of Volga Owner (JSC IGDS of amount according of Directors (minutes holds more than 20% tion (on purpose- Volga) of losses arising to the Agreement is No. 242 of 19.12.2014) of shares of JSC FGC oriented programs during implementation RUB 2,857,546 UES - JSC “Rosseti” financed within the of measures in the inter- scope of core activi- est of and in relation ties) to Company’s activities on construction of 500 296. Supplementary JSC FGC UES LLC “IT Reduction in the cost of Service cost defined The Company's Board member of the Com- kV OHL under the title: agreement No. 1 Energy Service” services at the current in the Supplemen- of Directors (minutes pany's Management “Construction of 500 kV to the Agreement scope of services tary agreement is No. 241 of 19.12.2014) Board V.P. Dikoy, who is Krasnoarmeyskaya – No. 42/2012-02 RUB 85,094,720.60, a member of the Board Gazovaya OHL” of 27.12.2012 for including VAT (18%) of Directors of a party telecommunication to the transaction services and LAN infrastructure equipment maintenance

116 117 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 303. Agreement for JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who 308. Agreement for JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who design and survey, “Electrosetservice “Electrosetservice 5,735,562.08 max., of Directors (minutes holds more than 20% design and survey, “Electrosetservice “Electrosetservice 19,764,162.70, in- of Directors (minutes holds more than 20% working documents UNEG” UNEG”) shall perform a including VAT (18%) No. 242 of 19.12.2014) of shares of JSC FGC construction and UNEG” UNEG”) shall perform cluding VAT (18%) No. 242 of 19.12.2014) of shares of JSC FGC development, con- set of works, including: UES - JSC “Rosseti”; installation, and complete works on the UES - JSC “Rosseti”; struction, installation - design and work docu- member of the Com- commissioning following: member of the Com- and commissioning, ments developing; pany's Management works, as well as - developing design and pany's Management and equipment sup- - design supervision Board V.P. Dikoy, who is equipment supply work documentation; Board V.P. Dikoy, who is ply for replacement implementation; a member of the Board for installation of - design supervision; a member of the Board of current transform- - reconstruction, of Directors of a party 35 kV dry reactor at - reconstruction; of Directors of a party er 220 kV DP at 220 - facility provision with to the transaction 220 kV Litovko SS - ensuring facility provi- to the transaction kV Dzhamku SS materials, equipment sion with materials, and spare parts equipment, and spare parts for equipment 304. Contract agree- JSC FGC UES JSC The Contractor (JSC Total work price on The Company's Board Shareholder who according to design and ments that are “Electrosetservice “Electrosetservice Contract agree- of Directors (minutes holds more than 20% work documentation related transac- UNEG” UNEG”) shall perform ments that are No. 242 of 19.12.2014) of shares of JSC FGC tions comprehensive recon- related transac- UES - JSC “Rosseti”; 309. Agreement for JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who struction (equipment tions is RUB member of the Com- design and survey, “Electrosetservice “Electrosetservice 21,186,745.00 max., of Directors (minutes holds more than 20% supply; constriction, 387,040,000.00 pany's Management construction and UNEG” UNEG”) shall perform including VAT (18%) No. 242 of 19.12.2014) of shares of JSC FGC installation, and commis- max., including VAT Board V.P. Dikoy, who installation, and complete works on the UES - JSC “Rosseti”; sioning works) of 220 kV (18%) is a member of the commissioning following: member of the Com- SS Zvyozdnaya PMES, Board of Directors of a works, as well as - registration of title for pany's Management 220 kV SS Vyazovskaya of party to the transac- equipment supply land plots for design Board V.P. Dikoy, who is Sverdlovskoye PMES tion for removing tower survey (if necessary); a member of the Board No. 1040 from sub- - engineering survey; of Directors of a party 305. Agreement for de- JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who sidence location on - registration of title for to the transaction veloping design and «Electrosetservice “Electrosetservice 497,450.00 max., of Directors (minutes holds more than 20% 50 kV “Primorskaya land plots for Facility procurement docu- UNEG» UNEG”) shall perform including VAT (18%) No. 242 of 19.12.2014) of shares of JSC FGC GRES – Dalnev- reconstruction; mentation under complete works on the UES - JSC “Rosseti”; ostochnaya OHL” - developing design and the title: “SS 220 following: member of the Com- work documentation; kV Topaz. Replace- - design documenta- pany's Management - design supervision; ment of VChZ-220 tion development and Board V.P. Dikoy, who is - reconstruction; kV, CT-220 kV» approval with the Cus- a member of the Board - ensuring facility provi- tomer (JSC FGC UES); of Directors of a party sion with materials, - procurement docu- to the transaction equipment, and spare mentation development parts for equipment and approval with the according to design and Customer work documentation 306. Agreement for JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who 310. Movable assets JSC FGC UES JSC The Seller (JSC FGC Movable assets The Company's Board Shareholder who developing design «Electrosetservice “Electrosetservice 497,450.00 max., of Directors (minutes holds more than 20% sale and purchase “RusGidro” UES) shall transfer top price according of Directors (minutes holds more than 20% and procurement UNEG» UNEG”) shall perform including VAT (18%) No. 242 of 19.12.2014) of shares of JSC FGC agreement Purchaser’s (JSC “Rus- to the Agree- No. 242 of 19.12.2014) of shares of JSC FGC documentation complete works on the UES - JSC “Rosseti”; Gidro”) property design ment is RUB UES - JSC “Ros- under the title: “220 following: member of the Com- documentation and a 200,557,296.98, seti”; members of the kV Variegan SS. - design documenta- pany's Management shunt reactor including VAT (18 %) Company’s Board of Replacement of tion development and Board V.P. Dikoy, who is Directors M.S. Bystrov obsolete back-up approval with the Cus- a member of the Board and V.M. Kravchenko protections and au- tomer (JSC FGC UES); of Directors of a party who are members of tomatics of OV-220” - procurement docu- to the transaction the Board of Dirce- mentation development tors of a party to the and approval with the transaction Customer 311. Supplementary JSC FGC UES LLC “IT Amendments to the Services price The Company's Board Shareholder who 307. Supplementary JSC FGC UES JSC Amendments to the Work price defined The Company's Board Shareholder who agreement No. 1 Energy Service” Agreement, including defined in the of Directors (minutes holds more than 20% agreement dated “Kuban Trunk Grid” Agreement in relation in the Supple- of Directors (minutes holds more than 20% to the Agreement services price Supplementary No. 244 of 31.12.2014) of shares of JSC FGC 13.09.2013 No. with defining the list mentary agree- No. 242 of 19.12.2014) of shares of JSC FGC No. 59/2011-02 of agreement is RUB UES - JSC “Rosseti” 15 to the Agency of Grid facilities which ment is RUB UES - JSC “Rosseti” 30.06.2011 51,912,663.47 max., agreement dated are reconstructed and 153,329,000.00, including VAT (18%) 29.05.2006 No. 69 on upgraded through Cus- including VAT (18%) implementation of tomer’s (JSC FGC UES) 312. Supplementary JSC FGC UES JSC Amendments to the Work price defined The Company's Board Shareholder who JSC “Kuban Trunk financing in 2013 agreement No. 1 “MUS Energetiki” Agreement, including in the Supplemen- of Directors (minutes holds more than 20% Grids”'s investment of 29.05.2014 to work scope and price tary agreement is No. 244 of 31.12.2014) of shares of JSC FGC program on electric the Agreement RUB 3,393,738.08 UES - JSC “Rosseti” grid facilities No. 122/13 of max., including reconstruction and 15.08.2013 VAT (18%) technical upgrade 313. Agreement for JSC FGC UES JSC The Contractor (JSC “Elec- Work price is RUB The Company's Board Shareholder who developing design “Electrosetservice trosetservice UNEG”) shall 388,220.00 max., of Directors (minutes holds more than 20% and procurement UNEG” perform complete works including VAT (18%) No. 244 of 31.12.2014) of shares of JSC FGC documentation un- on the following: UES - JSC “Rosseti”; der the title: “500 - design documentation member of the Com- kV Lugovaya SS. development and approval pany's Management Replacement of VT with the Customer (JSC Board V.P. Dikoy, who is 220 kV (7 phases)” FGC UES); a member of the Board - procurement docu- of Directors of a party mentation development to the transaction and approval with the Customer

118 119 JSC FGC UES Annual Report Appendices

Governing body that Governing body that made a decision on made a decision on Transaction Person(s) interested Transaction Person(s) interested № Transaction parties Transaction subject Transaction price transaction approval № Transaction parties Transaction subject Transaction price transaction approval description in the transactions description in the transactions (minutes' date and (minutes' date and number) number) 314. Agreement for JSC FGC UES JSC The Contractor (JSC Work price is RUB The Company's Board Shareholder who 321. Supplementary JSC FGC UES JSC Amendments to the Services price The Company's Board Shareholder who works on in- STC FGC UES STC FGC UES) shall 19,500,000.00 max., of Directors (minutes holds more than 20% agreement No. 5 IGDS of Volga price of services on defined by the of Directors (minutes holds more than 20% creasing heating perform works on including VAT (18%) No. 244 of 31.12.2014) of shares of JSC FGC to the Agreement placement of dispatch Supplementary No. 244 of 31.12.2014) of shares of JSC FGC systems operation increasing heating UES - JSC “Rosseti” dated 01.04.2008 control equipment agreement is RUB UES - JSC “Rosseti” efficiency in Val- systems operation No. 80330 57,897.53 per dayskoe PMES's efficiency in Valday- month, including buildings skoe PMES's buildings VAT (18%) according to technical assignment 322. Supplementary JSC FGC UES JSC Amendments to the Services price The Company's Board Shareholder who agreement No. 4 to IGDS of Volga price of services on defined by the of Directors (minutes holds more than 20% 315. Agreement for JSC FGC UES JSC The Contractor (JSC STC Work price is RUB The Company's Board Shareholder who the Agreement No. placement of dispatch Supplementary No. 244 of 31.12.2014) of shares of JSC FGC making research STC FGC UES FGC UES) shall perform 14,600,000.00, in- of Directors (minutes holds more than 20% 2 of 01.04.2008 control equipment agreement is RUB UES - JSC “Rosseti” of opportunities works on the topic: cluding VAT (18%) No. 244 of 31.12.2014) of shares of JSC FGC 17,369.26 per to reduce process “Searching for opportu- UES - JSC “Rosseti” month, including losses nities to reduce process VAT (18%) losses when transmitting electricity over UNEG”. 323. Supplementary JSC FGC UES JSC Amendments to the Compensation The Company's Board Shareholder who agreement No. 1 “MUEGC” Agreement on compen- amount defined by of Directors (minutes holds more than 20% 316. Supplementary JSC FGC UES JSC Amending the Agreement Work price is not The Company's Board Shareholder who to the Agreement sation dated 30.07.2012 the Supplementary No. 245 of 31.12.2014) of shares of JSC FGC agreement No. 5 STC FGC UES dated 31.10.2011 No. defined because of Directors (minutes holds more than 20% on compensation No. 201683 agreement is RUB UES - JSC “Ros- to the Agreement I-117-2/11 for research, the Supplementary No. 244 of 31.12.2014) of shares of JSC FGC dated 30.07.2012 778,601,600.00 (VAT seti”; members of the dated 31.10.2011 development and techno- agreement does UES - JSC “Rosseti” No. 201683 free) Company's Board of No. I-117-2/11 for logical works (“Establish- not change work Directors O.M. Budar- research, development of intellectual grid price set forth in gin, A.A. Demin, V.M. ment and techno- in UES of East for the the Agreement Kravchenko, who are logical works period till 2014 and pros- members of the Board pect through 2020”) of Directors of a party to the transaction 317. Supplementary JSC FGC UES JSC Amending technical Work price is not The Company's Board Shareholder who agreement No. 3 STC FGC UES assignment and work defined because of Directors (minutes holds more than 20% 324. Supplementary JSC FGC UES JSC Amendments to the Compensation The Company's Board Shareholder who to the Agreement schedule according to the Supplementary No. 244 of 31.12.2014) of shares of JSC FGC agreement No. 1 “MUEGC” Agreement on compen- amount defined by of Directors (minutes holds more than 20% dated 31.10.2011 the Agreement dated agreement does UES - JSC “Rosseti” to the Agreement sation dated 30.07.2012 the Supplementary No. 245 of 31.12.2014) of shares of JSC FGC No. I-105-2/11 for 31.10.2011 No. I-105-2/11 not change work on compensation No. 201682 agreement is RUB UES - JSC “Ros- research, develop- for research, develop- price set forth in dated 30.07.2012 170,675,400.00 (VAT seti”; members of the ment and techno- ment and technological the Agreement No. 201682 free) Company's Board of logical works works (“Developing and Directors O.M. Budar- manufacturing com- gin, A.A. Demin, V.M. mercial prototype of Kravchenko, who are controllable command members of the Board transmission device for of Directors of a party 500 kV of Sayano-Shush- to the transaction enskaya HPP OHL – 00 kV Novokuznetskaya SS”) 325. Supplementary JSC FGC UES JSC Amendmenta to the Services price ac- The Company's Board Shareholder who agreement No. 13 CIUS UES Agreement dated cording to the Sup- of Directors (minutes holds more than 20% 318. Supplementary JSC FGC UES JSC Amending work schedule Work price is not The Company's Board Shareholder who to the Agreement 01.04.2008 No. Ts/01, plementary agree- No. 245 of 31.12.2014) of shares of JSC FGC agreement No. 5 STC FGC UES according to the Agree- defined because of Directors (minutes holds more than 20% dated 01.04.2008 including remuneration ment for the period UES - JSC “Rosseti”; to the Agreement ment dated 13.09.2010 the Supplementary No. 244 of 31.12.2014) of shares of JSC FGC No. Ts/01 for amount from 01.01.2014 to member of the Compa- dated 19.09.2010 No. I-11-21/10 for agreement does UES - JSC “Rosseti” Owner-developer 31.12.2014 is RUB ny’s Management Board No. I-11-21/10 for research, development not change work functions imple- 2,301,000,000.00 N.I. Pozdnyakov who is a research, develop- and technological works price set forth in mentation max., including VAT member of the Board of ment and techno- (“Establishment of HTSC the Agreement (18%) Directors and a General logical works 20 kV DC 2500 cable line Director of a party to the up to 2500 m long”) transaction ; member of the Com- 319. Real estate lease JSC FGC UES JSC The Lesser (JSC STC of Rental fee amount The Company's Board Shareholder who pany’s Management agreement STC of Siberia Siberia) transfers to the is RUB 59,817.60 of Directors (minutes holds more than 20% Board D.L. Shishkin Lessee (JSC FGC UES) per month, includ- No. 244 of 31.12.2014) of shares of JSC FGC who is a member of non-residential premises ing VAT (18%) UES - JSC “Rosseti” the Board of Dirce- for temporary possession tors of a party to the and use for supervisory transaction . equipment installation 326. Voluntary medical JSC FGC UES JSC Provision of voluntary Total service The Company's Board Shareholder who 320. Supplementary JSC FGC UES JSC Amendments to the Services price The Company's Board Shareholder who insurance agree- “SOGAZ” medical insurance ser- price (insurance of Directors (minutes holds more than 20% agreement No. 4 to IGDS of Volga price of services on defined by the of Directors (minutes holds more than 20% ment vices to JSC FGC UES premium amount) n No. 245 of 31.12.2014) of shares of JSC FGC the Agreement No. placement of dispatch Supplementary No. 244 of 31.12.2014) of shares of JSC FGC employees and their the transaction for UES - JSC “Rosseti”; 80328 of 01.04.2008 control equipment of agreement is RUB UES - JSC “Rosseti” family members the whole period of member of teh Com- the user’s Zavolzhskoye 57,897.53 per transaction validity pany’s Board of Directors production department month, including shall not be equal and the Management at Operator’s commu- VAT (18%) or exceed 2% of Board Chairman A.E. nication centres and JSC FGC UES Murov, members of the ensuring their operation balance sheet as- Company’s Management sets based on its Board V.A. Goncharov, account statements A.V. Kazachenkov, A.V. on the latest date Vasiliev, V.P. Dikoy, A.A. before entering into Zagaratsky, N.I. Pozdn- the Agreement. yakov, M.G. Tikhonova, D.L. Shishkin – beneficiaries in the transaction

120 121 JSC FGC UES Annual Report Appendices

Information about the Actual Performance of Assignments of the President and the Government of the Russian Federation by Federal Grid Company in 2014

Assignment Registration data Brief summary of the document received Measures taken by the Company to fulfill the assignment Result of the completed assignment 1. Government of the Russian Federation No. VZ-P13--6294 dated 23 July.2009 On establishing special committees at the Board of Di- In 2009 the Company established four committees at the Board of Direc- See the annual report for further detail about the work of the Board commit- rectors (Supervisory Board) and implementing a system tors: the Investments Committee, the Personnel and Remuneration Com- tees in 2014: Corporate Governance /Governance System/Board of Directors of Key Performance Indicators (KPIs) for the Company mittee, the Strategy Committee, and the Audit Committee. KPIs are annually approved by the Federal Grid Company’s Board of Directors. All KPIs were met in 2014. In 2014, the Board of Directors (Minutes No. 217 dated 15 April 2014) approved the targeted parameters for KPIs, methodology of their calculation See the annual report for further detail: Corporate Governance /Governance and the procedure of their evaluation for 2014. System Management Board 2. President of the Russian Federation No 596 dated 07 May 2012 On selling the non-core assets The Company has a Noncore Assets Management Programme which sets Information about the sale of noncore assets in 2014 is available in the annual the criteria for classifying any real estate and interests (shares) in subsidiar- report: Appendices/Additional Information by Section of the Annual Report ies, affiliates and other business entities in which JSC FGC UES participates as noncore assets. The document also outlines the procedure and form of keeping the record of noncore assets, approaches to the calculation of their value, and the key provisions of divesting the noncore assets. 3. Government of the Russian Federation No. Ish-P13—8685 dated 17 December 2010 On implementation of initiatives aimed at ensuring Federal Grid Company’s Board of Directors (Minutes No. 140 dated 19 Since February 2008, almost all (more than 95%) of the competitive procure- the information openness of procurement and the August 2011) took the following decisions: ments for corporate needs are held on an electronic trading platform. This transition to electronic procurement, including the 1. It approved the Procedure for Using Preferences in Regulated Procure- platform helped to establish a more transparent competitive environment for provisions that regulate the procedures for procurements. vendors of goods, works, materials and equipment. ment of goods, works and services. 2. It set the minimum volume of electronic auctions with the procedure of Furthermore, the use of this electronic trading platform helped to increase an- rebidding through the means of electronic commerce which should be at nual saving during procurement by 4-5% of the saving volume that had been re- least 95% of the total volume of competitive procurements. ported before the Company began using electronic procurement on a large scale. 3. The Company’s Central Bidding Commission is authorised to make a list See the annual report for further detail: Performance Results /Operating of mass media where all open bidding procedures will be published. Performance /Procurement /063. 4. The Board approved the form of report about procurements. 5. It approved the Procedure of Response Actions when cases of bidders’ abnormally low quote prices are identified in the process of competitive procurement procedures. 6. It approved the form of report for posting information about awarded contracts on the corporate website. 7. It approved the deadlines for posting information about awarded contracts on the corporate website (no later than on the tenth date of every month). 8. The Board of Directors authorised the Management Board to ensure publishing of information about awarded contracts on the corporate website before the automated management system “Contracts” becomes operational. 4. President of the Russian Federation No. Pr-846 dated 02 April 2011 Joint-stock companies with government participa- In order to improve the procurement process and implement the Government’s as- By using competitive bidding procedures for procurement in 2011-2014, tion to take decisions on cutting the real procure- signment to reduce the costs of procurement of goods (works, services) by at least Federal Grid Company cut the costs of procurement of goods (works, services) ment costs of goods (works, services) per one unit 10% a year, JSC FGC UES approved an Executive Order No. 75 dated 15 February per unit by 9-10% a year. In 2014, the Company’s procurement costs declined by at least 10% a year during three years 2012 “On Improvement of Procurement” and the procedure of bringing issues by 18.49%. to the Central Bidding Commission. The document put limits on the number of See the annual report for further detail: Performance Results /Operating purchases that could be made from a single vendor, and established liability of Performance /Procurement approvers for decisions when issues are brought to the Central Bidding Commis- sion for discussion. On 12 September 2014, the Board of Directors approved the Regulation on the Procedure of Conducting Regulated Procurements of Goods, Works and Services. This document ensures procurement which is based on one methodology, and the use of modern competitive forms (mostly via auctions). 5. President of the Russian Federation No. Pr-1092 dated 27 April 2012 On the sale of core assets in the sectors with sufficient JSC FGC UES analysed the expediency of divesting core assets in the sec- Federal Grid Company’s Board of Directors (Minutes No. 174 dated 20 Septem- competition by the government-owned corporations tors with sufficient competition in order to ensure the maximum possible ber 2012) took the following decision: since electricity transmission services and business entities with more than 50% of shares participation of small and medium enterprises. are an operation of the natural monopoly as per Federal Law No. 147-FZ “On (interest) belonging to the Russian Federation, includ- Natural Monopolies” dated 17 August 1995, it is inexpedient to divest the Com- ing for ensuring the maximum possible participation of pany’s core assets that are electrical grid facilities, as well as other assets that small and medium enterprises in the manufacturing of are used by the Company for supporting its industrial operations. relevant products.

122 123 JSC FGC UES Annual Report Appendices

Assignment Registration data Brief summary of the document received Measures taken by the Company to fulfill the assignment Result of the completed assignment 6. Government of the Russian Federation No. 2988p-P13 dated 30 May 2013 On conducting a technical and pricing audit of Executive Order No. 578 of JSC FGC UES dated 12 December 2014 estab- The Company arranged for the technical and pricing audit of the following invest- investment projects lished the corporate Standard “Technical and Pricing Audit of Investment ment projects: Projects of JSC FGC UES.” • Comprehensive revamping and reconstruction of 500 kV Noginsk SS; The following companies were selected for conducting a technical and • 500 kV Cherepovetskaya SS; pricing audit after procurement procedures were completed: LLC “Project • Construction of 500 kV Beloberezhskaya SS with approach lines to 500 kV Novo- Bureau No. 1”; CJSC KIM and Partners; and Ef-Engineering LLC. bryanskaya – Eletskaya OHL, 220 kV Beloberezhskaya – Tsementnaya OHL, 220 A list of 14 investment projects of the Company involving construction, kv Beloberezhskaya - Mashzavod OHL and 220 kV Beloberezhskaya – Bryanskaya reconstruction, or technical re-equipment of capital construction projects OHL; with an estimated cost of RUB 1.5 billion or more each, scheduled to start • 330 kV Vyborgskaya SS(comprehensive reconstruction); in 2014, was approved by the Federal Grid’s Management Board on 19 • 330 kV Lomonosovskaya SS with approach lines; September 2014 (Minutes No. 1259 dated 19 September 2014). • 500 kV Yenisei SS with approach lines to 500 kV OHL and 220 kV OHL; • 500 kV Ust-Kut SS with approach lines to 500 and 220 kV OHL; • 220 kV Ust-Kut –Bobrovka OHL, 220 kV Ust-Kut-Tira OHL, 220 kV Bobrovka- Kirenskaya OHL, 220 kV Tira-Kirenskaya OHL, from 220 kV Bobrovka SS and 220 kV Tira SS, 220 kV Kirenskaya SS and reconstruction of 500 kV Ust-Kut SS; • Construction of 220 kV Milkovo – Ust-Kamchatsk OHL; • 500 kV Rostov NPP – Rostovskaya OHL; • Reconstruction of 500 kV Nevinnomyssk SS and construction of facilities (110 kV SS and transmission line 110 kV) for electric power supply to the industrial park in Nevinnomyssk; • Two 220 kV UrHPP - Mangazeya OHLs (Vankor field); • 500 kV Svyatogor SS with approach lines to 500 kV Surgutskaya HPP-2 – Magis- tralnaya OHL; • 220 kV Yermak SS with approach lines of one chain to 220 kV Urengoi HPP – Mangazeya OHL.

7. President of the Russian Federation No. 6362p-P13 dated 24 October 2013 On expanding the access for small and medium 1. The Board of Directors of Federal Grid Company (par. 2 of the Minutes 1. A Deliberative Assembly was formed that included representatives of public enterprises to the procurement of infrastructure No. 208 dated December 30, 2013) adopted a number of resolutions regard- organisations, approved by Decree No. 93 dated 25February 2014 entitled monopolies and state-owned companies. Pursuant ing expanding the access for small and medium enterprises to the procure- “Ratification of the Advisory Assembly on the issues of ensuring the efficiency to paragraphs 7, 8, 9, 10, 12, 17, 18, 19, 20, 24, 25, ment performed by Federal Grid on a competitive basis. of the procurement conducted by Federal Grid for small and medium enter- 26, 27, 28, 30, and 31 of the action plan (“roadmap”) 2. Actions are taken to review applications of small and medium enterprises”. “Expanding the access for small and medium prises for inclusion in the partnership programme between Federal Grid 2. Federal Grid’s Decree No. 92 dated 25 February 2014 was enacted entitled enterprises to the procurement of infrastructure Company and small and medium enterprises. A list of small and medium “Ratification of a partnership programme between Federal Grid Company and monopolies and state-owned companies”, approved enterprises is being drafted so that the Company would contract them small and medium enterprises”, which was developed based on the guidelines by the decree of the Government of the Russian when Resolution of the Government of the Russian Federation No. 1352 provided in the letter from the Ministry of Economic Development (No. 26231- Federation No. 867-r dated May 29, 2013 dated 11 December 2014 “On the participation of small and medium enter- EE/D28I dated 28 November 2013). prises in the procurement of goods, works and services by certain types of 3. The share of electronic procurements is more than 90% of the total competi- legal entities” becomes effective. tive procedures, which exceeds the targets set by the Roadmap. 3. Proposals were prepared aimed to amend Federal Grid Company’s Pro- 4. Labour productivity indicator is included in the “Methodology for Calculation curement Regulations before Resolution of the Government of the Russian and Performance Evaluation of the Key Performance Indicators Established for Federation No. 1352 dated 11 December 2014 “On the participation of small Senior Managers of JSC FGC UES” approved by the Board of Directors (Minutes and medium enterprises in the procurement of goods, works and services No. 243 dated 19 December 2014) in order to implement par. 3 of the Action by certain types of legal entities” becomes effective – 1 July 2015. Plan (Roadmap). 4. The Company made a List of Goods, Works and Services to Be Procured from Small and Medium Enterprises. 5. Federal Grid Company issued Decree No. 191 dated 15 April 2014 “On establishment and development of organisational and technical conditions for the introduction of innovative and high-technology products at the electrical grid facilities of OJSC FGC UES including those manufactured by small and medium enterprises.” 8. President of the Russian Federation No. Pr-3086 dated 27 December 2013 On the drafting and approval of a long-term de- On 19 December 2014, the Board of Directors of JSC FGC UES (Minutes The Board of Directors of JSC FGC UES (Minutes No. 245 dated 31 December velopment programme for the Company, auditing No. 243 dated 22 December 2014) approved a “Long-Term Development 2014) approved a standard for an annual independent audit of the programme implementation of the long-term development Programme of JSC FGC UES” for 2015-2019 and a forecast until 2030. performance. The audit findings, in the form of proposals for the appropriate programme and on the approval of a standard for adjustment of the programme, should be sent to the Ministry of Energy no later such audit than 10 July of the year following the reporting year. See the annual report for further detail about the Long-Term Development Programme of JSC FGC UES: Strategic Overview /Development Strategy 9. Government of the Russian Federation No. ISh-P8-6196 dated 15 August 2014 On including the key parameters of manpower Section “Manpower Needs” was included in Federal Grid’s Long-Term On 19 December 2014, the Board of Directors (Minutes No. 243 dated 22 De- needs (including those for engineering and techni- Development Programme. cember 2014) approved the “Long-Term Development Programme of JSC FGC cal specialists) in the Company’s long-term devel- Given the main initiatives of the Long-Term Development Programme, the UES for 2015-2019 and a forecast until 2030.” opment programme corporate HR policy is particularly focused on the growth of labour produc- See the annual report for further detail about the Long-Term Development tivity while maintaining the requirements to reliability of operations of the Programme of JSC FGC UES: electrical grid complex. Strategic Overview /Development Strategy Corporate HR policy is based on the optimal use of manpower in the Com- See the annual report for further detail about the Company’s personnel policy: pany’s interests and continuous professional development of its employees. Social Responsibility and Sustainable Development /HR Policy 10. Government of the Russian Federation No. ISh-P13-2043 dated 27 March 2014 On the improvement of the Company’s system of The methodology for calculation and evaluation of key performance The Board of Directors approved methodologies for calculation and evalua- key performance indicators indicators set for Federal Grid’s senior managers for 2014 is based on tion of key performance indicators of the Company’s senior managers for 2014 the methodological guidelines about using key performance indicators by (Minutes No. 217 dated 15 April 2014) and 2015 (Minutes No. 243 dated 22 the government-owned corporations, government-owned companies and December 2014). government-owned unitary enterprises as well as business entities in which See the annual report for further detail: Corporate Governance / Governance the total share of the Russian Federation in the charter capital exceeds 50%. System/Management Board 11. Government of the Russian Federation № 1250-р dated 9 July 2014 On raising labour productivity as per par. 6 of Sec- The Board of Directors (Minutes No. 242 dated 19 December 2014) required JSC FGC UES approved programs for long-term improvement of efficiency. tion 2 of the Action Plan aimed at raising labour the Chairman of the Management Board to make sure that appropriate Their targets are to reduce operational and investment costs (the “40 / 40” productivity, and the creation and modernisation of steps are taken to raise labour productivity in the Company. project). One of the key areas of the “40 / 40 project” is the Labour Productivity highly productive jobs, as approved by the Directive Improvement Programme. The Methodology for Calculation and Evaluation of KPIs for Senior Managers of JSC FGC UES which is approved by the Board of Directors (Minutes No. 243 dated 19 December 2014) includes a labour productivity indicator.

124 125 JSC FGC UES Annual Report Appendices

Quantity: for Information about the Structure of the Property Portfolio Accumulated OHL and cable Book Loss from Book Gain from amortisation networks, the (carrying) 01.01.2014 (carrying) of Federal Grid Company and Changes to it in 2014 01.01.2014 from length of the value as of through value as of Name through 01.01.2014 track (km); for 01.01.2014, 31.12.2014, 31.12.2014, 31.12.2014, through SS and other RUB RUB RUB RUB thousand 31.12.2014, Assets, the thousand thousand thousand Quantity: for RUB thousand Accumulated number (pcs) OHL and cable Book Loss from Book Gain from amortisation networks, the (carrying) 01.01.2014 (carrying) 01.01.2014 from length of the value as of through value as of Assets used under lease agreements Name through 01.01.2014 track (km); for 01.01.2014, 31.12.2014, 31.12.2014, 7. related to electric grid facilities, ------31.12.2014, through SS and other RUB RUB RUB including: RUB thousand 31.12.2014, Assets, the thousand thousand thousand RUB thousand number (pcs) 7.1. OHL 220 kV and higher ------7.2. OHL 110 kV ------Assets related to electric grid facilities, 1. 671,310,098 150,233,401 27,799,134 68,733,784 725,010,582 including: 7.3. OHL 35 kV ------

1.1. OHL 220 kV and higher 133,025.090 287,323,560 77,256,527 19,066,263 28,961,091 316,522,733 7.4. OHL 10 kV and lower ------

1.2. OHL 110 kV 1,211.757 1,951,628 289,031 277,640 162,906 1,800,113 7.5. SS 220 kV and higher ------

1.3. OHL 35 kV 65,465 140,653 11,961 11,544 12,516 128,554 7.6. SS 110 kV ------

1.4. OHL 10 kV and lower 221,813 151,975 173,915 7,851 10,941 307,098 7.8. SS 35 kV ------

1.5. 220 kV and higher 786 334,768,979 57,866,225 5,159,037 35,951,501 351,524,666 7.9. SS 10 kV and lower ------

1.6. SS 110 kV 41 8,953,910 1,070,936 524,341 991,796 8,508,710 7.10. Cable networks (all voltage classe ------

1.7. SS 35 kV 7 362,703 73,122 1,451 57,917 376,457 Other Assets used under lease agree- 8. ments designed to provide electric ------1.8. SS 10 kV and lower 59 1,221,753 537,782 134,927 391,591 1,233,016 connections

Cable networks (all voltage classes) and Other Assets used under lease agree- 1.9. 368,621 17,038,121 11,521,054 1,867,388 746,744 25,945,043 9. ------cable lines ments

Other Assets designed to provide electri- 1.10. 775,307 19,396,816 1,432,848 748,691 1,446,781 18,634,193 "Total for leased assets, including those cal connections,aerial cable lines 10. under lease agreements - 19,934,930 13,108,412 5,533,554 - 27,509,787 (I.10= I.5 + I.6 + I.7 + I.8 + I.9)" Non-core Assets listed in the Register 2. 479 8,052,175 617,291 136,511 645,755 7,887,200 of Non-core Assets 11. TOTAL (I.11 = I.4 + I.10) - 734,943,605 193,381,551 35,484,093 76,470,182 816,370,881

3. Other Assets (I.3 = I.4 – I.2 – I.1), including: 2 35,646,404 29,422,447 2,014,895 7,090,643 55,963,313

3.1. Land plots under ownership 169 1,547,211 84,583 - - 1,631,794

“Fixed Assets” (line of the balance 4. - 715,008,677 180,273,139 29,950,539 76,470,182 788,861,095 sheet)

Leased Assets related to electric grid 5. - 4,389,441 5,843,116 456,848 - 9,775,708 facilities, including:

5.1. OHL 220 kV and higher 3,092,876 839,193 - - 839,193

5.2. OHL 110 kV 32,703 9,281 - 9,281 - -

5.3. OHL 35 kV - - - 0 - -

5.4. OHL 10 kV and lower 1,517,463 - - 0 - -

5.5. SS 220 kV and higher 31 914,660 - 0 - 914,660

5.6. SS 110 kV 74,134 42,002 73,198 - 42,938

5.7. SS 35 kV - -

5.8. SS 10 kV and lower 133 - -

5.9. Cable networks (all voltage classes) ------

Other leased Assets designed to provide 5.10. ------electrical connections

6. Other leased Assets, including: 7,058 15,545,489 7,265,296 5,076,706 - 17,734,079

6.1. Land plots 6,880 14,712,438 6,243,939 4,241,066 - 16,715,312

126 127 JSC FGC UES Annual Report Appendices

Information on disposal of non-core assets of JSC FGC UES in 2014 Joint Stock Company “Federal Grid Company of Unified Energy System” Non-core Asset Management assets, as well as acquisition of income business entities in which the Company from such disposal. participates that refer to non-core assets. Programme ANNUAL FINANCIAL REPORT The Non-Core Asset Management The Programme prescribes criteria to The main goals and objectives that JSC Programme of JSC FGC UES was approved refer the real property and shares of FOR 2014 FGC UES sets in the area of non-core asset by the Board of Directors (Minutes No. 178 subsidiaries and associates and other management are the implementation of dated 16 November 2012) and determines business entities in which the Company assignments of the RF President and the the main areas of the Company’s focus participates to non-core assets, sets RF Government, separation and further in managing real property and shares approaches to valuation and the main In accordance with the UK Disclosure and Transparency Rules disposal of rights with respect to non-core of subsidiaries and associates and other provisions for non-core asset disposal.

Information on disposal of non-core assets in 2014, RUB

Difference between Actual actual Asset book Cause for the difference between actual Name disposal disposal value disposal proceeds and asset book value proceeds proceeds and asset book value Contents

Production facilities of Kurgan District, 1 9,651,686.85 19,000,000.00 9,348,313.15 - Kurgan, Omskaya street 130 ABOUT THE COMPANY 2 Facilities of Ledyaninsky section 4,219,176.76 5,535,000.00 1,315,823.24 - 130 CORPORATE GOVERNANCE 3 0.4 kV OHL and PTS 0.00 259,600.00 259,600.00 -

Leased out to JSC Yantarenergo under the 131 SHARE CAPITAL 110 kV OHL Kaliningradskaya TPP-2 - 4 161,035,527.82 contract No. 347337 dated 2 September 2014 Centralnaya SS – 19.442 km with a lease fee of RUB140.4 mln per year 132 MARKET REVIEW

110 kV OHL Kaliningradskaya TPP-2 – 140,400,000.00 - 5 64,856,917.06 133 CORPORATE STRATEGY, CHALLENGES AND SOLUTIONS Gvardeyskaya 135 OPERATING ACTIVITIES 110 kV OHL Kaliningradskaya TPP-2 – 6 197,759,654.41 Severnaya SS – 18.591 km 137 DEVELOPMENT OUTLOOK FOR THE COMPANY Piece of property was transferred without Non-residential building (rest and compensation to the municipal administra- 139 FINANCIAL RESULTS 7 29,986,059.32 0.00 29,986,059.32 recreation) tion of Tula under the gift agreement No. 119-Tr14 dated 18 December 2014 147 DISCLAIMER

JSC Glavsetservis UNEG was liquidated 8 Shares of JSC Glavsetservis UNEG (100% ) 0.00 0.00 0.00 147 RESPONSIBILITY STATEMENT (date of entry in the USRLE: 27.12. 2014)

Compensation-free transfer of property to TOTAL 43,856,922.93 24,535,000.00 19,062,322.93 the municipal administration of Tula to the value of RUB29.9 mln

April 2015 Moscow

128 129 JSC FGC UES Annual Report Appendices

1. ABOUT THE COMPANY 3. SHARE CAPITAL

Federal Grid Company (FGC) was founded in and also one of the leading “blue chips” on • 41 branches – Main Power Transmission As of 31 December 2014, the share Approximately 27% of our free-float that of partially government-owned 2002 during the reform of the Russian power the Russian stock market. Line Companies (PMES); capital of Federal Grid Company shares are owned by foreign institutional companies; industry. The Company’s key activities are: amounted to 637,332,661,531 investors, including some of the largest More than 24,000 individuals employed • 1 branch – Special Production Plant roubles and 50 kopecks divided into funds with total assets under management • Expectation of regulatory changes: • Electricity transmission through by our Company ensure the sustainable Bely Rast; 1,274,665,323,063 ordinary shares with a exceeding 1 billion US dollars. Short-term the regulator’s proposition regarding backbone electric grids; and efficient operation of more than nominal value of 50 kopecks each. investors constituted 4.1% of total foreign settlements with consumers based on 138.8 thousand kilometres of electricity • 1 branch – Center for Technical investments into the Company. actual capacity provided; • Technological connection services. transmission lines and 924 substations in Supervision. As of 31 December 2014, the number the territory of more than 15,1 mln sq km of authorised shares amounted to The entities stated in the diagram above • Uncertainty with regards to subsidies We are included in the list of strategically comprised of 77 regions of Russia. 72,140,500,768 ordinary shares with a approved the disclosure of their shares in on technological connection expenses; important companies for Russia’s nominal value of 50 kopecks each and FGC’s share capital. industrial development. As of 31 December 2014, FGC has 51 a total nominal value of 36,070,250,384 • FGC’s shares no longer included in regional branches, including: roubles. Authorised ordinary shares The management are not aware of MSCI Russia since June 2014. As a result of our 12-year work, we have have the same rights as outstanding investors owning more than 5% of the become one of Russia’s largest power • 8 branches – Main Power Transmission ordinary shares. Company’s share capital other than those sector companies by market capitalisation, Lines (MES); indicated in the diagram above. No preferred shares have been issued. Details on the Company’s share capital On 19 March 2014, an additional share structure and dynamics are available issue was completed with a price of 50 on our website www.fsk-ees.ru in the 2. CORPORATE GOVERNANCE kopecks per share. During the additional “Investors / Share Information” section. share issue, 7,524,307,067 shares (79.78% of the total number of securities Market quotations for the With a focus on long-term goals, we In 2015, the existing scope of tasks for exchange rate fluctuations, inflation from the additional issue subject to ensure the transparency of our activities, Audit and Strategy Committees will be expectations and changes of interest rates. placement) were placed. As a result of Company’s shares environmental protection, workplace extended with regards to assessing long- the placement, the Company received FGC’s share capital structure safety and social protection of our term operating efficiency of the Company. To achieve and constantly maintain the RUB 3,762 million. World stock markets met the end of employees, and we observe corporate high standards of corporate governance, 2014 differently: the developed markets’ governance principles. In the reporting period the focus point we have developed and implemented The main participant in the additional indicator MSCI World demonstrated for the Management Board’s activity numerous normative documents share issue was the Russian Federation, growth of 2.9%; on the other hand, the Corporate Governance at FGC complies was efficiency of the management regulating corporate governance which invested RUB 3,756 million in the developing markets’ indicator MSCI EM D E with Russian Federation Law governing over subsidiaries and affiliates. principles and procedures at the Company. Company’s share capital. The rest of dropped by 4.6%. C Joint Stock Companies, and we strive The Management Board performed the shares were purchased by minority to implement globally recognised good preliminary analysis of business planning On 21 March 2014 the Bank of Russia’s shareholders. Russian stock market’s indicator MICEX B governance practices as well. system and development strategies’ key Board of Directors adopted a new dropped by 7.1%, thus, performed worse areas of focus for 2014 – 2018 with regards Corporate governance code1. In accordance The proceeds from the share issue are than MSCI World и MSCI EM. The key The Company’s supreme governing body is to the subsidiaries and affiliates. with the orders issued by Government of being used to finance construction and factors behind the drop include: oil prices 2 % the General Meeting of Shareholders. The Russia , FGC was included on the list of commissioning of essential backbone plunge in the second half of the reporting Board of Directors, elected by the General The Management Board also adopted a the largest partially government-owned electric grids to increase the reliability of year (Brent quotations dropped by 48% Meeting of Shareholders, determines the “road map” to ensure financial soundness companies. Principles of the new Code the power supply in the Republic of Sakha in 2014) and economic sanctions against Company’s development strategy and also and economic efficiency of FGC’s are to be implemented first in corporate and Buryatia, and power assets employed Russia. A supervises the activities of the Management activities, including a comprehensive set of governance of such companies. to ensure the power supply to the Winter Board. The Management Board is entrusted crisis response measures, for 2014 – 2015. Olympic Games in Sochi. Shares of the power industry sector with operational management of the We analyzed the FGC’s corporate performed significantly worse than the Company. The Chairman of the Management To protect the interests of our governance system in place and concluded Currently we have over 400,000 market in general, with the industry Board is the sole executive governing body. shareholders, we have effective external that the Company meet most of the shareholders. As of 31 December 2014 indicator MicexPWR decreasing by 22.7% and internal control systems in place. The principles of the new Code. JSC “Russian Grids” was the Company’s in 2014. The negative dynamics with the A JLC “Russian Grids” The Board of Directors’ primary activity is external control system is represented main shareholder, owning 80.13% of indicator outpacing the market in general 80,13% ensuring further development of the UNEG by the independent auditor, and internal We also developed a set of measures to adopt the Company’s shares. The Russian is related to low capital-raising potential B JSC together with FGC’s financial soundness. control is undertaken by the Internal Audit the new Code’s recommendations. In 2014, Federation, represented by the Federal of the companies of the sector with “Centerenergoholding” 2,62% In 2014, the Long-term development Commission together with special internal we began integrating the new standards into Agency for State Property Management, continuing regulatory pressure resulting C Kopernik Global Allcap Fund 1,62% programme providing for a number of audit and control divisions. our corporate governance system. owned 0.59% of the Company’s shares. in fixed tariffs for the year 2014. indicators was adopted by the Board of D LLC “Index 1,08% Directors. Achieving the target indicators With understanding of internal control role Details on the Company’s corporate On 17 June 2013, JSC “Russian In 2014, our Company’s shares of Energy – FGC UES” will ensure sustained growth and efficient in effective implementation of a long- governance are available on our website Grids” and the Federal Agency for demonstrated a notably worse dynamics E Others 14,55% development of the Company. To analyze term development strategy, in 2014 we www.fsk-ees.ru in the “About Us / State Property Management signed than that of the industry indicator results of the programme implementation developed a programme aimed at internal Corporate Governance” section. a shareholders agreement regarding MicexPWR – the quoted prices declined an independent auditor will be engaged. control quality increase, including the Risk managing and voting of FGC’s shares. by 49.3% for the year. The following key management policy. The Board of Directors The agreement covers all the shares factors could be highlighted as the ones Committees are formed under the Board adopted a list of key operational risks. owned by the parties at that time and driving the dynamics described above: of Directors to increase the effectiveness any FGC voting shares purchased by the and quality of the Board of the Directors’ Business environment (external) factors parties in the future. • Lower economic growth of Russian work. Regular committees include: had primary impact on the risk assessment economy, rouble devaluation, increased Audit Committee, HR and Remuneration process. Among such factors the following As of 31 December 2014, free-float inflation rate resulted in lower capital- Committee, Strategy Committee and are of special note: the monetary policy constituted an average of 18.2% of raising potential for the companies Investment Committee. implemented by the Bank of Russia, FGC’s total share capital. Key minority focused on domestic market; shareholders included institutional investors and holdings; retail investors • Economic sanctions against Russia 1 Bank of Russia Letter of 10.04.2014 № 06-52/2463 “About corporate governance code” constituted 3.36%. affecting Russia’s credit rating and 2 Orders № ДМ-П36-46пр of 28.05.2014 and № ИШ-П13-5859 of 31.07.2014

130 131 JSC FGC UES Annual Report Appendices

Depositary receipts (Regulation S and Rule 144A). Since 1 July of Federal Grid Company’s GDRs was • Distortion of power consumption over In 2014, our Company experienced consumers of our services will primarily programme 2013, The Bank of New York Mellon (BNY launched on 28 March 2011. Russia’s regions due to the significant reduction in physical volume of both be driven by direct consumers, including Mellon) has been the depository bank for differences in potentials and current operating and investment activities “last mile”3 ones, and energy sales the programme. In 2011, the Company As of 31 December 2014, the depository dynamics of industrial and economic growth; resulted from the negative dynamics of organizations acting on behalf of ultimate On 30 June 2008, Federal Grid Company performed a technical listing of depository receipts programme amounted to 8.7 social and economic macro factors. consumers. Despite that distribution grid launched a Depository Receipts Pro- receipts (GDRs) on the main market of the million GDRs, or 0.34% of the Company’s • Growing reliability and power supply companies will remain our key consumers. gramme, not subject to listing procedures London Stock Exchange, where trading share capital. quality requirements made by Basing on the mentioned trends and consumers with electricity prices rising; factors and taking into account expected During the last few years the volume of settlement of accounts on the basis of technological connection just followed • Aggravation of competition on the actual capacity provided, we expect a the rate of applications and timeframes Key features wholesale electricity market resulted slight reduction of our market volume stipulated by the agreements. from commissioning up-to-date power despite the increase in number of our generating units. customers. The growth in number of Regulation S Rule 144A

Proportion 1 GDR : 500 shares 1 GDR : 500 shares

Code ISIN: US3133542015 CommonCode: 036273577 ISIN: US3133541025 CommonCode: 0362733372 5. CORPORATE STRATEGY, CHALLENGES AND SOLUTIONS

Price per 1 GDR as of 31.12.2014 0,79 US dollars - Long-term development • Implementation of the long-term in the structure of equipment purchases to Amount of GDR's issued as of 31.12.2014 1 252 623 7 425 700 programme investment programme with minimum 5% by 2030. reduction of physical indicators under the conditions of tariff restrictions and As a result of the programme In December 2014 the Board of Directors 30% reduction of specific investment implementation in 2014 the share of adopted the Long-term development expenses by 2017 compared with those domestically manufactured electrical programme for 2015 – 2019 with the of 2012; machinery in the total purchases volume prospect till 2030, previously approved by increased to 44.5% against 17% in 2013. the government of Russia. • Completion of new investment Such share was reached also due to the project of state importance within the allocation of foreign industrial facilities in The programme reviews the results prearranged timeline. Implementation Russia. of the first period of long-term tariff of the Innovative development, Energy Dividend policy Shareholder subject to recommendation policy and Russia’s government order regulation and formulates new tasks and efficiency and Import substitution Further implementation of the Import made by the Board of Directors. № 774-р of 29.05.2006. According to the key efficiency indicators for the second programmes; substitution programme will be focused on НOur dividend policy is based on the Recommended dividends volume is order at least 25% of the net profit for the long-term tariff regulation period (2015 – the following: approach of balancing the interests of assessed by the Board of Directors basing reporting period of partially government- 2019) taking into account the current state • Ensuring consumers’ satisfaction with our shareholders and the Company’s on the Company’s financial results and, owned companies could be spent on and perspectives of Russia’s economic the quality of the services rendered, • Stimulating allocation of foreign development needs taking into account according to the Dividend policy, cannot be dividend disbursement. development. including the level of tariffs and electrical machinery manufacturing the necessity to increase the Company’s less than 10% of net profit for the reporting technological connection timeline and facilities in Russia within the framework capital-raising potential and capitalization. period (RAS). A resolution on the payment of dividends During 2010 – 2014 (first long-term tariff costs; of long-term relations with: for 2014 (with account of the dividends regulation period) the overcoming of In accordance with Russian legislation According to Federal Grid Company’s already paid for the 1st quarter of 2014 – technological inferiority and extensive • Reduction of technological connection • “Hyundai electrosystems”; and the Charter of Federal Grid Company, 2014 statutory financial statements, the RUB 437 million) will be adopted by the development of power industry costs for new consumers. the source for dividend payments is the Company’s net profit for the reporting year Company’s Annual General Meeting of infrastructure were the priority of our • “Power machines Toshiba. High- Company’s net profit, which is determined amounted to RUB 5,137 million. Taking into Shareholders in June 2015. strategic development. Our Company strives to reduce the share Voltage Transformers»; on the basis of the Company’s annual account the net profit for the period the of imported equipment and services statutory accounts. Company’s management will recommend Details on the Company’s dividend With securing the achieved levels of in its activities in order to increase its • “Siemens Transformers”. the General Meeting of Shareholders to policy are available on our website in the technological development and reliability, business efficiency, reduce costs and also A resolution on payment of dividends adopt a resolution to pay dividends for 2014 “Investors / Share Information / Dividends” since 2015 the strategic focus will be to mitigate the negative macroeconomic • Assisting in implementing innovations is adopted by the General Meeting of in accordance with the Company’s Dividend section. shifted to business efficiency upgrade. factors. The reduction of dependency on and upgrading competitive ability of imported equipment and services is to domestic manufacturers; The priority tasks for the programme for be achieved via searching and developing 2015 – 2019 include: domestic substitutions and localization of • Assisting in upgrading legislative 4. MARKET REVIEW foreign technologies in Russia. and regulatory framework aimed at • Reduction of electricity undersupply protection of domestic markets and and workload optimization for In 2014, the Import substitution stimulating of import substitution. Organization and control over electricity power consumption within Russia’s UES strategic development. Primarily it commissioned capacity; programme (substitution of equipment, supply network constitute a separate increased by 0.4% to 1013.9 billion kWh. An is related to the construction of new technologies, materials and systems) was sector of power industry. Being a key insignificant increase of electricity demand power supply infrastructure, which will • 25% reduction of specific operational adopted by the Board of Directors in order element of infrastructure of Russian within Russia’s UES is forecasted for the ensure accelerated social and economic costs by 2017 compared with those of to stimulate and control the mentioned electricity market, our company is a natural period 2015 – 2018. development of Eastern Siberia and the Far 2012 maintaining the same high level of above processes. The strategic goal of the monopolist in the sector, and thus doing East. This will also assist in overcoming reliability and quality of power supply; programme is reduce the share of import business under government regulation. On a mid-tem horizon a notable change in lack of infrastructural integration among power consumption volumes and geography a number of regions and building up new The volume and physical characteristics is expected, which is due to new emerging territorial-production clusters based on of the services rendered by FGC are “growth areas”. Hence, the most significant energy supplying and processing plants. highly dependent on overall economic growth in electricity transmission services environment due to infrastructural nature is expected to happen in UES of East The key mid-term trends for power of power industry in general and power and UES of South. The growth will be industry in Russia include: grid in particular. partially driven by implementation of state investment projects. • Aggravation of competition for tariff Social and economic conditions of revenue among all the participants of the the reporting year restrained market In the mid-run the power industry sector generation-distribution-sales process; 3 «The Last Mile» is a type of cross-subsidization, under which large industrial users connected directly to Federal Grid Company’s backbone grids also pay the tariffs of capacity for power grid services. In 2014, will remain as a determinant for Russia the IDGC Holding’s distribution networks to which part of the Company’s grid facility was leased (the «last mile»).

132 133 JSC FGC UES Annual Report Appendices

Risk management in the reporting period and will face in the revealed risks is assessed as critical; 6. OPERATING ACTIVITIES the near future. We also developed a set on the other hand, we note growing Taking into account the recent economic of measures allowing the Company to magnitude of some of them in 2014. and political trends in the course of further mitigate to some extent the revealed risks. Electricity transmission services and reduction in the amount Our primary goal is to synchronize upgrading the existing risk management The following table provides brief services of “last mile” companies, which led to industrial development in different regions system, we updated the risk map so that it The key risks can be divided into three characteristics of the significant risks with FCG concluding direct contracts with its of Russia with the current capacity of could reflect all the challenges of business groups by the parameter of magnitude: growing magnitude. customers. backbone electric grids. environment the Company experienced critical, significant, moderate. None of Federal Grid Company’s principal activity is the transmission of electricity via the As of 31 December 2014 our key 4 Answering the needs of our customers we Russian Unified National Electric Grid (the consumers of electricity transmission pay much attention to transparency and “UNEG”). Payments for this type of service services consisted of the following: availability of technological connection Risk description Mitigation measures are the main source of revenue for the process, that results in less stages of the Tariffs regulation risks Company. • JSC «Tyumenenergo» – 9,68%; process and, hence, shorter timeline.

Lower investment component of the tariff. Changes in the Investment programme and its financing structure. According to Russian legislation, • JSC «IDGC of Centre» – 9,61%; As of 31 December 2014, our consumers Reduction of electricity transmission services revenue. Proposing changes to regulatory acts with regards to: tariff setting and electricity transmission services via the consisted of the following: Increase of costs with regards to electricity transmission via foreign determination of indicators used to set tariffs. energy systems. Efficiency increase of operating and investment activities and consecu- UNEG are monopolistic activities and are • JSC «IDGC of Urals» – 9,3%; Deviation of actual average tariff from the one stipulated by the busi- tive implementation of RAB regulation principles. regulated by the Russian Government. • Large businesses (oil and metallurgical ness plan. Quality upgrade of budget planning and supervision over implementation. • JSC «MOESK» – 9,14%; industries, production of construction The price for electricity transmission materials, etc.) – 50%; Economic environment risks in Russia and region services is determined by tariffs set by the • JSC «IDGC of Siberia» – 6,92%; Economic sanctions against Russia aggravated terms and conditions of Crisis response programme and other expenses reduction programmes Russian Federal Tariff Service, including: • Distribution grid companies – 44%; capital raising and bank loans. with regards to separate activities (investment in the first place) were • JSC «IDGC of Center and Volga Region» Overall aggravation of macroeconomic conditions: oil prices drop, ex- adopted. • The price for electricity transmission – 6,83%; • Power generating companies – 6%. change rate fluctuations, inflation escalation. The long-term development programme for 2015 – 2019 stipulates for services provided to maintain operation Together with negative political trends the mentioned above changes overall efficiency increase: 25% and 30% reduction of specific operation- of the power assets constituting the • JSC «IDGC of Volga» – 6,13%; In 2014, we concluded 2265 agreements to began to financially affect our operating activities. al and investment costs correspondingly by 2017 compared with 2012; power supply reliability increase. UNEG; provide technological connection services, • JSC «IDGC of the North-West» – 5,29%; a 65% decrease from the previous year. Bad debt risks • Normative technological losses of The main reason for the decrease of electricity during UNEG transmission • JSC «Lenenergo» – 4,38%. the concluded agreements number was Deviation of actual bad debt volume with regards to account receivable for Further development of bad debt management methods and procedures electricity transmission services from the one stipulated by the business plan. including legal and non-judicial ones. for the respective subject of the Russian legal restriction preventing from taking Federation, as adopted by the Russian orders with voltage class less than 110 Liquidity risks Ministry of Energy. Technological connection kV. Economic situation in Russia was Appears as a direct consequence of the mentioned above negative mac- Implementation of the “road map” to ensure financial soundness and another reason. The total volume of roeconomic trends and the bad debt growth. economic efficiency. For 2014, the volume of electricity services maximum capacity under the agreements Efficiency increase of working capital management and payment transmission services provided by with consumers and distribution grid discipline stiffening with regards to contractors; reduction of advance the Company decreased by 0.9% and Technological connections are a complex companies amounted to 3.8 GW and payments volume. amounted to 515,250 million kWh and service that provides for the actual additionally 1.8GW under the agreements Negotiating with the companies rendering transit electricity transmis- RUB 159,780 million according to our connection of electricity receiving devices with power generating objects. sion services in foreign countries (Kazakhstan, Belarus, the Baltics) in order to fix transit costs despite exchange rate fluctuations, and to audited IFRS financial statements. The (power units) to the electric grid system. synchronize tariffs indexation parameters. number of customers during the reporting We provide technological connection period increased to 417 organizations. services to new consumers as well as to Risks regarding geographical features of Russia and region This increase was mainly due to the new existing customers that need to increase Infrastructural objects are highly dispersed over the territory of Russia. Constant upgrading of reliability of the UNEG under the unified technical customers of technological connection power consumption. Some of them are located at a great distance from maintenance depots. policy: Possible negative effect from natural phenomena. • Increase of all-terrain vehicles number; • Implementation of air drone technology; • Increase of readiness to perform emergency repairs and reconstruction. Operational and technological risks Largest technological connection projects for 2014 6 This risk is directly connected with depreciation and deterioration of Implementation of the Funds renewal programme. electric grid assets and operation disturbances. Power supply failures Implementation of a set of measures aimed at failure prevention regard- subject to equipment malfunctioning and/ or natural disasters. ing transmission lines and substations. Customer Object Capacity, MW Maintaining the current number of maintenance staff, organization of trainings and appraisals for the staff operating the machinery, carrying JSC “TGC-1”, the Tumen Region Urengoiskaya state district power plant 490 out emergency response drills. Concluding agreements with the manufacturers for after-sales mainte- CJSC “Nizhnevartovskaya sdpp”, the Tumen Region Nizhnevartovskaya state district power plant, unit № 3.1 431 nance. Implementation of property insurance programme. JSC “Fortum”, the Tumen Region CCGT-3 of Nyaganskaya state district power plant 422 Maintaining a number of emergency repairs headquarters operating on a regular basis. Forming up emergency machinery backup. JSC “Kuzbasenergo”, the Kemerovo Region Novokuznetskaya gas-turbine electric power plant 298 LLC “Lukoil-Astrakhanenergo”, the Astrakhan region CCGT-235 of central boiler station 235

The branch of JSC “TGC-6” located in the Nizhny Novgorod Region Novogorkovskaya heat electric generation plant 188

In 2014, we also performed construction large business segment. Total capacity of works on other 6 large objects (not those projects constituted 323.5 MW. mentioned in the table above) from the

4 Such customers’ shares in the revenue (IFRS) exceeded 4%.

5 Number of contracts with direct private customers, distribution grid companies and power generating objects.

134 135 JSC FGC UES Annual Report Appendices

Upgrading the quality of services Carrying out activities stipulated by the losses were 21.261 MWh (a 1.001 MWh 7. DEVELOPMENT OUTLOOK FOR THE COMPANY Company’s repairs programme guarantees decrease since the end of 2013), which With the variety of climate zones in Rus- reliability of the UNEG. The programme is amounted to 4.13% of total electricity sia, we take very seriously our mission of based on the results of regular diagnostics supply; Investments • Providing reliable power supply with • Development of an efficient system to providing sustainable power supply. We do of technical condition of equipment taking separate functioning of Russia’s Unified control the UNEG. our best to ensure the provision of elec- into account local environment, normative • As a result of implementation of our Our Company’s investments are primarily Energy System and those of the Baltics tricity to our customers on a reliable basis, documents by manufacturers and our rich Energy efficiency programme, the total aimed at modernisation and reliability (Estonia, Latvia, Lithuania); The Investment programme is based on adhering to all the necessary technical experience in the industry. effect of energy saving in 2014 amount- upgrades to the Unified National Electric the forecast providing for the following: specifications. ed to 96 MWh. The positive result was Grid in order to ensure an uninterrupted • Providing reliable power supply with Scheduled repairs, maintenance and diag- mainly due to the decrease of undersupply of electricity to our consumers. separate functioning of Unified Energy • Fixed tariffs for natural monopolies for One of the key goals of the Long-term nostics with regards to the UNEG equip- supply and actual losses of electricity. Under the investment activities we carry Systems of Russia and Ukraine; 2014 (on the level of the previous year); development programme for 2015 – 2019 is ment were performed in full: out complex projects with the purpose of maintaining high reliability of the infra- The measures taken as a part of our building new electric grid infrastructure • Removing grid bottlenecks and • Changes to financing of investment structure and further reduction of energy • Cleared 49,573 ha of electricity trans- Energy efficiency programme in 2014 were units and reconstruction of the existing ones. providing high quality and availability of projects due to the decrease of revenue undersupply. mission lines; focused on the following points: electricity transmission and technical from energy transmission services. The priority tasks for the Company’s 2015 – connection services to our customers; Upgrading reliability and maintaining effi- • Replaced 235,112 insulators, 1,269 km • Lower technological energy consump- 2019 Investment programme include: The Company’s 2014 investment plans cient functioning of the UNEG are directed of ground wire, 183 electricity pylons; tion while transmitting via the UNEG; • Synchronization of the Company’s were implemented with the actual by the Funds renewal programme, which • Modernisation and reliability upgrades development programme with those financing being 78% of the plans. Targets is a part of the Investment programme for • Repaired 314 transformers’ branches; • Equipping buildings and constructions to the UNEG to ensure uninterrupted of power generating objects and for most indicators were exceeded. 2015 – 2019. 2,026 switches; 14,761disconnectors’ owned by FGC with water, gas, heat and electricity supply to our customers; distribution grid companies; Commissioning (under voltage) of branches and 124 compression pumps. electric meters; electricity transmission lines turned out The renewal programme’s budget reaches • Providing electricity supply to objects • Improvement of the efficiency to be the only indicator with the targets RUB 111.27 billion. During 2015 – 2019 Total investment into maintaining reliabil- • Lower electric and heat energy con- of high State importance, including of backbone electric grids by unreached – 95% of plans. commissioning of 12,395 MVA and 788.61 ity of the UNEG in 2014 amounted to RUB sumption in buildings and constructions reliable power supply of consumers implementing power efficiency km of transmission lines is scheduled by 11.8 billion. owned by FGC; located in Southern Federal District; programmes; the programme. The reliability and efficiency of our grids is • Lower consumption of POL (petroleum, In 2014, a full-scale reconstruction was upgraded with every year as new equip- oil, lubricants), used for electricity Key indicators of our Company’s Investment programme for 2014 performed with regards to 12 units, the ment is commissioned, timely diagnostics transmission services; most essential of which are the following: and repairs carried out and staff develop- Plan Actual ment is conducted: • Developing and upgrading normative • Substation 330 kV Vladikavkaz-2 supply- documents with regards to energy ef- Financing, billion roubles. (VAT inclusive) 116.0 90.9 ing electricity to large industrial facili- • Undersupply of energy to our custom- ficiency. ties located in Republic of North Ossetia; ers continues tends to be on a low level. Application of funds, billion roubles (VAT inclusive) 124.3 135.2 In 2014, the undersupply amounted to Apart from the decrease of actual electrici- • Substation 500 kV Tikhoretskaya be- 3,565 MWh against 2,768 MWh in 2013. ty losses the technological effect of the pro- Transfer of works-in-progress into fixed assets, billion roubles 128.5 155.1 ing a chief power unit links together 55% of the reporting year figure formed gramme also includes lower electric (0.9 energy system of Kuban with state up due to the ground fire cases outside MWh) and heat (1.88 thousand gigacalories) MVA km MVA km Commissioning (under voltage) district power plants of Stavropol and the security perimeter of «Amurskaya energy consumption in buildings. Addition- 8,478 3,298 9,522 3,121 Novocherkassk, and Volgodonsk atomic – Kheikhe» 500 kV overhead power ally the implementation of the programme power station; transmission line; resulted in lower consumption of gasoline and diesel fuel. In 2014, total economic ef- 64% of investments for the year were spent • Reconstruction of BRELL electricity circuit transmission line ensuring power • Substation 500 kV Kuibyshevskaya sup- • Despite constant increases in assets fect reached RUB 113.6 million on the construction of new capacities, 27% units (in 2014, commissioned 250 MVA); flows up to 2 thousand MW between plying electricity to more than 70% of the subject to maintenance, in 2014 the ac- on reconstruction and modernization, and Krasnoyarsk Territory and the Irkutsk Samara Region’s territory and linking cident rate at our power assets dropped In 2014, corporate energy management the remaining 9% on other investment • Damage recovery programme at the Region and increasing power supply together energy system the Region with by 14.5%; system of FGC and two our branches (MES projects for further development of the Sayano-Shushenskaya hydroelectric reliability; Zhigulevskaya hydroelectric power sta- Volga and PMES Samara) was certified in business and the industry in general. power station; tion, Zainskaya state district power plant • Actual losses of electricity in our accordance with ISO 50001:2011 by Rus- • 500 kV transmission line and the grid and Balakovskaya atomic power station. grids continues to decrease. In 2014, sian division of Bureau Veritas The overall size of the Investment • Ensuring power output of power units; ensuring power supply of 800 MW from programme financing for 2015 – 2019 will the 4th power unit of Bolyarskaya NPP; amount to 563.7 billion roubles. Within • Energy infrastructure development in the framework of implementing the the following regions: • 500 kV Rostovskaya NPP – Tikhoretsk Key production indicators Investment programme, the Company • BAM and Transsib (around the transmission line for the 3rd power unit plans to put into operation 55.5 thousand mentioned railway mainlines); (1,100 MW) of the mentioned NPP; 2014 2013 Change 2014/2013 MVA of transformer capacity and more • the Rostov Region; than 12.4 thousand km of electricity • Krasnodar Territory; • Constructed energy infrastructure for Number of substations 7 924 919 + 0.5% transmission lines. • Mitigating separate functioning of Nyaganskaya, Cherepovetskaya, Uzhno- Unified Energy Systems of Russia and Uralskaya and Chelyabinskaya SDPP’s; Total transmission grid length including rented lines, thousand km 138.8 135.1 + 2,7% The Investment programme will be Ukraine; Electricity transmitted from the UNEG, MWh 515 250 519 983 - 0,91% financed from the following sources: • Electric grid development in the Far • Connected to the UNEG Novuznetskaya Company’s own funds, bond issues and East and Transbaikal territory: GTPP and TPP owned by LLC Actual electricity losses, MWh 21.261 22.262 - 4,49% federal budget funds. Another key feature – the Republic of Buryatia (in 2014, “Stavrolen”; of the investment programme will be the commissioned 132.75 km); Transformer capacity including rented substations, GVA 332.1 332.0 + 0,03% equal distribution of investment expenses – the Republic of Sakha (Yakutia) (in • Commissioned 5.1 thousand km of FOCL within the next 5 years, which will 2014, commissioned 282 MVA). in Siberia, North-West, Urals and in Declared capacity, MW 90,887 91,398 - 0,6% allow our Company to save its balanced Central Russia to ensure efficient and structure of financing sources. The key results of the grid development in reliable control over the UNEG’s objects. 2014 were as follows (completed projects): The key investment projects for the upcoming years are the following: • 500 kV Boguchanskaya HPP – Ozernaya

6 The table demonstrates the projects with capacity exceeding 100 MW each. 7 Including rented sites as well as switchgears and units at substations of other owners.

136 137 JSC FGC UES Annual Report Appendices

Adjustments to our Innovation with the prospect till 2020. The key tasks of 8. FINANCIAL RESULTS Investment programme the programme include: The Management Board and Strategy Committee under the Board of Directors • Concept developing and pilot projects This report contains selected financial Summary of results According to the Russian Federation approved the Innovative development and carrying out with regards to the information, which has been derived Government Decree № 977 of 1 December modernisation policy aimed at creation of intelligent electric grid; from the Group’s consolidated financial For the year ended 31 December 2014 2009 (edition of 16 February 2015), an intelligent innovation-based electric statements as at and for the year ended 31 and 2013, our revenue amounted to RUR FGC developed a draft changes in the grid, including: • Upgrading the UNEG’s energy efficiency December 2014, prepared in accordance 173,353 million and RUR 157,970 million, Investment programme for 2015 – 2019 and ecological performance; with International Financial Reporting respectively. For the year ended 31 (adjustment of the Investment programme • Automate energy consumption Standards (IFRS) and its interpretations December 2014 our loss for the period for 2015) and the Draft investment management systems; • Further cooperation with universities, as adopted by the European Union. The amounted to RUR 20,601 million compared programme for 2016 – 2020. The latter scientific research organizations and selected financial and operating data below to RUR 234,771 million for the year ended stipulates for lower targets (including • Active grid units with altering technical venture business; should be read in conjunction with the 31 December 2013. financing and commissioning volume) characteristics; Group’s consolidated financial statements in order to maintain financial reliability • Upgrading the Company’s business prepared in accordance with IFRS. of the Company with volatile financial • Monitoring system of current grid processes and management system. markets, more expensive borrowings and status; deterioration of payment discipline. In 2014, the focus on innovative decisions Consolidated Income Statement (IFRS) • Automate real-time systems designed implementation was secured, that became Details on the Company’s Investment to maintain operation of the grid within a key strategic result of the Innovative Year ended 31 December Year ended 31 (in millions of roubles) programme are available on our website in the limits set, functioning as a part of development programme implementation. The 2014 December 2013 the “Operations / Investments” section. an integrated system of analysis and key effectiveness indicators of the programme decision-making. reached targeted values in the reporting period. Revenues 173,353 157,970

To achieve the goals of our Innovation The following table sets forth some of Other operating income 8,233 6,155 policy we adopted the Innovative the key effectiveness indicators of the development programme for 2013 – 2017 programme for 2014: Operating expenses (126,137) (133,811) Impairment and revaluation loss on property, plant and equipment, net (70,755) (292,860)

Indicator Plan Actual Status Operating loss (15,326) (262,546) Finance income 5,070 4,027 Ratio of actual losses of electricity to total electric energy supply, % 4.47 4.13 Done Finance costs (6,249) (2,109) Ratio of the personnel to 100 km of the transmission lines, units. 15 14.56 Done Impairment of available-for-sale investments (6,027) (28,757) Amount of patents and registration certificates received during the reporting 20 56 Done period Impairment of promissory notes - (540)

Amount of technologies developed and implemented as a result of R&D works 2 9 Done Share of profit of associates 19 11

Ratio of R&D carried out by universities (expenses) to total R&D expenses, % 1.0 6.7 Done Loss before income tax (22,513) (289,914)

Income tax benefit 1,912 55,143

FGC’s Innovative development programme instead of planned RUB 11,389 million. Such financing decrease of the Investment Loss for the period (20,601) (234,771) provides for upgrading use efficiency for dynamics was mainly due to the fixed tariffs programme and focus our efforts on Russia’s energy potential. The programme and completion of most essential building most progressive and crucial segments also contributes to further development and installation works under innovation of innovation activity; of industrial sector of Russia’s economy, projects active at that time. decrease of imported equipment share • Further development of “open and establishes conditions for Russian To adapt to the current financing innovation” mechanisms to work with economy gaining maximum benefits. restrictions, we are taking the following our partners in the field of innovative measures: development of FGC. The targeted values of the effectiveness indicators in the table above were reached • Improve planning and implementation despite a notable drop of the programme’s of the Innovative Development financing in 2014 – actual RUB 1,280 million Programme in order to compensate the

138 139 JSC FGC UES Annual Report Appendices

Consolidated Statement of Financial Position (IFRS)

Year ended 31 Year ended 31 (in millions of roubles) 31 December 2014 31 December 2013 (in millions of roubles) December 2014 December 2013

ASSETS CASH FLOWS FROM OPERATING ACTIVITIES:

Non-current assets Profit / (loss) before income tax (22,513) (289,914)

Property, plant and equipment 795,029 749,710 Adjustments to reconcile profit / (loss) before income tax to net cash provided by operations

Intangible assets 8,285 11,228 Depreciation of property, plant and equipment 43,365 56,758

Investments in associates 2,109 1,440 (Gain) / loss on disposal of property, plant and equipment (429) 1,295

Available-for-sale investments 14,384 20,442 Amortisation of intangible assets 3,773 878

Deferred income tax assets 437 7,162 Impairment and revaluation loss on property, plant and equipment, net 70,775 292,860

Other non-current assets 4,110 6,168 Impairment of available-for-sale investments 6,027 28,757

Total non-current assets 824,354 796,150 Impairment of promissory notes - 540

Current assets Share of result of associates (19) (11)

Cash and cash equivalents 42,068 21,627 Accrual of allowance for doubtful debtors 2,887 1,573

Bank deposits 185 39,070 Share-based compensation 6 192

Accounts receivable and prepayments 55,912 48,694 Finance income (5,070) (4,027)

Income tax prepayments 1,516 2,016 Finance costs 6,249 2,109

Inventories 10,446 7,990 Other non-cash operating (income) / expense (78) 10

Other current assets 694 2,955 Operating cash flows before working capital changes and income tax paid 104,973 91,020

Total current assets 110,821 122,352 Working capital changes:

TOTAL ASSETS 935,175 918,502 Increase in accounts receivable and prepayments (7,946) (12,952)

EQUITY AND LIABILITIES Increase in inventories (2,430) (995)

Equity (Increase) / decrease in other non-current assets (69) 264

Share capital: Ordinary shares 637,333 633,571 (Decrease) / increase in accounts payable and accrued charges (4,472) 1 799

Treasury shares (4,719) (4,725) Decrease in retirement benefit obligations (330) (71)

Share premium 10,501 10,501 Income tax paid - (273)

Reserves 226,382 184,916 Net cash generated by operating activities 89,726 78,792

Accumulated deficit (297,237) (275,024) CASH FLOWS FROM INVESTING ACTIVITIES:

Equity attributable to shareholders of FGC UES 572,260 549,239 Purchase of property, plant and equipment (73,612) (122,143)

Non-controlling interest 971 (942) Proceeds from disposal of property, plant and equipment 3,525 623

Total equity 573,231 548,297 Purchase of intangible assets (830) (2,787)

Non-current liabilities Purchase of promissory notes - (26,879)

Deferred income tax liabilities 1,954 512 Redemption of promissory notes 2,923 48,403

Non-current debt 233,291 257,964 Investment in bank deposits (688) (40,374)

Deferred income 1,130 - Redemption of bank deposits 39,573 2,612

Retirement benefit obligations 6,456 7,912 Dividends received 1 23

Total non-current liabilities 242,831 266,388 Interest received 4,336 3,064

Current liabilities Net cash used in investing activities (24,772) (137,458)

Accounts payable to shareholders of FGC UES 8 3,773 CASH FLOWS FROM FINANCING ACTIVITIES:

Current debt and current portion of non-current debt 29,686 29,624 Proceeds from share issuance - 3,762

Accounts payable and accrued charges 89,316 70,376 Proceeds from non-current borrowings 1 110,000

Income tax payable 103 44 Repayment of current and non-current borrowings (24,582) (40,151)

Total current liabilities 119,113 103,817 Repayment of lease (150) (150)

Total liabilities 361,944 370,205 Dividends paid (436) -

TOTAL EQUITY AND LIABILITIES 935,175 918,502 Interest paid (22,279) (17,224)

140 141 JSC FGC UES Annual Report Appendices

Year ended 31 Year ended 31 Adjusted profit for the period (in millions of roubles) December 2014 December 2013 Adjusted profit for the period is used to loss on property, plant and equipment, The following table sets forth a reconciliation Government grants 2,933 - calculate the return on assets and the return impairment of available-for-sale investments, of adjusted profit for the period to profit for the Net cash (used in) / generated by financing activities (44,513) 56,237 on equity indicators. Loss for the period was impairment of promissory notes, including periods indicated. adjusted for non-specific impairment of respective deferred income tax. Net increase / (decrease) in cash and cash equivalents 20,441 (2,429) property, plant and equipment, revaluation Cash and cash equivalents at the beginning of the period 21,627 24,056

Cash and cash equivalents at the end of the period 42,068 21,627 Year ended 31 December Year ended 31 December (in millions of roubles) 2014 2013

Loss for the period (20,601) (234,771) Non-IFRS Financial Information Adjustments to loss for the period:

Year ended 31 December Year ended 31 December Non-specific impairment of PPE 41 293,423 (in millions of roubles, except for margins and ratios in %) 2014 2013 Revaluation of PPE 70,714

EBITDA 25,804 (234,196) Impairment of available-for-sale investments 6,027 28,757

(1) EBITDA margin 14.9% (148.3)% Impairment of promissory notes - 540

(2) Adjusted EBITDA 107,656 92,551 Deferred income tax on adjustments (15,356) (64,544)

(1) Adjusted EBITDA margin 62.1% 58.6% Adjusted profit for the period 40,825 23,405 Adjusted operating profit(3) 55,429 30,877

Adjusted operating profit margin(1) 32.0% 19.5% EBITDA and Adjusted EBITDA Adjusted profit for the period(4) 40,825 23,405

Return on assets (5) 4.4% 2.1% EBITDA represents loss for the period equipment, revaluation loss on property, The following table sets forth a before income tax, finance income and plant and equipment, impairment reconciliation of profit for the period Return on equity (6) 7.3% 3.2% costs, depreciation and amortisation. of available-for-sale investments, to EBITDA and adjusted EBITDA for the Adjusted EBITDA represents EBITDA impairment of promissory notes, and to periods indicated. adjusted to exclude, if any, non-specific include finance income. (1) Margins are calculated as EBITDA, property, plant and equipment ,impairment be considered as alternatives to profit impairment of property, plant and adjusted EBITDA and adjusted operating of available-for-sale investments, for the period as a measure of operating profit divided by the total revenue impairment of promissory notes, including performance or to cash flows from for the period; respective deferred income tax; operating activities as a liquidity measure. Year ended 31 December Year ended 31 December (in millions of roubles) Our calculation of these ratios may be 2014 2013 (2) Adjusted EBITDA is calculated as (5) Return on assets is calculated as different from calculations used by other EBITDA adjusted to exclude non-specific adjusted profit for the period divided by the companies and therefore comparability Loss for the period (20,601) (234,771) impairment of property, plant and average total assets for the period; may be limited. We believe that EBITDA and Add back: equipment, revaluation loss on property, Adjusted EBITDA provide useful information plant and equipment, impairment (6) Return on equity is calculated as to investors, because they are indicators Income tax benefit (1,912) (55,143) of available-for-sale investments, adjusted profit for the period divided by of the strength and performance of our impairment of promissory notes and to the average total equity for the respective ongoing business operations and indicators Finance income (5,070) (4,027) include finance income period. For the purpose of this ratio, of our ability to fund discretionary amounts received from shareholders of spending, such as: capital expenditures, Finance costs 6,249 2,109 (3) Adjusted operating profit is calculated Federal Grid Company for the additional the acquisition of subsidiaries and other Depreciation and amortisation 47,138 57,636 as operating loss adjusted for non- share issues prior to the registration of investments and our ability to incur and specific impairment of property, plant these issues (recorded as accounts payable service debt. While depreciation and EBITDA 25,804 (234,196) and equipment and revaluation loss on to shareholders of Federal Grid Company) amortisation are considered operating property, plant and equipment; are treated as an element of equity. costs under IFRS, these expenses primarily Adjustments to EBITDA: represent non-cash current period Non-specific impairment of PPE 41 293,423 (4) Adjusted profit for the period is The indicators presented above are not allocations of costs associated with long- calculated as loss for the period adjusted financial performance measures that are lived assets that have been acquired or Revaluation of PPE 70,714 - for non-specific impairment of property, required by, or presented in accordance constructed in prior periods. plant and equipment, revaluation loss on with IFRS. Accordingly, they should not Impairment of available-for-sale investments 6,027 28,757 Impairment of promissory notes - 540

Add back:

Finance income 5,070 4,027

Adjusted EBITDA 107,656 92,551

142 143 JSC FGC UES Annual Report Appendices

Liquidity ratios and other measures Operating expenses

The table below sets out the Group’s operating expenses for the periods indicated. (in millions of roubles, except ratios) 31 December 2014 31 December 2013

Current liquidity ratio (1) 0.93 1.22 Percentage Percentage Percentage change between (2) (in millions of roubles except for Year ended of total Year ended of total Cash liquidity ratio 0.36 0.64 the year ended percentages) 31 December 2014 operating 31 December 2013 operating 31 December 2014 and 2013 Total equity/Total assets ratio (3) 0.61 0.60 expenses expenses

Net debt (4) 220,099 223,995 Depreciation of PP&E 43,365 34.38% 56,758 42.42% (23.6)%

Amortisation of intangible assets 3,773 2.99% 878 0.66% 329.73% (1) Current liquidity ratio is calculated short-term bank deposits and short- Federal Grid Company for the additional Employee benefit expenses and as total current assets divided by total term promissory notes divided by total share issues before the registration 26,606 21.09% 27,939 20.88% (4.77)% current liabilities. For the purpose of current liabilities. For the purpose of of these issues (recorded as accounts payroll taxes this ratio, the amounts received from this ratio, the amounts received from payable to shareholders of Federal Grid Purchased electricity 14,047 11.14% 14,151 10.58% (0.73)% shareholders of Federal Grid Company shareholders of Federal Grid Company Company) are treated as an element of for the additional share issues prior to for the additional share issues prior to equity; Allowance for doubtful debtors 2,887 2.29% 1,573 1.18% 83.53% the registration of these issues (recorded the registration of these issues (recorded as accounts payable to shareholders of as accounts payable to shareholders of (4) Net debt represents non-current and Electricity transit 3,599 2.85% 2,199 1.64% 63.67% Federal Grid Company) are excluded from Federal Grid Company), are excluded current debt reduced by cash and cash current liabilities; from current liabilities; equivalents, short-term bank deposits Taxes other than income tax 7,149 5.67% 4,302 3.20% 66.18% and short-term promissory notes. Other expenses 24,711 19.59% 26,011 19.44% (5.00)% (2) The cash liquidity ratio is calculated (3) For the purpose of this ratio, the as a sum of cash and cash equivalents, amounts received from shareholders of Total operating expenses 126,137 100% 133,811 100% (5.74)%

Revenue the period. The Group also earns revenue 2013 to RUR 173,353 million for the year Depreciation of PP&E Electricity transit Taxes other than income tax from the sale of electricity generated ended 31 December 2014. The Group’s revenue is derived primarily and sold to third parties by the Group’s The Group’s depreciation expenses The Group’s electricity transit expenses The Group’s taxes other than income tax from the provision of electricity subsidiaries. The table below sets out the Group’s decreased by RUR 13,393 million, or 23.6%, increased by RUR 1,400 million, or 63.67%, increased by RUR 2,847 million, or 66.18%, transmission services. Changes in this revenue for the periods indicated. from RUR 56,758 million for the year ended from RUR 2,199 million for the year ended from RUR 4,302 million for the year ended type of revenue are primarily dependent The Group’s revenue increased by RUR 31 December 2013 to RUR 43,365 million for 31 December 2013 to RUR 3,599 million for 31 December 2013 to RUR 7,149 million for on changes in tariffs set by the FTS and 15,383 million, or 9.74%, from RUR 157,970 the year ended 31 December 2014, mainly the year ended 31 December 2014 which the year ended 31 December 2014 mainly volumes of electricity transmitted during million for the year ended 31 December due to impairment of PP&E recognized as at was caused both by the increased volumes due to the increase in property tax expense 31 December 2013. of electricity transmitted and the growth caused by the growth of tax rates for of tariffs. power transmission grids. Percentage change Percentage Percentage (in millions of roubles except for Year ended Year ended between the year ended Amortisation of intangible assets of total of total percentages) 31 December 2014 31 December 2013 31 December 2014 revenue revenue Allowance for doubtful debtors Other expenses and 2013 The Group’s amortisation expenses increased by RUR 2,895 million, or 329.73%, After a detailed analysis of accounts The Group’s other expenses decreased Transmission fee 159,780 92.20% 152,430 96.50% 4.82% from RUR 878 million for the year ended 31 receivable as at 31 December 2014, by RUR 1,300 million, or 5,00%, from Electricity sales 5,591 3.20% 3,665 2.30% 52.55% December 2013 to RUR 3,773 million for the the Group recognised an allowance for RUR 26,011 million for the year ended 31 year ended 31 December 2014 as a result of doubtful debtors in amount of RUR 2,887 December 2013 to RUR 24,711 million for Other revenues 7,982 4.60% 1,875 1.20% 325.71% significant amounts of intangible assets put million for the year ended 31 December the year ended 31 December 2014 mainly into operation in 2014. 2014 resulting from expectations of due to decrease of subcontract works in Total revenues 173,353 100% 157,970 100% 9.74% future cash flows based on recoverability, total amount of RUB 1,161 million, these payment trends and subsequent receipt works mainly related to constructions in Employee benefit expenses and payroll analyses. For the year ended 31 December Sochi in 2013. Transmission fee Other revenues Other operating income taxes 2013, the Group recognised the allowance in amount of RUR 1,573 million. The Group’s revenue from electricity Other revenues include revenues from Other operating income primarily includes The Group’s employee benefits expenses and transmission services increased by RUR connection services and grid repair and income from non-core activities. The payroll taxes decreased by RUR 1,333 million, 7,350 million, or 4.82%, from RUR 152,430 maintenance services. The Group’s other Group’s other operating income increased or 4.77%, from RUR 27,939 million for the million for the year ended 31 December revenues increased by RUR 6,107 million, by RUR 2,078 million, or 33.76%, from year ended 31 December 2013 to RUR 26,606 2013 to RUR 159,780 million for the year or 325.71%, from RUR 1,875 million for the RUR 6 155 million for the year ended 31 million for the year ended 31 December 2014. ended 31 December 2014. The increase year ended 31 December 2013 to RUR 7,982 December 2013 to RUR 8,233 million for This was caused by the decrease in average was caused by the growth in average million for the year ended 31 December the year ended 31 December 2014 mainly number of employees in 2014. tariffs on 4.36%. 2014 due to increase in revenue from due to income from accrual of penalties and technological connection services by RUR fines as well as increase of rental income. Electricity sales 6,998 million, which is due to completion of technological connection services for The Group’s revenue from electricity sales significant customers and recognition increased by RUR 1,926 million, or 52.55%, of revenue relating to these contracts: from RUR 3,665 million for the year ended ОJSC “Fortum” - RUB 2,510 million, 31 December 2013 to RUR 5,591 million LLC “LUKOIL-Astrakhanenergo”- RUB for the year ended 31 December 2014 as a 1,119 million, LLC “RusVinil”- RUB 989 result of increase in volumes of electricity million, CJSC “Kaspiisky Truboprovodny sold by OJSC “MGES”. Konsortsium-P” - RUB

144 145 JSC FGC UES Annual Report Appendices

Finance income 2013 to RUR 6,027 million for the year Income tax benefit Net cash generated by operating by RUR 48,531 million and placement of net inflow of borrowings amounted to ended 31 December 2014. The loss activities deposits with maturity less than 3 months RUR 69,849 million), whilst the financing Finance income primarily includes interest recognised in both years was attributable The Group recognised an income tax (accounted for within cash equivalents) activities in 2014 were mostly represented income from investments in bank deposits to an impairment of shares in INTER RAO benefit in amount of RUR 1,912million for Net cash generated by the Group’s instead of deposits with a longer maturity, by the bonds repayment (the current and promissory notes. Finance income and additionally to the impairment of the year ended 31 December 2014, and operating activities increased by RUR which resulted in decrease of outflow portion of non-current bonds for the total increased by RUR 1,043 million, or 25.9%, shares in “JSC Russian Grids” in 2014 due RUR 55,143 million for the year ended 31 10,933 million, or 13.88%, from RUR 78,792 by RUR 39,686 million. This decrease in amount of RUR 24,582 million were paid from RUR 4,027 million for the year ended to a significant and prolonged decline in December 2013. The effective tax rate million for the year ended 31 December investment cash outflows was partly offset in 2014). Moreover the amount of interest 31 December 2013 to RUR 5,070 million the fair value of these equity investments decreased from 19% to 8%. 2013 to RUR 89,726 million for the year by the decrease in net cash inflows from paid increased by RUR 5,055 million, which for the year ended 31 December 2014. below their cost. ended 31 December 2014. This is due to the transactions with promissory notes by is in line with the increase of interest The increase is in line with the growth of Loss for the period revenue increase as described above. RUR 18,601 million. accrual on new bonds issued in 2013. weighted average balances of deposits Impairment and revaluation and relates to placement of available cash balances to deposit accounts aimed at loss on property, plant and As a result of the above-mentioned Net cash used in investing activities Net cash (used in) / generated by Debt gaining interest income. equipment, net factors, the Group recognised loss for the financing activities period in amount of RUR 20,601 million Net cash used in the Group’s investing As at 31 December 2014, the Group’s total Finance costs for the year ended 31 December 2014 activities decreased by RUR 112,687 Net cash used in the Group’s financing debt amounted to RUR 220,099 million as Impairment and revaluation loss on compared to RUR 234,771 million of the million, or 81.98%, from RUR 137,458 activities in the year ended 31 December compared to RUR 287,588 million as at 31 property, plant and equipment, net year ended 31 December 2013. million for the year ended 31 December 2014 amounted to RUR 44,513 million. Net December 2013. Finance costs increased by RUR 4,140 decreased by RUR 222,085 million, or 2013 to RUR 24,772 million for the year cash generated by the Group’s financing million, or 196.30%, from RUR 2,109 75.83%, from RUR 292,860 million for Capital resources ended 31 December 2014. This was activities amounted to RUR 56,237 million million for the year ended 31 December the year ended 31 December 2013 to mainly caused by a redemption of bank in the year ended 31 December 2013. The The following table sets out the Group’s 2013 to RUR 6,249 million the year ended RUR 70,775 million for the year ended 31 The electricity transmission business is deposits in amount of RUR 39,573 million, financing activities in 2013 were mostly current debt and non-current debt for the 31 December 2014. Increase is primarily December 2014. As a result of revaluation capital-intensive and many of the Group’s decrease in outflows for purchase of PPE aimed at attracting new borrowings (the periods indicated. attributable to issue of certified interest- of property, plant and equipment made facilities are aged and require regular bearing non-convertible bearer bonds in as at 31 December 2014, the Group maintenance and upgrades. Expenditures total amount of RUR 61,000 million in the recognised net revaluation loss in amount to maintain, expand and increase the (in millions of roubles) 31 December 2014 31 December 2013 2nd half of 2013. Moreover the amount of of RR 70,714 million. As at 31 December efficiency and size of the transmission grid interest capitalised decreased by RUR 342 2013 the Group recognised net impairment are, accordingly, an important priority and Total current debt and current portion of non-current debt 29,686 29,624 million due to overall decrease in capital of RR 293,254 million as a result of value- have a significant effect on the Group’s expenditure in 2014. in-use calculation. cash flows and future operating results. Total non-current debt 233,291 257,964 Total debt 262,977 287,588 Impairment of available-for- Loss before income tax The table below sets out total additions to property, plant and equipment and repair Net debt 220,099 223,995 sale investments and maintenance expenditures for the The Group recognised loss before income periods indicated. Impairment of available-for-sale tax in amount of RUR 22,513 million for The key reason for the decrease of the Company’s debt relates to a repayment of significant part of current portion of non-current investments decreased by RUR 22,730 the year ended 31 December 2014 and bonds in amount RUR 24,582 million. million, or 79.04%, from RUR 28,757 RUR 289,914 million for the year ended 31 million for the year ended 31 December December 2013. 9. DISCLAIMER Year ended Year ended (in millions of roubles) 31 December 2014 31 December 2013 This Annual Financial Report has been such responsibility or liability is expressly those that are anticipated. The forward- prepared for shareholders of Joint Stock disclaimed against. looking statements contained in this Annual Total addition to property, plant and equipment 111,994 160,389 Company «Federal Grid Company of Unified Financial Report reflect knowledge and Energy System» (the Company) as a body By their very nature, statements concerning information that were available at the date Repairs and maintenance expenditure 2,768 3,078 and for no other persons. The Company, its risks and uncertainties that the Company of preparing this Report and the Company directors, employees, agents or advisers faces in this Annual Financial Report undertakes no obligation to update these do not accept responsibility for any other involve uncertainty since future events forward-looking statements. Further, Liquidity needs, including those to fund additional sources and funds from the Russian person to whom this document is shown and circumstances can cause results and nothing in this Report should be construed capital expenditures in accordance with Government. or into whose hands it may reach and any developments to differ materially from as a profit forecast. The Group’s primary sources of liquidity its business strategy, are expected to are cash generated via operating activities, be financed by a combination of cash The table below summarizes the Group’s debt and equity financing. Future flows generated by the Group’s operating cash flows for the periods indicated. requirements for the Group’s business activities, as well as external financing 10. RESPONSIBILITY STATEMENT

Year ended 31 December Year ended 31 December I hereby confirm that to the best of my knowledge: (in millions of roubles) 2014 2013 (a) the consolidated financial statements, prepared in accordance with International Financial Reporting Net cash generated by operating activities 89,726 78,792 Standards, give a true and fair value of the assets, liabilities, financial position and profit or loss of Federal Grid Company UES Group, and the undertakings included in the consolidation taken as a whole (the «Group»); and Net cash used in investing activities (24,772) (137,458)

Net cash (used in) / generated by financing activities (44,513) 56,237 (b) the management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that are faced. Net increase / (decrease) in cash and cash equivalents 20,441 (2,429)

Cash and cash equivalents at the end of the period 42,068 21,627

Andrey Kazachenkov. First Deputy Chairman of the Management Board, Member of the Management Board April 23, 2015

146 147 JSC FGC UES Annual Report Appendices

JSC “FGC UES” CONTENTS Auditors’ Report CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement of Financial Position ...... 5 PREPARED IN ACCORDANCE WITH Consolidated Statement of Comprehensive Income...... 6 Consolidated Statement of Cash Flows ...... 7 INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EU Consolidated Statement of Changes in Equity ...... 8

FOR THE YEAR ENDED 31 DECEMBER 2014 Notes to the Consolidated Financial Statements AND AUDITORS’ REPORT Note 1. JSC “FGC UES” and its operations...... 10 Note 2. Basis of preparation ...... 10 Note 3. Summary of significant accounting policies...... 13 Note 4. Principal subsidiaries ...... 19 Note 5. Balances and transactions with related parties...... 19 Note 6. Property, plant and equipment ...... 21 Note 7. Intangible assets...... 24 Note 8. Investments in associates and joint ventures...... 25 Note 9. Available-for-sale investments ...... 25 Note 10. Other non-current and other current assets ...... 25 Note 11. Cash and cash equivalents ...... 26 Note 12. Bank deposits...... 26 Note 13. Accounts receivable and prepayments...... 27 Note 14. Inventories ...... 28 Note 15. Equity...... 28 Note 16. Income tax ...... 30 Note 17. Non-current debt...... 33 Note 18. Retirement benefit obligations...... 34 Note 19. Current debt and current portion of non-current debt ...... 36 Note 20. Accounts payable and accrued charges...... 36 Note 21. Revenues and other operating income ...... 36 Note 22. Operating expenses...... 37 Note 23. Finance income...... 37 Note 24. Finance costs...... 38 Note 25. Loss per ordinary share for profit attributable to shareholders of FGC UES...... 38 Note 26. Contingencies, commitments and operating risks...... 38 Note 27. Financial instruments and financial risks...... 39 Note 28. Capital risk management ...... 42 Note 29. Segment information ...... 43

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JSC “FGC UES”

Consolidated Statement of Comprehensive Income (in millions of Russian Rouble unless otherwise stated) Year ended Year ended Notes 31 December 2014 31 December 2013 Revenues 21 173,353 157,970 Other operating income 21 8,233 6,155 Operating expenses 22 (126,137) (133,811) Impairment and revaluation loss on property, plant and equipment, net 6 (70,775) (292,860) Operating loss (15,326) (262,546) Finance income 23 5,070 4,027 Finance costs 24 (6,249) (2,109) Impairment of available-for-sale investments 9 (6,027) (28,757) Impairment of promissory notes 10 - (540) Share of profit of associates and joint ventures 8 19 11 Loss before income tax (22,513) (289,914) Income tax benefit 16 1,912 55,143 Loss for the period (20,601) (234,771) Other comprehensive income / (loss) Items that will not be reclassified subsequently to profit or loss Change in revaluation reserve for property, plant and equipment 6 50,562 (155,532) Remeasurements of retirement benefit obligations 18 1,699 (176) Income tax relating to items that will not be reclassified 16 (10,253) 31,150 Total items that will not be reclassified to profit or loss 42,008 (124,558) Items that are or may be reclassified subsequently to profit or loss Change in fair value of available-for-sale investments 9 (6,488) (30,175) Impairment of available-for-sale investments recycled to profit or loss 9 6,027 28,757 Foreign currency translation difference 8 650 26 Income tax relating to items that may be reclassified 16 6 284 Total items that are or may be reclassified to profit or loss 195 (1,108) Other comprehensive income / (loss) for the period, net of income tax 42,203 (125,666) Total comprehensive income /(loss) for the period 21,602 (360,437) Loss attributable to: Shareholders of FGC UES 25 (21,581) (233,101) Non-controlling interest 980 (1,670) Total comprehensive income/(loss) attributable to: Shareholders of FGC UES 19,686 (358,767) Non-controlling interest 1,916 (1,670) Loss per ordinary share for loss attributable to shareholders of FGC UES – basic and diluted (in Russian Rouble) 25 (0.017) (0.186)

The accompanying notes are an integral part of these Consolidated Financial Statements 6

152 153 JSC FGC UES Annual Report Appendices

JSC “FGC UES” JSC “FGC UES” Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Attributable to shareholders of FGC UES Accumu- Non- Year ended Year ended Share Share Treasury lated controlling Total Notes 31 December 2014 31 December 2013 Notes capital premium shares Reserves deficit Total interest equity CASH FLOWS FROM OPERATING As at 1 January 2014 633,571 10,501 (4,725) 184,916 (275,024) 549,239 (942) 548,297 ACTIVITIES: Comprehensive income for the period Loss before income tax (22,513) (289,914) Loss for the period - - - - (21,581) (21,581) 980 (20,601) Adjustments to reconcile loss before income tax to Other comprehensive income / (loss), net of related net cash provided by operations income tax Depreciation of property, plant and equipment 22 43,365 56,758 Change in revaluation reserve for property, plant and equipment 15 - - - 39,713 (199) 39,514 936 40,450 (Gain) / loss on disposal of property, plant and equipment 22 (429) 1,295 Change in fair value of available-for-sale investments 9, 15 - - - (5,276) - (5,276) - (5,276) Impairment of available-for-sale investments recycled to Amortisation of intangible assets 22 3,773 878 profit or loss 9, 15 - - - 4,821 - 4,821 - 4,821 Impairment and revaluation loss of property, plant Remeasurements of retirement benefit obligations 15, 18 - - - 1,558 - 1,558 1,558 and equipment, net 6 70,775 292,860 Foreign currency translation difference 8, 15 - - - 650 - 650 - 650 Impairment of available-for-sale investments 9 6,027 28,757 Impairment of promissory notes 10 - 540 Total other comprehensive income - - - 41,466 (199) 41,267 936 42,203 Share of result of associates 8 (19) (11) Total comprehensive income for the period - - - 41,466 (21,780) 19,686 1,916 21,602 Accrual of allowance for doubtful debtors 22 2,887 1,573 Transactions with shareholders of FGC UES recorded directly in equity Share-based compensation 15, 22 6 192 Issue of share capital 15 3,762 - - - - 3,762 - 3,762 Finance income 23 (5,070) (4,027) Share-based compensation 15 - - 6 - - 6 - 6 Finance costs 24 6,249 2,109 Dividends declared - - - - (433) (3) Other non-cash operating (income)/ expense (78) 10 (433) (436) Operating cash flows before working capital Total transactions with shareholders of FGC UES 3,762 - 6 - (433) 3,335 (3) 3,332 changes and income tax paid 104,973 91,020 As at 31 December 2014 637,333 10,501 (4,719) 226,382 (297,237) 572,260 971 573,231 Working capital changes: Increase in accounts receivable and prepayments (7,946) (12,952) Increase in inventories (2,430) (995) (Increase) / decrease in other non-current assets (69) 264 (Decrease) / increase in accounts payable and accrued charges (4,472) 1,799 Decrease in retirement benefit obligations (330) (71) Income tax paid - (273) Net cash generated by operating activities 89,726 78,792 CASH FLOWS FROM INVESTING 8 ACTIVITIES: Purchase of property, plant and equipment (73,612) (122,143) Proceeds from disposal of property, plant and equipment 3,525 623 Purchase of intangible assets (830) (2,787) Purchase of promissory notes - (26,879) Redemption of promissory notes 2,923 48,403 Investment in bank deposits (688) (40,374) Redemption of bank deposits 39,573 2,612 Dividends received 1 23 Interest received 4,336 3,064 Net cash used in investing activities (24,772) (137,458) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from share issuance 15 - 3,762 Proceeds from non-current borrowings 1 110,000 Repayment of current and non-current borrowings (24,582) (40,151) Repayment of lease (150) (150) Dividends paid (436) - Interest paid (22,279) (17,224) Government grants received 2,933 - Net cash (used in) / generated by financing activities (44,513) 56,237 Net increase / (decrease) in cash and cash equivalents 20,441 (2,429) Cash and cash equivalents at the beginning of the period 11 21,627 24,056 Cash and cash equivalents at the end of the period 11 42,068 21,627

The accompanying notes on are an integral part of these Consolidated Financial Statements 7

154 155 JSC FGC UES Annual Report Appendices

JSC “FGC UES”

Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) 9 ) ) ) 6 2 2 (5) 297 192 ,

771 437 Note 1. JSC “FGC UES” and its operations , , (13 8 3,378 3,565 Total 4 0 equity 23,006 905,169 54 (24,139) Joint-Stock Company “Federal Grid Company of Unified Energy System” (“FGC UES” or the “Company”) was (23 (124,427) (125,666) (36 established in June 2002 for the purpose of operating and managing the electricity transmission grid infrastructure - of the Russian Unified National Electric Grid (the “UNEG”). ------(5) (5) Non 733

(942) FGC UES and its subsidiaries (the “Group”) act as the natural monopoly operator for the UNEG. The Group’s interest

(1,670) (1,670) principal operating activities consist of providing electricity transmission services, providing connection to the controlling electricity grid, maintaining the electricity grid system, technical supervision of grid facilities and investment ) ) ) -

6 activities in the development of the UNEG. The majority of the Group’s revenues are generated via tariffs for 2 2 239 192

, electricity transmission, which are approved by the Russian Federal Tariff Service (the “FTS”) based on the 101 767 , , (13 Total 9 3,378 3,570 3 23,006

58 Regulatory Asset Base (“RAB”) regulation. FGC UES's main customers are distribution grid companies 904,436 54 (24,139)

(23 (124,427) (125,666) (3 (“IDGCs”), certain large commercial end customers and retail electricity supply companies. ) ) ) ------On 14 June 2013 the Government of the Russian Federation (the “RF”) transferred its stake in FGC UES to 101 899 024 , , , lated OJSC “Russian Grids” (former OJSC “IDGC Holding”), the holding company of an electricity distribution group, 1,202 1,202 3 1 5 deficit

(43,125) controlled by the Government of the RF. As at 31 December 2014, FGC UES was 80.13% owned and controlled by Accumu (23 (23 (27 OJSC “Russian Grids”. The remaining shares are traded on Moscow Interbank Currency Exchange and as Global FGC UES

) Depository Receipts on the London Stock Exchange. - - - - - 6 2 2

(13 The registered office of the Company is located at 5A Akademika Chelomeya Street, Moscow 117630, Russian 23,006 311,784 184,916

(24,139) Federation. Reserves (125,629) (126,868) (126,868) Relationships with the state. The Government of the RF is the ultimate controlling party of FGC UES. The ------Government directly affects the Group's operations via regulation over tariff by the FTS and its investment 192 192

shares program is subject to approval by both the FTS and the Ministry of Energy. Ultimately the Government supports (4,917) (4,725)

Treasury the Group due to its strategic position in the Russian Federation. The Government's economic, social and other policies could have a material impact on the Group’s operations. ------Business environment. The Group’s operations are primarily located in the Russian Federation. Consequently, the Share 10,501 10,501 Attributable shareholders to of Group is exposed to the economic and financial markets of the Russian Federation which display characteristics premium of an emerging market. The legal, tax and regulatory frameworks continue development, but are subject to varying ------interpretations and frequent changes which together with other legal and fiscal impediments contribute to the

3,378 3,378 challenges faced by entities operating in the Russian Federation. (Note 26). Share capital 630,193 633,571 The recent conflict in Ukraine and related events has increased the perceived risks of doing business in the Russian Federation. The imposition of economic sanctions on Russian individuals and legal entities by the European Union, 8 5 5 5

5 5 the United States of America, Japan, Canada, Australia and others, as well as retaliatory sanctions imposed by the , 1 1 , 1 , 1 15 1 5 9 9 8, 1

1 Russian government, has resulted in increased economic uncertainty including more volatile equity markets, a Notes depreciation of the Russian Ruble, a reduction in both local and foreign direct investment inflows and a significant tightening in the availability of credit. In particular, some Russian entities may be experiencing difficulties in accessing international equity and debt markets and may become increasingly dependent on Russian state banks ) to finance their operations. The longer term effects of recently implemented sanctions, as well as the threat of recorded

stated additional future sanctions, are difficult to determine. The consolidated financial statements (“Consolidated Financial Statements”) reflect management’s assessment of the impact of the Russian business environment on the operations and the financial position of the Group. The Equity sale investments FGC UES -

in future business environment may differ from management’s assessment. for - Note 2. Basis of preparation unless otherwise sale investments recycled to -

Changes Statement of compliance. These Consolidated Financial Statements have been prepared in accordance with, and for of - available comply with, International Financial Reporting Standards (“IFRS”) and its interpretations as adopted by the

” European Union (the “EU”). of retirement benefit obligations benefit retirement of Each enterprise of the Group individually maintains its own books of accounts and prepares its statutory financial UES Statement statements in accordance with the Regulations on Accounting and Reporting of the RF (“RAR”). The declared accompanying Consolidated Financial Statements are based on the statutory records and adjusted and reclassified FGC based compensation based -

for the period the for for the purpose of fair presentation in accordance with IFRS.

hange in fair value of Functional and presentation currency. The Russian Rouble (“RR”) is functional currency for FGC UES and the As at 1 January 2013 1 January at As Comprehensive loss for the period Loss Other comprehensive loss, netof related income tax Change in revaluation reserve for property, plant and equipment C Impairment of available loss or profit Remeasurements difference translation currency Foreign Total other comprehensive loss Total comprehensive loss for the period Transactions with shareholders of equity in directly Issue of share capital Share Dividends UES with FGC transactions of shareholders Total 2013 31 December at As in millions of Russian Rouble Russian of millions in Consolidated JSC “ ( currency in which these Consolidated Financial Statements are presented. All financial information presented in RR have been rounded to the nearest million, unless otherwise stated.

156 157 JSC FGC UES Annual Report Appendices

JSC “FGC UES” JSC “FGC UES”

Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 2. Basis of preparation (continued) Note 2. Basis of preparation (continued) New accounting developments not yet adopted. A number of new Standards, amendments to Standards and Critical accounting estimates and assumptions Management makes a number of estimates and assumptions that Interpretations are not yet effective as at 31 December 2014, and have not been applied in preparing these are continually evaluated and may differ from the related actual results. The estimates and assumptions that have consolidated financial statements. Of these pronouncements, potentially the following will have an impact on the the most significant effect on the amounts recognised in these Consolidated Financial Statements and estimates Group’s operations. The Group plans to adopt these pronouncements when they become effective. that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year include:

New or Possible impact on Carrying value of property, plant and equipment (Note 6). The Group uses the revaluation model for property, amended consolidated financial plant and equipment. The last external valuation was performed as at 31 December 2014. standard Summary of the requirements statements Carrying value of investment in OJSC “INTER RAO UES” (Note 9). As at 31 December 2014 the Group owns IFRS 9 IFRS 9, published in July 2014, replaces the existing The Group is assessing the 18.57% of the voting shares of OJSC “INTER RAO UES” (“INTER RAO”). Management has assessed the level Financial guidance in IAS 39 Financial Instruments: Recognition and potential impact on its of influence that the Group has on INTER RAO, taking into account its limitation to obtain any additional financial Instruments Measurement. IFRS 9 includes revised guidance on the consolidated financial information which may be an indicator of such influence, and determined that it does not have significant influence. classification and measurement of financial instruments, statements resulting from the Consequently, this investment is classified as available-for-sale investment. including a new expected credit loss model for calculating application of IFRS 9. impairment on financial assets, and the new general hedge Decline in the fair value of available-for-sale equity investments (Note 9). The Group determines that available- accounting requirements. It also carries forward the guidance for-sale equity investments are impaired when there has been a significant or prolonged decline in the fair value on recognition and derecognition of financial instruments below its cost. The determination of what is significant or prolonged requires judgement. In making this judgement, from IAS 39. the Group evaluates, among other factors, the volatility in share price and trend in share price movements during the period of analysis. As at 31 December 2014, the decline in fair value of INTER RAO shares below cost is IFRS 9 is effective for annual reporting periods beginning on considered significant and prolonged and therefore the Group recorded an impairment of RR 5,620 million in the or after 1 January 2018, with early adoption permitted. Consolidated Statement of the Comprehensive Income. IFRS 15 IFRS 15 establishes a comprehensive framework for The Group is assessing the Carrying value of LLC “ENERGO-finance” promissory notes (Note 10). As at 31 December 2012 management Revenue determining whether, how much and when revenue is potential impact on its assessed the recoverable amount of long-term promissory notes issued by LLC “ENERGO-finance” and from recognised. It replaces existing revenue recognition guidance, consolidated financial guaranteed by Rusenergo Fund Ltd, which invests in the Russian utilities stock market. The recoverability of these Contracts including IAS 18 Revenue, IAS 11 Construction Contracts statements resulting from the promissory notes depends on the performance of the underlying Russian utilities’ stocks. Actual 2012 stock market with and IFRIC 13 Customer Loyalty Programmes. application of IFRS 15. returns significantly underperformed resulting in reduction of net assets of Rusenergo Fund Ltd and worsening its Customers The core principle of the new standard is that an entity future cash flow projections. Therefore, management concluded that these promissory notes were not recoverable recognises revenue to depict the transfer of promised goods or as at 31 December 2012 and accordingly were fully impaired. As at 31 December 2014, there were no changes in services to customers in an amount that reflects the the financial position of Rusenergo Fund Ltd, therefore the Group did not reverse related impairment loss. consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard Tax contingencies. Russian tax legislation is subject to varying interpretations and changes, which can occur frequently. results in enhanced disclosures about revenue, provides Where the Group management believes it is probable that their interpretation of the relevant legislation and the Group’s guidance for transactions that were not previously addressed tax positions cannot be sustained, an appropriate amount is accrued in the consolidated financial sstatements. The comprehensively and improves guidance for multiple-element possible tax claims in respect of certain open tax positions of the Group companies are disclosed in Note 26. arrangements. Measurement of fair values. When measuring the fair value of an asset or a liability, the Group uses market IFRS 15 is effective for annual reporting periods beginning observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on or after 1 January 2017, with early adoption permitted. on the inputs used in the valuation techniques as follows. Agriculture: These amendments require a bearer plant, defined as a living None. • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Bearer plant, to be accounted for as property, plant and equipment The Group does not have any • Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, Plants and included in the scope of IAS 16 Property, Plant and bearer plants. either directly (i.e. as prices) or indirectly (i.e. derived from prices). (Amendment Equipment, instead of IAS 41 Agriculture. • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). s to IAS 16 The amendments are effective for annual reporting periods and IAS 41) beginning on or after 1 January 2016, with early adoption If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the permitted. fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value The following new or amended standards are not expected to have a significant impact of the Group’s consolidated hierarchy as the lowest level input that is significant to the entire measurement. financial statements. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during • IFRS 14 Regulatory Deferral Accounts. which the change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes: • Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11). • Note 6 – Property, plant and equipment; • Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38). • Note 10 – Promissory notes; • Defined Benefit Plans: Employee Contributions (Amendments to IAS 19). • Note 17 – Non-current debt; • Annual Improvements to IFRSs 2010–2012 Cycle. • Note 27 – Financial instruments and financial risk. • Annual Improvements to IFRSs 2011–2013 Cycle.

11 12

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JSC “FGC UES” JSC “FGC UES”

Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 3. Summary of significant accounting policies Note 3. Summary of significant accounting policies (continued) Changes in accounting policies. The Group has adopted the following amendment to a standard with a date of Initial recognition of financial instruments. The Group’s financial instruments are initially recorded at fair value initial application of 1 January 2014: plus transaction costs. Fair value at initial recognition is best evidenced by the transaction price. A gain or loss on • Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36). initial recognition is only recorded if there is a difference between fair value and transaction price which can be evidenced by other observable current market transactions in the same instrument or by a valuation technique As a result of the amendments to IAS 36, the Group has expanded its disclosures of recoverable amounts when whose inputs include only data from observable markets. they are based on fair value less costs of disposals and recognised an impairment (see Note 6). Certain comparative amounts have been reclassified to conform with the current year’s presentation. Derecognition of financial assets. The Group derecognises financial assets when (a) the assets are redeemed or the rights to cash flows from the assets otherwise expired or (b) the Group has transferred the rights to the cash Principles of consolidation. Subsidiaries are entities (including special purpose entities) controlled by the Group. flows from the financial assets or entered into a qualifying pass-through arrangement while (i) also transferring The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the substantially all the risks and rewards of ownership of the assets or (ii) neither transferring nor retaining entity and has the ability to affect those returns through its power over the entity. The financial statements of substantially all risks and rewards of ownership but not retaining control. Control is retained if the counterparty subsidiaries are included in the consolidated financial statements from the date that control commences until the does not have the practical ability to sell the asset in its entirety to an unrelated third party without needing to date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them impose additional restrictions on the sale. with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit Available-for-sale investments. The Group classifies investments as available-for-sale at the time of purchase. balance. Available-for-sale investments are carried at fair value. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payment is established and it is probable that the Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group dividends will be collected. All other elements of changes in the fair value are recognised in other comprehensive transactions, are eliminated. income until the investment is derecognised or impaired at which time the cumulative gain or loss is reclassified Purchases of subsidiaries from parties under common control. Purchases of subsidiaries from parties under from other comprehensive income to profit or loss for the period. common control are accounted for using the predecessor values method. Under this method the consolidated Impairment losses are recognised in profit or loss when incurred as a result of one or more events (“loss events”) financial statements of the combined entity are presented as if the businesses had been combined from the that occurred after the initial recognition of available-for-sale investments. beginning of the earliest period presented or, if later, the date when the combining entities were first brought under common control. The assets and liabilities of the subsidiary transferred under common control are at the Any change in fair value of equity instruments is initially accumulated in other comprehensive income. predecessor entity’s carrying amounts. The predecessor entity is considered to be the highest reporting entity in A significant or prolonged decline in the fair value of an equity security below its cost is an indicator that it is which the subsidiary’s IFRS financial information was consolidated. Related goodwill inherent in the predecessor impaired. If asset is considered to be impaired at the reporting date, the cumulative impairment loss (measured as entity’s original acquisitions is also recorded in the consolidated financial statements. Any consideration for the the difference between the acquisition cost and the current fair value, less any impairment loss on that asset acquisition is accounted for in the consolidated financial statements as an adjustment to retained earnings within previously recognised in profit or loss) is removed from other comprehensive income and recognised in profit or equity. loss. Impairment losses on equity instruments are not reversed through profit or loss. Associates and joint ventures. Associates and joint ventures are entities over which the Company has significant Foreign currency. Monetary assets and liabilities, which are held by the Group entities and denominated in foreign influence (directly or indirectly), but not control, generally accompanying a shareholding of between 20 and 50 currencies at the end of the reporting period, are translated into Russian Roubles at the official exchange rates percent of the voting rights. Investments in associates and joint ventures are accounted for using the equity method prevailing at that date. Foreign currency transactions are accounted for at the exchange rates prevailing at the date of accounting and are initially recognised at cost. The carrying amount of associates and joint ventures includes of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of goodwill identified on acquisition and is reduced by accumulated impairment losses, if any. The Group monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. discontinues the use of the equity method of accounting from the date when it ceases to have significant influence in the associate. As at 31 December 2014, the official rate of exchange as determined by the Central Bank of the Russian Federation, between the Russian Rouble and the US Dollar was RR 56.26:US Dollar 1.00 (31 December 2013: RR 32.73:US The Group’s share of the post-acquisition profits or losses of associates and joint ventures is recorded in profit or Dollar 1.00); between the Russian Rouble and Euro: RR 68.34:Euro 1.00 (31 December 2013: RR 40.23:Euro loss, and its share of other comprehensive income of associates and joint ventures is recognised in the Group’s 1.00). other comprehensive income. When the Group’s share of losses in an associate and joint ventures equals or exceeds its interest in the associate and joint ventures, including any other unsecured receivables, the Group does not Property, plant and equipment. Property, plant and equipment are stated at revalued amounts less any subsequent recognise further losses, unless it has incurred obligations or made payments on behalf of the associates and joint accumulated depreciation and any subsequent accumulated impairment losses, where required. ventures. Property, plant and equipment are subject to revaluation on a regular basis to ensure that the carrying amount does Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the not differ materially from that which is determined using the fair value at the end of the reporting period. The extent of the Group’s interest in the associates and joint ventures; unrealised losses are also eliminated unless the frequency of revaluation depends upon the movements in the fair values of the assets being revalued. Increases in transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates and joint the carrying amount arising on revaluation of property, plant and equipment are credited to other comprehensive ventures have been changed where necessary to ensure consistency with the policies adopted by the Group. income and increase the revaluation reserve in equity; the increase is recognised in current period profits to the extent that it reverses previously recognised impairment loss of the same assets. Classification of financial assets. The Group holds financial assets of the following measurement categories: loans and receivables and available-for-sale financial assets. Decreases that offset previous increases of the same asset are recognised in other comprehensive income and decrease the previously recognised revaluation reserve in equity; all other decreases are recognised in profit or loss Loans and receivables are unquoted non-derivative financial assets with fixed or determinable payments other for the period. Any accumulated depreciation at the date of revaluation is eliminated against the gross amount of than those that the Group intends to sell in the near term. the assets, and the net amount is restated to the revalued amount of the asset. All other financial assets are included in the available-for-sale category, which includes investment securities The revaluation reserve in respect of an item of property, plant and equipment is transferred directly to retained which the Group intends to hold for an indefinite period of time and which may be sold in response to needs for earnings when the item is derecognised (on the retirement or disposal of the asset). liquidity or changes in interest rates, exchange rates or equity prices. Renewals and improvements are capitalised and the assets replaced are retired. The cost of minor repair and Classification of financial liabilities. The Group’s financial liabilities are carried at amortised cost. maintenance are expensed as incurred. Gains and losses arising from the retirement of property, plant and equipment are included in profit or loss as incurred.

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160 161 JSC FGC UES Annual Report Appendices

JSC “FGC UES” JSC “FGC UES” Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) Note 3. Summary of significant accounting policies (continued) Note 3. Summary of significant accounting policies (continued) Depreciation on property, plant and equipment is calculated on a straight-line basis over the estimated useful life of the asset when it is available for use. The useful lives are reviewed at each financial year end and, if expectations Impairment losses are always recognised through an allowance account to write down the asset’s carrying amount differ from previous estimates, the changes are recognised prospectively. to the present value of expected cash flows (which exclude future credit losses that have not been incurred) discounted at the original effective interest rate of the asset. The calculation of the present value of the estimated The useful lives, in years, of assets by type of facility are as follows: future cash flows of a collateralised financial asset reflects the cash flows that may result from foreclosure less Useful lives costs for obtaining and selling the collateral, whether or not foreclosure is probable. Buildings 50-80 If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to Electric power transmission grids 20-50 an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the Substations 15-30 previously recognised impairment loss is reversed by adjusting the allowance account in profit or loss. Other 5-50 Uncollectible assets are written off against the related impairment loss provision after all the necessary procedures At each reporting date the management assess whether there is any indication of impairment of property, plant and to recover the asset have been completed and the amount of the loss has been determined. Subsequent recoveries equipment. If any such indication exists, the management estimates the recoverable amount, which is determined of amounts previously written off are credited to impairment loss account in profit or loss. as the higher of an asset’s fair value less costs to sell and its value in use. The carrying amount is reduced to the recoverable amount and the impairment loss is recognised as current period loss to the extent it exceeds the Prepayments. Prepayments are carried at cost less provision for impairment. A prepayment is classified as non- previous revaluation surplus in equity on the same asset. An impairment loss recognised for an asset in prior years current when the goods or services relating to the prepayment are expected to be obtained after one year, or when the is reversed if there has been a change in the estimates used to determine the asset’s value in use or fair value less prepayment relates to an asset which will itself be classified as non-current upon initial recognition. If there is an costs to sell. indication that the assets, goods or services relating to a prepayment will not be received, the carrying value of the prepayment is written down accordingly and a corresponding impairment loss is recognised in profit or loss. Intangible assets. All of the Group’s intangible assets have definite useful lives and primarily include capitalised computer software and licences. Inventories. Inventories mostly include repair materials and spare parts for transmission assets. Inventories are valued at the lower of cost and net realisable value. Cost of inventory is determined on the weighted average basis. Acquired computer software and licences are capitalised on the basis of the costs incurred to acquire and bring Net realisable value is the estimated selling price in the ordinary course of business, less selling expenses. them to use. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that will probably generate economic benefits, are recognised as intangible assets. Value added tax. Output value added tax related to sales is payable to tax authorities on the earlier of (a) collection After initial recognition, intangible assets are carried at cost less accumulated amortisation and any accumulated of receivables from customers or (b) delivery of goods or services to customers. Input VAT is generally recoverable impairment losses. Amortisation of intangible assets is calculated on a straight-line basis over the useful lives. against output VAT upon receipt of the VAT invoice. The tax authorities permit the settlement of VAT on a net basis. VAT related to sales and purchases is recognised in the consolidated statement of financial position on a net At each reporting date the management assesses whether there is any indication of impairment of intangible assets. basis and disclosed as an asset or liability. Where provision has been made for impairment of receivables, If impaired, the carrying amount of intangible assets is written down to the higher of value in use and fair value impairment loss is recorded for the gross amount of the debtor, including VAT. less cost to sell. Research costs are recognised as an expense as incurred. Costs incurred on development projects are recognised Income taxes. Income taxes have been provided for in these Consolidated Financial Statements in accordance with as intangible assets only when the Group can demonstrate the technical feasibility of completing the intangible Russian legislation enacted or substantively enacted by the end of the reporting period. The income tax charge asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how comprises current tax and deferred tax and is recognised in the profit or loss unless it relates to transactions that the asset will generate future economic benefits, the availability of resources to complete and the ability to measure are recognised, in the same or a different period, in other comprehensive income. reliably the expenditure incurred during the development. Other development expenditures are recognised as an Current tax is the amount expected to be paid to or recovered from the taxation authorities in respect of taxable expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a profits/losses for the current and prior periods. Taxes other than on income are recorded as operating expenses. subsequent period. The carrying value of development costs is reviewed for impairment annually. Deferred income tax is provided using the balance sheet liability method for tax loss carry forwards and temporary Cash and cash equivalents. Cash comprises cash in hand and cash deposited on demand at banks. Cash equivalents differences arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting comprise short-term highly liquid investments that are readily convertible into cash and have a maturity of three purposes. In accordance with the initial recognition exemption, deferred taxes are not recorded for temporary months or less from the date of origination and are subject to insignificant changes in value. Cash and cash differences on initial recognition of an asset or a liability in a transaction other than a business combination if the equivalents are carried at amortised cost using the effective interest method. transaction, when initially recorded, affects neither accounting nor taxable profit. Bank deposits. Bank deposits comprise cash deposited at banks with a maturity date of more than three months Deferred tax balances are measured at tax rates enacted or substantively enacted at the end of the reporting period from the acquisition date. Bank deposits are carried at amortised cost using the effective interest method. which are expected to apply to the period when the temporary differences will reverse or the tax loss carry forwards Promissory notes. Promissory notes are financial assets with fixed or determinable cash flows recognised initially will be utilised. Deferred tax assets and liabilities are netted only within the individual companies of the Group. at fair value and subsequently carried at amortised cost using the effective interest method. Deferred tax assets for deductible temporary differences and tax loss carry forwards are recorded only to the extent that it is probable that future taxable profit will be available against which the deductions can be utilised. Trade and other receivables. Trade and other receivables are recorded inclusive of value added tax (VAT). Trade and other receivables are initially recognised at fair value and subsequently carried at amortised cost using the Deferred income tax is provided on post-acquisition retained earnings and other post acquisition movements in effective interest method. reserves of subsidiaries, except where the Group controls the subsidiary’s dividend policy and it is probable that the difference will not reverse through dividends or otherwise in the foreseeable future. Impairment of financial assets carried at amortised cost. Impairment losses are recognised in profit or loss when incurred as a result of one or more events (“loss events”) that occurred after the initial recognition of the financial The Group's uncertain tax positions are reassessed by management at each end of the reporting period. Liabilities asset and which have an impact on the amount or timing of the estimated future cash flows of the financial asset are recorded for income tax positions that are determined by management as more likely than not to result in or group of financial assets that can be reliably estimated. The primary factors that the Group considers in additional taxes being levied if the positions were to be challenged by the tax authorities. The assessment is based determining whether a financial asset is impaired are its overdue status and realisability of related collateral, if on the interpretation of tax laws that have been enacted or substantively enacted by the end of the reporting period any. and any known court or other rulings on such issues. Liabilities for penalties, interest and taxes other than on income are recognised based on management’s best estimate of the expenditure required to settle the obligations If the terms of an impaired financial asset held at amortised cost are renegotiated or otherwise modified because at the end of the reporting period. of financial difficulties of the counterparty, impairment is measured using the original effective interest rate before the modification of terms.

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162 163 JSC FGC UES Annual Report Appendices

JSC “FGC UES” JSC “FGC UES” Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 3. Summary of significant accounting policies (continued) Note 3. Summary of significant accounting policies (continued) Trade accounts payable and accrued charges. Trade accounts payable are stated inclusive of value added tax. Finance lease liabilities. Where the Group is a lessee in a lease which transferred substantially all the risks and Trade payables are accrued when the counterparty performed its obligations under the contract. Accounts payable rewards incidental to ownership to the Group, the assets leased are capitalised in property, plant and equipment at are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. the commencement of the lease at the lower of the fair value of the leased asset and the present value of the Advances received. Advances received are primarily a deferred income for the future connection services and are minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to stated at nominal amount. achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of future finance charges, are included in debts. The interest cost is charged to profit or loss over the lease period using the Debt. Debt is recognised initially at its fair value plus transaction costs that are directly attributable to its issue. effective interest method. The assets acquired under finance leases are depreciated over their useful life or the Fair value is determined using the prevailing market rates of interest for similar instruments, if significantly shorter lease term if the Group is not reasonably certain that it will obtain ownership by the end of the lease term. different from the transaction price. In subsequent periods, debt is stated at amortised cost using the effective interest method; any difference between the fair value of the proceeds (net of transaction costs) and the redemption Treasury shares. Treasury shares are stated at weighted average cost. Any gains or losses arising on the disposal amount is recognised in profit or loss as an interest expense over the period of the debt obligation. of treasury shares are recorded directly in shareholders’ equity. Borrowing costs are expensed in the period in which they are incurred if not related to purchase or construction of Dividends. Dividends are recognised as a liability and deducted from equity at the end of the reporting period only qualifying assets. Borrowing costs directly attributable to the acquisition, construction or production of assets that if they are declared (approved by shareholders) before or on the end of the reporting period. Dividends are necessarily take a substantial time to get ready for intended use or sale (qualifying assets) are capitalised as part of disclosed when they are declared after the end of the reporting period, but before the consolidated financial the costs of those assets. The commencement date for capitalisation is when the Group (a) incurs expenditures for statements are authorised for issue. the qualifying asset; (b) incurs borrowing costs; and (c) undertakes activities that are necessary to prepare the asset Non-controlling interest. Non-controlling interest represents minority’s proportionate share of the equity and for its intended use or sale. Capitalisation of borrowing costs continues up to the date when the assets are comprehensive income of the Group’s subsidiaries. This has been calculated based upon the non-controlling substantially ready for their use or sale. The Group capitalises borrowing costs that could have been avoided if it interests’ ownership percentage of these subsidiaries. Specific rights on liquidation for preference shareholders of had not made capital expenditure on qualifying assets. Borrowing costs capitalised are calculated at the Group’s subsidiaries are included in the calculation of non-controlling interests. The Group uses the ‘economic entity’ average funding cost (the weighted average interest cost is applied to the expenditures on the qualifying assets), approach to the recognition of non-controlling interest. Any gains or losses resulting from the purchases and sales except to the extent that funds are borrowed specifically for the purpose of obtaining a qualifying asset. Where this of the non-controlling interests are recognised in the consolidated statement of changes in equity. occurs, actual borrowing costs incurred less any investment income on the temporary investment of those borrowings are capitalised. Revenue recognition. Revenue amounts are presented exclusive of value added tax. Revenue from rendering the electricity transmission services is recognised in the period when the services are provided. Revenue from sales of Pension and post-employment benefits. In the normal course of business the Group makes mandatory social electricity is recognised on the delivery of electricity. Revenue from connection services represents a non-refundable security contributions to the Pension Fund of the RF on behalf of its employees. These contributions are expensed fee for connecting the customer to the electricity grid network and is recognised when the customer is connected to the when incurred and included in employee benefit expenses and payroll taxes in profit or loss. grid network. In addition, the Group maintains a number of post-employment and other long-term benefit plans which are defined Government grants. Government grants are recognised initially as deferred income at fair value when there is benefit in nature. These plans include life pension, lump sum upon retirement, financial support after retirement, reasonable assurance that they will be received and that the Group will comply with the conditions associated with jubilee and death benefits and cover majority of the Group’s employees. Under the pension plan amount of pension the grant and are then recognised in profit or loss as other income on a systematic basis over the useful life of the benefits that an employee will receive after retirement dependents on his date of birth, number of years of service, asset. Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on position, salary and presence of awards. The Group settles its liability to provide life pension through a non-state a systematic basis in the same periods in which the expenses are recognised. pension fund. However, the assets held in the non-state pension fund do not meet definition of plan assets in accordance with IAS 19(2011). These assets are accounted for as other non-current assets. Other benefits, apart Share capital. Ordinary shares with discretionary dividends are classified as equity upon completion of share issue and from life pension payable via the non-state pension fund, are provided when they are due directly by the Group. registration of the issue in the Federal Financial Markets Service. Any excess of the fair value of consideration received over the par value of shares issued is recorded as share premium in equity. The liability recognised in the consolidated statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of Earnings per share. Earnings per share are determined by dividing the profit or loss attributable to owners of the plan assets, together with adjustments for unrecognised past-service costs. The defined benefit obligation is Company by the weighted average number of participating shares outstanding during the reporting period. calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that have terms to maturity approximating the terms of the related pension liabilities. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Past-service costs are recognised immediately in income. Share-based compensation. The Group operates an equity-settled, share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments (options) of FGC UES. The fair value of options granted to employees is recognised as an employee benefit expense, with a corresponding increase in equity, over the period that employees become unconditionally entitled to the options (vesting period). At the end of each reporting period the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. The impact of the revision to original estimates, if any, is recognised in the profit or loss, with a corresponding adjustment to equity. Operating leases. Where the Group is a lessee in a lease which does not transfer substantially all the risk and rewards incidental to ownership from the lessor to the Group, the total lease payments, including those on expected termination, are charged to profit or loss on a straight-line basis over the period of the lease.

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164 165 JSC FGC UES Annual Report Appendices

JSC “FGC UES”

Notes to the Consolidated Financial Statements JSC “FGC UES” (in millions of Russian Rouble unless otherwise stated) Notes to the Consolidated Financial Statements Note 4. Principal subsidiaries (in millions of Russian Rouble unless otherwise stated) All subsidiaries are incorporated and operate in the Russian Federation. Note 5. Balances and transactions with related parties (continued) The principal subsidiaries as at 31 December 2014 and 31 December 2013 are presented below: Significant balances with government-related entities are presented below: 31 December 2014 31 December 2013 31 December 2014 31 December 2013 Name Ownership, % Voting, % Ownership, % Voting, % Cash and cash equivalents 41,474 8,485 Transmission companies: Bank deposits 130 38,912 OJSC “The Kuban trunk grids” 49.0 49.0 49.0 49.0 Other non-current assets 2,665 4,240 OJSC “The Tomsk trunk grids” 52.0 59.9 52.0 59.9 Other current assets 47 2,241 Other companies OJSC “Nurenergo” 77.0 77.0 77.0 77.0 Trade receivables OJSC “Mobile gas-turbine electricity plants” 100.0 100.0 100.0 100.0 (net of allowance for doubtful debtors of RR 3,236 million as at 31 December 2014 and RR 2,244 million as at 31 December 2013) 31,778 21,377 OJSC “Research and development centre of FGC Available-for-sale investments 14,384 20,442 UES” 100.0 100.0 100.0 100.0 OJSC “Dalenergosetproject” 100.0 100.0 100.0 100.0 Advances to construction companies and suppliers of property, plant and equipment (included in construction in progress) 1,119 1,574 OJSC “Specialised electricity transmission service company of the UNEG” 100.0 100.0 100.0 100.0 Accounts payable to the shareholders of FGC UES (8) (3,773) Non-current debt (519) (614) OJSC “Engineering and construction management centre of Unified Energy System” 100.0 100.0 100.0 100.0 Current debt (141) (136) LLC “Index energetiki – FGC UES” 100.0 100.0 100.0 100.0 Accounts payable and accrued charges (21,220) (20,827) Transmission companies. OJSC “The Kuban trunk grids” and OJSC “The Tomsk trunk grids” own the UNEG As at 31 December 2013 and 2014 the Group had long-term undrawn committed financing facilities with assets which are maintained and operated by the Company. government-related banks of RR 105,000 million with the interest rates not exceeding 14.95% and the maturity dates from 2018 to 2026. There were no short-term undrawn committed financing facilities with government- OJSC “Nurenergo” performs electricity distribution and sale activity in the Republic of Chechnya. Due to the related banks as at 31 December 2013 and 2014. difficult operating environment in the Republic of Chechnya, OJSC “Nurenergo” has negative net assets. Tax balances and charges are disclosed in Notes 16, 20 and 22. Tax transactions are disclosed in the Consolidated OJSC “Mobile gas-turbine electricity plants”. The primary activity of the company is generating and sale of Statement of Comprehensive Income. electricity provided by mobile gas-turbine electricity plants used in power deficient points of the power system or in peak periods as temporary source of additional capacity. Directors’ compensation. Compensation is paid to the members of the Management Board for their services in full time management position. The compensation is made up of a contractual salary, non-cash benefits, and a OJSC “Research and development centre of FGC UES” is a research and development project institution in the performance bonus depending on results for the period according to Russian statutory financial statements. Also, sphere of electric power. additional medical coverage is provided to the members of Management Board and their close family members. OJSC “Dalenergosetproject” is a grid engineering company. Fees, compensation or allowances to the members of the Board of Directors for their services in that capacity and OJSC “Specialised electricity transmission service company of the UNEG”. The main activities of this company for attending Board meetings are paid depending on results for the year. Fees, compensation or allowances, are are technical inspection, maintenance and regular and emergency repairs of power grids and other electric power not paid to the members of the Board of Directors who are government employees. facilities of the UNEG. Total remuneration in the form of salary, bonuses and non-cash benefits (social security contributions are not OJSC “Engineering and construction management centre of Unified Energy System”. The main activity of this included) provided to the members of the Management Board for the year ended 31 December 2014 and company is functioning as a customer-developer in capital construction projects associated with the reconstruction 31 December 2013 was as follows: and technical modernisation of electricity supply facilities and infrastructure. Year ended Year ended 31 December 2014 31 December 2013 LLC “Index energetiki – FGC UES” (“Index Energetiki”) owns minority shares in OJSC “INTER RAO UES” and OJSC “Russian Grids” (former OJSC “IDGC Holding”). Short-term compensation, including salary and bonuses 250 264 Termination benefits 16 241 Note 5. Balances and transactions with related parties Post-employment benefits and other long-term benefits 12 5 Government-related entities. In the normal course of business the Group enters into transactions with Share-based compensation 1 66 government-related entities – entities, controlled, jointly controlled or significantly influenced by the Total 279 576 Government of the RF. Large portion of the Group's primary activity – transmission services are rendered to The amount of the short-term compensation to members of the Management Board represents remuneration government-related entities at the regulated tariffs. The Group borrows funds from government-related banks at accrued during the respective period. the prevailing market rates. Taxes are accrued and settled in accordance with Russian tax legislation. No remuneration was provided to the members of the Board of Directors for the years ended 31 December 2014 During the years ended 31 December 2014 and 31 December 2013 the Group had the following significant and 31 December 2013. transactions with government-related entities: Year ended Year ended 31 December 2014 31 December 2013 Transmission revenue 136,232 131,629 Electricity sales 2,758 1,863 Relocation of mobile gas-turbine electricity plants to Sochi - 1,825 Connection services 1,616 76 Purchased electricity for production needs (7,375) (6,683) 19

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JSC “FGC UES” JSC “FGC UES”

Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 6. Property, plant and equipment Note 6. Property, plant and equipment (continued) Power trans- Construction Borrowing costs of RR 16,835 million for the year ended 31 December 2014 were capitalised within additions (for Buildings mission grids Substations in progress Other Total the year ended 31 December 2013: RR 17,177 million). A capitalisation rate of 6.27% was used for the year ended Appraisal value or cost 31 December 2013 (for the year ended 31 December 2013: 7.5%) to determine the amount of borrowing costs Balance as at 1 January 2014 20,912 495,652 341,136 306,514 43,829 1,208,043 eligible for capitalisation, representing the weighted average of the borrowing costs applicable to the borrowings Additions 258 433 297 108,800 2,206 111,994 of the Group that were outstanding during the periods. Transfers 3,795 86,613 49,018 (147,102) 7,676 - Construction in progress is represented by the carrying amount of property, plant and equipment that has not yet Disposals (46) (113) (1,129) (1,745) (1,401) (4,434) been put into operation and advances to construction companies and suppliers of property, plant and equipment. Elimination of accumulated As at 31 December 2014 such advances amounted to RR 13,773 million, net of impairment of RR 13,604 million depreciation and impairment (4,425) (195,619) (187,890) (84,636) (27,852) (500,422) (as at 31 December 2013: RR 28,659 million, net of impairment RR 17,790 million). Reversal of impairment provision 1,034 14,934 25,379 17,578 4,922 63,847 Other property, plant and equipment include motor vehicles, computer equipment, office fixtures and other Revaluation increase 3,074 78,719 25,054 408 6,744 113,999 equipment. Land plots are classified together with items of property, plant and equipment located on them. Decrease in revaluation reserve (1,524) (59,499) (2,032) - (382) (63,437) Revaluation. In 2014, management commissioned an independent appraiser for revaluation of property, plant and Revaluation loss (2,933) (48,461) (27,583) (52,052) (3,532) (134,561) equipment as at 31 December 2014. The fair value of property, plant and equipment was determined to be RR Balance as at 31 December 2014 20,145 372,659 222,250 147,765 32,210 795,029 795,029 million, which has been categorised as a Level 3 fair value based on the inputs to the valuation techniques used (see Note 2). Including PPE under finance lease - - - - 1,432 1,432 The majority of the Group’s property, plant and equipment is specialised in nature and is rarely sold on the open Accumulated depreciation and impairment market other than as part of a continuing business. The market for similar property, plant and equipment is not Balance as at 1 January 2014 (3,423) (157,012) (158,450) (117,237) (22,211) (458,333) active in the Russian Federation and does not provide a sufficient number of sales of comparable property, plant Depreciation charge (335) (20,354) (17,902) - (4,774) (43,365) and equipment for using a market-based approach for determining fair value. Transfers (673) (18,286) (12,166) 32,653 (1,528) - Consequently the fair value of property, plant and equipment was primarily determined using depreciated Impairment loss - (5) - (52) (5) (62) replacement cost. This method considers the cost to reproduce or replace the property, plant and equipment, Disposals 6 38 628 - 666 1,338 adjusted for physical, functional or economical depreciation, and obsolescence. Elimination of accumulated Depreciated replacement cost was estimated based on internal sources and analysis of the Russian and international depreciation and impairment 4,425 195,619 187,890 84,636 27,852 500,422 markets for similar property, plant and equipment. Various market data were collected from published Balance as at 31 December 2014 ------information, catalogues, statistical data etc, and industry experts and suppliers of property, plant and equipment Including PPE under finance lease ------were contacted both in the Russian Federation and abroad. Net book value as at 1 January 2014 17,489 338,640 182,686 189,277 21,618 749,710 In addition to the determination of the depreciated replacement cost, cash flow testing was conducted for each cash Net book value as at 31 generating unit. The Group’s Transmission segment (Note 29) was considered as a single cash generating unit. December 2014 20,145 372,659 222,250 147,765 32,210 795,029 This resulted in depreciated replacement cost values being decreased by RR 791,263 million in arriving at the above value. Power trans- Construction The following key assumptions were used in performing the cash flow testing of Transmission segment: Buildings mission grids Substations in progress Other Total • Forecast period is determined as 16 years – from 2015 to 2030; Appraisal value or cost Balance as at 1 January 2013 19,131 554,868 285,543 315,161 31,350 1,206,053 • A nominal after-tax discount rate of 12.6% in 2015, 11.32% in 2016 and 10.03% in 2017-2030 was determined based on the weighted average cost of capital. Additions 1,029 140 1,433 152,855 4,932 160,389 Transfers 1,589 76,338 75,326 (161,229) 7,976 - • Revenue projections are based on following assumptions: Disposals (7) (282) (2,125) (273) (180) (2,867) - Approved Regulatory Asset Base tariff calculation for 2015-2019; Decrease in revaluation due to - Key parameters for tariff-setting (rates of return for “old” and “new” capital (10%); normal useful live impairment (830) (135,412) (19,041) - (249) (155,532) for calculation of return of capital (35 years); Net Working Capital to revenue ratio (7.9%); level of Balance as at 31 December 2013 20,912 495,652 341,136 306,514 43,829 1,208,043 economy on controllable costs (3%) in 2020-2030 were based on 2019 data; Including PPE under finance lease - - 2,273 - 914 3,187 - Decrease of the volume of “old” capital employed under RAB methodology –down to nil; - Fixed volume of contracted capacity from 2016 onwards; Accumulated depreciation and impairment - Revenue included fees from technological connection services. Balance as at 1 January 2013 (989) (55,206) (43,656) (1,465) (8,202) (109,518) • The amount of expenditure for the period from 2014 through 2030 required for the maintenance of the Depreciation charge (628) (27,370) (23,577) - (5,329) (56,904) current property, plant and equipment is assumed to be equal to the amount of such expenditure determined Impairment loss (1,807) (74,498) (91,994) (115,772) (8,789) (292,860) as allowable for the purpose of tariff regulation. Disposals 1 62 777 - 109 949 • Balance as at 31 December 2013 (3,423) (157,012) (158,450) (117,237) (22,211) (458,333) Terminal value was determined based on Gordon growth model with terminal growth rate of 2.76% (in line with long-term consumer price index forecast published by Ministry of Economic Development) Including PPE under finance lease - - (1,170) - (196) (1,366)

Net book value as at 1 January 2013 18,142 499,662 241,887 313,696 23,148 1,096,535 If the discount rate would be 0.5% higher, the recoverable amount of property, plant and equipment included in Transmission segment would be 5.4% lower. Net book value as at 31 December 2013 17,489 338,640 182,686 189,277 21,618 749,710

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Impairment. For the year ended 31 December 2013 the Group recognised a net decrease in carrying value of Cost as at 31 December 2013 5,468 10,382 15,850 property, plant and equipment in the amount of RR 448,392 million, which consisted of an impairment of RR Accumulated amortisation (1,579) (3,043) (4,622) 293,254 million and revaluation decrease of RR 155,532 million related to result of value-in–use calculation, a Carrying value specific impairment of RR 169 million related to property, plant and equipment of OJSC “Nurenergo”, a specific as at 31 December 2013 3,889 7,339 11,228 impairment of RR 111 million related to property, plant and equipment of OJSC “Energy Main Computer Center”, and RR 674 million reversal of impairment related to construction in progress. Cost as at 1 January 2014 5,468 10,382 15,850 Leased property, plant and equipment. Included in property, plant and equipment are certain items under finance Accumulated amortisation (1,579) (3,043) (4,622) leases. As at 31 December 2014 the net book value of leased property, plant and equipment was RR 1,432 million Carrying value (as at 31 December 2013: RR 1,821 million). The leased equipment is pledged as security for the lease obligations. as at 1 January 2014 3,889 7,339 11,228 Operating leases. The Group leases a number of land areas owned by local governments under operating lease. Additions 298 998 1,296 The expected lease payments due are determined based on the lease agreements and are payable as follows: Transfers 91 (91) - Disposals – cost (345) (121) (466) 31 December 2014 31 December 2013 Amortisation charge (2,038) (1,735) (3,773) Under one year 780 707 Carrying value Between one and five years 1,997 1,796 as at 31 December 2014 1,895 6,390 8,285 Over five years 14,729 9,462 Total 17,506 11,965 Cost as at 31 December 2014 5,512 11,168 16,680 Accumulated amortisation (3,617) (4,778) (8,395) The above lease agreements are usually signed for a period of 1 to 49 years and may be extended for a longer Carrying value period. The lease payments are subject to review on a regular basis to reflect market rent prices. as at 31 December 2014 1,895 6,390 8,285 As at 31 December 2014 the carrying value of property, plant and equipment leased out under operating lease was The Corporate information management system (SAP R/3) consists of several modules (parts) and related licences. RR 8,232 million (as at 31 December 2013: RR 5,822 million). As at 31 December 2014 only certain modules (parts) were placed in operation and are subject to amortisation. These modules are amortised during 5 years, on a straight-line basis. SAP R/3 includes development costs of RR 930 million as at 31 December 2014 (as at 31 December 2013: RR 3,072 million). Other intangible assets include capitalised development costs that meet the definition of an intangible asset of RR 739 million as at 31 December 2014 (as at 31 December 2013: RR 2,358 million).

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JSC “FGC UES” JSC “FGC UES” Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) Note 8. Investments in associates and joint ventures Note 11. Cash and cash equivalents The movements in the carrying value of investments in associates and joint ventures are as follows: 31 December 2014 31 December 2013 Year ended Year ended Cash at bank and in hand 11,336 17,435 31 December 2014 31 December 2013 Cash equivalents 30,732 4,192 Carrying value as at 1 January 1,440 1,403 Total cash and cash equivalents 42,068 21,627 Share of result of associates and joint ventures 19 11 Translation difference 650 26 Cash at bank and in hand Rating Rating agency 31 December 2014 31 December 2013 Carrying value as at 31 December 2,109 1,440 OJSC “Sberbank” Ва2 Moody’s 9,880 1,440 The carrying value of investments in associates and joint ventures is as follows: OJSC “Gazprombank” BB+ Fitch Ratings 893 3,225 OJSC “Alfa-Bank” BB Standard & Poor's 461 9,632 31 December 2014 31 December 2013 OJSC "Bank “ROSSIYA” AA++ Expert RA 1 2,988 JSC UES “GruzRosEnergo” 1,724 1,064 Cash in hand 17 19 Other associates 385 376 Other banks 84 131 Total investments in associates 2,109 1,440 Total cash at bank and in hand 11,336 17,435 Note 9. Available-for-sale investments Cash equivalents include short-term investments in certificates of deposit:

Change in fair 31 December 31 December 1 January 2014 value Impairment charge 31 December 2014 Bank deposits Interest rate Rating Rating agency 2014 2013 OJSC “INTER RAO UES” 19,379 - (5,620) 13,759 OJSC “Gazprombank” 11.75%-29.5% BB+ Fitch Ratings 19,516 2,000 OJSC “Russian Grids” 1,063 (31) (407) 625 OJSC “Sberbank” 10.4%-30% Ва2 Moody’s 11,185 1,820 Total 20,442 (31) (6,027) 14,384 OJSC “Alfa-Bank” 6.50% BB Standard & Poor's - 340 Total certificates of deposit 30,701 4,160 Change in fair There were no certificates of deposit denominated in foreign currency included in cash equivalents as at 1 January 2013 value Impairment charge 31 December 2013 31 December 2014 and 31 December 2013. OJSC “INTER RAO UES” 48,136 - (28,757) 19,379 OJSC “Russian Grids” 2,481 (1,418) - 1,063 Note 12. Bank deposits Total 50,617 (1,418) (28,757) 20,442 31 31 December December For the year ended 31 December 2014 the change in the fair value of these available-for-sale investments in the Interest rate Rating Rating agency 2014 2013 total amount of RR 6,058 million was recognised in other comprehensive income (for the year ended 31 December OJSC “Sberbank” 17.03-18.31% Ва2 Moody’s 130 100 2013: RR 30,175 million). The amount of RR 6,027 million was reclassified from other comprehensive income to OJSC “Gazprombank” 13.00% BB+ Fitch Ratings 30 38,462 profit or loss for the year ended 31 December 2014 (for the year ended 31 December 2013: RR 28,757 million). OJSC "Bank “ROSSIYA” 17.25% AA++ Expert RA 25 - Valuation of available-for sale investments is made on a recurring basis using quoted market prices (Level 1 OJSC “Alfa-Bank” 6.5%-7.00% BB Standard & Poor's - 158 inputs) at the end of each reporting period. OJSC “VTB bank” 6.76%-6.86% BB+ Standard & Poor's - 350 Total bank deposits 185 39,070 Note 10. Other non-current and other current assets The carrying amount of bank deposits approximates their fair value.

31 December 2014 31 December 2013 There were no bank deposits denominated in foreign currency as at 31 December 2014 and 31 December 2013. Long-term trade receivables (net of allowance for doubtful debtors of RR 505 million as at 31 December 2014 and RR 905 million as at 31 December 2013) 2,933 4,482 Long-term promissory notes 354 874 Total financial assets 3,287 5,356 VAT recoverable 23 82 Other non-current assets 800 730 Total other non-current assets 4,110 6,168 Other current assets include short-term promissory notes in the total amount of RR 625 million as at 31 December 2014 (31 December 2013: RR 2,896 million). Included in short-term non-bank promissory notes are promissory notes of LLC “ENERGO-finance” which are fully impaired. The amount of impairment provision was RR 12,022 million as at 31 December 2014 and 31 December 2013. All promissory notes are denominated in Russian Rouble. Fair value of promissory notes approximates their carrying value.

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Note 15. Equity Year ended Long-term trade Short-term Other short-term Advances to 31 December 2014 receivables trade receivables receivables suppliers Total Share capital 905 5,689 789 1,979 9,362 As at 1 January Number of shares issued and fully paid Share capital Provision accrual - 3,306 190 4 3,500 31 December 2014 31 December 2013 31 December 2014 31 December 2013 Provision reversal - (491) (123) - (614) Ordinary shares 1,274,665,323,063 1,267,141,015,996 637,333 633,571 Debt written-off - (17) (33) (3) (53) Amortisation of discount (317) (178) - - (495) As at 31 December 2014 the authorised share capital comprised 1,346,805,824 thousand ordinary shares with a Transfer from other - - 649 - 649 nominal value of RR 0.5 per share. financial assets Reclassifications (83) 88 (6) 1 - Additional issue of shares. In April 2013, the Company completed and registered an additional issue of 6,754,357,256 shares with a nominal value of RR 0.5 per share. The total consideration received amounted to As at 31 December 505 8,397 1,466 1,981 12,349 RR 3,250 million in cash and other assets of RR 127 million. Year ended Long-term trade Short-term Other short-term Advances to In February 2014, the Company completed and registered an additional share issue of 7,524,307,067 ordinary 31 December 2013 receivables trade receivables receivables suppliers Total shares with a nominal value of RR 0.5 per share which were placed for a consideration of RR 3,762 million in As at 1 January 580 4,839 689 2,020 8,128 cash. As a result of the share issue, the interest of OJSC “Russian Grids” in the Company decreased from 80.6 to Provision accrual 831 1,775 105 1 2,712 80.13 per cent. Cash proceeds from the share issue will be used for financing of the investment program of the Provision reversal - (1,096) (3) (40) (1,139) Group. Debt written-off - (7) (2) (2) (11) The prepayment of RR 3,762 million received for shares to be issued was included as at 31 December 2013 in the Amortisation of discount (328) - - - (328) Consolidated Statement of Financial Position as accounts payable to the shareholders of FGC UES. Reclassifications (178) 178 - - - Treasury shares. As at 31 December 2014 the Group held through a subsidiary 13,727,165 thousand ordinary As at 31 December 905 5,689 789 1,979 9,362 shares in treasury at the total cost of RR 4,719 million (as at 31 December 2013: RR 4,725 million). In 2014, treasury shares decreased by RR 6 million (2013: RR 192 million) with the corresponding recognition of expense relating to share-based compensation (see below), since management plans to use treasury shares for the share option plan. Reserves. Reserves included Revaluation reserve for property, plant and equipment and available-for-sale investments. Foreign currency translation reserve and remeasurement reserve for retirement benefit obligations. The Foreign currency translation reserve relates to the exchange differences arising on translation of net assets of a foreign associate.

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JSC “FGC UES”

Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) JSC “FGC UES”

Note 15. Equity (continued) Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) Reserves comprised the following: 31 December 2014 31 December 2013 Note 15. Equity (continued) Revaluation reserve (net of tax) for: Share-based compensation. In February 2011, the Board of Directors approved an Option program (“the - property, plant and equipment (Note 6) 225,563 185,850 Program”) in which the members of the Management Board and other employees of the Company can participate. - available-for-sale investments (Note 9) - 455 In March 2011, 13,569,041,046 options to purchase the Company’s ordinary shares were allocated under the Remeasurement reserve for retirement benefit Program. In July 2012, additional 549,086,611 options were allocated. obligations (Note 18) 93 (1,465) Options granted vest over the period of three years and are exercisable during two years from the vesting date. In Foreign currency translation reserve 726 76 case of terminating employment at the initiative of the Company due to breaching certain employment duties by Total reserves 226,382 184,916 the employee the Program participant will lose his right to purchase the shares. Reserves for the year ended 31 December 2014 (net of tax): All options were granted with an exercise price of the RR 0.4065 per share. The total grant date fair value of stock options granted allowing updated forfeiture rate was RR 2,859 million, including RR 38 million related to options Revaluation reserve for: Remeasure- granted in July 2012. No options were granted in 2013 and 2014. ment Accounts payable to shareholders of FGC UES. Accounts payable to shareholders of FGC UES include dividends reserve for Foreign property, available- retirement currency payable and payables for shares issued: plant and for-sale benefit translation 31 December 2014 31 December 2013 equipment investment obligations reserve Total (Note 6) s (Note 9) (Note 18) (Note 8) reserves Dividends payable 8 11 Prepayments for shares to be issued - 3,762 As at 1 January 2014 185,850 455 (1,465) 76 184,916 Total accounts payable to shareholders of FGC UES 8 3,773 Change in revaluation reserve for property, plant and equipment 39,713 - - - 39,713 Note 16. Income tax Change in fair value of available-for- Income tax expense comprises the following: sale investments - (5,276) - - (5,276) Year ended Year ended Accumulated loss on available-for-sale 31 December 2014 31 December 2013 investments recycled to profit or loss - 4,821 - - 4,821 Current income tax charge (168) (258) Remeasurements of retirement benefit Deferred income tax credit 2,080 55,401 obligations - - 1,558 - 1,558 Total income tax benefit 1,912 55,143 Foreign currency translation difference - - - 650 650 As at 31 December 2014 225,563 - 93 726 226,382 During the years ended 31 December 2014 and 31 December 2013 most entities of the Group were subject to tax rate of 20 percent on taxable profit. In accordance with Russian tax legislation, tax losses in different Group companies may not be offset against Reserves for the year ended 31 December 2013 (net of tax): taxable profits of other Group companies. Accordingly, tax may be accrued even where there is a net consolidated Remeasure- tax loss. Revaluation reserve for: ment reserve for Foreign Loss before income tax for financial reporting purposes is reconciled to income tax expenses as follows: property, available- retirement currency Year ended Year ended plant and for-sale benefit translation 31 December 2014 31 December 2013 equipment investment obligations reserve Total (Note 6) s (Note 9) (Note 18) (Note 8) reserves Loss before income tax (22,513) (289,914) Theoretical income tax credit at the statutory tax rate of 20 percent 4,503 57,983 As at 1 January 2013 311,479 1,588 (1,333) 50 311,784 Change in revaluation reserve for Tax effect of items which are not deductible for taxation purposes (2,298) (655) property, plant and equipment (125,629) - - - (125,629) Movement in unrecognised deferred tax assets (293) (2,185) Change in fair value of available-for- sale investments - (24,139) - - (24,139) Total income tax benefit 1,912 55,143 Accumulated loss on available-for-sale Deferred income tax. Differences between IFRS and Russian statutory taxation regulations give rise to certain investments recycled to profit or loss - 23,006 - - 23,006 temporary differences between the carrying value of certain assets and liabilities for financial reporting purposes Remeasurements of retirement benefit and for income tax purposes. Deferred income tax assets and liabilities were measured at 20 percent as at obligations - - (132) - (132) 31 December 2014 and 31 December 2013, the rates expected to be applicable when the asset or liability will reverse. Foreign currency translation difference - - - 26 26 As at 31 December 2013 185,850 455 (1,465) 76 184,916 Dividends. The annual statutory accounts of the parent company, FGC UES, form the basis for the annual profit distribution and other appropriations. The specific Russian legislation identifies the basis of distribution as the net profit. For the year ended 31 December 2014, the net profit of FGC UES, as reported in the published statutory financial statements, was RR 5,137 million (net loss for the year ended 31 December 2013: RR 25,898 million). The Annual General Meeting in June 2014 approved the decision to declare dividends for the first quarter of 2014 in the total amount of RR 436 million (RR 0.0003 per ordinary share).

176 177 JSC FGC UES Annual Report Appendices

JSC “FGC UES” JSC “FGC UES” Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 16. Income tax (continued) Note 16. Income tax (continued) Deferred income tax assets and liabilities for the year ended 31 December 2014: Deferred income tax assets and liabilities for the year ended 31 December 2014: Movements for the year Movements for the year Recognised in Recognised in 31 December 2014 Recognised in other compre- 1 January 2014 31 December 2014 Recognised in other compre- 1 January 2014 () profit or loss hensive income () profit or loss hensive income Deferred income tax liabilities Deferred income tax liabilities Property, plant and equipment 5,814 (6,032) 10,112 1,734 Property, plant and equipment 5,814 (6,032) 10,112 1,734 Investments in associates 77 2 - 75 Investments in associates 77 2 - 75 Available-for-sale investments 1,325 (845) (6) 2,176 Available-for-sale investments 1,325 (845) (6) 2,176 Other deferred tax liabilities 1,080 713 - 367 Other deferred tax liabilities 1,080 713 - 367 Total deferred income tax liabilities 8,296 (6,162) 10,106 4,352 Total deferred income tax liabilities 8,296 (6,162) 10,106 4,352 Deferred income tax assets Deferred income tax assets Property, plant and equipment (1,439) 3,366 - (4,805) Property, plant and equipment (1,439) 3,366 - (4,805) Long-term promissory notes (4,102) (291) - (3,811) Long-term promissory notes (4,102) (291) - (3,811) Available-for-sale investments (2,385) (360) (2,025) Available-for-sale investments (2,385) (360) (2,025) Accounts receivable and prepayments (1,517) (132) - (1,385) Accounts receivable and prepayments (1,517) (132) - (1,385) Intangible assets (419) 149 - (568) Intangible assets (419) 149 - (568) Retirement benefit obligation (488) (4) 141 (625) Retirement benefit obligation (488) (4) 141 (625) Current and non-current debt (123) 17 - (140) Current and non-current debt (123) 17 - (140) Accounts payable and accruals (566) (30) - (536) Accounts payable and accruals (566) (30) - (536) Other deferred tax assets (589) (25) - (564) Other deferred tax assets (589) (25) - (564) Tax losses (2,077) 1,099 - (3,176) Tax losses (2,077) 1,099 - (3,176) Unrecognised deferred tax assets 6,926 293 - 6,633 Unrecognised deferred tax assets 6,926 293 - 6,633 Total deferred income tax assets (6,779) 4,082 141 (11,002) Total deferred income tax assets (6,779) 4,082 141 (11,002) Deferred income tax (assets) / liabilities, Deferred income tax (assets) / liabilities, net 1,517 (2,080) 10,247 (6,650) net 1,517 (2,080) 10,247 (6,650)

Unrecognised deferred tax assets in the amount of RR 6,926 million include deferred income tax assets on tax Unrecognised deferred tax assets in the amount of RR 6,926 million include deferred income tax assets on tax losses carried forward and deferred income tax assets on temporary differences arising in respect of loss-making losses carried forward and deferred income tax assets on temporary differences arising in respect of loss-making subsidiaries. These deferred tax assets are not recognised because it is not probable that sufficient taxable profits subsidiaries. These deferred tax assets are not recognised because it is not probable that sufficient taxable profits will be available against which the deferred tax assets can be utilised. will be available against which the deferred tax assets can be utilised. Tax losses carried forward in respect of which deferred tax assets were not recognised are presented by companies Tax losses carried forward in respect of which deferred tax assets were not recognised are presented by companies in the table below: in the table below: 31 December 2014 31 December 2013 31 December 2014 31 December 2013 OJSC “Mobile gas-turbine electricity plants” 3,292 3,825 OJSC “Mobile gas-turbine electricity plants” 3,292 3,825 OJSC “Nurenergo” 3,690 3,452 OJSC “Nurenergo” 3,690 3,452 Others 357 415 Others 357 415 Total tax losses carried forward 7,339 7,692 Total tax losses carried forward 7,339 7,692 The tax losses expire in 10 years after their origination. The Group’s tax losses expire mostly with term over The tax losses expire in 10 years after their origination. The Group’s tax losses expire mostly with term over 5 years (in 2020-2024) – RR 6,505 million, RR 3,584 million expire with terms from 2 to 5 years (during 2016- 5 years (in 2020-2024) – RR 6,505 million, RR 3,584 million expire with terms from 2 to 5 years (during 2016- 2019) and 296 expire during the year 2015. 2019) and 296 expire during the year 2015.

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JSC “FGC UES” JSC “FGC UES”

Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 16. Income tax (continued) Note 17. Non-current debt Deferred income tax assets and liabilities for the year ended 31 December 2013: 31 Effective 31 December December Movements for the year interest rate Due 2014 2013 Recognised in 1 January Certified interest-bearing 31 December 2013 Recognised in other compre- 2013 non-convertible bearer bonds: ) profit or loss hensive income with fixed rates 7.5-8.75% 2019-2028 122,836 147,621 Deferred income tax liabilities Property, plant and equipment 1,734 (46,837) (31,105) 79,676 with floating rates CPI+1-2.5% 2027-2048 111,383 111,121 Investments in associates 75 1 - 74 Stock Exchange authorised certified interest- bearing non-convertible bearer bonds 8.10% 2015 10,155 10,153 Available-for-sale investments 2,176 (3,726) (284) 6,186 Loan participation notes (LPNs) 8.45% 2019 17,943 17,943 Other deferred tax liabilities 367 307 - 60 Finance lease liabilities 9.50% 2018 614 700 Total deferred income tax liabilities 4,352 (50,255) (31,389) 85,996 Deferred income tax assets Total debt 262,931 287,538 Property, plant and equipment (4,805) (3,343) - (1,462) Less: current portion of non-current bonds and LPNs (29,545) (29,488) Long-term promissory notes (3,811) (282) - (3,529) Less: current portion of finance lease liabilities (95) (86) Available-for-sale investments (2,025) (2,025) - 233,291 257,964 Accounts receivable and prepayments (1,385) 53 - (1,438) Total non-current debt Intangible assets (568) 25 - (593) All debt instruments are denominated in Russian Rouble. Retirement benefit obligation (625) 7 (45) (587) As at 31 December 2014 the estimated fair value of non-current debt (including the current portion) with fixed Current and non-current debt (140) 16 - (156) rates was RR 129,377 million (as at 31 December 2013: RR 173,627 million), which was measured using the Accounts payable and accruals (536) (1) - (535) market prices for quoted FGC UES bonds (Level 1 inputs) as at 31 December 2014. The carrying amount of non- Other deferred tax assets (564) (44) - (520) current debt (including the current portion) with fixed rates was RR 147,771 million (as at 31 December 2013: RR Tax losses (3,176) (1,737) - (1,439) 172,349 million). Unrecognised deferred tax assets 6,633 2,185 - 4,448 As at 31 December 2014 the estimated fair value of non-current debt (including the current portion) with floating Total deferred income tax assets (11,002) (5,146) (45) (5,811) rates (bonds Series 22) was RR 9,746 million (as at 31 December 2013: RR 10,139 million), which was measured Deferred income tax (assets) / liabilities, using the market prices for quoted FGC UES bonds (Level 1 inputs) as at 31 December 2014. The carrying amount net (6,650) (55,401) (31,434) 80,185 of non-current debt (including the current portion) with floating rates was RR 10,000 million. The fair value of other non-current debt (including the current portion) with floating rates and finance lease liabilities amounted to RR 69,771 million. The carrying amount of other non-current debt (including the current portion) with floating rates and finance lease liabilities was RR 100,614 million (as at 31 December 2013: RR 100,700 million). An increase of 1% in discount rate at the reporting date would have decreased the estimated fair value by RR 4,532 million. A decrease of 1% in discount rate at the reporting date would have increased the estimated fair value by RR 5,257 million. This analysis assumes that all other variables remain constant. As at 31 December 2014 the Group had long-term undrawn committed financing facilities of RR 157,500 million (as at 31 December 2013: RR 157,500 million) which could be used for the general purposes of the Group. Finance lease. Minimum lease payments under finance leases and their present values are as follows: Due in Due between Due after 1 year 1 and 5 years 5 years Total Minimum lease payments as at 31 December 2014 150 607 - 757 Less future finance charges (55) (88) - (143) Present value of minimum lease payments as at 31 December 2014 95 519 - 614 Minimum lease payments as at 31 December 2013 150 757 - 907 Less future finance charges (64) (143) - (207) Present value of minimum lease payments as at 31 December 2013 86 614 - 700 Leased assets with carrying amount disclosed in Note 6 are effectively pledged for finance lease liabilities as the rights to the leased asset revert to the lessor in the event of default.

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JSC “FGC UES” JSC “FGC UES”

Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 18. Retirement benefit obligations Note 18. Retirement benefit obligations (continued) The Group’s post-employment benefits policy includes the employee pension scheme and other various post- Amounts recognized in other comprehensive income: employment, retirement and jubilee payments. The post-employment and retirement benefit system is a defined Year ended Year ended benefit program as part of which every participating employee receives benefits calculated in accordance with 31 December 2014 31 December 2013 certain formula or rules. The program’s core element is the corporate pension scheme implemented by the Group Loss from change in demographic assumptions 308 894 in cooperation with the Non-State Pension Fund of Electric Power Industry. Gain from change in financial assumptions (1,316) (1,009) The Group also pays various other long-term post-employment benefits, including lump sum benefits in case of Experience (gains)/losses (691) 291 death of employees or former employees receiving pensions, lump sum benefits upon retirement and in connection Total (1,699) 176 with jubilees.

Additionally, financial aid in the form of defined benefits is provided to former employees who have state, industry The movement of remeasurements in other comprehensive income are as follows: or corporate awards. Such financial aid is provided both to employees entitled and not entitled to non-state Year ended Year ended pensions. 31 December 2014 31 December 2013 The most recent actuarial valuation was performed as at 31 December 2014. At 1 January 1,722 1,546 Movement of remeasurements (1,699) 176 The tables below provide information about benefit obligations and actuarial assumptions as at 31 December 2014 At 31 December 23 1,722 and 31 December 2013. The amounts recognised in the Consolidated Statement of Financial Position are determined as follows: The significant actuarial assumptions are as follows: Year ended Year ended Financial actuarial assumptions: 31 December 2014 31 December 2013 Year ended Year ended 31 December 2014 31 December 2013 Discount rate (nominal) 13.00% 8.00% Future financial support benefit increases Present value of defined benefit obligation 6,234 7,649 7.00% 4.50% Future salary increases (nominal) Present value of other long-term employee benefit obligation 222 263 7.00% 4.50% Total net defined benefit liability 6,456 7,912 Financial assumptions are based on market expectations, at the end of the reporting period, for the period over The movement in the net defined benefit obligation over the year is as follows: which the obligations are to be settled. The average period over which the Group obligations are to be settled is Year ended Year ended 31 December 2014 31 December 2013 12.02 years. Defined benefit obligations at 1 January 7,912 7,294 Demographic actuarial assumptions: Included in profit or loss Year ended Year ended Current service cost 466 467 31 December 2014 31 December 2013 Expected retirement age Past service cost (347) 2 Male 60 60 Interest expense 573 513 Female 56 56 692 982 Employee turnover 5.1% 5.5% Remeasurements of defined benefit liability Mortality table 1998_adjusted 1998_adjusted Remeasurements: Loss from change in demographic assumptions 316 909 The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is as follows: Gain from change in financial assumptions (1,350) (1,036) Experience (gain)/losses (693) 354 Change in assumption Impact on defined benefit liability (1,727) 227 Discount rate Increase / decrease by 0.5% Decrease/ Increase by 3.76% Benefits paid by the plan (421) (591) Future salary increases (nominal) Increase / decrease by 0.5% Increase / decrease by 2.01% Defined benefit obligations at 31 December 6,456 7,912 Future pension increases (nominal) Increase / decrease by 0.5% Increase / decrease by 1.96% Employee turnover Increase / decrease by 10% Decrease/ Increase by 1.94% Amounts recognized in profit or loss: Mortality level Increase / decrease by 10% Decrease/ Increase by 0.93%

Year ended Year ended The above sensitivity analyses are based on a change in an assumption while holding all other assumptions 31 December 2014 31 December 2013 constant. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the Service cost 120 469 same method (present value of the defined benefit obligation calculated with the projected unit credit method at Remeasurements of other long-term employee benefit obligations (29) 51 the end of the reporting period) has been applied as when calculating the pension liability recognised within the Interest expense 573 513 consolidated statement of financial position. Total 664 1,033 The Group expects to contribute to the plan for the next annual reporting period RR 456 million.

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JSC “FGC UES” JSC “FGC UES” Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) Notes to the Consolidated Financial Statements Note 19. Current debt and current portion of non-current debt (in millions of Russian Rouble unless otherwise stated) Note 22. Operating expenses Effective Year ended Year ended interest rate 31 December 2014 31 December 2013 31 December 2014 31 December 2013 Third party non-bank loans 17.0% 46 50 Current portion of non-current borrowings (Note 17) 29,640 29,574 Depreciation of property, plant and equipment 43,365 56,758 Total current debt and current portion of non-current debt 29,686 29,624 Employee benefit expenses and payroll taxes 26,606 27,939 As at 31 December 2014 and 2013 the Group had no short-term undrawn committed financing facilities. Purchased electricity for production needs 14,047 14,151 Taxes, other than on income 7,149 4,302 Note 20. Accounts payable and accrued charges Amortisation of intangible assets 3,773 878 31 December 2014 31 December 2013 Other materials 3,639 2,021 Accounts payable to construction companies Electricity transit 3,599 2,199 and suppliers of property, plant and equipment 58,002 36,456 Accrual of allowance for doubtful debtors 2,887 1,573 Trade payables 17,942 18,340 Repairs and maintenance of equipment 2,768 3,078 Accrued liabilities 64 4 Materials for repair 2,289 2,877 Other creditors 1,769 1,111 Business trips and transportation expenses 2,026 2,336 Total financial liabilities 77,777 55,911 Security services 1,764 2,006 Advances received 7,060 10,306 Subcontract works 1,691 3,268 Accounts payable to employees 2,154 2,470 Rent 1,612 1,828 Taxes other than on income payable 1,825 1,344 Information system maintenance 1,116 1,322 Other provisions for liabilities and charges 500 345 Insurance 1,071 1,023 Total accounts payable and accrued charges 89,316 70,376 Consulting, legal and auditing services 938 908 Communication service 726 772 Movement in provision for legal claims: Utilities and maintenance of buildings 711 594 Disposal of intangible assets 455 20 Carrying amount at 1 January 2014 345 Research and development 417 203 Additional amounts charged to profit or loss 3,947 Movement in provision for legal claims 155 (5) Unused amounts reversed (3,792) (Gain)/loss on disposal of property, plant and equipment (429) 1,295 Carrying amount at 31 December 2014 500 Other expenses 3,762 2,465 Total 126,137 133,811 Note 21. Revenues and other operating income Employee benefit expenses and payroll taxes include the following: Year ended Year ended 31 December 2014 31 December 2013 Year ended Year ended 31 December 2014 31 December 2013 Transmission fee 159,780 152,430 Wages and salaries 21,447 22,182 Connection services 7,028 996 Social security contributions to the Pension Fund 3,849 3,872 Electricity sales 5,591 3,665 Social security contributions to other state non-budgetary funds 1,213 1,173 Grids repair and maintenance services 954 879 Pension costs – defined benefit plans (Note 18) 91 520 Total revenue 173,353 157,970 Share-based compensation (Note 15) 6 192 Other operating income primarily includes income from non-core activities. Total employee benefit expenses and payroll taxes 26,606 27,939 Year ended Year ended 31 December 2014 31 December 2013 Note 23. Finance income Penalties and fines 2,453 1,202 Year ended Year ended Government grants 1,803 - 31 December 2014 31 December 2013 Rental income 1,168 744 Interest income 4,988 3,977 Communication services 880 785 Foreign currency exchange differences 65 23 Research and development services 328 321 Dividends 1 23 Design works 276 360 Other finance income 16 4 Insurance compensation 231 440 Total finance income 5,070 4,027 Relocation of mobile gas-turbine electricity plants to Sochi - 1,825 Other income 1,094 478 Total other operating income 8,233 6,155

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JSC “FGC UES” JSC “FGC UES” Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) Note 24. Finance costs Note 26. Contingencies, commitments and operating risks (continued) Year ended Year ended 31 December 2014 31 December 2013 Environmental matters. The enforcement of environmental regulation in the Russian Federation is evolving and Interest expense 22,442 18,697 the enforcement posture of government authorities is continually being reconsidered. Group entities periodically evaluate their obligations under environmental regulations. Net interest on defined benefit liability 573 513 Foreign currency exchange differences 67 37 Potential liabilities might arise as a result of changes in legislation and regulation or civil litigation. The impact of Other finance costs 2 39 these potential changes cannot be estimated, but could be material. In the current enforcement climate under existing legislation, management believes that there are no significant liabilities for environmental damage, other Total finance cost 23,084 19,286 than any amounts which have been accrued in these Consolidated Financial Statements. Less capitalised interest expenses on borrowings related to qualifying assets (Note 6) (16,835) (17,177) Capital commitments related to construction of property, plant and equipment. Future capital expenditures for Total finance cost recognised in profit or loss 6,249 2,109 which contracts have been signed amount to RR 233,101 million as at 31 December 2014 (as at 31 December 2013: RR 234,096 million) including VAT. These amounts include accounts payable to construction companies Note 25. Loss per ordinary share for profit attributable to shareholders of FGC UES and suppliers of property, plant and equipment in the amount of RR 58,002 million as at 31 December 2014 (as at 31 December 2013: RR 36,456 million) (Note 20). Year ended Year ended 31 December 2014 31 December 2013 Note 27. Financial instruments and financial risks Weighted average number of ordinary shares (millions of shares) 1,260,938 1,253,587 Financial risk factors. The Group’s ordinary financial and business activities expose it to a variety of financial risks, including but not limited to the following: market risk (foreign exchange risk, interest rate risks related to Loss attributable to shareholders of FGC UES (millions of RR) (21,581) (233,101) changes in the fair value of the interest rate and the cash flow interest rate, and price risk), credit risk, and liquidity risk. Such risks give rise to the fluctuations of profit, reserves and equity and cash flows from one period to another. Weighted average loss per share – basic and diluted (in RR) (0.017) (0.186) The Group’s financial management policy aims to minimise or eliminate possible negative consequences of the The Group has no dilutive potential ordinary shares; therefore, the diluted earnings per share equal the basic risks for the financial results of the Group. The Group could use derivative financial instruments from time to time earnings per share. for such purposes as part of its risk management strategy. Note 26. Contingencies, commitments and operating risks Financial instruments by categories: Political environment. The operations and earnings of the Group continue, from time to time and in varying Investments degrees, to be affected by the political, legislative, fiscal and regulatory developments, including those related to Loans and available for Other financial environmental protection, in Russian Federation. 31 December 2014 receivables sale liabilities Total Financial assets Insurance. The Group held limited insurance policies in relation to its assets, operations, public liability or other Available-for-sale investments (Note 9) - 14,384 - 14,384 insurable risks. Accordingly, the Group is exposed to those risks for which it does not have insurance. Long-term promissory notes (Note 10) 354 - - 354 Legal proceedings. In the normal course of business the Group entities may be a party to certain legal proceedings. Other non-current assets (Note 10) 2,933 - - 2,933 In the opinion of management, currently there are no existing legal proceedings or claims outstanding or final Cash and cash equivalents (Note 11) 42,068 - - 42,068 dispositions which will have a material adverse effect on the financial position of the Group. Bank deposits (Note 12) 185 - - 185 As at 31 December 2014 the Group's subsidiary, OJSC ”Nurenergo” was engaged in a number of litigations Short-term promissory notes (Note 10) 625 - - 625 involving claims amounting in total to RR 12,363 million (as at 31 December 2013: RR 7,015 million), for Loans given 69 - - 69 collection of amounts payable for electricity purchased by OJSC ”Nurenergo”. The amount is recorded within Accounts receivable (Note 13) 46,286 - - 46,286 accounts payable. No additional provision has been made as the Group's management believes that these claims Total financial assets 92,520 14,384 - 106,904 are unlikely to result in any further liabilities. Financial liabilities Non-current debt (Note 17) - - 233,291 233,291 During 2012-2014 OJSC “Nurenergo” was involved in a number of litigations aiming to commence a bankruptcy procedure in respect of subsidiary. Last court decision by the Sixteenth Commercial Court of Appeal held on Accounts payable to the shareholders of FGC UES (Note 15) - - 8 8 November, 28th, 2014, granted an appeal to the company and dismissed the bankruptcy case. Current debt and current portion Tax contingency. Russian tax and customs legislation is subject to varying interpretation when being applied to of non-current debt (Note 19) - - 29,686 29,686 the transactions and activities of the Group. Consequently, tax positions taken by management and the formal Accounts payable and accrued charges documentation supporting the tax positions may be successfully challenged by the relevant regional and federal (Note 20) - - 77,777 77,777 authorities. Russian tax administration is gradually strengthening, including the fact that there is a higher risk of Total financial liabilities - - 340,762 340,762 review of tax transactions without a clear business purpose or with tax incompliant counterparties. Fiscal periods remain open to review by the authorities in respect of taxes for three calendar years preceding the year of decision to perform tax review. Under certain circumstances reviews may cover longer periods. Transfer pricing legislation enacted in the Russian Federation starting from 1 January 2012 provides for major modifications making local transfer pricing rules closer to OECD guidelines, but creating additional uncertainty in practical application of tax legislation in certain circumstances. Since there is no practice of applying the new transfer pricing rules by the tax authorities and courts as transfer pricing tax audits under new rules started recently, however, it is anticipated that transfer pricing arrangements will be subject to very close scrutiny potentially having effect on these consolidated financial statements. As at 31 December 2014 management believes that its interpretation of the relevant legislation is appropriate and the Group’s tax, currency and customs positions will be sustained. 38 39

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Investments The amounts exposed to credit risk are as follows: Loans and available for Other financial Long-term 31 December 2013 receivables sale liabilities Total Other Cash and Short-term promisso- non-cur- cash equi- Bank promissory Accounts Financial assets ry notes rent assets valents deposits notes Loans receivable Available-for-sale investments (Note 9) - 20,442 - 20,442 31 December 2014 (Note 10) (Note 10) (Note 11) (Note 12) (Note 10) given (Note 13) Long-term promissory notes (Note 10) 874 - - 874 Not overdue, not impaired 354 2,933 42,068 185 625 63 19,743 Other non-current assets (Note 10) 4,482 - - 4,482 Not overdue, but impaired: ------Cash and cash equivalents (Note 11) 21,627 - - 21,627 - gross amount 505 - - - - 1,706 Bank deposits (Note 12) 39,070 - - 39,070 - less impairment provision (505) - - - - (1,706) Short-term promissory notes (Note 10) 2,896 - - 2,896 Overdue, but not impaired - - - - - 5 26,543 Loans given 59 - - 59 Overdue and impaired: ------Accounts receivable (Note 13) 30,408 - - 30,408 - gross amount - - - - 12,022 - 8,157 Total financial assets 99,416 20,442 - 119,858 - less impairment provision - - - - (12,022) - (8,157) Financial liabilities Total amount 354 2,933 42,068 185 625 68 46,286 Non-current debt (Note 17) - - 257,964 257,964 Accounts payable to the shareholders of FGC UES (Note 15) - - 3,773 3,773 Long-term Other Cash and Short-term promisso- Current debt and current portion non-cur- cash equi- Bank promissory Accounts ry notes of non-current debt (Note 19) - - 29,624 29,624 rent assets valents deposits notes Loans receivable 31 December 2013 (Note 10) (Note 10) (Note 11) (Note 12) (Note 10) given (Note 13) Accounts payable and accrued charges (Note 20) - - 55,911 55,911 Not overdue, not impaired 874 4,482 21,627 39,070 1,319 38 12,908 Total financial liabilities - - 347,272 347,272 Not overdue, but impaired: ------gross amount 89 905 - - 12,022 - 217 - less impairment provision (89) (905) - - (12,022) - (217) (а) Market risk Overdue, but not impaired - - - - 1,577 21 17,500 (i) Foreign exchange risk. The Group operates within the Russian Federation. The major part of the Group’s Overdue and impaired: ------purchases is denominated in Russian Roubles. Therefore, the Group’s exposure to foreign exchange risk is - gross amount - - - - 451 - 6,261 insignificant. - less impairment provision - - - - (451) - (6,261) (ii) Interest rate risk. The Group’s operating profits and cash flows from operating activity are not largely Total amount 874 4,482 21,627 39,070 2,896 59 30,408 dependent on the changes in market interest rates. Changes in interest rates impact primarily loans and borrowings As at 31 December 2014 the amount of financial assets, which were exposed to credit risk, was RR 92,520 million by changing either their fair value (fixed rate debt) or their future cash flows (variable rate debt). Management (as at 31 December 2013: RR 99,416 million). Although collection of receivables could be influenced by economic does not have a formal policy of determining how much of the Group’s exposure should be to fixed or variable factors, management of the Group believes that there is no significant risk of loss to the Group beyond the provision rates. However, at the time of raising new loans or borrowings management uses its judgment to decide whether for impairment of receivables already recorded. it believes that a fixed or variable rate would be more favourable to the Group over the expected period until maturity. The Group’s trade debtors are quite homogenous as regards their credit quality and concentration of credit risk. They are primarily comprised of large, reputable customers, most of which are controlled by, or related to the The Group does not account for any fixed-rate borrowings as fair value through profit or loss or as available-for- Government of the RF. Historical data, including payment histories during the recent credit crisis, would suggest sale. Therefore a change in interest rates at the reporting date would not have an effect in profit or loss or in equity. that the risk of default from such customers is very low. There is no significant impact on the Group’s profit or loss or equity from the change in interest rates for variable rate borrowings as most of the Group’s interest on borrowings is being capitalised in property, plant and equipment. Credit risk is managed at the Group level. In most cases the Group does not calculate their customers’ credit status but rates their creditworthiness on the basis of the financial position, prior experience and other factors. The cash (iii) Price risk. Equity price risk arises from available-for-sale investments. Management of the Group monitors has been deposited in the financial institutions with no more than minimal exposure to the default risk at the time its investment portfolio based on market indices. Material investments within the portfolio are managed on an of account opening. Promissory notes are generally from Russian banks with minimum credit rating not below individual basis and all buy and sell decisions are taken by the management of the Group. The primary goal of the BB+ by Standard & Poor's or В1 by Moody’s. Although some of the banks and companies have no international Group’s investment strategy is to maximise investment returns in order to meet partially the Group’s investment credit rating, management believes that they are reliable counterparties with a stable position on the Russian program needs. Transactions in equity products are monitored and authorised by the Group’s corporate finance market. department. The total amount of investments available-for-sale exposed to the market risk equals RR 14,384 million. As at 31 December 2014, if equity prices at that date had been 10% higher (lower), with all other variables (c) Liquidity risk. Liquidity risk is managed at the Group level and includes maintaining the appropriate volume held constant, the Group’s before tax, and profit before tax would increase (decrease) by RR 1,439 million. As at of monetary funds, conservative approach to excess liquidity management, and access to financial resources by 31 December 2014, if equity prices at that date had been 10% higher (lower), with all other variables held constant, securing credit facilities and limiting the concentrations of cash in banks. The table below analyses the Group’s the Group’s before tax, and profit before tax would increase (decrease) by RR 1,439 million. financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

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Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 27. Financial instruments and financial risks (continued) Note 29. Segment information Less than 1 to 2 2 to 5 Over 5 The Group operates within one operating segment. The Group’s single primary activity is provision of electricity 1 year years years years Total transmission services within the Russian Federation which is represented as Transmission segment. As at 31 December 2014 Non-current and current debt and interest payable The Board of Directors of the Company has been determined as chief operating decision maker (the “CODM”) of (Notes 17, 19) 59,586 40,949 97,357 250,322 448,214 the Group which generally analyses information relating to Transmission segment. The Board of Directors does Accounts payable to the shareholders of FGC UES not evaluate financial information of other components of the Group to allocate resources or assess performance (Note 15) 8 - - - 8 and does not determine these components as segments. The key indicator of the transmission segment performance Accounts payable and accrued charges (Note 20) 77,777 - - - 77,777 is return on equity ratio (ROE). It is calculated based on the statutory financial statements prepared according to Total as at 31 December 2014 137,371 40,949 97,357 250,322 525,999 Russian Accounting Regulations (RAR) as net profit divided by net assets. Accordingly, the measure of As at 31 December 2013 transmission segment profit or loss analysed by the CODM is net profit of segment based on the statutory financial Non-current and current debt and interest payable statements prepared according to RAR. The other information provided to the CODM is also based on statutory (Notes 17, 19) 51,506 44,987 117,433 390,724 604,650 financial statements prepared according to RAR. Accounts payable to the shareholders of FGC UES (Note 15) 3,773 - - - 3,773 Transmission segment – based on statutory financial Accounts payable and accrued charges (Note 20) 55,911 - - - 55,911 statements prepared according to RAR Total as at 31 December 2013 111,190 44,987 117,433 390,724 664,334 Year ended Year ended 31 December 2014 31 December 2013 (d) Fair value. Management believes that the fair value of financial assets and liabilities carried at amortised cost Revenue from external customers 168,748 154,928 is not significantly different from their carrying amounts, except for non-current and current debt (Notes 18 and Intercompany revenue 237 289 20). The carrying value of trade payables and trade receivables less provision for doubtful debtors is assumed to approximate their fair value due to their short-term nature. The financial instruments of the Group carried at fair Total revenue 168,985 155,217 value represent available-for-sale investments (Note 9). The fair value of the available-for-sale investments is Depreciation and amortisation * 80,669 71,320 determined by the quoted prices (Level 1 inputs) in active markets for identical financial assets. There are no significant unobservable inputs used in measuring fair values of financial assets and liabilities. Interest income 6,305 5,139 Interest expenses 5,595 1,505 Note 28. Capital risk management Current income tax 82 103 The Group’s management of the capital of its entities aims to comply with the capital requirements established by Profit / (loss) for the year 3,198 (35,614) the legislation of the Russian Federation for joint stock companies, in particular: Capital expenditure 128,721 162,313 • share capital cannot be lower than RR 100 thousand; 31 December 2014 31 December 2013 • in case the share capital of an entity is greater than statutory net assets of the entity, such entity must reduce its share capital to the value not exceeding its statutory net assets; Total reportable segment assets 1,248 887 1,234,158 Total reportable segment liabilities 427,207 422,779 • in case the minimum allowed share capital exceeds the entity’s statutory net assets, such entity is subject for liquidation. * Depreciation charge under RAR is based on useful lives determined by statutory regulations. As at 31 December 2014 several companies of the Group namely OJSC “Nurenergo”, OJSC “Mobile gas-turbine electricity plants”, OJSC “The Kuban trunk grids”, were not in compliance with all requirements mentioned above. Year ended Year ended Management of the Group is currently implementing measures to ensure compliance with all legislation 31 December 2014 31 December 2013 requirements within a short period. Management considers that a breach of above mentioned requirements will not Total revenue from segment (RAR) 168,985 155,217 have material effect on the Group’s consolidated financial statements. The Group’s capital management objectives Reclassification between revenue and other income (1,336) (1,008) are to ensure that its operations be continued at a profit for the shareholders and with benefits for other stakeholders, and to maintain the optimal capital structure with a view to reduce the cost of capital. In order to maintain or adjust Non-segmental revenue 5,941 4,050 the capital structure, the Group can adjust the dividends paid to the shareholders or their contributions to the Elimination of intercompany revenue (237) (289) authorised capital by issuing new shares or by selling assets to reduce debts. Total revenue (IFRS) 173,353 157,970 The Group monitors capital ratios, including the gearing ratio, calculated on the basis of figures of financial statements prepared under the Russian Accounting Regulations. The Group should ensure that its gearing ratio, being the total debt divided by the total equity, does not exceed 0.50. As at 31 December 2014 the Company’s gearing ratio calculated under Russian Accounting Regulations was 0.31 (as at 31 December 2013: 0.34).

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JSC “FGC UES” JSC “FGC UES” Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements (in millions of Russian Rouble unless otherwise stated) (in millions of Russian Rouble unless otherwise stated) Note 29. Segment information (continued) Note 29. Segment information (continued) Year ended Year ended 31 December 2014 31 December 2013 31 December 2014 31 December 2013 Total reportable segment assets (RAR) 1,248,887 1,234,158 Profit /(loss) for the year (RAR) 3,198 (35,614) Property, plant and equipment Property, plant and equipment Adjustment to the carrying value of property, plant and equipment 181,050 145,588 Adjustment to the carrying value of property, plant and equipment 38,511 14,285 Impairment and revaluation of property, plant and equipment, net (465,268) (448,309) Impairment and revaluation of impairment of property, plant and Recognition of property, plant and equipment under finance lease 647 718 equipment, net (68,211) (293,326) Financial instruments Financial instruments Adjustment to cost of investments in associates 1,137 468 Reversal of re-measurement of available-for-sale investments and Adjustment to cost of available-for-sale investments 13,477 12,074 investments in associates 6,324 30,555 Discounting of promissory notes (428) (553) Impairment of available-for-sale investments (6,027) (28,757) Consolidation Discounting of promissory notes 125 (350) Reversal of impairment of investments in subsidiaries 8,447 8,276 Reversal of impairment of promissory notes - 697 Reversal of impairment of promissory notes 36,017 33,590 Consolidation Reversal of re-measurement of treasury shares (604) (1,241) Reversal of impairment of investments in subsidiaries 171 262 Unrealised profit adjustment (5,898) (5,094) Reversal of impairment of intercompany promissory notes 2,427 9,983 Elimination of investments in subsidiaries (23,406) (23,407) Reversal of re-measurement of treasury shares 637 1,524 Elimination of intercompany balances (58,379) (56,435) Other Other Adjustment to allowance for doubtful debtors (5,345) 8,087 Write-off of research and development to expenses (2,252) (2,495) Accrual of retirement benefit obligations (280) (682) Adjustment to allowance for doubtful debtors 5,250 10,598 Write-off of research and development to expenses 243 116 Deferred tax assets adjustment (12,793) (4,947) Share of result of associates 19 11 Netting of VAT recoverable and payable (1,805) (3,165) Share-based compensation (6) (193) Netting of advances and payables (2,860) (478) Deferred tax adjustment 11,311 63,511 Other adjustments (496) (327) Other adjustments 1,951 (1,297) Non-segmental assets 14,452 19,483 Non-segmental other operating loss (5,649) (3,584) Total assets (IFRS) 935,175 918,502 Loss for the year (IFRS) (20,601) (234,771) The main differences between financial information prepared in accordance with IFRS and the financial information reported to the chief operating decision-maker related to profit or loss, and assets and liabilities results 31 December 2014 31 December 2013 from the differences in the accounting methods under IFRS and RAR. Financial information on segments reported Total reportable segment liabilities (RAR) 427,207 422,779 to the CODM under RAR does not reflect the adjustments made in accordance with IFRS. Netting of VAT recoverable and payable (1,805) (3,165) Non-segmental revenue, non-segmental other operating loss, non-segmental assets and non-segmental liabilities Netting of advances and payables (2,860) (478) represent corresponding revenue, loss (profit), assets and liabilities of components (subsidiaries) that are not Recognition of finance lease liabilities 614 700 determined as segments by the CODM. Accrual of retirement benefit obligations 6,132 7,377 Deferred tax liabilities adjustment (32,332) (24,780) Information on revenue for separate services and products of the Group is presented in Note 21. The Group performs most of its activities in the Russian Federation and does not have any significant revenue from foreign (Reversal) / accrual of payables recognised in another accounting period (28) 1,050 customers or any non-current assets located in foreign countries. Non-segmental liabilities 23,395 23,157 Elimination of intercompany balances (58,379) (56,435) The major customers of the Group are government-related entities. The amounts of revenue from such entities are disclosed in Note 5. The Group has no other major customers with turnover over 10 percent of the Group revenue. Total liabilities (IFRS) 361,944 370,205

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