7.3. Financial and Economic Indicators of Company Activities

COMPONENTS OF SUCCESS There are no small things, there are details

ANNUAL REPORT JSC TYUMENENERGO FOR 2011

Annual Report of JSC Tyumenenergo for 2011 approved by the Board of Directors of JSC Tyumenenergo 23.05.2012 and submitted for approval of the annual General Meeting of shareholders of JSCSCC TyumenenergoTyu

Acting Director-Generaleneerar l JSC Tyumenenergogogo P.A. Mikheev

Chief accountantantt JSC Tyumenenergonergoo L.I. Lagunovaa JSC TYUMENENERGO CONTENTS ANNUAL REPORT | 2011 ANNUAL REPORT | 2011 CONTENTS JSC TYUMENENERGO

CONTENTS

Message from Chairman of the Board of Directors COMPANY DEVELOPMENT 82 and Acting Director General of JSC Tyumen energo 6 5.1. Research and development and innovation development 86 Area of Activities 10 №05 5.2. Investment activity 91 5.3. Development of the communication network and information technologies 94

COMPANY PROFILE 14 REPORT ON SOCIAL RESPONSIBILITY 96 1.1. Key fi gures for last fi ve years 16 6.1. The role of Tyumenenergo in regional development 99 №01 1.2. The Company’s Position within the Industry and the Region 18 №06 6.2. Public and government relations. Congress and exhibition activities 102 1.3. Strategic development. Priority areas 20 6.3. Environmental protection 105 1.4. The focus of the year. Main Events 24 6.4. Emergency prevention 107 1.5. History of the Tyumen energy system 26 6.5. Labor protection 108 6.6. Human resources management 110 COMPANY MANAGEMENT 30 2.1. Internal control and risk management system 33 FINANCIAL CONDITION AND PERFORMANCE ANALYSIS 116 №02 2.2. Legal regulation 38 7.1. Company property condition and fi nance source analysis 119 2.3. Customer focus 39 №07 7.2. Company fi nancial condition analysis 123 2.4. Quality Policy 40 7.2.1. Revenue 123 7.2.2. Cost 124 CORPORATE GOVERNANCE. 7.3. Financial and economic indicators of company activity 128 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY 42 7.4. Accounting balance sheet 132 №03 3.1. Corporate governance 45 3.1.1. Corporate governance principles 45 REFERENCE INFORMATION FOR SHAREHOLDERS 206 3.1.2. Information on material transactions 47 Glossary 209 3.1.3. Company management and control bodies 47 №08 3.1.4. Subsidiaries and affi liate companies 57 3.2. Securities, stockholders' equity, and dividend history 59 3.2.1. Stockholders' equity 59 3.2.2. Bonds 60 3.2.3. Dividend History 61

RESULTS OF OPERATING ACTIVITIES 64 4.1. Power transmission organisation 67 №04 4.1.1. Transmission capacity 68 4.1.2. Tariff setting. The tariff structure 69 4.1.3. Company income structure 72 APPENDIXES ON THE CD 4.1.4. Revenue from power transmission services 74 1. Main events 4.1.5. The volume of electricity transmitted through the power grids 74 CD 2. Information on compliance of the Company 4.1.6. The dynamics of electric power losses 75 with recommendations of the Corporate Code of Conduct 4.1.7. Energy conservation and improvement of energy effi ciency 76 3. Competence of the General Meeting of Shareholders 4.1.8. Energy consumption on production facilities and economic needs 77 and Board of Directors of the Company 4.1.9. Implementation of measures to reduce losses and their eff ectiveness 77 4. Information on Company subsidiaries and affi liates 4.1.10. The state of electricity metering, the introduction of automated measuring 5. Information about shares of JSC Tyumenenergo in the authorized capital and information systems for electricity control and metering 77 and voting shares in other companies 4.2. Organization of the technological connection process 78 6. Information about the Company's participation in nonprofi t institutions 4.3. Organization of long-term development 81 7. Repair program implementation JSC TYUMENENERGO MESSAGE ANNUAL REPORT | 2011 ANNUAL REPORT | 2011 MESSAGE JSC TYUMENENERGO

MESSAGE FROM CHAIRMAN OF THE BOARD OF DIRECTORS N.N. SHVETS AND ACTING DIRECTOR GENERAL OF JSC TYUMEN ENERGO P.A. MIKHEEV

Chairman of the board Acting Director General of directors N.N. Shvets P.A. Mikheev

Dear Ladies and Gentlemen! These include: increasing investment attractive- One of the results of this process was the project The year-end results are consistent with the indica- ness, improving effi ciency and reliability, and recommended by JSC Tyumenenergo, which won tors established in the business plan. The time has come to sum up the activities of ensuring transparency of our activities. A number the national competition of youth innovation the Group of Companies of IDGC Holding and of programs have been adopted to achieve the projects “The Energy of the Future”. The stability of JSC Tyumenenergo activities is JSC Tyumenenergo for 2011. This was a diffi cult determined aims, and one of the most important is particularly important in the view of the specifi cs period, but the fact is that there are no easy times the Innovation Development program. IDGC Holding It is with pride for the JSC Tyumenenergo team that of the areas where the Company operates, which for our industry. The power industry is an underlying companies, being among the fi rst in Russia to begin we can state that the Company has accomplished include the main oil and gas production regions driving force for the development of other indus- work on renovation of production facilities, have its main task for 2011 — to provide reliable, high of the country. A high concentration of gas and oil tries. This is why any diffi culties we encounter are achieved tangible results and have grown into driv- quality power supply to consumers of electricity in companies, processing plants, an extensive oil and new experiences to be handed down to those who ers of innovation ideology for the regions they oper- the Tyumen Region, and Khanty-Mansi and Yamalo- gas transportation system within the serviced area follow us. And our common task consists in making ate in. Moreover, today they do not only practise the Nenets Autonomous Districts. requires that the Company assumes the highest this experience as useful as possible to learn all use of new technologies; the interregional distribu- responsibility for ensuring reliable energy supply. lessons and draw the correct conclusions. tion grid companies have concentrated a serious JSC Tyumenenergo retains an important role in the scientifi c potential, which can aff ect the vector of region development of the areas it operates in. On JSC Tyumenenergo achieved quite good results in Throughout the year the Board of Directors of the the industry’s development in the decades to come the whole, one of the main features of the Com- reducing the number of emergency power sys- Company has worked on ensuring the interests of to actually formulate the basic principles of the pany’s work in 2011 was reliability and stability. tem blackouts in 2011. The implementation of all shareholders, improving the quality of com- energy system of the future. It cannot be disputed We have continued the work we commenced earlier JSC Tyumenenergo target programs — reducing pany management and achieving key performance that the management of JSC Tyumenenergo, being on distribution and promotion of the government's process failures in the work of substations, high- indicators. The well organized and effi cient work of fully aware of the importance of the innovation policy of modernization, we achieved good results in voltage transmission lines, distribution networks the shareholder representatives and the company's process in its aspiration for a more effi cient power energy effi ciency, including a relatively new energy and improving the lightning-proof system of power management has ensured stronger corporate unity industry, provides maximum assistance to develop- service line, we launched several major projects for lines all made it possible to eliminate technical fail- and fi nancial stability for the Company. ers of unique technologies in Russia for implement- the regions and introduced a power facility that is ures due to falling power transmission line supports ing their experience, stimulates the activities of strategically important for the industrial and social caused by the heaving of pile foundations, to reduce 6 Several priorities have been set for the Company’s young scientists and supports institutions of higher development of the Khanty-Mansi Autonomous signifi cantly the number of outages due to storm 7 development over the next few years. education. District — Yugra. surges or associated with damage to high-voltage WWW.TE.RU COMPONENTS OF SUCCESS JSC TYUMENENERGO MESSAGE ANNUAL REPORT | 2011 ANNUAL REPORT | 2011 MESSAGE JSC TYUMENENERGO

power transformer bushings, ceramic covers of high Meanwhile, the amount of the Company’s consum- unions, veteran and youth organizations, universi- voltage oil switches or to support core insulation ers is increasing and further growth is forecasted. ties, and other organizations interested in the inno- disconnectors. The above is related to the changes in the structure vative development of the Russian economy, as well of power demand: the dynamics for consumption as in the creation of a new type of society. Due to the high quality performance of the growth in urban areas due to their rapid develop- measures of the above programs, compliance with ment exceeds the growth dynamics for industrial In 2011, the Company continued its winning tradi- maintenance program parameters, and implemen- consumption. JSC Tyumenenergo has formed an tion. The JSC Tyumenenergo team once again won tation of the equipment renovation program, all investment program in the light of this trend which the All-Russian professional skills competition JSC Tyumenenergo units have received certifi cates anticipates the need for developing extra energy within JSC IDGC Holding, having shown the best stating their preparedness for work in the autumn- infrastructure for cities in the Tyumen Region and possible results. Crew foreman Nikolai Malakhov and-winter period. the Khanty-Mansi Autonomous District — Yugra. was awarded the title of the “Best Foreman of Eff ective organization of investment program activi- JSC IDGC Holding”. In the results of the All-Russian In 2011, the Company implemented a series of ties for regional development is one of the main contest “Best Russian Power Grid Company” measures to provide additional protection to power tasks of JSC Tyumenenergo. The Company launched JSC Tyumenenergo won in the nominations “Eff ec- facilities with the purposes of improving the reliabil- a facility needed to implement the Khanty-Mansi Au- tive Energy Saving” and “Most Customer-Friendly ity of Tyumen Region distribution network complex. tonomous District in 2011 — the Yugra energy strat- Company”. Furthermore, JSC Tyumenenergo was All JSC Tyumenenergo facilities were equipped in egy, namely, the launch of the fi rst energy generating awarded the title of “Modernization Leader 2011” the shortest possible time with state-of-the-art units of Nyaganskaya State District Power Plant — at the economic forum “Elite of the Year”. security systems, anti-terrorism and anti-sabotage a 220 kV wing to the 110 kV Vandmtor substation protection means. Currently, the security equipment with a capacity of 400 MW and 220 kV overhead The above facts confi rm that the Company’s priori- meets the highest industry standards. lines 44 kilometers long. Also, a number of facilities ties have been set correctly. Solutions adopted by were launched to ensure reliable supply to the cities the Board of Directors and the Company manage- The implementation of energy conservation of Surgut, Nizhnevartovsk, Noyabrsk, Nadim, Tyu- ment and the work carried out over the year has government policy is one of the priority areas for men and the villages of the Tyumen Region and the provided the basis for the stable operation of the Company. JSC Tyumenenergo registered a Khanty-Mansi Autonomous District — Yugra. JSC Tyumenenergo. The Company provides stable subsidiary associate company JSC Energy Service functioning and development of the power indus- Company Tyumenenergo in 2011. In a short period As part of environmental programs, 2011 was try in one of the strategically important regions of of time ESCO Tyumenenergo achieved success in proclaimed the Year of Environmental Safety in the Russian Federation. We can be confi dent that the energy services market, entering among others JSC Tyumenenergo. The results of the contest by continuing comprehensive work in these areas, into three contracts which were among the largest determined the branches that are coping most JSC Tyumenenergo will retain its status as a leader energy service transactions in Russia. As a result of eff ectively with environmental issues. In general, among distribution companies in the region and the activities lead by JSC ESCO Tyumenenergo, the all Company activities comply with environmental will gain additional importance as the company Tyumen Region was the fi rst subject of the Russian standards, however, as a progressive enterprise that that plays a major role in shaping the innovation Federation to register energy certifi cates for all cares about the environmental balance in the area economy of the Tyumen Region, Yugra and Yamal. public institutions. it operates in, JSC Tyumenenergo encourages and welcomes any events reducing human environmen- Yours sincerely, JSC Tyumenenergo has retained one of the key tal impact. indicators for energy distribution companies — Chairman of the Board of Directors the volume of electricity transport network losses. JSC Tyumenenergo progressed signifi cantly in cus- of JSC Tyumenenergo, Director General The volume of energy losses in the Tyumen Energy tomer relations issues in 2011, including clarifi ca- of JSC IDGC Holding System is the lowest for all the subsidiaries of tion of the policy and the development strategy of N.N. Shvets JSC IDGC Holding. The power system complex the Tyumen Region power supply system. Con- carried out a set of measures on reducing costs, structive dialogues with the authorities, NGOs and Acting Director General including the reduction of losses, which allowed consumer group representatives made it possible of JSC Tyumenenergo JSC Tyumenenergo to keep this low rate almost to accurately correlate the Company's investment P.A. Mikheev unchanged over several years. This fi gure does not plans with the needs of the regions, to make its exceed 2.5% for the Company on the whole. work comprehensible and transparent. IDGC Holding has also reached a new level in this area with in- As a result of energy conservation programs im- novative and targeted strategic communications. plemented among major customers, the volume of electric energy transmission in 2011 decreased by Currently, IDGC Holding policy drivers in society are 3% as compared to the previous year. the scientifi c and business communities, trade

8 9

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JSC TYUMENENERGO COMPANY PROFILE ANNUAL REPORT | 2011

Tyumenenergo is one of the largest power grid distributing companies in the Russian Federa- tion. It is located in the Ural Federal District and ensures industry capacity growth of the most important districts, thus improving the №01 power safety of the country on the whole. COMPANY PROFILE

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Our Mission

We provide each client with reliable, high quality and safe electricity transmission and distribution services at the highest standards.

We guarantee the opportunity for regional economies to grow freely, through timely construction and development of an eﬀ ective, eﬃ cient and secure electrical grid complex.

We lead the communal power industry and housing and communal services along the way of innovative development, energy eﬃ ciency and energy conservation.

We care for every one of our employees and create decent conditions for work and professional growth. Strategic Goals

To retain the leading position in the regional market of electric power grid ser vices and to create a united network space by integrating the distribution network assets of the territories.

Implementation of government energy policy in Tyumen region including energy conservation and energy eﬃ ciency, innovative development.

Development of power grid infrastructure in the regions in accordance with the needs of the economy and the social sphere.

Eliminating areas of decentralized energy supply.

Improving management of the power grid complex and its investment attractiveness.

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY PROFILE ANNUAL REPORT | 2011 ANNUAL REPORT | 2011 COMPANY PROFILE JSC TYUMENENERGO

1.1. KEY FIGURES FOR LAST FIVE YEARS

Network length, thousand km Productive supply, billion kWh Key Indicators 2007 2008 2009 2010 2011 Increase % 45.07 71.8 2011 to 2010 / 44.97 71.5 44.90 71.1 44.7 69.0 *absolute out 44.48 69.0

Length of network, thousand km 44.48 44.7 44.90 44.97 45.07 0.2

Total transformer capacity, GW 23.25 24.18 25.34 25.61 26.34 2.9

-3.0% Productive supply, billion kWh 69.0 71.8 71.5 71.1 69.0 -3.0 0.2%

Loss e/e, % 3.03 2.64 2.5 2.5 2.5 0.0* 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Revenue, mln rub. 27,787.2 35,193.8 37,245.0 46,146.7 47,449.3 2.8

Net income, mln rub. 1,175.2 1,080.4 1,668.6 5,515.4 4,177.9 -24.3 Loss e/e, % Revenue, mln rub.

47,449.3 Net assets, mln rub. 31,571.1 60,955.1 78,324.0 88,582.0 104,297.0 17.7 46,146.7

3.03 37,245.0 ROE, % 3.18 1.72 2.30 6.95 4.70 -2.25* 35,193.8

27,787.2 EBITDA, mln rub. 2,840.8 5,432.8 7,815.3 13,435.3 11,813.3 -12.1 2.64 2.5 2.5 2.5

Operating and construction 30,550.9 64,501.4 78,117.9 87,632.7 113,315.1 29.3 2.8% in progress, mln rub.

Fixed capital depreciation ratio 48.8 47.3 47.1 53.3 52.2 -1.1* 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Total debt to equity 0.8 0.8 0.8 0.8 0.8 0.0

Average % rate on loans, % 7.92 12.69 12.14 8.09 7.77 -0.3* Net income, mln rub. Net assets, mln rub.

104,297.0 Loan portfolio, mln rub. 4,795 9,307 11,522 5,522 10,507 90.3 5,515.4 88,582.0 4,177.9 78,324.0 Receivables turnover, times 5.3 3.7 14.1 10.6 7.8 -26.4 60,955.1 -24.3% 31,571.1 17.7%

1,668.6 Highly effi cient management and a high level 1,175.2 of production setup together with extensive 1,080.4 implementation of advanced technologies allow JSC Tyumenenergo to achieve stable growth of its production and fi nancial indicators. This confi rms 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 the Company’s stable development.

ROE,% EBITDA, mln rub.

13,435.3 6.95 11,813.3

4.70

7,815.3

3.18 5,432.8

2.30 -2.25% 2,840.8 -12.1% 1.72

16 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 17

WWW.TE.RU COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY PROFILE ANNUAL REPORT | 2011

1.2. THE COMPANY’S POSITION WITHIN THE INDUSTRY AND THE REGION

The gross power transmission market share of the Company is 87%.

JSC Tyumenenergo is the largest power grid compa- 2. Khanty-Mansiysk — Yugra — the Kogalym, ny of the Ural Federal District and has leading posi- Nizhnevartovsk, Surgut, Neﬅ eyugansk, and Urai tions on the market of power transmission services electrical networks and Energy complex; for fi nal consumers among other grid companies 3. Tyumen Region — Tyumen distribution net- of the Tyumen power system, thus covering three works, comprising four territorial industrial subjects of the Russian Federation: Yamal-Nenets branches: Tyumen, Tobolsk, Ishim and Southern. Autonomous District, Khanty–Mansi Autonomous District — Yugra, and the Tyumen Region aﬅ er JSC Tyumenenergo ensures industrial capacity reorganization. growth of one the most important regions in Russia, thus securing reliability, quality and safety of power Currently, there are three levels of network transmission and distribution services in line with companies which have been formed based on international standards; it continues to confi dently the technological and administrative-territorial develop and improve the power grid complex of the criteria: Tyumen Region, Khanty–Mansi Autonomous Dis- trict — Yugra and Yamal–Nenets Autonomous Dis- – Level 1. The Federal Grid Company which trict. Methodical work on grid complex renovation and owns the main power transmission lines of commissioning new facilities retain their relevance 220 kV and over, constituting the UNEG. This and are of high importance for JSC Tyumenenergo. company operates throughout the territory of the Russian Federation, and has branches covering all Russian regions. – Level 2. Interregional distribution grid companies formed aﬅ er the restructuring of SC-Energo (one of which is JSC Tyumenenergo). 66,128 These organizations own 110-0.4 kV voltage million roubles — the total range of commis- networks and provide power transmission and sioned lines amounts as a result of the invest- technological connection services in those ment program for the period from 2012 to 2017 subjects of the Russian Federation in which they are located; – Level 3. Local territorial network organiza- Transformer capacity to be commissioned in the tions, which own mostly 0.4-10 kV networks. period from 2012 to 2017 is 2,155.7 MVA, power These organizations have been mostly formed lines commissioned in the period from 2012 to on the basis of wholesale companies, resel- 2017 is 1,705.4 km. The amount of investment lers, are created as municipal enterprises, and activity fi nancing in the period from 2012 to 2017 serve the customers of the municipal power is 69,460.6 million roubles (including VAT). In order grid and private power networks of industrial to fi nance investment activities JSC Tyumenenergo enterprises. plans to attract loaned funds.

JSC Tyumenenergo has nine branches, which are Currently, apart from JSC Tyumenenergo, there located in three Russian regions: are 70 regional network organizations engaged in electricity transmission and providing technologi- 1. Yamalo-Nenets Autonomous District — cal connection services within the municipalities The North and November electric networks; or for the needs of industrial enterprises. Most

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of these network organizations do not have zations receive the electricity transmitted over their direct access to the Uniﬁ ed National (All-Russia) networks from the mains of JSC Tyumenenergo. No electric grid (UNEG), provide service for electricity signiﬁ cant changes in the market share controlled by transmission mostly at low and medium voltage JSC Tyumenenergo are expected. However, the trend (0.4-10 kV) and are connected to the electrical among the major oil companies to move their energy power network of JSC Tyumenenergo, which has assets into separate individual networks is likely a higher voltage level. to continue in the future.

In accordance with Regulation № 861 of the Government of the Russian Federation of Decem- Being fully aware of the fact that the enterprise ber 27, 2004, Tyumen Region uses a “common pot” operates within a developing power services method of setting electricity transmission tariﬀ s, market and that the possibility of arising com- which means “common” (equal) tariﬀ s for electric- pletition exists, JSC Tyumenenergo determines ity transmission supply to all consumers of the expansion of the grid economy as one of its key region, whichever network organization they are activities, including by development and improve- attached to. ment of the process of technological connection of power receivers belonging to power consumers The existence of territorial network organizations of JSC Tyumenenergo power grid. does not create a substantial risk for JSC Tyumen- energo operations, as the territorial network organi-

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY PROFILE ANNUAL REPORT | 2011

1.3. STRATEGIC DEVELOPMENT. PRIORITY AREAS

The priorities of power supply security, eﬃ ciency and investment attractiveness underlie the strategic development of JSC Tyumenenergo.

JSC TYUMENENERGO DEVELOPMENT 3. R educe equipment wear in the complex net- STRATEGY work and power transmission losses; 4. M odernization, technical re-equipment and “Vision of the future” for JSC Tyumenenergo: reconstruction of power facilities; consumers, regional and local administrations, 5. C reation of the necessary reserve capacity, senior corporate and departmental structures are especially for socially signifi cant facilities in satisfi ed with the Company’s activities; techno- Tyumen Region; logical connection of new and/or expansion of the 6. E stablish an eff ective mechanism for reducing existing consumer electrical installations is ensured; costs, cost-eff ective management of our own the dynamics of the major industrial and economic and borrowed resources; performance and reliability indicators is positive; the 7. I mplement government energy security policies: staff are motivated and loyal; management at all – implement international quality, occupa- levels is competent and responsible; the team as a tional health, workplace safety and envi- whole has an understanding of the company’s stra- ronmental protection standards; tegic objectives and a willingness to work every day – connect to the integrated electrical grid to achieve and/or maintain the proclaimed target space of areas with a decentralized energy results. An optimal balance is supported between supply; the Company’s investment activities in the interests – implement the JSC Tyumenenergo Innova- of the regions and the tariff burden on consumers tive Development Program, study, adapt, for electricity supply services. and introduce advanced international practices, modern developments and inno- PRIORITY AREAS vative technologies for the development of the energy complex and improving energy – increase the reliability and quality of electricity effi ciency in Tyumen Region; supply for Tyumen energy system consumers; 8. I mprove corporate governance principles and – maintain a leading position in the market for implement an open and transparent informa- electricity transmission services in Tyumen tion policy. Region; – achieve high fi nancial, economic, industrial, and On January 27, 2012 the Board of Directors ap- technological indicators; proved the Plan for implementing the develop- – increase the Company’s investment attractive- ment strategy of JSC IDC Holding to 2015 and to ness and capitalization; 2020 within JSC Tyumenenergo. This plan contains – increase the availability of the power grid detailed measures in areas such as: improving infrastructure; the quality and reliability of services provided to – introduce innovative technologies and higher customers, maintaining tariff sources of investment energy effi ciency; into upgrading and developing the network; improv- – develop human capital. ing the investment effi ciency; energy effi ciency and reducing losses, improving customers, community MAIN OBJECTIVES: and investor relations and raising operating costs effi ciency. 1. Improve the quality and the level of uninterrupted and reliable electricity supply for municipal In this way, the scenario conditions that determine and industrial consumers in Tyumen Region; the strategic development of the Company are set 2. D evelop the power grid infrastructure to ensure by its shareholder, JSC IDC Holding. the needs of consumers in Tyumen Region;

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IMPLEMENTATION OF THE MAIN COMPANY OBJECTIVES

Activities Implemented in 2011 Plans for 2012

SECURING NETWORK RELIABILITY

Providing a reli- – Construction of a branch to SS Almaz from the110 kV overhead – Complete the design of the able electric- line Polotskaya-Pimskaya, needed to improve the reliability of facility, proceed to building ity supply for OJSC Surgutneﬅ egas electricity supply in. permit application. consumers – Work was carried out on designing the 110 kV overhead line – Complete construction and Tyumen TPP-2 — Ozhogino, which is needed to create the pos- commissioning of the 110 kV sibility of Tyumen city consumers getting the prospective load. Kyrillovskaya-Tavricheskaya Taking into account the speciﬁ cs of the project, the CL route overhead line needed to im- passes through the city, in 2011 the choice of a possible site prove power supply reliability was made in coordination with the land owners. in the Kogalym area.

The main THE RECONSTRUCTION AND TECHNICAL Increase the volume of re- reconstruction REEQUIPMENT PROGRAM HAS BEEN equipment and reconstruction and technical FULLY COMPLETED. with the use of innovative re-equipment solutions in the ﬁ eld of elec- areas – Reconstruction of the replacement of oil-ﬁ lled equipment by tricity and modern high-tech modern high-tech gas-insulated and vacuum equipment com- equipment. pleted (110 kV, 45 pcs.). – Replacement of overhead line wires to increase Company network capacity and increase transformer capacity at the substation has been carried out, to match the anticipated growth of consumer loads. – Replacement completed of 19 transformers to higher capacity transformers. – 10 reclosers installed in the 10 kV networks. – New equipment installed to improve lightning-proof safety by inserting surge arresters (surge limiting equipment) (110 kV overhead line Urai — Novaya, 321 pcs.).

Repair Program Repair Program implemented in full, to execute the program of Repair Program implemented repairs and maintenance in 2011 3,780.5 million roubles was in full, to execute the program spent, of which 2,188.2 million roubles on repairs. Autumn and of repairs and maintenance winter passed as planned. in 2011 3,780.5 million roubles was spent, of which 2,188.2 million roubles on repairs. Autumn and winter passed as planned.

NETWORK DEVELOPMENT AND REGIONAL DEVELOPMENT PROMOTION

Main activities – Procurement of equipment for substation-110/10kV Odesskaya – Due to changes in company aimed at con- with double-circuit 110 kV overhead lines, in Tyumen. The facil- investment plans, construc- necting new ity under construction will provide higher capacity for city energy tion of the facility is tempo- customers consumers. rarily suspended. – Construction was started of the 110 kV substation-ABZ – Complete the construction of with -110 kV feeding overhead line to the city of Khanty- the facility in the 4th quarter Mansiysk — Yugra to provide higher capacity for city energy of 2012. consumers. General construction work was completed: ﬁ lling, pile foundations and access roads. Equipment and supplies for the facility were procured. In 2011 work continued on the construction of 110 kV overhead supply line. – Construction of 110 kV substation Fedorovskaya-2 in the town of Fedorovsky was completed on schedule to provide higher capacity for the town energy users and JSC Surgutneﬅ egas. 21

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY PROFILE ANNUAL REPORT | 2011

Activities Implemented in 2011 Plans for 2012

Connection Construction of 110 kV Northern Lights substation in the city Due to changes in company to the grid of of Salekhard with a 110 kV feeding overhead line to central- investment plans, construc- isolated power ize power supply from the power system of Tyumen region for tion of the facility is tempo- districts: urban pressures and to provide higher capacity for city energy rarily suspended. consumers. – in the north- western part of Yamal;

– in Khanty- – More than 70% of construction completed of overhead lines – Complete construction Mansiysk — 110 kV Sergino — Punga with the SS Punga and extension of the facility in the 4th quar- Yugra: of the SS Sergino, Punga — Igrim, and with extension of the ter of 2012. SS Igrim to ensure centralized power supply from the power – Complete construction of the in Oktyabrsky, system of Tyumen region for the town of Punga, and the town facility, to be commissioned in Berezovsky, of Igrim, and to provide higher capacity for energy consumers. the 4th quarter of 2012. Khanty-Mansi- – Construction was started, preparatory work carried out and yskiy district materials and equipment procured for the following facilities: (for the – Extension of 110 kV switchyard at the substation 110 kV Oktya- Program of brskaya, which will improve the quality and reliability of electric- centralized ity supply in Oktyabrsky and Beloyarsky districts, by creating power supply a closed 110 kV network of ring conﬁ guration. to settlements – Designing of 110 kV distribution networks in Berezovsky district in Khanty-Man- to transfer to centralized power supply of a number of towns in siyskiy district) Khanty-Mansiysk — Yugra: Aneevo, Sartynya, Sosva, Lom- bovozh, Saranpaul.

REALIZING COMPANY POTENTIAL

Innovative 1,457,265.70 roubles were earmarked in 2011 for innovative Implementation of the Com- development development. pany Innovative Development Program for 2011–2016. Aﬅ er modernization, technical re-equipment and reconstruction of basic production assets more technologically advanced and Introduction of modern inno- new equipment is used. vative equipment and technical solutions. Research and development in the electric power industry.

Improving – As a result of activities of the energy conservation and energy Implementation of the energy effi cien- effi ciency program, losses decreased by 130.8 million kWh. energy conservation and cy and energy The eff ect is 45,114.2 tce and 628.4 million roubles exc. VAT. energy effi ciency program for conservation – Actual electricity loss amounted to 2.5%, which is lower than 2012–2017. the norm (2.71%). Implementation of measures to reduce electricity losses during transportation in the networks.

Introduction of energy saving equipment.

Creating On January 12, 2011 state registration was completed of Implementation of a market- energy service JSC Energy Service Company Tyumenenergo, with 51% partici- ing strategy for the develop- subsidiaries pation of Tyumenenergo. The total value of contracts executed ment of the Company’s core and aﬃ liates and implemented in the energy survey sites by the executive activities for 2012–2015, and municipal authorities amounted to 100,139.9 thousand approved by the Board of Di- roubles (including VAT). In total more than 600 energy audit rectors of JSC ESCO Tyumen- projects were realized, a database of energy-eﬃ cient solutions energo January 30, 2011. 22 was collected for both the state sector, and industrial enterprises.

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Activities Implemented in 2011 Plans for 2012

Development In order to develop the managerial and professional competen- Participation of young employees of intellectual cies of young professionals, the Company took part in the business in the business project in Khanty- capital project in Khanty-Mansiysk — Yugra, Growth Points, and also won Mansiysk — Yugra, Growth Points. the district competition of youth invention projects "Russia is my Country". Implementation of the training Program for young managerial As part of the program to train young managers and of the III Fes- staﬀ of JSC Tyumenenergo. tival for young workers, JSC Tyumenenergo organized a series of lectures on professional topics, as well as a training seminar with In order to develop a person- the participation of psychologists. nel reserve Young Support of IDGC Holding, formation of Selection evaluation activities were conducted and a pool of young individual development plans talents formed — Young Support of IDGC Holding. for reserve members and their implementation. A conference of young company specialists was organized, "Innova- tive Projects in the Energy Sector”, with the participation of relevant The organization and conducting regional higher education institutions, and the Company special- of the IV Festival of Young Work- ists took part in the Inter-University Conference" Psychology in the ers of JSC Tyumenenergo. Northern Region: Practice, Problems and Prospects”. In order to enhance cooperation with relevant institutions, ﬁ nalizing Cooperation agreements with leading regional educational institutions.

JSC Tyumenenergo will continue to use all of its accumulated potential, both technological and human, in its quest to become the leader within IDGC, the most reliable, technologically and dynamically developing company within the industry.

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY PROFILE ANNUAL REPORT | 2011

1.4. THE FOCUS OF THE YEAR. MAIN EVENTS

Every event in the life of Tyumenenergo, from commissioning a power facility to winning All-Russian or international contests are a result of everyday work of the Company's thousands of employees.

* Details of the main Com- The JSC Tyumenenergo team won the All-Rus- organization of regional service centres, as well pany events are listed sia competition of professional skills in Vo- as a wide range of additional services off ered to in Appendix No 1 to this annual report on CD. logda. At the end of four days of competition, customers ensured JSC Tyumenenergo’s victory it emerged as the strongest of the 13 teams in the nomination “The Most Customer-Friendly representing the companies of IDGC Holding. Power Grid Company.” Over 4 days, energy workers from all over the country demonstrated their endurance in going through One of JSC Tyumenenergo’s largest invest- the stages, the technique of performing various ment program facilities was commissioned, tasks, knowledge and experience. Tyumen Energy which added 220 kV to the 110 kV Vandmtor System was represented in the national competition substation with a capacity of 400 MVA in the of 2011 by a working team from the affi liate Tyu- city of Nyagan. men distribution networks. Substation Vandmtor is one of the feeding power Nikolai Malakhov, a team member from centres of Nyagan power district through a 110 kV JSC Tyumenenergo, a foreman from the Tyumen network. The need for a 220 kV wing on this substa- distribution networks branch, received the title of tion is determined not only by the planned growth “Best Foreman” aﬅ er the fi nals of the All-Russian of prospective loads in this power district, which is competition in Vologda. As the winner in the “Best already about 8% per annum and will be supplied Foreman” nomination put it, “we were just doing by connecting to the Berezovsky energy system and our usual work. Just what we do every day, clearly, by the development of the city of Nyagan, but also soundly and thoroughly. In our team everyone is secured by the power supply from the newly built the best”. Nyagan SDPP.

JSC Tyumenenergo was declared the winner in The Governor of Yugra, Natalia Komarova, during the nominations “For Eﬀ ective Energy Con- one of her visits to Nyagan Power Station, said: servation” and “The Most Customer-Friendly “Construction has always demonstrated the oppor- Power Grid Company” in the competition “The tunities for growth and characterizes the region as Best Power Grid Company of Russia” in 2011. a living organism. This facility is part of the devel- Participants were evaluated by specialists from re- opment strategy of the Autonomous District up to gional energy ministries and departments in seven 2020. Nyaganskaya SDPP should provide energy to nominations on the basis of work results of 2010. our major industrial customers, companies that are The winner in each nomination was the company engaged in oil extraction, reﬁ ning and transporta- which achieved the highest expert score. tion of hydrocarbons”.

What allowed JSC Tyumenenergo to win in the The Nyaganskaya power plant is one of the largest nomination “For Energy Conservation” were the investment projects not just for Khanty-Mansiysk — energy loss ﬁ gures compared to the input into the Yugra — or the UFD, but also for all of Russia. network, 2.5%, while the norm is 3.0%. Eﬀ ective

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COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY PROFILE ANNUAL REPORT | 2011

1.5. HISTORY OF TYUMEN ENERGY SYSTEM

The great history of Tyumenenergo began on May 3, 1979 when the district power authority Tyumenenergo was created.

The story of Tyumenenergo’s success is acknowl- the regional economy by timely building and edged by one of its key principles: developing an eﬀ ective, cost-eﬃ cient and safe “We ensure the possibility of free growth for power grid complex.”

STAGES OF TYUMENENERGO DEVELOPMENT

03.05. District power authority Tyumenenergo was created. 1979 Sverdlovenergo enterprises joined it.

14.09. District power authority Tyumenenergo was renamed Tyumen Production 1988 Association for Power and Electriﬁ cation (PAPE) Tyumenenergo.

12.03. Open Joint Stock Company for Power and Electriﬁ cation Tyumenenergo, which was the successor of PAPE Tyumenenergo, was established as 1993 part of the privatization process in the Russian Federation.

26.12. AOOT Tyumenenergo was reregistered into Open Joint Stock Company 1996 for Power and Electriﬁ cation Tyumenenergo.

01.07 JSC Tyumenenergo — distribution grid company (resulting from dividing 2005 the Company as per types of activities).

27.04 JSC Tyumenenergo — 2007 interregional distribution grid company.

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1956 — October 8, 1960 — Construction of Tyu- 1983 — construction of the second 500 kV core * Reference: The State privatization program, men TPP-1 and launching of the plant’s fi rst electric line Reﬅ inskaya TPP — Tyumen — Surgut was approved by the Supreme turbo-generator, with a capacity of 25 MW. completed, which ensures reliable system intercon- Soviet of the Russian nections with the Ural. Federation on June 11, May 15, 1969 the 220 kV overhead line Tyumen — 1992 ref. No. 2980-1, and in accordance with Ust-Balik was switched on to the operating voltage. End of 1983 — two cogeneration power producing the Presidential Decree units were added to Surgut SDPP-1, which resolved No. 922 dated August 14, March 1, 1964 the company Tyumen Power Grid the problem of centralized heat supply for the city 1992 “On the specifi cs of transformation of state was founded, within the district energy manage- of Surgut. enterprises, associations, ment Sverdlovenergo, the fi rst company in the and organizations of the energy system of Tyumen region. March 1, 1985 — the fi rst power producing unit fuel and power complex with a capacity of 800 MW was connected to the into joint-stock companies”, the Presidential In 1970 — the 220 kV substation Surgut was com- network at Surgut SDPP-2, in November, the second Decree No. 923 of August missioned, which allowed power to be supplied to power producing unit was put into operation. Two 15, 1992, “On organiza- many oil and gas companies. The power lines Tyu- power producing units of such capacity had never tion of management of the power complex of men — Tavda — Urai and Surgut — Megion came before been commissioned during one year at the the Russian Federation in into operation, joining Tyumen region to Khanty- same power plant in power industry history. the context of privatiza- Mansiysk Autonomous District — Yugra. tion”, Presidential Decree By 1986, the structure of Tyumenenergo included No. 1334 of November 5 1992, “On realization 1970 — the enterprise Surgut Power Grid was two new grid enterprises: the Neﬅ eyugansk power within the power industry separated from Tyumen Power Grid. grid and the Noyabrsk power grid. of Presidential Decree No. 922 dated August 14, 1992 On the specifi cs of December 1972 — Reﬅ inskaya SDPP with a In February 1987 Surgut SDPP-2 leﬅ the United transformation of state 500 kV overhead line was commissioned in Tyumen. Surgut SDPP as a separate entity, in the same enterprises, associa- month, the branch Kogalym power grid was formed. tions, and organizations December 31, 1972 — the launch of the Surgut of the fuel and power complex into joint-stock SDPP-1, the fi rst power plant built in the north of September 14, 1988 the Regional Electricity companies”, on March 12, Tyumen region and the fourth in Russia in terms of Board Tyumenenergo was renamed the Tyumen 1993 the Open Joint installed capacity. The installed electrical capacity Industrial Association of Power and Electrifi cation Stock Company for Power Production and Electri- of Surgut SDPP-1 is 3,280 MW. The plant equip- Tyumenenergo. fi cation Tyumenenergo ment consists of 16 energy production units and was established, which a reserve TPP. January 1991 — the Energocomplex branch was is the legal successor established in Nyagan. to the state enterprise the Tyumen production May 3, 1979 — District Energy Administration association of Power Pro- Tyumen energo was formed which consisted of January 30, 1993 — launch of the fi rst power duction and Electrifi cation Sverdlovenergo power grid companies. producing unit at Nizhnevartovsk SDPP. Construc- Tyumenenergo (PAPE tion was then closed down for a long time. It was Tyumenenergo). April 1977 — the 500 kV Surgut SDPP — Megion resumed in 2000 under the Tyumenenergo invest- was launched, which made it possible to transport ment program. Installed capacity of the fi rst phase energy produced by Surgut power plant to the east of the power plant is 1600 MW. Thermal output of into the oil and gas extraction areas. the plant is 758 Gcal/h.

1979 — the branch Nizhnevartovsk Power Grid was 1993 — OJSC Tyumenenergo was established under established. the State privatization program of the Russian Fed- eration, and became the legal successor of the state 1980 — within Tyumenenergo a new network en- enterprise, Tyumen Industrial Association of Power terprise was created, Northern Power Grid, providing Production and Electriﬁ cation Tyumenenergo (formed energy conservation services in the Yamal Autono- May 3, 1979). Three years later, OJSC Tyumenenergo mous District. was re-registered as JSC Tyumenenergo.*

1981 — the branch Urai Power grid was established. 1995 — commissioning of the 500 kV overhead line Pyt-Yakh — Nelymsky (266 km). 1982 — launch of the 500 kV overhead line from Surgut to the Nizhnevartovsk power district, where 2000 — JSC Tyumenenergo becomes one of as a result of widespread use of electric drives in the largest power companies in the country. The the oil extraction industry the largest increase in Company consists of 21 separate enterprises: energy consumption was recorded. 7 power plants with a total capacity of 10,421 MW, 12 power grid enterprises, as well as repair and 1982 — the 500 kV overhead line Kholmogory — maintenance departments. Urengoy was built. This was the ﬁ rst time that the sub-polar gas-producing regions of Nadym — 2000–2005 — Reforms 27 Urengoy power centre, which was previously fed During this period, Russia's economy began to show from autonomous stations, acquired a reliable and signs of recovery. The recovery in the industrial COMPONENTS economical power source. sector gave rise to a to a systematic increase trend OF SUCCESS JSC TYUMENENERGO COMPANY PROFILE ANNUAL REPORT | 2011

in energy consumption. It became obvious that for part of the Territorial Generating Company (TGC), sustainable development of the industry and up- and 12 grid enterprises were to be joined into a grade of worn-out capital assets it was necessary single distribution network company. The company to attract multibillion dollar investments. The solu- restructuring lasted three years. tion to this problem was seen as the fundamental reform of the country’s power industry, reducing On March 5, 2005 the Board of RAO UES of Rus- its monopolization and state regulation, bringing in sia decided to reorganize JSC Tyumenenergo. In market relations into the sector and a wide range of accordance with the Russian law “On the Electric institutional investors. Power Industry” and other legislation, JSC Tyumen- energo was divided according by activity type. Before the reforms a tremendous amount of work was done: payment discipline was restored, barter Thus on July 1, 2005 JSC Tyumenenergo schemes were ended which led to the industry (100% subsidiary of RAO UES of Russia) became having the resources for normal activity and for the a distribution grid company. resumption of development interrupted during the crisis years. On April 27, 2007 the Board of Directors of RAO UES of Russia decided to increase the number A large-scale investment program was developed in of interregional distribution grid companies from JSC Tyumenenergo, which made provisions for new 4 to 11, formed based on territory and comparabil- construction and for modernization of the existing ity of balance sheet assets. So, JSC Tyumenenergo power facilities using modern technical solutions. was approved as an interregional distribution grid company, without changing its name. The ﬁ rst steps in its implementation was the construction of a second 800 MW power production On July 1, 2008, as part of reorganization of RAO unit in Nizhnevartovsk state district power plant and UES of Russia, JSC IDGC Holding became the owner reconstruction of the ﬁ rst unit in Tyumen TPP-1. of 100% stake in JSC Tyumenenergo.

In 2003, more than 1.7 billion roubles of the Com- In 2009, the branch Tyumen Power Grid was pany’s own funds were invested in these projects. transformed into Tyumen Distribution Grid, whose JSC Tyumenenergo was, at the time, the only power activities covers the whole of the southern part of company in Russia undertaking construction using Tyumen Region. only their own funding. August 2010 — launch of new 110 kV substation In 2002, RAO UES of Russia approved the draﬅ Istominskaya with a feeding overhead line of 110 kV reforms of JSC Tyumenenergo. The document in the village Novoagansk of Nizhnevartovsk district. proposed taking four power plants (Urengoy, Nizh- nevartovsk and both of the Surgut SDPPs) to form November 22, 2010 — the Noyabrsk combined- 28 wholesale generating companies (WGC). Tyumen cycle electric generating plant was put into opera- TPP-1, TPP-2 and Tobolsk TPP were to become tion, the ﬁ rst power plant of this class in the Far WWW.TE.RU ANNUAL REPORT | 2011 COMPANY PROFILE JSC TYUMENENERGO

North, with European standards of energy and resources conservation. The installed electric power JSC Tyumenenergo is currently an interregional capacity of the power plant is 122.6 MW, thermal distribution grid company comprising impressive ca- output 95 Gcal per hour. pacities: 634 substations of 35-220 kv of installed transformer capacity — 26,334 MVA, 5,341 trans- October-November 2011 former substations with installed transformer capacity amounting to 1,097.9 MVA. The length of One of JSC Tyumenenergo largest investment power transmission lines amounts to 45,071 km program facilities was commissioned, which (according to circuits). The volume of technologi- added 220 kV to the 110 kV Vandmtor substation cal connection to JSC Tyumenenergo grids in 2011 with a capacity of 400 MVA capacity, in the city amounted to 380,800 MW. It is due to the Company of Nyagan. that the Region is able to live a productive life and develop its industrial, scientiﬁ c and social potential. Vandmtor substation is one of the feeding power centres of Nyagan power district on a 110 kV net- The Company is ready to expand its possibilities work. The need to add a 220 kV wing to this substa- as it has extensive construction capacities and tion is determined not only by the planned growth the most valuable accumulated capital — a proof prospective loads in this power district, which is fessional team of power engineers. All of the already about 8% per annum,and will be supplied above makes JSC Tyumenenergo one of the most by connecting to Berezovsky energy system and promising and rapidly expanding companies of the by development of the city of Nyagan, but also country’s energy sector. secured by the power supply from the newly built Nyagan SDPP.

The Governor of Yugra, Natalia Komarova, during one of her visits to Nyagan Power Station, said: “Construction has always demonstrated the opportunities for growth and characterizes the region as a living organism. This facility is part of the development strategy of the Autonomous Okrug up to 2020. Nyaganskaya SDPP should provide energy to our major industrial customers, companies that are engaged in oil extraction, reﬁ ning and transportation of hydrocarbons”.

The Nyaganskaya power plant is one of the largest investment projects not just for Khanty-Mansiysk — Yugra — or the UFD, but also for all of Russia. 29

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY MANAGEMENT ANNUALANNUAL REPORT REPORT | 2011 | 2011

Expert management and a highly professional team are integral parts of success for a promising and rapidly expanding №02 power company. COMPANY MANAGEMENT

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Opinion of Deputy Director General for Security Sergey Yurievich Kvachadze on the Company’s performance in 2011

The economic importance of the region housing the most important oil and gas producing facilities in Stable and safe opera- the country imposes on JSC Tyumenenergo a huge responsibility for ensuring safe operatin of the pow- tion, protection of per- er grid complex. sonal interests, interests Increased attention to security issues at energy sector facilities entails that equipment of most of the of the society and the Company’s substations have up-to-date technical security means, while state security was engaged state on the whole from for key facilities in 2011. unauthorized intervention The well-coordinated activities of security divisions prevented security incidents at the Company's prop- into the activities lead Sergey erty and reputation. Yurievich by the Energy Complex Kvachadze Information events held for both the population and the employees of contractor parties decreased the underlie the safety of risks of unauthorized activities with the protected areas of power transmission lines. the JSC Tyumen energo Furthermore, the population of the Tyumen Region power grid complex. is informed on a regular basis of the procedures to be taken in case of a terrorist threat or an emergency at a power facility.

The Company implements activities at protecting state and commercial secrets, its personnel and property, ensuring transparency of ﬁ nancial and business activities of JSC Tyumenenergo, activities at detecting cases of unrecorded power consumption, and has a system of internal control and risk management.

The above activities as a whole entail considerable improvement of both the technical and physical security of the Company’s power grid facilities.

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY MANAGEMENT ANNUAL REPORT | 2011

CORPORATE STRUCTURE

MANAGEMENT STRUCTURE

GENERAL SHAREHOLDERS MEETING

Board of Directors Auditing Commettee

Director General

Yamal-Nenets Hanty-Mansi Autonomous Tyumen Region (excluding Autonomous District District — Yugra autonomous districts)

Northern Power Grids Surgut Power Grids Tyumen Power Grids

Noyabrsk Power Grids Neﬅ eyugansk Power Grids

Nizhnevartovsk Power Grids

Kogalym Power Grids

Uraysk Power Grids

Energokompleks

7, 205 persons average number of employees 32 of JSC Tyumenenergo in 2011

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2.1. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

The risk management system is the central piece of the Company’s strategic management.

KEY DOCUMENTS GOVERNING THE SYSTEM Improvement of the system of internal control and OF INTERNAL CONTROL AND RISK risk management. MANAGEMENT Three types of control are performed under the The system of internal control and risk manage- local regulations as part of the SIC&RM: preventive, ment (hereinaﬅ er referred to as the SIC&RM) current and revision. operates in JSC Tyumenenergo on the basis of local regulations aimed at improving internal control and For the purpose of improving preventive control, risk management: Risk Management Policies and the Company works on a monthly basis on updating Internal Control Policies (approved by the resolution the risks register with precision of risk evaluation, of the Board of Directors of July 30, 2010), as well status of risk management events and key risk fac- as risk management guidelines. tors for the Company.

PARTICIPANTS OF THE SYSTEM OF INTERNAL The Company develops its current control through CONTROL AND RISK MANAGEMENT AND improving the control environment of business pro- DIVISION OF RESPONSIBILITIES cesses via standardization of business processes, approval of template provisions on the control Managers and specialists of all management levels environment and business process risks at the of JSC Tyumenenergo, both of the executive ap- Board of Directors, determination of check points, paratus and the Company’s branches, participate in risks, internal and external risk factors and control the risk management and internal control processes procedures. The Board of Director considered and in accordance with the local regulations on SIC&RM approved provisions on the control environment and improvement. The Board of the Company’s Directors business process risks in 2011 (Minutes No. 9/11 establishes development guidelines and approves dates July 22, 2011): local regulations underlying the SIC&RM. SIC&RM effi ciency and implementation of SIC&RM local 1. “Commercial accounting and sale of power regulations are the responsibility of the Director transmission services”; General. Heads of operating units are responsible 2. “Sale of technological connection services”; for stating and implementation of risk-oriented 3. “Procurement management”; control procedures and risk management events, 4. “Operational activities”. as well as for the timely identifi cation and evaluation of risks. The Internal Audit and Risk Management Adminis- tration arranges work on implementing the above THE INTERNAL AUDIT AND RISK provisions within the Company. MANAGEMENT ADMINISTRATION MONITORS AND EVALUATES SIC&RM EFFICIENCY KEY RISKS AND RISK MINIMIZATION ACTIVITIES Apart from the above, the internal control and risk management department included into the In view of the fact that activities lead by Internal Audit and Risk Management Administration JSC Tyumenenergo are infl uenced by many factors, establishes and coordinates the SIC&RM processes the integral system of internal control and risk and ensures circulation of information on risks and management is focused on identifi cation, evaluation internal control procedures within the Company and management of the risks to which the fi nancial between concerned parties. and business activities are exposed, providing risk information in the course of making management As there are a large number of factors aff ecting decisions and creation of response programs for JSC Tyumenenergo's operations, the main objec- risk situations. tives of the integrated risk management and internal control systems are the identifi cation, as- STRATEGY RISKS sessment and management of risks in fi nancial and AND ENVIRONMENTAL RISKS economic activities, provision of risk information 33 when making management decisions, and forming Despite crisis developments in the economy, the programs to respond to risk situations. social and political situation in the Russian COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY MANAGEMENT ANNUAL REPORT | 2011

temperatures etc..). To minimize the above risks the Company designs its power facilities with consideration of the peculiarities of the regional climate and geography, and implements insurance coverage programs of the power distribution complex facilities for natural disasters.

JSC Tyumenenergo concludes contracts with consideration of force-majeure events to decrease risks related to: political instability, strikes, natural disasters, and announcement of emergency states. Agreements of JSC Tyumenenergo include force- majeure articles decreasing the Company’s ﬁ nancial losses in case the said circumstances set in.

On the whole, JSC Tyumenenergo believes that any country or regional risks will not signifi cantly infl u- ence the Company’s activities and fulfi lment of its obligations in the medium term.

REGULATORY RISKS

The main source of the Company's income is provision of power transmission services belonging to the types of services falling under state regulation and requiring approval by regional executive authorities. Under the Direction of the Government Federation can be characterized as stable over of the Russian Federation No. 30-р dated January the last decade. 19, 2010, JSC Tyumenenergo transferred into the power transmission price (rates) management in JSC Tyumenenergo operates within 3 subjects of form of fi xing long-term regulation characteristics the Russian Federation (Tyumen Region, Khanty- for its activities with application of the return on Mansi Autonomous District and Yamal-Nenets invested capital method (RAB). The above regula- Autonomous District) belonging to the most well tion method implies ensuring refund of investment developed regions in the country. The stable and return on investment suffi cient to service increase in power consumption within the area liabilities and receiving income, and it encourages of JSC Tyumenenergo operation is promoted by JSC Tyumenenergo to decrease costs as the saved the existence of a large number of oil and gas funds are retained by the Company which was not producing enterprises and by development of the the case with the application of the previous cost- fuel and energy sector in the region. Despite the plus method. However, transfer to another regula- world economic crisis, the demand and prices for tion method implies a number of risks related to petrochemicals has not decreased, which supports non-recognition of the components comprising the the stable nature of power consumption. Neverthe- tariff for power transmission services by regional au- less, deterioration of the economic situation in the thorities. The above can be related to the limitation Russian Federation on the whole can entail a de- of increase of maximum power tariff levels estab- crease in the number of industrial and agricultural lished on the Federal level, as well as to the decrease enterprises of all types of ownership operating in of the tariff s within the period of tariff regulation. the region, along with an increase in the unemploy- ment rate and a decrease of the eff ective demand The said risk can entail the impossibility of full from the population. The above course of events compensation of the economically sound expenses could entail suspension of implementation of the of JSC Tyumenenergo and limit volumes of equity Company’s investment program, deterioration of its investement into power grid complex development. fi nancial situation and a slow-down in income basis growth pace. To minimize the above risk, the Company cooper- ates with regional regulatory authorities to deter- In case the above development comes into play, the mine economically sound tariff s, compensating for Company will adopt measures on anti-crisis man- all the Company’s costs and ensuring implementa- agement to decrease much as possible the negative tion of the investement program to the required ex- impact on its fi nancial and business activities. tent, and implements a well-balanced costs policy.

The geographical and climate peculiarities of Regulatory risks can also include a decrease in the 34 the region located in the northern part of Western demand for power and output, and demand for Siberia carry the hazards of emergencies arising technological connection as compared to the fore- WWW.TE.RU at power installations due to natural disasters (ex- casted demand considered when regional authori- treme wind, heavy snow, glaze frost, extremely low ties decide on tariﬀ s and balances. To decrease the ANNUAL REPORT | 2011 COMPANY MANAGEMENT JSC TYUMENENERGO

said risk, the Company includes in its investment accordance with the Resolution of the Government program the volumes of power grid construction of the Russian Federation “Concerning the Proce- required for securing long-term loads with consid- dure of Approving the Lease of Power Grid Facili- eration of the plans of projected development of ties Belonging to the Unifi ed National Electric Grid industrial consumers so that the latter abandon to Territorial Grid Organizations” No. 1173 dated construction of own generating facilities; it moni- December 27, 2010. In October 2011, JSC Tyumen- tors applications (including with consideration of energo and JSC FGC UES concluded lease agree- increased geography) and on their basis creates ments for the Unifi ed National Electric Grid facilities productive power supply forecast along with the de- (fi nal mile agreements) for 2012. Power transmis- mand for technical connection services for the com- sion performed with the use of separate Unifi ed ing year. Furthermore, JSC Tyumenenergo works to National Electric Grid facilities leased by subsidiar- strengthen consumer confi dence through clarifi ca- ies and affi lialtes under "fi nal mile" agreements has tion of the whole process of rendering services on been accounted by the regional governing authority technological connections (information is available as part of the planned scope of power transmission at the offi cial web-site of JSC Tyumenenergo, de- services of JSC Tyumenenergo for 2011. velopment of methods for providing the information to the applicants) and holds roundtable discussions Being a subject of natural monopoly, the Company with participation of the Head of the Department is exposed to the risks of violating the anti-monop- for Technological Connection along with representa- oly legislation as to rendering power transmission tives of the business society which aim at attracting services and in providing technological connection customers to the Comany and clarifying the process services. The Company supervises timely processing of technological connection. of any applications and requests fi led by the consumers in order to decrease the above risk. Apart The power industry has been changing considerably from the above, JSC Tyumenenergo strictly controls over recent years. The reformation of the industry, and supervises timely disclosures in accordance which started in the 2000s, has brought a number with the legislation of the Russian Federation. of uncertainties about the conditions on which the distribution grid complex operates in the Russian FINANCIAL RISKS Federation. CURRENCY RISKS The key risk factor is insuffi cient elaboration of the mechanisms of functioning of the retail power mar- JSC Tyumenenergo operates within the Russian ket, involving risks related to discrepancies between Federation and is not an exporting company, with power grid companies and power retail suppliers its counterparties being residents of the Russian as to the power consumption volumes, growth of Federation. Power transmission prices and prices accounts receivable, and low consumer payment for technological connection of consumers to power discipline. grids and the Company’s assets and liabilities are denominated in roubles. To minimize the above risks, JSC Tyumenenergo implements measures on eliminating grounds for any The Company accomplishes its settlements, pay- confl icts with consumers, on decreasing accounts ments and borrowings in the national currency. receivable for power transmission services, and Nevertheless, JSC Tyumenenergo has a practice of accumulates court practices and creates positive purchasing foreign produced equipment and goods precedents in cases when the consumer unlawfully which entails the possibility of infl uence of foreign disputes its ownership of delivery points. currency fl uctuations on the price of goods denominated in roubles. The mechanism of cross-subsidization of other consumer categories: population, small and average- Furthermore, ruble devalvation can strengthen the sized companies by large industrial consumers is infl ation pressure. Thus, the risks of foreign currency also a considerable risk factor. A number of large fl uctuations to the Russian ruble are directly related industrial consumers connected directly to the Uni- to the infl ation risks. fi ed National Electric Grid pay for power transmission services provided by JSC Tyumenenergo at In case a negative impact of foreign currency the unifi ed boiler tariff s for power transmission fl uctuations occurs, the Company plans to analyze services due to the transfer of power grid facilities the risks and pass a respective decision for each included into the Unifi ed National Electric Grid into individual case. JSC Tyumenenergo lease (“fi nal mile”) agreements. As there is no legislation governing “fi nal mile” RISKS OF INTEREST RATES CHANGES agreements, LLC Rusenergoresurs, which supplies power to JSC Sibneﬅ eprovod, transferred in 2011 As JSC Tyumenenergo borrows money to perform to direct contractual relations with JSC FGC UES in its primary activities, there is a risk of changes of accordance with court decisions. credit interest rates. On the whole, the situation on 35 the Russian debt capital market in 2011 remained Currently, “fi nal mile” agreements have to be ap- favourable and allowed retaining the price of credit COMPONENTS proved by the Federal and regional authorities in resources at a low level. OF SUCCESS JSC TYUMENENERGO COMPANY MANAGEMENT ANNUAL REPORT | 2011

One of the factors minimizing the risk of interest which, according to the State Statistics Committee rates changes is the fact that the banks- partners of the Russian Federation (Rosstat), is one of the of the Company for borrowing are the largest banks lowest indices in the country’s contemporary history, of Russia — JSC Sberbank of Russia and Gazprom- since 1991, (2010 — 8.8%). That said, the infl ation bank OJSC. The risk of increase in the interest rates rate does not signifi cantly infl uence the Company’s of JSC Tyumenenergo’s credit portfolio in the near fi nancial situation. It should be noted however, that future is assessed as low. it is impossible to guarantee the absence of infl a- tion risks infl uence on the Company’s fi nancial and The management of the risk of interest rate business activities. changes consists in continous debt capital market monitoring and use of economically feasible bor- In general, negative infl uences on JSC Tyumen- rowing sources as to the interest rate and terms, energo fi nancial and economic activities can be as well as work on supporting interest rates on the expressed with the following risks: current credit agreements at the level acceptable for the Company. – risk of losses related to losses in the actual value of accounts receivable at considerable The following steps can be defi ned as the Company’s delay or postponement in payments; expected steps for cases of negative infl uence of – risk of increasing interest payable on borrowings; interest rate changes on its activities: – risk of increasing the cost price of goods, produce, works and services due to indexation of – credit portfolio optimization with consideration tariff s for purchased power, wages etc.. of market conditions; – monitoring of debt capital markets to discover Steps aimed at decreasing infl uence of the infl ation the most profi table lending terms and conditions; risks on JSC Tyumenenergo include estimation of – increase in the share of instruments with infl ation risks with presenting economically sound a rate fi xed at the level acceptable for the costs as part of approving the tariff and balance Company; decision by the regulator, and cost optimization by – possible expansion of the number of partner- development and implementation of a cost man- banks. agement program. In case the general infl ation indices are amended in a negative way, the Company Issuing a funded debt, the Company is exposed to plans to optimize accounts receivable management the risk of interest rate changes on interest liabili- and cost management and focus on the turnover of ties (payment of coupon yield). the current assets.

The circulating funded debt of JSC Tyumenenergo RISKS OF FAILING TO FULFILL OBLIGATIONS of series 02 (placement date — April 5, 2007, ON COMMISSIONING INVESTMENT OBJECTS maturity date — March 29, 2012) has a fi xed coupon yield amounting to 8.7% per annum. As JSC Tyumenenergo invests into fi xed capital in the opposed to variable interst rates related, as a rule, form of capital investment including expenses on to specifi c economic indicators, fi xed interest rates new construction, expansion, reconstruction, techni- allow neutralizing the risk of interest rate changes cal reequipment, etc.. The considerable investment and the infl uence of changes in economic indicators amount entails an increase in the risk of failing to on the values of coupon rates. Furthermore, fi xed comply with the terms of assimilation of capital interest rates protect the calculated value of future investment approved by regulators at making the liabilities on servicing bond loans from infl uences of tariff and balance decision, as from the point of political, economical or other factors. view of attracting new funding sources, and from the point of view of the terms for commmissioning INFLATION RISK new investment construction objects. The basic current measures on managing the above risk include: Under infl ation conditions, the Company can arrangement of timely adjustment of the invest- encounter devaluation of the actual value of the ment program; reallocation of resources saved as estimated revenues. Infl ation risks are conditioned a result of tender procedures into other investment by the fact that the Company’s abilities on translat- program objects; control of the timely nature of ing cost growth to the power transmission price in tender procedures held for the investment program case the expected infl ation ratio is exceeded are objects the tender for which have already taken limited by the tariff level established by the regula- place; control over the construction time; control tor for the year. Meanwhile, the negative infl uence over observing the terms of concluding agreements, of infl ation on the Company’s fi nancial and business terms of procurement procedures; check-ups of the activities can manifest itself in the depreciation volumes of capital investment to be accomplished. of accounts receivable with considerable delay or The probability of occurrence of the above risk is postponement in payments and increase of the currently low. 36 services cost price. The Company has no investments whose expected WWW.TE.RU According to the fi nal data, the increase in con- income level amounts to more than 10 percent of sumer prices in Russia in 2011 amounted to 6.1%, the aggregate proceeds per annum. ANNUAL REPORT | 2011 COMPANY MANAGEMENT JSC TYUMENENERGO

OPERATIONAL AND TECHNOLOGICAL RISKS Together with the above, the amendments to the branch legislation adopted within the last two years Increase in the prices for equipment, materials and governing activities on technological connection and services provided by contractors and used by of power receivers and other facilities belonging to the Company for its activities can bear a negative the applicants, as well as activities on preparation, impact on the rate of power grid complex develop- approval and reporting of investment programs ment. implementation, create risks of disputes with consumers, federal and regional executive authorities, To minimize the infl uence of the said risks, as well as sanctions from supervising bodies. the Company implements measures on supporting a competitive environment in the area of works and Risks related to imperfect legislation and currently services procurement; optimization of costs for re- eff ective regulations including in the area of tech- pair and maintenance needs and major construction nological connection, are overcome by the activities works; elimination of cross-purchases. Furthermore, of JSC Tyumenenergo based on compliance and the means of performing and number of procure- system application of the standards of the current ment procedures is controlled; template technical legislation, forecasting legal risks and by protecting design specifi cations for design and exploration its rights and legal interests in courts of law, thus works, construction and assembly works, operation creating the respective legal practices. and repair activities; compliance with the terms of examination of applications (proposals) of tender The existing legal proceedings with participation participants. of JSC Tyumenenergo do not carry any risks for its regular activities and operation. The Company The Company considers important operational risks has fi led 129 actions against its counterparties on related to equipment ageing and depreciation of recovery of 67.189 mln roubles of principal and fi xed assets, as well as possible negative changes interest amounting to 2.347 mln roubles for using to the industry, the direct consequence of which third-party funds. The subject of most of the fi led are an increase in the number of accidents and actions is falure to pay for power transmission serv- emergency situations in the power grid distribution ices and not contract allowed power consumption. complex. Its counterparties fi led 21 actions against JSC Tyumenenergo to the total amount of The above group of risks also includes production 1,212.034 mln roubles. and technical risks arising with using equipment and related to the possible transfer to operation under Work on discovering the whole chain of owners the conditions of forced fl ow (admissible under ab- of the Company’s counterparties and existence normal conditions) and actual abrupt load increase (absence) of affi liates has been performed with exceeding the load planned based on consumer the purposes of ensuring transparency of the applications; technical risks related to equipment Company’s activities. The local regulations were use. The above are determined by such factors as respectively amended: “Provisions on the procedure possible use of equipment with extreme deviations for the scheduled procurement of goods, works and from regulatory and engineering requirements, services for the needs of JSC Tyumenenergo” and errors of the operating crew, violations of operation “Provisions on arrangement of contract work”. rules and discipline.

JSC Tyumenenergo is exposed to risks related to the seasonal nature of power consumption. The consumption peak comes in the winter and autumn period thus entailing the risks of grid congestion.

In order to decrease the inﬂ uence of operational and technological risks, the Company reconstructs its functioning and constructs new grid objects, performs technical reequipment of its ﬁ xed assets to increase reservation capabilities under system blackouts, as well as implements the program of insurance coverage for property, hazardous production facilities, transportation means and public liability.

COMPLIANCE RISKS

The Company continuously monitors the amendments in the legislation and sees no possibilities 37 for any considerable risks related to changes of the tax or civil legislation arising from its ﬁ nancial and COMPONENTS business activities in the short term. OF SUCCESS JSC TYUMENENERGO COMPANY MANAGEMENT ANNUAL REPORT | 2011

2.2. LEGAL REGULATION

JSC Tyumenenergo, as a network organization that provides services in power transmission, is a natural monopoly and operates under state regulations.

* To view the relevant In addition to federal laws and regulations, the tariff Mansiysk Autonomous District — Yugra, and decisions of the regula- regulating decisions of the regional executive Yamalo-Nenets Autonomous District; tory body designated on the offi cial site of the authorities are also applicable — the Regional – the establishment of individual tariff s for Regional Energy Commis- Energy Commission of Tyumen Region, of Khanty- electricity transmission for mutual settlements sion of Tyumen region, Mansiysk — Yugra and Yamalo-Nenets Autonomous of JSC Tyumenenergo and allied network Khanty-Mansiysk — Districts: companies; Yugra, Yamal see http://www.rectmn. ru/, as – the establishment of payment amount under well as the offi cial website – the establishment of uniform (common pot) the contracts for technological connection be- of the Company. tariff s for the transmission of electrical energy tween JSC Tyumenenergo and the applicants.* to consumers in Tyumen Region, Khanty-

WWW.TE.RU ANNUAL REPORT | 2011 COMPANY MANAGEMENT JSC TYUMENENERGO

2.3. CUSTOMER FOCUS

JSC Tyumenenergo’s customer relation policies are aimed at providing a client-oriented approach in its operational activities.

The main purpose of the client-oriented approach JSC Tyumenenergo’s website has an “online is to promote customer loyalty to the organization reception room” http://www.te.ru/asc_question/, through quality of service satisfactory to customers where anyone can put a question directly to a in the short and long term. specialist in the relevant area.

JSC Tyumenenergo's focus on customers is realized The company provides consumers the choice through the creation and functioning of the system of using any type of communication channel: of centralized provision for service consumers, Full-time (personal visit) and distance (via based on the following principles: telephone, fax, mail, or Internet), depending on the individual possibilities and preferences of 1. Providing consumers with suﬃ cient infor- the client. mation about the company and its services. Complete and accurate information on all 4. High quality service is ensured by procedures for dealing with JSC Tyumenenergo JSC Tyumenenergo in all its services by the is made public, available in an accessible form high level of skill and competence of staﬀ for consumers of services: in the media, on working with the customers. the corporate website of the Company www.te.ru and on Company information stands.

2. Territorial accessibility and convenient face-to-face services. The infrastructure of face-to-face services provides full-time territorial availability of the service company for consumers. JSC Tyumenenergo provides the following face-to-face service elements:

– customer service centres created on the basis of the Tyumen branch distribution network, Surgut power grids and Nizhnevartovsk power grids; – all Company branches have customer relations departments; – there are also units for dealing with customer complaints in the aﬃ liate distribution zones.

These units deal with the issues of technological connection of customer energy receivers to the grid, power quality issues, support services for the contracts on transmission of electrical energy.

3. Availability and eﬃ ciency of company correspondence and online services. The Company has put into operation a single toll-free telephone number for cases of technological problems: 8-800-200-55-02, and hotline services on economic security and conditions 8-800-200-55-03. In 2011, a single telephone number was created for connection issues for the south of Tyumen region: 8-800-200-55-04. Information about these 39 telephone numbers is available on the home page of JSC Tyumenenergo’s website. COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY MANAGEMENT ANNUAL REPORT | 2011

2.4. QUALITY POLICY

The Company believes that the quality of their services is the basis of market relations, and therefore seeks to meet the ever-increasing demands of consumers to ensure the reliability, quality and safety services for the transmission and distribution of electric energy.

The Company seeks to reduce the negative impact activities for compliance with established of the results of its operations on the environment rules and improvement of productivity and and takes measures to prevent deterioration of effi ciency. Solutions developed were aimed health among personnel and reduce the number at enhancing the applicability of the require- of workplace injuries. ments of international standards in actual production; To control the quality of services provided at the – fi nalized a new standard for the organization level of advanced technologies since 2008, the of labour and management, including the com- Company operates according to international stand- mitments to innovative development. Some ards ISO 9001:2008 (Quality Management System), provisions of the standard were applied during ISO 14001:2004 (Environmental Management Sys- the re-certifi cation audit; tem) and OHSAS 18001:2007 (Occupational Health – in August — December 2011 the re-certifi - Management System and Security), which in 2011 cation audit for compliance with international was confi rmed by the recertifi cation audit. standards ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 was successfully con- By applying international standards the Company: ducted by an external certifi cation body.

– demonstrates a stable high quality of provided In 2012, under the requirements of international services; standards, the Company plans to: – provides a modern approach to the priority of environmental protection when planning and – introduce a new standard for the organiza- implementing activities that reduce the costs tion of labour and management, including the associated with ineffi cient use of resources and obligations of innovative development, and materials, and losses, etc..; develop a plan for implementing the standard – carries out the control and prevention of pos- in the industry; sible hazards in the workplace; – organize the program of personnel training in – is constantly improving technology (introducing the application of new management standards innovations); in their work, including the performance of du- – continuously improves the quality of human ties of innovative development; resources. – conduct the next internal audit and analysis of labour organization and management of key Management which complies with international activities for compliance with established rules, standards is the best way to reduce the risk of increase productivity and effi ciency, as well as accidents, ensure health protection of employees note any improvements; and compliance with safety in the workplace. It – refi ne, taking account of recent practice, the contributes to a better involvement of staff in the activities and methods intended to increase organization activities and increases the level of productivity and effi ciency of the targeted type culture of the organization as a whole. of operations; – arrange for an external certifi cation body In 2011, under the requirements of international to conduct a surveillance audit for compli- standards the Company: ance with international standards of ISO 9001:2008, ISO 14001:2004 and OHSAS – conducted an internal audit and analysis of 18001:2007. work organization and management of key 40

WWW.TE.RU ANNUAL REPORT | 2011 COMPANY MANAGEMENT JSC TYUMENENERGO

Managing the Comapny in compliance with international standards is the best way to decrease the risk of accidents, ensuring health care and workplace safety. It furthers better engagement of the Company’s personnel into its activities and improves the company culture level on the whole.

COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUALANNUAL REPORT REPORT | 2011 | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

Tyumenenergo carefully works on improving corporate management as one of the key components of the Company’s business eﬃ ciency based on current legislation of the Russian Federation and №03 best international practice. CORPORATE GOVERNANCE. SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

WWW.TE.RU ANNUAL REPORT | 2011 CORPORATE GOVERNANCE. JSC TYUMENENERGO SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

Opinion of Deputy Director General for Corporate Management Sergey Yurievich Gromov on the Company performance in 2011

For approximation of the capital to the fair valuation of assets, increasing investment attractiveness Corporate procedures and level of conﬁ dence in the company by potential partners in 2011 corporate procedures were performed with a high successfully completed to increase the authorized capital stock up to 27,373,895,100 roubles. The quality and in a timely nominal value of shares of the Company changed from 10 to 100 rubles in accordance with the deci- manner, as well as disclo- sion of the General Meeting of Shareholders on July 23, 2011. This signiﬁ cantly increased the level sures aimed at improv- of capitalization of JSC Holding MRSK, and also by reducing the credit risk the Tyumenenergo borrowing transparancy of the ing capacity was enhanced.

Company's activities, are Sergey A long-term program for consolidation of power Yurievich grid assets was approved by the Board of the Com- priorities for Tyumen- Gromov pany’s Directors for 2011–2015 with the pusposes of increasing the eﬃ ciency of the regional power energo. economy.

The integration of the power grids into the unifi ed regional power grid companies allows setting up mechanisms of control over the feasibility of investment programs, improve operational reliability The Company timely and fully disclosed information and decerase growth of power tariff s. Since 2008 in accordance with the legislation of the Russian the Company has been successfully implement- Federation concerning joint stock companies and ing measures on consolidation of municipal power securities market on its corporate web-site, the news grid assets by conclusing lease agreements. All the feed of Interfax news agency and stock markets. Due measures planned for 2011 have been fulfi lled. to the Company’s repayment of all of its commercial papers (value of the funded loan — 2.7 bln rub.), The Company puts particular emphasis on qual- JSC Tyumenenrgo’s obligation to disclose informa- ity asset management. JSC Tyumenenergo is the tion in form of its quarterly report and corporate leader within IGDC as to documenting its rights on action notices ceased to exist since March 29, 2012. real estate objects and land plots. Furthermore, JSC Tyumenenergo decided on proceeding with in accordance with the new requirements of the voluntary disclosure of the above information, as it legislation of the Russian Federation, the Company believes that transparency and availability are es- has been working on introducing information on the sential for effi cient corporate management. boundaries of the fenced-off areas of the power grid facilities into the State Cadaster of Property In order to create a positive image of the Com- since 2011. The plans for 2011 have been fulfi lled. pany and attract the attention of every interested JSC Tyumenenergo currently governs two subsidiar- party — prospective investors, mass media etc., ies: transportation — JSC Tyumenenergoavtotrans, Tyumenenergo participates in contests of annual and power servicing — JSC ESCO Tyumenenergo, reports of issuers held by Expert RA rating agency, which were established in January 2011. RBC Media Group, and the integrated exchanges RTS and MICEX on an annual basis. The Board of the Company’s Directors at its meetings passed decisions that are important for the The Company’s work in disclosing information by Company, and timely considered and approved issuers of securities was highly appraised at one reports of the Director General on the areas of the of the largest Federal contests of annual reports for Company’s activities. All instructions of the Board of 2010 — it took third place in the nomination “the Directors have been fulfi lled. Best Interactive Annual Report”. The winners were awarded at the X International Investment Forum “Sochi–2011”. 43

COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

STRUCTURE OF THE MANAGEMENT BODIES IN 2011

GENERAL SHAREHOLDERS MEETING

COMMITTEE FOR BOARD OF DIRECTORS UDITING COMMITTEE TECHNOLOGICAL CONNECTION N.N. Shvets (Chairperson) I.A. Alimuradova AND POWER GRIDS M. Yu. Kurbatov (Chairperson) E.E. Kryuchkov L.D. Kormushkina A.F. Ponomarchuk A.V. Sannikov V.N. Arkhipov (Chairperson) A.V. Sergutin I.A. Filippova D.O. Tyadukhov A.V. Kurochkin K.S. Serebryakov S.U. Gromov M.V. Kaloeva S.N. Egorshin A.F. Ponomarchuk A.M. Pyatigor P.V. Golubev Y.P. Mylnikov V.V. Inozemtsev V. N. Kuznetsov S.V. Vasiliev

COMMITTEE FOR RELIABILITY ACTING DIRECTOR GENERAL

R.R. Magadeev (Chairperson) P.A. Mikheev P.A. Mikheev T.V. Petrova V.G. Borovitskiy A.P. Petrov D.L. Pankov G.O. Marzinkovskiy

CORPORATE MANAGEMENT HIERARCHY IN 2011

JSC IDGC HOLDING 100 % JSC TYUMENENERGO

99.997 % JSC TYUMENENERGOAVTOTRANS 51 % JSC ESCO TYUMENENERGO

WWW.TE.RU ANNUAL REPORT | 2011 CORPORATE GOVERNANCE. JSC TYUMENENERGO SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

3.1. CORPORATE GOVERNANCE 3.1.1. Principles of Corporate Governance

JSC Tyumenenergo is striving to improve the corporate governance system based on the requirements of applicable Russian laws and best international practices. The result of good corporate governance is a high reputation and investment attractiveness.

The Company understands corporate governance ability of the executive body of the Company's to be a set of processes that provide control and Board of Directors in accordance with the monitoring of its activities and involve the relations applicable law; among the shareholder(s), the Board of Directors – fairness in the implementation of shareholder and executive bodies of the Company in the interest rights, eff ective protection of shareholder of shareholders. rights; – transparency and timely disclosure of accurate A specifi c feature of corporate governance in information about the material facts relating JSC Tyumenenergo is that there is a sole sharehold- to the Company, including its fi nancial situa- er of the Company, JSC IDGC Holding, which owns tion, social and environmental indicators, its 100% shares of the Company. performance, ownership structure and governance of the Company, as well as free access to Eff ective corporate governance in any joint stock the necessary information to all stakeholders; company is a decisive factor in its success, and – accountability to shareholders and other eventually determines its reputation and invest- persons, willingness to cooperate with a view ment attractiveness. Sound corporate governance to fi nancial sustainability and development of promotes improved internal effi ciency of business the Company. processes within the Company and their transition to a higher level. JSC Tyumenenergo guarantees the shareholder the opportunity to exercise their rights, the protection of Thus, all corporate processes in the Company are which is guaranteed by: organized in accordance with the interests of this shareholder. – registration of security ownership; – maintaining and keeping the Register of Share- Basic Principles of Corporate Governance are set out holders in accordance with Art. 44, 45 and 46 in the Code of Corporate Governance of JSC Tyumen- of the Federal Law “On Joint Stock Companies”; energo, and are based on the norms of Russian law, – the right to participate in the management the Company's Charter, Code of Corporate Conduct of the Company through participation in the recommended for use by the FCSM Directive of General Meeting of shareholders, to vote on all April 4, 2002, No 421/p, and the principles of cor- matters within its competence, the participa- porate governance recognized by international best tion of shareholders in the Board of Directors, practice (Principles of Corporate Governance of the as well as in the work of the Audit Commission. Organization for Economic Cooperation and Develop- ment). The report on the Observance of the Corpo- A Company shareholder has a set of rights with rate Governance Code has been prepared in accord- respect to the Company, and the observance and ance with the Directive of the Federal Commission protection of those must be provided by the Board for Stock Markets of April 30, 2003 No. 03-849/r “On of Directors. The register of shareholders is kept by methodological recommendations on the contents an independent registrar (LLC RN-Registry). and format of presentation of information in compli- The shareholder receives regular and timely informa- ance with the Corporate Governance Code in the an- tion about the activities of the Company in the amount nual reports of joint stock companies” and attached and manner consistent with legal requirements. in Appendix 2 to this Annual Report on CD. JSC Tyumenenergo complies with the requirements Corporate governance in JSC Tyumenenergo is of Russian legislation in the fi eld of corporate based on the following principles: governance. The Company has adopted and follows 45 internal documents. These documents can also be – accountability of the Board of Directors of the accessed on the website of the Company (www.te.ru) COMPONENTS Company to the shareholder and the account- in the subsection “Internal documents” under “About”. OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

INFORMATION DISCLOSURE POLICIES Basis for the Company’s obligation to disclose infor- AND PRACTICES mation as it is an issuer of securities is as follows: with respect to issuing securities (interest-bearing The implemented within the Company disclosure non-convertible bond certifi cates to the bearer) policy mainly aims at ensuring a high degree of JSC Tyumenenrgo registered the listing prospec- confi dentiality from its shareholders, prospective tus FFMS of Russian on February 21, 2007 (State investors and other interested parties by means of Regis tration Number of the issue: 4-02-00159-F). providing information on the Company, its activities and securities to the extent suffi cient for passing The Company as a subject of the retail electric- grounded and informed decisions on the Company ity market reveals information on the website** and its shares by such persons. in accordance with the Resolution of the RF Government dated January 21, 2004 No 24). Also, Disclosing information, the Company is not limited the Company shall disclose information to the by the information to be disclosed under the interagency portal Property Management Agency regulations of the Russian Federation, but addition- (Rosimushshestvo). ally discloses other information ensuring a high degree of the Company’s transparency and furthers The responsibility for information disclosure lies achievement of the goals set by the implemented with the General Director. Members of the Board by the Company disclosures policy. of Directors of the Company disclose information about themselves necessary for the Company to The Board of Directors approved the Regulation disclose information in accordance with the regula- on Information Policy (Minutes of August 23, 2007 tions of the Russian Federation. * Most of the information No 12/07), which governs the additional voluntary dis- is disclosed on the Com- closure of information by the Company on its website, In addition, interested persons may obtain informa- pany's corporate website at: www.te.ru in the quarterly and annual reports of the Company.* tion about the activities of the Company in a press conference format on the website www.uralpolit.ru, In disclosing information the Company is guided by as well as through the federal and regional publica- ** “Mandatory disclosure” the following principles: tions (“The Expert”, “Energy and Industry of Russia”, http://www.te.ru/about/ “The Tyumen Region Energy Industry”, ”The Ural info_disclosing and in offi cial publications – the principle of completeness and accuracy Expert”, “Kommersant-Ural” etc.). (“Tyumen Region Today”, of the information disclosed in accordance with “News of the Yugra” which the Company provides all stakeholders The Company believes that having a professional with information corresponding to fact, without Board of Directors is an important element of eff ec- avoiding the disclosure of negative informa- tive corporate governance. The Board of Directors tion about itself, to the extent that makes it impacts the results of the Company, carrying out possible to form a more complete understand- the overall strategic direction and supervision of the ing of the Company, and of the results of the executive bodies in the interests of the Company Company activities; and its shareholders. – the principle of accessibility of information, according to which the Company uses distribution The Executive Body of the Company, the General channels in the disclosure of information on their Director, manages the ongoing operations of the activities, providing free and easy access to share- Company, except for the matters referred to the holders, creditors, and other interested parties; competence of the General Meeting of Sharehold- – the principle of well-balanced information ers, or the Board of Directors of the Company, and meaning that the Company’s information organizes the implementation of decisions of the policy is based on the reasonable balance General Meeting of Shareholders and Board of Di- of the Company’s transparency for all those rectors. Eff ective cooperation between these bodies interested, on the one part, and confi dential- and a clear delineation of authority is a key factor ity, on the other part, in order to excersise in ensuring good corporate governance. the rights of the Company's shareholders on receiving information on its activities provided The Company seeks to disclose all necessary the information considered to be either confi - information both in compliance with legislation dential or insider is protected; and to increase the investment attractiveness – the principle of regularity and timeliness of of JSC IDGC Holding in general. disclosures, which specifi es that the Company shall provide to shareholders, creditors and The Company confi rms in practice its commitment other stakeholders the information about its to protect the rights of a broad range of fi nancial activities at the time required by the regulations stakeholders, and demonstrates a high level of of the Russian Federation and of the Company. corporate responsibility. The principles of corporate governance are the standard both for the Company, During 2011 the Company disclosed information for government executive bodies, and for employees 46 in the form of quarterly reports, annual report of its subsidiaries. for 2010, lists of affi liated persons, reports of facts, WWW.TE.RU information, which may have a signifi cant impact on the value of the securities of the Company. ANNUAL REPORT | 2011 CORPORATE GOVERNANCE. JSC TYUMENENERGO SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

3.1.2. Information on material transactions

In 2011, the Company has not entered any signiﬁ - cant transactions (major and related party transactions), that are subject to approval by the Board of Directors or the General Meeting of Shareholders.

3.1.3. Company management and control bodies

Under the Charter of JSC Tyumenenergo the gov- Persons elected to the Board of Directors may be * Competence of the erning bodies of the Company are as follows: re-elected an unlimited number of times. General Meeting of JSC Tyumenenergo is set down in Art. 10.1 of the 1. The General Meeting of Shareholders; In accordance with section 13.1. of Article 13 Charter of the Company 2. The Board of Directors; of the Charter of JSC Tyumenenergo the quan- and is quoted in Ap- 3. General Director (sole-person executive body). titative composition of the Board of Directors is pendix 3 to this Annual Report on CD. 11 people.*** The body which controls the fi nancial and business operations of the Company is the Company's Audit Matters relegated to the competence of the Board ** Decisions of the General Committee. of Directors of the Company may not be delegated Meeting of Shareholders are also published on the to the General Director of the Company. offi cial website in the sec- GENERAL MEETING OF SHAREHOLDERS tion “Investor Relations In accordance with Article 16 of the Charter of / General Shareholders In accordance with section 11.1 of Art. 11 of the JSC Tyumenenergo, to work through issues within Meeting” at: http://www. te.ru/akcioneram_i_in- Charter of JSC Tyumenenergo, if all the voting the competence of the Board of Directors or studied vestoram/osa/reshosa/ shares of the Company are owned by one share- by the Board of Directors in order to control the holder, the decisions on matters within the com- activities of the executive body of the Company, petence of the General Meeting of Shareholders and to develop the necessary recommendations for *** The competence of the Board of Directors of shall be adopted by the shareholder (the authorized the Board of Directors and for the executive body JSC Tyumenenergo is set governing body of the shareholder) to be made in of the Company, by decision of the Board of Direc- down in Art. 12 of the writing and notifi cation given to the Company. tors of the Company committees of the Board of Charter of the Company and the quoted in Ap- Directors may be created. pendix 3 to this Annual In respect of JSC Tyumenenergo, in accordance Report on CD. with section 13.2 of the Charter of JSC IDGC Committees of the Board of Directors are estab- Holding such an authorized governing body of the lished for the preliminary consideration of impor- shareholder is the collegial executive body, the tant issues relating to the competence of the Board Management Board of JSC IDGC Holding, exercis- of Directors. ing the powers of the supreme governing body of JSC Tyumenenergo.* With a view to making recommendations on the most important issues, the Board of Directors has Matters relegated to the competence of the General established a Committee on reliability and a Com- Meeting of shareholders cannot be delegated to the mittee on technological connection to power grids. Board of Directors or to the General Director of the The activities of the committees are governed by Company.** the Regulations for the Committee on reliability created by the Board of Directors of JSC Tyumen- BOARD OF DIRECTORS energo, and for the Committee on technological connection created by the Board of Directors of The Board of Directors of JSC Tyumenenergo JSC Tyumenenergo, local regulatory documents of provides overall management of the Company, the Company containing provisions on the composi- except in matters relating to the General Meeting tion, competence, procedure of the committees, of Shareholders in compliance with the Federal Law as well as on the powers and responsibilities of its “On Joint Stock Companies”. members.

The procedure for electing the Board of Directors is The procedure of the Board of Directors is governed determined in the Company's Charter and com- by the Regulations on the procedure for conven- 47 plies with the legislation of the Russian Federation. ing and holding meetings of the Board of Directors COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

of JSC Tyumenenergo, approved by the General MEMBERS OF THE BOARD OF DIRECTORS Meeting of shareholders of JSC Tyumenenergo on OF JSC TYUMENENERGO EFFECTIVE June 10, 2002, Minutes No 678 pr/2.3 (hereinaf- FROM JUNE 29, 2010 TO JUNE 28, 2011 ter— Regulations). POSITIONS INDICATED AS OF THE ELECTION DATE: In accordance with clause 5.1 of the Regulations, meetings of the Board of Directors shall be held as Shvets Nikolay Nikolayevich — necessary but at least once a quarter. General Director of JSC IDGC Holding;

The Secretary of the Board of Directors ensures the Binko Gennady Feliksovich — timely receipt by all directors of complete informa- Deputy General Director of JSC IDGC Holding; tion simultaneously with the notice about the meeting of the Board of Directors. Oakleigh Pavel Ivanovich — Deputy General Director — Technical Director In 2011, there were no transactions between mem- of JSC IDGC Holding; bers of the Board of Directors, and no suits ﬁ led against any members of the Board of Directors. Alexeev Pavel Anatolyevich — Director of Technical Controlling of JSC SO UES; In 2011, the Company did not provide loans and funds for training to members of the Board of Sannikov Aleksei Valeryevich — Directors. Deputy General Director of JSC IDGC Holding;

Sergutin Alexey Vladimirovich — Economics Director of JSC IDGC Holding;

Tikhonova Maria Gennadyevna — Director of Department of the Ministry of Energy of Russia;

Tkacheva Olga Vladimirovna — Deputy Head of Department of Corporate Govern- ance and Shareholder Relations of JSC IDGC Holding;

Kurochkin Alexei Valeryevich — Head of Department of Corporate Governance and Shareholder Relations of the JSC IDGC Holding;

Shaplyko Dmitry Vladimirovich — Deputy Head of Department of Property Manage- ment of JSC IDGC Holding;

Kryuchkov Evgeny Evgenyevich — General Director of JSC Tyumenenergo.

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THE COMPANY’S BOARD OF DIRECTORS WAS ELECTED ON JUNE 28, 2011, AT THE ANNUAL GENERAL SHAREHOLDERS’ MEETING OF JSC TYUMENENERGO, AS FOLLOWS POSITIONS ARE INDICATED AS OF THE ELECTION DATE:

KALOYEVA MADINA VALERYEVNA

Born 1980

Education: Higher Education

Position held: Deputy Director, Depart- ment of economic regulation and property relations in the TEC

Positions held over the past 5 years: 2006–2007 — Secretary of court, court counsellor, assistant judge of the Leninsky district court of Vladikavkaz; 2007–2008 — Leading expert-specialist, Chief Expert, Department of Property SHVETS NIKOLAY NIKOLAYEVICH KURBATOV MIKHAIL YURYEVICH Relations in the TEC, Legal Support and Property Relations of the Federal Energy CHAIRMAN OF THE BOARD OF DIRECTORS DEPUTY CHAIRMAN OF THE BOARD Agency; OF DIRECTORS 2008–2009 — Advisor of the expert and Born 1956 analytical department of the Federal Born 1981 Agency for State Property Management. Education: Higher Education, PhD in Economics, assistant professor Education: Higher Education A member of the Board of Directors of the following companies: Position held: General Director, Chairman Position held: Deputy General Direc- JSC OGK-1, JSC Far East Distribution Grid of the Board of Directors of tor, Member of the Board of Directors Company, JSC IDGC Siberia, JSC IDGC Holding of JSC IDGC Holding JSC IDGC Centre.

Positions held over the past 5 years: Positions held over the past 5 years: No share in charter capital 2001–2007 — Managing Director, Assistant 2006–2010 — Consultant, Deputy Divi- of JSC Tyumenenergo to the Deputy General Director of sion Chief, Division Chief, Deputy Director, FSUE Rosoboronexport; Director of the Department of the Ministry 2007–2008 — Government of the Amur of Economic Development and Trade. Region, First Deputy Prime Minister; 2008–2009 — Chairman of the Legislative A member of the Board of Directors Assembly of Amur region; of the following companies: 2008–2009 — National Agrarian Institute JSC SG-Trans, JSC SO UES, JSC IDGC Urals, of the Far East, Professor of the Chair of Man- JSC IDGC North-West, JSC IDGC Centre, agement, Marketing and Law (second job). JSC TRC, JSC Management FOCL-VL.

A member of the Board of Directors No share in charter capital (Supervisory Board) of the following of JSC Tyumenenergo companies: All-Russian public organization Union of Machine Builders of Russia, Russian industry employers association Union of Machine Builders of Russia, NGO Scientiﬁ c-Technical Council of the Uniﬁ ed Energy System, JSC MOESK, JSC Lenenergo, OJSC Yantar- energo, JSC IDGC Centre, JSC IDGC South, JSC Kubanenergo, JSC Agency for Energy Industry Balance Forecasting, JSC Russian Regional Development Bank.

No share in charter capital of JSC Tyumenenergo 49

COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

SANNIKOV ALEKSEY VALERYEVICH SERGUTIN ALEKSEY VLADIMIROVICH KUROCHKIN ALEKSEY VALERYEVICH

Born 1965 Born 1961 Born 1973

Education: Higher Education Education: Higher Education Education: Higher Education

Position held: 2009–2011 — Director Position held: Deputy Director General Position held: Director of Corporate Policy of Economy JSC IDGC Holding of JSC IDGC Holding of JSC IDGC Holding

Positions held over the past 5 years: Positions held over the past 5 years: Positions held over the past 5 years: 2005–2007 — Chief of the Regulation 2006–2008 — Deputy Director of the 2005–2008 — Deputy Head of the Control and control over pricing in the electricity Federal Migration Service. Centre IDGC JSC FGC UES; industry FTS RF; 2008–2009 — Director of Corporate 2007–2008 — Director of the Depart- A member of the Board of Directors Policy, Head of Corporate Governance and ment of the generation and reform of the of the following companies: JSC IDGC Shareholder Relations JSC IDGC Holding. electricity market Atomenergoprom. Centre and Volga Region, JSC IDGC Centre. A member of the Board of Directors No share in charter capital No share in charter capital (Supervisory Board) of the following of JSC Tyumenenergo of JSC Tyumenenergo companies: JSC Ekaterinburg Electric Company, JSC Lenenergo, JSC IDGC Volga.

No share in charter capital of JSC Tyumenenergo

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KRYUCHKOV EVGENY EVGENYEVICH PONOMARCHUK ANDREY FEDOROVICH GOLUBEV PAVEL VLADILENOVICH

Born 1969 Born 1974 Born 1962

Education: Higher Education Education: Higher Education Education: Higher Education

Position held: 2008–2011 — Director Position held: Deputy General Director for Position held: Head of operation organi- General of JSC Tyumenenergo Economics and Finance, SRC UES zation and of MRO at JSC IDGC Holding

Positions held over the past 5 years: Positions held over the past 5 years: Positions held over the past 5 years: 2006–2007 — JSC IDGC Urals and Volga 2006–2007 — Director of LCC Prominstru- 2006–2007 — Deputy Director of MUPOE Executive Director of Chelyabenergo; ment-Holding; Omskelektro; February 2007 – December 2007 — 2007–2010 — General Director of 2007–2008 — Head of PTS of JSC MOESK. JSC Urals and Volga IDGC Executive Direc- JSC Prominstrument; tor of JSC Tyumenenergo. 2010–2011 — Advisor to the General No share in charter capital Director of JSC Moskabelsetmontazh. of JSC Tyumenenergo No share in charter capital of JSC Tyumenenergo No share in charter capital of JSC Tyumenenergo

COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

All members of the Com- pany Board of Directors have agreed to disclose this information for the Company's annual report on the corporate website of the Company.

INOZEMTSEV VLADIMIR VASSILIEV SERGEY VYACHESLAVOVICH VYACHESLAVOVICH

Born 1977 Born 1975

Education: Higher Education Education: Higher Education

Position held: Head of the Department Position held: Member of the Board, Di- of Transport and Energy Conservation rector of Legal Aﬀ airs in JSC IDGC Holding JSC IDGC Holding Positions held over the past 5 years: Positions held over the past 5 years: 2006–2008 — Head of Legal Department 2006–2008 — Head of Transport and of JSC RAO UES of Russia. reduction of energy losses Control Centre of IDGC JSC FGC UES. A member of the Board of Directors of the following companies: A member of the Board of Directors JSC IDGC Urals, JSC Management of FOCL- of the following companies: JSC IDGC VL, JSC Kalmenergosbyt, Karachaevo- Centre and Volga Region, JSC IDGC South, Cherkesskenergo, JSC Tyvaenergosbyt, JSC IDGC North-West. JSC Yantarenergo, JSC IDGC Volga.

No share in charter capital No share in charter capital of JSC Tyumenenergo of JSC Tyumenenergo

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On December 16, 2005 the Company established a Pyatigor Alexandr Mikhailovich — Committee on reliability of the Board of Directors of Head of Prospective Development and Technologi- JSC Tyumenenergo. The Members of the Commit- cal connection of JSC IDGC Holding; tee for Reliability were determined by resolution of the Board of Directors of JSC Tyumenenergo of Mylnikov Yuri Petrovich — July 22, 2011 (Minutes No. 09/11) (positions indi- Head of Energy Production and Energy Conservation cated as of the election date): Department of Regional Energy Commission of Tyu- men Region, and Khanty-Mansiysk — Yugra and Magadeev Ruslan Raisovich — Yamalo-Nenets Autonomous Districts; Head of operations and technology control of JSC IDGC Holding — Chairman of the Committee on Kuznetsov Vladimir Nikandrovich — reliability; Deputy Chief Manager of the Schedule Dispatcher of JSC SO UES of Tyumen RDO. Mikheev Pavel Alexandrovich — First Deputy General Director of JSC Tyumenenergo; THE MOST IMPORTANT ISSUES ON WHICH THE BOARD OF DIRECTORS MADE DECISIONS IN 2011 Petrova Tatiana Valerievna — Deputy General Director for Economics and Finance During 2011, the Board of Directors held 19 meet- of JSC Tyumenenergo; ings in absentia, with 174 issues considered. There were two joint attendance meetings of the Board Borovitskii Vasily Gennadyevich — of Directors. Acting Deputy Director General for Technical Af- fairs — Chief Engineer of JSC Tyumenenergo; In 2011, at meetings of the Board of Directors, important Company decisions were adopted, reports Petrov Alexey Petrovich — by the General Director on the activities of the Com- Deputy Head of Department — Head of produc- pany reviewed and approved and several internal tion and technical management of the Depart- documents approved, — programs and regulations ment of Technical Development and regulation of governing the Company's divisions. All requests of JSC IDGC Holding; the Board of Directors were satisﬁ ed.

Pankov Dmitry Leonidovich — REPORT ON THE WORK OF THE COMPANY BOARD Director of Strategy, Development and Innovation OF DIRECTORS IN 2011 of JSC IDGC Holding; In the reporting year, the Board of Directors Martsinkovsky Gennady Olegovich — of JSC Tyumenenergo approved the following: Head of Department of Capital Construction of JSC IDGC Holding. – the Company’s business plan (including the investment program) for 2011 and 2012; On March 6, 2009 the Board of Directors of – target key performance indicators (KPI) values JSC Tyumenenergo decided to establish a Commit- for the Company for 2011; tee for Technological Connection to Power Grids at – the annual comprehensive procurement pro- the Board of the Company’s Directors. gram for 2011; – the program of insurance coverage for the On December 14, 2011 Board of Directors of Company for 2011; JSC Tyumenenergo determined the following mem- – the program of support and development bership of the Committee (protocol number 18/11) of human resources at JSC Tyumenenergo; (positions are given as at the time of election): – the Company technological policy standard in metering electricity within the distribution grid Ponomarchuk Andrey Fyodorovich — complex; Deputy General Director for Economics and Finance, – approved the collective bargaining agreement Research Center UES — Chairman of the TC Com- of Tyumenenergo for 2012; mittee; – the program of non-state pension provision of workers of Tyumenenergo for 2011 and 2012. Pyadukhov Dmitry Olegovich — – regulations on insider information for Deputy Director General for Development and im- JSC Tyumenenergo in the new edition; plementation services of JSC Tyumenenergo; – regulations on the procedure of regulated procurement of goods and services for the needs Gromov Sergey Yuryevich — of JSC Tyumenenergo in the new edition; Deputy General Director for Corporate Governance – the program of energy conservation and en- of JSC Tyumenenergo; ergy eﬃ ciency of JSC Tyumenenergo for 2012 and a forecast for 2013–2016. Egoshin Sergey Nikolaevich — 53 Deputy Chief Engineer of JSC Tyumenenergo; The following issues were identiﬁ ed as priority areas for the Company: the development of the COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

* Decisions of the Company’s innovative development Program; consoli- tions to the Members of the Board of Directors Board of Directors of JSC Tyumenenergo are dation of network assets, introduction of construction of JSC Tyumenenergo approved by the Resolution published on the offi cial management of major investment projects; perform of the General Shareholders' Meeting (Minutes website in the section mandatory energy audit of the facilities of industrial No. 1868 пр/1 of May 6, 2008).** “Investor Relations / Decisions of Board of and economic needs and of transmission facilities of Directors” at: http://www. the Company in 2011–2012; the Company to provide te.ru/akcioneram_i_in- levels of reliability and quality of services, as estab- vestoram/sd/reshsd/ lished by the executive authorities of the Russian Federation in the sphere of state regulation of tariff s, 16,099,421 provided in accordance with the regulations. roubles of remuneration was paid to the members ** The Company publicly When considering priority activity areas, the Com- of the Company’s Board of Directors in 2011 discloses the information of remuneration paid to pany's Board of Directors approved the following members of the Board documents: of Directors. In addition In 2011, general remuneration amounting to to the issuer's quarterly report, this information – the innovation development program of 16,099,421.75 roubles (including NDFL (Personal is also published on the JSC Tyumenenergo. Prospective spending on Income Tax) 2,092,924 roubles) was accrued and Company's corporate R & D works was defi ned at the same time paid to the members of the Board of Directors, website at: http://www. within the business plan of JSC Tyumenenergo including 8,774,541.75 roubles according to the te.ru/akcioneram_i_in- vestoram/sd/vozsd in 2011 to the sum of 2% of its own revenue, results of 2010 (NDFL — 1,140,689 rub.). for 2012 — 2.5%, from 2013 — 3% of its own revenues; GENERAL DIRECTOR – the program of consolidation of power grid assets of JSC Tyumenenergo in 2011–2015; Director General is the sole executive body of – regulations for implementing the system of the Company. The duties of the Company’s Direc- construction management of major investment tor General include all and any issues related to projects of the Company; managing the Company’s current activities, except – plan of action to implement the mandatory for the issues attributed to the authority of General energy audit of the facilities of industrial and Shareholders’ Meeting or the Board of Directors. economic needs, and transmission grid facilities of JSC Tyumenenergo in 2011–2012. The Director General is elected by the Board of the Company’s Directors by a majority of votes of the Aﬅ er the election of the new Board of Direc- members of the Board of Directors participating in tors, the Annual General Meeting of Sharehold- the meeting. ers on June 29, 2011 elected Chairman, Deputy Chairman, Secretary of the Board of Directors of The provisions of the labor contract including the JSC Tyumenenergo, the members of the Reliability terms of the vested authority are determined by the Committee, Committee for Technological Connec- Company’s Board of Directors or the person author- tion within the Board of Directors. The Work Plan of ized by the Company’s Board of Directors to sign the Board of Directors of JSC Tyumenenergo was the labor contract in accordance with the Articles approved for 2011–2012.* of Association of the Company.

REMUNERATION The Board of Directors is at any time entitled to decide on terminating the authority of the Compa- The remuneration of the members of the Board of ny’s Director General and on establishing any new Directos complies with market conditions and is executive bodies. established in a way as to ensure attraction to and participation in the Company’s operation of highly REMUNERATION AND PERFORMANCE EVALUATION qualifi ed specialists and motivate them to work honestly and effi ciently. The remuneration system for the Director Gen- eral is determined by the Board of Directors. The The remunerations are paid to the members of the remuneration consists of permanent and variable Board of Directors in accordance with the Provision parts, while meanwhile the latter relies on achieving on Payment of Remunerations and Compensa- a defi nite system of indices of work of executive

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bodies and is connected with personal input into of JSC Tyumenenergo. No transactions were con- ensuring the Company’s long-term development cluded between E.E. Kryuchkov and the Company within the interests of its shareholders. in 2011. No actions have been fi led against the Director General. The indices are a system of fi nancial and non-fi nancial indicators infl uencing the quantitative or quali- On December 23, 2011 the authority of the Compa- tative change of results as towards the Company’s ny’s Director General E.E. Kryuchkov was terminated. strategic goal. Pavel Aleksandrovich Mikheev has been appointed Acting Director General since December 24, 2011. On December 27, 2007, the Resolution of the Board of Directors of JSC Tyumenenrgo elected Evgeniy Evgenievich Kryuchkov Director General

KRYUCHKOV EVGENY EVGENYEVICH MIKHEEV PAVEL ALEXANDROVICH

DIRECTOR GENERAL OF TYUMENENERGO  ACTING DIRECTOR GENERAL JANUARY 09, 2008  DECEMBER 23, 2011 SINCE DECEMBER 24, 2011

Born 1968

Education: Higher Education

Positions held over the past 5 years: 2006–2007 — Deputy General Director of Inter- techelectro — New Generation; 2007–2008 — First Deputy General Director of JSC IDGC Urals; 2008–2011 — Deputy Director General for Regional Development, First Deputy General Director, Deputy Director General for Technical Issues — Chief Engineer, Acting General Director of JSC Tyumenenergo.

No share in charter capital of JSC Tyumenenergo

COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

INTERACTION BETWEEN THE BOARD Alimuradova Izumrud Aligadzhievna — OF DIRECTORS AND THE EXECUTIVE BODY Director of Internal Audit and Risk Management (Head of Internal Audit and Risk Management of Eﬀ ective corporate governance requires the pres- JSC IDGC Holding, chairman of the Audit Commis- ence of an open dialogue between the Board of sion); Directors and the executive body of the Company. Arkhipov Vladimir Nikolaevich — For this purpose, the General Director presents to Head of Security Department JSC IDGC Holding; the Board of Directors reports on the results of the operations of the Company in the manner and Kormushkina Lyudmila Dmitrievna — form that are deﬁ ned by internal documents of the Head of Internal Audit, Inspections and Examina- Company and by the resolutions of the Board of tions of the Department of Internal Audit and Risk Directors. During the reporting period, the Gen- Management of JSC IDGC Holding; eral Director presented to the Board of Directors reports on the various aspects of operations of the Filippova Irina Alexandrovna — Company. leading expert of Internal Audit, Inspections and Examinations of the Department of Internal Audit THE AUDIT COMMISSION OF JSC TYUMENENERGO and Risk Management of JSC IDGC Holding;

The Audit Committee is a permanent internal Serebryakov Konstantin Sergeevich — control body of the Company exercising control over Head of the Corporate Events of JSC IDGC Holding. the Company’s ﬁ nancial and business activities as to its compliance with the legislation of the Russian Members of the Audit Commission do not own Shares Federation, Articles of Association of the Company in JSC Tyumenenergo. No transactions were concluded and internal documents. between the Company and the members of the Audit Commission in 2011. The Company did not ﬁ le any The Audit Commission acts in the interests of the suits against members of the Audit Commission. shareholder of the Company and is accountable to the General Meeting of Shareholders. In accordance with the Charter of the Company, the size of the Audit Commission was determined as 5 members. 600,463 roubles On June 28, 2011 the Annual General Shareholders’ commission paid in 2011 (including personal Meeting elected the Audit Committee including the income tax to the amount of 78,060 roubles) following members (positions indicated as of the election date):

REPORTING REQUIREMENTS FROM THE GENERAL DIRECTOR TO THE BOARD OF DIRECTORS

Frequency of reports presented by Reports presented the General Director

Quarterly reports – on achievement of KPI targets

– on fulﬁ lment of the business plan

– on implementation of the investment program

– on achievement of the DPN benchmarks (cash ﬂ ow)

– on the credit policy

– on the execution of decisions made at meetings of the Board of Directors

– on the execution of decisions of the Board of Directors of the Company regard- ing implementing the strategy for non-core assets of the Company

– on compliance with the Regulation on Information Policy

56 – on implementing the integrated annual procurement program for the Company

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Frequency of reports presented by Reports presented the General Director

– on implementing the Insurance program

– on implementing the housing policy

– on managing the subsidiaries and aﬃ liates of the Company

Annual Reports– Annual Company report

– Annual ﬁ nancial statements, report on compliance with the Code of Corporate Governance

3.1.4. Subsidiaries and aﬃ liate Companies

Currently JSC Tyumenenergo owns two subsidiary companies:

Subsidiary* Core business of the Share of the Authorized capital * Subsidiaries do not own subsidiary Company in the shares in the authorized capital of JSC Tyumen- capital of the energo subsidiary (%)

JSC ESCO Tyumenenergo Energy Audit 51 20,000,000 rub. (core type of activity) divided into 20,000,000 ordinary nominal non-documentary shares of par value of 1 rub./1 unit.

JSC Tyumenenergoavtotrans Operation and main- 99,9969 202,073,886 rub. tenance of automotive divided into 3,207,522 ordinary nominal sector non-documentary shares of par value of (non-core type of activity) 63 rub. / 1 unit.

INFORMATION ABOUT JSC ENERGY SERVICE Over the last year the Energy Service Company COMPANY TYUMENENERGO Tyumenenergo has become one of the largest companies in Russia providing services to conduct State registration of the subsidiary of JSC Ty- energy audits and implement energy conservation umenenergo, JSC Energy Service Company measures. Tyumen energo was completed on January 12, 2011. The decision to establish an energy service At the moment, ESCO Tyumenenergo has more than company was made by the Board of Directors of 100 of its own and about 200 attracted profes- JSC Tyumenenergo on December 15, 2010. sional energy auditors trained to conduct energy audits in accordance with approved educational The main activity of the energy service company is programs, and more than 100 pieces of equip- to implement the full range of services for con- ment required to conduct energy audits (thermal ducting energy audits, compiling energy service, imagers, power monitors, luxometers, etc..). The investment and other programs, as well as the company’s top management received certiﬁ cation actual implementation of energy conservation to conduct energy audits of investment-grade and measures. execute energy service contracts in accordance with IPMVP international standards of measurement and The total value of signed and currently executed veriﬁ cation. contracts to conduct energy audit of facilities, executive bodies and municipalities amounted to The company conducted a survey of energy fa- 57 100,139.9 thousand roubles (including VAT). cilities of executive bodies and agencies, as well COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

* For more information, as several municipalities of the Tyumen region. On December 30, 2011 the Board of Directors including lists of registers This is than 4,000 projects with a total area of of JSC ESCO Tyumenenergo approved the Marketing of Company subsidiaries see Appendix 4 of this 3,300,000 m². Tyumen Region was the fi rst re- Strategy of ESCO Tyumenenergo for the develop- Annual Report on CD. gion in the Russian Federation to register energy ment of the core activities for 2012–2015.* passports for all regional agencies in the Russian Ministry of Energy. Management of subsidiaries and affi liates Tyumen- ** Information about the energo shall, in accordance with the Procedure for share of JSC Tyumen- relations of JSC Tyumenenergo with organizations energo in the authorized capital and in the voting in which the Company has interest, was approved shares of the Company energy audit projects by the Board of Directors on March 17, 2009, in the as of December 31, 2011, 600 new edition (Minutes No 03/09). as well as information were performed, accumulating a base of energy- about the Company's effi cient solutions both for the state sector, participation in non- Control by the Company of the future and current profi t organizations as and for the industrial enterprises activities of subsidiaries and affi liates is provided of December 31, 2011, is by the meetings of the Board JSC Tyumenenergo, available on the CD in the Appendixes to this annual JSC ESCO Tyumenenergo is a member of self-regu- inaccordance with its Charter, declaring the position report, number 5 and 6, latory organizations: of the Company on decisions made by the General respectively. Meeting of Shareholders and Board of Directors of – NP Union of energy auditors and energy serv- subsidiaries. ice companies received a certifi cate of admission to work in energy audits under number Control over fi nancial and economic activities SRO-E-095/025 of June 22, 2011; of subsidiaries and affi liates of JSC Tyumenenergo – NP ENERGOPROJEKT (Minutes No 48 of the is realized through the collection of quarterly Council of Partnership on February 2, 2012); reporting and the inclusion of Company's special- – NP EnergoStroy (Minutes No 47 of the Council ists in the Auditing Commissions of subsidiaries of Partnership on February 3, 2012). for audits.

Also, for energy audits, and to implement energy The share of JSC Tyumenenergo in the authorized saving measures at the sites of state agencies and capital of the target companies in the industry, federal services, the Company is planning to acquire formed as a result of reorganization of RAO UES a license to carry out work associated with the use of Russia is less than 2%.** of information constituting a state secret.

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3.2. SECURITIES, STOCKHOLDERS' EQUITY, AND DIVIDEND HISTORY 3.2.1. Stockholders' equity

In 2011 the corporate procedures were completed to increase the authorized capital of JSC Tyumen energo by increasing the nominal value of common shares from 10 to 100 roubles.

State registration of the amendments to the Arti- STRUCTURE OF EQUTY CAPITAL cles of Association of JSC Tyumenenergo related to AS OF 31.12.2011, % the increase of the Company’s charter capital based on the resolution of the Extraordinary General Shareholder’s Meeting of JSC Tyumenenergo of July 23, 2010 and the report on securities issue of JSC Tyumenenergo registered with the FFMS of 100% Russian in February 8, 2011, was accomplished on February 8, 2011.

JSC Tyumenenergo’s charter capital amounts to 27,373,895,100 roubles and is divided into 273,738,951 ordinary shares with a par value of 100 roubles. Additionally, the Company an- nounced 3,121,409 pieces of ordinary shares with a par value of 100 roubles. There are no privileged shares. The Company’s shares are not in circulation on any organized securities market.

Since July 1, 2008, as a result of reorganization JSC IDS Holding of RAO UES of Russia, JSC IGDC Holding is the sole shareholder of the Company. JSC Tyumenenergo owns privileged shares of JSC IDGC Holding.

INFORMATION ABOUT SHARES IN CROSSHOLDING AS OF DECEMBER 31, 2011

Issuer Central Bank Code Nominal shareholder JSC Tyumenenergo share, % Nominal value 1 share, rub.

JSC IDGC Holding MRKHP CJSC IC Troika Dialog 0.01158 1

COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

3.2.2. Bonds

The value of the funded loan amounted to 2.7 billion roubles. The creditors are the general public — owners of the bonds. The par value of one bond of the issue amounts to 1,000 rub.

As of March 28, 2012, interest-bearing non-con- Order No. 106 of March 19, 2010 issued by vertible JSC Tyumenenergo bond certiﬁ cates to the JSC Tyumenenergo determined the interest rate for bearer allocated by public oﬀ ering were in circula- the seventh-tenth coupons of JSC Tyumenenergo's tion (State Registration Number of the securitites bonds with 02 series. The coupon rate amounted issue: 4-02-00159-F). The said issue was allocated to 8.7% per annum, which amounts to 43 roubles on the MICEX Stock Exchange on April 5, 2007 in and 38 kopecks per each bond. accordance with the resolution of the Board of Di- rectors of December 28, 2006 (Minutes No. 18/16). The 8th and 9th coupon yield to the total amount of 234,252 thousand roubles was paid in 2011. The State Registration of the bond issue was The total yield amount on JSC Tyumenenergo performed by the FFMS of Russia on February 21, bonds paid from the 1st to 9th coupons amounted 2007, and the state registration of the report on to 973,296 thousand roubles. the results of issuing the bonds was performed on May 8, 2007. JSC Tyumenenergo repaid its funded loan to the full on March 29, 2012 and paid the 10th coupon yield The volume of the funded loan amounted to 2.7 bil- amounting to 117,126 thousand roubles. Repay- lion roubles. The creditors are the general public — ment of the bonds and payment of the coupon yield owners of the bonds. The par value of one security were included into the business plan and accom- of the issue amounts to 1,000 rub. plished timely and to the full.

The maturity of the bonds amounts to 1,820 days JSC Tyumenenergo concluded 331 transac- (5 years) with the possibility of put date in tions within 2011 in the basic trading session 1,092 days. The maturity date for the bonds is mode, and the transactions volume amounted March 29, 2012. The interest rate of the ﬁ rst cou- to 2,282,336 thousand roubles. pon paid in October 2007 amounted to 7.7%.

The eﬀ ective yield of the bonds to the three-year put date amounted to 7.85% as of the allocation date.

THE DYNAMICS OF YIELDS ON BONDS

102.50%

–

101.50%

–

100.50%

NOV JAN MAR APR MAY JUL SEP NOV 2010 2011 The volume of transactions, mln roubles

200 100 60 0 NOV JAN MAR APR MAY JUL SEP NOV WWW.TE.RU 2010 2011 ANNUAL REPORT | 2011 CORPORATE GOVERNANCE. JSC TYUMENENERGO SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

3.2.3. Dividend History

The Company’s dividend policy principles are set (the implementation of investment programs), down in the Company's Provisions on Dividend ensuring the development prospects of the Policy, approved by the Board of Directors of Company; JSC Tyumenenergo in 2010. – compliance of practices accepted in the Com- pany of calculation and payment of dividends The Company’s dividend policy is based on balanc- with the legislation of the Russian Federa- ing the interests of the Company and its share- tion and with the best standards of corporate holders when determining the amount of dividend behaviour; payments, on respect for and strict observance of – the optimum combination of interests of the the rights of shareholders under the current legisla- Company and of its shareholders; tion of the Russian Federation, the Charter and the – the need to improve the investment attractive- internal documents of the Company, and is aimed ness of the Company and its capitalization; at increasing the attractiveness of the Company – ensuring transparency of the mechanism of and growth of its market capitalization. determining the amount of dividends and their payment. The dividend policy is based on the following principles: Under 2010 results, the Company paid dividends on its ordinary shares amounting to 1.61 roubles – calculation of dividends is based on use of per one ordinary share of the Company. The profi t profi t without accounting for the eff ect of retained aﬅ er the dividend payment was allocated revaluation of fi nancial investments; to the implementation of investment programs – the need to maintain the required level of amounting to 5,073,596 thousand roubles. fi nancial and technical status of the Company

AMOUNT OF DIVIDENTS PER SHARE, RUB.

5.24

3.79 3.80

2.26 1.57 1.6 1.24 1.10 0.73 0.33 0.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 61

COMPONENTS OF SUCCESS JSC TYUMENENERGO CORPORATE GOVERNANCE. ANNUAL REPORT | 2011 SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

DISTRIBUTION OF THE PROFITS OF THE COMPANY IN ACCORDANCE WITH THE DECISIONS OF THE GENERAL MEETING OF SHAREHOLDERS OF JSC TYUMENENERGO:

Total amount of accrued Share of net proﬁ ts Dividend per Minutes date and number and unpaid dividends on directed to the pay- ordinary share common shares (thousand ment of dividends, (rub.) rub.) %

In 2001 on results 200,000 12.39 0.7306 Minutes No 05/01 of 2000 of May 4, 2001

In 2002 on results 619,028 26.30 2.2614 Minutes No 678pr/2 of 2001 of June 10, 2002

In 2003 on results 1,038,511 51.97 3.7938 Minutes No 848pr/3 of 2002 of June 10, 2003

In 2004 on results 1,038,988 49.72 3.795542 Minutes No 1037pr/6 of 2003 of June 29, 2004

In 2005 on results 1,434,994 50.7 5.2422 Minutes No 1131pr/5 of 9 month of 2004 of December 31, 2004

In 2006 on results 90,000 7.96 0.32878 Minutes No 1473pr/5 of 2005 of June 6, 2006

In 2007 on results 339,660 19.53 1.2408172 Minutes No1694pr/1 of 2006 of June 29, 2007

In 2008 on results 300,000 25.53 1.0959346 Minutes No 1868pr/1 of 2007 of May 6, 2008

In 2009 on results dividends not paid By order of of 2008 JSC IDGC Holding of June 29, 2009 No 9r

In 2010 on results 430,000 25.77 1.570839657 Minutes No 22pr/8 of 2009 of June 29, 2010

In 2011 on results 441,830 8.01 1.614056013 Minutes No 96pr/12 of 2010 of June 28, 2011

In 2012 on results 369,548 8.85 1.3500015202 of 2011 (planned)

WWW.TE.RU ANNUAL REPORT | 2011 CORPORATE GOVERNANCE. JSC TYUMENENERGO SECURITIES, EQUITY CAPITAL, AND DIVIDEND HISTORY

In 2005, due to the reorganization of RAO UES of Russia, an extraordinary general meeting of shareholders was held, and the dividends were calculated on the results of the ﬁ rst 9 months of 2004. 369,548thous. rub. The dynamics of dividend payments is shown in the are planned to be allocated on dividend payment diagram. baased on the results of 2011

Starting from 2006, the dividend payments made by the Company declined signiﬁ cantly compared In accordance with the results for 2011, it to previous periods. This is due to the fact that in is planned to allocate for dividend payment 2005 power systems were restructured by type of 411,000 thousand roubles. activity — the four power plants were moved into the wholesale generation companies (WGC), the Change in the share of net proﬁ t allocated annually three TPP were included into the territorial generat- for the payment of dividends can be seen in the ing companies (TGC), and 12 network companies diagram. were made into a single distribution grid company — JSC Tyumenenergo.

DINAMYC OF DIVIDENT PAYMENTS, THOUS. RUB.

1,434,994

1,038,511 1,038,511

619,028 430,000 441,830 339,660 300,000 200,000 90,000 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SHARE OF NET PROFIT ALLOCATED FOR THE PAYMENT OF DIVIDENDS, %

51.97 49.72 50.70

26.30 25.53 25.77 19.53 12.39 7.96 8.01

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

COMPONENTS OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUALANNUAL REPORT REPORT | 2011 | 2011

In their daily activities in 2011 the Company’s divisions were guided by the following strategic priorities: improvement in the quality of the services provided, reliability of the power supply to consumers №04 and power eﬃ ciency. RESULTS OF OPERATING ACTIVITIES

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

Opinion of Dmitry Olegovich Pyadukhov, Deputy Director General for Development and Sales Services, on the Company’s performance in 2011

JSC Tyumenenergo provides power supply services within three subjects of the Russian Federation JSC Tyumen energo — which are the main oil and gas producing regions of the country. The chief particularity of the Com- the policy of energy pany’s servicing area consists in the high concentration of oil and gas producing companies and conservation, increase of the wide natural resources transportation network outside the regions. Without doubt, the main con- power effi ciency and cus- sumers of JSC Tyumenenergo as per the volume of provided services are large enterprises of the tomer centricity. oil and gas producing complex. These enterprises have long been reliable partners of the Company. Alongside with the above, the amount of new consumers — individuals, small and average-sized Dmitry business companies — increases by 3,500 — Olegovich 4,000 per annum. And the above index annually Pyadukhov grows. The measures adopted by the Government of the Russian Federation with respect to the above consumer category, including benefi ts for technological connection, bear fruit — the private Tyumenenergo follows the way of implementing new housing and industrial construction has been rap- technologies and ensuring power effi ciency, while idly increasing, along with the rapid development remaining a reliable and stable company. A spe- of servicing companies and housing and commu- cial purpose subsidiary of JSC Tyumenenergo — nity amenities. JSC ESCO Tyumenenergo was established to accom- plish energy conservation projects, perform energy The work on implementation of the Federal Law inspections and fulfi l power servicing contracts as No. 261 of November 23, 2009 “Concerning Energy an instrument of implementation of the state policy. Conservation and Increasing Power Effi ciency” as to In January 2012, ESCO celebrated its fi rst anniver- decreasing power losses at its grid transportation sary, and, even being this young, the company has and as to the use of energy conserving equipment already found its niche and its customers. was continued in 2011. JSC Tyumenenergo developed and approved a Program for energy conserva- Being a customer oriented company, JSC Tyumen- tion and increasing power effi ciency for 2011–2016. energo proceeds with its development of customer Due to the performance of comprehensive meas- relations at new levels, expanding information ures under the eff ective Program, including imple- cooperation including on the Internet, opening new mentation of electric power recording system for cooperation means, e.g. hot lines and trust lines. household users Smart Metering, the decrease of power losses in JSC Tyumenenergo grids amounted In 2011, the Standard of centralized servicing of to 130.8 mln kWh in 2011. Thus, the actual power JSC Tyumenenergo customers was approved along losses in JSC Tyumenenergo grids amounted in with the Plan of measures on bringing the Com- 2011 to 1,789.7 mln kWh or 2.5% from the daily pany’s services in line with the said standard. In grid output (this is the lowest loss degree among the results of the All-Russian contest “Best Russian all the JSC IDGC Holding companies). It should be Power Grid Company” in 2011 JSC Tyumenenergo noted that the optimum degree of transportation won in the nominations “Eff ective energy saving” losses has been reached. and “The most customer-friendly company”.

Acting in compliance with its best traditions devel- Today and tomorrow, JSC Tyumenenergo is a secure oped over the more than a thirty-year-old history foothold for the economy, a steadily developing, of JSC Tyumenenergo, the Company extensively customer-oriented and socially responsible enter- applies new technologies in its activities. prise which is fully opened to innovations and constructive cooperation. 65

COMPONENTS OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUAL REPORT | 2011

POWER BALANCE FOR JSC TYUMENENERGO IN 2011

Generation — 5.9 bln kWh Agriculture

GRID OUTPUT NET SUPPLY FGS 500 — 10.1 bln kWh 70.7 69 Large cities — 6.1 bln kWh FGS 220 — 2.5 bln kWh Other consumers — 5.8 bln kWh BLN KWH BLN KWH

Large industrial consumers — Switching units — 2.5 bln kWh 56.6 bln kWh

Power losses — 1.8 bln kWh (2.5%)

VOLUME OF TECHNOLOGICAL CONNECTION TO JSC TYUMENENERGO GRIDS Natural persons — 13.4 MW 2,081 Industrial enterprises — 284.1 MW CONNECTION TO JSC TYUMENENERGO GRIDS Territorial grid companies — 33.3 MW Budget-funded organizations — 24.5 MW

MW Agriculture — 2.8 MW 504.8 Other consumers — 22.7 MW CONNECTED CAPACITY

Generation facilities — 124 MW

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

4.1. POWER TRANSMISSION ORGANIZATION

The main activity of JSC Tyumen energo is the provision of electricity transmission services through transmission facilities owned by the right of ownership or other legal basis, with a range of voltage 220-0.4 kV.

Provision of electricity transmission services can be ing research, construction, reconstruction, divided into two processes: modernization, installation and maintenance, development of measurement and account- 1. Technological: ing systems, relay protection equipment and automatic emergency devices. – keeping power facilities effi cient and service- able in accordance with acting regulatory re- 2. Organizational: quirements, performing maintenance services, diagnostics and repairs of the grids, techno- – organization of work to ensure reliable and logical connection, measuring and metering of trouble-free operation of equipment, HR work, energy, providing relay protection equipment including training and retraining; and automatic emergency devices, and other – organization of contract work, work on pay- technological equipment associated with the ments for services provided to customers, work operation of the power supply network, as well on tariff regulation, fi nance and fi scal activities, as its technological management; legal support, etc.. – development of power grids and other transmission facilities, including design, engineer-

COMPONENTS OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUAL REPORT | 2011

4.1.1. Transmission capacity

In 2011, the operating activities of JSC Tyumen- THE DYNAMICS OF THE LENGTH OF OVERHEAD energo were carried out by 9 power grid branches, LINES OF 0.4220 KV BY THE NETWORK, KM including those of the Tyumen Power Grids 4 Terri- torial Production Association branch, engaged in the operation and maintenance of power grids. 45,071

Today, the total length of overhead lines 44,971 of JSC Tyumenenergo is 45,071 km, and 536 km of cable lines. 44,905

There are 634 substations of 35-220 kV, with 44,704 transformer capacity of 26.344 MVA.

There are 5,341 transformer substations of 6-10 / 0.4 kV with transformer capacity of 1,097.9 MVA. 2008 2009 2010 2011

THE DYNAMICS OF THE NUMBER AND CAPACITY OF 35220 KV SUBSTATIONS

26,344

25,611

25,344

24,180 Pcs

МВА 634 619 627 631

2008 2009 2010 2011

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

4.1.2. Tariﬀ setting. The tariﬀ structure

The basic principle of the company’s tariff policy is the timely protection of state-regulated tariff s on electricity transmission, providing stable fi nancial conditions for the Company, and development of reliable and quality electricity supply for consumers.

In 2011, JSC Tyumenenergo regulation was carried out by making the invested RAB capital proﬁ table.

UNIFORM COMMON POT TARIFFS

Uniform (common pot) tariﬀ s for the transmission of electrical energy to consumers in Tyumen region in 2011 were approved by the REC of Tyumen Re- gion, and of Khanty-Mansiysk — Yugra and Yamal Autonomous Districts.

UNIFIED COMMON POT TARIFFS APPROVED BY DECISION OF THE REC OF TYUMEN REGION, AND OF KHANTYMANSIYSK  YUGRA AND YAMAL AUTONOMOUS DISTRICTS NO 614 OF DECEMBER 30, 2010, THAT WERE IN FORCE IN JANUARY  APRIL 2011

Tariﬀ rates Units Tariﬀ s by range of voltage (without VAT) of measurement HV MV-I MV-II LV

BINOMIAL RATE TARIFF

maintenance rate rub./MW per month 566,380.93 816,019.53 856,372.93 510,865.91

rate on recouping losses rub./MWh 53.44 148.83 156.27 319.41

FLATRATE TARIFF

rub./MWh 829.31 1,277.96 1,329.38 1,367.36

COMPONENTS OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUAL REPORT | 2011

UNIFIED COMMON POT TARIFFS APPROVED BY THE DECISION OF THE REC OF TYUMEN REGION, AND OF KHANTYMANSIYSK  YUGRA AND YAMAL AUTONOMOUS DISTRICTS NO 36 OF APRIL 28, 2011 PURSUANT OF THE RUSSIAN FEDERATION PP NO 1172. THAT WERE IN FORCE IN MAY  DECEMBER 2011

Tariﬀ rates Units Tariﬀ s by range of voltage (without VAT) of measurement HV MV-I MV-II LV

BINOMIAL RATE TARIFF

maintenance rate rub./MW per month 518,390.20 802,882.99 883,521.09 510,865.91

rate on recouping losses rub./MWh 45.20 125.62 132.00 269.11

FLATRATE TARIFF

rub./MWh 747.74 1,224.70 1,329.38 1,367.36

FLATRATE UNIFIED COMMON POT TARIFFS IN FORCE IN TYUMEN REGION, RUB., MWH

Period of validity Range of voltage

HV MV-I MV-II LV

2010 650.00 1,064.97 1,155.98 1,188.97

since January 1, 2011 829.31 1,277.96 1,329.38 1,367.36

since May 1, 2011 747.74 1,224.70 1,329.38 1,367.36

Rate increase May 1, 2011 against 2010 15% 15% 15% 15%

THE STRUCTURE OF REVENUE ACCORDING THE STRUCTURE OF UNIFIED COMMON POT TO UNIFIED BOILER AND INDIVIDUAL TARIFFS, % TARIFF ON SERVICES OF E/P TRANSMISSION, %

69% 18% 37%

24% 31% 21%

69% — Revenue on uniform 21% — TCO support (common pot) tariﬀs 24% — Payment for services of JSC FGC UES 31% — Revenue on individual tariﬀs 18% — Expenses to replace losses

37% — JSC Tyumenenergo

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

COMMODITY REVENUES The required gross proceeds of JSC Tyumenenergo in 2011, as a result of using the mechanism of Commodity revenues for JSC Tyumenenergo electri- “smoothing” expenditure in accordance with the cal power transmission consist of payments by methodology of RAB tariff calculation, remained sales companies according to uniform (common almost unchanged compared to 2010 (an increase pot) tariff s and payments by subordinate territorial of 0.52% from 2010) and, accordingly, had no ef- network organizations according to individual tariff s. fect on tariff s (prices) growth for electricity in the Purchase of electrical power in order to compen- region in 2011. The growth of own tariff for electric sate for energy losses in the grids is made from power transmission services through the networks JSC Tyumen Energy Retail Company. of JSC Tyumenenergo were 3.2% compared to the previous year.

THE STRUCTURE OF THE COMPANY’S OWN TARIFF, %

36% Maintenance costs without investment 43% Investments 11% 15% 9% Compensation of energy losses 10% 8% 9% Payment for TCO services 33% 27% Payment to JSC FGC UES

2010 2011

COMPONENTS OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUAL REPORT | 2011

4.1.3. Company income structure

The largest consumer of electricity transmission services in the Tyumen region is JSC Tyumen Energy Retail Company which was formed in the process of reform- ing the Company.

The share of JSC Tyumen Energy Retail Company It also has contracts with energy supply companies, in the structure of the proceeds from the sales of participants in the wholesale electricity market and electricity transmission services is around 36%, or participants in the retail electricity market: 16,639.5 million roubles aﬅ er VAT. Relations with JSC TEC in terms of settlement for services for the 1. wholesale electricity market participants: transmission of electricity are stable. During the reporting year, the amount of power transmitted was – CJSC Uniﬁ ed Energy Supply Company 21,856.2 million kWh. Major customers of JSC TEC (for JSC TNK-BP); are: LLC Lukoil-Western Siberia, and OJSC Slavneﬅ - – LLC Rusenergoresurs (for Transneﬅ ); Megionneﬅ egaz. – LLC RN-Energo (for JSC RN-Purneﬅ egaz and JSC RN-Yuganskneﬅ egaz); In addition, JSC Tyumenenergo provides power – LLC Surgutenergosbyt (for OJSC Surgutneﬅ egas); transmission services to the following oil and gas extraction industry companies: 2. retail market participants:

– LLC GazpromDobychaYamburg; – LLC Energostream-Energosbyt (JSC Novatech); – OJSC Surgutneﬅ egas; – LLC TEC-Energo. – LLC RN-Energo; – LLC Gazpromneﬅ -Khantos.

REVENUE STRUCTURE BY CONTRACTOR IN 2011

* The value of services Contractor Volume of electric power Cost of electric power transmitted, provided is given less the transmitted, mln kWh mln kWh before VAT* cost of energy losses, recorded in the prices of wholesale electricity JSC Tyumen Energy Retail Company 21,856.2 19,634.6 market. CJSC EESnK 9,132.8 8,128.5

LLC Rusenergoresurs 1,572.6 1,351.7

LLC RN-Energo 8,852.8 7,827.3

LLC Surgutenergosbyt 4,921.2 4,195.3

LLC Energostream-Energosbyt 134.5 123.2

LLC TEC-Energo 201.5 184.1

Other consumer services 647.1 591.8

Regional grid organizations 15,775.9 11,965.0 72 TOTAL: 63,094.6 54,001.5

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

REVENUE STRUCTURE BY CONTRACTOR IN 2011, %

36.4% — LLC TEC

22.2% — TCO

15.1% — CJSC EESnK

14.5% — LLC RN-Energo

7.8% — LLC Surgutenergosbyt

2.5% — LLC Rusenergoresurs

1.1% — Others

0.3% — LLC TEC-Energo

0.2% — LLC Energostream 73

COMPONENTS OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUAL REPORT | 2011

4.1.4. Revenue from power transmission services

The value of useful Revenue, including VAT, The average tariﬀ , aﬅ er VAT, output, million kWh mln rub rub./KWh

Plan (in accordance with the ratiﬁ ed 62,420.7 53,567.6 0.858 business plan of Tyumenenergo)

Actual 63,094.6 54,001.5 0.856

The value of revenue for services of electric energy (aﬅ er VAT), since the plan had estimated contrac- transmission provided by JSC Tyumenenergo in tual amounts of major consumers 0.8% lower than 2011 was 54,001.5 million roubles aﬅ er VAT, the the actual ﬁ gure. planned value having been 53,567.6 million roubles

4.1.5. The volume of electricity transmitted through the power grids

DYNAMICS OF THE OPERATIONS OF JSC TYUMENENERGO ELECTRIC POWER OUTPUT, MLN KWH, %

73,752.1 73,333.4 72,908.1 71,116.8 71,802.7 71,514.3 71,066.9 68,961.4 70,671.3 68,881.6

3.0% 2.6% 2.5% 2.5% 2,5%

2,155.4 1,949.4 1,819.1 1,841.2 1,789.7

2007 20082009 2010 2011

Output of e/p into the grid Losses of e/p Output of e/p out of the grid Losses %

In 2011, a total of 70,671.3 million kWh electricity received by end-users and regional distribution was put into the grids of JSC Tyumenenergo from companies. Loss of electric power amounted to the grids of the Federal Grid Company, from elec- 1,789.7 million kWh, or 2.5% of electricity output tric energy producers, and from allied transmission in the grids of JSC Tyumenenergo. companies. Of that, 68,881.6 million kWh were 74

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

OPERATING RESULTS FOR 2011

Output into the network, Productive output, mln kWh Losses mln kWh mln kWh %

70,671.3 68,881.6 1,789.7 2.5

DYNAMICS OF THE VOLUME OF SERVICES PROVIDED FOR THE TRANSFER OF ELECTRICITY

Volume of servises provided for the transfer of electricity, mln kWh

2010 2011 Change

mln kWh %

71,066.9 68,881.6 -2,185.3 -3.07

Reduction of the services of electricity transmission quence a reduction in the volume of energy provided over the 12 months of 2011 totalled 3.1% transported; compared to the same period in 2010. The main – Customers commissioning their own small reasons for the decline in transmission of electric generation facilities, power plant of JSC NK energy were: Rosneﬅ , OJSC Surgutneﬅ egaz, OJSC Lukoil, JSC Gazprom Neﬅ , OJSC TNK-BP; – Reduced volume of crude oil and gas extracted, – Change in contract terms with LLC Rusener- uneconomic wells of oil and gas enterprises goresurs (Customer — JSC Sibneﬅ eprovod) re- in Tyumen region put in reserve, as a conse- garding the list of points of supply of electricity to consumers.

4.1.6. The dynamics of electric power losses

Reducing electricity losses during transmission and distribution is an important task and one of the main areas of energy eﬃ ciency in JSC Tyumenenergo.

THE ACTUAL LOSS OF ELECTRIC POWER

Loss of electric power

Actual 2010 Actual 2011 Change

mln kWh % mln kWh % mln kWh %

1,841.2 2.5 1,789.7 2.5 -51.5 0

The actual loss of electric energy in JSC Tyumen- same period in 2010 the loss of electricity de- energo power grids was 1,789.7 million kWh, creased by 51.5 million kWh, and in relative ﬁ gures or 2.5% of supply in the grid. Compared to the has remained at the same level. 75

COMPONENTS OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUAL REPORT | 2011

4.1.7. Energy conservation and improvement in energy eﬃ ciency

The Program of energy conservation and improve- – reduction of water consumption on production ment in energy effi ciency in JSC Tyumenenergo was facilities and economic needs — 5.6 m3; developed and approved by the Board of Directors – reduction of energy consumption on production on April 14, 2011 (and then amended by the Board facilities and economic needs — 0.1 mil- of Directors on August 12, 2011) (hereinaﬅ er — lion kWh. the Program). The eff ect was 628.4 million roubles aﬅ er VAT. The target indicators, as adopted in the approved Program, are: The energy conservation and improvement in energy effi ciency structure of JSC Tyumenenergo – reduction of energy losses; consists of the following subprograms: – reduction of heat consumption on production facilities and economic needs; – Program to reduce losses in power grids of af- – reduction of water consumption on production fi liates of JSC Tyumenenergo; facilities and economic needs; – Program of prospective development of elec- – reduction of electricity consumption on produc- tricity metering systems in the retail electricity tion facilities and economic needs. market for JSC Tyumenenergo; – Program of measures to regulate and conserve The numerical values of the targets are set for the energy resources; period of 2011–2015, for 2011 the values of the – and activities included in the Company's in- targets are set as follows: vestment program.

– reduction in energy losses — 75.4 million kWh, In 2011 the eff ect planned according to the Pro- including reducing energy consumption for in- gram was 26,005.5 tce and 451.9 million roubles house needs — 1.9 million kWh.; aﬅ er VAT. In the results of 2011 the eff ect was – reduction in heat consumption on production 45,114.2 tce and 628.4 million roubles aﬅ er VAT. facilities and economic needs — 106 Gcal.; – reduction of water consumption on production facilities and economic needs — 5.6 m3; – reduction of energy consumption on production facilities and economic needs — 0.1 mil- 1,625.7mln rub. lion kWh. aﬅ er VAT — the cost of the energy conservation and energy effi ciency program activities, of which: The planned eff ect — 451.9 million roubles aﬅ er VAT.

At the end of 2011 the target values were as follows: – the activities of the investment program — 522.9 mln roubles aﬅ er VAT; – reduction in energy losses — 130.8 mil- – the activities of the repairs program — lion kWh, including reducing energy consump- 60.5 mln roubles aﬅ er VAT; tion for in-house needs — 1.9 million kWh.; – through other activities ﬁ nanced at cost, – reduction of heat consumption on production 42.4 mln roubles aﬅ er VAT. facilities and economic needs — 113.3 Gcal.;

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

4.1.8. Energy consumption on production facilities and economic needs

Name Measurement units 2011

Plan Actual

Energy resources provided on the basis thousand roubles * 509,125.8 421,938.9 * аmount in thousand of supply contracts (sales), TOTAL roubles before VAT. .

electrical energy thousand roubles 313,242.8 241,747.1

thousand kWh 93.8 85.3

thermal energy thousand roubles 62,811.4 42,411.9

Gcal. 49,840.0 35,339.7

cold water thousand roubles 8,920.8 7,065.4

thousand m3 156.3 125.00

hot water thousand roubles 0.00 0.00

thousand m3 0.00 0.00

natural gas thousand roubles 6,940.2 5,676.0

thousand m3 3,230.8 2,501.5

other (diesel, kerosene, gasoline, etc..) thousand roubles 117,210.6 125,038.4

tce 7,149.9 6,236.2

4.1.9. Implementation of measures to reduce losses and their eﬀ ectiveness

As a result of the Program of energy saving and – organizational measures — losses were re- energy eﬃ ciency operating in the Company, as well duced by 63.9 million kWh; as measures included in the Program of long-term – technical measures — losses were reduced by development of electricity metering systems in the 1.9 million kWh; retail electricity market and the Company's reno- – activities included in the Program of long-term vation program, reduction of power losses in the development of electricity metering systems networks of JSC Tyumenenergo for 2011 amount- in the retail electricity market, losses were ed to 130.8 million kWh, including by means of: reduced by 53.5 million kWh; – activities included the Program of renovation, losses were reduced by 11.5 million kWh. 4.1.10. The state of electricity metering, the introduction of automated measuring and information system for electricity control and metering

In 2011 equipment was purchased, and a planned it possible to reduce the risk of losing information replacement of the outdated AMR server hard- from the customers’ metering devices, ands also 77 ware began in the executive management oﬃ ce reduces the cost of repairs and maintenance of and in the territory of the 9 JSC Tyumenenergo the out-dated server equipment. COMPONENTS branches. Upgrading the server hardware makes OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUAL REPORT | 2011

4.2. ORGANIZATION OF THE TECHNOLOGICAL CONNECTION PROCESS

To interact better with customers, since 2007, JSC Tyumenenergo has had a Customer Service Center, which is based on the “single window” principle.

In 2007, JSC Tyumenenergo opened a one stop process is aimed at improving the quality and customer service center for customer relations. effi ciency in taking applications from consumers, At the end of 2010 this included the Central Offi ce providing them with advice on the procedure and under the executive management, three regional with information about processing of documents. offi ces based on the branches of Tyumen Power More information on the JSC Tyumenenergo Grids, the Surgut Power Grids, the Nizhnevartovsk Customer Service Centre is presented in the section Power Grids, as well as additional offi ces in the on “Customer Focus”. territorial network organizations in Tyumen, Surgut and Nizhnevartovsk. The process of technological connection of power receivers of applicants to the grids of JSC Tyumen- The work of the Customer Service Center for energo is carried out in accordance with Russian implementing the JSC Tyumenenergo connection legislation.

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

INFORMATION ON FEES FOR GRID Yamal Autonomous Districts adopted a resolution CONNECTION FOR 2011 AND APPROVAL establishing the value of the cost of issuing OF TARIFFS FOR 2012 speciﬁ cations, checking compliance to them, and the actual connection of the electric power receivers The Regional Energy Commission of Tyumen of the applicants according to contracts concluded Region, and Khanty-Mansiysk — Yugra and in 2011.

Expenditure item Voltage class, for range of capacity above 15 kW

0.4 kW 6–10 kW 35–110 kW

Preparation of technical conditions for connection, 1,181.00 1,732.00 4,269.00 rub./connection

Checking compliance with speciﬁ cations, rub./connection 1,749.00 3,859.00 5,137.00

Actual connection of energy receivers of the applicants, 2,683.00 5,758.00 12,696.00 rub./connection

TOTAL expenditure in the absence of capital expenses, 5,613,00 11,349,00 22,102.00 rub./connection

Capital expenditure individually individually individually

These expenses in 2012 were indexed:

Expenditure item Voltage class, for range of capacity above 15 kW

0.4 kW 6–10 kW 35–110 kW

Preparation of technical conditions for connection, 1,287.00 2,193.00 4,613.00 rub./connection

Checking compliance with speciﬁ cations, 1,874.00 4,169.00 5,579.00 rub./connection

Actual connection of energy receivers 2,845.00 5,801.00 13,592.00 of the applicants, rub./connection

TOTAL expenditure in the absence of capital expenses, 6,006.00 12,163.00 23,784,00 rub./connection

Capital expenditure individually individually individually

COMPONENTS OF SUCCESS JSC TYUMENENERGO RESULTS OF OPERATING ACTIVITIES ANNUAL REPORT | 2011

If capital investments are necessary, their value is During 2011, the Regional Energy Commission of included in the additional amount of the fee and in Tyumen Region, and Khanty-Mansiysk — Yugra each case approved by the regulatory authority. and Yamal Autonomous Districts adopted 36 Reso- For applicants with a maximum connection capacity lutions on establishing payment fees for 225 con- not exceeding 15 kW inclusive (dependent on the tracts worth 1.831 billion roubles (aﬅ er VAT) and capacity previously connected at this connection with total capacity of 233.301 MW. point) the fee set for connection to JSC Tyumen- energo power grids is 550 roubles (including VAT).

Number of contracts, units 225

Total value of contracts, roubles, aﬅ er VAT 1,831,056,294

Total capacity according to the contracts, kW 233,301

Estimated cost of joining a unit of power, rub./KW 7,848.47

THE VOLUME OF DEMAND FOR – 4,616 contracts were concluded, with a to- TECHNOLOGICAL CONNECTIONS, tal technological connection capacity of WITHOUT GENERATING FACILITIES 241.904 MW. The number of contracts compared to 2010 has increased by 30.5%, while During 2011: the contract capacity has decreased by 58.7%; – Measures were fully implemented and grid – 4,940 applications were received for tech- connections carried out on 2,078 contracts nological connection with a total capacity of with total capacity of 380.800 MW. The in- 690.168 MW. Compared to similar indicators crease in total connected capacity in relation in 2010, the number of applications has in- to 2010 was 38.76%, the total number of creased by 19%, while the volume of commit- executed contracts reduced by 1.68%. ted capacity has decreased by 12.8%;

RESULTS OF FINANCIALECONOMIC ACTIVITY ON TECHNOLOGICAL CONNECTIONS, THOUS RUB.

Indicators Amount, aﬅ er VAT

Proceeds from TC 1,295,222

Costs of TC 141,773

Gross proﬁ t from TC 1,153,449

Net income from TC 922,759

Advances received 1,643,871

WWW.TE.RU ANNUAL REPORT | 2011 RESULTS OF OPERATING ACTIVITIES JSC TYUMENENERGO

4.3. ORGANIZATION OF LONGTERM DEVELOPMENT

Long-term development involves performing activi- – cooperation with JSC FGC UES on contracts ties in the following areas: for technological connection to power grids of JSC FGC UES; – power production industry development – interaction with generating companies con- schemes and programs for Tyumen Region, cerning signing contracts for technological con- Khanty-Mansiysk Autonomous District — Yu- nection of generating facilities to power grids gra, and Yamalo-Nenets Autonomous District, of Company affi liates. are carried out in accordance with the Rules of designing Schemes and Programs of electric INFORMATION ON FUTURE DEVELOPMENT power production development in the regions SCHEMES OF THE NETWORKS of the Russian Federation No 823 of Octo- ber 17, 2009, approved by the Government of In 2010–2011, together with the administra- the Russian Federation; tions of three regions, namely, Tyumen Region, – designing, justifi cation and receiving approval Khanty-Mansiysk Autonomous Okrug — Yugra, and for JSC Tyumenenergo investment programs; Yamalo-Nenets Autonomous District, JSC Tyumen- – assessment of the relevance of current long- energo took part in the development of schemes term power grid development schemes of and programs for power industry development in company branches, organization of work to the regions, according to the Rules of Designing of develop new schemes for future development, Schemes and Programs for electric power industry and updating of existing schemes; development in the regions of the Russian Federa- – development and conclusion of Agreements tion, No 823 of October 17, 2009, approved by with the administration of the regions, provid- Order of the Government of the Russian Federa- ing programs for priority measures to develop tion. Based on these schemes and programs in the and to improve reliability of the electricity sup- regional authority of consistent investment program ply complexes in Company affi liates; of JSC Tyumenenergo for 2012–2017.

COMPONENTS OF SUCCESS JSC JSC TYUMENENERGOTYUMENENERGO COMPANY DEVELOPMENT ANNUALANNUAL REPORT REPORT | 2011 | 2011

Tyumenenergo makes extensive use of innovative ideas and the best existing technical solutions to implement its own №05 investment plans for development. COMPANY DEVELOPMENT

WWW.TE.RU ANNUAL REPORT | 2011 COMPANY DEVELOPMENT JSC TYUMENENERGO

Opinion on the Company operational results in 2011 from the acting Deputy Director General for Technical Aﬀ airs, Chief Engineer of the Company, Sergei Nikolayevich Egoshin

Fulﬁ llment of activities ensuring safe and eﬃ cient transmission of electric power to consumers, and The task of JSC Tyumen- continual improvement of stability in the electric networks of JSC Tyumenenergo has been a prior- energo is to provide ity in Tyumenenergo for many years. At the same time regional distribution electrical networks are reliable and high quality continuously growing, in accordance with the needs of economic and social development, providing the electric power to consum- possibility of expanding existing consumers and connecting new ones. ers of electricity in the One of the essential measures to ensure reliable Khanty-Mansi Territo- power supply is the program of capital construction, technical upgrading and renovation of the main ry — Yugra, the Yamalo- Sergei equipment carried out in the JSC Tyumenenergo. Nikolaevich The increase in transformer capacity amounted to Nenets, and the Tyumen Egoshin 537.5 MVA, and power transmission overhead lines to 166.33 km. Plans for capital and current repair Autonomous Regions. and technical maintenance of all equipment were implemented 100%.

JSC Tyumenenergo shows high inner electric power effi ciency. Electricity losses in the networks of Tyumenenergo in 2011 came down to 1,789.69 mil- Action plans were drawn up for the threat of emer- lion kWh, that is, 2.5% of input into the network. gency caused by power failure in the communities In accordance with the plans for 2011, there were within the territory of Khanty-Mansiysk — Yugra, 137 diff erent drills and training exercises held to Yamal and Tyumen regions. For use in operation eliminate possible emergency situations specifi c during a threat of emergency, the approved action to work in conditions of low outdoor air tem- plans are kept in the operation dispatching servi- peratures, training exercises related to the newly ces (ODS) and in the control rooms of the regions established schedules of emergency restrictions, of electrical networks (REN) of the branches of on the deployment of reserve training mobile JSC Tyumenenergo. substations of 110 kV, with participation of the territorial Emergency Ministry agencies, the municipal The organizational measures resulted in 2011 administrations, housing services and utilities of in a decrease of undersupplied energy relative cities and towns located in the Khanty-Mansiysk — to 2010 data by 58%, of economic damage — Yugra, Yamal and Tyumen regions, a subsidiary of by 77%, and the total duration of the process fail- JSC SO UES, Tyumen RDU, a branch of JSC FGC UES, ures caused by the interruption of energy provision MEA Western Siberia, JSC Fuel and Energy Complex, to consumers — by 47%. and other electricity stakeholders. Performing a set of measures provided for a reli- To improve the communication level and to promote able passage of the autumn and winter period, and effi ciency of the rescue and recovery operations, of the storm period in 2011. 65 agreements were concluded, on cooperation in prevention and mitigation of accidents at power Tyumenenergo implements a consistent technologi- plants, between OJSC Tyumenenergo and JSC cal and investment policy, the priorities of which FGC UES, a branch of MEA Western Siberia, and the are to improve the quality of consumer services, Tyumen energy system of consumers, administra- customer orientation, and reliability of electricity tions, regulating authorities, emergency depart- supply to consumers. ments of cities, regions and municipalities (20 in Khanty-Mansiysk — Yugra, 10 in the Yamal, and 23 in the Tyumen region). 83

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY DEVELOPMENT ANNUAL REPORT | 2011 2011 ANNUALANNUAL REPORTREPORT | | 2011 COMPANY DEVELOPMENT JSC TYUMENENERGO

ELECTRIC SUBSTATION

6 4

2 1 Coupling Capacitors 2 High-frequency 3 suppressor 110 / 35 / 10 kV One of the elements of communication equip- Electrical device ﬁ tted 4 COMMISSIONING OF THIS POWER SUBSTATION ment, which sepa- in the gap of the phase WILL ENABLE US TO PROVIDE ELECTRICITY rates communications conductor of the trans- 5 TO 8,000 APARTMENTS OR JOIN UP 500 SMALL equipment from the mission line and having 1 BUSINESSES. IN ADDITION, THE EXISTENCE OF high voltage frequency a high resistance at the AN ADVANCED DISTRIBUTION NETWORK OF 10 KV of 50 Hz while passing frequency of the HF con- high frequency signals nection channel and low 4 WILL IMPROVE THE RELIABILITY OF PROVIDING through the channels resistance at the mains POWER TO COMMUNITIES. of communication. frequency (50 Hz).

3 The conﬁ guration 4 Disconnector 5 High-voltage 6 Transformer 7 CDS serving to connect the power lines to Switching device, in Electrical switching de- Static electromagnetic Closed distribution the substation. the open position vice having two switch- device having two or system (CDS) is an elec- corresponding to the ing positions or states, more inductively coupled trical installation serving requirement of power- and designed to enable coils, and intended for for the reception and oﬀ in the entire plant and disable circuits. conversion of electro- distribution of electric or a separate part of magnetic induction of power. The switchboard it by disconnecting all one or more alternating contains a set of switch- the installation or part current systems into one ing devices, assembly of it from the source of or more other alternat- and connecting buses, electrical energy. ing current systems. accessory devices and means of relay protection and emergency controls for metering and measurement.

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY DEVELOPMENT ANNUAL REPORT | 2011

5.1. RESEARCH AND DEVELOPMENT AND INNOVATION DEVELOPMENT

The Company management understands that a signifi - cant increase in reliability, safety and quality of service can be achieved by implementing an eff ective mechanism for the management of innovation and scientifi c and technological development.

The modern electric power industry needs to provide 2. Improved safety of the technical equipment reliable, high quality and aff ordable electricity sup- in use. ply, which requires the introduction of research and 3. Increased effi ciency of the power grid equipment. development achievements, innovative equipment 4. Reduction of losses in the transmission of elec- and new and improved technologies. tricity through power grids to the level of the specifi c values of similar foreign companies JSC Tyumenenergo is a modern energy company, that are leaders in the industry. which is on the path to innovation development. 5. Reduction in the cost of providing services In order to implement their investment plans, the of electric power transmission through the Company makes extensive use of modern innova- networks of JSC Tyumenenergo. tive ideas based on the best applied solutions avail- 6. Reduction of specifi c values of capital invest- able in the fi eld. ments per unit of input capacity and power lines of JSC Tyumenenergo. In accordance with the decisions of the Board 7. Conservation of energy used for industrial and of Directors of JSC IDGC Holding of January 26, domestic needs to the level of specifi c indica- 2011 No 53, and of the Board of Directors tors of similar foreign companies — leaders of JSC Tyumenenergo of February 25, 2011 of the industry. No 02/11, a Program of innovative development 8. Increase in labour productivity. of JSC Tyumenenergo has been developed for 9. Improved environmental effi ciency of the en- the period 2011–2016. (Approved by the Board ergy complex JSC Tyumenenergo in achieving of Directors of JSC Tyumenenergo, Minutes the goals of long-term sustainable develop- No 10/11 of July 29, 2011). ment.

The Program’s mission is: investment, institution- JSC Tyumenenergo’s innovative program includes al advancement and implementation of research, a series of eff ective measures aimed at creating development and technological fi ndings, innovative new values in the form of improving the existing projects concerning energy conservation, energy technical production systems and business proc- effi ciency, cost eff ectiveness and reliability of the esses of the Company, introducing new technolo- electricity distribution grid in the complex. At the gies, development of scientifi c and engineering same time, optimizing operating costs and reducing potential of the industry, implementing appropriate Company expenditure is a priority in the implemen- infrastructure and human resources. tation of these projects. 2011 was a year for preparing program activities, The Program’s goal is to develop an eff ective JSC Tyumenenergo research and development mechanism for implementing the innovation cycle, and innovative development was being organized. so that it would provide favourable conditions for A system for managing Company innovation activ- the creation and promotion of high-tech equipment ity and innovation projects, sources of funding for and advanced technologies for the distribution grid innovative projects were established and identifi ed, complex. a database compiled of initiatives and potential projects, key partners identifi ed for implementing Expected outcomes from Program implemen- the scientifi c research and innovation activities, the tation: fi rst steps made to develop a core of regulatory support providing targeted innovation development 1. Increased reliability and quality of services of JSC Tyumenenergo, to evaluate the eff ectiveness 86 of electrical power transmission to consumers of strategic objectives and innovation activities, the connected to power grids of JSC Tyumenenergo. Company's Program introduced innovation develop- WWW.TE.RU ment performance indicators. ANNUAL REPORT | 2011 COMPANY DEVELOPMENT JSC TYUMENENERGO

PLAN FOR R & D FUNDING, THOUS. RUB.

Name 2011 2012 2013 2014 2015 2016 TOTAL

Contributions to the R & D 0 173,226 188,062 138,504 160,430 181,643 841,865 Fund

Company Funding of the 62,370 173,226 282,092 207,756 240,645 272,465 1,238,554 R & D programs

TOTAL: 62,370 346,453 470,154 346,260 401,075 454,108 2,080,420

Program implementation in 2011 was conducted in major institutions, scientifi c and technological the following areas: centres and small and medium-sized business enterprises, whose fi ndings were included in the – implementation of research and development, R & D plan for 2011. and technology (R & D) projects signed before adoption of the program; In 2011, two research projects were run: – implementation of the R & D plan, craﬅ ed and incorporated into the Program; 1. A study was conducted and an estimate was – implementation of existing eff ective and obtained on the eff ectiveness of line type innovative operation development designs lightning arresters to increase lightning-proof (technologies, equipment and services) within safety, and recommendations issued on the the investment program; use of line type lightning arresters as a result – introduction of innovative management prac- of research work on the project “The develop- tices and other innovative developments, fi - ment of devices recording lightning strikes nanced at cost and included in other programs in the line, and monitoring the situation in within the Company’s business plan; thunderstorms along the -110 kV overhead – development of human resources and im- lines Gubkinskaya-Novogodnyaya 1.2, Contour- provement of business process management Ai-Pimskaya 1.2”, executed by the affi liate within the Company; company of JSC NTC of electric energy indus- – collaboration with relevant universities, re- try — SibNIIE (Novosibirsk). search organizations and innovative enterpris- The results obtained are important for es of small and medium-sized businesses; JSC Tyumenenergo as the approved method – working with the Centre for Strategy, Devel- is being taken into operation as a prospective opment and Innovation and the Department one, for increasing lightning-proof safety with of Technical Development and management HVL-110 kV arresters, which will have to be of JSC IDGC Holding on improving innovative introduced on a large number of lines working development; in areas with poorly conducting soils. – one essential ingredient of the Program is 2. A technical project has been developed which a mechanism for funding R & D. The program including the method of calculation and design provides two major R & D fi nancing sources; documentation, with unifi ed construction of – the Company’s own funds allocated for re- foundation supports, based on metal open search and development; profi le cross-section piles for building and – a centralized R & D Fund created by reconstruction of 35-220 kV overhead lines, JSC IDGC Holding in order to fi nance break- made by the JSC Institute Energosetproject through innovative projects and developments. (Moscow).

In order to build an R & D plan for JSC Tyumen- This work was reviewed at a meeting of the section energo, 250 diff erent research proposals “Technologies for the construction and installation” were received from 28 organizations, total- of Non-Commercial Partnership Scientifi c-Technical ling 3,769,363.31 roubles. Aﬅ er they were Council of the Unifi ed Energy System (hereinaﬅ er analysed, an innovative portfolio was formed: NCP STC UES), and was appreciated and approved. 35 projects selected from 13 organizations total- The members of the section also noted that the ling 1,069,024.42 thousand roubles, which were work is of great practical importance to the national selected in accordance with the principles of effi - power industry in the area of design, construc- ciency, optimization of operating costs, reduction tion and reconstruction of power lines not only in of losses, improvement of reliability and safety permafrost regions, but also in other regions with of energy supply, and meeting the requirements heaving soils and adverse climatic conditions, since of current legislation of the Russian Federation in the unifi ed design of foundation bearings on the ba- 87 the fi eld of research and development. Potential sis of metal open profi le cross-section piles have an participants in research and development are undoubted advantage over conventional reinforced COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY DEVELOPMENT ANNUAL REPORT | 2011

concrete piles for stability and load bearing capac- insulating traverse for high-voltage lines (HVL) ity, as well as bearing the impact of frost heaving under 110 kV. Performed by the consortium: forces. In addition, the technical and economic JSC IDGC NIITS and CJSC Phoenix 88. characteristics of the cross-section pile, compact, relatively light weight, high technology of manufacturing and installation in the ground, as well as low labour and energy cost installations, are the most suitable ones. 210,302 thous. rub. the total number of contracts signed within The economic eff ect of the technical project is to the R & D plan for 2011 reduce the cost of materials through selection of rational schemes and parameters of foundation support of HV lines, reducing labour costs in the Practical implementation of innovative programs design, as well as reducing the operating cost of made it possible in 2011 to introduce into trial op- overhead lines (eliminating all swelling in pile foun- eration three innovative network management cen- dation supports). tres (NMC) using the soﬅ ware-hardware complex of PSI Control. This NMC development was done Also in performing the Program in 2011, contracts in three branches of JSC Tyumenenergo — Surgut were signed, under which research and develop- Power Grids, Kogalym Power Grids, and Noyabrsk ment and engineering work on nine projects was Power Grids. conducted: In 2011 remote control systems were reconstructed 1. Development of a device, which determines the on the SS110/35 kV JSC Tyumenenergo. 49 power conditions of galloping conductors, conduct- projects were equipped with remote control sys- ing research to identify eff ective methods to tems, of which 40 substations telecommunication combat the galloping of conductors. Executed data transmission is carried out with voltage class by: JSC Elektrosetstroyproekt (Moscow). equipment of 6 kV and more, in the international 2. Further development of the impulse protection protocols of IEC-101 (104) with time stamps. device against ground short-circuits of 6-35kV In 2011 JSC Tyumenenergo performed a large overhead and cable lines will depend on the number of planned introductions of already avail- results of the trial. Performed by: JSC ENIN able eff ective innovative production developments, (Moscow). technologies and equipment: 170 oil circuit breakers 3. Development of T connectors based on a spiral decks and separators-fault-throwers (ODKZ) were protector. Performed by: JSC Scientifi c and replaced with gas-insulated and vacuum ones in Technical Centre Electrosety (Moscow). the voltage class of 110, 35, 10, 6 kV; 194.92 km 4. Development of a damping dance absorber. of cable was replaced at the Steel Insulated Wires Performed by: CJSC Scientifi c and Technical test site; 10 sets of reclosers on feeders of 10 kV Centre Electrosety (Moscow). overhead lines installed; installation of 321 units 5. Development of spiral-type protectors to of overvoltage limiters on 110 kV overhead lines; protect the AC cables at the exit of the cable installation of 6,905 multi-frequency vibration lug. Performed by: CJSC Scientifi c and Technical absorbers (including replacement of standard vibra- Centre Electrosety (Moscow). tion absorbers with multi-frequency ones); 60 pil- 6. Development of a Comprehensive security lars were placed on surface foundation; reconstruc- system and monitoring of the operation of the tion was done of 12 electromagnetic blocks (EMB) electric power equipment (KSBiKR). Performed for soﬅ ware; 10 fault location devices (FLD) were by: LLC Prosoﬅ -Systems (Ekaterinburg). reconstructed into microprocessor ones; at six facili- 7. Development of a hierarchical system of ties remote access was enabled to RPAE microproc- collection and review of emergency informa- essor units. tion from heterogeneous distributed sources. LLC Energopromavtomatizatsiya (St. Peters- By 01.01.2012, the main activities to be undertaken burg). according to the program of innovation develop- 8. Development of a system of comprehensive ment plan for 2011 had been completed. monitoring of insulation and storm conditions, determining the cut-off points in the 110 kV The program envisages active involvement of overhead lines. Performed by: affi liate of the Society of Young Professionals in innovative JSC NTCelectroenergetiki — SibNIIE). activities, planning the development of a program 9. The development, prototyping and testing of for youth participation in science and research, single circuit and double circuit light intermedi- exploration, rationalization, invention and innova- ate supports made of composite materials with tion activities, exchange of production experience 88

WWW.TE.RU ANNUAL REPORT | 2011 COMPANY DEVELOPMENT JSC TYUMENENERGO

among young professionals within the Company, of work on power equipment (KSBiKR)”, developed holding thematic classes of young workers with by LLC Prosoﬅ -Systems for the JSC Tyumenenergo, experienced specialists and heads of departments which won in one of the nominations of the First of the Company. All-Russia Youth Contest of high-tech innovative ideas and projects “Energy of the Future”. In order to provide the most promising, — “break- through”,- areas of technological development of The Expert Council decided that the project has the electrical distribution grid complex, JSC Tyumen- practical uses, and its subsequent implementation energo proposes cooperation with higher education, would be a major contribution to improving work- research and production associations, industrial place safety at electrical power facilities. enterprises, scientifi c research and design insti- tutes, and is ready to implement joint projects in The contest was organized by JSC IDGC Holding the area of research and development activities, in with the active participation of the Coordinating accordance with the principles of energy effi ciency, Council on Youth in the Area of Science and Educa- optimization of operating costs, reducing losses and tion of the Presidential Council of the Russian Fed- improving reliability and safety of energy supply eration for Science, Technology and Education, and through 0.4 — 110/220 kV power grids. of the Non-Profi t Partnership “Energy of the Future”. the launch of this contest of knowledge-based inno- In JSC IDGC Holding and the JSC Tyumenenergo vative ideas and projects “Energy of the Future” was priority is given to supporting research activities given at a press conference on November 23 from of engineering staff , scientists, inventors, graduate 13.00 to 14.00 (GMT) in Moscow, in RIA Novosti, students, undergraduate and school students in the that featured a presentation by the General Director interest of the power distribution grid complex. of JSC IDGC Holding N.N. Shvets.*

One result of the eﬀ ective cooperation of A professional team of energy engineers, eﬀ ective JSC Tyumenenergo in attracting young scientists management and the Board of Directors of the and engineers into innovation development in the Company are the necessary ingredients that enable Company is the innovative project “Development JSC Tyumenenergo to solve the problems it faces * Repair program performance is presented in Ap- of an integrated security system and monitoring every day on the way to “intellectual energy”. pendix No 7 to this annual report on CD.

FUNDING UNDER THE PROGRAM OF INNOVATION DEVELOPMENT IN 2011, THOUS. RUB.

Item Funding source Amount, thousand roubles before VAT

In-house R & D prime cost 62,370.00

Transfers to the R & D fund proﬁ t0

Implementation of “ready” technologies, equipment (innovative projects investment 1,362,763.40 of known developments) program

Implementation of “ready” innovative organisations (management) prime cost 26,910.10

Professional development and staﬀ training in higher education establishments prime cost 5,772.20

TOTAL: 1,457,815.70

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY DEVELOPMENT ANNUAL REPORT | 2011

Opinion of the Deputy Director General for Capital Construction Igor Ivanovich Yaskovets on the Company’s performance in 2011

and technical re-equipment provide for a number The Company’s strategic of investment projects, which are highly socially signifi cant and directed at the prospective develop- goal is development of ment of the Tyumen power system: a unifi ed national power – meeting additional power demand entailed by the development of oil and gas producing system within the area enterprises and municipal units in the region; – fulfi llment of reliable loop power supply sys- of its operation and ensur- tems of Tyumen Region cities (Nizhnevartovsk, Noyabrsk, Surgut and Surgut District); ing its reliable operation, – arrangement of schemes of power distribution at the new generating stations (construction of VL 220 kV and build-up 220 kV at 110 kV Igor as well as improving the Ivanovich substation Vandmtor); Yaskovets quality of the consumer – connection of isolated inhabited localities to the unifi ed power system and creation of a grid power supply. infrastructure in the districts of prospective commercial exploration in the Tyumen Region and Nether-Polar Urals.

The measures accomplished in 2011 are included into the long-term investment program Construction of new power grid facilities and reno- of JSC Tyumenenergo through 2017, which vation of ﬁ xed assets performed by the Company presents a set of projects on implementation of the aim at providing an uninterrupted power supply to Company’s targeted programs and power industry the three most important regions in the Russian development pattern for the Tyumen Region agreed Federation — the Yamal and Nenets Autonomous with the executive authorities of the three subjects District, the Khanty-Mansi Autonomous District — of the Russian Federation. Yugra, and the Tyumen Region. JSC Tyumenenergo invested more than 15 bln roubles into the develop- The scope of the investment program funding ment of power grid potential of the said regions in for 2012–2017 will amount to more than 69 bln 2011; 166 km of new power transmission lines and roubles. According to the Company’s estimates, 600 MWA of transformer capacity were commis- as a result of the fulﬁ llment of the above, some sioned within the year. 1,705 km power transmission lines are planned to be constructed and 2,156 MWA transformator ca- All the investment measures in 2011 were accom- pacity planned to be commissioned, which will allow plished to ensure uninterrupted, quality and reliable meeting current generating capacity needs of the power supply for both household and industrial regions, as well as create a basis for power industry consumers. The programs of new construction development until 2020.

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5.2. INVESTMENT ACTIVITY

JSC Tyumenenergo’s investment program focuses on commissioning new facilities, ensuring reliability and eﬃ ciency of existing equipment and increasing its energy producing eﬃ ciency.

In 2011, JSC Tyumenenergo carried out investment 1. PARAMETERS OF THE INVESTMENT in the ﬁ xed assets in the form of capital invest- ACTIVITY ments, which include expenditure on new construction, expansion, reconstruction and modernization of The investment program of JSC Tyumenenergo existing facilities, purchase of equipment and other in 2011 planned for investments of 12,270.417 expenses of capital nature. million roubles. In fact, 11,974.225 million roubles were spent, which is 97.6% of the plan for the year.

Indicator disbursement of capital investment

plan actual % completed

Investment, TOTAL 12,270.417 11,974.225 97.6%

1. Capital expenditures, total 12,177.174 11,935.829 98.0%

including:

1.1. industrial construction, including 12,177.174 11,935.829 98.0%

1.1.1.– new construction 7,209.270 7,347.130 101.9%

1.1.2.– re-equipment and reconstruction 4,967.904 4,588.699 92.4%

2. Acquisition of proﬁ le property 93.244 38.396 41.2%

All work on new construction, modernization and re- district of the North-Western part of the Yamal with construction planned for 2011, providing a reliable the current load of 82 MW. electricity supply to cities and towns, and industrial enterprises, was carried out in full. Deviation of Construction period: 2006–2014 2.4% from the plan was due to savings made on Lead in power: 250 MVA (2х125). the results of tender procedures conducted in the The length of overhead lines commissioned: reporting year. 718 km.

Completing the activities of the investment program Disbursed capital investment since the beginning in 2011 has made it possible to get through the of construction 646.918 million roubles, including winter maxima of 2011–2012 without a single 723.338 million roubles in the reporting period, with accident. 488.720 million roubles planned.

Of particular note is the importance of the imple- HVL110 KV UGRESURENGOY WITH PP110 KV mentation of the largest new construction projects: IN THE REGION OF LIMBAYAHA WITH OVERHANG OF VL110 KV CONSTRUCTION OF THE 220 KV SALEKHARD SUBSTATION TO SUPPLY HVL220 KV NADYM The aim of the project is to provide unconditional SALEKHARD energy output of 450 MW from Urengoy GRES, the possibility of construction of JSC FGC UES double- As a result of this project JSC Tyumenenergo will circuit 220 kV overhead lines Urengoy GRES-Uren- be able to connect to the grid an isolated energy goy, and the increase in technical ability of energy 91 output of the Urengoy GRES. COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY DEVELOPMENT ANNUAL REPORT | 2011

STRUCTURE OF NEW FIXED ASSETS BROKEN DOWN BY TYPE OF CONSTRUCTION

Plan for 2011 Actual Performance in 2011 Achieved, %

Input PF, Capacity Increase in Input PF, Capacity Increase Input PF, Capacity Increase mln rub. input capacity input mln rub. input in capacity mln rub. input in capacity MVA input input

Km MVA Km MVA Km MVA Km MVA Km MVA Km MVA

6,756.9 158 600 158 525 6,615.2 166 624 166 537 98% 105% 104% 105% 102%

Construction period: 2007–2013 The volume of ﬁ xed assets commissioned in 2011 Commissioned length: 135.8 km. totalled 6,615.213 million roubles (of which, 56.1% of the total investments have gone into new Disbursed capital investment since the beginning construction, 43.3% reconstruction, 0.6% for the of construction 1,048.328 million roubles, including purchase of specialised property), which accounted 771.962 million roubles in the reporting period, with for 97.9% of the plan for the year. 583.796 million roubles planned. The importance of putting the following new con- 110 KV OVERHEAD LINE SERGINOPUNGA WITH struction projects into operation should be noted: AN EXTENSION OF A 110 KV SWITCHYARD OPEN BUS AND SWITCH ARRANGEMENT SERGINO – 220 kV overhead line at the 220 kV Vandmtor substation; addition of 220 kV at the 110 kV Construction of new overhead lines in this area Vandmtor substation (Implementation of will ensure uninterrupted power supply and quality these projects will secure the issuance of new for existing household consumers in the towns capacity of the Nyagansk GRES being built of Aneyeva, Sartynya, Sosva, Lombovozh, and and to eﬀ ect the technological connection of Saranpaul, and for the industrial customers of the power facilities of the Nyagansk GRES, as well Subpolar Urals, as well as create an opportunity for as provide a prospective increase in loads in further development of both industry and residen- the Nyagansk power district. Construction of tial settlements. the projects yielded an increase in capacity of the 220 kV overhead line of 2x22.222 km, the Construction period: 2010–2012 increase in transformer capacity of 400 MVA); Commissioned capacity: 160.506 km – SS 110/35/10 kV MFC-9A with a 110 kV (2x80.253 km). overhead line (The project creates technical opportunities for development of urban Disbursed capital investment since the beginning construction of state and individual housing in of construction of 699.803 million roubles, including Nizhnevartovsk. Increase in capacity amounted in 2011, 518.142 million roubles, with 341.515 mil- to 50 MVA). lion roubles planned.

DYNAMICS OF COMPANY CAPITAL INVESTMENTS

2009 2010 2011 in fact

10,219.00 6,567.37 11,974.22

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Analyzing the dynamics of investment of AMOUNT OF CAPITAL INVESTMENT, MLN RUB. JSC Tyumenenergo in general, it may be noted that the volume of investment decreased by 55.6% in 2010 relative to 2009, and increased by 45.15% in 2011 relative to 2010 due to the use of bank loans for company investment activities. 11,974.22 3. THE LONGTERM INVESTMENT PROGRAM 10,219.00 6,567.37 As a result of executing the investment program for the period from 2012 to 2017 the total amount of inputs will amount to 66,128 million roubles. Trans- former capacity to be commissioned from 2012 to 2017 is 2,155.7 MVA, new power lines from 2012 to 2017 are 1,705.4 km. The amount of ﬁ nancing 2009 2010 2011 for investment activities in the period from 2012 to 2017 is planned to be 69,460.6 million roubles (including VAT). In order to ﬁ nance investment activity, JSC Tyumenenergo plans to attract loan funds.

INVESTMENT DYNAMICS, MLN RUB

22,410 13,846 14,124 11,700 10,659 10,177 12,834 12,772 8,954 9,916 9,847 10,140 9,918 8,625 7,130 8,018 9,370 6,565

2012 2013 2014 2015 2016 2017

Amount of capital investment, mln rub. aﬅer VAT Input of ﬁxed assets, mln rub. aﬅer VAT

Amountof ﬁnansing, mln rub. before VAT

COMPONENTS OF SUCCESS JSC TYUMENENERGO COMPANY DEVELOPMENT ANNUAL REPORT | 2011

5.3. DEVELOPMENT OF THE COMMUNICATION NETWORK AND INFORMATION TECHNOLOGIES

JSC Tyumenenergo is a modern energy company, which relies on advanced information technology for its development.

The Company conducts systematic development of GROWTH RATE OF EQUIPPING ENERGY FACILITIES corporate information technology and communica- WITH REMOTE CONTROL SYSTEMS THAT MEET tion networks which, in their turn, help the com- MODERN REQUIREMENTS pany’s core business in achieving its goals.

To ensure the tasks of the dispatcher technological 244 communication and business management of the grid system, diﬀ erent power transmission systems 194 are used. 154

In JSC Tyumenenergo, the following types of communication are in use:

– radio relay communications; 2010 2011 2012 – cable connection; – wired communication; Data in fact Data in planning – command-and-search services; – high-frequency communication along power lines; – wireless communication; munication technologies (ATM, Frame Relay, HDSL, – wired telephone service; RadioEthernet), providing high speed, reliability – trunking radio communications; and security of data processing, effi cient access to – external digital communications based on fi bre shared resources (corporate applications and data- optics; bases, information and referral systems, electronic – satellite telephone service; document systems, the Internet). – cellular telephone service. In 2011, the following measures were taken at the On 01.01.2012, the total length of cable lines, in- communication facilities of JSC Tyumenenergo: cluding fi bre-optic cables, was 15.13 thous. km, the length of radio relay lines — 2.012 thous. km, radio – 49 energy facilities were equipped with links — 129.21 thous. km, high-frequency channels a remote control system, of which at 40 sub- on the lines electricity — 45.32 thous. km, voice stations telecommunication data transmis- channels — 210.32 thousand channel-kilometres. sion is carried out with equipment of voltage class of 6 kV and over, in the international The total capacity of automatic telephone stations protocols IEC-101 (104) with time stamps. is 19,148 numbers, including automatic access to The growing rate of equipping energy facili- the nationwide telephone network of 17,654 num- ties of JSC Tyumenenergo with remote control bers. All JSC Tyumenenergo enterprises have access systems that meet modern requirements is to a nationwide automated telephone network. shown in the chart; – 18 energy facilities have been equipped with The corporate telecommunications network for communication systems; data transmission is based on modern telecom- – over 50 km of fi bre-optic lines have been built.

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As part of the development of automated process In order to increase the reliability of electricity sup- control systems, 85 measures were carried out to ply for customers in 2011, the following was done increase the number of monitored parameters of at the facilities of JSC Tyumenenergo: power, telemechanization of substations, equipment upgrades in order to start using modern data com- – 153 outgoing lines of voltage class of 6, 10, munication protocols. 35 kV were equipped with microprocessor- based relay protection and automatics; Plans for further development of JSC Tyumen- – 20 power transformers were equipped with energo communication networks involve the recon- microprocessor-based relay protection and struction of the automatic telephone exchanges to automatics; use IP telephone, and the replacement of obsolete – 52-110 kV overhead lines were equipped with equipment with digital equipment. The expansion of microprocessor-based relay protection and broadband access network based on RadioEthernet automatics. technology, the growth of optical trunk lines and data transmission, lead to the creation of uniform To increase the reliability of the Tyumen energy information space, which, in turn, will allow man- system in emergency conditions to do with a lack agement to make the quickest possible decisions. of power and lower frequency, the facilities In order to improve power quality and reduce losses, of JSC Tyumenenergo installed 8 sets of microproc- work at the facilities of JSC Tyumenenergo in 2011 essor-based automatic load shedding devices. was continued on the Setup microprocessor voltage regulation devices. 38 devices were installed in the Work on the implementation of this program will past year alone. continue in 2012.

To decrease the negative impact on the equipment Over 500 million roubles were allocated in the for arc faults in the compartments of the distribu- investment program in 2012 for development tion device of 6, 10, 35 kV, in 2011 at two facilities of technological communication and telemechanic of JSC Tyumenenergo, a fast arc protection was systems. installed, made on the basis of ﬁ bre-optic sensors.

OBJECTIVES OF COMMUNICATION AND PROCESS CONTROL SYSTEMS DEVELOPMENT IN JSC TYUMENENERGO FOR 2012

Measures Outcome

Development of network In 2011 three state of the art CCCs using PSI Control soﬅ ware and hardware complex management centres. were built and put into trial operation. This development of the CCCs was done in three branches of JSC Tyumenenergo, Surgut Power Grids, Kogalym Power Grids, and Neﬅ eyugansk Power Grids. In 2012, the CCCs will be put into full industrial operation, which will provide centralized operational and technological (dispatch) management of electrical networks of aﬃ liate companies.

Reconstruction of remote control In accordance with the investment program of JSC Tyumenenergo for 2012, planned systems reconstruction of the telemechanic systems built on the principle of layered archi- tecture based on modern soﬅ ware and hardware production tools with soﬅ ware lock foolproof switchgear at the 110/35 kV SS of JSC Tyumenenergo. JSC Tyumenenergo plans to reconstruct 50 telemechanics system facilities, which will provide a great head start before 2013.

Reconstruction of the channels For 2012 large-scale construction of ﬁ bre-optic communication lines is planned of communication and data along the electricity transmission lines. As backup communication channels transmission satellite terminals will be used, as well as for covering groups of substations in JSC Tyumenenergo aﬃ liates. Nizhnevartovsk electrical networks will use broadband wireless access technology.

COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUALANNUAL REPORT REPORT | 2011 | 2011

JSC Tyumenenergo’s industrial activity is based on strict compliance with international and national environmental safety standards and putting the life and health of employees above business №06 results. REPORT ON SOCIAL RESPONSIBILITY

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Opinion on the Company’s results from Deputy General Director, Chief of Staﬀ , Vadim Nikolaevich Shuvalov

JSC Tyumenenergo is a modern company which is of great importance to the economy of the region Important areas of the in which it operates, as well as the mainstay of a one-enterprise town. It upholds the principles company’s social policy of social responsibility and supports state initiatives towards strengthening the role of employers in the are working with young social sphere. people and veterans Over the years, JSC Tyumenenergo has maintained a high level of social partnership, accepting, and of the energy industry. adjusting the collective bargaining agreement on a regular basis. Work on strengthening social partnership, as well as activities aimed at developing the Company's personnel, have oﬅ en received high Vadim praise from experts the within the industry contest Nikolaevich The Organization of High Social Eﬃ ciency within Shuvalov power production. Traditionally, JSC Tyumenenergo implements comprehensive measures aimed at personnel healthcare, promoting healthy lifestyles, continuous training and education, self improvement and personal growth of employees.

JSC Tyumenenergo is a modern company which is of great importance to the economy of the region lifestyles, continuous training and education, self in which it operates, as well as the mainstay of improvement and personal growth of employees, a one-enterprise town. It upholds the principles of high priority in Tyumenenergo. For several years of social responsibility and supports state initiatives Tyumenenergo has been cooperating with the larg- towards strengthening the role of employers in the est universities in the area of practical training for social sphere. students. In 2011, one result of this collaboration was the opening of energy specialization in the Over the years, JSC Tyumenenergo has maintained largest university in Surgut. a high level of social partnership, accepting, and adjusting the collective bargaining agreement JSC Tyumenenergo is keen that the maximum on a regular basis. Work on strengthening social theoretical knowledge should correlate with reality, partnership, as well as activities aimed at develop- and the experience of the Company employees, ing the Company's personnel, have oﬅ en received oﬅ en truly unique, should be handed down to a new high praise from experts the within the industry generations of engineers. We are striving to obtain contest The Organization of High Social Eﬃ ciency specialists who will be linked to the company not within power production. Traditionally, JSC Tyumen- only by labor relations, but also imbued with the energo implements comprehensive measures spirit of Tyumenenergo and inspired by the history aimed at personnel healthcare, promoting healthy of the Tyumen energy system.

COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUAL REPORT | 2011

THE OPERATIONAL The JSC Tyumenenergo team has for the fourth time reached the top rung MAINTENANCE PERSONNEL of the podium in the all-Russian competition in professional skills among OF TYUMENENERGO IS THE operational and maintenance personnel of electric distribution networks. BEST IN RUSSIA

TYUMENENERGO At the All-Russia competition of regional grid companies "Best Power Grid IS A CLIENTORIENTED Company of Russia" it came first in two categories: "The most client-oriented COMPANY Electric Company" and "For energy saving".

TYUMENENERGO IS 2011 was declared the Year of environmental safety. The production activities A COMPANY OF HIGH of all Company agencies are carried out in accordance with all the environmental SOCIAL RESPONSIBILITY safety requirements, and the undisputed leader on the results of the competition the subsidiary November electrical networks, which operates in the Yamal Peninsula.

JSC TYUMEN JSC Tyumenenergo continued constructive dialogue with public authorities ENERGO IS HAVING and local governments, public organizations and associations and educational A CONSTRUCTIVE institutions training staﬀ for the electricity industry. Words of thanks for social DIALOGUE partnership and cooperation in 2011 came from the regional oﬃ ces of Business Russia, SUPPORT OF RUSSIA, DOSAAF, secondary and higher educational institutions of Tyumen Region, Khanty-Mansiysk — Yugra and Yamalo-Nenets Region and many others.

THE YOUTH ASSOCIATION From the organization of the open Working Youth Festival to the victory in IS GAINING MOMENTUM the ﬁ rst all-Russian Power Companies KVN games between employees of the companies of JSC IDGC Holding and the city and regional intellectual games “What? Where? When?” and “Brain Ring”. Never be content what has been achieved, keep going forward is the motto of the young people of Tyumenenergo.

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6.1. THE ROLE OF TYUMENENERGO IN REGIONAL DEVELOPMENT

The power industry is the most important sector of the economy, one of the main factors of socio-economic development and a key element in national security.

Sustained growth of the regional economy is largely portation facilities, and coupled with the parallel determined by the quality and reliability of electric- development of the transport network will increase ity transmission. The Distribution Grid Company is the investment attractiveness of the territories of obliged to provide the basic needs of enterprises the autonomous area. and households, regardless of socio-economic changes and natural phenomena, which generates JSC Tyumenenergo is a major taxpayer. The amount an increased sense of responsibility in the company of tax revenue that the activities of JSC Tyumen- for stability in the regions it works in. energo bring is comparable to the size of the annual budget of Russian industrial cities. JSC Tyumenenergo, with its responsibility of implementing public electricity sector tasks, is developing and improving the effi ciency of the distribution grid, providing the conditions for technological connection of small and medium businesses, large 5.5 billion roubles consumers and implementing an energy saving policy. Due to the specifi cs of this industry, it has сompany tax payments in 2011 a real impact in many areas of socio-economic development. In 2011 the federal budget received over 2.5 billion The role of JSC Tyumenenergo in socio-economic roubles and Federation subjects about 3 billion rou- development of the region is defi ned as direct, as bles. (For comparison, the budget for 2011 Kurgan well as indirect, participation in it. City with a population of 340,000 is 3.45 billion roubles, Barnaul, with a population of 615,000, Direct participation is the development of the en- 7.1 billion roubles, the city of Surgut (Khanty- ergy infrastructure for industrial and social spheres. Mansiysk Autonomous District — Yugra), with a JSC Tyumenenergo is a government partner in population of 308,000, about 14 billion roubles). the implementation of electrifi cation programs of Therefore, the enterprise is consistently involved the regions. It should be noted that some regional in the implementation of diff erent scale socio-eco- projects are designed to provide in the future indus- nomic development programs, and the smaller the trial development areas across the federal district sources of income for a certain budget, the more and to be a catalyst for growth in certain sectors pronounced this eff ect is. of the Russian Federation. One of the basic principles of JSC Tyumenenergo Thus, implementation of the program to eliminate is to ensure the adequacy of energy infrastructure areas of decentralized energy supply in Khanty- for the region and a constructive dialogue with Mansiysk Autonomous District — Yugra will provide consumers. The principle of sustainable construction an incentive for industrial and logistics develop- has been the basis for the formation of the investment in the western part of the autonomous region ment program. By implementing an investment with access to Sverdlovsk and Perm region, which program, the Company continued building new and will signifi cantly improve the quality of life and will renovating existing facilities, has stepped up the im- encourage the infl ow of investment into the region. plementation of state policies on energy effi ciency Development of the distribution grid in the south of and conservation and has identifi ed new areas Tyumen region will have an impact on development for future development of the regions. Interaction and construction in the manufacturing industries with public authorities helps the company to avoid and will provide additional opportunities for improv- unnecessary construction, to allocate investment ing agricultural production. The development of the resources rationally and to draw the enterprise into energy infrastructure of Yamalo-Nenets Autono- projects based on the principles of public-private mous District will provide a centralized energy partnership. By the end of the year, we can say that supply for the capital of Yamal, will signifi cantly relations between JSC Tyumenenergo and regional 99 increase the reliability of power supply areas with authorities in the area of responsibility is based on high concentrations of gas production and trans- mutually benefi cial cooperation and coordination of COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUAL REPORT | 2011

interests of all groups participating in the social and Today, the most important task in the country’s economic processes. power industry is to increase operating effi ciency and cost reduction of energy. Reliable and high According to its results for 2011, JSC Tyumen- quality electricity supply for existing customers and energo can add client focus to its three undis- timely connection of new facilities allows us to say puted achievements, of reliability, availability and that JSC Tyumenenergo is a platform for the forma- performance: client-oriented practice. New facets in tion of a unifi ed power grid space, the promotion of customer relations, innovative products and forms innovative technologies and energy effi ciency stand- of customer interaction have become Company pri- ards and energy conservation. Today, the Company orities. JSC Tyumenenergo held a series of confer- has one of the lowest in Russia depreciation of ences and meetings with various consumer groups, equipment (about 50%) and losses in the network which made it possible to make its activities more are less than 2.5%. Eff ective investment manage- understandable and transparent. The professional ment and cost management enabled the company community has also appreciated this work. In 2011 to achieve good results: the growth of the invest- JSC Tyumenenergo won in the nomination “The ment program in 2011 to last year is nearly three most customer-oriented electricity company” in the times more, while the growth of prices on electric- “Best Power Grid Company of Russia” competition. ity transmission services was only 0.5%. Having In 2011 JSC Tyumenenergo continued the to work achieved signifi cant progress on energy effi ciency, in its branches located across three RF subjects Tyumen energo seeks to spread its positive experi- (Khanty-Mansiysk — Yugra, Yamalo-Nenets, Tyu- ence of both utilities and consumers interested in men Region), guided by international best prac- sensible energy consumption. tices in environmental safety, health protection, and industrial safety. As a result of the Year of JSC Tyumenenergo seeks to ensure that Tyumen re- Environmental Safety, in the Company’s area of gion is an attractive business and investment region responsibility best practice activities were spread with an active interest in modernization of produc- for improving environmental performance and tion programs and introduction of energy saving compliance to eco-standards. All the relevant facili- technologies. To do this, it is important to establish ties conformed with industry requirements in terms a constructive dialogue with the business commu- of compliance with all of the most comprehensive nity in Tyumen region. This is why the practice of safety standards. The enforcement of standards Agreements is widely used by JSC Tyumenenergo for industrial control and labour protection were in building relationships with stakeholders such as strengthened. Thus, JSC Tyumenenergo has contrib- non-profi t partnerships or non-governmental organ- uted to the energy security of Tyumen region and izations involved in supporting small and medium 100 autonomous districts. businesses. More on this in the next subsection.

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101

COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUAL REPORT | 2011

6.2. PUBLIC AND GOVERNMENT RELATIONS. CONGRESS AND EXHIBITION ACTIVITIES

Public relations is one of the most important aspects of the Company’s work in building a positive image, strengthening goodwill and increasing publicity capital.

In achieving these goals the Company is guided by More than 90% of the publications were made common principles of Community policy reputa- on non-commercial basis and were based on the tion, internal and external information policy, as materials prepared and distributed by the PR Of- established in JSC IDGC Holding and its subsidiaries fi ce of JSC Tyumenenergo. More than 90% of the and affi liates. total volume of materials with reference to the Company was also printed on a non-commercial Among the priorities for this type of management is basis. The main themes of the publications were: forming ideas, strategies and implementation plans production activities of JSC Tyumenenergo, the for eff ective communication with representatives process of investment program implementation, of business and expert community, public authori- the commissioning of new and renovated facilities, ties, the public (including youth and veterans) and the introduction of innovative technologies, training religious organizations, and the media in order to and passing the autumn-winter peak consumption, harmonize relations with the surroundings and corporate events, interaction with public authorities enhance the Company’s business reputation. and consumers, staff training, working with young The Company has organized relations with public people and veterans and environmental measures. authorities and local government. In the interests In 2011 regular meetings were held with mem- of the Company's position as the leading power bers of the Surgut city organization of journalists. grid company in the regions of its activities, during Several training sessions were conducted for mass important events the Company and affi liates invite media employees aimed at improving the com- offi cials from the government and management. Es- petence of journalists in preparing materials on tablished business contacts with the press centre of subjects of electric power. the Government of Tyumen Region, Yamal-Nenets Autonomous District (Yamal), Khanty-Mansiysk JSC Tyumenenergo’s social responsibility, its Autonomous District — Yugra (Khanty-Mansiysk — willingness to engage in constructive dialogue Yugra), local governments, as well as the Offi ce with representatives of the business community, of Information of the Russian Emergencies Ministry, was confi rmed by the signing in 2011 of agree- the Departments of Propaganda and the Public Re- ments between affi liate companies and regional lations State Emergency Ministry of Tyumen region, offi ces of nationwide public organizations. In order Khanty-Mansiysk — Yugra and Yamalo-Nenets. to create favourable conditions for development in the region of small or medium-sized businesses, In order to ensure maximum Company transparency a cooperation agreement was signed in March in a timely manner and in full compliance, fulfi ls its 2011 between JSC Tyumenenergo, Tyumen, and the obligations to disclose information to the wholesale regional offi ce of the All-Russian public organization and retail electricity markets, the organization of Business Russia. As part of the Agreement, during public utilities and natural monopolies, operating the year a number of events were held, aimed at in the area of service provision for the transfer of improving the quality of customer service, avail- heat, by placing the information disclosure on its ability, power grid infrastructure for diff erent groups corporate website, in print media in the region and by of consumers, informing them on the tariff and the sending this information to regulatory authorities. technological connection.

On April 27, 2011 in Tyumen, the conference “En- ergy Eﬃ ciency” took place, in which representatives of government, business, industry and energy dis- 2,735 times cussed issues of cooperation and ways to improve the quality of services to consumers. during the reporting period the Company and the subsidiaries were mentioned in print On May 11, 2011 a meeting was held in Surgut and electronic media (in 2010 — 1,604 times) 102 with representatives of small and medium-sized

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businesses on the topic of “Interaction with of the University and of the Council of Youth, etc.. * The Company’s preventive JSC Tyumenenergo and the business community”, JSC IDGC Holding Having taken part in prepar- work in this area was reﬂ ected on the child which was attended by First Deputy Head of ing youth councils chairmen and its SDCs Student safety website “Spas- Administration of Surgut, CEO of Surgut Chamber Councils, the Chairmen of the partner universities of Extreme” — of Commerce, chairman of the department of the JSC IDGC Holding, and the chairman of the Student www.spas-extreme.ru “Support of Russia” in the Surgut municipality, the Council of SurGU joined the Council of Representa- chairman of the association of private entrepre- tives of the students of partner universities in the neurs of the city of Surgut and leaders of city JSC IDGC Holding. business organizations. On the eve of Energy Day, December 15, “Electric On November 14, 2011 JSC Tyumenenergo organ- Power Systems and Networks” SurGU organized ized a seminar in Tyumen, at the Chamber of an excursion for students enrolled in the relevant Commerce of Tyumen Region, on technological con- course of study, to the substation Northern of Sur- nection to power grids of small, medium and large gut Power Grids”, a branch of JSC Tyumenenergo. enterprises of Tyumen region, to which the Deputy For organizing and hosting this event, for many Governor of Tyumen Region and Chairman of the years of social partnership and cooperation, and RECs of Tyumen Region, Khanty-Mansiysk — Yugra, contributions to the training of future profession- Yamal, were invited. als for the energy industry a letter of thanks was received from SurGU. In order to establish long-term cooperation for managing public safety and the patriotic educa- Good relations have formed between the Company tion of the younger generation, on April 2011 and KMC Centralized Library System of the city JSC Tyumenenergo concluded an agreement of Surgut, which JSC Tyumenenergo helps to stock with the regional oﬃ ce of the All-Russian public up its periodicals library, as well as with the MUK and state DOSAAF organization of Khanty-Man- Surgut museum, in supporting the preparation of siysk — Yugra. As part of the cooperation a joint a permanent exhibition “Surgut: People. Events. event was organized in May, which launched the Facts” in the museum (one of the showcases of the historical memorial action “Relay Banner of Vic- exhibition, as well as information on the electronic tory” on Tyumen soil. resources of the museum, is devoted to the work of JSC Tyumenenergo). As part of the program of JSC IDGC Holding and JSC Tyumenenergo to reduce injuries to third par- In June 2011 young professionals of the executive ties in power facilities in 2011 an Agreement was management of JSC Tyumenenergo and its branch signed on cooperation to improve the electrical Surgut Power Grids, together with representatives safety among trainees, students of educational of the administration of the city of Surgut, the institutions, with the Department of Education and Patriotic Heritage Centre, members of Surgut social Science of Tyumen Region, Yamal-Nenets Autono- organizations, search teams, youth organizations mous Department of Education, Department of of the city of Surgut, World War II veterans and Education and Youth Policy of Khanty-Mansiysk — workers participated in the city event “Bivouac”, Yugra. Since June, Company specialists have devoted to the 70-th anniversary of the Great Patri- conducted about one hundred events on preventa- otic War. So, there is another common thread in the tive measures in the educational institutions of relations between the company and the museum, Tyumen Region. The Company has received several including the International relay race in memory letters of appreciation from the heads of children's and in gratitude “Motherland of achievements — summer camps and educational institutions, where Homeland of the Hero”. these events were held.* An important component of the integrated com- A new round of development in 2011 was co-oper- munications of the Company is work with young ation with the State Educational Institution Surgut people. Youth councils of the Company and its State University, Khanty-Mansiysk Autonomous branches are actively involved in all areas of District — Yugra (SurGU), where reception was open JSC Tyumenenergo, including sports, historical and for training in “Power and Electrical Engineering”. commemorative activities such as the International During the year, there were several working meet- memory and gratitude relay race “Motherland of ings between representatives of JSC Tyumenenergo achievements — Homeland of the Hero” and “Relay and SurGU and, as part of addressing the issues of Race of the Banner of Victory”. cooperation, including in terms of innovation, the organization of Youth Innovation Centre (YIC), the The internal target audience and bearers of the participation of undergraduate and graduate stu- Company’s corporate values are also veterans of dents in the First All-Russian SurGU youth competi- the industry and of the Company. In order to ensure tion of high innovative ideas and projects “Energy of continuity of working generations, the tradition the Future”, the interaction of the Student Council of mentoring, to increase the prestige of energy 103

COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUAL REPORT | 2011

professions and labor and patriotic education of In April 2011 Tyumenenergo specialists took part young people, meetings with veterans were held on in the 9th International Energy Forum “Fuel and various subjects. Energy Complex of Russia in the 21st century”, in November 2011 as part of the united exposi- In order to create favourable conditions for tion of JSC IDGC Holding in the 14-th International strengthening the positive image position of specialized exhibition “Electrical Networks of Rus- JSC Tyumenenergo in the energy market, the Com- sia–2011”. pany has centralized congress and exhibition activities. In 2011, the Company participated in 19 All- The participation of Company specialists in congress Russian / regional trade shows and investment and exhibition events is an important prerequisite forums in the electricity sector. At these events, for the establishment of business and friendly con- JSC Tyumenenergo was presented to the invest- tacts with the authorities, business partners, media ment and the expert community and positioned as and civil society organizations at diff erent levels. one of the largest distribution power grid companies in Russia, following the path of innovative develop- Therefore, thanks to participation in the regional ment, social responsibility and customer service. media forum on the Yamal Peninsula, the Company managed to establish relations with the press offi ce Among the major achievements of the specialists at of the Governor of Yamal, the Tyumen Oblast Union the congress and exhibition events were an interna- of Journalists. Participation in the exhibition “Educa- tional award in the nomination “Leader of moderni- tion and Career 2011” contributed to the establish- zation — 2011” at the economic forum “Elite of the ment of friendly relations with universities and col- Year” (Moscow), a medal in the category of “Develop- leges, which train students in areas of “Energy” and ment and implementation of new technologies” in “Energy Systems and Networks” in Tyumen region. the specialized exhibition “Energy. Power equipment. Energy-saving technologies” (Tyumen), a diploma “For Therefore, maintaining and building new business high professionalism in the presentation of services” relationships with representatives of state and local at the specialized exhibition “Oil. GAS. FEC” (Tyumen), governments and community organizations, as well gold medals in the categories “Best customer-oriented as congress and exhibition activity in 2011 contrib- company” and “Best Image Presentation” in the uted to the strengthening the Company’s business 6th inter-regional exhibition “Surgut: Building. Energy. reputation, as well as a source of positive informa- Utilities” (Surgut), winning the nomination “For the tion on many occasions. eff ective energy-saving” and “The Most Customer- oriented Power Grid Company of Russia” in the contest “Best Power Grid Company of Russia”.

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6.3. ENVIRONMENTAL PROTECTION

The Company fully recognises its role in protecting the environment for future generations and does all it can to minimize its negative impact.

The position of the JSC Tyumenenergo in relation NUMBER OF ESTABLISHED DISCREPANCIES to the environment is expressed in its developed en- OF INTERNAL AND “EXTERNAL” STATE vironmental protection policy within the Company’s ENVIRONMENTAL CONTROL FOR, PCS IMS which represents the basis for determining the Company’s environmental strategy and the target planning of its environmental activities in the short- and middle-term.

When creating and establishing the environmental 37 strategy, its basic principle consisted in detec- tion, elimination and prevention of discrepancies 25 (formation of internal and external environmental reporting, non-observance of nature conservation 18 requirements). When developing and improving it 10 further, its basic principle consisted in prediction 5 and prevention of relevant risks. 2 0 0 Analysis of nature conservation activities of the Company branches for 2008–2010 (three years) made it possible to draw a number of conclu- 2008 2009 2010 2011 sions relevant for further improvement of nature conservation activity in JSC Tyumenenergo. Overall, Internal control State control production activity of all inspected branches corresponds with the requirements of domestic environmental legislation and the standards of IDGC Hold- ing JSC and JSC Tyumenenergo: Service for Supervision of Natural Resource Usage) analysed observance of the compulsory require- – all the branches have permissions from the ments established by the federal laws in the area federal executive bodies for the atmospheric of subsoil, atmospheric air, and the production of emissions and limits for creation and allocation waste treatment in the branch of the Company Tyu- of production and consumption residues; men Distributing Grids. The inspection did not reveal – waste standards and limits for waste creation any breach of environment legislation (Deed No. were not exceeded; 35n/35AO dated 30.09.2011). – manufacturing environmental control of observance of the maximum permitted emission Analysis of results obtained for work in standards, storage and allocation of produc- 2008–2010 made it possible to determine the tion and consumption waste, condition of the priority directions for improving the Company's en- production facilities and electric substations vironmental activity in 2011, to determine them in territories, and high-voltage line protection terms of the degree of signifi cance for conditions zones was performed on time; in 2011 and the short-term. – discrepancies in the primary accounting procedure for all types of production infl uence on In April 2011, aﬅ er implementation the Company's the environment, and discrepancies revealed Standard "Organization of labour and manage- as a result of the state environmental control ment by the environmental service of JSC Tyumen- of the FEB were considerably reduced 1 (Fig.1); energo", requirements were established for the – effi ciency of the manufacturing environment principles of forming the Environmental protection control at all levels of the internal engineering management system which apply to the structural control system was signifi cantly raised. subdivisions of JSC Tyumenenergo. The Company’s document specifi es the structure of the environ- From 5th to 30th September, 2011, the Commit- mental service of JSC Tyumenenergo, taking into tee of the Rospotrebnadzor Administration (Federal account the administrative and territorial function 105

COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUAL REPORT | 2011

DYNAMICS OF POLLUTION PAYMENT, THOUS. RUB.

1,362.0 1,330.3 1,312.2 1,322.2 1,139.5 1,282.0 1,289.6 1,249.5 1,253.7 1,080.0

80.0 40.7 59.5 62.7 68.5

2007 2008 2009 2010 2011

Adverse eﬀect payment Atmospheric emission

Waste allocation payment

CURRENT ENVIRONMENT PROTECTION COSTS, 2011, %

20.7%

20.7% — Water resources protection and harmonious exploitation

2.7% 2.7% — Atmospheric air protection

14.4% 14.4% — Land resources protection and harmonious exploitation

TOTAL 37.8 mln rub.

DYNAMICS OF TARGET STAFF TRAINING ON ENVIRONMENTAL ISSUES, PEOPLE

86 86 85

71 64

2006 2007 2008 2009 2010 2011

of the subdivisions. This structure is bound to the The pollution payment for 2011 was 1.322 mln multi-level organization of the Company's manu- roubles in total for the Company, which comprises facturing activity: 0.7% of the sum charged in 2010 with indexation rate growth in 2011 of 7.8% as against 2010. Over 106 – PD of JSC Tyumenenergo; the last 5 years, the pollution payment shows that – Branch of JSC Tyumenenergo; the Company’s production activity has a moderate WWW.TE.RU – Territorial and Production Department (TPD). inﬂ uence on the environment. ANNUAL REPORT | 2011 REPORT ON SOCIAL RESPONSIBILITY JSC TYUMENENERGO

6.4. EMERGENCY PREVENTION

Timely work on modernization, overhaul repair, replacing of worn and outdated equipment is one of the main directions for preventing emergency situations.

Based on the geographical and social-economical In accordance with the regulation No. 1340 dated characteristics of the location of JSC Tyumen- 10.11.1996 of the RF Government "Concerning the energo, the main kinds of emergency which can procedure of creating and using material resources aff ect the vital activity of workers, offi cers, their for natural and man-made emergency responses”, family and the function of the electrical equipment a material and fi nancial reserve for natural and could be the following: man-made emergency response was created in the Company. 1. Explosions at explosive/fl ammable and fl ammable facilities; JSC Tyumenenergo owns four mobile 110 kV 2. Forest and ground fi re next to conservation substations (PTPA-16 MVA — 2 pcs. and zones; MMPS-25 MVA — 2 pcs.) with the local deployment 3. Flooding part of the territory during the spring at Noyabrskiye PG, Nizhnevartovskiye PG, Surgut- fl ood; skiye PG, TPO Tyumenskoye branches. The storage 4. Natural disasters (storm, hurricane, heavy sites and transport delivery schemes to the facilities prolonged rains, heavy blizzard and abundant have been determined. The mobile substations are snowfall with power lines icing). prepared for possible relocation to the emergency situation locations and further commissioning (an No natural emergencies were registered in 2011 audit has been conducted, as well as all necessary where JSC Tyumenenergo facilities are located. preventive maintenance works and trainings with substation deployment). One of the main areas in emergency prevention is timely work on modernization, complete overhaul As well as contracting agencies, maintenance teams and replacement of worn and outdated equipment. for performing emergency recovery works at the Company’s facilities were created. In total, 102 JSC Tyumenenergo is performing a great deal of teams were created made up of 803 people and work: according to the replacement measures plan 391 equipment units. at several substations, the outdated VMT circuit- breakers have been replaced with modern VGT type JSC Tyumenenergo works with other organizations SF6 circuit-breakers, and power transformers and to provide reliable and uninterrupted power supply transmission lines have been repaired. New substa- to consumers, as well as to prevent and eliminate tions have been introduced which make it possible of any production violations. to unload the existing substations and thus increase energy supply reliability of the vital activity facilities. Over the reporting period, 72 specialized anti- damage trainings were hold for implementing The measures are developed to prevent emergency emergency electric energy restriction schedules situations. The operating personnel are prepar- at JSC Tyumenenergo branches. ing for the winter maximum loads; anti-damage trainings were conducted with the help of contract- 50 exercises were hold with the Ministry of Emer- ing agencies and energy companies in towns and gency Situations, Administrations and government settlements. agencies of the RF subjects. All the exercises were hold in full and were given an overall score of "good". The mobile teams are equipped with all necessary devices, tools, transport, personal protection Personnel and facility protection against natural equipment and are created in the branches of and man-made emergencies in JSC Tyumenenergo JSC Tyumenenergo. Complex, team-headquarters is of a high level and complies with the require- and special tactics- exercises are held according ments of the guideline documents. to the previously developed and confi rmed schedule, as well as the headquarters and facility based anti-damage and fi re prevention trainings. 107

COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUAL REPORT | 2011

6.5. LABOUR PROTECTION

The main direction of Tyumenenergo’s occupational safety policy is to put the life and health of employees above business results.

The Energy industry is one where injury risks are – conduction of annual review contest on labour high, so JSC Tyumenenergo pays extra attention to protection and staﬀ relations among the issues of safety and precautions in the workplace. branches of JSC Tyumenenergo; – holding competitions on professional skills Tyumenenergo is constantly striving to reduce the among the branches of JSC Tyumenenergo. risks of occupational diseases and to prevent workplace injuries. In 2011 the winner of the contest in JSC Tyumenen- ergo for the Occupational Safety and Human JSC Tyumenenergo has developed, implemented, Resources staﬀ was Surgut electrical grids, who and has in operation and maintained in working received the cup for the “Winner of the Occupational order a System of health care and workplace safety Safety competition”. Second and third place were management, which corresponds to the interna- divided between Nizhnevartovsk and Neﬅ eyugansk tional standards of OHSAS 18001:2007. As part of electrical grids, respectively. the health care and workplace safety system, there is a functioning Management of occupational health and workplace safety, the functions and activities aimed at reducing risks to health and workplace safety Program. 3,000,000 Management of occupational health and workplace roubles were allocated for prizes to reward safety at JSC Tyumenenergo includes the following the teams winning the contest risk management functions:

– production control; 3,500,000 Roubles were assigned by JSC Tyumen- – provision of personal and collective protectiona energo in 2012 for awarding the winning teams of equipment; the review contest on labour protection and staff – training, instruction and knowledge tests in the relations; this is a good stimulus for an improving area of occupational health and safety; the quality of labour protection work performed in – development and implementation of collective the Company’s branches. measures in the area of occupational health and safety protection. JSC Tyumenenergo branch Tyumen Distribution Grids” successfully performed in 2011 in the all- The main collective measures intended for an Russia competition on professional skills of the op- improvement in the labour safety condition are eration and maintenance staff of distribution grids in the following: Vologda, where they took fi rst place out of 13 teams.

– certifi cation of work sites in terms of labour The "Program of injury prevention measures” was conditions and certifi cation of compliance with developed by JSC Tyumenenergo in 2011. It com- of labour protection works, bringing working prises 90 measures including: conditions at work sites into compliance with the eff ective standards and regulations; – carrying out initial and periodical staff medical – laboratory control for observance of sanitary examinations; rules and hygiene standards at work sites; – performance of psychophysiological staff tests provision of cleaning and protective means, at the time of employment and during produc- milk, clean drinking water and medicines to tion activity; employees working with hazardous substances; – teaching JSC Tyumenenergo employees fi rst – furnishing work sites with modern certifi ed aid measures in case of emergency with the personal and collective protection equipment, help of resuscitation specialist instructors; including electric arc resistant kits; 108

WWW.TE.RU ANNUAL REPORT | 2011 REPORT ON SOCIAL RESPONSIBILITY JSC TYUMENENERGO

– familiarization of the personnel with the Labour Protection Days are regularly held at all hazards and risks which can arise during work JSC Tyumenenergo branches; inspection of the performance; working sites and operative teams is arranged. – teaching employees at the training ranges on On a monthly basis, the Labour Protection Serv- correct and safe work performance; carrying ices of the Company’s branches perform system out test admittance of maintenance teams; analysis of identifi ed deviations, plan measures – monthly analysis of violations revealed when for eliminating the identifi ed violations and for the inspecting working sites, production teams; prevention of any similar violations. All working – certifi cation of JSC Tyumenenergo working sites of JSC Tyumenenergo, operative-fi eld and sites, laboratory control of the observance of maintenance teams are furnished with certifi ed sanitary regulations and hygienic standards at protection equipment, tools and accessories in com- working sites, etc.. pliance with the regulations. All JSC Tyumenenergo branches store protective equipment in compli- Great attention is paid in the Program to injury ance with the requirements of the Instruction for prevention for visitors to JSC Tyumenenergo facili- application and test of protective equipment used ties, electrical safety classes are run in pre-school in electric installations. Additionally, special electric facilities and schools; additional warning posters arc resistant outerwear is provided for staff safety. and safety signs are put up. 60,671.245 thousand roubles were spent for providing employees with personal protection equipment in In addition, the “Program of measures for reducing JSC Tyumenenergo in 2011. Antiencephalitic suits, de- injury risks to visitors of JSC Tyumenenergo facili- veloped by FPG Energocontract CJSC, are widely used ties for 2010–2011” is eff ective in the Company; in the Company. Also, staff are regularly vaccinated the Program stipulates the following: against consequences of encephalitic mite’s bite.

– reconstruction and complete overhaul of The expenses for the labour protection meas- transformer substations and distributing grids ures in 2011 including the costs of measures on in 2010–2015; providing employees with protective equipment – work with the mass media, provide television increased by 31.66% compared to 2010 and was and radio companies with video- and audio- 102,656.958 thousand roubles, including the costs clips on the risks of electrical shocks risk; per employee of 14.17 thousand roubles. – issue and distribute printed materials (book- lets, posters, calendars, and bookmarks) on Tyumenenergo seeks to prevent injuries in their electrical safety among children — 27 meas- facilities, to enhance the responsibility and com- ures in total. mitment of each employee to create safe working conditions, in compliance with the legislation and All the measures planned for 2011 have been regulations. implemented. The work on injury prevention of JSC Tyumenenergo employees and visitors to Company’s facilities will continue in 2011 and subsequent years.

STRUCTURE OF EXPENSES FOR LABOUR PROTECTION MEASURES IN 2011, THOUSAND RUB., %

59%

60,671.245 (59%) — Provision of the employees with personal protection equipment

12,972.318 (13%) — Overall improvement of 15% 13% working conditions 13% 13,429.685 (13%) — Industrial illnesses prevention

15,583.710 (15%) — Occupational accident prevention

109

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6.6. HUMAN RESOURCES MANAGEMENT

The goal of preserving and increasing the positions of JSC Tyumen energo in the competitive labor market determines the basic trends of the Company’s personnel policy.

PERSONNEL POLICY – enhancement of work with the personnel reserve; The priorities and the main objective of the Com- – enhancement of work on psychophysiological pany’s personnel policy are preservation of a stable provision of occupational safety of production and creative team capable of changing and develop- personnel; ing in complex conditions of the Company’s function. – improvement of staff motivation system and social programs. High-quality and highly professional staff are a modern innovative company’s most valuable Each of the areas has a complex of measures resource and competitive advantage, therefore the whose implementation is scheduled for fi ve years, human resources capital investment is the strategic up to 2014 inclusive. and most reliable investment for creating a basis for its development. STAFF STRUCTURE AND MANPOWER

Based on this, the company's human resources At the end of the reporting year, the company had management policy is a socially oriented policy 7,309 employees working in 3 Russian Federation intended to preserve, maintain and develop staff subjects, including Yamalo-Nenets autonomous potential, as well as to enhance staff effi ciency and district, Khanty-Mansi autonomous district and the the personal interest of employees in achieving the south of Tyumen Region. stated strategic company goals. During 2011, the number of employees increased – the employer and employees have the same by 294, due to the Company policy performed for interest in achieving maximum production and reducing the work carried out by contractors in economic results and for supplying production order to raise the performance reliability of the with highly qualifi ed staff able to solve a wide regional electric grid complex. range of issues; – creation of an optimal organizational and func- The result of the staff policy which is aimed at pre- tional structure, improvement of the remunera- serving and retaining qualifi ed staff and motivating tion system providing more effi cient human employees to do highly effi cient work is a stable resources management. working team. The Company staffi ng level is 96%.

According to the Program of support and develop- Employee turnover has decreased over the last ment of staff potential of JSC Tyumenenergo, the 3 years; compared to 2010, the turnover percentage work on the following main areas continued in 2011: decreased by 0.2 and stands at 3.2% which can be explained by the Company’s personnel policy which – determination of the special category of em- is aimed at preserving and retaining qualifi ed staff ployees whose retention is of key importance and motivating personnel to do work effi ciently. for JSC Tyumenenergo; – development and implementation of measures DYNAMICS OF ACTIVE EMPLOYEE TURNOVER, % on rejuvenating the staff , especially the manufacturing subdivisions personnel (workers and engineering personnel); 3.6% – development of a system of intercommunica- 3.4% tion with specialized educational institutions 3.2% for higher and secondary vocational education making an emphasis on specialized energy educational institutions and departments; – development of the personnel training system 110 with wide use of innovative forms and methods of training, as well as implementation of 2009 2010 2011 WWW.TE.RU fl exible training techniques; ANNUAL REPORT | 2011 REPORT ON SOCIAL RESPONSIBILITY JSC TYUMENENERGO

DYNAMICS OF STAFF STRUCTURE BY CATEGORIES, PEOPLE, %

17% 16% 16%

31% 33% 34% Managers

Specialists and oﬃcers 52% 51% 50% Workers

01.01.2010 01.01.2011 01.01.2012

DYNAMICS OF STAFF STRUCTURE BY AGE, PEOPLE, %

8.3% 8.3% 7.7% Working retired employees 29.6% 29.7% 29.0% 45 to retirement age

29.4% 29.4% 29.7% 35 to 45

25 to 35 25.9% 25.8% 27.9% under 25 6.8% 6.8% 5.7%

01.01.2010 01.01.2011 01.01.2012

The structure of employees by category has been teaching technologies, broadening intercommunica- relatively stable over the last 3 years and workers tion with higher and secondary vocational educa- are the largest group due to production specifi cs. tion institutions, enhancement of work with young specialists, and formation of staff reserves. The reduction in the proportion of workers is due to optimization of the number of support staff in STAFF TRAINING AND DEVELOPMENT the ”worker” category and the strengthening of the capital construction block in connection with the In order to increase the level of manufacturing and growth of the investment program. engineering training of the personnel necessary for providing stable work in the branches and to en- Maintaining a balance between the policy of releas- hance the service work quality, a complex continuing retirement age personnel, retaining highly quali- ous training system has been created covering all fi ed staff and taking on young professionals is an staff categories and management levels. The staff important component of sustaining and renewing training and professional development program the human resources potential of the Company. envisages the following:

The Company’s personnel structure for the age 1. P rofessional training of workers; groups has been stable for three years. The most 2. P rofessional development of workers; numerous personnel category are those aged 25 to 3. P rofessional development of managers 45, who are characterized by of suffi cient skills and and specialists; high working capacity, their share in the overall 4. P re-examination training of managers number is 57.6%. and specialists; 5. T raining of the support personnel for replacing The staff dynamics in terms of education has not executive positions; signifi cantly changed over the last 3 years. 6. U niversities and secondary professional educational institutions. The Company’s personnel development policy 111 consists in providing continuous training using the The total workforce trained in diff erent fi elds and spe- entire range of forms and methods of modern cializations in 2011 was 6,740, including 1,534 man- COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUAL REPORT | 2011

DYNAMICS OF STAFF STRUCTURE BY EDUCATIONAL, PEOPLE, %

1.5% 1.5% 1.7%

40.5% 39.9% 40.7 % Two higher degrees, academic degree

Higher degree 25.4% 24.5% 24.4% Secondary vocational education

Secondary education 32.6% 34.1% 33.2%

01.01.2010 01.01.2011 01.01.2012

agers, 1,780 specialists and oﬃ cers, 3,426 workers, – managers in soﬅ ware (including the heads of which is 93.5% of the average workforce number. RES, operational managers).

The priority areas for training and professional de- The main criteria for including of an employee into velopment of management staff and specialists in the personnel management reserve are: the new working conditions are controlling various kinds of activity and processes, power effi ciency and – high results in production activity; energy saving, business-planning, fi nancial activity, – evident leadership potential; training of the reserve for the positions of top and – ability to learn; mid level managers. At the same time, the require- – mobility (willingness of the candidate to move ments for manufacturing and engineering training to another location). of the power system staff were increased. At the end of the year the management talent pool During 2011, 168 students of high and secondary had 462 employees enrolled in it. special educational institutions have passed working and pre-degree practice in JSC Tyumenenergo; In order to involve young employees in solving 24 of them were employed on completion of the urgent problems of the power grid facilities, to course. Cooperation agreements with GOU VPO enhance their professional competence, to assist in Surgut State University, GOU VPO Tyumen State Oil their career, in 2011 the Company did much work and Gas University, GOU VPO Surgut Pedagogical on the forming of a human resources pool of young University, GOU VPO Omsk State Technical Univer- professionals. A young talent pool was formed by sity were entered into in the fi eld of formation and selecting promising employees under 35 with a high implementation of joint programs for training young potential for development. specialists, engagement of employees to participate in the educational process, arrangement of practice All candidates have passed a competitive selection. and probations in the subdivisions of JSC Tyumen- Those employees who showed the best results were energo. enrolled in the young HR reserves of the various subsidiaries and of the Company itself. FORMING A PERSONNEL RESERVE In all the subsidiaries the competitive selection One of the main objectives of JSC Tyumenenergo in was attended by 96 employees, of them 36 were the area of personnel management is the formation employees of RES and IT, included in the subsidiary and training of a personnel reserve. youth reserves were 84 employees, of them 30 employees of RES and IT. The Company is working with a talent pool of managerial staff and a talent pool of young profes- The selection contest for the youth talent pool sionals. of the Company was attended by 99 employees of the various subsidiaries and the executive of- The managerial talent pool is formed in order to fi ce of Tyumenenergo, the fi nal shortlist included ensure prompt and high quality provision of the 24 employees of Tyumenenergo. requirements of the Company in employees trained to work in the following management positions: The list for the personnel pool of young professionals of the Tyumenenergo was considered in – senior managers; the Youth Council of the Company and approved 112 – mid-level managers (the level of head of by the Deputy Director General — Chief of Staff department); of JSC Tyumenenergo. WWW.TE.RU ANNUAL REPORT | 2011 REPORT ON SOCIAL RESPONSIBILITY JSC TYUMENENERGO

In 2012, the Company and its subsidiaries will con- – the family health activities and children’s sum- duct work on carrier enhancement of the members mer health- campaign are organized annually of the young personnel reserve. For each member in order to restore the working capability of of the young personnel reserve target posts are ap- the employees living in the regions of the Far proved and mentors chosen, in April 2012 individual North and similar areas. development plans will be developed for personal growth of the reserve members (IPDR). Events in Tyumen energo actively helps employees to improve the IPDR include not only training in seminars and their housing. This work is performed in compliance workshops, but also the development of a reserve with the “Provision on corporate assistance and member in the workplace, participation in project support of JSC Tyumenenergo employees in housing activities. improvement” approved by the Board of Direc- tors of JSC Tyumenenergo. The priority is given to CORPORATE SOCIAL RESPONSIBILITY employees in desperate need of housing improvement in order to secure and engage highly qualifi ed The social responsibility of the Company is ex- specialists and to attract young employees. pressed in the implementation of various internal and external social programs. Staff development, 80 Company employees have taken part in the pro- health protection, maintenance of safe working gram. They include foremen, enterprise dispatchers, conditions, nature conservation activity, and the re- and young managers out of the staff reserves. source conservation are in the fi rst set of programs; charitable activity, development of local society, and The personnel insurance system is active and com- sound business practice refer to the second set of prises the following elements: programs. – voluntary health insurance; Like all advanced Russian enterprises, JSC Tyumen- – occupational injury insurance; energo shares social responsibility principles – employee life assurance. accepted in most developed countries and strives to apply them practically in all areas of its activity. According to the collective agreement of Tyumen- energo, the Company’s employees are provided with Regulation of relations between the Company additional benefi ts and social safeguards, particu- and its employees in the social and work fi eld is larly, the collective agreement envisages welfare determined by the Sectorial Tariff Agreement in assistance in case of happy events in an employee’s the RF power industry and the collective agreement private life, as well as for supporting in tragic or of JSC Tyumenenergo. diffi cult life situations.

As a socially oriented company, JSC Tyumenenergo In addition to material incentives, JSC Tyumen- adheres to the following principles: energo applies a moral incentives system. The company regularly presents employees – non-use of forced labour; for state, departmental, corporate and regional – absence of discrimination in the area of labour awards and honourable work distinctions. relations based on the following features: sex, age, nationality, etc..; – wage payment on time; – provision of increase in the staff wage level by persons indexation of the base wage rates and offi cial 400 salaries; in 2011 some people were presented the awards – presence of a system of material and moral at various levels to the anniversary dates, incentives; and the professional holiday – equal opportunities for personal and professional growth of Company employees. The honorary title "Honored Power Engineer of Rus- The work in the following activity fi elds is performed sia" was given to: in the Company: 1. J.K. Birzgal — electrician servicing the PS, – the Program of non-state pension provi- 5-class, of the Energocomplex affi liate; sion of the employees has been eff ective in 2. T.I. Talyanova — electrician to repair the RZA JSC Tyumenenergo since 1994. The program is equipment, 7-class, of the Noyabrsk Power intended to ensure a deserved living standard Grids; for employees upon retirement. Participation of 3. T.I. Kovtun — dispatcher of Nadym RES of the Company in the non-state pension program the Northern Power Grids; strengthens the employees’ trust in the em- 4. S.P. Nazarkina — electrician OBV of Samot- ployer which infl uences the team’s stability and lor RES of the Nizhnevartovsk Power Gridse. 113 renewal with the new young staff ; COMPONENTS OF SUCCESS JSC TYUMENENERGO REPORT ON SOCIAL RESPONSIBILITY ANNUAL REPORT | 2011

The Company has developed the Provision “Concern- with the Youth board of the company and the Veter- ing honourable lapel badges of JSC Tyumenenergo” ans organization: in 2011. In honour of the professional holiday "Power worker Day", 8 most distinguished employees were – meeting with the veterans of Blockaded Len- marked with the fi rst Honourable lapel badges “Merit ingrad; for Tyumenenergo” executed in gold and silver. – senior citizen day; – action “Victory heirs for the Conquerors”; The personnel training program focused on enhanc- – All-Russia action “Victory fl ag”. ing professional knowledge and skills of employees is being constantly implemented. Young specialists took part in such events as the Club of Cheerful and Sharp-witted and meeting of The company holds various professional skills con- leaders of young Company employees. The internal tests in the branches, particularly, among the opera- intellectual game “What? Where? When?" competitive-fi eld teams, protective relaying and automation tion, which had already become a tradition, formed services, distribution grid servicing brigades, and the a strong team of experts. This team become a re- annual contest “Best professional” (among electri- peated prize winner in town games. cians for servicing substations, repairing airlines and equipment of the distribution devices). The youth organization of the Company participated in the district meeting “On the wing” having won the JSC Tyumenenergo participates in higher level com- “Friendship goblet”. petitions on an annual basis. The Company’s team regularly takes the prize positions in the all-Russia The traditional Company’s action "Make your town and international competitions. The JSC Tyumen- cleaner" was held in all branches of JSC Tyumen- energo team won again in 2011 in the all-Russia energo. Activities promoting family values were competition of professional skill in Vologda, where held in 2011: a children’s New Year party and they were the strongest among 13 IDGC teams, af- contest of presentations "Heroes of our Homeland" fi liate companies of IDGC Holding OJSC. They have for children of JSC Tyumenenergo employees were demonstrated robustness in passing the stages, organized. technique of diff erent works execution, implemented innovations, knowledge and experience. The Company pays equal attention to the healthy lifestyle of its employees. Therefore, the following The key value of Tyumenenergo is the employees; activities are organized: therefore great attention is paid to consolidation of corporate culture and establishment of internal – Health days; communication between the company’s employees. – Hiring of sports halls; 114 Over 70 corporate events were organized and held – compensation for purchasing swimming-pool in 2011. The following activities were held jointly membership cards. WWW.TE.RU ANNUAL REPORT | 2011 REPORT ON SOCIAL RESPONSIBILITY JSC TYUMENENERGO

Sports contests are held among the branches of – evolution of the personnel training and profes- JSC Tyumenenergo on an annual basis. The winners sional development system using innovative take part in All-Russian competitions. Following the forms and methods of training, as well as fl ex- results of the Third All-Russia winter sports contest ible training techniques; for the power workers of IDGC Holding JSC distribu- – continuation of work on forming and develop- tion grid complex, the athletes of JSC Tyumen- ing members of the management and youth energo came 4th in the overall team classifi cation reserves within the Management Staff Training and took prize positions in individual competitions: Program, training Company managers on the swimming — silver, tennis — bronze, and 3rd place President Program and MBA programs in vari- in the individual chess classifi cation. The company ous areas; plays an active role in developing children’s sports. – continuation of work on performing psychophysiological examination of the produc- In order to acquire a corporate spirit and pro- tion staff for issuing recommendations on mote creative types of activity, the festive events organization of general health and targeted for Power worker Day were organized and held rehabilitation measures for employees in risk among teams of the structural subdivisions of groups and subject to hazardous manufactur- JSC Tyumenenergo in 2011, as well as the Musical ing factors. Ring “Battle of Generations”, and a poetry contest. The staff policy being executed and planned is The main tasks for 2012 are the following: intended to achieve the main objectives of the Company: provision of high performance indicators, – maintenance of the Company’s stable highly increase in the effi ciency, high-quality staff man- professional staff structure; agement, preservation of a stable, highly qualifi ed, – maintenance of the level of social benefi ts and hard-working team and its further development. safeguard for supporting the stable team; – raising staff loyalty through development of a complex system of staff motivation for the highly effi cient work due to combining material and non-material incentives and preservation of a competitive salary; – improvement of the material incentives system in terms of changing key effi ciency factors in compliance with the priority objectives and tasks set for the Company; – development of the system of interrelation with specialized educational institutions in 115 order to train young specialists; COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUALANNUAL REPORT REPORT | 2011 | 2011 AND PERFORMANCE ANALYSIS

Due economic planning and a set of measures for optimization of operational costs determine the positive tendencies in business and ﬁ nancial performance, which enables Tyumenenergo to position itself as a reliable, prospective and ﬁ nancially independent №07 company. FINANCIAL CONDITION AND PERFORMANCE ANALYSIS

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The Opinion on the Company results for 2011 from Deputy General Director for Economics and Finance Tatiana Valeryevna Petrova

In the present context it is important to follow strictly along the set priorities, as developed by the The policy of Company, not only for the current period, but also for the future. To achieve the objectives of improv- JSC Tyumenenergo ing internal effi ciency in order to achieve maximum results, control was strengthened over the actual is to increase internal implementation of the programs for innovative development, energy effi ciency and conservation, and effi ciency. cost management, relevant at the present time.

Summing up the relevant year of Company operations, it should be noted that, despite working in conditions of increased risk and uncertainty about the mechanisms of regulation of the economy, the Tatiana company is still building up capacity. JSC Tyumen- Valeryevna energo improves the reliability and quality of Petrova service for electric power transmission. Although in 2011 the Company experienced diﬃ culties in connection with the fact that the consumers were leaving the ”last mile”, the quick response of top managers to the changing conditions helped the Company to keep stable ﬁ nancial positions.

Particular attention is paid to the effi ciency As a result of the implementation of programs of procurement procedures, which make it possible in priority areas, the Company annually achieves to save about 1 billion roubles annually. all the key performance indicators and makes a profi t allowing it to fully fund a long-term invest- The Company is implementing a whole range ment program, to extinguish attracted investment of measures to optimize costs in order to reduce credits, and to pay dividends. Thus, the return on the share of JSC Tyumenenergo in the growth of equity (ROE) in 2011 was 4.70%, which is higher electricity tariff s for end consumers. The cost of its than the set value by 0.58 points. Implementation own maintenance in 2011, despite rising infl ation, of the energy effi ciency program reduced the loss remained at the same level, which was achieved by rate (already the lowest among all the companies implementing a costs management program. The of JSC IDC Holding), by 0.02 points. In addition, in Company management intends to continue carrying 2011 all the aproved indicators on the criteria of out measures aimed at curbing the growth of tariff s reliability of supply were achieved. for end consumers.

Work on reducing controllable costs is going on in During the period of its existence, JSC Tyumen- several directions, primarily in terms of administra- energo has not only succeeded in providing reliable tive and management costs. The controllable costs electric power supply and the possibility of connect- of JSC Tyumenenergo in the current year decreased ing regional customers without problem, but also, by 4.6% in relation to the level of 2010 in compara- due to effi cient management, has remained one ble terms. As a result of tight fi nancial discipline in of the most stable and successful companies in the the Company there has been a trend of signifi cant industry. economy over the past 3 years. As a result, the profi tability of electricity transmission services in 2011 was 15.4% and is one of the highest in the JSC IDGC Holding.

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COST MANAGEMENT PROGRAM:

– reducing costs of acquisition of maintenance services; NET PROFIT – reducing the cost of repairs by means of establishing regulated procurement; ROE 4,178 – reducing electric power losses; MLN RUB. – optimization of schemes of servicing 4.70 % newly commissioned facilities.

As a result of implementing innovative development programs, energy eﬃ ciency and energy conservation, and cost management, The Company has kept up with all the key performance indicators. Return on equity (ROE) in 2011 was 4.70%, which is higher than the set value by 0.58 points.

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7.1. COMPANY PROPERTY CONDITION AND FINANCE SOURCE ANALYSIS

The Company exceeded the determined proﬁ tability in 2011 which allowed it to accrue dividends, fulﬁ l the approved investment program and repay credits over and above the plan.

The present section of the annual report provides It should be noted, that a considerable part of information on assets and liabilities, and also liabilities side are raised funds in the form of analyses the dynamics of the fi nancial and eco- advanced payments for technological connection. nomic condition and main indicators of Tyumen- The specifi ed obligations do not require a provision energo’s activity. with the current assets, because they represent the sources for formation of the non-current assets and Considering the specifi c character of its activities, are paid off when providing services on technologi- the predominance of non-current assets in the as- cal connection. set structure is typical for JSC Tyumenenergo.

ASSETS STRUCTURE AS OF 31.12.2011, % LIABILITIES STRUCTURE AS OF 31.12.2011, %

88.94% — Fixed assets 81.86% — Additional capital

4.78% — Accounts receivable 21.49% — Authorized capital

3.05% — Monetary funds 0.31% — Reserve capital

1.68% — Reserves 12.18% — Undistributed proﬁt (unrecovered loss)

8.05% — Long-term liabilities

10.08% — Short-term liabilities

FIXED ASSETS REAPPRAISAL During the period being analyzed, the reappraisal of the cost of the Company’s fi xed cost was performed The reappraisal is performed in compliance with (the last one — as of 31.12.2011). the Provision on accounting “Assets accounting” PBU 6/01 confi rmed by Order No. 26 dated The rise of the residual value of the fi xed as- 30.03.2001 of the RF Ministry of Finance and Order sets as a result of the reappraisal amounted to No. 33 dated 20.07.1998 of the RF Ministry of 12,162 mln roubles as of 31.12.2011, of which Finance “Concerning approval of methodological 11,979 mln roubles are the fi nal appraisal paid to guidelines on fi xed assets accounting”, and also in the Company’s Additional capital. 119 order to bring the fi xed assets cost of Tyumen- energo into compliance with the actually estab- COMPONENTS lished cost of their restoration. OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

DYNAMICS OF BALANCE ASSETS STRUCTURE, MLN RUB.

88,508 94,757 113,315

Fixed assets

Monetary funds 4,354 6,085 3,897 3,356 3,888 Accounts receivable 2,640 Reserves 1,446 1,055 2,144

31.12.2009 31.12.2010 31.12.2011

DYNAMICS OF BALANCE LIABILITIES STRUCTURE, MLN RUB.

13,247 12,846 10,259 8,509 8,408 7,301 Long-term liabilities, mil. rub.

Short-term liabilities, mil. rub.

31.12.2009 31.12.2010 31.12.2011

DYNAMICS OF NET ASSETS, MLN RUB.

The Management of IDGC Holding JSC made a decision in July 2010 to increase the Authorized 104,297 capital by raising the share denomination of the 88,582 registered ordinary shares from 10 roubles to 78,324 100 roubles per share.

The changes in the Charter of JSC Tyumenenergo concerning an increase in the Company’s Authorized capital were registered on February 16, 2011.

31.12.2009 31.12.2010 31.12.2011 Net assets. The shares of JSC Tyumenenergo do not circulate on an organized stock market. Con- sequently, the Company calculates the indicator “Net assets” instead of the market capitalization AUTHORIZED CAPITAL indicator.

As of 31.12.2011, the size of the Company’s The net assets size exceeds the size of the Author- Authorized capital corresponds with the constituent ized capital which is a criterion of stability of the documents and amounts to 27,373,895.1 thousand Company’s ﬁ nancial condition. roubles. A positive dynamics of cost of the net assets has JSC Tyumenenergo addressed IDGC Holding JSC been observed over the three-year period (+33.2% in 2010 as the shareholder owning 100% shares of by 2009). the Company and oﬀ ered to increase the Company’s Authorized capital by raising the share denomina- 120 tion at the expense of the Company property — the Additional capital. WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

TURNOVER OF ACCOUNTS RECEIVABLE, ACCOUNTS RECEIVABLE STRUCTURE TIMES AS OF 31.12.2011, %

6.32%

14.1

10.6 93.68% 7.8

31.12.2009 31.12.2010 31.12.2011

6.32% — Long-term accounts receivable

93.68% — Short-term accounts receivable

The short-term liability of the buyers and custom- ACCOUNTS PAYABLE STRUCTURE ers (30.3%) and the advanced payments made for AS OF 31.12.2011, % the technical connection (53.2%) dominate in the composition of the accounts receivable.

The turnover of the accounts receivable is at high 26.19% 26.20% level which conﬁ rms the liquidity of the Company’s circulating assets.

According to the results for 2011, the greatest percentage of the accounts payable are liabilities 47.61% to suppliers and contractors (26.2%) and advance payments received for technological connection (47.6%).

The accounts receivable/payable reporting collection and formation are performed online using the SAP R/3 program, which helps minimize risks of 26.19% — Suppliers and contractors Company’s insolvency. 26.20% — Other accounts payable 47.61% — Advance payments received

ACCOUNTS RECEIVABLE STRUCTURE, THOUS. RUB.

Periods

2009 2010 2011

Accounts receivable, incl.: 2,639,802 4,354,237 6,085,085

Long-term accounts receivable 43,368 90,188 384,372

Short-term accounts receivable, incl.: 2,596,434 4,264,049 5,700,713

– Buyers and customers 1,891,340 2,493,943 1,841,675 – Advance payments made 640,764 1,708,663 3,238,083 121 – Other accounts receivable 64,330 61,443 620,955 COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

ACCOUNTS PAYABLE STRUCTURE, THOUS. RUB.

Periods

2009 2010 2011

Total accounts payable, incl.: 6,772,348 7,399,885 8,173,285

– Suppliers and contractors 1,441,880 2,341,135 2,140,185

– Advance payments received 3,845,588 2,700,255 3,891,263

Other accounts payable 1,484,880 2,358,495 2,141,837

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7.2. COMPANY FINANCIAL CONDITION ANALYSIS 7.2.1. Renue

JSC Tyumenenergo revenue in 2011 was 47,449 mln roubles (+ 2.8% increment compared to 2010).

Revenue changed in the following activities: is associated with the rise in the federal constituent by 25%: payment for FGC UES OJSC – The proceeds from electric power transmis- services and purchasing electric power in the sion and transit came to 45,764 mln roubles wholesale market for electricity and power; to a in 2011 (+ 7% increment compared to 2010). lesser extent growth in the regional constituent: The extent of services on the electric power Expenses of other regional grid organizations; transmission in the grids of JSC Tyumenenergo – Revenue from technological connection serv- amounted to 68,882 mln kWh which is 3% ices amounted to 1,295 mln roubles. 381 MW lower than 2010. The extent of electric power of installed power were connected in 2011; transmission services decreased by 0.9% – Revenue from non-core activity services against 2010. revenue growth is due to the amounted to 390 mln roubles. rise in the uniform boiler rate. The rate growth

REVENUE STRUCTURE FOR 2011, % REVENUE STRUCTURE, MLN RUB.

47,449 46,147

37,245

96% — Transmission revenue 2009 2010 2011 3% — Technical connection revenue

1% — Non-core activity revenue

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7.2.2. Cost

The cost of sold goods, works, and services of JSC Tyumenenergo in 2011 amounted to 39,162 mln roubles (+5% compared to 2010). The cost growth in 2011 is due to a rise in infrastructure payments and depreciation.

The dynamics of the cost components are given in the table.

Item Growth/Reduction 2010 2011 Item Growth/ Mln Roubles Share, % Mln Roubles Share, % Reduction

TOTAL COST, including: 37,318 100 39,162 100 4.9%

1. Own support 12,281 43 12,736 33 3.7%

1.1. Material expenses 651 2 801 2 23.1%

1.2. Salary fund 4,461 12 5,099 13 14.3%

1.3. Insurance premium 625 2 971 8 55.3%

1.4. Insurance 676 2 660 2 -2.3%

1.5. Taxes 318 1 211 1 -33.5%

1.6. Payment for connection to the grids 602 5 12 0 -98.1% of FGC UES OJSC

1.7. Others 4,949 21 5,953 15 20.3%

2. Depreciation 4,854 12 5,395 14 11.1%

3. Infrastructure payments, including: 20,182 45 21,030 54 4.2%

3.1. Services of FGC UES OJSC 11,387 28 13,929 36 22.3%

3.2. Services of distribution grid companies 3,921 11 3,759 10 -4.1%

3.3. Purchased electric power for loss 4,875 6 3,342 9 -31.4% compensation

Main factors of cost change: the Consumer Price Index according to the Sectorial Tariff Agreement in the RF electrical – Reduction in the cost item “Payment for energy complex and the Collective agreement connection to the grids of FGC UES OJSC" of JSC Tyumenenergo; was made according to the terms of the – Depreciation growth occurred as a result of signed contracts on technological connection a reappraisal of the fi xed assets in compliance of objects of end applicants to the grids of with the accounting policy of the company as JSC Tyumenenergo which did not require con- of 31.12.2011 with the average reappraisal nection of the objects of JSC Tyumenenergo to factor of 1.064; the Federal Grid Company; – The growth of payment for the services of – Salary growth is related to a rise in base wage FGC UES OJSC is due to the rise in the rates 124 rates and offi cial salaries in accordance with for support and for loss compensation in the

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

grids of FGC UES OJSC approved by the Federal Khanty-Mansiysk Autonomous District — Yu- Tariﬀ Service of Russia; gra, Yamal-Nenets Autonomous District; – The reduction of payment for the services of – Reduction of the costs for purchasing electric other distribution grid companies occurred due power in order to compensate for losses in to the change in the mutual settlements model the grids of JSC Tyumenenergo is due to the of individual territorial grid organizations ac- reduction in the actual purchasing price of cording to the tariﬀ s approved by the Re- the electric power in the wholesale market for gional Energy Commissions of Tyumen Region, electricity and power.

COST STRUCTURE, %

54.1% 53.7%

32.9% 32.5%

13.8% 13.0%

2010 2011 2010 2011 2010 2011 JSC Tyumenenergo Services of FGC UES OJSC, other distribution Depreciation support expenses grid companies, purchased electric power for loss compensation

JSC Tyumenenergo support expenses Services of FGC UES OJSC, other distribution grid companies, purchased electric power for loss compensation.

FINANCIAL RESULTS, MLN RUB.

No. Item Actual Change

2010 2011 + / - %

1. Revenue from product sales, TOTAL 46,147 47,449 1,303 3%

incl.:

1.1. Core business production (services), TOTAL 45,693 47,059 1,366 3%

2. Product cost, TOTAL -37,318 -39,162 1,844 5%

3. Gross proﬁ t, TOTAL 8,829 8,288 -541 -6%

– proﬁ tability of all activity types 19.13% 17.47% -1.67% -

– proﬁ tability of electric power transmission services 15.15% 15.40% 0.25% -

4. Sales proﬁ t 8,829 8,288 -541 -6%

5. Other revenue, TOTAL 2,711 4,979 2,268 84% 125

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

No. Item Actual Change

2010 2011 + / - %

7. Proﬁ t before tax 7,895 6,046 -1,849 -23%

8. Proﬁ ts tax and other similar compulsory payments -2,380 -1,868 511 -21%

9. Net proﬁ t 5,515 4,178 -1,338 -24%

– in terms of % of proceeds 12% 9% -3% -

10. ROE, % 6.95% 4.70% -2.25% -

11. EBITDA 13,435 11,813 -1,622 -12%

With the growth in product sales proceeds, the cost NET PROFIT DYNAMICS, MLN RUB. has also increased by 5%; as a result, the gross proﬁ t of the Company for the current year amounted to 8,288 mln roubles. 5,515

The proﬁ tability of the electric power transmission services was 15% (growth +0.3% compared to 4,178 2010).

According to results of 2011, EBITDA amounted to 1,669 11,813 mln roubles (12% less than 2010) which is due to a decrease in net profi t of 1,338 mln roubles. Aﬅ er profi t tax is paid and other similar compulsory payments are made, the net profi t of the Company was 4,178 mln roubles. 2009 2010 2011 The net profi t of the Company in 2009–2011 remains at high stable level which indicates the company’s stable fi nancial condition. Clause 8 of the Company Charter, the reserve funds of the Company should amount to 5% of the PROFIT DISTRIBUTION Authorized capital.

According to the results for 2011, JSC Tyumen- As a result of the growth in the Company’s Au- energo made a net profi t of 4,178 mln roubles. thorized capital in 2011, based on the decision of the annual general meeting of shareholders, The scheduled net profi t distribution following the JSC Tyumenenergo will send a share (5%) of the results of 2011 is presented in the table. net profi t to the amount of 209 mln roubles to the reserve funds. According to the Federal law No. 208-FZ “Concern- ing joint-stock companies” dated 26.12.1995 and

NET PROFIT DISTRIBUTION, MLN RUB.

Item 2009 2010 2011

Undistributed net proﬁ t 1,669 5,515 4,178

Reserve funds - - 209

Dividends 430 442 370

Use of proﬁ t for current year investments 1,239 5,073 3,599 126

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

COMPANY KPI KEY PERFORMANCE INDICATORS The loss of electric power for delivery to the grid AND DATA ON THEIR IMPLEMENTATION in 2011 equalled 2.53% which is lower than the approved scheduled task by 0.02 points and is a The target values of annual and quarterly key per- positive factor. formance indicators (KPI) of JSC Tyumenenergo for 2011 have been approved by the Board of Directors The effi ciency of investment program implementa- of the Company on 14.10.11. (minutes of meeting tion with regard to the current year (in terms of No. 15/11). time frames and cost) amounted to 96% with the approved scheduled task ≥ 95%. The key performance indicator ROE (effi ciency of equity capital covered by cash fl ow) in 2011 According to JSC Tyumenenergo results, the KPI amounted to 4.70% which is 0.58 points higher specifi ed for the Company for 2011 have been than the scheduled task. implemented in full. * In order to calculate the No. Item Units 2011 ROE indicator, net profi t is used covered by the cash fl ow which corresponds to approved actual the net profi t value (line 2400 of the “Profi t and 1. Return on equity (ROE) covered by cash fl ow* % 4.12 4.70 loss statement”) reduced by the diff erence of the following clauses of the 2. Loss of electric power for delivery to the grid % 2.5 2.5 annual accounting reports adjusted by the profi t tax: – profi t of previous years 3. Reliability criterion, simultaneously: revealed in the reporting period (less profi t tax); 3.1.– Prevention of an excess of accidents falling under the signs Accident 00– accounts payable write- of clause 2.1 Instructions number off (less profi t tax); – revenue from reappraisal of fi nancial investments, 3.2.– System indicator of power supply interruption to consumers <1 <1 equity securities circulat- (for feeders of 6 kW and over) ing in the stock market; – write-off of restructured tax fi nes and penalties. 3.3.– System indicator of average duration of power supply interruption <1 <1 to consumers (for feeders of 6 kW and over)

4. Eﬃ ciency of investment program implementation with regard to the cur- % ≥ 95 96 rent year (in terms of time frames and cost)

127

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

7.3. FINANCIAL AND ECONOMIC INDICATORS OF COMPANY ACTIVITIES

Capability of the Company to fulﬁ l its obligations in due time is conﬁ rmed by the obtained values of liquidity ratios.

DYNAMICS OF LIQUIDITY RATIOS OF THE COMPANY

1.3 1.2 1.1 1.0 1.0 0.8

31.12.2009 31.12.2010 31.12.2011

Quick liquidity ratio (QLR) (f1line1200-f1line1231)/(f1line1500-f1line1530)

Current liquidity ratio (CLR) (f1line1200-f1line 1210-f1line1220-f1line1231)/ (f1line1500-f1line1530)

The performed analysis of the liquidity ratios of fi xed asset objects, whose cost is repaid within showed that the following has aff ected their values the periods exceeding 12 months, the amounts of adversely in 2011: the performed advance payments and prepayments are refl ected in the balance sheet in Sec- – according to the changes in the Provision on tion I "Non-current assets" regardless of the time accounting (PBU), the advance payments made of repayment of obligations associated with the for capital construction and for purchasing received advanced payments (prepayments) by the fi xed assets were transferred from the current contractors. assets to the non-current assets; – considerable proportion of the advance pay- As a result, the accounts receivable (line 1232) ments received from consumers for technolog- reduced by 1,867 mln roubles. ical connection services in the total sum of the accounts payable; ADVANCE PAYMENTS RECEIVED FROM – creation of assessed reserves in accordance SUBSCRIBERS ACCORDING TO TECHNOLOGICAL with RF legislation. CONNECTION AGREEMENTS

ADVANCE PAYMENTS MADE FOR CAPITAL In most cases, the payment for technological con- CONSTRUCTION AND PURCHASING FIXED ASSETS nection services represents advance payments made at the stage of an entry into the agreement According to the Letter of the RF Ministry of Finance which are actually a long-term source of funds, No. 07-02-06/42 dated April 11, 2011, when because of their relation to performance of the making advance payments and prepayments for long-term Company investment program. works, services and other, related to construction 128

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

COMPANY FINANCIAL STABILITY ANALYSIS

Indicator 2009 2010 2011

Equity-assets ratio (independence) 0.8 0.8 0.8

Equity to debt ratio 3.8 5.2 4.5

Ratio of borrowed funds to capital and reserves, % 26.2 19.1 22.2

Cover of payments for servicing liabilities, % 100.7 150.5 398.0

Overdue liabilities, % 0.01 0.01 0.01

These kind of liabilities, according to the results for An important characteristic of company fi nancial 2011, amount to over 47% of the whole sum of stability is the debt to equity ratio. According to short-term accounts payable. results of the year, the equity exceeds the amount of raised funds by a factor of 4.5. It should be noted, that the Company fulfi ls its obligations on technological connection agreements The indicator “cover of payments for servicing lion a timely basis, thus providing an improvement in abilities” refl ects the capability of the company to the liquidity ratios of the Company. pay debts. The reduction of the loan debt by 65% in 2011 compared to 2010 (repayment of the loan RESERVES GENERATION and interests) has provided growth in the indicator by the factor of over 2.6. In accordance with PBU 8/2010 (Order of the RF Ministry of Finance of December 13, 2010 Following the results of 2011, the Company has No 167n), the accounting policies of the Company virtually no overdue accounts receivable (0.01%) for 2011 established the procedure for calculat- which is indicative of the high level of fi nancial ing the allowance for estimated liabilities. The size discipline in the enterprise. of "estimated liabilities" of the Company (provision for vacation pay, for the payment of annual DEBT PORTFOLIO MANAGEMENT fees, as well as an allowance for claims brought against the Company) as at 31.12.2011 amounts The activity of JSC Tyumenenergo in attract- to 1,691.4 million roubles. ing borrowed funds is performed in compliance with the approved Provision on loan policy of the LIQUIDITY MANAGEMENT distribution grid company and the Standard of debt position management of associated and dependent Liquidity management is an essential condition for companies of IDGC Holding JSC. They state that, the maintaining the fi nancial stability of the Company. system of limits on loan capital size making it pos- Monitoring and analysis of this indicator is per- sible to predict company solvency and to establish formed to control of the quick liquidity ratio (QLR) management authority for making fi nancial deci- (prevention from liquidity reduction risk). sions in the area of credit.

Liquidity risk control envisages preservation of In 2011, JSC Tyumenenergo held open electronic suffi cient cash resources for fulfi lling obligations auctions for the right to enter into agreements on and is carried out by the competent scheduling and opening non-revolving credit lines for fi nancing analysis of cash fl ow in the entire Company and in investment activity. Following the auctions, loan the branches. agreements were entered into to 9,000 mln roubles at rates which are lower than the offi cial bank The equity-assets ratio describes the share of rate of the Central Bank of the Russian Federation equity intended for formation of Company property eff ective as of the date of signing. Within the indi- and defi nes a degree of dependence of the enter- cated agreements, the credit funds were attracted prise on external fi nancing. of 6,985 mln roubles in 2011 for fi nancing investment activity and refi nancing investment expenses Over the period being analyzed, the equity-assets incurred earlier. In addition, JSC Tyumenenergo ratio value remains at a high level (above the rec- paid debt according to the credit agreement of ommended value of 0.5-0.6). 2009 to the amount of 2,000 mln roubles in the same period ahead of schedule. 129

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

DYNAMICS OF LOAN INDEBTEDNESS CREDIT PORTFOLIO STRUCTURE AND WEIGHTED AVERAGE INTEREST RATE, OF AS OF 31.12.2011, % %, MLN RUB.

12.14% 19% 26%

8.09% 7.77%

55%

11,522 5,522 10,507

2009 2010 2011 19% — Gazprombank

Credits and loans, mln rub. 55% — Sberbank

Weighted average interest rate, % 26% — Bonded debt

CREDIT PORTFOLIO STRUCTURE, %

23% 49% 26%

77% 51% 74%

2009 2010 2011

Bonded debt Long-term credits

The favourable situation in the corporate credit- The largest Russian banks act as the Company’s ing market in 2011 (absence of liquidity prob- partners in the area of crediting, namely Sberbank lems of banks and low interest rates) allowed RF OJSC and Gazprombank OJSC. Participation of JSC Tyumenenergo to nearly double its credit these banks in the credit portfolio as well as the portfolio from 5,522 mln roubles (as of the end signifi cant volume of borrowed funds attracted in of 2010) to 10,507 mln roubles (as of the end 2011 on benefi cial terms confi rm the fi nancial sta- of 2011). The weighted average interest rate for bility of JSC Tyumenenergo and confi dence of the credits and loans of the Company as of the end banks in the Company’s reliability and stability. of 2011 amounted to 7.77% (8.09% as of the end of 2010). Analysis gives quite a full complex evaluation of the fi nancial and economic condition of the Company The credit portfolio of JSC Tyumenenergo as and its development prospects. of 31.12.2011 consists of a bonded loan of 2,700 thousand roubles and long-term investment In spite of the economic crisis over the last few credits of 7,807 thousand roubles. years in the Russia, the Company remained solvent and strengthened its occupied position on the PLANS FOR ATTRACTING BORROWED FUNDS: power market.

In 2012, JSC Tyumenenergo plans to attract bor- Competent scheduling of all business processes 130 rowed funds for fi nancing Company investment and an effi ciently implemented credit and fi nance and current activity. The attraction of loan funds policy are the contribution to the fi nancial stability WWW.TE.RU will be carried out in accordance with RF legislation of the Company. through purchasing procedures. ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

131

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

7.4. ACCOUNTING BALANCE SHEET

ACCOUNTING BALANCE SHEET FOR DECEMBER 31, 2011

Codes

Form according to OKUD 0710001 (National Management Documentation Classifier)

Date (day, month, year) 31.12.2011

OKPO (General Classifier of Enterprises and 05770629 Organizations) Company: JSC Tyumenenergo Taxpayer Identification Number INN (Taxpayer Identification Number) 8602060185 Type of economic activities: power transmission Business legal structure/form of ownership: Open OKVED (Russian Classification of Economic 40.10.2 Joint Stock Company / private property Activities) Unit of measurement: thousand roubles Location (address): OKOPF/OKFS 47/16 626406, RussiaTyumen Region Universitetskaya ul. 4, Surgut, OKEY 384 Khanty-Mansi Autonomous Okrug — Yugra

Explanations Narrative name Code For For For December 31, December 31, December 31, 2011 2010 2009

12 3 4 56

ASSETS

I. NONCURRENT ASSETS

table 5.1 Intangible assets 1110 30 35 11

table 5.2.1– Research and development results 1120 7,417 4,958 3,683 5.2.2

table 5.3.1– Fixed assets 1130 113,315,075 94,756,666 88,507,591 5.3.6

– land plots and environmental facilities 1131 36,592 12,434 10,468

– buildings, machinery and equipment, 1132 100,560,934 87,327,458 80,007,498 constructions

– other types of ﬁ xed assets 1133 256,567 143,685 104,337

table 5.3.5 incomplete construction 1134 10,592,184 5,442,773 5,721,889

table 5.3.6 advances paid for major construction works 1135 1,868,798 1,830,316 2,663,399 and purchase of ﬁ xed assets

Income-bearing investments in tangible assets 1140 0 0 0

table 5.4.1 Financial investment 1150 322,351 361,642 321,740 and 5.4.2

table 5.7.2 Deferred tax assets 1160 142,141 134,989 220,368

132 clause 3.3 Other noncurrent assets 1170 452,777 507,243 574,027

WWW.TE.RU TOTAL for section I 1100 114,239,791 95,765,533 89,627,420 ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

12 3 4 56

II. CURRENT ASSETS

table 5.5 Inventories 1210 2,143,682 1,054,502 1,446,120

Value added tax on acquired assets 1220 83,251 86,471 87,352

table 5.6.1– Accounts receivable 1230 6,085,085 4,354,237 2,639,802 5.6.3

payment expected beyond 12 months aﬅ er 1231 384,372 90,188 43,368 the reporting date

expected payments within 12 months from 1232 5,700,713 4,264,049 2,596,434 the accounting date

– buyers and ordering customers 123201 1,841,675 2,493,943 1,891,340

– advance payments made 123202 3,238,083 1,708,663 640,764

– other accounts receivable 123203 620,955 61,443 64,330

ﬁ nancial investment (except for cash equiva- 1240 0 0 98 lents)

F.4 cash and cash equivalents 1250 3,887,729 3,355,876 3,897,139

– cash desk 1251 2,052 1,532 1,077

– settlement accounts 1252 1,883,757 1,952,237 2,789,640

– other funds 1254 2,001,920 1,402,107 1,106,422

clause 3.6 Other current assets 1260 962,197 882,134 1,174,118

TOTAL for section II 1200 13,161,944 9,733,220 9,244,629

BALANCE 1600 127,401,735 105,498,753 98,872,049

LIABILITIES

III. CAPITAL AND RESERVES

F.3, clause Charter capital (share capital, authorized 1310 27,373,895 2,737,389 2,737,389 3.7 fund, contributions of partners)

F.3, table Revaluation of noncurrent assets 1340 61,000,018 73,686,306 67,997,844 5.3.1

F.3 Surplus 1360 400,375 400,375 400,375

table 2.3 Retained earnings (uncovered loss) 1370 15,522,417 11,757,595 7,188,382

– of past years 1371 11,344,498 11,757,595 7,188,382

F.2– of the reporting period 1372 4,177,919

TOTAL for section III 1300 104,296,705 88,581,665 78,323,990 133

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

12 3 4 56

IV. LONG-TERM LIABILITIES

table 5.6.7; Borrowed funds 1410 7,807,344 5,522,416 11,522,416 5.6.8

– bank loans repayable in more than 12 1411 7,807,344 2,822,416 8,822,416 months aﬅ er the reporting date

– loans repayable in more than 12 1412 0 2,700,000 2,700,000 months aﬅ er the reporting date

table 5.7.2– Deferred tax liabilities 1420 2,242,921 2,068,516 1,015,633

Estimated liabilities 1430 0 0 0

table 5.6.5 – Other liabilities 1450 208,431 918,110 709,081 5.6.6.

TOTAL for section IV 1400 10,258,696 8,509,042 13,247,130

V. SHORT-TERM LIABILITIES

table 5.6.7; Borrowed funds 1510 2,700,000 0 0 5.6.8

table 5.6.5; Accounts payable 1520 8,173,285 7,399,885 6,772,348 5.6.6

– suppliers and contracts 1521 2,140,185 2,341,135 1,441,880

– advance payments received 1522 3,891,263 2,700,255 3,845,588

– other accounts payable 1523 2,141,837 2,358,495 1,484,880

Prepaid income 1530 0 7 30

table 5.7.1 Estimated liabilities 1540 1,691,429 748,234 489,385

clause 3.13 Other liabilities 1550 281,620 259,920 39,166

TOTAL for section V 1500 12,846,334 8,408,046 7,300,929

BALANCE 1700 127,401,735 105,498,753 98,872,049

Directorr P.A. Mikheev Chief accountantaccccccounouoununtanttaanant L.I. Lagunova 28 February,ebbruaruruauary,ryry,y 202201201212

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WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

PROFIT AND LOSS STATEMENT FOR THE 12 MONTHS OF 2011 Codes

Form according to OKUD 0710002 (National Management Documentation Classifier)

Date (day, month, year) 31.12.2011

OKPO (General Classifier of Enterprises and 05770629 Company: JSC Tyumenenergo Organizations) Taxpayer Identification Number Type of economic activities: power transmission INN (Taxpayer Identification Number) 8602060185 Business legal structure/form of ownership: Open Joint Stock Company / private property OKVED (Russian Classification of Economic 40.10.2 Unit of measurement: thousand roubles Activities) Location (address): 626406, RussiaTyumen Region OKOPF/OKFS 47/16 Universitetskaya ul. 4, Surgut, Khanty-Mansi Autonomous Okrug — Yugra OKEY 384

Explanations Narrative name Code For For 12 months 12 months 2011 2010

12 3 4 5

clause 3.15 Proceeds 2110 47,449,294 46,146,689

including: – proceeds from power transmission 2111 45,764,026 42,805,029

– proceeds from technical connection 2112 1,295,222 2,888,245

– other proceeds 2113 390,046 453,415

table 2.1 sales cost 2120 (39,161,545) (37,467,753)

including: – cost of power transmission 2121 (38,714,431) (36,470,810)

– cost of technical connection 2122 (83,874) (603,865)

– other costs (363,240) (393,078)

Gross proﬁ t (loss) 2100 8,287,749 8,678,936

clause 2.5 Business expenses 2210 (0) (0)

clause 2.5 Administrative expenses 2220 (0) (0)

Sales proﬁ t (loss) from sales 2200 8,287,749 8,678,936

Income from participation in other companies 2310 498 28

Interest receivable 2320 79,933 197,307

Interest payable 2330 (372,163) (686,266) table 5.11 Other income 2340 4,898,393 2,513,721 135 table 5.11 Other expenses 2350 (6,848,205) (2,958,884) COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

12 3 4 5

Income (loss) before taxation 2300 6,046,205 7,744,842

table 2.3 Current proﬁ t tax 2410 (2,079,880) (2,140,924)

table 2.3 including permanent tax liabilities (assets) 2421 700,556 844,413

table 2.3 Modiﬁ cation of deferred tax liabilities 2430 162,931 -167,078

table 2.3 Modiﬁ cation of deferred tax assets 2450 7,152 -85,379

table 2.3 Other 2460 41,511 42,535

Net proﬁ t (loss) 2400 4,177,919 5,393,996

REFERENCE:

table 5.3.1 result of revaluation of noncurrent assets 2510 11,978,951 5,293,679 excluded from the net proﬁ t (loss) for the period

AggregateAggAgAggggregrerege ateatattee ﬁ nannnancial performance for the period 2500 16,156,870 10,687,675

tableabblele 2.2222 2 BasB Basicasiicc eareaeearningsarninnininingsgs (lo((l(loss)loloss)s peper share (rub.) 2900 15 20

DirectorDirirrectecccttoror P.A. Mikheev ChiefChihihiefef accacaaccountantccccouno ntantatanant L.I. Lagunova 28 February,FebFeFebebruaruruauary,rryy 220201212

2.1. COST VALUE OF SOLDLD GOODS, PRODUCE, WORKS AND SERVICES BY COST ELEMENTS

Narrative For the 12 months For the 12 months of 2011 of 2010 Name Code

123 4

sales cost 6510 (39,161,545) (37,467,753)

including: – material costs 6511 10,669,876 12,459,562

– labor costs 6512 5,249,846 4,460,944

– allocations for social needs 6513 840,766 644,155

– amortization 6514 5,394,949 4,853,957

– other expenses: including 6515 17,006,108 15,049,135

– services of Open Joint Stock Company Federal 65151 13,928,925 11,386,775 Grid Company on power transfer via the Uni- ﬁ ed National Electric Grid (UNEG)

– services of JSC IDGC Holding on arrangement 65152 281,259 330,960 of operation and development of Uniﬁ ed Elec- 136 tric Grip of Russia – taxes and other fees 65153 211,892 231,213 WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

1234

– payments to Non-governmental Pension Fund 65154 422,046 422,046

– rental fee 65155 239,380 209,507

– passenger transportation services 65156 317,551 299,254

– property insurance expenses 65157 125,557 125,608

– property protection services 65158 242,103 185,325

– information services 65159 103,017 73,142

– buildings maintenance services 65160 218,975 269,277

– other 65161 915,403 1,365,779

FOR REFERENCE: changes in inventory and 6520 reserves(increase [+], decrease [-])

including: – incomplete production 6521 174,532 -359,313

– ﬁ nal products 6522 49 380

TOTAL COST PRICE of the produce sold 6500 (39,161,545) (37,467,753) (goods, works, services)

including: – cost of produce sold 6530 39,161,545 37,467,753

Business expenses 6550 (0) (0)

Administrative expenses 6560 (0) (0)

Directorcttoror P.A. Mikheev Chiefefef accacaaccountantccccounouununtantatanant L.I. Lagunova 288 FebFeFFebruary,ebebruaruruauary,ryy 220201212

137

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

2.2. EARNINGS PER SHARE, DILUTED EARNINGS PER SHARE

Narrative For the 12 months For the 12 months of 2011 of 2010 Name Code

123 4

Net proﬁ t (uncovered loss) of the reporting period 6610 4,177,919 5,393,996

Dividends on privileged shares3 6611 (0) (0)

Base proﬁ t (loss) of the reporting period 6612 0 0

Average weighted number of ordinary shares 6613 273,738,951 273,738,951 in circulation of the reporting year

Basic earnings (loss) per share (rub.) 6620 15 20

Average weighted market value of one ordinary share 6621 0 0

possible increase of proﬁ t and average weighted 6630 ХХ number of shares in circulation

as a result of conversion of privileged shares into 6631 ХХ ordinary shares

– possible proﬁ t increase 66311 0 0

– additional number of shares 66312 0 0

As a result of conversion of bonds into ordinary shares 6632 ХХ

– possible proﬁ t increase 66321 0 0

– additional number of shares 66322 0 0

as a result of fulﬁ llment of purchase and sale 6633 ХХ agreements shares at a lower-than-market value

– contractual purchase price 66331 0 0

– possible proﬁ t increase 66332 0 0

– additional number of shares 66333 0 0

Diluted earnings per share (rub.) 6640 0 0

– adjusted value of base proﬁ t 6641 0 0

– adjusted value of average weighted number 6642 0 0 of shares in circulation

Director P.A. Mikheev Chief accountant L.I. Lagunova 28 February, 2012

138

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

2.3. TAXATION OF PROFIT

Narrative Code For the 12 months For the 12 months of 2011 of 2010

123 4

Income (loss) before taxation 6710 6,046,205 7,744,842

including taxed at the rate of: 20% 67101 6,046,205 7,744,842

permanent diﬀ erences 6711 3,502,778 4,222,064

FOR REFERENCE: permanent diﬀ erences corresponding 67111 0 0 to time diﬀ erences

Modiﬁ cation of deductible time diﬀ erences 6712 35,760 -426,895

Modiﬁ cation of taxed time diﬀ erences 6713 814,656 -835,390

Tax base 6714 10,399,399 10,704,621

Expenses (income) on income tax 6720 1,250,524 1,591,205

Qualiﬁ ed expenses (income) on income tax 6721 1,209,241 1,548,968

Permanent tax liabilities (assets) 6722 700,556 844,413

FOR REFERENCE: Modiﬁ cation of deferred taxes posted 67221 2,046 0 to proﬁ ts and losses

Expenses (income) on deferred taxes 6723 170,083 -252,457

including: – Modiﬁ cation of tax assets 67231 7,152 -85,379

– Modiﬁ cation of deferred tax liabilities 67232 162,931 -167,078

Current proﬁ t tax 6724 (2,079,880) (2,140,924)

Adjustment of income tax amounts for previous tax 6725 41,283 42,237 periods

Other tax payments and sanctions from proﬁ t 6730 (228) (298)

Sales proﬁ t (loss) from ordinary activities 6740 4,177,919 5,393,996

Director P.A. Mikheev Chief accountant L.I. Lagunova 28 February, 2012

139

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

STATEMENT OF CHANGES IN EQUITY FOR 2011

Codes

Form according to OKUD 0710003 (National Management Documentation Classifier)

Date (day, month, year) 31.12.2011

OKPO (General Classifier of Enterprises and 05770629 Organizations) Company: JSC Tyumenenergo Taxpayer Identification Number: INN (Taxpayer Identification Number) 8602060185 Type of economic activities: power transmission Business legal structure/form of ownership: Open OKVED (Russian Classification of Economic 40.10.2 Joint Stock Company / private property Activities) Unit of measurement: thousand roubles Location (address): OKOPF/OKFS 47/16 626406, RussiaTyumen Region Universitetskaya ul. 4, Surgut, OKEY 384 Khanty-Mansi Autonomous Okrug — Yugra

3.1. CAPITAL FLOW

Narrative name Code Charter Own shares Surplus Reserve Retained Total capital repurchased capital earnings from share- (uncovered holders loss)

12345678

Capital value for 3100 2,737,389 (0) 67,997,844 400,375 7,188,382 78,323,990 December 31, 2009

For 2010 3210 0 0 5,788,602 0 5,393,996 11,182,598 Increase in capital — TOTAL:

including: – net proﬁ t 3211 хх хх5,393,996 5,393,996

– property revaluation 3212 хх5,788,602 х 0 5,788,602

– income posted directly 3213 хх 0 х 00 to capital increase

– additional issue of 3214 0 0 0 хх0 shares

– increase of the shares 3215 0 ххх0x par value

– entity reorganization 3216 0 0 0 0 0 0

capital decrease — TOTAL: 3220 (0) (0) () (0) (924 923) (924 923)

including: – loss 3221 хх хх() (0)

– property revaluation 3222 хх(0) х (494,923) (494,923)

140 – expenses posted 3223 хх () х (0) (0) directly to capital WWW.TE.RU decrease ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

12345678

– decrease of shares par 3224 (0) 0 хх 0 (0) value

– decrease of the number 3225 (0) (0) хх 0 (0) of shares

– entity reorganization 3226 0 0 0 0 0 (0)

– dividends 3227 хх хх(430,000) (430,000)

Modiﬁ cation of surplus 3230 хх-100,140 х 100,140 х

Modiﬁ cation of reserve 3240 хх х0 (0) х capital

Capital value for 3200 2,737,389 (0) 73,686,306 400,375 11,757,595 88,581,665 December 31, 2010 for 2011 3310 24,636,506 0 -12,657,555 0 4,177,919 16,156,870 Increase in capital — TOTAL: including: – net proﬁ t 3311 хх хх4,177,919 4,177,919

– property revaluation 3312 хх11,978,951 х 0 11,978,951

– income posted directly 3313 хх 0 х 00 to capital increase

– additional issue of 3314 0 0 хх0 shares

– increase of the shares 3315 24,636,506 х -24,636,506 х 0x par value

– entity reorganization 3316 0 0 0 0 0 0

Capital decrease  TOTAL: 3320 (0) (0) () (0) (441,830) (441,830) including: – loss 3321 хх хх(0) (0)

– property revaluation 3322 хх () х (0) (0)

– expenses posted 3323 хх () х (0) (0) directly to capital decrease

– decrease of shares par 3324 (0) ххх0 (0) value

– decrease of the number 3325 (0) (0) хх 0 (0) of shares

– entity reorganization 3326 0 0 0 0 0 (0)

– dividends 3327 хх хх(441,830) (441,830)

Modiﬁ cation 3330 хх-28,733 х 28,733 х of surplus 141

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

12345678

Modiﬁ cation of reserve 3340 хх х0 (0) х capital

Capitalpital valuevaluluue 330033 27,373,895 (0) 61,000,018 400,375 15,522,417 104,296,705 for DecemberDeecemcecememberbeberer 31331,1,,2 220110110101111

Director P.A. Mikheev Chief accountant L.I. Lagunova 28 February, 2012

3.2. ADJUSTMENTS DUE TO CHANGES IN ACCOUNTING POLICY AND CORRECTION OF ERRORS

Narrative name Code For December Changes in equity for 2010 (2) For December 31, 2009 31, 2010 due to net proﬁ t due to other (loss) factors

123456

Capital — TOTAL 3400 78,722,894 5,515,426 4,863,679 89,101,999 before corrections

correction due to: – changes in accounting policy 3410 -398,904 -121,430 0 -520,334

– correction of errors 3420 0 0 0 0

aﬅ er corrections 3500 78,323,990 5,393,996 4,863,679 88,581,665

including: retained earnings (uncovered 3401 7,587,286 5,515,426 -824,783 12,277,929 loss): before corrections

correction due to: – changes in accounting policy 3411 -398,904 -121,430 0 -520,334

– correction of errors 3421 0 0 0 0

aﬅ er corrections 3501 7,188,382 5,393,996 -824,783 11,757,595

other capital items for which 3402 71,135,608 0 5,688,462 76,824,070 corrections were made: (for articles) before corrections

Charter capital 3402 2,737,389 0 0 2,737,389

Own shares repurchased from 3402 0 0 0 0 shareholders

Additional capital 3402 67,997,844 5,688,462 73,686,306 142 Surplus 3402 400,375 0 0 400,375 correction due to: WWW.TE.RU – changes in accounting policy 3412 0 0 0 0 ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

123456

– correctioncoc r of errors 3422 0 0 0 0

aﬅ erer correctionscoorrrrececttiionons 3502 71,135,608 0 5,688,462 76,824,070

Director P.A. Mikheev Chief accountant L.I. Lagunova 28 February, 2012

3.3. NET ASSETS

Narrative name Code For December 31, 2011 For December 31, 2010 For December 31, 2009

123 45

Net assetsts 3600 104,296,705 88,581,672 78,324,020

Director P.A. Mikheev Chief accountant L.I. Lagunova 28 February, 2012

3.4. CALCULATIONULATION OOFF THE ESTIMATED VALUE OF NET ASSETS OF JSC TYUMENENERGOENEN

Narrative name Account- For For For ing balance December 31, December 31, December 31, sheet line 2011 2010 2009 code

123 45

I. Assets

1. Intangible assets 1110 30 35 11

2. Research and development results 1120 7,417 4,958 3,683

3. Fixed assets 1130 113,315,075 94,756,666 88,507,591

4. Income-bearing investments in tangible assets 1140 0 0 0

5. Long-term and short-term ﬁ nancial investment 1150 + 322,351 361,642 321,838 1240

6. Other noncurrent assets 1160+1170 594,918 642,232 794,395

7. Inventories 1210 2,143,682 1,054,502 1,446,120

8. Value added tax on acquired assets 1220 83,251 86,471 87,352

9. Accounts receivable 1230 6,085,085 4,354,237 2,639,802 143

10. cash and cash equivalents 1250 3,887,729 3,355,876 3,897,139 COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

12345

11. Other current assets 1260 962,197 882,134 1,174,118

12. TOTAL assets considered for calculation (sum of 127,401,735 105,498,753 98,872,049 items 1-11)

II. Liabilities

13. Long-term borrowings 1410 7,807,344 5,522,416 11,522,416

14. Deferred tax liabilities 1420 2,242,921 2,068,516 1,015,633

15. Estimated liabilities 1430+1540 1,691,429 748,234 489,385

16. Other non-current liabilities 1450 208,431 918,110 709,081

17. Short-term borrowings 1510 2,700,000 0 0

18. Accounts payable 1520 8,173,285 7,399,885 6,772,348

19. Other current liabilities 1550 281,620 259,920 39,166

20. TOTAL assets considered for calculation (sum of 23,105,030 16,917,081 20,548,029 items 13-19)

21. Cost of net assets of a joint-stock company (total 104,296,705 88,581,672 78,324,020 assets considered for calculation (line 12, less total liabilities considered for calculation (line 20))

Director P.A. Mikheev Chief accountant L.I. Lagunova 28 February, 2012

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WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

CASH FLOW STATEMENT FOR THE 12 MONTHS OF 2011

Codes

Form according to OKUD 0710004 (National Management Documentation Classifier)

Date (day, month, year) 31.12.2011

OKPO (General Classifier of Enterprises and 05770629 Organizations)

INN (Taxpayer Identification Number) 8602060185

Company: JSC Tyumenenergo OKVED (Russian Classification of Economic 40.10.2 Taxpayer Identification Number: Activities) Type of economic activities: power transmission Business legal structure/form of ownership: Open OKOPF/OKFS 47/16 Joint Stock Company / private property Unit of measurement: thousand roubles OKEY 384

Narrative name Code For 12 months For 12 months 2011 2010

123 4

Cash ﬂ ows from current operations

Proceeds  TOTAL 4110 48,612,764 46,727,678

including: – from sales of produce, works and services 4111 48,233,667 44,693,014

– including from sale of produce, goods, works and services to parent 411101 925 1,062 companies, subsidiaries and associated companies

– rent payments, license payments, royalty, commission fees and 4112 120,822 171,817 similar payments

– including rent payments, license payments, royalty, commission fees 411201 1,029 659 and similar payments from parent companies, subsidiaries and associated companies

from resale of ﬁ nancial investments 4113 0 0

– including from resale of ﬁ nancial investments to parent companies, 411301 0 0 subsidiaries and associated companies

other proceeds 4119 258,275 1,862,847

– including other proceeds from parent companies, subsidiaries and 411901 0 0 associated companies

Payments — TOTAL 4120 (39,987,382) (36,142,305)

including: – to suppliers (contractors) for raw materials, materials, works, services 4121 (28,258,553) (26,762,252)

– including services provided by Open Joint Stock Company Federal Grid 412101 (11,338,093) (10,105,151) Company on power transfer via the UNEG 145

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

123 4

– including to suppliers (contractors) for raw materials, materials, 412102 (444,175) (388,975) works and services of parent companies, subsidiaries and associated companies

due to remuneration of employees' labor 4122 (4,950,715) (4,180,862)

per cent for debt instruments 4123 (369,110) (687,574)

– including per cent on debt instruments to parent companies, 412301 (0) () subsidiaries and associated companies

company tax 4124 (1,784,258) (2,016,635)

other payments 4129 (4,624,746) (2,494,982)

– including other payments to parent companies, subsidiaries and 412901 (2,808) (0) associated companies

Cash ﬂ ow balance from current operations 4100 8,625,382 10,585,373

Cash ﬂ ows from investment operations

Proceeds — TOTAL 4210 78,101 237,311

including: – from sale of noncurrent assets (except for ﬁ nancial investments) 4211 27,673 59,408

– including from sale of noncurrent assets (except for ﬁ nancial 421101 0 0 investments) to parent companies, subsidiaries and associated companies

from sale of shares of other companies (holdings) 4212 686 3

– including from sale of shares of other companies (holdings) to parent 421201 0 0 companies, subsidiaries and associated companies

from repayment of extended loans, from sale of debt securities (rights of 4213 0 0 claims against third persons)

– including from repayment of extended loans, from sale of debt 421301 0 0 securities (rights of claims against third persons) of parent companies, subsidiaries and associated companies

dividends, interest on debt ﬁ nancial investments and similar proceeds from 4214 49,742 177,900 holdings in other companies

– including dividends, interest on debt ﬁ nancial investments and similar 421401 0 0 proceeds from holdings in other companies from parent companies, subsidiaries and associated companies

other proceeds 4219 0 0

– including other proceeds from parent companies, subsidiaries and 421901 0 0 associated companies

Payments  TOTAL 4220 (12,714,728) (4,941,463)

including: due to purchase, creation, modernization, reconstruction and preparation 146 for use of noncurrent assets 4221 (12,614,092) (4,813,476)

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

123 4

– including payments to parent companies, subsidiaries and associated 422101 (0) (0) companies due to purchase, creation, modernization, reconstruction and preparation for use of noncurrent assets due to purchase of shares of other companies (holdings) 4222 (10,232) (0)

– including payments to parent companies, subsidiaries and associated 422201 (10,200) (0) companies due to of shares of other companies (holdings) due to purchase of debt securities (rights of claims against third persons), 4223 (0) (0) extension loans to third persons

– including payments to parent companies, subsidiaries and associated 422301 (0) (0) companies due to purchase of debt securities (rights of claims against third persons), extension loans to third persons interests on debt instruments included into the investment asset price 4224 (37,167) (124,914)

– including interests on debt instruments included into the 422401 (0) () investment asset price to parent companies, subsidiaries and associated companies other payments 4229 (53,237) (3,073)

– including other payments to parent companies, subsidiaries 422901 (0) (0) and associated companies

Cash ﬂ ow balance from investment operations 4200 -12,636,627 -4,704,152

Cash ﬂ ows from ﬁ nancial operations Form 071

Proceeds  TOTAL 4310 6,984,928 7,516 including: – borrowings 4311 6,984,928 0

– including borrowings from parent companies, subsidiaries 431101 0 0 and associated companies contributions of owners (members) 4312 0 0

– including contributions of owners (members) of parent companies, 431201 0 0 subsidiaries and associated companies from issue if shares, increase of holdings 4313 0 0

– including from issue of shares, increase of holdings of parent compa- 431301 0 0 nies, subsidiaries and associated companies from issue of bonds, promissory notes and other debt securities etc.. 4314 0 0

– including from issue of bonds, promissory notes and other debt 431401 0 0 securities etc.. of parent companies, subsidiaries and associated companies other proceeds 4319 0 7,516

– including other proceeds from parent companies, subsidiaries 431901 0 0 and associated companies 147 Payments — TOTAL 4320 (2,441,830) (6,430,000) COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

123 4

including: – to owners (members) due to repurchase of shares (holdings) 4321 0 (0) of the company or their withdrawal from membership

– including to owners (members) due to repurchase of shares (holdings) 432101 () () of the company or their withdrawal from membership parent companies, subsidiaries and associated companies

for dividends and other payments on proﬁ t allocation to owners (members) 4322 (441,830) (430,000)

– including for dividends and other payments on proﬁ t allocation to 432201 (441,830) (430,000) owners (members) of parent companies, subsidiaries and associated companies

due to repayment (repurchase) of promissory notes and other debt 4323 (2,000,000) (6,000,000) securities, repayment of borrowings

– including due to repayment (repurchase) of promissory notes and 432301 (0) (0) other debt securities, repayment of borrowings to parent companies, subsidiaries and associated companies

other payments 4329 (0) (0)

– including other payments to parent companies, subsidiaries 432901 (0) (0) and associated companies

cash ﬂ ow balance from ﬁ nancial operations 4300 4,543,098 -6,422,484

Cash ﬂ ow balance for the reporting period 4400 531,853 -541,263

Opening cash balance and balance of cash equivalents for the reporting 4450 3,355,876 3,897,139 period

Closing cash balance and balance of cash equivalents for the reporting 4500 3,887,729 3,355,876 period

Director P.A. Mikheev Chief accountant L.I. Lagunova 28 February, 2012

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WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

JSC TYUMENENERGO Explanatory note to accounting statements for 2011

1. GENERAL INFORMATION

Full name: Open Joint Stock Company Tyumenenergo

Abbreviated name: JSC Tyumenenergo

Legal address: Universitetskaya ul. 4, Surgut, Tyumen Region, Khanty-Mansi Autonomous Okrug — Yugra

Location and postal address: Universitetskaya ul. 4, Surgut, Tyumen Region, Khanty-Mansi Autonomous Okrug — Yugra

The Company is included into the Uniform State Register of Legal Entities under Primary State Regis- tration Number (OGRN) 1028600587399 which is certiﬁ ed by Certiﬁ cate of State Registration series 86 No. 000503856 of October 14, 2002 issued by the Inspection of the Russian Federation for Taxes and Levies for Surgut, Khanty-Mansi Autonomous Okrug.

The entity is registered with the Interdistrict Inspectorate of the Ministry of the Russian Federation for Taxes and Levies for Major Taxpayers No. 4, which is certifi ed by Registration Certifi cate series 99 No. 000018264 of June 30, 2004. INN (Taxpayer Identifi cation Number) 8602060185, KPP (Taxpayer Record Validity Code) 997450001, OKATO (All-Russian Classifi er of Political Subdivisions) 71136000000.

The entity is registered with its local tax authority at the territory of the Russian Federation which is certiﬁ ed by Certiﬁ cate 86 No. 001630190, KPP 860201001.

The entity is registered with non-budgetary funds, which is certiﬁ ed with respective notiﬁ cations.

JSC Tyumenenergo is an interregional distribution grid company being a subject of natural monopoly in the sphere of power transmission services, operating under state governance. The company operates on the territory of three subjects of the Russian Federation: Yamal-Nenets Autonomous Okrug, Khanty-Mansi Autonomous Okrug — Yugra, and Tyumen Region.

As of December 31, 2011, the company has 9 branches securing functions related to power transmission and distribution. The branches are duly registered.

149

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

Branch name Location

Surgut Power Grid ul. 30 let Pobedy 34, Surgut, Khanty-Mansi Autonomous Okrug — Yugra, Tyumen Region 628403

Nizhnevartovsk Power Grid ul. Permskaya 22, Nizhnevartovsk, Khanty-Mansi Autonomous Okrug — Yugra, Tyumen Region 628600

Neﬅ eyugansk Power Grid ul. Mira 15, Neﬅ yugansk, Khanty-Mansi Autonomous Okrug — Yugra, Tyumen Region 628300

Northern Power Grid North-Eastern industrial area, Noviy Urengoy, Yamal-Nenets Autonomous Okrug, Tyumen Region 629300

Energokompleks Mikrorayon Energetikov 70, Nyagan, Khanty-Mansi Autonomous Okrug — Yugra, Tyumen Region 628187

Noyabrsk Power Grid ul. Kholmogorskauya 25, Noyabrsk, Yamal-Nenets Autonomous Okrug, Tyumen Region 629804

Kogalym Power Grid pr. Neﬅ yanikov 5, Kogalym, Khanty-Mansi Autonomous Okrug — Yugra, Tyumen Region 628486

Uraysk Power Grid Elektroseti settlement, Uray, Khanty-Mansi Autonomous Okrug — Yugra, Tyumen Region 628281

Tyumen Distribution Mains ul. Daudelnaya 44, Tyumen, Tyumen Region 625000

The Company performed the following types of activities within the reporting period:

– power transmission along the National (All-Russian) Power Grid and power grids belonging to it under the right of ownership or under other grounds; – services on technological connection; – other types of activities not contrary to the current legislation of the Russian Federation.

The Company’s charter capital includes 273,738,951 pieces of ordinary shares with the par value of 100 roubles each.

The Holder of the Company’s Register is LLC Reestr-RN. 100% of shares belong to JSC IDGC Holding. The Com- pany’s shares are not in circulation at any organized securities market.

The current edition of the Company’s Articles of Association was approved by the Resolution of the Board of Directors of JSC IDGC Holding No. 96 пр/12 of June 28, 2011.

The Company’s Auditor: LLC Nexia Pacioli is a member of Non-commercial Partnership Institute of Professional Auditors.

Information on the number of employees.

for 2009 for 2010 for 2011

Average number of employees 6,114 6,961 7,243

Increase in the number of employees is related to the transfer of the functions on maintenance and current repair of ﬁ xed assets to be managed with its own resources.

The powers of the sole executive body are fulﬁ lled by Director General.

150 The Board of Directors includes:

WWW.TE.RU – Nikolay Nikolaevich Shvets — Chairman of the Management Board, Director General of JSC IDGC Holding; – Evgeniy Evgenyevich Kryuchkov — Director General of JSC Tyumenenergo until December 23, 2011; ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

– Madina Valeryevna Kaloeva — Deputy Director of the Department for Economic Regulation and Property Relations at the Fuel and Energy Complex of the Ministry of Energy of the Russian Federation; – Pavel Vladilenovich Golubev — Head of the Department for Field Engineering and Maintenance and Current Repair of JSC IDGC Holding; – Andrey Fedorovich Ponomarchuk — Deputy Director General for Economy and Finance of JSC NITS-EES; – Aleksey Valeryevich Sannikov — Member of the Management Board, Deputy Director General of JSC IDGC Holding; – Vladimir Vyacheslavovich Inozemtsev — Head of the Department for Power Transport and Power Saving of JSC IDGC Holding; – Aleksey Vladimirovich Sergutin — Director for Economy of JSC IDGC Holding; – Aleksey Valeryevich Kurochkin — Director for Corporate Policy of JSC IDGC Holding; – Mikhail Yuryevich Kurbatov — Member of the Management Board, Deputy Director General of JSC IDGC Holding; – Sergey Vyacheslavovich Vasilyev — Member of the Management Board, Director for Legal Issues of JSC IDGC Holding.

The Internal Audit Committee includes:

– Izumrud Aligadzhievna Alimuradova — Director for Internal Audit and Risk Management (Head of the Department for Internal Audit and Risk Management) of JSC IDGC Holding; – Vladimir Nikolaevich Arkhipov — Head of the Security Department of JSC IDGC Holding; – Lyudmila Dmitrievna Kormushkina — Head of the Department of Internal Audit, Inspections and Examinations of the Department of Internal Audit and Risk Management of JSC IDGC Holding; – Konstantin Sergeevich Serebryakov — Head of the Direction for Corporate Events of JSC IDGC Holding; – Irina Aleksandrovna Filippova — Leading Expert of the Department of Internal Audit, Inspections and Examinations of the Department of Internal Audit and Risk Management of JSC IDGC Holding.

The following oﬃ cers are responsible for drawing up accounting (ﬁ nancial) statements:

Acting Director General: Pavel Aleksandrovich Mikheev; Chief accountant: Lyudmila Ivanovna Lagunova.

FINANCIAL SITUATION OF JSC TYUMENENERGO

Evaluation of the ﬁ nancial situation is displayed in the table below:

Narratives 2009 2010 2011

Return on equity (ROE), % 2.30 6.95 4.68

Current liquidity 1.26 1.15 1.00

Quick liquidity 1.05 1.01 0.82

Leverage 0.26 0.19 0.22

Equity-assets ratio 0.79 0.84 0.82

Accounts receivable for the end of the period 2,639,802 4,354,237 6,085,085 (thousand roubles)

Accounts payable for the end of the period (thousand roubles) 6,772,348 7,399,885 8,173,285

The Company’s business and ﬁ nancial activities were cost-eﬃ cient over the analyzed period.

The Company timely fulﬁ lls its obligations, which is certiﬁ ed by the values of the liquidity ratios.

The leverage ratio displays the Company’s low dependency on borrowed means and its being positioned within the recommended value (<0.7). 151

The equity-assets ratio is also relatively high (higher than the recommended 0.5-0.6). COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

EXTRAORDINARY ECONOMIC EVENTS AND THEIR CONSEQUENCES

The Company experienced a number of extraordinary events within the reporting period the consequences of which did not inﬂ uence considerably the Company’s ﬁ nancial performance.

The primary type of activities on power transmission is related to use of highly dangerous objects under aggressive conditions.

The Company entered into an agreement of voluntary property insurance for cases of occurrence of extraordinary events. Insurance fees are paid under the above agreement and in case any extreme events set in the Company receives an insurance benefi t for the suff ered by the Company losses. The insurance benefi t amounted to 30,440 thousand roubles in 2011.

2. BASIS OF PRESENTATION OF INFORMATION IN STATEMENTS

The accounting statements were drawn up under the Accounting Policy approved by the Director’s Order No. 436 dated December 29, 2006 with the further amendments and additions executed in form of separate orders. The accounting policy was developed based on the current rules of accounting and preparation of statements established by the legislation of the Russian Federation and accounting regulations (Russian Accounting Standards).

There were no substantial deviations from the rules established by regulatory documents for accounting which could have any inﬂ uence on the Company’s ﬁ nancial situation.

2.1. R&D RESULTS

The terms for application of the obtained results of scientiﬁ c-research, development and engineering and technological works are determined by the Company at its own discretion, individually for each object and based on the estimated data on the period within which it is possible to receive economic beneﬁ ts (income), but not more than 5 years.

Expenses on scientiﬁ c-research, development and engineering and technological works are written oﬀ on a linear basis and evenly within the accepted terms.

2.2. FIXED ASSETS

Real estate objects, the construction of which was completed, the price of which was fully shaped and which were commissioned, are accounted as part of the ﬁ xed assets irrespective of the fact whether the respective documents were submitted for state registration.

The price of the ﬁ xed assets (except for groups: oﬃ ce appliances and furniture) is repaid by monthly linear accrual of amortization based on the useful lives of the said objects.

The useful lives of the ﬁ xed assets accepted for accounting in 2002–2010 are determined within the limits ﬁ xed by the Decree of the Government of the Russian Federation No. 1 of January 1, 2002.

The useful lives of the ﬁ xed assets accepted for accounting in 2011 are determined based on:

– the estimated tear and wear depending on the operation conditions, natural conditions and inﬂ uence of aggressive environments as well as the repair system; – estimated useful life in accordance with the estimated performance or capacity;exiting regulatory restrictions of the object’s operation.

For groups “offi ce appliances” and “furniture” the declining balance amortization method is applied based on the residual value of the fi xed assets item for the beginning of the year and amortization rate calculated based on the useful life and acceleration ration amounting to 3. The property of the above groups is displayed in the statements as other fi xed assets.

On an annual basis as of the beginning of the year, the Company performs revaluation of its ﬁ xed assets (except for non-core ﬁ xed assets) with the useful life amounting to more than 5 years and included into the fol- 152 lowing groups: – Buildings; WWW.TE.RU – Constructions; – Power machines and equipment. ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

An independent appraiser is engaged for the revaluation which performed by means of direct recalculation based on documented market prices.

The Company does not display the revaluation result in its accounting and statements in case the revaluation ratio for all groups of ﬁ xed assets does not exceed 1.05.

2.3. INCOMPLETE CONSTRUCTION

Capital investment related to construction, reconstruction and improvement of items of the fi xed assets is displayed in the Company’s books at account 08 “Capital investment”. Capital investment is performed on a contract basis. The expenses are shaped as the stages of performed works are accepted based on the Certifi cates made aﬅ er form KC-2 “Acceptance Certifi cate for the Performed Works” and form KC-3 “Information Sheet on the Price of the Performed Works” signed with the contractor. Any risks of accidental loss in case of damaging construction objects before their acceptance by the Customer against Certifi cates of Completed Construction shall be borne by the Contractor. Insurance of the objects within construction agreements shall be performed by general contractors.

Any advance payments made to the contractors under a construction agreement the subject of which is construction, reconstruction or improvement of objects of ﬁ xed assets are displayed in the balance sheet based on narrative “Fixed assets” in the amount without VAT, and the amount of the VAT paid by the contractors is displayed as part of current assets.

2.4. INVENTORIES

Mechanical facilities with the useful life of more than a year and the price of more than 40 thousand roubles area accounted as part of inventories.

Special clothing and special equipment is accounted as part of inventories irrespective of their price and life. Evaluation of inventories at their release to production or any other withdrawal is accomplished at the average cost price.

2.5. RECOGNITION OF INCOME AND EXPENSES

Proceeds from sales, provision of services and performance of works for ordinary activities and proceeds from sale of ﬁ xed assets and other property are recognized in the accounting according to the accrual method.

Proceeds for agreements with a prolonged cycle of servicing and/or performance of works are recognized as the work is fi nished or service provided. Agreements of technological connection with the fulfi llment terms amounting to more than a year are defi ned as agreements with a prolonged servicing period.

Commercial expenses are accounted as part of general business expenses due to their minority.

Administrative expenses are distributed on a monthly basis and posted to the cost of services of primary and other types of activities thus shaping full cost price for each type of activities.

2.6. CHANGES IN ACCOUNTING POLICY

Due to the fact that PBU 8/2010 “Provisions, Contingent Liabilities and Contingent Assets” became eﬀ ective, the accounting policy for 2011 established the procedure of accrual of provisions for estimated liabilities. The Company recognizes liabilities on the remaining unused holidays for the end of the reporting period and on payment of annual bonuses as its estimated liabilities.

The above amendment to the accounting policy is displayed in retrospect in the accounting statement for December 31, 2009 and for December 31, 2010 be means of adjustment of the information of retained profits, short-term contingent liabilities and deferred tax assets.

Additional information is displayed in table 3.2. of clariﬁ cations to the balance sheet.

Amendments of the accounting policies due to changes of the price criteria at recognitions of property as ﬁ xed assets from “more than 20,000” to “more than 40,000” is only applicable to the property accepted for accounting in 2011.

The accounting policy for 2012 established specifi cation of forms of accounting statements, the working plan 153 was supplemented with analytical characters for the purposes of drawing up management statements, determined approaches to classifi cation of cash fl ows and cash equivalents. Short-term fi nancial investments COMPONENTS with the times not exceeding 90 calendar days are deemed to be cash equivalents. OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

THOUSAND ROUBLES

Balance sheet account Balance sheet Modifi cation Modifi cations Modifi cation line number of balances for 2010 of balances for 31.12.2009 for 31.12.2010

Deferred tax assets 1160 +97,877 +28,819 +126,696

Deferred expenses (paid leaves) 216 (form -7,396 -6,154 -13,550 until 2011)

TOTAL balance sheet assets 1600 +90,481 +22,665 +113,146

Retained proﬁ t of previous years 1370 -398,904 -121,430 -520,334

Estimated liabilities 1540 +489,385 +144,093 +633,478

TOTAL balance sheet liabilities 1700 +90,481 +22,665 +113,146

The accounting policy for 2012 introduced no material changes into the previously accepted accounting methods.

3. DISCLOSURE OF ESSENTIAL REPORTING NARRATIVES

3.1. FIXED ASSETS LINE 1130 OF THE ACCOUNTING BALANCE SHEET

The balance sheet line 1130 “Fixed assets” displays information on ﬁ xed assets (line 1131-1133), expenses on incomplete major construction works and reconstruction (line 1134), as well as advance payments made to the contractors under agreements for major construction, reconstruction and purchase of ﬁ xed assets (line 1135).

3.1.1. FIXED ASSETS BALANCE SHEET LINE 11311133

Information on existence, movement of the fi xed assets shown in groups and in progress being compared with the previous year, as well as use of the same is represented in tables 5.3.1. and 5.3.4. of the clarifi cations to the Accounting Balance Sheet and to the Profi t and Loss Statement.

Fixed assets are displayed in the statements at their replacement cost less accrued depreciation for the period of their operation. No amortization was accrued for land plots.

Depreciation of fi xed assets according to the accounting data for December 31, 2011, calculated as correlation of the accrued amortization to the replacement cost, amounted to 52.15%. The above index is not synon- ymous to depreciation as for the objects of fi xed assets accepted for accounting between 2002 and 2010 the amortization in accounting was accrued according to the norms of Chapter 25 of the Tax Code of the Russian Federation providing for an accelerated amortization mechanism for fi xed assets.

As of January 1, 2010 and December 31, 2011 the Company performed revaluation of its ﬁ xed assets based on the current market value of their recovery.

An independent appraiser was engaged to perform the said revaluation.

As a result of the above revaluation as of January 1, 2011 the residual value of ﬁ xed assets increased by 5,293,679 thousand roubles. Including: 5,788,602 thousand roubles — the amount of additional evaluation credited to the additional capital, and 494,923 thousand roubles is the amount of decrease in the object’s value and excess of the amount of decrease in its value over the amount of its additional evaluation displayed at the account of retained proﬁ ts.

The revaluation for January 1, 2011 is displayed in the accounting in the ﬁ rst quarter of 2011 by means of changing the balance sheet narratives for December 31, 2012.

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WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

Balance sheet account name Balance sheet Data on 31.12.2010 Revaluation as of Data for 31.12.2010 line number (before revaluation) 01.01.2011 (aﬅ er revaluation) (+) increase, (-) decrease

Fixed assets 1130 82,189,898 +5,293,679 87,483,577

Additional capital 1350 67,897,705 +5,788,602 73,686,306

Retained proﬁ ts 1370 12,772,851 -494,923 12,277,928

Balance sheet total 1600 100,091,930 +5,293,679 105,385,609

Increase of the residual value of ﬁ xed assets as a result of revaluation for December 31, 2011 amounted to 12,162,002 thousand roubles, including 11,978,951 thousand roubles — additional evaluation credited to the additional capital, 233,205 thousand roubles — additional evaluation within the previously performed decrease on value credited to other income, 50,154 — decrease in value of ﬁ xed assets displayed as part of other expenses.

The price of fi xed assets at the expense of further construction, further equipment and reconstruction of the already existing objects of fi xed assets has been increased by 2,454,735 roubles. Information on the amendment of price in groups of fi xed assets and in comparison to the previous year is presented in table 5.3.3. of clarifi cations to the Accounting Balance Sheet and Profi t and Loss Statement.

Surplus amounting to 22,425 thousand roubles was discovered in the course of inventory of fi xed assets. The revealed items are part of property complexes the expenses on creation of which were by mistake not qualifi ed as expenses on creation independent inventory objects in the previous reporting periods. According to the opinion of the members of the inventory committee, the revealed items are prospective inventory items the criteria of which comply with the criteria for recognition of property as fi xed assets based on the requirements of PBU 6/01 “Accounting of Fixed Assets”. The items revealed during the inventory are accepted to the books at their market value confi rmed by an opinion of an independent appraiser.

Expenses from withdrawal of fi xed assets and writing off of fi xed assets are displayed in the Profi t and Loss State- ment as part of other expenses, and income from withdrawal of fi xed assets is displayed as part of other income.

No ﬁ xed assets were purchased in exchange to other goods.

3.1.2. INCOMPLETE CONSTRUCTION LINE 1134 OF THE ACCOUNTING BALANCE SHEET

Information on the balances and changes in expenses related to capital investment into items of fi xed assets is represented in table 5.3.5 of the clarifi cations to the Accounting Balance Sheet and Profi t and Loss Statement.

Construction and reconstruction of items of ﬁ xed assets is performed on a contract basis.

Expenses on incomplete construction amount to 10,592,184 thousand roubles as of December 31, 2011, including:

– 7,344,782 thousand roubles — expenses on new construction and expenses on expansion of industrial purpose objects, including construction of VL-220 Nadym-Salekhard with PS Salekhard to the amount of 1,591,013 thousand roubles and PP-110 in the area of Limbya-Yakha with VL-110 kv Ur-UGRES to the amount of 1,048,328 thousand roubles. – 2,714,657 thousand roubles — expenses on non-ﬁ nished works on technical re-equipment and reconstruction of industrial purpose objects. – 528,244 thousand roubles — commissioned object (PS 220 kv Yugra) constructed under shared construction agreement and performance of the functions of a Customer with the Regional Service for Rates of Khanty-Mansi Autonomous District — Yugra. Determination of shares in the object is currently negotiated with the administration of Khanty-Mansi Autonomous District — Yugra.

155

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

3.1.3. ADVANCE PAYMENTS MADE FOR MAJOR CONSTRUCTION WORKS AND PURCHASE OF FIXED ASSETS LINE 1135 OF THE ACCOUNTING BALANCE SHEET

Information is presented in table 5.3.6. of the clariﬁ cations to the Accounting Balance Sheet and Proﬁ t and Loss Statement.

According to the provisions of the agreements, the Company transfers advance payments to its contractors for the purchase of long-lead equipment requiring assembly and are included into the construction estimate. The Balance Sheet displays information in an amount without VAT. The VAT amount transferred to the contractors is displayed as part of other noncurrent assets and amounts to 336,418 thousand roubles.

BREAKDOWN OF ADVANCE PAYMENTS MADE AS TO THE COUNTERPARTIES: FOR DECEMBER 31, 2011 THOUSAND ROUBLES

Name Amount inclusive of VAT

Advance payments made, TOTAL 2,205,216

including: advance payments transferred to the contractors

CC EFESk 174,767

JSC Engineering Centre UES 170,938

LLC Sibspetsstroy 203,495

LLC Elektrosetstroykomplekt 83,929

Investment transferred to the customer under investment agreement:

JSC Yugra territorial Power Company 887,079

3.2. LONGTERM FINANCIAL INVESTMENT LINE 1150 OF THE ACCOUNTING BALANCE SHEET

The Company’s long-term ﬁ nancial investment amounted to 322,251 thousand roubles as of December 31, 2010, including:

– shares of companies of the fuel and energy sector circulating at the organized securities market — 109,914 thousand roublesshares; – in a subsidiary — JSC Tyumenenergoavtotrans — 202,237 thousand roubles shares; – in a subsidiary JSC ESCO TE, the state registration of which commenced in January 2011 — 10,200 thousand roubles.

Financial investments into shares the quotations for which are published are displayed for the end of the reporting year at the market value level.

The price of ﬁ nancial investment circulating at the organized securities market decreased by 48,991 thousand roubles as of December 31, 2011 as compared to late December 2010 which occurred mainly due to the decrease in the market value of the shares.

The price of ﬁ nancial investment the current market value of which is not determined (shares of JSC Tyumenenergoavtotrans) is displayed at its book value less the amount of the created reserve 88,696 thousand roubles.

The structure and movement of fi nancial investment is represented in tables 5.4.1. and 5.4.2. of the clarifi cations to the Accounting Balance Sheet and Profi t and Loss Statement. Financial investment was neither transferred to any third parties nor pledged. 156 3.3. OTHER NONCURRENT ASSETS LINE 1170 OF THE ACCOUNTING BALANCE SHEET Expenses made by the Company in the previous periods and within the reporting year, as well as those referred to WWW.TE.RU next reporting periods, are displayed in the Accounting Balance Sheet as deferred expenses and are written off to ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

the respective accounts of expenses evenly within the year to which they belong. Expenses in form of ﬁ xed non- recurrent payments for purchase of non-exclusive rights for the use of soﬅ ware, information databases, as well as expenses related to creation of automated systems and databases are accounted as part of deferred expenses. A considerable part (98%) of the deferred expenses as of December 31, 2011 constitutes expenses on soﬅ ware purchase, including expenses related to creation of an automated corporate management system of the Company’s business activities under SAP R/3 soﬅ ware purchased under a license agreement — 381,093 thousand roubles.

3.4. STOCK LINE 1210 OF THE ACCOUNTING BALANCE SHEET

The stock in the Accounting Balance Sheet as of the end of the year amounts to 2,143,682 thousand roubles or 16% of current assets.

Inventories primarily consist of:

– materials, spare parts and components for maintenance and current repairs — 376,405 thousand roubles; – fuel — 17,828 thousand roubles; – special clothes and special equipment — 147,606 thousand roubles; – construction materials — 918,283 thousand roubles; – implements and maintenance accessories — 24,366 thousand roubles.

Increase of the stock as of the end of the year amounting to 1,089,180 occurred due to receipt of construction materials to the amount of 1,086,434 thousand roubles in the fourth quarter of the year designated for construction of VL-220 Nadym-Salekhard with PS Salekhard.

The inventories were estimated in the amount of actual expenses for purchase of the same and displayed in the balance sheet less accrued provision for decrease of market value. The provision for decrease of the market value of the inventories is created according to the results of the inventory inspection. The provision amounts to 41,262 thousand roubles as of the end of the year. Expenses in incomplete construction amount to 680,395 thousand roubles as of December 31, 2011. Expenses related to fulﬁ llment of obligations on agreement of a prolonged cycle of works, rendering services including agreements on technological connection with the validity exceeding a year and construction agreement under which the Company fulﬁ lls functions of a General Contractor are displayed as part of expenses in incomplete construction.

Expenses under the construction agreement amounted to 174,722 thousand roubles in the current period. The proceeds under the agreement were not recognized in the reporting period. Recognition of the proceeds and creation of ﬁ nancial results is expected to be performed in 2012 as the works are completed in their whole.

Information on existence and movement of stock as compared to 2010 is displayed in table 5.5. of the clariﬁ - cations to the Accounting Balance Sheet and Proﬁ t and Loss Statement. No stock was pledged.

3.5. ACCOUNTS RECEIVABLE LINE 1230 OF THE ACCOUNTING BALANCE SHEET

The structure and movement of accounts receivable are displayed in table 5.6.1.–5.6.3. of the clariﬁ cations to the Accounting Balance Sheet and Proﬁ t and Loss Statement.

BREAKDOWN OF ACCOUNTS RECEIVABLE AS TO THE GROUPS AND COUNTERPARTIES AS OF DECEMBER 31, 2011 THOUSAND ROUBLES

No Name Amount

1 Buyers, customers, 1,841,675

including: 1,043,484 JSC Tyumen Energy Service Company

LLC RN-Energo 120,450 LLC Gazpromenergo 134,423 157 LLC Surgutenergosbyt 127,920 COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

№ Name Amount

JSC Varyeganenergoneﬅ 53,443

LLC Noyabrsk ЗПУ 62,324

2 Advance payments made, 3,512,293

including: LLC Techstroy 2,766,921

JSC FGC UES 378,330

JSC the Second Generating Company of Wholesale Power Market 205,086

3 Other debtors, 620,955

including: Overpayment to the budget on income tax 65,979

Overpayment to the budget on property tax 35,347

VAT (deductions) to be repaid from the budget 436,213

Advance payments made as part of agreements for technological connection are displayed as part of accounts receivable.

Accounts receivable for VAT occurred due to the VAT paid in excess for goods, works, services (deductions) over the VAT amounts calculated from sales of goods, works, services and those reported in tax declaration for the 4th quarter of 2011.

3.6. OTHER CURRENT ASSETS LINE 1260 OF THE ACCOUNTING BALANCE SHEET

The amount of Value Added Tax paid to the budget from the advance payments received and to claimed to be deducted from the budget under the requirements of chapter 21 of the Tax Code of the Russian Federation in the period of rendering services and performance of works — 625,304 thousand roubles, and the VAT amount from advance payments paid for major construction works and purchase of ﬁ xed assets — 336,418 thousand roubles is accounted as part of other current assets.

3.7. CHARTER CAPITAL LINE 1310 OF THE ACCOUNTING BALANCE SHEET

The Company’s charter capital was changed based on the resolution passed by JSC IDGC Holding. The size of the charter capital was increased to 27,373,895.1 thousand roubles due to the increase in the par value of ordinary inscribed shares to 100 roubles each. The increase by 24,636,506 thousand roubles was performed at the expense of additional capital. The report of securities issue was registered with Federal Service for Financial Markets of the Russian Federation on February 8, 2011. Amendments to the Articles of Association of JSC Tyumenenergo were registered on February 16, 2011 which is certiﬁ ed by the Certiﬁ cate of Making an Entry to the Uniform State Register of Legal Entities series 86 No. 002079521 of February 16, 2011.

3.8. EARNINGS RETAINED BY THE COMPANY LINE 1370 OF THE ACCOUNTING BALANCE SHEET

Retained proﬁ t of the reporting year is calculated with consideration of the rules provided for by PBU 18/02 “Accounting of Income Tax Calculations”.

Current income tax is determined by means of adjustment of contingent income tax expenses by the amount of the tax assets and liabilities recognized in the reporting period, and by the amount of diﬀ erences between the recognized and settled tax assets and liabilities within the reporting period.

Information on changes in deferred tax assets and deferred tax liabilities, on amounts of permanent tax liabilities and current income tax is displayed in table 2.3. of the clariﬁ cations to the Accounting Balance Sheet 158 and Proﬁ t and Loss Statement.

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

3.9. BORROWINGS LINE 1410 AND 1510 OF THE ACCOUNTING BALANCE SHEET

Information on the borrowings’ structure in progress as compared to the previous year, and on the interest accrued is displayed in tables 5.6.7. and 5.6.8. of clariﬁ cations to the Accounting Balance Sheet and Proﬁ t and Loss Statement.

The Company borrows in order to fund its investment activities. All of the Company’s borrowings were raised according to the results of public auctions and under the Standard of Debt Position Managing for Subsidiaries and Aﬃ liates of JSC IDGC Holding dated September 5, 2008 and Credit Policy Regulations dated April 19, 2007.

As of December 31, 2011, the Company has the following outstanding debts:

– 822,416 thousand roubles under the agreement on non-revolving credit facilities with maturity date in 2011–2014 at the rate of 7.5% per annum; – 1,984,933 thousand roubles under the agreement on non-revolving credit facilities with maturity date in 2013–2016 at the rate of 7.6416% per annum; – 2,499,998 thousand roubles under the agreement on non-revolving credit facilities with maturity date in 2013–2016 at the rate of 7.37% per annum; – 2,499,997 thousand roubles under the agreement on non-revolving credit facilities with maturity date in 2013–2016 at the rate of 7.37% per annum.

Borrowing liabilities are displayed in the balance sheet at the amount of funds received. The amount of funds non-received within the opened credit facility at the rate of 7.64% per annum amounts to 2,015,067 thousand roubles.

Corporate bonds of JSC Tyumenenergo series 02 at the number of 2,700 million roubles are currently circulating. The placement date was April 5, 2007 and the placement time — 5 years, coupon yield is paid once in every six months. The maturity date for the bonds is March 29, 2012. Order No. 106 of March 19, 2010 issued by JSC Tyumenenergo determined the interest rate for the seventh-tenth coupons of JSC Tyumenenergo’s bonds with 02 series. The coupon rate amounted to 8.7% per annum which amounts to 43 roubles 38 kopecks per each bond.

The interests on loans received are recognized as expenses evenly (monthly) for the end of the reporting month irrespective of payment. Interest due for bonds is recognized evenly (once a quarter) for the last day of the reporting quarter.

The price of assets includes interest on borrowings received for investment purposes within the period of an object’s construction, expansion. Interest on borrowings received is ceased to be included into the initial value of the investment assets from the ﬁ rst day of the month following the month when the construction of the respective object was completed and it was commissioned.

Interest due for borrowings as of December 31, 2011 amounting to 63,435 thousand roubles is displayed in the balance sheet separately as part of accounts payable in line “Other creditors”. Including: loan interest — 4,782 thousand roubles; interest on loan against bonds — 58,363 thousand roubles.

The Company has no overdue debts under borrowings.

3.10. DEFERRED TAX LIABILITIES LINE 1420 OF THE ACCOUNTING BALANCE SHEET

Information on the deferred taxes is displayed in tables 5.7.2. of clariﬁ cations to the Accounting Balance Sheet and Proﬁ t and Loss Statement.

Deferred tax liabilities arise due to diff erences in data of valuation base and useful lives of fi xed assets items in the accounting and tax accounting. Deferred tax liabilities on fi xed assets are determined according to the “balance sheet method”.

Deferred tax assets and liabilities are displayed in the accounting statements in detail.

A tax liability amounting to 339,382 thousand roubles for income tax for previous tax periods arose in the reporting period. The above occurred due to the presentation of an adjusted tax declaration on income tax- deduction for 2009 amounting to 236,116 thousand roubles and for 2010 — 103,266 thousand roubles. The adjusted declarations were submitted due to the additionally declared expenses for reconstruction of mobilization facilities as part of non-operational expenses. 159

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

3.11. ACCOUNTS PAYABLE LINE 1450 AND LINE 1520 OF THE ACCOUNTING BALANCE SHEET

Liabilities to suppliers and contractors, advance payments received from buyers and customers, liabilities to budget and non-budgetary funds, debt to the personnel for labor payments and other liabilities are displayed as part of short-term accounts payable. The structure and movement of accounts payable are displayed in table 5.6.5.–5.6.6 of the clariﬁ cations to the Accounting Balance Sheet and Proﬁ t and Loss Statement.

BREAKDOWN OF ACCOUNTS PAYABLE AS TO COUNTERPARTIES FOR DECEMBER 31, 2011 THOUSAND ROUBLES

No. Name Amount

1 Suppliers and contracts 2,140,185

including: JSC Tyumen Energy Service Company 257,704

JSC FGC UES 995,316

JSC YuTEK-Regional Grid 226,415

2 Advance payments received, 4,099,694

including: OJSC Fortum 1,073,286

LLC Lukoil West Siberia 165,157

LLC RN-Purneﬅ egaz 632,105

JSC Nizhnevartovskoe Neﬅ egazodobivajusee Predprijatie 543,855

LLC Chernogorenergo 197,470

LLC Torgplaza-Surgut 201,719

SUENCO JSC 150,000

JSC Slavneﬅ -Мegionneﬅ egas 196,967

OJSC Gazpromneﬅ -Noyabrskneﬅ egaz 239,576

LLC RN-Yuganskneﬅ egaz 131,646

3 Other creditors, 1,604,272

including: Funding of Khanty-Mansi Autonomous Okrug in shared construction 469,983

3.12. ESTIMATED LIABILITIES LINE 1540 OF THE ACCOUNTING BALANCE SHEET

Information on the estimated liabilities is displayed in tables 5.7.1. of clariﬁ cations to the Accounting Balance Sheet and Proﬁ t and Loss Statement.

Provision for vacation payment consists of the provision amounts and insurance fees due to non-budgetary funds under the regulations on allocations established by the legislation. The principal provision amount is calculated for each employee as the number of unused paid leave days for the end of the month multiplied by the average daily income of the same employee determined according to the procedure applied for calculation of leave allowances. The principal provision amount for each employee is 160 increased by the amount of insurance fees.

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

Estimated liability on payment of annual bonuses is created based on the estimated bonus amount planned to be paid to the employees in March 2012. The provision amount includes insurance fees due to non-budgetary funds.

In the reporting period the Company created provisions for a claim fi led by LLC Rusenergoresurs. The claim was received by the Arbitration court of Khanty-Mansi Autonomous District — Yugra on February 24, 2012, fi le No. А75-1654/2012. The preliminary hearing was fi xed for March 21, 2012.

The claim amounts to 1,200,064.16 thousand roubles. The claims submitted by LLC Rusebergoresurs are sub- stantiated by the nullity of the services agreement on power transfer as to the supply points from the objects of the “last mile” due to the fact that the debtor and the creditor appeared to be the same person. Accord- ing to the expert estimation of the Legal Administration performed on the basis of the facts of the case and actual jurisdiction, the probability of granting satisfaction to the claims of LLC Rusebergoresur by the Arbitra- tion court is high. Meanwhile, the attorneys believe that the claim amount can be decreased in the course of the action from 1,200,064 thousand roubles to 809,076 thousand roubles. The estimated eﬀ ective time of the award of the Arbitration court is September 2012.

Taking into consideration the essential nature of the event aﬅ er the balance sheet date and a high probability of its occurrence aﬅ er the annual accounting statement is approved by the shareholder, as well as being governed by the requirement of prudence, the Company created the respective provisions amounting to 1,004,570 thousand roubles.

The provision was created based on the probable arithmetic average (minimum and maximum) of loss of funds resulting from the proceedings. The above provision is displayed in the accounting for December 31, 2011 due to other expenses.

The provision amounting to 114,756 accrued in 2010 for contingent liability related to an on-site tax inspection for 2007–2008 was added to the proﬁ t in November 2011 as the proceedings resulting in the paid amount of taxes of 17,079 thousand roubles and penalties — 1,069 thousand roubles ﬁ nished.

3.13. OTHER SHORTTERM LIABILITIES LINE 1550 OF THE ACCOUNTING BALANCE SHEET

Other short-term liabilities include the amount of VAT declared for deduction from the budget in the period of transferring advance payments provided for under agreements to suppliers and contractors and subject to be restored in the period of receipt of dispatch tax invoices for the rendered services, performed works under the requirements of Chapter 21 of the Tax Code of the Russian Federation.

3.14. INFORMATION ON OFFBALANCE SHEET ACCOUNTS

Information on the property accounted at off -balance sheet accounts is displayed in tables 5.8. and 5.12. of the clarifi cations to the Accounting Balance Sheet and Profi t and Loss Statement.

3.15. INCOME AND EXPENSES ON ORDINARY ACTIVITIES

Income and expenses for the reporting year are displayed in form No. 2 “Proﬁ t and Loss Statement” separately for ordinary activities, other income and expenses.

The primary types of activities are power transmission and works on technological connection. Proceeds from power transmission amount to 96% in the total amount of proceeds.

The structure of the cost price as to the cost elements is displayed in table 2.1. of clariﬁ cations to the Ac- counting Balance Sheet and Proﬁ t and Loss Statement.

The Company did not sell any goods, works and services under conditions of payment with non-monetary resources.

3.16. OTHER INCOME AND EXPENSES

Breakdown of other income and expenses as compared to 2010 is displayed in table 5.11. of clarifi cations to the Accounting Balance Sheet and Profi t and Loss Statement. The Company had no other income and expenses not subject to be posted to the profi t and loss account under the accounting rules within the reporting period. 161

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

3.17. COSTS ASSOCIATED WITH POWER RESOURCES

2009 2010 2011

Power for business needs 191,847 233,644 241,848

Power 153,033 193,733 204,480

Heat power 38,814 39,871 37,368

3.18. EARNINGS PER SHARE

The basic earnings per share refl ect part of the profi t of the reporting period which can be eventually distributed to the shareholders — owners of ordinary shares. It is calculated as the correlation of the basic profi t for the reporting year to the average weighted number of ordinary shares in circulation within the reporting year. The basic earnings equals to the net profi t of the reporting year.

2010 2011

Basic proﬁ t for the reporting year, thousand roubles 5,516,426 4,177,919

Average weighted number of ordinary shares in circulation within 273,738.951 273,738.951 the reporting year, thousand shares

Basic earnings per share, roubles 20.1521 15.2624

3.19. CASH FLOW STATEMENT

Short-term ﬁ nancial investment in from of bank promissory notes with the circulation period amounting to less than 90 calendar days is displayed as part of cash and cash equivalents (line 1250 of the Accounting Balance Sheet).

Changes to the rules of drawing up statements for this narrative are displayed in retrospect. Namely, data for the end of 2010 and for the end of 2009 are increased by 1,400,113 thousand roubles and 1,100,063 thousand roubles, respectively, with the simultaneous decrease of line 1240 of the Accounting Balance Sheet.

VAT as part of receivables from buyers and customers, payments to buyers and customers, payments to the budget of the Russian Federation is displayed in brief as part of cash ﬂ ows from current operations.

There were no cash ﬂ ows in foreign currency within the reporting period.

3.20. INFORMATION ON RELATED PARTIES

INFORMATION ON SUBSIDIARIES AND AFFILIATES OF JSC TYUMENENERGO

Subsidiary name Share in capital Location Type of activities stock, %

JSC Tyumenenergoavtotrans 99.997 ulitsa Energostroiteley, 10, Surgut, Operation and maintenance Khanty-Mansi Autonomous Okrug — of automobile infrastructure Yugra, Tyumen Region, 628400 Russian Federation

JSC ESCO TE 51 ulitsa Universitetskaya, 4, Surgut, Services on power audit and Khanty-Mansi Autonomous Okrug — implementation of power Yugra, Tyumen Region, 628400 Russian saving events. Federation

Operations with related parties were accomplished with cash means. No provisions for bad debts were created 162 for related parties. No accounts receivable of the related parties were written off . No borrowing operations were performed with affi liated persons. WWW.TE.RU No other transactions were closed with affi liated persons within the reporting period. ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

OPERATIONS WITH RELATED PARTIES THOUSAND ROUBLES

Related party Operation type Operation Settlements balance Terms and conditions volume accounts receivable (+) of ﬁ nalizing settlements with VAT accounts payable (-)

JSC IDGC Holding Services on arrangement 331,886 - 16,594 Cash payment operation of Uniﬁ ed Electric in January 2012 Grid

JSC IDGC Holding Dividends 441,830 -

JSC Tyumenenergoav- Transport services, mainte- 107,841 -10,027 Cash payment in the totrans nance and current repair of ﬁ rst quarter of 2012 transport means, etc..

JSC Tyumenenergoav- Property lease 1,435 353 Cash payment in the totrans ﬁ rst quarter of 2012

JSC ESCO TE Services of power audit 113,335 (advance payments) Acceptance of the 11,172 performed works is expected in 2012

-19,813 Accounts payable settled with cash in January 2012

JSC ESCO TE Leas, other 1,259 -

Board of Directors Payment of remuneration 16,099 -

The remuneration to the key management personnel of the Company paid in 2011 amounted to 162,752 thousand roubles. The remunerations planned to be paid in 2012 according to the results of 2011 amounts to 50,282 thousand roubles. Allocations under agreements on non-state pension schemes concluded on behalf of the key management personnel for their retirement amount to 152,799 thousand roubles.

The powers of the sole executive body are fulﬁ lled by Director General. The Director General is remunerated under its labor contract.

3.21. DATA COMPARABILITY

Due to the changes in forms of accounting statements the data for previous periods were adjusted according to the comparability requirements. Clarifi cations are presented in tables 5.14., 5.15. and 5.16. of clarifi cations to the Accounting Balance Sheet and Profi t and Loss Statement.

3.22. EVENTS AFTER THE BALANCE SHEET DATE

No other material events, except for the events disclosed in clause 3.12. of this Explanation note, which could infl uence the Company’s fi nancial situation, cash fl ow and performance, occurred aﬅ er the balance sheet date.

3.23. CONTINGENCIES

The Company issued no guarantees or sureties, and did not give any other commitments to any third parties. The Company is a party (defendant) in a number of arbitration proceedings. However, we believe the above proceedings will not result in any material inﬂ uence on the Company’s ﬁ nancial situation.

Deputy Director General P.A. Mikheev 163 Chief accountant L.I. Lagunova COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

5.1. INTANGIBLE ASSETS

Narrative For the beginning of the year Changes over the period For the end of the period

Name Code Period Initial/current Amortization Depreciation Residual Received Withdrawn Amortization Depreciation Revaluation market value accrued losses value accrued loss Initial/current Amortization Depreciation Initial/current Amortization Initial/current Amortization Depreciation Residual market value accrued losses market value accrued market value accrued losses value

12345678910111213141516171819

Intangible assets  TOTAL 5100 for 2011 116 (81) (0) 35 0 (0) 0 0 (5) 0 0 0 116 (86) (0) 30

5110 for 2010 82 (71) (0) 11 34 (0) 0 0 (10) 0 0 0 116 (81) (0) 35

Intellectual property objects (exclusive 5101 for 2011 116 (81) (0) 35 0 (0) 0 0 (5) 0 0 0 116 (86) (0) 30 rights for the results of intellectual property) 5111 for 2010 82 (71) (0) 11 34 (0) 0 0 (10) 0 0 0 116 (81) (0) 35

including: from a patent-holder for an invention, 51011 for 2011 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0 an industrial sample, a useful model 51111 for 2010 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0

from the holder of PC soﬅ ware, data- 51012 for 2011 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0 base copyright 51112 for 2010 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0

From the holder of topography of inte- 51013 for 2011 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0 gral circuits copyright 51113 for 2010 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0

from the owner of trademark and 51014 for 2011 116 (81) (0) 35 0 (0) 0 0 (5) 0 0 0 116 (86) (0) 30 service mark, name of the goods origination 51114 for 2010 82 (71) (0) 11 34 (0) 0 0 (10) 0 0 0 116 (81) (0) 35

company goodwill 5102 for 2011 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0

5112 for 2010 0 (0) () 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0

Other 5103 for 2011 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0

5113 for 2010 0 (0) (0) 0 0 (0) 0 0 (0) 0 0 0 0 (0) (0) 0

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5.2. RESULTS OF DEVELOPMENT AND ENGINEERING WORKS AND INTANGIBLE ASSETS

5.2.1. EXISTENCE AND PROGRESS OF R&D RESULTS

Narrative name Code Period for the beginning of the year Changes over the period For the end of the period

initial value part arrived withdrawn part of the value initial value part of the value posted posted of the value posted to expenses initial value part of the value to expenses to expenses posted to expenses

1234567891011

R&D  TOTAL 5140 for 2011 11,608 (8,150) 3,700 (0) 0 (2,141) 15,308 (10,291)

5150 for 2010 7,608 (5,925) 4,000 (0) 0 (2,225) 11,608 (8,150)

amongongg these:theththheese:sese: 5141 for 2011 11,608 (8,150) 3,700 (0) 0 (2,141) 15,308 (10,291) Expensespensenennsseses forfoforo R&RR&D&DDr rresultsesuesesusultslttsts ofof whwwhichhichiicc araree uused fororor prpproductionroduodduductictctitiono 5151 for 2010 7,608 (5,925) 4,000 (0) 0 (2,225) 11,608 (8,150)

Chief accountant L.I. Lagunova 28 February, 2012

5.2.2. NOT FINISHED AND NNOT DOCUMENTED R&D AND NOT FINISHED TRANSACTIONS OF PURCHASING INTANGIBLE ASSETS

Narrative name Code Period For the Changes over the period For beginning the end of the year expenses expenses writ- accepted for of the over the ten oﬀ as accounting period period not yielding a as intangible positive result assets or R&D

12345678

Expenses on incomplete 5160 for 2011 1,500 4,600 (0) (3,700) 2,400 researches and developments  TOTAL 5170 for 2010 2,000 3,500 (0) (4,000) 1,500

including: – Scientiﬁ c research 5161 for 2011 1,000 4,600 (0) (3,700) 1,900 works 5171 for 2010 1,500 1,500 (0) (2,000) 1,000

– Development and 5162 for 2011 500 0 (0) (0) 500 engineering works 5172517 for 2010 500 2,000 (0) (2,000) 500

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5.3. FIXED ASSETS

5.3.1. ASSETS EXISTENCE AND TRANSACTION

Narrative name Code Period For the beginning of the year Changes over the period For the end of the period

initial value amortization residual value arrived amortization accrued reclassiﬁ cation of reclassiﬁ cation of objects withdrawn amortization revaluation initial valueamortization residual value accrued for received objects soﬅ ware tools amortization accrued accumulated

initial value amortization initial value amortization accumulated accumulated

12345678 910111213141516

Fixed assets (less income-bearing investments in 5200 for 2011 187,333,652 (99,850,075) 87,483,577 6,637,639 (0) 0 0 (197,753) 167,170 (5,398,542) 17,014,087 4,852,085 210,787,625 (109,933,532) 100,854,093 tangible assets)  TOTAL

5210 for 2010 169,511,715 (89,389,412) 80,122,303 7,617,685 (233,552) 0 0 (1,153,318) 698,475 (4,861,694) 11,357,570 6,063,892 187,333,652 (99,850,075) 87,483,577

including: 5201 for 2011 187,323,192 (99,850,075) 87,473,117 6,613,481 (0) 0 0 (197,753) 167,170 (5,398,542) 17,014,087 4,852,085 210,753,007 (109,933,532) 100,819,475 Depreciable ﬁ xed assets  TOTAL:

5211 for 2010 169,501,247 (89,389,412) 80,111,835 7,617,685 (233,552) -1,974 0 (1,153,310) 698,475 (4,861,694) 11,357,570 6,063,892 187,323,192 (99,850,075) 87,473,117

including: – production buildings 52011 for 2011 12,960,879 (3,946,989) 9,013,890 472,022 (0) 44,544 -19,994 (27,401) 15,288 (367,054) 891,572 164,447 14,297,072 (4,463,202) 9,833,870

52111 for 2010 11,804,874 (3,492,152) 8,312,722 772,187 (0) 39,044 -24,586 (34,013) 22,824 (305,190) 417,831 172,471 12,960,879 (3,946,989) 9,013,890

– constructions, except for power 52012 for 2011 11,852,230 (6,891,776) 4,960,454 408,456 (0) -1,325,390 1,109,594 (20,278) 13,132 (374,648) 523,262 -35,903 12,763,670 (7,217,389) 5,546,281 transmission lines 52112 for 2010 10,843,005 (6,434,547) 4,408,458 843,453 (37) 138,454 -128,450 (69,171) 45,308 (348,201) 234,943 154,299 11,852,230 (6,891,776) 4,960,454

– power transmission lines and related devices 52013 for 2011 115,086,710 (59,180,285) 55,906,425 3,290,215 (0) -84,317 74,135 (0) 0 (2,611,416) 12,983,666 3,753,102 131,360,591 (65,544,803) 65,815,788

52113 for 2010 104,888,408 (52,548,402) 52,340,006 2,121,262 (149,273) -888,519 780,405 (274,599) 161,787 (2,359,203) 8,351,639 4,285,194 115,086,710 (59,180,285) 55,906,425

– machines and equipment of power production, 52014 for 2011 42,202,657 (26,936,910) 15,265,747 1,536,914 (0) 1,396,150 -1,171,791 (37,072) 32,485 (1,586,882) 2,625,696 974,369 46,328,195 (29,465,676) 16,862,519 substations, equipment for power conversion 52114 for 2010 37,051,031 (24,144,457) 12,906,574 3,236,528 (83,370) 793,291 -708,235 (438,092) 150,370 (1,407,500) 2,353,190 1,451,953 42,202,657 (26,936,910) 15,265,747

– production and organizational stock 52015 for 2011 22,941 (18,421) 4,520 538 (0) 952 -940 (1,238) 1,238 (1,845) 0 0 22,241 (19,028) 3,213

52115 for 2010 25,476 (20,527) 4,949 2,048 (0) 290 16 (4,583) 4,260 (2,154) 0 0 22,941 (18,421) 4,520

other 52016 for 2011 5,197,775 (2,875,694) 2,322,081 905,336 (0) -31,939 8,996 (111,764) 105,027 (456,697) -10,109 -3,930 5,981,238 (3,223,434) 2,757,804

52116 for 2010 4,888,453 (2,749,327) 2,139,126 642,207 (872) -84,534 80,850 (332,852) 313,926 (439,446) -33 -25 5,197,775 (2,875,694) 2,322,081

Objects with an undeﬁ ned value-added use, not subject 5202 for 2011 10,460 (0) 10,460 24,158 (0) 0 0 (0) 0 (0) 0 0 34,618 (0) 34,618 to amortization

5212 for 2010 10,468 (0) 10,468 0 (0) 1,974 0 (8) 0 (0) 0 0 10,460 (0) 10,460

including:ing: – landandndnd ploplplotslootst 52021 for 2011 10,460 (0) 10,460 24,158 (0) 0 0 () 0 () 0 0 34,618 (0) 34,618

52121 for 2010 10,468 (0) 10,468 0 (0) 1,974 0 (8) 0 (0) 0 0 10,460 (0) 10,460

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5.3.2. USEFUL LIVES AND AMORTIZATION METHODS

Name of narrative Code Deﬁ ned useful life (months) Amortization method

1234

Production buildings 7001 421 linear

Constructions, except for power transmission lines 7002 335 linear

Power transmission lines and related devices 7003 343 linear

Machines and equipment of power production, 7004 226 linear sub-stations, equipmentent for power conversion

production aandndnd orgoororganizationalrgrganiananniizatzazaationo a stock 7005 108 linear

Othertherer 7006 108 linear; diminishing balance method

Chief accountant L.I. Lagunova on February 28, 2012

5.3.3. CHANGEGE IINN THE VALUE OF FIXED ASSETS OBJECTS DUE TO FURTHER CONSTRUCTION, FURTHER EQUIPMENT, RECONSTRUCTION, PARTIAL LIQUIDATION

Narrative name Code 2011 2010

1 2 3 4

Increase in the value of ﬁ xed assets objects due to further construction, 5260 2,454,735 1,991,844 further equipment, reconstruction  TOTAL

including: – production buildings 5261 308,359 74,142

– constructions, except for power transmission lines 5262 81,766 323,243

– power transmission lines and related devices 5263 829,382 677,564

– machines and equipment producing power, sub-stations, equipment for 5264 920,566 884,425 power conversion

– other 5265 314,662 32,470

Decrease in the value of ﬁ xed assets objects due to partial liquidation — 5270 609 3,184 TOTAL:

including:g: – powerower tratransmissionnsms is lines and related devices 5271 (0) (1,885)

– machinesmacacachinhinneses andanandnd eqeequipmentquuippmemmenenent pproducingroducing ppower, sub-stations, equipment 5272 (609) (1,299) forfoforor poppowerowerwewe cocconversionnvennvversirsrs onon

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5.3.4. OTHER USE OF FIXED ASSETS

Narrative name Code as of as of as of December 31, December 31, December 31, 2011 2010 2009

123 45

Leased ﬁ xed assets included into the balance sheet 5280 1,074,006 1,061,548 1,655,514

Leased ﬁ xed assets listed oﬀ the balance sheet 5281 3,487 2,897 3

Received ﬁ xed assets included into the balance sheet 5282 0 0 0

Received into lease ﬁ xed assets listed oﬀ the balance sheet 5283 13,520,743 12,660,723 11,825,609

real estate objects received 5284 8,851,780 532,745 601,535 into use and actually used, are under state registration

Fixed assets transferred into preservation 5285 197,939 176,748 97,706

other use of ﬁ xed assets (pledge and oother)ther) 5286 0 0 0

Chief accountant L.LL.I.I.I LagLagunovaunononovav on February 28, 2012

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5.3.5. INCOMPLETE CAPITAL INVESTMENT

Narrative name Code Period For the Changes over the period For the beginning end of the of the year period

expenses written oﬀ accepted for account- over the ing as ﬁ xed assets or period increased value

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Incomplete 5240 for 2011 5,442,773 15,567,859 (209,600) (10,208,848) 10,592,184 construction and unﬁ nished operations 5250 for 2010 5,721,889 8,002,914 (0) (8,282,030) 5,442,773 on purchase, modernization etc.. of ﬁ xed assets — TOTAL

including Designated 5241 for 2011 5,442,773 15,567,859 (209,600) (10,208,848) 10,592,184 for production 5251 for 2010 5,721,889 8,002,914 (0) (8,282,030) 5,442,773

– incomplete 52411 for 2011 5,070,187 11,306,144 (147,713) (6,167,285) 10,061,333 construction 52511 for 2010 5,406,658 6,210,236 (0) (6,546,707) 5,070,187

– purchase of ﬁ xed 52412 for 2011 0 447,929 (0) (447,929) 0 assets 52512 for 2010 1,610 298,168 (0) (299,778) 0

– Equipment to be 52413 for 2011 372,586 3,813,786 (61,887) (3,593,634) 530,851 installed 52513 for 2010 313,621 1,494,510 (0) (1,435,545) 372,586

designated for 5242 for 2011 0 0 (0) (0) 0 non-production purposes 5252 for 2010 0 0 (0) (0) 0

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5.3.6. ADVANCES PAID FOR MAJOR CONSTRUCTION WORKS AND PURCHASE OF FIXED ASSETS

Narrative name Code Period For the beginning of the year Changes over the period For the end of the period

accounted reserve size arrival withdrawal accounted for reserve size under for bad debts under agreement for bad debts agreement as a result of other accrual repayment writing off at the writing off reserve recovery business operations charges of reserve expense of the to fi nancial (debt amount accrued reserve performance for a transaction, operation)

1 2345 678 9 1011121314

Advances paid for 5291 for 2011 1,830,316 (0) 4,379,943 0 (0) (4,341,461) (0) (0) (0) 1,868,798 (0) major construction works 5292 for 2010 2,663,399 (0) 3,248,263 0 (0) (4,081,346) (0) (0) (0) 1,830,316 (0)

including: – major construc- 52911 for 2011 1,830,316 (0) 3,932,014 0 (0) (3,893,532) (0) (0) (0) 1,868,798 (0) tion works 52921 for 2010 2,663,399 (0) 2,950,095 0 (0) (3,783,178) (0) (0) (0) 1,830,316 (0)

– purchasepurururchachchahasese ofof 529529122991212 f for 2011 0 (0) 447,929 0 (0) (447,929) (0) (0) (0) 0 (0) ﬁ xxededed assaasassetsssssetseetttss 52955292229292222 forfof o 20201010 0 (0) 298,168 0 (0) (298,168) (0) (0) (0) 0 (0)

Chief accountant L.I. Lagunova on February 28, 2012

5.4. FINANCIAL INVESTMENTSTM

5.4.1. EXISTENCE AND PROGRESS OF FINANCIAL INVESTMENT

Narrative name Code Period For the beginning of the year Changes over the period For the end of the period

initial value accrued arrived withdrawn (repaid) accrual of current market initial value accrued adjustment interest (including value (depreciation adjustment initial value accrued bringing initial value losses) adjustment to the nominal value)

123456789101112

Long-term ﬁ nancial investment  TOTAL 5301 for 2011 392,728 -31,086 10,997 (1,307) -454 0 -48,527 402,418 -80,067

5311 for 2010 392,728 -70,988 0 (0) 0 0 39,902 392,728 -31,086

Investment into equity (share) capitals of other entities  53021 for 2011 392,728 -31,086 10,997 (1,307) -454 0 -48,527 402,418 -80,067 TOTAL 53121 for 2010 392,728 -70,988 (0) 0 0 39,902 392,728 -31,086

including: subsidiaries 530211 for 2011 290,933 -88,696 10,200 (0) 0 0 0 301,133 -88,696 174 531211 for 2010 290,933 -88,696 0 () 0 0 0 290,933 -88,696 175

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State and municipal securities 53022 for 2011 0 0 0 (0) 0 0 0 0 0

53122 for 2010 0 0 0 (0) 0 0 0 0 0

Securities of other companies  TOTAL 53023 for 2011 0 0 0 (0) 0 0 0 0 0

53123 for 2010 0 0 0 (0) 0 0 0 0 0

Loans granted 53024 for 2011 0 0 0 (0) 0 0 0 0 0

53124 for 2010 0 0 0 (0) 0 0 0 0 0

Deposits 53025 for 2011 0 0 0 (0) 0 0 0 0 0

53125 for 2010 0 0 0 (0) 0 0 0 0 0

Long-term ﬁ nancial investment with current market value 5302 for 2011 101,769 57,610 797 (1,281) -454 0 -48,527 101,285 8,629

5312 for 2010 101,769 17,708 0 (0) 0 0 39,902 101,769 57,610

Investment into equity (share) capitals of other entities  53031 for 2011 0 0 0 (0) 0 0 0 0 0 TOTAL 53131 for 2010 0 0 0 (0) 0 0 0 0

State and municipal securities 53032 for 2011 0 0 0 (0) 0 0 0 0 0

53132 for 2010 0 0 0 (0) 0 0 0 0 0

Securities of other companies  TOTAL 53033 for 2011 0 0 0 (0) 0 0 0 0 0

53133 for 2010 0 0 0 (0) 0 0 0 0 0

Other 53034 for 2011 101,769 57,610 797 (1,281) -454 0 -48,527 101,285 8,629

53134 for 2010 101,769 17,708 0 (0) 0 0 39,902 101769 57,610

Long-term ﬁ nancial investment for which current market 5303 for 2011 290,959 -88,696 10,200 (26) 0 0 0 301,133 -88,696 value is not determined  TOTAL 5313 for 2010 290,959 -88,696 0 (0) 0 0 0 290,959 -88,696

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5.4.2. ADJUSTMENT OF VALUATIONS OF FINANCIAL INVESTMENT

Narrative For the Changes for the period For the beginning end of the Name Codeof the Increase Decrease Withdrawal period year at writing oﬀ of ﬁ nancial investment

1234567

long-term ﬁ nancial 7100 -31,086 0 -48,981 0 -80,067 investment

Diﬀ erence between the current market 7110 57,610 0 -48,981 0 8,629 value of ﬁ nancial investment and their previous valuation

including: 7111 0 0 0 0 0 Investment into equity (share) capitals of other entities  TOTAL

State and municipal securities 7112 0 0 0 0 0

securities of other companies 7113 0 0 0 0 0

Other 7114 57,610 -48,981 8,629

Provision for impairment of ﬁ nancial 7130 88,696 0 0 0 88,696 investment for which market value is not determined

including 7131 88,696 0 0 0 88,696 Investment into equity (share) capitals of other entities  TOTAL

including: subsidiaries 71311 88,696 0 0 0 88,696

State and municipal securities 7132 0 0 0 0 0

securities of other companies 7133 0 0 0 0 0

Loans granted 7134 0 0 0 0 0

Deposits 7135 0 0 0 0 0

Other 7136 0 0 0 0 0

Short-term ﬁ nancial investments 7200 0 0 0 0 0

Diﬀ erence between the current market 7210 0 0 0 0 0 value of ﬁ nancial investment and their previous valuation, for which it was determined

including: Investment into equity (share) capitals of 7211 0 0 0 0 0 other companies 178 securities of other companies 7212 0 0 0 0 0 Other 7213 0 0 0 0 0 WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

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Diﬀ erence between the current value 7220 0 0 0 0 0 of debt securities and their initial value

including: securities of other companies 7221 0 0 0 0 0

Other 7222 0 0 0 0 0

Provision for impairment of ﬁ nancial 7230 0 0 0 0 0 investment with no market value

including: Investment into equity (share) capitals of 7231 0 0 0 0 0 other companies

State and municipal securities 7232 0 0 0 0 0

Securities of other companies  TOTAL 7233 0 0 0 0 0

Loans granted 7234 0 0 0 0 0

Deposits 7235 0 0 0 0 0

Other 7236 0 0 0 0 0

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5.5. INVENTORIES

Narrative name Code Period For the beginning of the year Changes over the period For the end of the period

cost value reserve size proceeds withdrawn losses stock turnover be- cost value size of provision for decrease in value and expenses from decrease in value tween stock groups for decrease cost value provision (types) in value for decrease in value

123 4 56 789101112

Stock  TOTAL 5400 for 2011 1,073,995 (19,493) 1,950,373 (839,424) 7,240 29,009 х 2,184,944 (41,262)

5420 for 2010 1,515,192 (69,072) 568,640 (1,009,837) 49,579 0 х 1,073,995 (19,493)

raw materials and 5401 for 2011 566,404 (19,493) 1,770,688 (834,320) 7,240 29,009 1,502,772 (41,262) supplies 5421 for 2010 647,908 (69,072) 562,136 (643,640) 49,579 0 566,404 (19,493)

goods-in-progress 5402 for 2011 505,863 (0) 174,722 (190) 0 0 680,395 (0)

5422 for 2010. 865,176 (0) 0 (359,313) 0 0 505,863 (0)

goods dispatched 5403 for 2011 0 (0) 0 (0) 0 0 0 (0)

5423 for 2010 0 (0) 0 (0) 0 0 0 (0)

ﬁ nal products and 5404 for 2011 1,728 (0) 4,963 (4,914) 0 0 1,777 (0) goods 5424 for 2010 2,108 (0) 6,504 (6,884) 0 0 1,728 (0)

other inventories 5405 for 2011 0 (0) 0 (0) 0 0 0 (0) and expenses 5425 for 2010 0 (0) 0 (0) 0 0 0 (0)

Chief accountant L.I. Lagunova on February 28, 2012

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5.6. ACCOUNTS PAYABLE AND ACCOUNTS RECEIVABLE

5.6.1. EXISTENCE AND PROGRESS OF ACCOUNTS RECEIVABLE

Narrative name Code Period For the beginning Changes over the period For the end of the period of the year

accounted reserve arrival withdrawal transfer accounted reserve size under size for from long-term under for bad debts agreement bad debts as a result interest accrual repayment writing off writing off reserve into short-term agreement of business payable, of reserve at the expense to fi nancial recovery debts operations (debt penalties and of the accrued performance amount for other charges reserve a transaction, operation)

1 23 45 6 78 9 101112131415

long-term accounts 5501 for 2011 90,188 (0) 342,425 0 0 (48,241) (0) (0) 0 (0) 384,372 (0) receivable  TOTAL 5521 for 2010 43,368 (0) 50,136 0 0 (3,316) (0) (0) 0 (0) 90,188 (0)

including: Settlements with buyers 5502 for 2011 0 (0) 0 0 0 (0) (0) (0) 0 (0) 0 (0) and customers 5522 for 2010 0 (0) 0 0 0 (0) (0) (0) 0 (0) 0 (0)

Advance payments 5503 for 2011 9,788 (0) 264,710 0 (288) (0) (0) 0 (0) 274,210 (0) made 5523 for 2010 1,788 (0) 8,254 0 (254) (0) (0) 0 (0) 9,788 (0)

Bills receivable 5504 for 2011 0 (0) 0 0 (0) (0) (0) 0 (0) 0 (0)

5524 for 2010 0 (0) 0 0 (0) (0) (0) 0 (0) 0 (0)

Other accounts 5505 for 2011 80,400 (0) 77,715 0 0 (47,953) (0) (0) 0 (0) 110,162 (0) receivable 5525 for 2010 41,580 (0) 41,882 0 0 (3,062) (0) (0) 0 (0) 80,400 (0)

From the total 5506 for 2011 0 (0) 0 0 (0) (0) (0) 0 (0) 0 (0) amount of long-term receivables: 5526 for 2010 0 (0) 0 0 (0) (0) (0) 0 (0) 0 (0)

debts of subsidiaries 55061 for 2011 0 (0) 0 0 (0) (0) (0) 0 (0) 0 (0)

55261 for 2010 0 (0) 0 0 (0) (0) (0) 0 (0) 0 (0)

Short-term accounts 5510 for 2011 4,264,049 (0) 71,371,405 0 0 (69,927,911) (0) (6,830) 0 0 5,700,713 (0) receivable  TOTAL 5530 for 2010 2,596,434 (0) 62,286,913 0 0 (60,618,973) (0) (325) 0 0 4,264,049 (0)

including: Settlements with buyers 5511 for 2011 2,493,943 (0) 56,640,310 0 0 (57,291,252) (0) (1,326) 0 0 1,841,675 (0) and customers 5531 for 2010 1,891,340 (0) 54,437,378 0 0 (53,834,746) (0) (29) 0 0 2,493,943 (0)

including: – for power 55111 for 2011 2,374,219 (0) 54,003,845 0 (54,633,680) (0) (0) 0 0 1,744,384 (0) transmission 55311 for 2010 1,822,617 50,493,671 0 (49,942,069) (0) (0) 0 0 2,374,219 (0)

182 – for technical 55112 for 2011 62,350 (0) 1,528,023 0 (1,528,049) (0) (0) 0 0 62,324 (0) 183 connection WWW.TE.RU 55312 for 2010 84 3,407,275 0 (3,345,009) (0) (0) 0 0 62,350 (0) COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

1 23 45 6 78 9 101112131415

– for rent receipts 55113 for 2011 16,191 (0) 141,044 0 (142,243) (0) (763) 0 0 14,229 (0)

55313 for 2010 23,855 195,817 0 (203,481) (0) (0) 0 0 16,191 (0)

– for other 55114 for 2011 41,183 (0) 967,398 0 (987,280) (0) (563) 0 0 20,738 (0)

55314 for 2010 44,784 340,615 0 (344,187) (0) (29) 0 0 41,183 (0)

Advance payments 5512 for 2011 1,708,663 (0) 6,760,470 0 (5,227,983) (0) (3,067) 0 0 3,238,083 (0) made 5532 for 2010 640,764 3,689,250 0 (2,621,351) (0) (0) 0 0 1,708,663 (0)

Bills receivable 5513 for 2011 0 (0) 0 0 (0) (0) (0) 0 0 0 (0)

5533 for 2010 0 (0) 0 0 (0) (0) (0) 0 0 0 (0)

Other accounts 5514 for 2011 61,443 (0) 7,970,625 0 0 (7,408,676) (0) (2,437) 0 0 620,955 (0) receivable 5534 for 2010 64,330 (0) 4,160,285 0 0 (4,162,876) (0) (296) 0 0 61,443 (0)

including: – non-interest- 55141 for 2011 0 (0) 0 0 (0) (0) (0) 0 0 0 (0) bearing notes 55341 for 2010 0 (0) 0 0 (0) (0) (0) 0 0 0 (0)

– overpayment for 55142 for 2011 6,224 (0) 3,594,496 0 (3,058,424) (0) (18) 0 0 542,278 (0) taxes and levies 55342 for 2010 16,910 1,301,140 0 (1,311,826) (0) (0) 0 0 6,224 (0)

– disposal 55143 for 2011 1,679 (0) 71,113 0 (72,121) (0) (0) 0 0 671 (0) of property 55343 for 2010 6,436 107,890 0 (112,647) (0) (0) 0 0 1,679 (0)

– other 55144 for 2011 53,540 (0) 4,305,016 0 (4,278,131) (0) (2,419) 0 0 78,006 (0)

55344 for 2010 40,984 2,751,255 0 (2,738,403) (0) (296) 0 0 53,540 (0)

From the total 5517 for 2011 101 (0) 66,925 0 (55,501) (0) (0) 0 0 11,525 (0) amount of short-term receivables: 5537 for 2010 141 (0) 2,063 0 (2,103) (0) (0) 0 0 101 (0)

debts of subsidiaries 55171 for 2011 101 (0) 66,925 0 (55,501) (0) (0) 0 0 11,525 (0)

55371 for 2010 141 (0) 2,063 0 (2,103) (0) (0) 0 0 101 (0)

TOTAL 5500 for 2011 4,354,237 (0) 71,713,830 0 0 (69,976,152) (0) (6,830) 0 0 6,085,085 (0)

5520 for 2010 2,639,802 (0) 62,337,049 0 0 (60,622,289) (0) (325) 0 0 4,354,237 (0)

Chief accountant L.I. Lagunova on February 28, 2012

184 185

WWW.TE.RU COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

5.6.2. PROVISION FOR BAD DEBTS

Narrative For the begin- Changes for the period For the end ning of the year of the period Name Code Creation Writing oﬀ of a reserve of the reserve

1 2 3456

Settlements with buyers and 7310 0 650,766 -650,766 0 customers

including: for power transmission 7311 0 650,766 -650,766 0

Advance payments made 7330 0 0 0 0

Other accountsaccounts recreceivablee 7320 0 0 0 0

Totalal 730 73000 0 650,766 -650,766 0

Chief accountant L.I. Lagunova on February 28, 2012

5.6.3. OVERDUE ACCOUNTSNTS RRECEIVABLE

Narrative name Code as of December 31, 2011 as of December 31, 2010 as of December 31, 2009

accounted balance accounted balance accounted balance sheet under sheet value under agree- sheet value under value agreement (less ment (less provi- agreement (less provision provision for sion for bad for bad debts) bad debts) debts)

1234 567 8

Total 5540 0 81,700 0 111,243 0 148,778

including: Settlements with 5541 0 60,722 0 98,272 0 140,682 buyers and customers

including: – for power 55411 0 49,005 0 44,755 0 45,241 transmission

– for technical 55412 0 11,717 0 53,517 0 95,441 connection

Other accountstss 554255455554542 0 20,978 0 12,971 0 8,096 receivableablle

Chief accountant L.I. Lagunova 186 on February 28, 2012

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

5.6.5. EXISTENCE AND PROGRESS OF ACCOUNTS PAYABLE

Narrative name Code Period Closing Changes over the period Balance balance for the arrival withdrawal transfer from end of the long-term period as a result of accrued repayment writing oﬀ into short- business op- interest, to ﬁ nancial term debts erations (debt penalties result amount for and other a transaction, charges operation)

12345678910

Long-term accounts 5551 for 2011 918,110 64 0 (167,296) (0) (542,447) 208,431 payable  TOTAL 5571 for 2010 709,081 209,029 0 (0) (0) (0) 918,110

including: 5552 for 2011 0 0 0 (0) (0) (0) 0 accounts payable of suppliers and 5572 for 2010 0 0 0 (0) (0) (0) 0 contractors

Advance payments 5553 for 2011 918,110 64 0 (167,269) (0) (542,447) 208,431 made 5573 for 2010 709,081 209,029 0 (0) (0) (0) 918,110

From the total 5554 for 2011 0 0 0 (0) (0) (0) 0 amount of long-term payables 5574 for 2010 0 0 0 (0) (0) (0) 0

debts to subsidiaries 55541 for 2011 0 0 0 (0) (0) (0) 0

55741 for 2010 0 0 0 (0) (0) (0) 0

Short-term accounts 5560 for 2011 7,399,885 90,041,736 0 (89,810,604) (179) 542,447 8,173,285 payable, TOTAL 5580 for 2010 6,772,348 66,732,093 0 (66,104,551) (5) 0 7,399,885

including: 5561 for 2011 2,341,135 47,205,490 0 (47,406,280) (160) 0 2,140,185 Settlements with suppliers and contractors 5581 for 2010 1,441,880 36,618,189 0 (35,718,934) (0) 0 2,341,135

including: – construction 55611 for 2011 466,146 14,319,783 0 (14,501,572) (0) 0 284,357

55811 for 2010 33,476 4,655,354 0 (4,222,684) (0) 0 466,146

– other 55612 for 2011 1,874,989 32,885,707 0 (32,904,708) (160) 0 1,855,828

55812 for 2010 1,408,404 31,962,835 0 (31,496,250) (0) 0 1,874,989

Advance payments 5562 for 2011 2,700,255 23,373,493 0 (22,724,932) (0) 542,447 3,891,263 received 5582 for 2010 3,845,588 15,559,859 0 (16,705,192) (0) 0 2,700,255

187

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

12345678910

including: – for power 55621 for 2011 11,674 21,511,640 0 (21,501,139) (0) 0 22,175 transmission 55821 for 2010 5,084 13,400,051 0 (13,393,461) (0) 0 11,674

– for technical 55622 for 2011 2,670,407 1,818,771 0 (1,171,396) (0) 542,447 3,860,229 connection 55822 for 2010 3,832,179 2,129,137 0 (3,290,909) (0) 0 2,670,407

– for rental 55623 for 2011 4,710 670 0 (1,033) (0) 0 4,347 services 55823 for 2010 4,674 3,015 0 (2,979) (0) 0 4,710

– for other 55624 for 2011 13,465 42,412 0 (51,364) (0) 0 4,513

55824 for 2010 3,652 27,656 0 (17,843) (0) 0 13,465

Dividends payable 5563 for 2011 0 0 0 (0) (0) 0 0

5583 for 2010 0 0 0 (0) (0) 0 0

Notes payable 5564 for 2011 6,756 0 0 (0) (0) 0 6,756

5584 for 2010 6,756 0 0 (0) (0) 0 6,756

debt to state non- 5565 for 2011 23,056 1,116,592 0 (1,112,567) (0) 0 27,081 budgetary funds 5585 for 2010 15,791 578,601 0 (571,336) (0) 0 23,056

settlements on taxes 5566 for 2011 732,265 1,117,810 0 (1,491,252) (0) 0 358,823 and levies payable 5586 for 2010 388,555 3,175,891 0 (2,832,181) (0) 0 732,265

debt to the personnel 5567 for 2011 208,307 4,748,349 0 (4,811,751) (0) 0 144,905 of the company 5587 for 2010 191,156 4,166,523 0 (4,149,372) (0) 0 208,307

Other accounts 5568 for 2011 1,388,111 12,480,002 0 (12,263,822) (19) 0 1,604,272 payable 5588 for 2010 882,622 6,633,030 0 (6,127,536) (5) 0 1,388,111

From the total 5569 for 2011 7,638 200,058 0 (181,578) (0) 0 26,118 amount of short-term payables 5589 for 2010 3,228 72,868 0 (68,458) (0) 0 7,638

debts to subsidiaries 55691 for 2011 7,638 203,780 0 (181,578) (0) 0 29,840

55891 for 2010 3,228 72,868 0 (68,458) (0) 0 7,638

TOTAL 5550 for 2011 8,317,995 90,041,800 0 (89,977,900) (179) 8,381,716

55705570 for 2010 7,481,429 66,941,122 0 (66,104,551) (5) 8,317,995

Chief accountant L.I. Lagunova on February 28, 2012 188

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

5.6.6. OVERDUE ACCOUNTS PAYABLE

Narrative name Code as of December 31, as of December 31, as of December 31, 2011 2010 2009

123 45

TOTAL 5590 2,192 1,153 1,298

including: Settlements with suppliers 5591 998 1,153 1,149 and contractors

including: other 55911 998 1,153 1,149

Dividends payable 5592 0 0 0

debt to state non-budgetary funds 5593 0 0 0

settlements on taxes and levies payable 5594 0 0 0

debt to the personnel of the company 5595 0 0 0

Other accounts payable 5596 1,194 0 149

Chief accountant L.I. Lagunova on February 28, 2012

189

COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

5.6.7. CREDITS AND LOANS

Narrative name Code Period For the Changes over the period For the beginning end of the of the year Arrival Accrual Repayment Payment Transfer from period of interest of principal of interest long-term into short-term debts

12345678910

Long-term 7410 for 2011 5,522,416 6,984,928 233,641 (2,000,000) (289,162) (2,700,000) 7,807,344 borrowings — TOTAL 7430 for 2010 11,522,416 0 811,180 (6,000,000) (812,492) (0) 5,522,416

including: Credits 7411 for 2011 2,822,416 6,984,928 0 (2,000,000) (0) (0) 7,807,344

7431 for 2010 8,822,416 0 0 (6,000,000) (0) (0) 2,822,416

Interest on long-term 74111 for 2011 60,303 0 233,641 (0) (289,162) (0) 4,782 loans Loans for 2010 61,615 0 811,180 (0) (812,492) (0) 60,303

Loans 7412 for 2011 2,700,000 0 0 (0) (0) (2,700,000) 0

7432 for 2010 2,700,000 0 0 (0) (0) (0) 2,700,000

Short-term 7420 for 2011 0 0 175,689 (0) (117,126) 2,700,000 2,700,000 borrowings  TOTAL 7440 for 2010 0 0 0 (0) (0) 0 0

including: Credits 7421 for 2011 0 0 0 (0) (0) 0 0

7441 for 2010 0 0 0 (0) (0) 0 0

Interest on short- 74211 for 2011 0 0 175,689 (0) (117,126) 0 58,563 term loans 74411 for 2010 0 0 0 (0) (0) 0 0

Loans 7422 for 2011 0 0 0 (0) (0) 2,700,000 2,700,000

7442 for 2010 0 0 0 (0) (0) 0 0

Chief accountant L.I. Lagunova on February 28, 2012

190

WWW.TE.RU ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

5.6.8. EXPENSES ON BORROWINGS

Narrative For long-term borrowings For short-time borrowings

Name Code

1234

Costs of credits — TOTAL: 7510 175,078 0

– written oﬀ to other expenses 7511 137,911 0

– included into the assets value 7512 37,167 0

Costs of loans TOTAL: 7520 58,563 175,689

– written oﬀ to other expenses 7521 58,563 175,689

Fromm ggeneraleneneeralrraalal bobborrowingorrorrrrorowinwiwinnggc ccosts: 7530 196,474 175,689

– accruedaccacccrurueruueedd% % 7531 196,474 175,689

Chief accountant L.I. Lagunova on February 28, 2012

5.7. CONTINGENTNT ASASSETSSET AND LIABILITIES

5.7.1. ESTIMATED LIABILITIES

Narrative Opening Acknowl- Repaid Written oﬀ Closing balance edged as excessive balance Name Code amount

1234567

Contingent liabilities  TOTAL 5700 748,234 2,011,582 -1,068,386 0 1,691,429

including: – Payment of upcoming leaves of absence 5701 305,276 655,477 -625,428 0 335,325

– Payment of bonuses according to the 5702 328,202 351,535 -328,202 0 351,534 results of the year

– court proceedings not ﬁ nished for the 5703 0 1,004,570 0 0 1,004,570 reporting date

– claims of tax authorities resulting from 5704 114,756 0 -114,756 0 0 tax inspections, not settled for the reporting date

– other contingent liabilities 5705 0 00 0 0

From the general amount of contingent liabilities:

Created based on the expenses on ordinary 5710 1,007,011 activities Chief accountant Created based on other expenses 5720 1,004,570 L.I. Lagunova 191

included into the assets value 5730 0 on February 28, 2012 COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

5.7.2. DEFERRED TAXES

Name Code Deductible time Deferred tax Taxed time Deferred tax diﬀ erences assets diﬀ erences liabilities

123456

Opening balance for the 7700 674,945 134,989 10,342,580 2,068,516 reporting year

Income 7710 35,760 7,152 0 0

Expenses 7720 (0) (0) (814,656) (162,931)

Result of changes in tax 7730 Х 0 Х 0 rates

result of correction of errors 7740 0 0 16,96,910 3,39,382 of past years

Constant diﬀ erences in the 7750 0 0 0 0 value of assets and liabilities

Writing oﬀ not entailing tax 7760 (0) (0) (10,230) (2,0460) consequences

Closing balancelance foforr tthehe 7800 710,705 142,141 11,214,604 2,242,921 reporting peperiodriood

Chief accountant L.I. Lagunova on February 28, 2012

5.8. COLLATERALL

Narrative For December 31, For December 31, For December 31, 2011 2010 2009 Name Code

123 45

Received  TOTAL 5800 129,531 90,821 151

including: – promissory notes 5801 0 0 0

– pledged property 5802 129,531 90,821 151

including: – ﬁ xed assets objects 58021 0 0 0

– securities and other ﬁ nancial 58022 0 0 0 investments

– other 58023 129,531 90,821 151

192 other received 58024 0 0 0

WWW.TE.RU Issued under own liabilities  TOTAL 5810 0 9,953 161 ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

123 45

including: promissory notes 5811 0 0 0

Property transferred to pledge 5812 0 9,953 161

including: – ﬁ xed assets objects 58121 0 0 0

– securities and other ﬁ nancial 58122 0 0 0 investments

– other 58123 0 9,953 161

otherother ississuedssssueduueedd 58124 0 0 0

Chief accountant L.I. Lagunova on February 28, 2012

5.11.1 OTHOTHER INCOME AND EXPENSES

Narrative For 2011 For 2010

Name Code

123 4

Other income TOTAL 8000 4,898,393 2,513,721

including: – From sale of ﬁ xed assets, except for apartments 8001 24,436 51,182

– From sale of apartments 8002 1,049 125

– From sale of inventories 8003 11,420 22,647

– From sale of securities 8004 3,620,598 2,107,579

– From sale of other assets 8005 26,777 16,598

Proﬁ t 2010 discovered in the reporting period 8006 11,795

Proﬁ t 2009 discovered in the reporting period 8007 1,007 2,790

Proﬁ t 2008 discovered in the reporting period 8008 170 100

Proﬁ t before 01.01.2008 discovered in the reporting period 8009 100

Penalties, ﬁ nes and forfeits recognized or for which there exists a court 8010 2,908 12,349 (arbitration court) award

Accounts payable the action limitation period of which elapsed 8011 179 5 (more than three years) Surplus property as a result of inventory check 8012 24,359 157,347 193 Income from ﬁ xed assets received gratuitously, determined according 8013 7 23 to the established procedure COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

123 4

Price of material valuables remaining aﬅ er writing oﬀ assets not ﬁ t for 8014 10,356 8,853 restoration and further use

Revaluation of ﬁ nancial investment at their current 8015 1,374 40,001 market value

Income from decrease (writing oﬀ ) of the provision for bad debts 8016 650,766 0

Income from decrease (writing oﬀ ) of provision for contingent liabilities 8017 114,756 0

Income from decrease (writing oﬀ ) of the provision for decrease in value of 8018 7,240 49,579 inventories

Income from discovered non-contracted consumption of power 8019 10,118 6,322

Insurance beneﬁ ts receivable 8020 30,440 29,246

Other 8021 348,538 8,975

Other expenses TOTAL 8100 (6,848,205) (2,958,884)

including: – From sale of ﬁ xed assets, except for apartments 8101 (15,832) (10,026)

– From sale of apartments 8102 (2,590) (339)

– From sale of inventories 8103 (11,347) (44,685)

– From sale of securities 8104 (3,620,140) (2,100,161)

– From sale of other assets 8105 (21,474) (4,052)

Expenses of bank fees 8106 (10,008) (16,350)

Expenses on servicing ﬁ nancial investment 8107 (62) (779)

Provision for bad debts 8108 (650,766) (0)

Provision for impairment of ﬁ nancial investment 8109 (0) (0)

Provision for decrease in value of material valuables 8110 (29,009) (0)

Provision for contingent liabilities 8111 (1,004,570) (114,756)

Retirement of non-income-bearing assets 8112 (158,685) (96,821)

VAT on gratuitously transferred property 8113 (623) (2,123)

Loss 2010 discovered in the reporting period 8114 (56,557) (0)

Loss 2009 discovered in the reporting period 8115 (5,593) (11,660)

Loss 2008 discovered in the reporting period 8116 (398) (9,173)

Loss before 01.01.2008 discovered in the reporting period 8117 (87) (5,780)

Penalties, ﬁ nes and forfeits recognized or for which there exists a court 8118 (85,987) (3,959) (arbitration court) award

194 State duties on business agreements 8119 (1,256) (868)

WWW.TE.RU Revaluation of ﬁ nancial investment at their current market value 8120 (49,901) (100) ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

123 4

Non-refundable VAT 8121 (57,092) (63,838)

Contributions into unions and funds 8122 (9,079) (3,053)

Accounts receivable the action limitation period of which elapsed 8123 (6,830) (325) (more than three years)

Legal costs 8124 (6) (3)

Theﬅ s, shortages 8125 (205) (170)

Other material (ﬁ nancial) aid and other payments to employees 8126 (275,550) (239,623)

material aid to retirees (including non-recurrent payments, recovery 8127 (1,271) (1,541) of community charges)

Expenses on sports events 8128 (6,173) (9,505)

Expensesses onn culcucculturalululturtutururalal andanandd edeeducationalducauuc events 8129 (35,415) (41,585)

Charityitty 8130 (350,000) (0)

Otherheerr 8131 (381,699) (177,609)

Director P.A. Mikheev Chief accountant L.I. Lagunova on February 28, 2012

5.12. REFERENCE ON ITEMS ACCOUNTED ON OFFBALANCE SHEET ACCOUNTS

Narrative Code for for for December 31, December 31, December 31, 2011 2010 2009

123 45

Leased capital assets 8200 13,520,742 12,660,723 11,825,609

including: leasing 82001 0 0 0

Inventory assets, accepted for secure storage 8201 0 21,708 22,048

Bad debts of insolvent debtors written oﬀ to losses 8202 91,788 168,612 563,324

Depreciation of land improvement facilities and similar 8203 209 209 209 objects

Strictly-controlled forms 8204 1,010 1,005 1,007

Property in federal ownership 8205 7,017 7,017 7,017

IntangibleIntanggiblibblbleae aassetsssessssesetsts recreceivedececeiveeiiviveded foforfoorr ususee 8206 443,216 482,707 544,764

PropertyProroroperpeperertyty tratrttransferredraransfnsn errrrr edd intiniintonttooc ccharterhaharhara tterteerer ccacapital to pay 8207 forfofoorr puppurchasedurchrcrchchaased ssharesharhahaarres

Chief accountant L.I. Lagunova 195 on February 28, 2012 COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

5.14. CHANGES IN BALANCE SHEET TOTAL

Assets as of 31.12.2009 as of 31.12.2010

According to statements According to statements for Adjustment reasons Additional According to statements According to statements for Adjustment Reasons Additional for 2009 2011 line "as of 31.12.2009" of data explanations for 2010 2011 line "as of 31.12.2010" of data explanations

balance amount balance amount changes in revaluation correction amendment balance amount balance amount changes in revaluation correction amendment sheet line (thousand sheet line (thousand accounting of revealed of the sheet line (thousand sheet line (thousand accounting of revealed of the code roubles) code roubles) policy errors reporting type code roubles) code roubles) policy errors reporting type

1 23 45 6 7 8 9 10 11 2 3 456 7 8 9 10 11

I. NONCURRENT ASSETS

Intangible assets 110 1,694 1110 11 -1,683 -1,683 110 3,493 1110 35 -3,458 -3,458

Research and development results - 1120 3,683 3,683 3,683 - 1120 4,958 4,958 4,958

Fixed assets 120 72,396,023 1131-1133 80,122,303 7,726,280 7,726,280 120 82,189,898 1131-1133 87,483,577 5,293,679 5,293,679

Incomplete construction 130 5,721,889 1134 5,721,889 0 130 5,442,773 1134 5,442,773 0

advances paid for major construction works and purchase of ﬁ xed assets - 1135 2,663,399 2,663,399 2,663,399 - 1135 1,830,316 1,830,316 1,830,316

Income-bearing investments in tangible assets 135 0 1140 0 0 135 0 1140 0 0

Financial investment 140 321,740 1150 321,740 0 140 361,642 1150 361,642 0

Deferred tax assets 148 122,491 1160 220,368 97,877 97,877 148 8,293 1160 134,989 126,696 126,696

Other noncurrent assets 150 2,000 1170 574,027 572,027 572,027 (+ ) 574027- soﬅ ware 150 1,500 1170 507,243 505,743 505,743 (+ ) 507243- soﬅ - products, ware products, (-) 2000 — incomplete (-) 1500 — R&D incomplete R&D

TOTAL for section I 190 78,565,837 1100 89,627,420 8,398,184 97,877 7,726,280 0 3,237,426 190 88,007,599 1100 95,765,533 7,757,934 126,696 5,293,679 0 2,337,559

II. CURRENT ASSETS

Inventories, including: 210 2,038,718 1210 1,446,120 -592,598 -7,396 -585,204 210 1,576,898 1210 1,054,502 -522,396 -13,550 -508,848

– deferred expenses 216 592,598 - -592,598 -7,396 -585,204 including (-)11176 — 216 522,396 - -522,396 -13,550 -508,848 including (-)1605 — expenses on insurance expenses on insurance

Value added tax for purchased valuable 220 87,352 1220 87,352 0 220 86,471 1220 86,471 0

Accounts receivable 230+240 5,771,429 1230 2,639,802 -3,131,627 -3,131,626 230+240 6,513,156 1230 4,354,237 -2,158,919 -2,158,919

including: 230 41,580 1231 43,368 1,788 1,788 230 80,400 1231 90,188 9,788 9,788 – Accounts receivable (payment expected beyond 12 months aﬅ er the reporting date)

– Accounts receivable (expected payments within 12 months from 240 5,729,849 1232 2,596,434 -3,133,415 -3,133,415 240 6,432,756 1232 4,264,049 -2,168,707 -2,168,707 the accounting date)

among these: 241 1,891,340 123201 1,891,340 0 241 2,493,943 123201 2,493,943 0 – buyers and ordering customers

– advance payments made 245 3,774,179 123202 640,764 -3,133,415 -3,133,415 245 3,876,894 123202 1,708,663 -2,168,231 -2,168,231 196 197

WWW.TE.RU COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

1 2345 6 7 8 9 10 11 2 3 456 7 8 9 10 11

– other accounts receivable 246 64,330 123203 64,330 0 246 61,919 123203 61,443 -476 -476

ﬁ nancial investment (except for cash equivalents) 250 1,100,161 1240 98 -1,100,063 -1,100,063 250 1,400,113 1240 -1,400,113 -1,400,113

cash and cash equivalents 260 2,797,076 1250 3,897,139 1,100,063 1,100,063 260 1,955,763 1250 3,355,876 1,400,113 1,400,113

Other current assets 270 694,714 1260 1,174,118 479,404 479,404 VAT from advances on 270 551,930 1260 882,134 330,204 330,204 VAT from advances major construction on major construc- works tion works

TOTAL for section II 290 12,489,450 1200 9,244,629 -3,244,821 -7,396 0 0 -3,237,426 290 12,084,331 1200 9,733,220 -2,351,111 -13,550 0 0 -2,337,559

BALANCE 300 91,055,287 1600 98,872,049 5,153,363 90,481 7,726,280 0 0 300 100,091,930 1600 105,498,753 5,406,823 113,144 5,293,679 0 0

Liabilities

III. CAPITAL AND RESERVES 0

Charter capital (share capital, authorized fund, contributions of partners) 410 2,737,389 1310 2,737,389 0 410 2,737,389 1310 2,737,389 0

Additional capital /Revaluation of noncurrent assets 420 58,205,829 1340 67,997,844 9,792,015 9,792,015 420 67,897,705 1340 73,686,306 5,788,601 5,788,602

Surplus 430 400,375 1360 400,375 0 430 400,375 1360 400,375 0

Retained earnings (uncovered loss) 460, 470 9,505,387 1370 7,188,382 -2,317,005 -398,904 -2,065,735 147,634 460, 470 12,772,851 1370 11,757,595 -1,015,256 -520,334 -494,923

TOTAL for section III 490 70,848,980 1300 78,323,990 7,475,010 -398,904 7,726,280 147,634 0 490 83,808,320 1300 88,581,665 4,773,345 -520,334 5,293,679 0

IV. LONG-TERM LIABILITIES 0 0

Borrowed funds 510 11,522,416 1410 11,522,416 0 510 5,522,416 1410 5,522,416 0

Deferred tax liabilities 515 1,163,267 1420 1,015,633 -147,634 -147,634 515 2,068,516 1420 2,068,516 0

Estimated liabilities - 1540 0 - 1540 0

Other liabilities 520 0 1450 709,081 709,081 520 0 1450 918,110 918,110 918,110

TOTAL for section IV 590 12,685,683 1400 13,247,130 561,447 0 0 -147,634 0 590 7,590,932 1400 8,509,042 918,110 0 0 0 918,110

V. SHORT-TERM LIABILITIES 0 0

Borrowed funds 610 1510 0 610 1510 0

Accounts payable 620 7,481,429 1520 6,772,348 -709,081 620 8,317,995 1520 7,399,885 -918,110 -918,110

Prepaid income 640 30 1530 30 0 640 7 1530 7 0

Reserves for future expenses/ Contingent liabilities 650 1540 489,385 489,385 489,385 650 114,756 1540 748,234 633,478 633,478

Other liabilities 660 39,165 1550 39,166 660 259,920 1550 259,920 0

TOTAL for section V 690 7,520,624 1500 7,300,929 -219,696 489,385 0 0 0 690 8,692,678 1500 8,408,046 -284,632 633,478 0 0 -918,110

BALANCE 700 91,055,287 1700 98,872,049 7,816,761 90,481 7,726,280 0 0 700 100,091,930 1700 105,498,753 5,406,823 113,144 5,293,679 0 198 199 Chief accountant L.I. Lagunova WWW.TE.RU on February 28, 2012 COMPONENTS OF SUCCESS JSC TYUMENENERGO FINANCIAL CONDITION ANNUAL REPORT | 2011 AND PERFORMANCE ANALYSIS

5.15. CLARIFICATION ON COMPATIBILITY OF FORM NO. 2 "PROFIT AND LOSS STATEMENT"

Narrative name For the current reporting period Reasons for discrepancies according according to discrepancies to statements statements for 2011 for 2010 on line for 2010

123 45

Proceeds 46,146,689 46,146,689 0

Sales cost -37,317,504 -37,467,753 150,249 changes in accounting policy

Gross proﬁ t 8,829,185 8,678,936 150,249 changes in accounting policy

Business expenses 0 0 0

Administrative expenses 0 0 0

Sales proﬁ t (loss) from sales 8,829,185 8,678,936 150,249 changes in accounting policy

Income from participation 28 28 0 in other companies

Interest receivable 197,307 197,307 0

Interest payable -686,266 -686,266 0

Other income 2,513,721 2,513,721 0

Other expenses -2,958,884 -2,958,884 0

Income (loss) before taxation 7,895,091 7,744,842 150,249 changes in accounting policy

Current proﬁ t tax -2,140,924 -2,140,924 0

including permanent tax 843,182 844,413 -1,231 changes liabilities (assets) in accounting policy

Modiﬁ cation of deferred -167,078 -167,078 0 tax liabilities

Modiﬁ cation of deferred -114,198 -85,379 -28,819 changes tax assets in accounting policy

Other 42,535 42,535 0

Netett prpproroﬁ tt( (loss)(loslolososs)s) ofof theththehe rerreportingeporpopoorrtinttiinng 5,515,426 5,393,996 121,430 periodperpepeerriodioodod

200 Chief accountant L.I. Lagunova WWW.TE.RU on February 28, 2012 ANNUAL REPORT | 2011 FINANCIAL CONDITION JSC TYUMENENERGO AND PERFORMANCE ANALYSIS

5.16. CLARIFICATION ON COMPATIBILITY OF FORM NO. 4 "CASH FLOW STATEMENT"

Narrative name line No. For the current reporting period Clariﬁ cation

according to according to discrepancies changes of form excluded from internal turnover statements the statements (reclassiﬁ cation) cash ﬂ ows VAT between cash for 2010 for the current amounts and cash period Cash Flow equivalents Statement for 2011

1234 5678

Cash ﬂ ow on current activities

Cash received  TOTAL 4110 54,804,114 46,727,678 8,076,436 0 -8,076,436 0

including: – from sales of produce, 4111 52,940,499 44,693,014 8,247,485 -171,817 -8,075,668 works and services

– rent payment, license pay- 4112 0 171,817 -171,817 171,817 ment, fees, commission fees etc..

– other proceeds 4119 1,863,615 1,862,847 768 -768

Sent cash, TOTAL 4120 43,917,395 36,142,305 7,775,090 -3,235,606 -7,220,176 0

including: – for payment of goods, 4121 31,579,532 26,762,252 4,817,280 -4,817,280 works, services

– labor payment 4122 4,180,862 4,180,862 0

– for payment of interest on 4123 812,488 687,574 124,914 -124,914 debt instruments

– for payments of taxes and 4124 4,697,327 2,016,635 2,680,692 -2,680,692 charges

– for other payments, 4129 2,647,186 2,494,982 152,204 -430,000 -2,402,896 transfers 2,680,692

Results of cash ﬂ ow from cur- 10,886,719 10,585,373 301,346 rent activities

Cash ﬂ ow on investment activities

Cash received  TOTAL 4210 248,004 237,311 10,693 0 -10,693 0

including: from sale of ﬁ xed assets objects 4211 70,101 59,408 10,693 -10,693 and other property

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1234 5678

dividends, interest on ﬁ nancial 4214 177,903 177,903 0 investment

other proceeds 4219 0

Sent cash, TOTAL 4220 8,083,615 4,941,463 3,142,152 124,914 -866,953 -2,400,113

including: – for purchase of ﬁ xed assets objects (including income 4221 5,679,902 4,813,476 866,426 -866,426 bearing investment into material valuables) and intangible assets

– for ﬁ nancial investment 4224 2,400,113 124,914 2,275,199 124,914 -2,400,113

– for other payments, 4229 3,600 3,073 527 -527 transfers

Results of cash ﬂ ow from -7,835,611 -4,704,152 -3,131,459 investment activities

Cash ﬂ ow on ﬁ nancing activities

CASH RECEIVED  TOTAL 4310 2,107,579 7,516 2,100,063 0 0 -2,100,063

including: – from borrowings 4311 2,107,579 0 2,107,579 -7,516 -2,100,063

– budgetary allocations and 0 other targeted funding

– contributions of members 0

other proceeds 4319 7,516 -7,516 7,516

Sent cash, TOTAL 4320 6,000,000 6,430,000 -430,000 430,000 0 0

including: – for repayment 4323 6,000,000 6,000,000 0 – of borrowings

– for dividends 4322 430,000 -430,000 430,000

– for other payments, 00 transfers

Results of cash ﬂ ow from -3,892,421 -6,422,484 2,530,063 ﬁ nancial activities

Cash ﬂ ow result for the -841,313 -541,263 -300,050 reporting period

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1234 5678

Opening cash balance 2,797,076 3,897,139 -1,100,063 for the reporting period

Closing cash balance 1,955,763 3,355,876 -1,400,113 or the reporting period

Ruble exchange rate diﬀ erence 0

Chief accountant L.I. Lagunova on February 28, 2012

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AUDIT REPORT ON ACCOUNTING FINANCIAL STATEMENTS

TO THE SHAREHOLDER OF OPEN JOINT STOCK COMPANY TYUMENENERGO AS OF FEBRUARY 28, 2012

INFORMATION ON THE AUDITED ENTITY:

Full name: Open Joint Stock Company Tyumenenergo

Abbreviated name: JSC Tyumenenergo

State registration Certiﬁ cate of State Registration series 86 No. 000503856 of October 14, 2002, issued by the Inspection of the Ministry of the Russian Federation for Taxes and Levies for Surgut of Khanty-Mansi Autonomous Okrug; Included into the Uniform State Register of Legal Entities under the Primary State Registration Number 1028600587399

Location: Universitetskaya ul. 4, Surgut, Tyumen Region, Khanty-Mansi Autonomous District — Yugra, 628406

Postal address Universitetskaya ul. 4, Surgut, Tyumen Region, Khanty-Mansi Autonomous District — Yugra, 628406; tel. +7 (3462) 77-66-77

INFORMATION ON THE AUDITOR

Full name: Limited Liability Company Nexia Pacioli

Abbreviated name: LLC Nexia Pacioli

State registration Certiﬁ cate of State Registration No. 856.235 of June 23, 1995 issued by the Moscow Registration Chamber; Certiﬁ cate of State Registration series 77 No. 005390060 of July 22, 2002 issued by Interdistrict Inspectorate No. 39 of the Ministry of the Russian Federation for Taxes and Levies for Moscow; Included into the Uniform State Register of Legal Entities under the Primary State Regis- tration Number 1027739428716

Location: ul. Malaya Polyanka, d.2., Moscow, 119180

Postal address ul. Malaya Polyanka, d.2., Moscow, 119180

Membership Is a member of Self-regulatory Organization of Auditors Non-commercial Part- in a self-regulatory nership Institute of Professional Auditors (NP IPAR); Included into the Register organization of Auditors and Audit Firms of the mentioned self-regulatory organization on of auditors October 30, 2009 under the Primary Registration Number 10202000073.

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We have audited the attached accounting statements of JSC Tyumenenergo comprising: – an Accounting Balance Sheet as of December 31, 2011; – a Proﬁ t and Loss Statement for 2011; – a Statement of Changes in Equity for 2011; – a Cash Flow Statement for 2011; – and an Explanatory Note to the Accounting Statements for 2011.

RESPONSIBILITY OF THE AUDITED ENTITY FOR THE ACCOUNTING STATEMENTS

Management of the Audited Entity bears full responsibility for drawing up and validity of the above accounting statements under the rules for drawing up accounting statements established in the Russian Federation and for the system of internal control required to draw up accounting statements containing no material distor- tions due to any fraudulent actions or errors.

THE AUDITOR'S RESPONSIBILITY

Our responsibility consists in providing an opinion on the validity the said ﬁ nancial statements based on the carried out audit. We carried out the audit in compliance with the federal standards of audit activities in the Russian Federation. The above standards require compliance with the applicable principles of professional eth- ics, and planning and carrying out the audit in such a way as to obtain reasonable assurance in the fact that the accounting statements contain no considerable misstatements.

The audit included auditing procedures directed to obtain audit evidence conﬁ rming amounts displayed in the accounting statements and information disclosed therein. Selection of the audit procedures has been made upon our judgment based on the estimation of exposure to material misstatements arising due to fraudulent actions or errors. In the course of estimating the said exposure, we considered the system of internal control ensuring drawing up and validity of the accounting statements in order to select the respective audit procedures, and with no purpose to express our opinion on the eﬃ ciency of the internal control system.

Apart from the above, the audit covered estimation of the appropriateness of the accounting policies and rea- sonability of the estimated ﬁ gures obtained by the management of the Audited Entity, as well as evaluation of the presentation of the accounting statements on the whole.

We believe the obtained audit evidence presents suﬃ cient grounds to express our opinion on the validity of these ﬁ nancial statements..

OPINION

We believe that the accounting statements of JSC Tyumenenergo refl ect in all essential aspects its fi nancial situation as of December 31, 2011, its performance and cash fl ow for 2011 according to the established regulations on drawing up accounting statements in the Russian Federation.

RELATED INFORMATION

The audit of the accounting statements for the previous period of 2010 was performed by Auditor ZAO NP Consult. According to the audit results, the audit report dated January 31, 2011 expresses an unmodiﬁ ed opinion on the validity of the accounting statements for 2010.

Deputy Director General for Audit O.V. Danilova LLC Nexia Pacioli (Qualiﬁ cation certiﬁ cate No. К 012652 in general audit; Included into the Register of Auditors and Audit Firms of NP IPAR under the Primary Registration Number 29502000246)

Chief project Manager LLC Nexia Pacioli (Qualiﬁ cation certiﬁ cate No. 042346 V.I. Ekimovskikh of February 28, 2002, in general audit, with no expiration date; Included into the Register of Auditors and Audit Firms of NP IPAR on October 30, 2009 under the Primary Registration Number February 28, 2012 20202001648) 205

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Maximum openness and transparence of Tyumenenergo is a basis of conﬁ - dence of our partners, shareholder №08 and investors. REFERENCE INFORMATION FOR SHAREHOLDERS

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Reference information

LOCATION AND POSTAL ADDRESS OF JSC TYUMENENERGO

Universitetskaya street 4, Khanty-Mansiysk Au- tonomous District — Yugra, Tyumen Region, Surgut 628406, Russia

STATE REGISTRATION INFORMATION:

In accordance with information stated in the Certiﬁ cate of State Registration of Legal Entities registered before July 1, 2002:

Legal entity state registration number: 07-4784

Registration date: March 12, 1993

State registering authority: Administration of Surgut city

In accordance with information in the Certiﬁ cate of Record in the Uniform State Register of Legal Entities on the legal entity registered before July 1, 2002:

Legal entity main state registration number: 1028600587399

Registration date: October 14, 2002

State registering authority: Inspectorate of the Ministry of Russia for Taxes and Levies for Surgut city of Khanty-Mansiysk Autonomous District

BANK DETAILS:

Settlement account: 40702810267170101719 in Zapadno-Sibirsky Bank of Sberbank of the RF, Tyumen Correspondent account: 30101810800000000651 Taxpayer Identiﬁ cation Number (INN)/Taxpayer Clas- siﬁ cation Code (KPP) 8602060185 / 997450001 BIC 047102651

CONTACT DETAILS:

Telephones: +7 (3462) 77-63-59, 77-63-10. Fax: +7 (3462) 77-66-77 Single Company Call Center number 8 800 200-55-04 Hot-line for technical violations 8 800 200-55-02 Ask an expert: http://www.te.ru/asc_question/ E-mail: [email protected] www.te.ru

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AUDITOR OF JSC TYUMENENERGO

The auditor from Nexia Pacioli LLC (Moscow) was approved by the General meeting of shareholders of JSC Tyumenenergo on June 28, 2011. He does not have a license for performing audits; is a member of the self-controlled auditor organization Noncommercial Partnership "Institute of Profes- sional Auditors".

Full name of the audit organization Limited Liability Company Nexia Pacioli

Short name of the audit organization Nexia Pacioli LLC

Location 2-nd Spasonalivkovsky alley 6, Moscow, 119049, Russia

Postal address: Malaya Polyanka street 2, Mos- cow, 119180, Russia

Telephone +7 (495) 640-64-52

Fax + 7 (495) 640-64-53

E-mail [email protected]

Financial year (years) for which the independent inspection of the Audit of annual reports according to Russian accounting and ﬁ nancial (accounting) reports of the issuer was per- standards as of 2011 formed by the auditor

REGISTRAR OF JSC TYUMENENERGO

The register of owners of registered securities of the issuer is maintained by the registrar.

Full name of registrar Limited Liability Company Reestr-RN

Short name of registrar Reestr-RN LLC

Location of registrar Podkopayevsky alley 2/6, building 3-4, Moscow 109028

Postal address P/o box 4, Moscow 115172

Telephone/Fax (495) 411-79-11 / (495) 411-83-12

E-mail [email protected]

Web-site http://www.reestrrn.ru/

Number of registrar’s license for maintenance of security 10-000-1-00330 owners register

Date of issue 16.12.2004

License validity Not limited 208 License issuing authority Federal Financial Markets Service Date of commencement of registered securities register 16.12.2010 WWW.TE.RU maintenance by the indicated registrar ANNUAL REPORT | 2011 REFERENCE INFORMATION FOR SHAREHOLDERS JSC TYUMENENERGO

GLOSSARY

ABBREVIATIONS

ABACS Automated business activity control system

ABMS Automated budget management system

AC Authorized capital

ACC Area control centre

ACPP Annual complex purchasing program

ADC Associated dependent company

ADCS Automated dispatcher control system

ADMS CAER Automated data measurement system for control and accounting of energy resources

AEPCS Automated engineering process control system

ANPO PTC Autonomous Non-Proﬁ t Organization Professional Training Centre

APMS Automated process management system

AR Automatic reclosing

ASEECA Automated system for electric energy commercial accounting

ASFEAA Automated system for ﬁ nancial and economic activity accounting

ASMDF Automated system for managerial document ﬂ ow

ATCB Automatic transfer circuit-breaker

ATE Automatic telephone exchange

AV Average voltage

B2B Information analysis and trade operative system “Market of products, services and technologies for power industry”

CA Capital assets

CAGR Compound annual growth rate

CCP Combined-cycle plant

CF Cash ﬂ ow

CI Capital investments

CICS Corporate information control system

CJSC Closed Joint-Stock Company

CPL Cable power lines

CS Closed switchgear 209

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CSR Controlled shunt reactor

DB Dispatch boards

DE Design estimates

DGC Distribution grid company

DPC Data processing centre

DZ Distribution zone

EBITDA Earnings before interest, taxes, depreciation and amortization

EMP Electromagnetic ﬁ eld

FA Fixed assets

FCS of Russia Federal Commission on Securities of Russia

FEC Fuel-energy complex

FGC UES, OJSC Open Joint-Stock Company Federal Grid Company of Uniﬁ ed Energy System

FSE Hygiene and Epidemiology Federal State Enterprise Hygiene and Epidemiology Centre Center

FSEI FVE SPb EIFE Federal State Educational Institution for Further Vocational Education Saint Petersburg Energetic Institute for Further Education

FSFM of Russia Federal Service for Financial Markets of Russia

GASIS State Academy for Occupational Retraining and Professional Development of Executive Employees and Investment Specialists

GMC Grid monitoring centre

HFC High-frequency communication

HMAD-Yugra Khanty-Mansiysk Autonomous District-Yugra

HPP Heat and power plant

HV High voltage

ICN Integrated communication network

ID Executive direction of JSC Tyumenenergo

IDGC Holding, OJSC Open Joint-Stock Company International Distribution Grid Companies Holding

IDGC Interregional Distribution Grid Company

IFE for Public Employees Institute for Further Education of Public Employees

IMS Integrated management system

IP Investment program

ISO International Standardization Organization

210 IT Information technologies

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ITI Internal technical inspection

JSB Sberbank RF Joint-Stock Bank Sberbank of the Russian Federation

KPI Key performance indicators

LAN Local area network

LLC Limited Liability Company

LV Low voltage

M Maintenance

MAE Maximum allowable emission

MD (EGE) Manufacturing department (electric grid enterprise)

MPL Maximum permissible level

MR Maintenance and repair

NATR Northern areas of Tyumen Region

NC New construction

NPG National power grid

OCB Oil circuit breakers

ODS Operative dispatch service

OFT Operative ﬁ eld team

OJSC Open Joint-Stock Company

OPTL Overhead power transmission line

OS Outdoor switchgear

PTS Packaged transformer substation

RAB Regulatory asset base

RAO UES of Russia, OJSC Russian Open Joint-Stock Company of Power and Electriﬁ cation UES of Russia

RDA Research and development activity

RDC Regional dispatcher control

REC Regional Energy Commission

REIC of Ural Regional engineering inspection centres of Ural

RL Relay line

ROE Return on equity

RPA Relay protection and automation RPA Regional power authority 211 S Substation COMPONENTS OF SUCCESS JSC TYUMENENERGO REFERENCE INFORMATION FOR SHAREHOLDERS ANNUAL REPORT | 2011

S Separators

SanPiN Sanitary regulations and standards

SBIC Self-bearing insulated conductors

SC Short circuiters

SCB Static compensator battery

SCB Stabilizing condenser battery

SDPP State district power plant

SE MICE Stock Exchange Moscow Interbank Currency Exchange

SED Substation electrician on duty

SEI HPE Tyumen State State Educational Institution for Higher Professional Education University Tyumen State University

SEI HPE Yuzhno-Ural State State Educational Institution for Higher Professional Education University Yuzhno-Ural State University

SF Salary fund

SLA Service level agreement

SMMS Stability margin monitoring system

SN 2.2.4/2.1.562-96 Sanitary standards

SO UES, OJSC Open Joint-Stock Company System Operator of Uniﬁ ed Energy System of Russia

SRI Supporting rod insulation

SS Surge suppressors

SS Switching substation

TGK Territorial generating company

TL Transmission line

TNO Territorial network organization

TOFTS Tax Oﬃ ce of the Federal Tax Service

TRDM Tyumen regional dispatch management

TS Transformer substation

TUC, OJSC Open Joint-Stock Company Tyumen Utilities Company

TUR Technical upgrade and reconstruction

TZS Elektra Competitive bidding information support system

UST Uniﬁ ed social tax 212 VAT Value-Added Tax

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VIPKenergo All-Russia Institute for Further Education

WGC Wholesale generating company

YNAD Yamalo-Nenets Autonomous District

MEASUREMENT UNITS

A/m Amperes per meter. Electromagnetic ﬁ eld electric component measurement unit

GW Gigawatt. Transformer capacity measurement unit

Gcal Gigacalorie. Thermal energy measurement unit

Gcal/hour Gigacalorie/hour. Thermal capacity measurement unit

Hz Hertz. Frequency measurement unit dB(A) Decibel. Noise measurement unit kV Kilovolt. Voltage measurement unit kV/m Kilovolts per meter. Electromagnetic ﬁ eld magnetic component measurement unit kWh Kilowatt-hour. Electric energy measurement unit

MW Megawatt. Electric power measurement unit

MWh Megawatt-hour. Electric energy measurement unit. 1 MWh = 1,000 kWh

MVA Megavolt-ampere. Transformer capacity measurement unit

MVar Megavar. Reactive power measurement unit

Mbit/s Megabits per second

TWh Terawatt-hour = 1 bln. kWh

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APPENDIX NO. 1 Main events

MAIN EVENTS OF 2011 *** The General Director of JSC Tyumenenergo attend- JANUARY ed a meeting of the Board of Directors, chaired by Governor of Yugra Natalia Komarova for discussion *** of the draﬅ Master plan for oil industry develop- On January 12, 2011 a subsidiary of Tyumen- ment in Russia until 2020. energo — OJSC Energy Service Company Tyumenenergo was registered. The main activity MARCH of the energy service company is to implement the full range of services for conducting energy audits, *** development of energy service, investment and Noyabrsk power engineering specialists started the other programs, as well as actual implementation reconstruction of one of the oldest plants in the of energy saving measures. region, KNS-1, involved in supply of Kholmogory ﬁ eld. Works are carried out within the framework *** of a comprehensive renovation and modernization For JSC Tyumenenergo, 2011 was a year of program for 110 kV plants. practical customer orientation. New customer relations technologies, advanced products and *** forms of customer interaction were one of the JSC Tyumenenergo held a large meeting on directions for the company in the past year. the changes in organization of the process of technological connection. The need for the *** meeting was caused by changes in the law of the The company introduced a new form of technological connection involving revision of terms, interaction with customers — multichannel sources of ﬁ nancing and various aspects of the twenty-four-hour telephone for questions process organization. about technological failures in the electrical network. In case of power failure, if any, any *** consumer in the area of responsibility of Tyumen- On March 16 the press conference of the energo can make a free call to that number and General Director of JSC Tyumenenergo was get to know all the circumstances. If the failure held. During the meeting with reporters results of occurred in the area of the other energy companies, the company activities in 2010 were summed up, the operator redirects the customer to the support and prospects of innovation development of the service of this company. Company in the coming years were revealed.

*** *** JSC Tyumenenergo passed to a new registrar On March 23 in Tyumen, the Agreement on Coop- LLC Registry — RN. eration between JSC Tyumenenergo and Tyumen regional branch of the regional public organization The register of shares of the Company 100% Business Russia was signed. of which are owned by the sole shareholder — OJSC IDC Holding, from 12.16.2010 is kept by *** Registry — RN. Appropriate procedures for selection On March 24 General Director of JSC Tyumenenergo and approval of the Registrar by the Board of Direc- took part in the visiting meeting of the Russian tors were held in autumn 2010. Security Council Secretary in Salekhard, on national security issues in the framework of the regional FEBRUARY investment project "Ural Industrial — Ural Polar".

*** APRIL In February 2011 the state registration of capital increase by raising the par value *** of shares ended. In the future, a signiﬁ cant On April 9, 2011 in Surgut a cooperation agree- amount of capital will have a positive impact on ment between JSC Tyumenenergo and the regional the credit policy, expanding the possibilities of oﬃ ce of the All-Russian public organization of the Tyumen energo for borrowing resources on more state "Voluntary Society of Assistance to the Army, favorable terms and, accordingly, the Company's Air Force and Navy of Russia" of Khanty-Mansiysk strategic business development. Autonomous District — Yugra was signed. 215

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*** Tyumen energo was allocated for the company's de- On April 19–20 in Khanty-Mansiysk, a meeting of velopment. In addition, the auditor of the Compa- chief engineers of structural units of Tyumenenergo ny — LLC Nexia Pacioli, the Charter of JSC Tyumen- where experts summed up the last autumn-winter energo in the new edition were approved, and a new period, and discussed plans for the company devel- Board of Directors was also elected. opment. JULY *** On April 27, 2011 in Tyumen, conference *** "Energy Effi ciency" took place. The event was On July 9 in Nizhnevartovsk the competition in the organized by JSC Tyumenenergo with assistance professional skill of operational and mobile crews of the Tyumen Regional Department of Public in conjunction with the automatic equipment mainte- Organization Business Russia. Representatives of nance staff of branches of JSC Tyumenenergo ended. government, business, industry and power engineering discussed at the round table the issues related AUGUST to problems of interaction, and ways to improve the quality of consumer services. *** One of the largest sites of Surgut — Ice Palace, which MAY power consumption will be 3.5 MW was connected to the centralized power grid of Tyumenenergo. *** On May 11 Tyumenenergo held a meeting with SEPTEMBER the business community of Surgut and Surgut region. At the invitation of power engineering spe- *** cialists the event was attended by the Chamber of The branch of JSC Tyumenenergo Neﬅ eyugansk Commerce of Surgut, LLC Support of Russia as well Electrical Network on September 15, 2011 celebrat- as association of builders and business owners. ed the 25th anniversary of successful activity in the power supply industry. JUNE *** *** The branch of JSC Tyumenenergo Urai Electrical Net- On June 7-8 a meeting of the Technical Council of work celebrated the momentous event — 30 years JSC Tyumenenergo to discuss the diagnosis of elec- of effi cient activity in the in power supply industry. trical equipment of electrical networks with voltage up to 220 kV was held. *** JSC Tyumenenergo organized the conference *** on technological connection and tariff set- From June 14 to 17 in Nizhnevartovsk competitions ting for consumers of oil and gas industry. The of professional skill of crews maintaining 10-0.4 kV event was the opening day of XVIII exhibition "Oil distribution networks were held. and Gas. Fuel and Energy Complex" on September 20 in Tyumen. *** The General Director of JSC Tyumenenergo *** took part in the work of the Council on The Tyumen region was of the fi rst regions of Economic Policy under the Plenipotentiary the Russian Federation to register with the Representative of the President of the Rus- Russian Ministry of Energy energy passports sian Federation in the Ural Federal District of all regional agencies. Energy audit for more Nikolay Vinnichenko. The Council with participa- than two and a half thousand buildings of regional tion of Minister of Power Engineering of the Russian property, with total area of nearly two million Federation Sergey Shmatko was held in Ekaterin- square meters, operated by OJSC ESCO Tyumenen- burg on June 21. ergo was completed.

*** OCTOBER On June 28 the annual general meeting of shareholders took place. The AGM of the Com- *** pany approved the Company's annual report for Branches of Tyumenenergo obtained pass- 2010, the annual fi nancial statements for the past ports of readiness for winter. Work on preparing year, including profi t and loss statement, as well enterprises for the autumn and winter period were as the distribution of profi ts in fi scal year of 2010. carried out without deviation from the intended It is important that more than 90% of the profi ts plan, and in some areas — ahead of schedule. 216

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*** *** On October 27 the meeting of Tyumen regional The Board of Directors approved the business plan public organization "Energy Club named aﬅ er of the Company (including the investment program) V.P. Roslyakov" on "Problems and prospects of de- for 2012. velopment of the Tyumen energy system" was held. JANUARY 2012 NOVEMBER *** *** For the development of engineering infrastruc- On November 11, 2011 representatives of the ture of the capital of Yugra the construction of Ministry of Energy and the Ministry of Emergency 110/10 kV ABZ substation is carried out, which Situations of the Russian Federation conﬁ rmed the will ensure uninterrupted power supply of a new readiness of JSC Tyumenenergo for the winter. neighborhood of Khanty-Mansiysk — Yugra under construction, East, and the wider area of individual *** construction. JSC Tyumenenergo was awarded for the best annual report in 2010. FEBRUARY 2012

The second consecutive year OJSC IDC Holding *** recognized the annual report of JSC Tyumenenergo In JSC Tyumenenergo summed up the Year the best among its subsidiaries. of environmental safety. Prizes are awarded as follows: In addition, the debut of Tyumenenergo in one of the largest federal contest for annual reports, – I place — team of the branch Noyabrsk electri- organized by the Administration of Krasnodar cal networks; Region and the Chamber of Commerce, brought – II place — team of the branch Nizhnevartovsk the Company the third place in the category "Best electrical networks; Electronic Annual Report". Winners of the contest – III place — teams of branches Neﬅ eyugansk were awarded at international X Investment Forum electrical networks and Tyumen distribution of Sochi in 2011.* networks. * See http://www.te.ru/ press_center/compa- *** MARCH 2012 ny/2011/09/19/1288 On November 14 in the West-Siberian Innovation Center Tyumen Industrial Park with participation *** of Deputy Governor of the Tyumen Region Sergey On March 29 non-convertible documentary interest Degtyar a round table on explaining the process bearer bonds of JSC Tyumenenergo placed by open of technological connection to electric networks of subscription (state reg. number of securities issue: JSC Tyumenenergo was held. 4-02-00159-F, amount of bonded debt — 2.7 billion roubles, 1,000 roubles — nominal value of *** a bond) were repaid. On November 24 in Ekaterinburg the technical Coun- cil of JSC Tyumenenergo, on operation, repair, mod- MAY 2012 ernization of 35-110 kV circuit breakers was held. *** DECEMBER Preliminary approval of the Company's Annual Report for the 2011 by Board of Directors. *** On December 13 JSC Tyumenenergo held the tech- JUNE 2012 nical Council on operation of relay protection and automation. *** Annual General Meeting of Shareholders. *** On December 20, the eve of the Day of Power NOVEMBER 2012 engineering specialists, Nizhnevartovsk Electrical Networks of JSC Tyumenenergo put under operating *** voltage the substation which was named GPP-9A Annual Seminar of IR Services with IDC, when under construction. At the opening ceremony organized by OJSC IDC Holding. it was named Kolmakovskaya.

217

COMPONENTS OF SUCCESS JSC TYUMENENERGO APPENDIXES ON THE CD ANNUAL REPORT | 2011

APPENDIX NO. 2 Information on compliance of the Company with recommendations of the Corporate Code of Conduct

(Prepared according to the Order of the Federal Commission on Securities Market of 4.30.2003 No. 03-849 / r "On methodological recommendations on composition and presentation of information on compliance with the Corporate Code of Conduct in annual reports of joint stock companies").

No. Provision of the Corporate management code Observed or Note not observed

GENERAL MEETING OF SHAREHOLDERS

1 Notice to shareholders of the general meeting Not observed The sole shareholder of Tyumenenergo is of shareholders not later than 30 days before OJSC IDC Holding. In accordance with section 11.1 the date of the meeting, regardless of issues of the Charter of the Company, if all the voting on its agenda, unless the law provides for a shares of the Company are owned by one share- longer period. holder, the decisions on matters within the competence of the General meeting of shareholders of the Company shall be made by this shareholder (the authorized governing body of the shareholder) in writing and notiﬁ ed to the Company.

2 The possibility of shareholders to check the Not observed The list of persons entitled to participate in the list of persons entitled to participate in the general meeting, is not made. general meeting of shareholders starting of the date of notice of the general meeting of shareholders and to the closing of the general meeting of shareholders, as in the case of closing of the general meeting of shareholders — before the closing date for receipt of ballots.

3 The possibility of shareholders to check infor- Observed The Charter and internal documents do not mation (materials) to be provided in prepara- provide this provision. tion for a general meeting of shareholders by electronic means, including via the Internet. The information (materials) to be provided in preparation for a general meeting of shareholders is sent to shareholders in due course, by electronic means.

4 The possibility of a shareholder to put the Not observed The sole shareholder of Tyumenenergo is question on the agenda of the general meeting OJSC IDC Holding. In accordance with section of shareholders or to require the convening of 11.1 of the Charter of the Company, if all the the general meeting of shareholders without voting shares of the Company are owned by one providing extracts from the register of share- shareholder, the decisions on matters within holders, if his/her rights to shares is registered the competence of the General meeting of in the Company's shareholder register, and if shareholders of the Company shall be made by his/her rights to shares accounted for on the this shareholder (the authorized governing body 218 custody account — suﬃ ciency of the extract of the shareholder) in writing and notiﬁ ed to the from the custody account for implementation Company. WWW.TE.RU of the above rights. ANNUAL REPORT | 2011 APPENDIXES ON THE CD JSC TYUMENENERGO

5 Presence in the Charter and internal docu- Partially According to section 5.2.3. of Article 5.2. of the ments of the Company of the requirement of observed Corporate management code Tyumenenergo, mandatory attendance at a general meeting if possible, provides attendance at the gen- of shareholders of CEO, board members, eral meeting of shareholders of members of members of board of directors, members of the Board of directors, executive bodies, Audit the audit commission and Company auditor. Commission and the auditor of the Company, and authorizes them to answer questions from shareholders.

6 Mandatory presence of candidates for Not observed The Charter and internal documents do not consideration at a general meeting of provide this provision. shareholders of the issues on the election of members of the board of directors, CEO, board members, members of the Audit Com- mission, and the question of approval of the Company auditor.

7 The procedure of registration of participants Not observed The Charter and internal documents do not of the general meeting of shareholders in provide this provision. internal documents of the Company.

BOARD OF DIRECTORS

8 The authority of the Board to annually ap- Observed Subparagraph 13 of paragraph 12.1 of Article 12 prove the ﬁ nancial and business plan of the of the Charter of the Company provide approval Company. of the business plan (adjusted business plan) that includes the investment program and quarterly report on the outcome of their performance.

9 The Company risk management procedure Observed The Company Risk Management Policy was ap- approved by the board of directors proved by decision of the Board of Directors of the Company on 7.30.2010

10 The right of the Board of Directors to decide Observed According to subparagraph 7 of paragraph 12.1 on suspension of powers of the Director of Article 12 of the Charter of the Company elec- General, appointed by the general meeting tion of the General Director of the Company and of shareholders, provided for in the Company early termination of his/her powers, including the Charter. decision on early termination of the employment contract with him/her is the responsibility of the Board of Directors

11 The right of the Board of Directors to estab- Partially According to paragraph 18.6 of Article 18 of the lish qualiﬁ cations and size of remuneration observed Charter of the Company conditions of employ- of the General Director, board members, ment, including in the term of the General Direc- heads of major divisions of the Company tor of the Company shall be determined by the provided for by the Charter. Board of Directors of the Company or a person authorized by the Board of Directors to sign the employment contract.

Also, the decision of the Board of Directors of the Company of 7.22.2011 approved the Regulation on ﬁ nancial incentives and remuneration of top executives of the Company, which determines the system of remuneration of top executives of the Company (Deputy Director General, Chief Accountant, Directors of the branches).

The Board is not provided by the Charter.

12 The right of the Board of Directors to ap- Partially According to paragraph 18.6 of Article 18 of the prove terms of contracts with the General observed Charter of of the Company conditions of employ- Director and board members provided for by ment, including for the term of employment of 219 the Charter. the General Director of the Company shall be determined by the Board of Directors COMPONENTS OF SUCCESS JSC TYUMENENERGO APPENDIXES ON THE CD ANNUAL REPORT | 2011

of the Company or a person authorized by the Board of Directors to sign the employment contract. The Board is not provided by the Charter.

13 The requirement provided for by the Charter Not observed The Charter and internal documents of the Com- or internal documents that in case of ap- pany do not provide this requirement. The Board proval of conditions of the contracts with is not provided by the Charter. the General Director (managing organization, CEO) and members of the board votes of members of the board of directors who are the General Director and board members are not counted in counting of votes.

14 The presence in the Board of Directors of Observed In the Board of Directors at least three independ- the Company of at least three independent ent directors are elected. directors who meet the requirements of the Corporate Code of Conduct.

15 Absence in the Board of Directors of the Observed There are no such people Company of people who were found guilty of in the Board of Directors committing crimes in the fi eld of economic activity or crimes against the state government, public service and service in local government, or persons to which administrative penalties for violations in the fi eld of business or fi nance and taxes and levies, securities market were imposed.

16 Absence in the Board of Directors of the Observed The Board of Directors of the Company does Company of persons who are general direc- not include persons who are general directors tors (managers), members of the governing (managers), members of the governing body or body or employees of a legal entity compet- employees of a legal entity competing with the ing with the Company. Company.

17 The requirements for election of the board of Not observed The Charter does not provide this provision. directors by cumulative voting provided for by the Charter.

18 The responsibility of members of the Board Observed Provided for in subparagraph 4.1.6. para- of directors provided for by internal docu- graph 4.1. Article 4 of the Corporate manage- ments to abstain from actions that will or ment code. may potentially lead to a confl ict between their interests and the interests of the Com- pany, and in the event of a confl ict — the duty to disclose information on this confl ict to the Board of Directors.

19 The responsibility of members of the Board Observed Provided for in paragraph 4.1, paragraph 4 of of directors provided for by internal docu- the Regulations on Insider Information of the ments notify in writing the Board of Directors Company. of intention to eff ect transactions with securities of the Company, the members of the In accordance with paragraph "c" of paragraph 2 Board of Directors of which they are, or its of Annex No. 5 to the Regulations on Insider In- subsidiaries (affi liates), as well as to disclose formation of the Company insiders of Category 1 information on transactions with securities. (General Director of the Company or the person performing his/her duties, persons who own at least 25 percent of the vote in the supreme governing body of the Company; members of the Board of Directors of the Company) shall, within 30 days of the end of the quarter provide written confi rmation of the number belonging to them at 220 the end of the accounting quarter Insider fi nancial instruments of the Company and made for WWW.TE.RU the quarter (either directly or through any other ANNUAL REPORT | 2011 APPENDIXES ON THE CD JSC TYUMENENERGO

persons acting on their behalf) transactions with insider ﬁ nancial instruments of the Company to the department of risk management and organization of internal control.

20 The requirement to hold meetings of the Not observed Internal documents of the Company do not pro- Board of Directors at least once every six vide such requirement. Performed in practice. weeks provided for by Company internal documents.

21 Meetings of the Board of Directors during Observed In the accounting year of 2011 meetings of the the year for which the annual statement of Board of Directors were held at least once every the Company is made, with frequency of at six weeks (a total of 21 meetings held). least once every six weeks.

22 The procedure of holding meetings of the Observed Provided for in Article 6, 7, 8 and 10 of the Board of Directors provided for by Company Regulations on the procedure for convening and internal documents. holding meetings of the Board of Directors.

23 The provision on the need for approval by the Observed According to subparagraph "a" of subpara- Board of Directors of the Company transac- graph 37 of paragraph 12.1. Article 12 of the tions amounting to more than 10 percent Charter of the Company to the competence of of the value of Company assets, except for the Board of Directors of the Company prior ap- transactions made in the ordinary course of proval of decisions on transactions is attributed, business, provided for by Company internal the subject of which are non-current assets of documents. the Company in the amount greater than ten (10) percent of the carrying value of the assets of the Company according to the ﬁ nancial statements of the last accounting date.

24 The rights of members of the Board of Direc- Partially According to paragraph 3.2. of Article 3 of the tors provided for by Company internal docu- observed Procedure for convening and conducting meet- ments, to obtain from executive authorities ings of the Board of Directors of the Company a and heads of major divisions of the Company member of the Board of Directors may in writing the information they need to perform their request documents and information necessary to functions, as well as liability for failure to make a decision on the competence of the Board provide such information. of Directors, either directly with the General Director of the Company (other person performing the functions of the sole executive body), and through the Secretary of the Board of Directors.

25 The presence of the Board Committee for Not observed The Company did not establish the Committee Strategic Planning or assigning of functions of for Strategic Planning. The functions of this com- this committee to another committee (except mittee are not assigned to other committees of the Audit Committee and the Committee for the Board of Directors of the Company. Personnel and Remuneration).

26 The presence of the Board Committee (Audit Not observed The Company did not establish Committee), which recommends the auditor the Audit Committee. to the Board of Directors and interacts with it and the Audit Commission of the Joint Stock Company.

27 Independent and non-executive directors in Not observed The Company did not establish the audit committee only. the Audit Committee.

28 Management of the Audit Committee by Not observed The Company did not establish independent director. the Audit Committee.

29 The right of all members of the Audit Com- Not observed The Company did not establish mittee provided for by Company internal the Audit Committee. documents, to access any documents and 221 information of the Company subject to non- disclosure of conﬁ dential information. COMPONENTS OF SUCCESS JSC TYUMENENERGO APPENDIXES ON THE CD ANNUAL REPORT | 2011

30 Establishing of the Board Committee (Com- Not observed The Company did not establish the Committee mittee for Personnel and Remuneration), for Personnel and Remuneration whose function is to determine the criteria for selection of candidates for Board members and develop policy of the Company in the ﬁ eld of remuneration.

31 Management of the Committee for Personnel Not observed The Company did not establish the Committee and Remuneration by independent director. for Personnel and Remuneration.

32 Absence of oﬃ cials of the Company in the Not observed The Company did not establish the Committee Committee for Personnel and Remuneration. for Personnel and Remuneration.

33 Establishing of the Board Risk Committee or Not observed The Company did not establish the Risk assigning of functions of this committee to Committee. another committee (except the Audit Com- mittee and the Committee for Personnel and Remuneration).

34 Establishing of the Board Committee for Not observed The Company did not establish the Committee Corporate Conﬂ ict Settlement or assigning of for Corporate Conﬂ ict Settlement. functions of this committee to another committee (except the Audit Committee and the Committee for Personnel and Remuneration).

35 Absence of offi cials of the Company in the Not observed The Company did not establish the Committee Committee for Corporate Confl ict Settlement. for Corporate Confl ict Settlement.

36 Management of the Committee for Corporate Not observed The Company did not establish the Committee Conﬂ ict Settlement by independent director. for Corporate Conﬂ ict Settlement.

37 The presence of approved by the Board of Observed Decisions of the Board of Directors approved the Directors of Company internal documents, following regulations: providing the order of formation and operation of committees of the Board of Directors. – regulation on the Reliability Committee of the Board of Directors of Tyumen- energo OJSC; – regulation on the Committee for service connection to electric networks of the Board of Directors of Tyumenenergo OJSC.

38 The procedure for determining the quorum of Not observed There are no requirements of the procedure of the Board of Directors, which allows to pro- determining the quorum of the Board of Direc- vide the mandatory participation of independ- tors, which allows to provide the mandatory ent directors in Board meetings, provided for participation of independent directors in meet- by Company Charter. ings of the Board of Directors of the Company in the Charter.

The Company's Charter was developed on the basis of Russian legislation, under which a quorum for a meeting of the Board of Directors is determined by the company's charter, but shall not be less than half of the elected members of the Board of Directors.

Pursuant to paragraph 15.12. of Article 15 of the Charter the quorum for a meeting of the Board of Directors shall be not less than half of the elected members of the Board of Directors. 222 EXECUTIVE BODIES 39 The presence the collegial executive body Not observed The Board is not provided by the Charter. WWW.TE.RU (Board) of the Company. ANNUAL REPORT | 2011 APPENDIXES ON THE CD JSC TYUMENENERGO

40 The regulation on the need for approval by the Not observed The Board is not provided by the Charter. Board of real estate transactions, obtaining loans by the Company, if such transactions do not belong to major transactions and their performance is not a ordinary course of business of the Company, provided for by Company Charter or internal documents.

41 Approval procedures for transactions that go Observed Provided for by Article 3 of the Rules of the beyond the ﬁ nancial and business plan of the Company business planning. Company, provided for by Company internal documents.

42 Absence in the executive bodies of persons Observed The acting General Director of the Company is who are parties, general directors (managers), not a party, general director (manager), member members of the governing body or employees of the governing body or employee of a legal of a legal entity competing with the Company. entity competing with the Company.

The Board is not provided by the Charter.

43 Absence in the executive bodies of the Observed The acting General Director of the Company was Company of persons who were found guilty not found guilty of committing crimes in the fi eld of committing crimes in the fi eld of economic of economic activity or crimes against the state activity or crimes against the state govern- government, public service and service in local ment, public service and service in local government, or crimes for which administrative government, or persons to which administra- penalties for violations in the fi eld of business or tive penalties for violations in the fi eld of fi nance and taxes and levies, securities market business or fi nance and taxes and levies, were imposed. securities market were imposed. If functions of a sole executive body are performed by management organization or manager — compliance of the General Director and Board members of the management organization with requirements to the General Director and Board members of the Company.

44 The prohibition to the managing organiza- Not observed The Charter and internal documents do not tion (manager) to perform similar functions provide this provision. in a competing company, and to be in any other property relations with the Company, in addition to providing services of the managing organization (manager), provided for by Company Charter or internal documents.

45 The responsibility of the executive bodies Observed Provided for in subparagraph 4.2.4. para- provided for by internal documents to abstain graph 4.2. Article 4 of the Corporate manage- from actions that will or may potentially lead ment code. to a confl ict between their interests and the interests of the Company, and in the event of a confl ict — the duty to disclose information on this confl ict to the Board of Directors.

46 Criteria for selection of the managing organi- Not observed The Charter and internal documents do not zation (manager) provided for by Company provide this provision. Charter or internal documents.

47 Presentation of the executive bodies of Partially According to paragraph 4.3 of Article 4 of the monthly reports on its work to the Board of observed Corporate Management Code the General Direc- Directors. tor provides the Board of Directors reports on its activities in a manner and time ﬁ xed by internal documents of the Company and decisions of the Board of Directors. 223

COMPONENTS OF SUCCESS JSC TYUMENENERGO APPENDIXES ON THE CD ANNUAL REPORT | 2011

48 Establishing in contracts concluded by the Observed The contract between the Company and the Company with the General Director (manag- General Director includes this provision. ing organization, manager) and members of the Board, responsibility for violation of The Board is not provided by the Charter. the provisions on the use of conﬁ dential and proprietary information.

SECRETARY OF THE COMPANY

49 The presence of a special oﬃ cial (Secretary of Partially According to paragraph 4.1. of Article 4 of the the Company) in the Company, whose task is observed procedure for convening and conducting meet- to ensure that authorities and oﬃ cials of the ings of the Board of Directors of the Company company comply the procedural requirements Secretary of the Board of Directors performs the to provide execution of rights and lawful functions of organizational and information sup- interests of shareholders. port of the Board of Directors.

The issue of ensuring compliance of bodies and oﬃ cials of the Company with the procedural requirements to ensure execution of the rights and lawful interests of shareholders is carried pout by the Oﬃ ce of the Company Corporate Policy.

50 The procedure of appointment (election) of Observed Provided for in paragraph 4.2. and 4.3. of the Secretary of the Company and duties of Article 4 of the procedure for convening and the Secretary of the Company provided for by conducting meetings of the Board of Directors. Company Charter or internal documents.

51 Requirements for candidature of the secretary Not observed The Charter does not provide this provision. of the company provided for by the Company Charter.

SIGNIFICANT CORPORATE ACTIONS

52 The requirement for approval of a major Not observed The Charter and internal documents do not transaction prior to its conclusion provided for provide this provision. Performed in practice, ac- by Company Charter or internal documents. cording to requirements of the Federal Law "On Joint Stock Companies".

53 Mandatory involvement of an independent Observed Performed in practice, according to requirements appraiser to estimate the market value of of the Federal Law "On Joint Stock Companies". the property, which is the subject of a major transaction.

54 The prohibition on taking during acquisition Not observed The Charter does not provide this provision. of large blocks of shares of the Company (takeover), any actions aimed at protecting the interests of the executive bodies (members of these bodies) and members of the Board of Directors of the Company, as well as worsening the position of shareholders as compared to the existing one (in particular, the prohibition on making by the Board before the expected date of acquisition of shares the decision to issue additional shares, issue securities convertible into shares or securities granting the right to purchase shares of the Company, even if the right to such a decision is granted by the Charter), provided for by the Company Charter.

55 The requirement of mandatory involvement of Not observed The Charter does not provide this provision. Per- 224 an independent appraiser to assess the current formed in practice, according to requirements of market value of shares and possible changes the Federal Law "On Joint Stock Companies". WWW.TE.RU in their market value as a result of takeover, provided for by the Company Charter. ANNUAL REPORT | 2011 APPENDIXES ON THE CD JSC TYUMENENERGO

56 The absence in the Charter of release of Observed The Charter does not provide this provision. the purchaser from the obligation to oﬀ er to shareholders to sell their common shares of the company (equity securities that are convertible into ordinary shares) in case of takeover.

57 The requirement of mandatory involvement Not observed The Charter and internal documents do not of an independent appraiser to determine the provide this provision. Performed in practice, ac- ratio of conversion of shares during reorgani- cording to requirements of the Federal Law "On zation, provided for by Company Charter or Joint Stock Companies". internal documents.

DISCLOSURE OF INFORMATION

58 The internal document approved by the Board Observed On 8.23.2007 the Board of Directors of the of Directors that deﬁ nes the rules and ap- Company approved the Regulation on Informa- proaches of the Company to information dis- tion Policy of the Company. closure (the Regulation on Information Policy).

59 The requirement to disclose information about Not observed Information disclosure is carried out according purposes of placement of shares, persons with the requirements of Russian legislation who intend to acquire placed shares, includ- and the Regulation on Information Policy of the ing a large block, also about whether senior Company. oﬃ cials will participate in acquiring of placed shares of the Company, provided by Company internal documents.

60 The list of information, documents and Not observed Internal documents do not provide this provision. materials to be provided to shareholders to address the issues submitted for general meeting of shareholders provided by Com- pany internal documents.

61 The company website on the Internet and Observed Provided for in paragraph 6.4. of Article 6 the regular disclosure of the Company informa- Regulation on Information Policy of the Company. tion on this website.

62 The requirement, provided by Company inter- Observed Provided in subparagraph 5.2.10.5 para- nal documents, to disclose information about graph 5.2.10. paragraph 5.2 of Article 5 of the Company transactions with persons belonging Regulation on Information Policy of the Company. to, in accordance with the Charter, to the senior offi cials of the Company, as well as Company transactions with organizations in which senior offi cials of the Company, directly or indirectly own 20 percent or more of the authorized capital stock company or to which such persons may otherwise have a material eff ect.

63 The requirement to disclose information about Observed Information disclosure is carried out according all transactions that may aﬀ ect the market with the requirements of Russian legislation value of the shares of the Company, provided and the Regulation on Information Policy of the by Company internal documents. Company.

64 The internal document approved by the Board Observed On 12.29.2011 the Board of Directors of the of Directors on the use of essential informa- Company approved the Regulation on Insider tion about the activities of the Company, Information of the Company. shares and other securities and transactions with them, which is not public and disclosure of which could have a signiﬁ cant impact on the market value of shares and other securi- 225 ties of the Company. COMPONENTS OF SUCCESS JSC TYUMENENERGO APPENDIXES ON THE CD ANNUAL REPORT | 2011

MONITORING OF FINANCIAL AND ECONOMIC ACTIVITY

65 The presence of procedures of internal control Observed On 7.30.2010 the Board of Directors of the Com- over ﬁ nancial and economic activities of pany approved the Policy of Internal Control. the Company approved the board of directors.

66 The presence of a special subdivision of the Observed The Company established the Oﬃ ce of Internal Company that provides compliance with Audit and Risk Management of the Company. internal control procedures (control and audit service).

67 The requirement for determining the structure Not observed Internal documents do not provide this provision. and composition of control and audit service of the Company by the Board of Directors According to internal documents the staff list of provided by Company internal documents. the Offi ce of Internal Audit and Risk Management of the Company is confi rmed by the General Director of the Company.

68 Absence in the control and audit service of Observed There are no such persons in the Offi ce of Inter- persons who were found guilty of commit- nal Audit and Risk Management ting crimes in the fi eld of economic activity or crimes against the state government, public service and service in local government, or persons to which administrative penalties for violations in the fi eld of business or fi nance and taxes and levies, securities market were imposed.

69 Absence in the control and audit service of Observed There are no such persons in the Oﬃ ce of Inter- persons who are general directors (manag- nal Audit and Risk Management. ers), members of the governing body or employees of a legal entity competing with the Company.

70 The date of submission to the control and au- Not observed Internal documents do not provide this provision. dit service of documents and materials to assess implementation of a ﬁ nancial and business transaction, as well as the responsibility of oﬃ cials and employees of the Company for their failure to submit prior to this date, provided by Company internal documents.

71 The responsibility, provided by Company Not observed Internal documents do not provide this provision. internal documents, of the control and audit service to report on violations to the Audit Committee, and in case of its absence — the Board of Directors.

72 The requirement for preliminary assessment Not observed The Charter does not provide this provision. of control and audit service appropriateness of transactions not covered by ﬁ nancial and business plan of the Company (non-standard transactions), provided by Company internal documents.

73 The procedure of approval of a non-standard Not observed Company internal documents do not include such transactions by the Board of Directors pro- procedure. vided by Company internal documents.

74 The internal document approved by the Board Observed On 6.10.2002 the Regulation on the Audit Com- of Directors that deﬁ nes the procedure for mission was approved by decision of the sole 226 conducting audits of ﬁ nancial and economic shareholder of the Company. activity of the Company by the Audit Com- WWW.TE.RU mission ANNUAL REPORT | 2011 APPENDIXES ON THE CD JSC TYUMENENERGO

75 Assessment by the Audit Committee of the Not observed The Company did not establish the Audit Com- auditor's report before submitting it to share- mittee. holders at a general meeting of shareholders.

DIVIDENDS

76 The internal document approved by the Board Observed On 8.27.2010 the Board of Directors of the Com- of Directors that guides the Board in making pany approved the Regulation on Dividend Policy. recommendations about the amount of dividends (the Regulation on Dividend Policy).

77 The presence the Regulation on Dividend Observed Provided for in Articles 3, 4, 5 of the Company's Policy of the procedure for determining the Dividend Policy. minimum share of net proﬁ ts of the Company, allocated for dividend payments, and the conditions under which dividends on preferred shares are not paid or partially paid, the dividend on which is deﬁ ned in the Charter.

78 Publication of information about the Com- Partially Information on dividend policy of the Company pany's dividend policy, and changes therein, in observed and changes therein are posted on the Com- a periodical edition provided by the Company pany's website on the Internet according with the charter to publish notices of general meetings Regulation on Information Policy of the Company. of shareholders, as well as posting of this information on the website of the Company Publication of notices of general meetings of on the Internet. shareholders of the Company's Charter is not provided.

APPENDIX NO. 3 Competence of the General Meeting of Shareholders and Board of Directors of the Company

In accordance with Article 10.1 of the Company – election of members of the Board of Directors Charter the competence of the General Meeting of and early termination of their powers; Shareholders includes the following: – election of members of the Audit Commission and early termination of their powers; – amendments to the Charter or approval of the – approving the Company's Auditor; new edition of the Charter; – making decision to transfer the authority of the – reorganization of the Company; sole executive body to the managing organiza- – liquidation of the Company, appointment of a tion (manager) and early termination of pow- liquidation committee and approval of interim ers of the managing organization (manager); and fi nal liquidation balance sheets; – approving the annual report and annual – determination of the number, nominal value, fi nancial statements, including profi t and loss category (type) of shares and rights provided statements (profi t and loss accounts) of the by such shares; Company, as well as distribution of profi ts – increase the share capital by increasing the (including payment (declaration) of dividends, nominal value of shares or by issuing addi- except profi ts distributed as dividends for the tional shares; fi rst three, six, nine months of a fi scal year) – reduction of the share capital by reducing the and losses for the fi scal year; nominal value of shares through the acquisi- – payment (declaration) of dividends for the fi rst tion of a portion of shares in order to reduce quarter, six months, nine months of a fi scal year; their total number, as well as through redemp- – determination of the procedure of the General tion of shares acquired or repurchased by the Meeting of Shareholders; Company; – making decisions on the approval of transac- – splitting and consolidation of shares; tions in cases stipulated by Article 83 of the – making decisions about placement of bonds Federal Law "On Joint Stock Companies"; 227 convertible into shares and other securities – making decisions on the approval of major convertible into shares; transactions in cases stipulated by Article 79 COMPONENTS of the Federal Law "On Joint Stock Companies"; OF SUCCESS JSC TYUMENENERGO APPENDIXES ON THE CD ANNUAL REPORT | 2011

– making a decision about participation in the – approval of transactions under Chapter XI of fi nancial-industrial groups, associations and the Federal Law "On Joint Stock Companies"; other business organizations; – making decisions on the conclusion of transac- – approval of internal documents regulating the tions involving property, works and services activities of the Company; which value ranges from 5 to 25 percent of – making decisions on payment of remunera- book value of assets of the Company, de- tion and (or) compensation to members of the termined on the date of the decision on the Company's Audit Commission; conclusion of the transaction; – making decisions on payment of remunera- – preliminary approval of decisions on the Com- tion and (or) compensation to members of the pany to conclude transactions related to the Board of Directors of the Company; gratuitous transfer of the Company property – other issues, the Federal Law "On Joint Stock or property rights (claims) to itself or to a third Companies". party; transactions related to the exemption from property liability ti itself or a third party; In accordance with Article 12 of the Charter of transactions involving the gratuitous provision JSC Tyumenenergo the competence of the Board of of services (works) by the Company to third Directors includes the following: parties in the cases (amounts) determined by individual decisions of the Board of Direc- – identifi cation of priority activities and develop- tors, and making decisions on the Company ment strategies of the Company; concluding these transactions in cases where – placement of bonds and other securities, the above-mentioned cases (amounts) are not except as specifi ed in the legislation of the established; Russian Federation and this Charter; – prior approval of transactions that may entail – approval of the decision to issue securities, se- liabilities denominated in foreign currency (or curities prospectus, and report on the issue of liabilities which value is tied to foreign curren- securities, reports on the acquisition of shares cies), in the cases and amounts determined by from the shareholders of the Company, reports individual decisions of the Board of Directors on redemption of shares, reports on the results of the Company, and if these cases (amounts) of claims to shareholders of the Company to are not established by the Board of Directors; repurchase their shares; – establishment of branches and representative – purchase of shares, bonds and other securi- offi ces, and their liquidation, as well as amend- ties in cases stipulated by the Federal Law "On ments to the Charter relating to the estab- Joint Stock Companies"; lishment of branches, representative offi ces – alienation (sale) of shares, placed at the (including changes in information about the disposal of the Company as a result of the pur- names and locations of branches and repre- chase or redemption from Company sharehold- sentative offi ces) and their liquidation; ers, as well as in other cases stipulated by the – participation of the Company in other organi- Federal Law "On Joint Stock Companies"; zations (including approval of the constitu- – election of the General Director of the Com- ent documents), changes in interest (number pany and early termination of his/her powers, of shares, size, proportion), encumbrance of including the decision on early termination of shares and termination of participation in other employment contract with him/her; organizations; – recommendations to the General Meeting of – making decisions to suspend the powers of the shareholders on the amount of remuneration managing organization (manager); and compensation paid to members of the – approval of the procedure of the Company Audit Commission and determination of the cooperation with organizations in which the amount of the Auditor’s fee; Company participates; – recommendations on the amount of the divi- – preliminary approval of decisions of the Com- dend on shares and its payment procedure; pany concluding: – approval of internal documents establishing the order of formation and use of Company funds; a) transactions which subject is non-current – making decisions on the use of funds of the assets of the Company in excess of ten (10) Company, approval of the use of estimates for percent of the book value of the assets special purpose funds and review of the results of the Company according to the fi nancial of execution of estimates for the use of special statements of the last reporting date; purpose funds; b) transactions (including several interconnect- – approval of internal documents of the Com- ed transactions) related to the acquisition, pany, except for internal documents, approval alienation or possible alienation of property of which is within the competence of the Gen- which constitutes fi xed assets, intangible eral Meeting of shareholders, as well as other assets, unfi nished construction projects, internal documents, approval of which is within the aim of which is production, transfer, 228 the competence of executive bodies; dispatching and distribution of electrical – approval of major transactions in cases stipu- and heat energy in the cases (amounts), WWW.TE.RU lated in Chapter X of the Federal Law "On Joint determined by individual decisions of the Stock Companies"; Board of Directors of the Company; ANNUAL REPORT | 2011 APPENDIXES ON THE CD JSC TYUMENENERGO

c) transactions (including several intercon- – approval of the candidate for the fi nancial ad- nected transactions) related to the acquisi- viser, involved in accordance with Federal Law tion, alienation or possible alienation of "On securities market" as well as candidates property which constitutes fi xed assets, for the organizers of the issue of securities intangible assets, unfi nished construction and advisers for transactions directly related to projects, the aim of which does not involve raising funds through public borrowings; production, transfer, dispatch and distribu- – other matters within the competence of the tion of electrical and thermal energy in the Board of Directors according to the Federal cases (amounts) determined by individual Law "On Joint Stock Companies" and the decisions of the Board of Directors of the Charter. Company;

APPENDIX NO. 4 Information on Company subsidiaries and aﬃ liates

No. Name Location of subsidiary / Main activity Company Revenue of Financial Information of subsidiary / of subsidiary / affi liate of subsidiary/ share in sub- subsidiary / result of affi liate registrar affi liate affi liate sidiary / affi liate subsidiary / affi liate (thousand affi liate Name Location capital (%) roubles) (thousand roubles)

1 Tyumenenergo- ulitsa Energostroiteley, Operation and 99.9969 118,403.00 1,043.00 Status CJSC 185 ulitsa avtotrans OJSC 10, Surgut, Ugra Khanty- maintenance of (Ekaterinburg Lunacharskovo, Mansiysk District, Tyumen vehicle ﬂ eet branch) oﬃ ce 406, Region, 628400, Russian Ekaterinburg, Federation Sverdlovsk Region

2 ESCO ulitsa Universitetskaya Energy audit 51 96,046.00 17,195.00 Reestr-RN LLC Podkopae- Tyumenenergo 4, Surgut, Ugra Khanty- vsky pereulok OJSC Mansiysk District, Tyumen 2/6, building Region, 628406, Russian 3-4, Moscow Federation 628406 109028

TOTAL: 214,449.0018,238.00

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APPENDIX NO. 5 Information about shares of JSC Tyumen energo in the authorized capital and voting shares in other companies as of 12.31.2011

Issuer name Main activity Block share Block share (in accordance with in authorized in voting shares, % Company Charter) capital, %

1 OJSC Tyumenenergoavtotrans, 628400, Rus- Operation and mainte- 99.997 99.997 sian Federation, Tyumen region, KhMAD — nance of vehicle ﬂ eet Yugra Surgut, ul. Energostroiteley, 10

2 OJSC Energy Service Company Tyumenenergo, Energy audit 51.000 51.000 628406, Russian Federation, Tyumen Region, Khanty-Mansiysk autonomous district — Yugra Surgut, Universitetskaya, 4

3 FGC UES, OJSC, 117630, Russian Federation, Services of transfer and 0.0037 0.0037 Moscow, Russia, ul. Akademika Chelomeya, 5, distribution of electric building A energy

4 OJSC RusHydro, Russian Federation, Krasno- Production and sale 0.0054 0.0054 yarsk Region, Krasnoyarsk ul. Respubliki, 51 of electric energy

5 OJSC INTER RAO UES, Russia, 123610, Moscow, Production of electric 0.0701 0.0701 Krasnopresnenskaya nab, 12, Entrance 7 and heat energy

6 Kuzbass OJSC for Power and Electriﬁ cation, Production of electric 0.0045 0.0045 656037, Russia, Altai territory, Barnaul, Bril- and heat energy liantovaya, 2

7 OJSC Holding of Interregional Distribution Exercise of powers of the 0.0111 0.0116 network companies, 107996, Russia, Moscow, executive bodies in the GSP-6, Ulan pereulok, 26 joint-stock companies and other business entities

8 OJSC for Power and Electriﬁ cation Mosenergo, Production of electric 0.0039 0.0039 115035, Russian Federation, Moscow, Raush- and heat energy skaya naberezhnaya, 8

9 OJSC First Generation Company of Wholesale Production of electric 0.0067 0.0067 Electricity Market, Russian Federation, Tyumen and heat energy region, Tyumen, ul. Odesskaya, 1, building 1

10 OJSC Second Generation Company of Whole- Production of electric 0.0038 0.0038 sale Electricity Market, Russian Federation, and heat energy Russian Federation, Stavropol Territory, Izobiln- ensky district, village Solnechnodolsk

11 OJSC Third Generation Company of Wholesale Production of electric 0.004 0.004 Electricity Market, Russian Federation, Republic and heat energy of Buryatia, Ulan-Ude, prospekt Pyatidesyati- letiya Oktyabrya, 28 230

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12 OJSC Fourth Generation Company of Wholesale Production of electric 0.0075 0.0075 Electricity Market, Russian Federation, Tyumen and heat energy region, Khanty-Mansiysk autonomous district — Yugra Surgut, ul. Energostroiteley 23, building 34

13 OJSC Enel OGK-5, Russian Federation, Sved- Production of electric 0.037 0.037 lovskaya region., Ekaterinburg, Lenina str., 38 and heat energy

14 OJSC SFERA TV Company, 628606, Russian Production and distribution 0.5925 0.5925 Federation, Tyumen Region, Khanty-Mansiysk of mass media Autonomous District, Nizhnevartovsk, Lenina, 2p

15 OJSC -11 Holding, 119526, Russian Federation, Exercise of powers of the 0.0358 0.0399 Moscow, Vernadsky Prospekt, 101, b. 3 executive bodies in the joint-stock companies and other business entities

16 OJSC Territorial Generation Company No. 1, Production of electric 0.0045 0.0045 191186, Russian Federation, St. Petersburg, and heat energy Marsovo Pole, 1

17 OJSC Territorial Generation Company No. 2, Production of electric 0.004 0.004 150040, Yaroslavl region., Yaroslavl, pr. Oktya- and heat energy brya, 42

18 OJSC Quadra-Generation Company Production of electric 0.0037 0.0037 (OJSC Territorial Generation Company No. 4), and heat energy Russia, 300600, Tula, Timiryazev str., 99 v

19 OJSC Territorial Generation Company No. 5, Production of electric 0.0351 0.0351 428 029, Russia, Chuvash Republic, Chebok- and heat energy sary, pr.I.Yakovleva, 4/4

20 OJSC Territorial Generation Company No. 6, Production of electric 0.0038 0.0038 603950, Russian Federation, Nizhny Novgorod, and heat energy ul. Alekseevskaya, h.10/16

21 OJSC Volga Territorial Generation Company, Production of electric 0.0051 0.0051 443100, Russia, Samara, Mayakovskogo, 15 and heat energy

22 OJSC Territorial Generation Company No. 9, Production of electric 0.0039 0.0039 614990, Russia, Perm, Komsomolsky and heat energy prospect, 48

23 OJSC Yenisei Territorial Generating Company Production of electric 0.005 0.005 (TGK-13), 660021, Russian Federation, Krasno- and heat energy yarsk Region, Krasnoyarsk, ul. Bograda, 144 A

24 OJSC RAO Energy System of East, 675000, Rus- Exercise of powers of 0.0116 0.0122 sian Federation, Amur Region, Blagoveshchensk, the executive bodies in Shevchenko, 28 the joint-stock companies and other business entities

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APPENDIX NO. 6 Information about the Company's participation in nonproﬁ t institutions as of 12.31.2011

Nonprofi t institution name and location Date of decision Main activity of a nonprofi t institution to join a nonprofi t institution

All-Russian Industry Association of Employers 1.05.2004 Representing the interests of employers of in Electric Power Industry the industry, protection of their rights in public (Association RAEL) authorities, local self-government in relations 119526, Russian Federation, Moscow, prospect with trade unions, their associations and other Vernadskogo, 101, building 3, oﬃ ce 0607 organizations of employees.

Nonproﬁ t Partnership Tyumen Training Center 6.29.2006 Training, retraining and development of staﬀ (NP CONC) of energy companies.

* The Board of Directors Nonproﬁ t Partnership Innovation in the Electric 7.13.2006* Analysis and identiﬁ cation of current problems decision of 10.14.11 Power Industry of the Partnership members of technological discontinued participation in NP INVEL (NP NVEL) and technical nature and their solutions. 119991, Russian Federation, Moscow, Leninsky Prospect, 19

Nonprofi t Partnership Scientifi c-Technical Council of 11.13.2008 Activities of professional organizations. the Unifi ed Energy System (NP UES NTS) 109044, Moscow, Vorontsovsky pereulok, 2, Build- ing 1, offi ce 420

Nonproﬁ t Partnership "Association of Organizations 10.14.2009 Integrating eﬀ orts of the Partnership mem- Performing Construction, Reconstruction and Repair bers for strengthening and development of Power plants, Networks and Substations" ENER- of construction and installation complex of GOSTROY (NP ENERGOSTROY) the Russian Federation, representation and Russia, 107996, Russian Federation, Moscow, Ulan- protection of rights and lawful interests of the sky pereulok, 26, building 1. Partnership.

Nonprofi t Partnership "Association of Organizations 12.24.2009 Development and approval of regulatory Performing the Preparation of Design Documenta- documents of the Partnership, binding on all tion of Energy Facilities, Networks and Substations", its members, including provided for in Article ENERGOPROYEKT (NP ENERGOPROYEKT) 55.5 of the Civil Code of the Russian Federa- 125362, Moscow, Stroitelny proezd 7A, block 6. tion requirements for issuance of certifi cates of admission to works on preparation of project documentation, which aff ect the safety of capital construction, control rules in the fi eld of self-regulation, system of disciplinary actions for members of the Partnership, the Partnership's standards and rules of self- regulation, as well as monitoring compliance of members of the Partnership with these documents.

NP Union Energy Auditors and Energy Service 10.14.2010 The purpose of the partnership is to assist Companies members of the Partnership to improve the 125171, Russian Federation, Moscow, Leningrad quality of works in the ﬁ eld of energy audits highway, 8, Building 2, oﬃ ce 36. and the provision of energy services. 232

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APPENDIX NO. 7 Repair program implementation

In providing reliable uninterrupted power supply to consumers it is important to maintain existing equipment in good, working condition. Readi- ness for accident-free load bearing is achieved by strict adherence to the timing and regulations for 1901.2 maintenance and repair, timely diagnosis and the assignment of the volume and timing of repair by technical condition of the equipment.

The Company’s repair program has been fully 303.9 implemented for 2011.

Expenses for repair and maintenance of basic production assets in the Company as a whole amounted to 3,786.1 million roubles in 2011, including the Economic method cost of repairs of 2,205.1 million roubles. Contract In this case the cost of repairs carried out by economic method, were 303.9 million roubles, the cost of the work carried out under contracts — a 1,901.2 million roubles.

Implementation of the program of repairs and maintenance of basic electrical equipment of substations and overhead power lines of Tyumenen- ergo in 2011, million roubles by value:

Name Actual volume in 2011, million roubles exclusive of VAT

TOTAL including

Economic method Contract

TOTAL 2,205.2 303.9 1,901.2

including:

1.1. Repair of power lines 569.0 75.4 493.6

1.2. Repair of substations equipment 752.3 103.1 649.2

1.3. Buildings and structures 353.9 11.8 342.1

1.4. Other facilities 530.0 113.7 416.3

Implementation of the program of repairs and – Repair of overhead power lines 0,4 KW — maintenance of basic electrical equipment of sub- 77.94 km; stations and overhead power lines of Tyumenen- – Repair of overhead power lines 10/0,4 KW — ergo in 2011, in physical terms: 84 units.

– Repair of circuit breakers — 338 units; In order to ensure safety of citizens and create – Repair of overhead power lines 110 KW — necessary conditions for operation of line facili- 1 327.9 km; ties (to avoid accidents, ﬁ res, etc.). Every year – Repair of overhead power lines 35 KW — JSC Tyumenenergo carries out works for clearing 109 km; ﬁ rebreaks of overhead power lines within pro- 233 – Repair of overhead power lines 10 KW — tected areas. 62.78 km; COMPONENTS OF SUCCESS JSC TYUMENENERGO APPENDIXES ON THE CD ANNUAL REPORT | 2011

Expansion, Costs, thousand Clearing, Costs, thousand hectares roubles hectares roubles

2011 actual 178 81,900 6,520 100,552.6

2012 planned 204 109,272 5,130 80,517.5

ANALYSIS OF REPAIR COSTS FOR 20102012, MLN RUB.

2010 actual 2011 actual 2012 planned

TOTAL 2,050.3 2,205.2 1,809.7

Economic method 172.6 303.9 303.3

Contract method 1,877.7 1,901.2 1,506.4

ANALYSIS OF REPAIR COSTS, MLN RUB.

In 2012 its is planned to allocate 3,447.7 million roubles for the program of repairs and maintenance, including 1,809.6 million roubles for repairs. 1,901.2 1,877.7 1,506.4

303.9 303.3 172.6

2010 actual 2011 actual 2012 planned

Contract method Economic method

234