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2011 Results
& Strategic Outlook for 2012
Renaissance Capital 16th Annual Investor Conference




  Moscow|25-26 June 2012
Disclaimer
    This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or
    subscribe for any shares or other securities representing shares of IDGC of Centre, nor shall it or any part of it nor the fact of its
    presentation or distribution form the basis of, or be relied on in connection with any contract or investment decision.
    The information in this presentation includes forward-looking statements. These forward-looking statements include all matters that are
    not historical facts, statements regarding the intentions of IDGC of Centre, beliefs or current expectations concerning its results of
    operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which IDGC of Centre operates. By their nature,
    forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the
    prospectus, because they relate to events and depend on circumstances that may or may not occur in the future. IDGC of Centre cautions
    you that forward looking statements are not guarantees of future performance and that the actual results of operations, financial condition
    and liquidity of IDGC of Centre as well as the development of the industry in which the Company operates may differ materially from those
    made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company's results of
    operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the
    forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments
    in future periods.
    In addition to the official information on the activity of IDGC of Centre, this presentation contains information obtained from third parties.
    This information has been obtained from sources which, according to IDGC of Centre, are reliable. Nevertheless, we do not guarantee the
    accuracy of this information, which may be abbreviated or incomplete. All opinions and estimates contained in this material reflect our
    view on the day of publication and are subject to change without notice. IDGC of Centre shall not be liable for the consequences of use of
    the views or statements, or incomplete Information contained in this presentation.
    IDGC of Centre undertakes no obligation to revise or confirm the forward-looking statements and assessments, as well as to update
    information contained in this presentation.
    Despite the fact that prior to 31.03.2008 IDGC of Centre was not an operating company, this presentation contains the consolidated data
    on all Distribution Grid Companies of the service area of IDGC of Centre, including for the period up to 31.03.2008. The information about
    the financial and operational data on the Company was received as the sum of the corresponding indicators of 11 Distribution Grid
    Companies, which were consolidated with IDGC of Centre. Despite the fact that in 2006 and 2007 under the control of IDGC of Centre (at
    that time IDGC of Centre and Northern Caucasus) there were more than 11 companies, for correct comparison of the information for these
    periods the information is shown for 11 Distribution Grid Companies in the current configuration.



2                                                                                                                                         www.mrsk-1.ru
Overview of the Company
    & Its Development Priorities




3                                  www.mrsk-1.ru
Industry Structure

            POWER SECTOR RESTRUCTURING 2003-2007                                                  TARIFF STRUCTURE*

                                                                                                               CURRENT TARIFF
                                                   RAO UES
                                                   of Russia                                                             100%
                                                                                                       63%                             3%

                                                                                                   Generation             34%        Retailers
    Generation (Electricity and Heat Production)    Transmission (High Voltage Grids)
        Hydro Power Plants                                                                               Transmission & Distribution*
                                                     Federal Grid Company
        Heat Power Plants
                                                     Transmission grid >220 kV
        TGKs
                                                                                                                               Federal Grid Company
        OGKs                                                                                                                  of Unified Energy System
                                                    Distribution (Low Voltage Grids)                     17%                          7%
    Infrastructure                                                                                                       34%
                                                     Holding IDGC (MRSK)                                 4%                           6%
        Market Council                              Transmission & Distribution
                                                                                                      Losses                          TGOs
        System Operator                             grids <110 kV

    Supply (Electricity Trading)                      11 IGDCs (MRSKs)                                  The structure is provided
                                                      7 retailers                                      according to the results of
        Retailers                                    5 DGCs                                             2011 tariff campaign
        Others                                       others


4                                                                                       * Indicative as at January 01, 2011        www.mrsk-1.ru
Benchmark Among MRSKs (RAS 2011)

           MCAP*                                                              REVENUE
                                                                  RUR bln                                                               RUR bln
                    MOESK                                  79                          MOESK                                      127
           IDGC of Centre                        34                           IDGC of Centre                           68
                IDGC of CV             22                                          IDGC of CV                    64
            IDGC of Volga             21                                         IDGC of Ural               55
              IDGC of Ural            20                                      IDGC of Siberia              52
           IDGC of Siberia      13                                             IDGC of Volga              48
                 Lenenergo      12                                                  Lenenergo        37
               IDGC of NW       9                                                 IDGC of NW        31
            IDGC of South       3                                              IDGC of South      24
                IDGC of NC      2
                                                                  #2               IDGC of NC    11
                                                                                                                                        #2
        NET PROFIT                                                              RAB
                                                                  RUR bln                                                               RUR bln
                    MOESK                                  17,1                         MOESK                               205
           IDGC of Centre                    5,2                               IDGC of Centre                         121
                IDGC of CV            4,2                                           IDGC of CV            85
              IDGC of Ural      2,5                                                  Lenenergo           79
               IDGC of NW       1,4                                             IDGC of Volga            77
                IDGC of NC      1,3                                               IDGC of Ural      57
                 Lenenergo      0,4                                            IDGC of Siberia     52
            IDGC of Volga       0,3                                             IDGC of South    38
            IDGC of South       0,3                                                IDGC of NW    23
           IDGC of Siberia      0,1                               #2                IDGC of NC   18                                     #2
5   * Market capitalization, indicative as at March 2012                                                                      www.mrsk-1.ru
Map of IDGC of Centre. Overview

                                                                                      KEY INDICATORS
    BRANCHES OF IDGC OF CENTRE
                                                              Service area
                                                             458 000 km2          MСap*      RUR bln                                  34,3
    1    Belgorodenergo
                                                               Population
    2    Bryanskenergo                                      13,6 mln people       Revenue (IFRS)          RUR bln                     69,0
    3    Voronezhenergo
                                                                                  Length of conductors
    4    Kostromaenergo
                                                                                  0.4 – 110 kV thousand km                           366,1
    5    Kurskenergo
                                                       10                         Length of cables
    6    Lipetskenergo                 8                    11
                                                                                  0.4 – 110 kV thousand km                            9,4
    7    Orelenergo                2
                                                                 4
    8    Smolenskenergo                7           Head office, Moscow
                                                                                  Substation capacity:
                                   5
                                               6
    9    Tambovenergo                              9                              35 – 110 kV        MVA                             32 187
                                   1
    10   Tverenergo                        3

    11   Yarenergo                                                                6 – 10/0,4 kV        MVA                           15 498

                                                                                  Staff number**                                     30 977

                                                                                  Number of shareholders***                          16 775
     IDGC of Centre is a natural
     monopoly, its tariff rates                                                    * indicative as at March 30, 2012
     are regulated by the                                                          ** indicative as at December 31, 2011
                                                                                   *** indicative as at May 12, 2011 (record date)
     Federal Tariff Service


6                                                                                                                        www.mrsk-1.ru
Milestones of 2010 - 2011

                              Sep 2010            Nov 2010               Dec 2010         Jan 2011         Jun - Aug 2011          Dec 2011

        2004
          –
        2009




             Board of Directors                      5 years RAB tariff system      Successful implementation                  The Company developed
             approved the Regulations                was adopted in Orelenergo      of Business Plan and                       and approved the Program of
             on the dividend policy                  and Bryanskenergo, iRAB        Investment Program for                     innovative development for
             based on a system                       amounts to RUR 118 bln         2010, approved by the                      2011-2016, the Board of
             executing a set of criteria                                            Board of Directors, CAPEX                  Directors approved Business
                                                                                    amounted to RUR 12.2 bln                   Plan and Investment Program
                                                                                                                               for 2012

    Dec 2004                               The first stage
    As part of RAO UES reforming IDGC      of Smart Grid
    of Centre and Northern Caucasus        Program is                               5 years RAB tariff system       The Company fulfilled its
    was registered for RGC integration     completed in                             adopted in Kostromaenergo,      obligations for dividend
    Apr 2007                               Belgorod                                 Tambovenergo,                   payments of RUR 611 million
    The final structure of the Company
                                                                                    Voronezhenergo,                 (13% - pay out ratio); Company
    was accepted, including 11 regional
                                                                                    Smolenskenergo and              stocks moved across to MICEX
    grid companies of Central Russia
                                                                                    Yargorelectroset, 100%          quotation list A2; 1H2011 IFRS
    (the decision of Board of Directors            The Company acquired 100%        subsidiary of the Company       financials were reported
    of RAO UES)                                    of Yargorelectroset, the share
    Mar 2008 Affiliation of RGCs                                                                                    demonstrating growth of the key
                                                   of IDGC of Centre in regional                                    financial indicators
    May 2008 Listing on MICEX and RTS
                                                   grid assets increased to 90%


7                                                                                                                                         www.mrsk-1.ru
Strategic Priorities

                              • Implementation of SAIDI*/ SAIFI** indicators calculation system in accordance with
                                international standards
    Quality, Reliability
                              • Implementation of asset management methodology, integration of asset management
     & Innovations              system with geo-informational system (technical risk management)
                              • Reduction of technical and commercial losses (implementation of smart metering systems)


                              • Increase of the market share in the regions of the Company’s service area
      Market Share            • Consolidation of grid assets (TGOs, ownerless grids)


                              •   Increase of transparency and efficiency of the procurement process
       Investment             •   Use of typified project solutions
         Activity             •   Use of a system approach to evaluate and approve investment projects
                              •   Increase of monitoring of the performance of work by contractors


                              •   OPEX optimization, reducing costs under control
        Operating             •   Governance improvement: implementation of an optimized KPI system for top-management
         Activity             •   Optimization of systems and processes in operation and maintenance
                              •   Development of additional energy service areas


                              •   Implementation of the policy of stable dividend payments
                              •   Implementation of a complex of measures to improve the liquidity of shares
       Investment
                              •   Access to foreign trading floors
         Appeal               •   Start of an option program
                              •   Possibility of privatization of the Company within the development strategy of IDGC Holding

8                          * System Average Interruption Duration Index ** System Average Interruption Frequency Index     www.mrsk-1.ru
Company Structure & Major Shareholders

                                                                                                        SHARE CAPITAL STRUCTURE
       Russian Federation
                                                                                                         50,23%
                    53,69%                                                                                                                 15,90%

        IDGC Holding, JSC                                    Minority shareholders
                                                                                                                  Free Float**
                    50,23%                                                         49,77%*
                                                                                                                     25%                    8,40%

                        IDGC of Centre, JSC                                                                                           3,20%
                                                                                                                                    2,73%
                                                                              Group of Companies                                 1,45%
                                                                                                                  18,09%
                      Energy Service
                                               Yargorelectroset, JSC             Energetik, JSC
                      Company, JSC                                                                          IDGC Holding, JSC
                                                                                               51%          GENHOLD LIMITED
      11           The main activities are
                   to provide energy
                   saving and energy
                   efficiency services
                                               One of the largest
                                               Territory Grid Organization
                                               in the Central Federal
                                                                                  YarESK, JSC               THE BANK OF NEW YORK MELLON

    Operating                                  Region. The result of
                                               acquisition of the 100%                       100%
                                                                                                            IMMENSO ENTERPRISES LIMITED
    business                                   stake is that IDGC of                                        Energosoyuz Holdings Limited
                                               Center now controls more           CIEET, CJSC
      units                                    than 90% of the power                                        RUSENERGO FUND LIMITED
                                               grid assets in the Yaroslavl
                                               region                           Centre of innovations       Others
                                                                                and energy efficient
                  Subsidiaries -100%                                            technologies

                 * including the State share 0,46%
                 ** according to the MICEX Index Committee
9                                                                                                                                www.mrsk-1.ru
Corporate Governance & Rating
                                               External control over financial
     Supreme governing body :                  activities of the Company:             RATING

            General Meeting
                                                       Auditor
            of Shareholders

                                                      Audit
                                                    Commission
     Strategic governing body :


          Board of Directors
                                          Committees
                                       under the Board
                                          of Directors:
                                                                                  Developed corporate governance
                                                                                  practice & leading position among
                                                     Committee
         Management Board                       1
                                                     on Strategy
                                                                                  MRSKs

                                                2
                                                     Committee                   National Corporate Governance Rating (NCGR)
      Chairman of the Management                      on Audit
        Board - Director General                                                 Confirmed                             Feb’ 12
                                                     Committee                   Upgraded (7+)                        Mar’ 11
                                                3
                                                    on Personnel
                                                                                 Confirmed                             Jul’ 09
     Internal control over financial                 Committee
     activities of the Company:
                                                4                                Confirmed                             Feb’ 09
                                                    on Reliability
         Internal Control and                                                    Assigned                              Sep’ 08
                                                     Committee
          Audit Department                      5
                                                       on TC*

10
                                           *   technological connection                                           www.mrsk-1.ru
Financial and Operating Indicators
& Investment Program
Financial Performance (IFRS)

              REVENUE
                                                          RUR bln                      Indicator                       2009          2010       2011
                                      69,0
                                                                          Revenue growth, incl.:                       12,8%         22,9%      13,9%
                       60,6                   other services
                                                                           Growth of revenue from electric
       49,3                            65,9                                power transmission
                                                                                                                       16,4%         22,6%      14,8%
                       57,4
                                              from technological           Growth of revenue from TC
       46,8                                   connection
                                                                                                                       -42,9%        43,8%      -21,7%
                                                                           Growth of revenue from other services       28,6%           0%       44,4%
                                              from electric
                                              energy                      EBITDA growth                                 -2,3%        44,2%      19,4%
                                              transmission
                                                                          Net profit growth                            -25,0%       142,9%       7,8%
       2009             2010           2011
                                                                          ROE                                             7,4         15,2        143



          EBITDA                                    NET PROFIT                                                PRODUCTIVE SUPPLY*
                                  RUR bln                                          RUR bln                                                   kWh bln
     EBITDA margin                             Net profit margin

                               21,4%                               8,4%         8,0%
                     20,5%

      17,4%                                      4,3%

                                                                    5,1         5,5                                                      54,1
                               14,8                                                                                        53,4
                     12,4
       8,6                                         2,1                                                        51,5

       2009          2010      2011                2009            2010         2011                           2009         2010         2011

12                                                                                                      * incl. TGOs               www.mrsk-1.ru
Key Operating Indicators

      PRODUCTIVE SUPPLY                                    10 LARGEST CLIENTS
                 9%
                                                                                             14%
                                          TGO's
                                                               33%
                      from grids          to customers -                                              9%
     35%                                  legal entities
                       of DGCs
                                          to residential
                                          customers
                                                                               Revenue %
                                                                          from transmission                9%
                                    56%

                                                               4%
                                                                                                      6%
      PRODUCTIVE SUPPLY BY VOLTAGE LEVELS                            4%
                                                                                              6%
                                                                          5%
                      5%                                                         5%    6%
            9%
                                          HV 110                      OJSC Belgorod Retail Company
                                                                      OJSC Tverenergosbyt
      10%                                 LV                          OJSC Voronezh Retail Company
                                                                      OJSC Yaroslavl Retail Company
                                                                      OJSC Smolenskenergosbyt
                      from grids          MV2                         OJSC Bryanskenergosbyt
                       of DGCs                                        OJSC NLMK
     15%                                                              OJSC Kurskenergosbyt
                                          MV1
                                                                      OJSC Kostroma Retail Company
                                                                      OJSC LESK
                                   61%    HV 220                      Others


13                                                                                              www.mrsk-1.ru
Loan Portfolio & Credit Rating


     40
                  NET DEBT / EBITDA*                                                           2,0
                                                                                                        CREDIT RATING HISTORY
     35                                                                                      RUR bln
     30                                     1,3                                    1,3         1,5
                                                             1,2
     25             1,1
     20                                                                                        1,0
     15                                                                               18,6
     10                                                            14,7        14,8            0,5
                                                         12,4
                          9,3                 10,8
      5          8,8                  8,6
     0                                                                                         0,0
                                                                                                       Standard&Poor’s
                    2008                 2009                2010                 2011
                                                                                                       Confirmed                            Feb’ 12
                           EBITDA                 Net debt                Net debt/EBITDA
                                                                                                       Confirmed                             Jul’ 10
                                                                                                       Assigned (level BB-/ruAA-)           Nov’ 10
                 STRUCTURE OF LOAN PORTFOLIO IN 2011
                                    3%
                       13%                                                     Sberbank                National Rating Agency (NRA)
                                                                                                       Confirmed (outlook “positive”)       Dec’ 11
                                                                               VTB
                                                                                                       Upgraded (level AA-)                 Dec’ 10
              18%               Average rate                                   Rosbank                 Confirmed                            Oct’ 10
                                    8.35%
                                                                                                       Upgraded (level A+)                  Sep’ 08
                                                                               Alfa-Bank
                   18%                                  49%                                            Assigned (level A)                   Aug’ 07
                                                                               Gazprombank


14
          *   Target ratio Net debt / EBITDA – 3,5                                                                                      www.mrsk-1.ru
CAPEX 2009 – 2012 (F)

           CAPEX AREAS IN 2012                                                                SOURCES OF FINANCING FOR 2012*

     RUR bln                                                     9,2%                                  2% 2%
                                                                                                                                            tariff sources
                                                                 1,32
                                              3,0 %    0,4%
                                                                                                                                            borrowed funds
                                      6,1%    0,43     0,05
                                                                                     36%
                                      0,88                                                                                                  other own
                           6,3%
                                                                                                                                            sources
                 35,9%     0,91                                         14,35                                                               connection fee
                                                                                                                            60%
                 5,16
       39,0%
                                                                                                                                  Commissioning of power
                                                                                                    Commissioning,                   on fixed assets
         5,6                                                                         Period
                                                                                                       RUR bln
                                                                                                                                  km                    MVA

                                                                                2009                       6,5                   2 414                  877
           retrofitting and reconstruction
           new construction (substations, overhead and cable lines)             2010                      12,2                   4 155                1 050
           SCADA systems, communications, IT
                                                                                2011                      15,2                   4 630                1 490
           creation/upgrade of metering systems
           EAD                                                                  2012 (F)*                 14,3                   4 010                  811
           purchase of fixed assets
           others                                                               *   according to the approved Investment Program for 2012


15                                                                                                                                           www.mrsk-1.ru
Transition to Regulatory Asset Base Method
     (RAB-Regulation)




16                                                www.mrsk-1.ru
Return on Invested Capital Method (RAB-regulation)



                                                    The size of invested capital of IDGC of Centre (taking
          Since January 01, 2009 IDGC of                                                                          In 2011, IDGC of Centre
         Centre has been among the first           into account Yargorelectroset, JSC) is RUR 118 bln
                                                       (the average rate of revaluation ~2,4). The fair
                                                                                                                 completed the transition
      Russian energy companies to start the
      transition to a new regulatory system           evaluation was performed by the Consortium of                   of its branches &
         in the regions of its service area               Independent Appraisers, which includes                    subsidiaries to RAB
                                                                 ZAO Deloitte&Touche CIS




         2009                 2010                   2011                 2012                   2013             2014            2015
     01.01.2009                                        31.12.2011
     Belgorod, Tver, Lipetsk                                          The 2nd long-term regulation period up to 2016 for Belgorod and Lipetsk

                         01.01.2010                                         31.12.2012
                         Kursk, Yaroslavl                                                    Prolongation up to 2015 (3+2)

                                              01.11.2010                                                            31.12.2014
                                              Bryansk, Orel
                                                01.01.2011                                                                         31.12.2015
                                                Voronezh, Kostroma, Smolensk, Tambov & Yargorelectroset, JSC



17                                                                                                                               www.mrsk-1.ru
Goals & Results of the Transition to RAB

           AVERAGE JOINT RATE
     kopeck / kWh                                                                                       Goals of return on invested capital method (RAB)
     140                             27%                                                        30%
                                                              25%
     120
                                                                                                         provides a clear relationship between customers,
                                                                                                25%
     100                         22%                                                                      shareholders (investors) and the Company
                                                                                                20%
      80                                                     21%               14%                       rates are approved for a long-term period (3-5 years) of
                                                                                                15%
      60                                                                                                  regulation
                                                                                                10%
      40
                                                                                                         creation of incentives to improve operating performance of
      20                                                                                        5%
               74,96                 91,8                111,25               126,6                       the Company
       0                                                                                        0%
                2008                 2009                    2010             2011                       provision of an opportunity to return on investment in assets
                                                                                                          and receive income
                Average joint rate            Gain             Gain for Branches in RAB




              KEY INDICATORS

                                                                       65,9                             Results of RAB implementation
      70                                                                                        12%
                                           57,4
      60
              46,8                                                                              9%
                                                                                                         additional electric grid capacity for connections
      50
      40                                               8,4%
                                                                                8,0%                     improvement of the quality of service and reliability of
      30
                                                                                                6%        electricity supply
                         4,3%
      20                                                                                        3%
                                                                                                         the load in the tariff for return on investment is distributed
      10                   2,1                         5,1                         5,5                    in the long run
       0                                                                                        0%       inflow of additional investment in the region
                    2009                       2010                         2011
                                                                                                         increase of revenue at a faster pace
            Revenue from electric power transmission           Net Profit          Net Profit margin



18                                                                                                                                                     www.mrsk-1.ru
Tariffs for 2012

                                                         The following regulations to be amended
        RF Government approved Decree #1178
        of December 29, 2011 “On the pricing of         Order of the FTS of Russia of 01.09.2010 # 218-e/5 "On amendments to Order of the Federal Tariff Service of
                                                         15.08.2008 # 152-e/15 "On approval of the rate of return on invested capital"
        regulated tariffs in the Electric Power
                                                        Order of the FTS of Russia of 26.06.2008 # 231-e "On approval of guidelines to regulate rates using the method of
        Industry“                                        return on invested capital"
                                                        Order of the FTS of Russia of 18.08.2010 # 183-e/1 "On approval of the agreement procedure by the Federal Tariff
                                                         Service of proposals of executive bodies of subjects of the Russian Federation in the field of rate regulation in
                                                         respect to the transition to the regulation of rates using the method of return on invested capital ..."




     December                                                                                                                                                    December
         2011                                                                                                                                                    2012


         before January 01, 2012                   before April 01, 2012                                                                  before July 01, 2012

        The establishment by regional             Adoption of decisions by regional regulators:                                          The new tariff decisions
        regulatory authorities of the uniform                                                                                            will become effective
                                                   on establishment of the revised from 01.07.2012 of long-
        (joint) rates for the period from
                                                    term parameters of RAB-regulation (LPR) and their
        01.01.2012 to 30.06.2012 at the level
                                                    agreement with the FTS of Russia;
        ≤ 2011 (subject to the execution of
        Government Decree # 1172)                  on establishment of tariffs for electric energy transmission
                                                    services in the second half of 2012, provided not
                                                    exceeding the 11% average growth of the joint tariff rate
                                                    in relation to the level set from 01.01.2012. Further up to
                                                    2017 the growth of rates shall be at the level of Statistical
                                                    Department of the Ministry of Economic Development
                                                    (10% per year)


19                                                                                                                                                  www.mrsk-1.ru
Consolidation of Grid Assets in the Regions
     of the Company’s Service Area & Implementation
     of Measures to Improve Investment Attractiveness of Its Stocks




20                                                                    www.mrsk-1.ru
Consolidation of Electric Grids



                        • Providing the share on the electric grid services market in the regions of the service
                          area with not less than 97% by 2015
     Target / Program   • Long-term target program for the consolidation of power grid assets have been
                          developed and approved (power grid assets consolidation plan for 2012 - 2015)




                        • Company consolidates the assets primarily in 3 ways: acquisition of power grid
         Methods          property, long term property rent, purchase of shares of power grid companies
                        • The basic advantages of consolidation are as follows: implementation of a unified
      & Advantages        technical policy, the development of a unified scheme of long-term development of
     of Consolidation     power grids, improving the reliability of electricity supply to consumers of all
                          categories, increasing of power grid transmission capacity




                        • It is planned to continue consolidating municipal power grid assets in some regions
        Plans for         where the Company operates
       2012 - 2015      • Program provides working with more than 5 000 owners




21                                                                                                       www.mrsk-1.ru
Plans for Consolidation of Grid Assets

                                                                                TGOs in IDGC of Centre Service Area

                                                                              Number of other TGOs = 441
        The other TGOs' average share in revenue in IDGC of Centre
         service areas – 17%                                                                                                                                                       102
        Required Gross Revenue (RGR) of the Company due to the
         assets consolidation in regions may increase to RUR 10                                                                                                       70
                                                                                                                                                          62
         billion by 2015, RGR share may grow up to 97%                                                                                          53
                                                                                                                                     39
        One of the key goals of the Company is the integration of                                                         26
                                                                                                           23      25
         power grid assets that will allow:                                             14      18
                                                                               9
          - increasing the reliability level of power supply
          - enlarging the electric energy distribution sales market




                                                                                                                           Lipetsk
                                                                               Tambov




                                                                                                                                                Bryansk




                                                                                                                                                                                   Voronezh
                                                                                                Kostroma




                                                                                                                    Tver




                                                                                                                                                          Smolensk
                                                                                                           Orel




                                                                                                                                                                       Yaroslavl
                                                                                        Kursk




                                                                                                                                     Belgorod
          - improving the quality of customer service
          - balancing the tariff on electric energy transmission



     Dynamics of the Company’s Share in the Electric Power Transmission Market (in terms of money)




            83.6%                         83.8%                       84.0%                                       83.0%                                              97.0%


             2008                          2009                       2010                                        2011                                               2015 F

22                                                                                                                                                        www.mrsk-1.ru
Dynamics of Shares, Trading Volume
                                                                                                                          & Key Events of 2011-2012
                                                                                                                                        Mln
                                                                                                                                              70
     The need to curb the
     growth rate of tariffs on
                                                                                                                                                                Multipliers
     electric energy was
     announced                          Record date to pay                                                                                         Current        MRKC      RF      INTL
                                        dividends for 2010                                                                                    60   (RAS)                   peers   peers*
                                                                                                                                                   P/E              6,6      7,8     13,2
                                                        Annual General       Meeting with                                                          EV/EBITDA        3,8      3,9      8,0
                                                        Meeting of           analysts within                                                  50
                                                        Shareholders         the Investor                                                          EV/S             0,8      0,6      1,3
                                                                             Day of IDGC
                                                                             Holding                                  Interim results              EV/RAB          0,44     0,44     1,28
                                                                                                 IFRS reporting
     Remaining 4                                                                                 for 1H 2011          for 2011 and
                         RAS reporting for
     branches and                                                                                                     plans for 2012
                         2010                                                                                                                 40
     1 Subsidiary
     to adopt
     RAB                                                                                                                                                       Start of trading:
                                              RAS reporting
                                              for 1H 2011                                                                                     30
                                                                                                                                                             May 21, 2008
                                                                 Shares of the
                                                                 Company were
                                                                 included into MICEX                                                                           Quotation list:
                                                                 A2 quotation list             RAS reporting
                                                                                               for 9M 2011
                                                                                                                  RAS reporting
                                                                                                                                                               А2 (MICEX)
                                                                                                                  for 2011
                                                                                                                                              20
                                                                                                                                                       Shares of IDGC of Centre
                                                                                                                                                    are part of the calculation base
                                                                                                                                              10             in the indices:
                                                                                                                                                               MICEX PWR
                                                                                                                                                               MICEX SC
                                                                                                                                              0



23                                                                                                                                                                   www.mrsk-1.ru
Stock Performance & Liquidity Increase



        May                    April             September           2Q 2011               3Q 2011                3Q 2011             2Q
        2008                   2009              2010                                                                                2012F



       Company 's shares
                                             Company's shares                        Dividends payment                           Quotation list
         were listed on
                                             were included in                        RUR 610 million,                            upgrade
       MICEX (quotation
                                             RTS EU                                  pay-out-ratio 13%                           (MICEX-RTS A1)
          list B) & RTS



                          Company's shares                      Confirmation                                 Quotation list
                          were included in the                  of presence in                               upgrade
                          index MICEX PWR                       RTS EU and RTS-2                             (MICEX A2 )




     Payment of Dividends for 2010                                                          Company's priorities for 2012
     Total, RUR million                                                        611             stable dividend policy
                                                                                               quotation list upgrade (MICEX A1)
     Net Profit share                                                         13%              depositary receipts launching
                                                                                               inclusion in international indexes
     Dividend yield (as at 12.05.2011)                                       1,33%             launching of option program

24                                                                                                                              www.mrsk-1.ru
Appendix




25              www.mrsk-1.ru
Reported EBITDA 2011 Analysis

                                                                                                                                                      RUR mln



                         +8 428              -1 797
                                                                -197
                                                                                  -2 263
                                                                                                    -415              -1 015
                                                                                                                                     -432
                                                                                                                                                     15 217*
     12 908*
                            Revenue




                                                                distribution


                                                                                   Purchased




                                                                                                                        Other opex
                                               Personnel cost
         EBITDA' 2010




                                                                                                    Raw materials




                                                                                                                                      Other income



                                                                                                                                                       EBITDA' 2011
                                                                                   electricity



                                                                                                     and supplies
                                                                   Power




     * - EBITDA calculated as results from operational activities and amortization (not adjusted)
26                                                                                                                                                     www.mrsk-1.ru
27
                                                                                                                   EBITDA 2011


                                                                                                                                                                                            15 217*
                                                                                                          Other non-cash items                                                              +587




                                                                                                                 Changes in WC
                                                                                                                                                                           -517




                                                                                                          Cash income tax paid
                                                                                                                                                                    -981




                                                                                                           Operating Cash flow
                                                                                                                                                                                            14 305




                                                                                                                         Capex
                                                                                                                                   -15 659




     * - EBITDA calculated as results from operational activities and amortization (not adjusted)
                                                                                                      Free cash flow to the firm
                                                                                                                                      -1 354




                                                                                                      Net borrowings & finance
                                                                                                                                                           +5 690




                                                                                                               lease


                                                                                                              Net Interest paid
                                                                                                                                                       -1 370




                                                                                                    Free cash flow to the equity
                                                                                                                                               2 966




                                                                                                                 Dividends paid
                                                                                                                                               -579
                                                                                                                                               2 387




                                                                                                     Net increase in cash, 2011
                                                                                                                                                                                  RUR mln




www.mrsk-1.ru
                                                                                                                                                                                                      Cash Flow Statement 2011 Analysis
Business Model of the Company

                                                                                                   payment for electric energy

                                                                                                      Customers
            Generation,                                                                           Electricity supplied         payment for power supply             Retailers,
                                                                                                    by contract (by
             wholesale                                                                             utility companies                                            guaranteed supply
             electricity                                    payment for electric                     and retailers)                payment for electric
                                                                                                                                                                   companies
                                                              energy purchase                                                       energy purchase
              market                                            (wholesale
                                                             market customers)
                                                                                                                                      (retail market
                                                                                                                                        customers)

                                                                                                      By ”direct”
                                                                                                       contracts
                     electric energy




                                                                              electric energy
                                       electric energy




                                                                                                                                                                     payment
                                                                                                                                                                     for losses




                                                                                                                transmission
                                                                                                               payment for


                                                                                                               services
                                                                                                                power
     Transmission                                                                                                                                         electric energy
       services


          Transmission                                   payment for power                                                           payment for power               Territorial Grid
                                                         transmission services                                                       transmission services
              grids                                                                                                                                                   Organizations
       Federal Grid Company of Unified                    electric energy                       Interregional Distribution           electric energy
                                                                                                                                                                         (TGOs)
                Energy System                                                                         Grid Company
                                                                                                                                                                            Municipal grids

                                                                                                                                                                                        “Joint operation”



28                                                                                                                                                                                       www.mrsk-1.ru
IR Contacts




Head of Investor Relations
Tatiana Miroshnichenko
+7 919 768 92 09
ir@mrsk-1.ru


IDGC of Centre
4, 2nd Yamskaya Str., Moscow, Russia 127018
T: +7 495 747 9292 F: +7 495 747 9292

Tickers:
MICEX-RTS:    MRKC
Bloomberg:    MRKC RX
Reuters:      MRKC.MM

www.mrsk-1.ru/ru/investors

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Renaissance Capital Investment Conference June 2012

  • 1. 2011 Results & Strategic Outlook for 2012 Renaissance Capital 16th Annual Investor Conference Moscow|25-26 June 2012
  • 2. Disclaimer This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or other securities representing shares of IDGC of Centre, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with any contract or investment decision. The information in this presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the intentions of IDGC of Centre, beliefs or current expectations concerning its results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which IDGC of Centre operates. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties to be set forth in the prospectus, because they relate to events and depend on circumstances that may or may not occur in the future. IDGC of Centre cautions you that forward looking statements are not guarantees of future performance and that the actual results of operations, financial condition and liquidity of IDGC of Centre as well as the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company's results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. In addition to the official information on the activity of IDGC of Centre, this presentation contains information obtained from third parties. This information has been obtained from sources which, according to IDGC of Centre, are reliable. Nevertheless, we do not guarantee the accuracy of this information, which may be abbreviated or incomplete. All opinions and estimates contained in this material reflect our view on the day of publication and are subject to change without notice. IDGC of Centre shall not be liable for the consequences of use of the views or statements, or incomplete Information contained in this presentation. IDGC of Centre undertakes no obligation to revise or confirm the forward-looking statements and assessments, as well as to update information contained in this presentation. Despite the fact that prior to 31.03.2008 IDGC of Centre was not an operating company, this presentation contains the consolidated data on all Distribution Grid Companies of the service area of IDGC of Centre, including for the period up to 31.03.2008. The information about the financial and operational data on the Company was received as the sum of the corresponding indicators of 11 Distribution Grid Companies, which were consolidated with IDGC of Centre. Despite the fact that in 2006 and 2007 under the control of IDGC of Centre (at that time IDGC of Centre and Northern Caucasus) there were more than 11 companies, for correct comparison of the information for these periods the information is shown for 11 Distribution Grid Companies in the current configuration. 2 www.mrsk-1.ru
  • 3. Overview of the Company & Its Development Priorities 3 www.mrsk-1.ru
  • 4. Industry Structure POWER SECTOR RESTRUCTURING 2003-2007 TARIFF STRUCTURE* CURRENT TARIFF RAO UES of Russia 100% 63% 3% Generation 34% Retailers Generation (Electricity and Heat Production) Transmission (High Voltage Grids)  Hydro Power Plants Transmission & Distribution* Federal Grid Company  Heat Power Plants Transmission grid >220 kV  TGKs Federal Grid Company  OGKs of Unified Energy System Distribution (Low Voltage Grids) 17% 7% Infrastructure 34% Holding IDGC (MRSK) 4% 6%  Market Council Transmission & Distribution Losses TGOs  System Operator grids <110 kV Supply (Electricity Trading)  11 IGDCs (MRSKs) The structure is provided  7 retailers according to the results of  Retailers  5 DGCs 2011 tariff campaign  Others  others 4 * Indicative as at January 01, 2011 www.mrsk-1.ru
  • 5. Benchmark Among MRSKs (RAS 2011) MCAP* REVENUE RUR bln RUR bln MOESK 79 MOESK 127 IDGC of Centre 34 IDGC of Centre 68 IDGC of CV 22 IDGC of CV 64 IDGC of Volga 21 IDGC of Ural 55 IDGC of Ural 20 IDGC of Siberia 52 IDGC of Siberia 13 IDGC of Volga 48 Lenenergo 12 Lenenergo 37 IDGC of NW 9 IDGC of NW 31 IDGC of South 3 IDGC of South 24 IDGC of NC 2 #2 IDGC of NC 11 #2 NET PROFIT RAB RUR bln RUR bln MOESK 17,1 MOESK 205 IDGC of Centre 5,2 IDGC of Centre 121 IDGC of CV 4,2 IDGC of CV 85 IDGC of Ural 2,5 Lenenergo 79 IDGC of NW 1,4 IDGC of Volga 77 IDGC of NC 1,3 IDGC of Ural 57 Lenenergo 0,4 IDGC of Siberia 52 IDGC of Volga 0,3 IDGC of South 38 IDGC of South 0,3 IDGC of NW 23 IDGC of Siberia 0,1 #2 IDGC of NC 18 #2 5 * Market capitalization, indicative as at March 2012 www.mrsk-1.ru
  • 6. Map of IDGC of Centre. Overview KEY INDICATORS BRANCHES OF IDGC OF CENTRE Service area 458 000 km2 MСap* RUR bln 34,3 1 Belgorodenergo Population 2 Bryanskenergo 13,6 mln people Revenue (IFRS) RUR bln 69,0 3 Voronezhenergo Length of conductors 4 Kostromaenergo 0.4 – 110 kV thousand km 366,1 5 Kurskenergo 10 Length of cables 6 Lipetskenergo 8 11 0.4 – 110 kV thousand km 9,4 7 Orelenergo 2 4 8 Smolenskenergo 7 Head office, Moscow Substation capacity: 5 6 9 Tambovenergo 9 35 – 110 kV MVA 32 187 1 10 Tverenergo 3 11 Yarenergo 6 – 10/0,4 kV MVA 15 498 Staff number** 30 977 Number of shareholders*** 16 775 IDGC of Centre is a natural monopoly, its tariff rates * indicative as at March 30, 2012 are regulated by the ** indicative as at December 31, 2011 *** indicative as at May 12, 2011 (record date) Federal Tariff Service 6 www.mrsk-1.ru
  • 7. Milestones of 2010 - 2011 Sep 2010 Nov 2010 Dec 2010 Jan 2011 Jun - Aug 2011 Dec 2011 2004 – 2009 Board of Directors 5 years RAB tariff system Successful implementation The Company developed approved the Regulations was adopted in Orelenergo of Business Plan and and approved the Program of on the dividend policy and Bryanskenergo, iRAB Investment Program for innovative development for based on a system amounts to RUR 118 bln 2010, approved by the 2011-2016, the Board of executing a set of criteria Board of Directors, CAPEX Directors approved Business amounted to RUR 12.2 bln Plan and Investment Program for 2012 Dec 2004 The first stage As part of RAO UES reforming IDGC of Smart Grid of Centre and Northern Caucasus Program is 5 years RAB tariff system The Company fulfilled its was registered for RGC integration completed in adopted in Kostromaenergo, obligations for dividend Apr 2007 Belgorod Tambovenergo, payments of RUR 611 million The final structure of the Company Voronezhenergo, (13% - pay out ratio); Company was accepted, including 11 regional Smolenskenergo and stocks moved across to MICEX grid companies of Central Russia Yargorelectroset, 100% quotation list A2; 1H2011 IFRS (the decision of Board of Directors The Company acquired 100% subsidiary of the Company financials were reported of RAO UES) of Yargorelectroset, the share Mar 2008 Affiliation of RGCs demonstrating growth of the key of IDGC of Centre in regional financial indicators May 2008 Listing on MICEX and RTS grid assets increased to 90% 7 www.mrsk-1.ru
  • 8. Strategic Priorities • Implementation of SAIDI*/ SAIFI** indicators calculation system in accordance with international standards Quality, Reliability • Implementation of asset management methodology, integration of asset management & Innovations system with geo-informational system (technical risk management) • Reduction of technical and commercial losses (implementation of smart metering systems) • Increase of the market share in the regions of the Company’s service area Market Share • Consolidation of grid assets (TGOs, ownerless grids) • Increase of transparency and efficiency of the procurement process Investment • Use of typified project solutions Activity • Use of a system approach to evaluate and approve investment projects • Increase of monitoring of the performance of work by contractors • OPEX optimization, reducing costs under control Operating • Governance improvement: implementation of an optimized KPI system for top-management Activity • Optimization of systems and processes in operation and maintenance • Development of additional energy service areas • Implementation of the policy of stable dividend payments • Implementation of a complex of measures to improve the liquidity of shares Investment • Access to foreign trading floors Appeal • Start of an option program • Possibility of privatization of the Company within the development strategy of IDGC Holding 8 * System Average Interruption Duration Index ** System Average Interruption Frequency Index www.mrsk-1.ru
  • 9. Company Structure & Major Shareholders SHARE CAPITAL STRUCTURE Russian Federation 50,23% 53,69% 15,90% IDGC Holding, JSC Minority shareholders Free Float** 50,23% 49,77%* 25% 8,40% IDGC of Centre, JSC 3,20% 2,73% Group of Companies 1,45% 18,09% Energy Service Yargorelectroset, JSC Energetik, JSC Company, JSC IDGC Holding, JSC 51% GENHOLD LIMITED 11 The main activities are to provide energy saving and energy efficiency services One of the largest Territory Grid Organization in the Central Federal YarESK, JSC THE BANK OF NEW YORK MELLON Operating Region. The result of acquisition of the 100% 100% IMMENSO ENTERPRISES LIMITED business stake is that IDGC of Energosoyuz Holdings Limited Center now controls more CIEET, CJSC units than 90% of the power RUSENERGO FUND LIMITED grid assets in the Yaroslavl region Centre of innovations Others and energy efficient Subsidiaries -100% technologies * including the State share 0,46% ** according to the MICEX Index Committee 9 www.mrsk-1.ru
  • 10. Corporate Governance & Rating External control over financial Supreme governing body : activities of the Company: RATING General Meeting Auditor of Shareholders Audit Commission Strategic governing body : Board of Directors Committees under the Board of Directors: Developed corporate governance practice & leading position among Committee Management Board 1 on Strategy MRSKs 2 Committee National Corporate Governance Rating (NCGR) Chairman of the Management on Audit Board - Director General Confirmed Feb’ 12 Committee Upgraded (7+) Mar’ 11 3 on Personnel Confirmed Jul’ 09 Internal control over financial Committee activities of the Company: 4 Confirmed Feb’ 09 on Reliability Internal Control and Assigned Sep’ 08 Committee Audit Department 5 on TC* 10 * technological connection www.mrsk-1.ru
  • 11. Financial and Operating Indicators & Investment Program
  • 12. Financial Performance (IFRS) REVENUE RUR bln Indicator 2009 2010 2011 69,0 Revenue growth, incl.: 12,8% 22,9% 13,9% 60,6 other services Growth of revenue from electric 49,3 65,9 power transmission 16,4% 22,6% 14,8% 57,4 from technological Growth of revenue from TC 46,8 connection -42,9% 43,8% -21,7% Growth of revenue from other services 28,6% 0% 44,4% from electric energy EBITDA growth -2,3% 44,2% 19,4% transmission Net profit growth -25,0% 142,9% 7,8% 2009 2010 2011 ROE 7,4 15,2 143 EBITDA NET PROFIT PRODUCTIVE SUPPLY* RUR bln RUR bln kWh bln EBITDA margin Net profit margin 21,4% 8,4% 8,0% 20,5% 17,4% 4,3% 5,1 5,5 54,1 14,8 53,4 12,4 8,6 2,1 51,5 2009 2010 2011 2009 2010 2011 2009 2010 2011 12 * incl. TGOs www.mrsk-1.ru
  • 13. Key Operating Indicators PRODUCTIVE SUPPLY 10 LARGEST CLIENTS 9% 14% TGO's 33% from grids to customers - 9% 35% legal entities of DGCs to residential customers Revenue % from transmission 9% 56% 4% 6% PRODUCTIVE SUPPLY BY VOLTAGE LEVELS 4% 6% 5% 5% 5% 6% 9% HV 110 OJSC Belgorod Retail Company OJSC Tverenergosbyt 10% LV OJSC Voronezh Retail Company OJSC Yaroslavl Retail Company OJSC Smolenskenergosbyt from grids MV2 OJSC Bryanskenergosbyt of DGCs OJSC NLMK 15% OJSC Kurskenergosbyt MV1 OJSC Kostroma Retail Company OJSC LESK 61% HV 220 Others 13 www.mrsk-1.ru
  • 14. Loan Portfolio & Credit Rating 40 NET DEBT / EBITDA* 2,0 CREDIT RATING HISTORY 35 RUR bln 30 1,3 1,3 1,5 1,2 25 1,1 20 1,0 15 18,6 10 14,7 14,8 0,5 12,4 9,3 10,8 5 8,8 8,6 0 0,0 Standard&Poor’s 2008 2009 2010 2011 Confirmed Feb’ 12 EBITDA Net debt Net debt/EBITDA Confirmed Jul’ 10 Assigned (level BB-/ruAA-) Nov’ 10 STRUCTURE OF LOAN PORTFOLIO IN 2011 3% 13% Sberbank National Rating Agency (NRA) Confirmed (outlook “positive”) Dec’ 11 VTB Upgraded (level AA-) Dec’ 10 18% Average rate Rosbank Confirmed Oct’ 10 8.35% Upgraded (level A+) Sep’ 08 Alfa-Bank 18% 49% Assigned (level A) Aug’ 07 Gazprombank 14 * Target ratio Net debt / EBITDA – 3,5 www.mrsk-1.ru
  • 15. CAPEX 2009 – 2012 (F) CAPEX AREAS IN 2012 SOURCES OF FINANCING FOR 2012* RUR bln 9,2% 2% 2% tariff sources 1,32 3,0 % 0,4% borrowed funds 6,1% 0,43 0,05 36% 0,88 other own 6,3% sources 35,9% 0,91 14,35 connection fee 60% 5,16 39,0% Commissioning of power Commissioning, on fixed assets 5,6 Period RUR bln km MVA 2009 6,5 2 414 877 retrofitting and reconstruction new construction (substations, overhead and cable lines) 2010 12,2 4 155 1 050 SCADA systems, communications, IT 2011 15,2 4 630 1 490 creation/upgrade of metering systems EAD 2012 (F)* 14,3 4 010 811 purchase of fixed assets others * according to the approved Investment Program for 2012 15 www.mrsk-1.ru
  • 16. Transition to Regulatory Asset Base Method (RAB-Regulation) 16 www.mrsk-1.ru
  • 17. Return on Invested Capital Method (RAB-regulation) The size of invested capital of IDGC of Centre (taking Since January 01, 2009 IDGC of In 2011, IDGC of Centre Centre has been among the first into account Yargorelectroset, JSC) is RUR 118 bln (the average rate of revaluation ~2,4). The fair completed the transition Russian energy companies to start the transition to a new regulatory system evaluation was performed by the Consortium of of its branches & in the regions of its service area Independent Appraisers, which includes subsidiaries to RAB ZAO Deloitte&Touche CIS 2009 2010 2011 2012 2013 2014 2015 01.01.2009 31.12.2011 Belgorod, Tver, Lipetsk The 2nd long-term regulation period up to 2016 for Belgorod and Lipetsk 01.01.2010 31.12.2012 Kursk, Yaroslavl Prolongation up to 2015 (3+2) 01.11.2010 31.12.2014 Bryansk, Orel 01.01.2011 31.12.2015 Voronezh, Kostroma, Smolensk, Tambov & Yargorelectroset, JSC 17 www.mrsk-1.ru
  • 18. Goals & Results of the Transition to RAB AVERAGE JOINT RATE kopeck / kWh Goals of return on invested capital method (RAB) 140 27% 30% 25% 120  provides a clear relationship between customers, 25% 100 22% shareholders (investors) and the Company 20% 80 21% 14%  rates are approved for a long-term period (3-5 years) of 15% 60 regulation 10% 40  creation of incentives to improve operating performance of 20 5% 74,96 91,8 111,25 126,6 the Company 0 0% 2008 2009 2010 2011  provision of an opportunity to return on investment in assets and receive income Average joint rate Gain Gain for Branches in RAB KEY INDICATORS 65,9 Results of RAB implementation 70 12% 57,4 60 46,8 9%  additional electric grid capacity for connections 50 40 8,4% 8,0%  improvement of the quality of service and reliability of 30 6% electricity supply 4,3% 20 3%  the load in the tariff for return on investment is distributed 10 2,1 5,1 5,5 in the long run 0 0%  inflow of additional investment in the region 2009 2010 2011  increase of revenue at a faster pace Revenue from electric power transmission Net Profit Net Profit margin 18 www.mrsk-1.ru
  • 19. Tariffs for 2012 The following regulations to be amended RF Government approved Decree #1178 of December 29, 2011 “On the pricing of  Order of the FTS of Russia of 01.09.2010 # 218-e/5 "On amendments to Order of the Federal Tariff Service of 15.08.2008 # 152-e/15 "On approval of the rate of return on invested capital" regulated tariffs in the Electric Power  Order of the FTS of Russia of 26.06.2008 # 231-e "On approval of guidelines to regulate rates using the method of Industry“ return on invested capital"  Order of the FTS of Russia of 18.08.2010 # 183-e/1 "On approval of the agreement procedure by the Federal Tariff Service of proposals of executive bodies of subjects of the Russian Federation in the field of rate regulation in respect to the transition to the regulation of rates using the method of return on invested capital ..." December December 2011 2012 before January 01, 2012 before April 01, 2012 before July 01, 2012 The establishment by regional Adoption of decisions by regional regulators: The new tariff decisions regulatory authorities of the uniform will become effective  on establishment of the revised from 01.07.2012 of long- (joint) rates for the period from term parameters of RAB-regulation (LPR) and their 01.01.2012 to 30.06.2012 at the level agreement with the FTS of Russia; ≤ 2011 (subject to the execution of Government Decree # 1172)  on establishment of tariffs for electric energy transmission services in the second half of 2012, provided not exceeding the 11% average growth of the joint tariff rate in relation to the level set from 01.01.2012. Further up to 2017 the growth of rates shall be at the level of Statistical Department of the Ministry of Economic Development (10% per year) 19 www.mrsk-1.ru
  • 20. Consolidation of Grid Assets in the Regions of the Company’s Service Area & Implementation of Measures to Improve Investment Attractiveness of Its Stocks 20 www.mrsk-1.ru
  • 21. Consolidation of Electric Grids • Providing the share on the electric grid services market in the regions of the service area with not less than 97% by 2015 Target / Program • Long-term target program for the consolidation of power grid assets have been developed and approved (power grid assets consolidation plan for 2012 - 2015) • Company consolidates the assets primarily in 3 ways: acquisition of power grid Methods property, long term property rent, purchase of shares of power grid companies • The basic advantages of consolidation are as follows: implementation of a unified & Advantages technical policy, the development of a unified scheme of long-term development of of Consolidation power grids, improving the reliability of electricity supply to consumers of all categories, increasing of power grid transmission capacity • It is planned to continue consolidating municipal power grid assets in some regions Plans for where the Company operates 2012 - 2015 • Program provides working with more than 5 000 owners 21 www.mrsk-1.ru
  • 22. Plans for Consolidation of Grid Assets TGOs in IDGC of Centre Service Area Number of other TGOs = 441  The other TGOs' average share in revenue in IDGC of Centre service areas – 17% 102  Required Gross Revenue (RGR) of the Company due to the assets consolidation in regions may increase to RUR 10 70 62 billion by 2015, RGR share may grow up to 97% 53 39  One of the key goals of the Company is the integration of 26 23 25 power grid assets that will allow: 14 18 9 - increasing the reliability level of power supply - enlarging the electric energy distribution sales market Lipetsk Tambov Bryansk Voronezh Kostroma Tver Smolensk Orel Yaroslavl Kursk Belgorod - improving the quality of customer service - balancing the tariff on electric energy transmission Dynamics of the Company’s Share in the Electric Power Transmission Market (in terms of money) 83.6% 83.8% 84.0% 83.0% 97.0% 2008 2009 2010 2011 2015 F 22 www.mrsk-1.ru
  • 23. Dynamics of Shares, Trading Volume & Key Events of 2011-2012 Mln 70 The need to curb the growth rate of tariffs on Multipliers electric energy was announced Record date to pay Current MRKC RF INTL dividends for 2010 60 (RAS) peers peers* P/E 6,6 7,8 13,2 Annual General Meeting with EV/EBITDA 3,8 3,9 8,0 Meeting of analysts within 50 Shareholders the Investor EV/S 0,8 0,6 1,3 Day of IDGC Holding Interim results EV/RAB 0,44 0,44 1,28 IFRS reporting Remaining 4 for 1H 2011 for 2011 and RAS reporting for branches and plans for 2012 2010 40 1 Subsidiary to adopt RAB Start of trading: RAS reporting for 1H 2011 30 May 21, 2008 Shares of the Company were included into MICEX Quotation list: A2 quotation list RAS reporting for 9M 2011 RAS reporting А2 (MICEX) for 2011 20 Shares of IDGC of Centre are part of the calculation base 10 in the indices: MICEX PWR MICEX SC 0 23 www.mrsk-1.ru
  • 24. Stock Performance & Liquidity Increase May April September 2Q 2011 3Q 2011 3Q 2011 2Q 2008 2009 2010 2012F Company 's shares Company's shares Dividends payment Quotation list were listed on were included in RUR 610 million, upgrade MICEX (quotation RTS EU pay-out-ratio 13% (MICEX-RTS A1) list B) & RTS Company's shares Confirmation Quotation list were included in the of presence in upgrade index MICEX PWR RTS EU and RTS-2 (MICEX A2 ) Payment of Dividends for 2010 Company's priorities for 2012 Total, RUR million 611  stable dividend policy  quotation list upgrade (MICEX A1) Net Profit share 13%  depositary receipts launching  inclusion in international indexes Dividend yield (as at 12.05.2011) 1,33%  launching of option program 24 www.mrsk-1.ru
  • 25. Appendix 25 www.mrsk-1.ru
  • 26. Reported EBITDA 2011 Analysis RUR mln +8 428 -1 797 -197 -2 263 -415 -1 015 -432 15 217* 12 908* Revenue distribution Purchased Other opex Personnel cost EBITDA' 2010 Raw materials Other income EBITDA' 2011 electricity and supplies Power * - EBITDA calculated as results from operational activities and amortization (not adjusted) 26 www.mrsk-1.ru
  • 27. 27 EBITDA 2011 15 217* Other non-cash items +587 Changes in WC -517 Cash income tax paid -981 Operating Cash flow 14 305 Capex -15 659 * - EBITDA calculated as results from operational activities and amortization (not adjusted) Free cash flow to the firm -1 354 Net borrowings & finance +5 690 lease Net Interest paid -1 370 Free cash flow to the equity 2 966 Dividends paid -579 2 387 Net increase in cash, 2011 RUR mln www.mrsk-1.ru Cash Flow Statement 2011 Analysis
  • 28. Business Model of the Company payment for electric energy Customers Generation, Electricity supplied payment for power supply Retailers, by contract (by wholesale utility companies guaranteed supply electricity payment for electric and retailers) payment for electric companies energy purchase energy purchase market (wholesale market customers) (retail market customers) By ”direct” contracts electric energy electric energy electric energy payment for losses transmission payment for services power Transmission electric energy services Transmission payment for power payment for power Territorial Grid transmission services transmission services grids Organizations Federal Grid Company of Unified electric energy Interregional Distribution electric energy (TGOs) Energy System Grid Company Municipal grids “Joint operation” 28 www.mrsk-1.ru
  • 29. IR Contacts Head of Investor Relations Tatiana Miroshnichenko +7 919 768 92 09 ir@mrsk-1.ru IDGC of Centre 4, 2nd Yamskaya Str., Moscow, Russia 127018 T: +7 495 747 9292 F: +7 495 747 9292 Tickers: MICEX-RTS: MRKC Bloomberg: MRKC RX Reuters: MRKC.MM www.mrsk-1.ru/ru/investors