Local Version
Menu
Interactive Analysis Development of Additional Services BB Credit Rating Business Model Strategy Grid Evolution Investment Appeal Upside Share Potential KPIs Transmission Investment Program Implementation Grid Connection Financial Results BB Credit Rating Share Capital A supplier of last resort Capital Investments The Geography of Activity
Interactive
Analysis
Geographical
Footprint
Business Model
Investment
Attractiveness

Interactive Analysis

Production performance
data
Financial performance
data
RAS
data
IFRS
data
Annual
data
Six months
data
(1) Productive supply within the company (including losses of TGOs)
(1) EBITDA is calculated as: net income + income tax and other similar obligatory payments + interest payable - interest receivable + depreciation and amortization
(2) Net debt is calculated as: long-term borrowings + short-term borrowings – cash and cash equivalents – financial investments
(1) Excluding retrospective recalculation related to the requirements of the updated IAS 19 standard
(2) EBITDA is calculated as: income and total comprehensive income for the period + income tax + interest expense (excluding interest on finance lease, remuneration to employees and changes in the fair value of financial investments (net)) + depreciation and amortization
(3) Net debt is calculated as: short-term borrowings and long-term borrowings – cash and cash equivalents

Overview

11 branches
458 thousand sq. km
Service area
13.6 mln
Population

KEY INDICATORS

THE GEOGRAPHY OF ACTIVITY

TYPES OF OPERATIONS
2012
6M 2013
Market Cap(1), RUB bn
Market Cap, USD mln
Productive supply(2), bn kWh
Revenue (RAS/IFRS), RUB bn
Net income (RAS/IFRS)(3), RUB bn
CAPEX, RUB bn
Staff (RAS/IFRS), thousand people
Number of shareholders(4)
24.6
808
57.9
69.4/69.9
3.5/4.4
15.8
29.9/31.2
16,428
15.6
475
29
41.8/41.9
1.2 /0.6
4.2
30.8/31.5
16,428
Types of operations

• Transmission and distribution of power electricity
• Grid connection
   (connection to 0.4-110 kV power grids)
• The functions of a supplier of last resort
   (Bryansk, Kursk, Orel, Tver, Smolensk)
• Energy services

IDGC of Centre is a natural monopoly; prices are set by regulators: the Federal Tariff Service (FTS) and regional regulatory bodies (REC)

x
«Kostromaenergo»
Area of the region 60.2 thousand sq. km
Population 668 thousands people
Share in the power transmission market

(in terms of revenue)		 96.9%
Share in the market for grid connection 100%
Length of 0.4-110 kV overhead lines
(along the ROW)		 23,792.29 km
Length of 0.4-110 kV cables 1,466.99 km
Capacity of Substations 3,164.84 MVA
Number of substations 6,424
Number of installed units 105,069
Go to the branch’s page
x
«Yarenergo»
Area of the region 36.2 thousand sq. km
Population 1,272 thousands people
Share in the power transmission market
(in terms of revenue)		 86.6%
Share in the market for grid connection 90%
Length of 0.4-110 kV overhead lines
(along the ROW), km		 26,542.25 км
Length of 0.4-110 kV cables 315.95 km
Capacity of Substations 4,106.37 MVA
Number of substations 6,992
Number of installed units 124,077
Go to the branch’s page
x
«Tverenergo»
Area of the region 84.2 thousand sq. km
Population 1,353 thousands people
Share in the power transmission market
(in terms of revenue)		 79.9%
Share in the market for grid connection 89.1%
Length of 0.4-110 kV overhead lines
(along the ROW)		 46,262.27 km
Length of 0.4-110 kV cables 315.54 km
Capacity of Substations 5,599.61 MVA
Number of substations 11,397
Number of installed units 170,288
Go to the branch’s page
x
«Smolenskenergo»
Area of the region 49.8 thousand sq. km
Population 986 thousands people
Share in the power transmission market
(in terms of revenue)		 93.8%
Share in the market for grid connection 99%
Length of 0.4-110 kV overhead lines
(along the ROW)		 38,019.15 km
Length of 0.4-110 kV cables 2,008.43 km
Capacity of Substations 4,825.36 MVA
Number of substations 9,370
Number of installed units 154,958
Go to the branch’s page
x
«Bryanskenergo»
Area of the region 34.9 thousand sq. km
Population 1,278 thousands people
Share in the power transmission market
(in terms of revenue)		 70.6%
Share in the market for grid connection 77%
Length of 0.4-110 kV overhead lines
(along the ROW)		 25,090.90 km
Length of 0.4-110 kV cables 131.14 km
Capacity of Substations 3,060.10 MVA
Number of substations 5,783
Number of installed units 84,405
Go to the branch’s page
x
«Orelenergo»
Area of the region 24.7 thousand sq. km
Population 787 thousands people
Share in the power transmission market
(in terms of revenue)		 83.9%
Share in the market for grid connection 90.1%
Length of 0.4-110 kV overhead lines
(along the ROW)		 27,853.14 km
Length of 0.4-110 kV cables 113.14 km
Capacity of Substations 2,541.77 MVA
Number of substations 5,982
Number of installed units 92,049
Go to the branch’s page
x
«Kurskenergo»
Area of the region 30.0 thousand sq. km
Population 1,127 thousands people
Share in the power transmission market
(in terms of revenue)		 80.3%
Share in the market for grid connection 78.3%
Length of 0.4-110 kV overhead lines
(along the ROW)		 34,675.24 km
Length of 0.4-110 kV cables 232.02 km
Capacity of Substations 4,939.86 MVA
Number of substations 9,421
Number of installed units 152,210
Go to the branch’s page
x
«Belgorodenergo»
Area of the region 27.1 thousand sq. km
Population 1,533 thousands people
Share in the power transmission market
(in terms of revenue)		 98.7%
Share in the market for grid connection 100%
Length of 0.4-110 kV overhead lines
(along the ROW)		 41,540.71 km
Length of 0.4-110 kV cables 6,253.37 km
Capacity of Substations 7,058.24 MVA
Number of substations 12,396
Number of installed units 273,220
Go to the branch’s page
x
«Lipetskenergo»
Area of the region 24.0 thousand sq. km
Population 1,174 thousands people
Share in the power transmission market
(in terms of revenue)		 80.9%
Share in the market for grid connection 82.5%
Length of 0.4-110 kV overhead lines
(along the ROW)		 28,176.60 km
Length of 0.4-110 kV cables 342.01 km
Capacity of Substations 4,069.41 MVA
Number of substations 7,602
Number of installed units 112,607
Go to the branch’s page
x
«Voronezhenergo»
Area of the region 52.2 thousand sq. km
Population 2,335 thousands people
Share in the power transmission market
(in terms of revenue)		 76.7%
Share in the market for grid connection 77%
Length of 0.4-110 kV overhead lines
(along the ROW)		 50,980.77 km
Length of 0.4-110 kV cables 188.49 km
Capacity of Substations 6,355.68 MVA
Number of substations 11,556
Number of installed units 176,476
Go to the branch’s page
x
«Tambovenergo»
Area of the region 34.5 thousand sq. km
Population 1,092 thousands people
Share in the power transmission market
(in terms of revenue)		 67.8%
Share in the market for grid connection 76%
Length of 0.4-110 kV overhead lines
(along the ROW)		 26,478.15 km
Length of 0.4-110 kV cables 114.59 km
Capacity of Substations 3,493.99 MVA
Number of substations 6,159
Number of installed units 99,929
Go to the branch’s page
x
IDGC of Centre
Area of the region 457.8 thousand sq. km
Population 13.6 mln people
Share in the power transmission market
(in terms of revenue)		 84.5%
Share in the market for grid connection 87%
Length of 0.4-110 kV overhead lines
(along the ROW)		 369,411 km
Length of 0.4-110 kV cables 11,482 km
capacity of Substations, MVA 49,215 MVA
Number of substations 2,336
Number of installed units 1,545,288
Go to company website
x
(1) weighted average price as of 30.09.2013/ June 30, 2013
(2) Within the company
(3) Excluding retrospective recalculation related to the requirements of the updated IAS 19 standard
(4) as of 06.05.2013
(1) as of 30.09.2013

Strategic Goals of IDGC of Centre

QUALITY,
RELIABILITY
AND INNOVATION

• Reducing technological and commercial losses (implementation of smart metering systems)
• Adopting asset management methods (technical risk management)
• Implementing a system for calculating SAIDI (System Average Interruption Duration Index) (1)/ SAIFI
  (System Average Interruption Frequency Index) (2) in accordance with international standards

MARKET
SHARE

• Increasing the market share in operating regions
• Consolidating grid assets (TGO, abandoned grids)

INVESTMENT
ACTIVITY

• Using standards designs
• Increasing the efficiency of procurement
• Improving control over the work of contractors

OPERATIONS

• Increasing the efficiency of management: implementing an optimal KPI system for senior management
• Optimizing systems and processes for operations and repairs
• Developing additional types of energy services

INVESTMENT
APPEAL

• Implementation of stable dividend payments policy
• Taking measures for improving the liquidity of shares
• Entering foreign stock markets

1) average outage duration
2) estimated number of interruptions experienced by consumers

Key Performance Indicators for 2012

KPIs for 2012(1) were fully implemented

Net income

Target

3.0RUB bn

Actual

3.5RUB bn

Compare with other companies of JSC Russian Grids (ROSSETI)

Net income
covered with
cash flow

Target

2.9RUB bn

Actual

3.0RUB bn

Equity

Target

50.5RUB bn

Actual

50.5RUB bn

ROE
covered with
cash flow

Target

5.65%

Actual

6.02%

Compare with other companies of JSC Russian Grids (ROSSETI)

Electrical energy losses
to supply to the grid

Target

9.93%

Actual

9.71%

Number of
accidents

Target

0

Actual

0

System Average
Interruption Frequency
Index (SAIFI)

Target

< 1

Actual

0.99

System Average
Interruption Duration
Index (SAIDI)

Target

< 1

Actual

0.9

Electrical energy
losses to supply
to the grid

Target

≥ 95

Actual

103

Net income in 2012, RUB bn
x
ROE covered with cash flow in 2012, %
x

The KPI implementation plan for 2012 was approved by the resolution of the Board of Directors of IDGC of Centre, minutes No. 28/11 of December 30, 2011; minutes No. 22/12 of September 21, 2012. Actual KPI implementation for 2012 was approved by the Board of Directors of IDGC of Centre, minutes No. 13/13 of May 30, 2013

Business Model of IDGC of Centre

? Stage 1
? Stage 2
? Stage 3
? Stage 4
Stage 1

Electricity is transmitted from generating companies to the area of responsibility of IDGC of Centre, the “joint operation” area (IDGC of Centre + TGC): either directly or via FGS UES

x
Stage 2

Electricity is transmitted from the area of responsibility of IDGC of Centre (from the “joint operation” area) to consumers (under “direct” contracts + power supply contracts): either directly or via TGC

x
Stage 3 (LETTERS IN ORANGE TRIANGLES)

Part 1:

  • Consumers make payments for electricity under sale and purchase agreements to power supply companies and guarantee suppliers
  • Consumers make payments for electricity and power transmission under power supply contracts to power supply companies and guarantee suppliers
  • IDGC of Centre and TGC make payments for energy losses under sale and purchase agreements to power supply companies and guarantee suppliers

Part 2:

  • Payment for electricity from power supply companies and guarantee suppliers to the wholesale electricity market
  • Payment for electricity from consumers to the wholesale electricity market

Part 3:

  • Power supply companies and guarantee suppliers make payments for power transmission under contracts for power transmission to IDGC of Centre
  • Consumers make payments for power transmission under contracts for power transmission to IDGC of Centre

Part 4:

  • IDGC of Centre makes payments for power transmission under contracts for power transmission to FGC UES
  • IDGC of Centre makes payments for power transmission under contracts for power transmission to TGC
x
Stage 4. Guarantee supplier:
(LETTERS IN BLUE TRIANGLES)

Part 1:

  • Consumers make payments for electricity under sale and purchase agreements to power supply companies, guarantee suppliers and IDGC of Centre
  • Consumers make payments for electricity and electricity transmission under power supply contracts to power supply companies, guarantee suppliers and IDGC of Centre
  • TGC make payments for energy losses under sale and purchase agreements to power supply companies, guarantee suppliers and IDGC of Centre

Part 2:

  • Payment for electricity from power supply companies, guarantee suppliers and IDGC of Centre to the wholesale electricity market
  • Payment for electricity from consumers to the wholesale electricity market

Part 3:

  • Power supply companies and guarantee suppliers make payments for power transmission under contracts for power transmission to IDGC of Centre
  • Consumers make payments for power transmission under contracts for power transmission to IDGC of Centre

Part 4:

  • IDGC of Centre makes payments for power transmission under contracts for power transmission to FGC UES
  • IDGC of Centre makes payments for power transmission under contracts for power transmission to TGC
x

Tariff Regulation

* 2012-2013: approved by REC; 2014-2017: calculated based on approved
long-term regulation parameters and expert analysis of IDGC of Centre
71.3 15.5 42.8 12.9 55.5 128.4 1.4 35.2 8.4
78.4 16.3 47.2 14.8 55.5 141.5 10.2 39.0 9.2
85.4 16.8 51.7 16.9 55.6 153.8 8.7 42.5 11.1
93.6 17.4 56.5 19.7 56.4 166.0 8.0 46.7 13.3
102.7 18.0 62.0 22.8 57.2 179.6 8.2 51.2 16.2
113.4 18.6 68.2 26.6 58.0 195.6 8.9 56.9 19.9
2012 2013 2014 2015 2016 2017
Required gross revenue (RGR), RUB bn 71.3 78.4 85.4 93.6 102.7 113.4
OPEX, RUB bn 15.5 16.3 16.8 17.4 18.0 18.6
Non-controllable costs, RUB bn 42.8 47.2 51.7 56.5 62.0 68.2
Return + Income + Smoothing + RGR Adjustments(1), RUB bn 12.9 14.8 16.9 19.7 22.8 26.6
Productive supply, bn kWh 55.5 55.4 55.6 56.4 57.3 58.0
Average one-rate tariff(2), Kopecks/kWh 128.4 141.5 153.8 166.0 179.6 195.6
Tariff growth, % 1.4 10.2 8.7 8.0 8.2 8.9
Own required gross revenue, RUB bn 35.2 39.0 42.5 46.7 51.2 56.9
Operating income (EBIT), RUB bn 8.4 9.2 11.1 13.3 16.2 19.9
(1) The breakdown of required gross revenue by branches regulated using the long-term indexation method was reconciled, i.e. depreciation and amortization, capital investments from income are recorded in the Return + Income + Smoothing-out + Adjustments to required gross revenue item
(2) As of January 1, 2013, 8 branches of IDGC of Centre were regulated using the Regulatory Asset Base (RAB) method (based on return on invested capital), while 3 branches (Tverenergo, Bryanskenergo, Lipetskenergo) were regulated based on long-term indexation of required gross revenue

Comparative analysis with the Peers

IDGC of Centre is an industry leader in terms of key operating, financial and economic indicators

#1

in terms of length of power lines

Length of power lines (6M 2013),
thousand km

380.9

IDGC of Center

255.1

IDGC of Center and Volga Region

242.8

IDGC of Siberia

215.8

IDGC of Volga

175.1

IDGC of North-West

157.6

IDGC of the South

139.0

MOESK

120.2

IDGC of Urals

113.1

IDGC of Siberia

57.3

Lenenergo

#2

in terms of capitalization

Market Cap (6M 2013),
RUB bn

59.9

MOESK

15.6

IDGC of Center

15.0

IDGC of Center and Volga Region

14.6

IDGC of Urals

9.7

IDGC of Volga

7.6

IDGC of Siberia

6.3

Lenenergo

3.7

IDGC of North-West

1.8

IDGC of the South

0.8

IDGC of Siberia

#2

in terms of trading volume

Trading volume (6M 2013), RUB mln

763.1

MOESK

424.2

IDGC of Center

387.7

IDGC of Center and Volga Region

283.2

IDGC of Urals

154.0

IDGC of Siberia

109.1

IDGC of Volga

81.9

IDGC of the South

77.5

Lenenergo

99.0

IDGC of North-West

34.6

IDGC of Siberia

#2

in terms of revenue

Revenue (under RAS) (6M 2013), RUB bn

59.1

MOESK

41.8

IDGC of Center

36.8

IDGC of Center and Volga Region

29.9

IDGC of Siberia

26.5

IDGC of Urals

22.9

IDGC of Volga

18.9

IDGC of North-West

15.5

Lenenergo

12.3

IDGC of the South

5.4

IDGC of Siberia

#2

in terms of dividends

Dividends for 2012, RUB mln

4,396.0

MOESK

862.9

IDGC of Center

479.0

IDGC of Center and Volga Region

308.6

Lenenergo

291.1

IDGC of Volga

289.2

IDGC of Siberia

160.3

IDGC of Siberia

156.5

IDGC of Urals

15.4

IDGC of North-West

0.0

IDGC of the South

Characteristics of Grid Assets

IDGC of Centre has one of the largest power grids among other IDGCs

Annual
data
Six months
data

Length of 0.4-110 kV overhead lines
(along the ROW), thousand km

365.0 366.1
2010 6M 2011
366.1 367.3
2011 6M 2012
368.6 368.6
2012 6M 2013

Length of 0.4-110 kV cables,
thousand km

9.2 9.4
2010 6M 2011
9.4 9.7
2011 6M 2012
11.3 11.5
2012 6M 2013

Amount of conventional units, mln

1.376 1.461
2010 6M 2011
1.461 1.490
2011 6M 2012
1.526 1.545
2012 6M 2013

Substation capacity, thousand MVA

46.6 47.7
2010 6M 2011
47.7 47.9
2011 6M 2012
49.0 49.2
2012 6M 2013

Number of substations, thousand units

89.6 90.6
2010 6M 2011
90.6 91.5
2011 6M 2012
92.5 93.0
2012 6M 2013

Key Performance Indicators

Annual
data
Six months
data

Electricity output,
bln kWh

62.3 31.8
2010 6M 2011
62.9 32.4
2011 6M 2012
64.0 31.9
2012 6M 2013

Electricity supply(1),
bln kWh

56.0 28.5
2010 6M 2011
56.7 29.2
2011 6M 2012
57.9 29.0
2012 6M 2013

Total losses,bln kWh

6.2 3.2
2010 6M 2011
6.2 3.2
2011 6M 2012
6.1 2.9
2012 6M 2013

Total losses,%

10.01 10.29
2010 6M 2011
9.93 9.81
2011 6M 2012
9.53 9.23
2012 6M 2013
(1) Electricity supply within the circuit (including local grid companies' losses)

IDGC of Centre as a supplier of last resort

1

The increase in revenue due to performance of the functions of a supplier of last resort in the first half of 2013 to 9.8 billion rubles (excluding VAT), which is 23% of the total revenue of JSC "IDGC of Center"

2

Consumer debt to ESCs that lost the supplier of last resort status on 1st February 2013 has decreased by 1 billion rubles or 36% for the period from February to June 2013

3

0.67% electricity losses reduction has been achieved in the networks of JSC "IDGC of Center" (including through the performance of the functions of a supplier of last resort) in the first half of 2013 relative to the similar conditions of the previous year.

Revenue from power sales for 6M 2013 (net of VAT), RUB bn

3.7
Bryansk
3.0
Kursk
1.4
Orel
1.7
Tver
9.8
IDGC of Centre
For reference
For reference

In accordance with orders of the Ministry of Energy of Russia Nos. 25, 26 and 28 dated January 24, 2013, on February 1, 2013 IDGC of Centre was granted the status of a guarantee supplier in the operating regions of JSC Bryanskenergosbyt, JSC Kurskregionenergosbyt, JSC Orelenergosbyt. It also became a guarantee supplier in the operating regions of JSC Tverenergosbyt (on May 1, 2013 in accordance with order No. 210 dated April 25, 2013) and JSC Smolenskenergosbyt (on October 1, 2013 in accordance with order No. 646 dated September 25, 2013).

The status of a guarantee supplier acquired by the Company enabled it:

• to improve payment performance in the retail and wholesale energy market;

• to ensure transparency of payments and provide reliable power supply to socially and strategically important facilities;

• to improve the quality of customer service by creating “one-stop shop” service centres where a customer will be able to settle all issues related to power supply to consumers.

x

Grid Connections

Number of requests for grid connections,
thous. units

41.2
2010
56.5
2011
63.4
2012

Number of contracts signed for grid connections,
thous. units

35.3
2010
48.5
2011
52.,9
2012

Number of implemented contracts for grid connections,
thous. units

26.7
2010
37.5
2011
36.6
2012

Connected capacity,MW

582.3
2010
946.4
2011
853.9
2012

Revenue from grid connections in 2010-2013

2010
2011
2012
6M 2013
Revenue, RUB bn
2.2
1.7
1.2
0.3
Net income, (1) млрд руб.
1.6
1.2
0.7
0.1
(1) Obligations related to grid connection included in financial reports as net income.

Energy Services (Additional Services)

1

Maintenance and development of outdoor lighting networks

2

Service and repairs of power grids and electrical equipment

3

Overhaul of power grids for the benefit of customers

4

Equipment testing and diagnostics

5

Installation and replacement of meters

6

Energy audit and services

7

Design and construction of power generation facilities, etc.

Changes in the number of customer requests for additional
services in 2010-2012, thous. units

42.5
2010
56.9
2011
72.0
2012

The Company’s revenue from other
operations in 2010-2013(1), RUB mln

656
2010
780
2011
732
2012
366
6M 2013
(1) Excluding income from lease of assets, sale of goods (revenue is recorded as other income) and a one-time contract for accident response at facilities of JSC MOESK in 2011 (worth RUB 62 mln).

Governance Structure and Major Shareholders

of the company’s shares are in free float,
which is one of the highest rates in distribution sector (1)
25%
JSC Energy Service
Company JSC Yargorelektroset JSC Energetik
SHARE
CAPITAL
STRUCTURE
(1) Estimates of the Index Committee of the MICEX Stock Exchange
IDGC of Centre's
branches

Belgorodenergo

Bryanskenergo

Voronezhenergo

Kostromaenergo

Kurskenergo

Lipetskenergo

Orelenergo

Smolenskenergo

Tambovenergo

Tverenergo

Yarenergo

x
JSC Energy Service
Company

The company provides services related to energy conservation, energy efficiency and other energy services

x
JSC Yargorelektroset

One of the largest TGO in the Central Federal District. Following the acquisition of 100% of the company’s shares, IDGC of Centre owns over 90% of the power grid complex in the Yaroslavl Region

x
JSC Energetik
x
SHARE CAPITAL STRUCTURE OF IDGC OF
CENTRE AS OF MAY 6, 2013, %
   
(2) JSC IDGC Holding until April 4, 2013
x

Corporate Governance

The Company has the highest corporate governance rating among all IDGC
(according to the Russian Institute of Directors)
(1) По версии Российского института директоров.

Investment Structure and Changes in Capital

In 2012, capital of IDGC of
Centre totalled

15.85
RUB bn

In 2012, IDGC of Centre commissioned over 8 thousand km of power lines and transformer capacity totalling 1.5 thousand MVA; the year-on-year increase amounted to 73.3% and 1.9% respectively.

SOURCES OF FINANCE FOR CAPITAL
IN 2012, %

Sources
Destinations
Breakdown
of the
Company’s
CAPEX
CAPEX
breakdown
by
branch
Breakdown of the Company’s CAPEX
x
CAPEX breakdown by branch
x

Large Investment Projects Implemented in 2013

Implementation
of investment
projects will
enable the Company
to improve reliability
and quality of power
supply in its service area
«Kostromaenergo»

Overhaul of Motordetal – Kostroma-1 and Zavolzhskaya 1, 2 110 kV overhead lines

Project outcome: improving the reliability of power supply to consumers in Kostroma

Commissioning: 2014
Estimated cost: RUB 505 mln
Capacity to be commissioned: 20 km
x
«Voronezhenergo»

Construction of a 110 kV cable line between substation No. 30 and Studencheskaya substation (No. 13)

Project outcome: improving the reliability and quality of power supply to consumers in Voronezh

Commissioning: 2013
Estimated cost: RUB 300 mln
Capacity to be commissioned: 7 km
x
«Kurskenergo»

Construction of 8 March – Korenevo – Rylsk 110 kV overhead lines

Project outcome: improving the reliability of power supply in the south-western part of the Kursk Region, which is connected with Ukraine via 110 kV transit lines

Commissioning: 2019
Estimated cost: RUR 614 mln
Capacity to be commissioned: 45 km
x
«Orelenergo»

Overhaul of Mtsensk – Chern, Mtsensk – Plavsk 110 kV overhead lines

Project outcome: Plavsk – Mtsensk and Mtsensk – Chern 110 kV overhead lines are intersystem transit lines transmitting power from the Tula power system to the Orel Region. The project is aimed at ensuring the reliability of power transmission and increasing the capacity of the power lines

Commissioning: 2015
Estimated cost: RUB 300 mln
Capacity to be commissioned: 52 km
x
«Belgorodenergo»

Renovation of Yuzhnaya 110/10 kV substation and installation of 2х40 and 2х25 MVA power transformers

Project outcome: overcoming the shortage of capacity at the regional main substation; extending the operational life of main equipment, meeting the target for quality and reliability of power supply to consumers

Commissioning: 2016
Estimated cost: RUB 541 mln
Capacity to be commissioned: 130 MVA

Construction of Kreyda 110kV substation

Project outcome: commissioning capacities to supply power to a new private housing estate; ensuring sustainability of a section of the power grid (renovation of Belgorod 330 kV substation), meeting the target for reliability of power supply; boosting power consumption

Commissioning: 2014
Estimated cost: RUB 284 mln
Capacity to be commissioned: 50 MVA
x

Credit Ratings and Loan Portfolio

NET DEBT(1) / EBITDA(2), RUB bn
LOAN PORTFOLIO STRUCTURE
(AS OF JUNE 30, 2013)
IDGC of Centre is one of the few power distribution companies to have been assigned an international credit rating by Standard & Poor’s. In 2013, the agency upgraded the Company’s credit rating to ‘BB’,
outlook ‘Stable’
The ‘BB/Stable’ rating assigned to IDGC of Centre confirms:
high reliability, a stable financial position, a high level of liquidity
RAS
IFRS
Foreign Peers S&P Moody's
National Grid (UK) A- —
Red Electrica (Spain) BBB Baa2
REN (Portugal) BB+ Ba1
Tata Power (India) BB- B1
Capex SA (Argentina) B- —
Manila Electric
(Philippines)		 B- —
Domestic Peers S&P Moody's
FSK EES BBB Baa3
Rosseti — Ba1
Rushydro BB+ Ba1
Mosenergo BB —
IDGC of Centre BB —
MOESK BB Ba2
IDGC of Volga — Ba2
IDGC of Centre
and Volga Region		 — Ba2
IDGC of Urals — Ba2
Lenenergo — Ba2
(1) Net debt is calculated as: long-term borrowings + short-term borrowings – cash and cash equivalents – financial investments
(1) Net debt is calculated as: long-term borrowings + short-term borrowings – cash and cash equivalents – financial investments
(2) EBITDA is calculated as: net income + income tax and other obligatory payments + interest payable – interest receivable + depreciation and amortization
(2) EBITDA is calculated as: net income + income tax and other obligatory payments + interest payable – interest receivable + depreciation and amortization

Dynamics of Quotes & Milestones

In October 2012, shares of IDGC of Centre were included in the A1 Quotation List of the MICEX Stock Exchange

Throughout 2012, the power distribution sector was under pressure from external factors.
Shares of IDGC of Centre ended 2012 down 2.7% from the start of the reporting period; however, at the same time the MICEX PWR Index fell by 16.8%

Start of trading
May 21, 2008
Quotation list
MICEX Stock ExchangeA-1
Ticker symbols
Moscow ExchangeMRKC
BloombergMRKC RX
ReutersMRKC.MM
Index calculation
Weighting, %
Shares used in
the index
calculation		MICEX PWR2.33
MICEX SC3.44
Dividend history
Stock quotes
Preliminary results for 2011 and plans for 2012 are released
Comment of President D. Medvedev emphasizing that high tariffs and difficulties with connection are among the key problems of small business
Government Resolution No. 1178 'On Pricing with regard to Regulated Prices (Tariffs) in the Electric Power Industry' dated December 29, 2011
Management of JSC IDGC of Centre takes part in the Russia Forum 2012 organized by Troika Dialog Investment Company and Sberbank of Russia
The Ministry of Economic Development of Russia opposes postponing privatization of fuel and energy companies
IDGC of Centre publishes its financial statements for 2011 under RAS
The Ministry of Economic Development plans to order subsidiaries of state-owned companies to allocate 25% of income for dividends
IDGC of Centre releases its IFRS financial statements for 2011
V. Putin instructs ministers to continue keeping down utility tariffs
Book closure for dividend payments for 2011
The Government transfers the management of IDGC to the Federal Grid Company
The FTS suggests that revision of RAB tariffs should be postponed until November 1
The Government intends to consolidate FGC and IDGC Holding under the management of Rosneftegaz
The FTS approves long-term RAB regulation for the Belgorodenergo branch of IDGC of Centre
The annual GSM appproves dividends for 2011 totalling RUB 422 mln
The head of the Russian Ministry of Energy considers the RAB–based tariff system important
The Russian Ministry of Energy suggests that subsidiaries of IDGC Holding should be privatized when consolidated with FGC
IDGC of Centre acquires the municipal grid assets of Stary Oskol urban district of the Belgorod Region for RUB 416 mln
IDGC of Centre publishes its IFRS financial statements for 6M 2012
Management of IDGC of Centre takes part in a conference of the investment bank HSBC
The Government finds an alternative to Rosneftegaz for consolidating FGC and IDGC Holding
The FTS does not approve the transition of Bryanskenergo, a branch of JSC IDGC of Centre, to RAB
The Moscow Commercial Court upholds the claim of NLMK against IDGC of Centre for RUB 5.1 bn
The Russian Minister of Energy A. Novak confirms the plan to privatize one or two pilot IDGCs in 2013; President V. Putin supports this idea
MICEX includes shares of IDGC of Centre in the A1 Quotation List
The FTS approves the transition of Voronezhenergo, a branch of JSC IDGC of Centre, to RAB
IDGC of Centre publishes its financial statements for 9M 2012 under RAS
President V. Putin signs a decree to rename IDGC Holding JSC Russian Grids and give this company the state-owned stake in FGC
According to Vedomosti, audit of IDGC of Centre conducted by a special commission reveals numerous violations in the company's operations
According to Vedomosti, termination of 'last mile' agreements may be postponed until 2017
The head of Technopromexport O. Isaev is appointed acting General Director of IDGC of Centre
Interfax reports citing a source close to the BD of IDGC Holding that three or four IDGCs (the source named IDGC of Centre, IDGC of Centre and the Volga Region, IDGC of Volga) have been shortlisted for the first privatization
V.Putin signs a law on long-term regulation of prices for power and water supply
The court postpones considering the appeal of IDGC of Centre and FGC against NLMK's claim for payment of RUB 5.1 bn until February 7 to provide documents
On January 23, the supervisory board of NP Market Council may strip seven power supply companies of their status of guarantee suppliers
According to Kommersant, the proposal of IDGC Holding for licensing all grid companies is being discussed by the Ministry of Energy and relevant agencies
M. Kurbatov: in 2013 one or two IDGCs are to be privatized
According to A. Dvorkovich, Russia plans to present JSC Russian Grids to investors at the forum in Davos
Functions of a guarantee supplier of power in the Bryansk, Orel and Kursk Regions are transferred to JSC IDGC of Centre
IDGC Holding increases the scope of its investment program for 2012-2017 by RUB 10 bn to RUB 835 bn
Izvestia reports quoting the Deputy Minister of Energy M. Kurbatov that the government is still unable to give up the 'last mile' completely
The Chairman of the Board of Directors of the state-owned IDGC Holding Georgy Boos thinks that Lenenergo, Tyumenergo, Yantarenergo and IDGC of Centre and the Volga Region may be sold this year
IDGC Holding to convene an Extraordinary General Meeting of Shareholders over renaming the company JSC Russian Grids on March 23
A shortlist of IDGCs to be privatized to be compiled at the end of summer at the earliest, after Russian Grids are established
The strategy for the development of the power grid complex in Russia up to 2017 is brought up for public discussion
Standard & Poor's upgrades the credit rating of JSC IDGC of Centre to 'BB/B/ruAA', outlook 'Stable'
V. Putin orders that utility prices be reduced in the regions where they have been raised unreasonably
The court upholds the decision to charge IDGC of Centre RUB 5.1 bn in favour of NLMK
IDGC of Centre publishes its financial statements for 2012 under RAS
According to Interfax, Rosimushchestvo and FGC are involved in a dispute over the government's authority over the company following the establishment of Russian Grids
The Supreme Commercial Court of the Russian Federation reverses the decision to charge IDGC of Urals RUB 285 mln in favour of Chelyabinsk Electrometallurgical Plant
The Russian President V. Putin holds a meeting over the development of the power grid complex
The head of FGC Oleg Budargin reports to the Russian President Vladimir Putin that the government's irresponsible tariff policy may drive a number of interregional distribution grid companies into bankruptcy as early as next year
IDGC of Centre publishes its IFRS financial statements for 2012
The draft Strategy for the Development of the Power Grid Complex in Russia up to 2030 involves limiting the share of the tariff for power transmission in the final electricity price
Rosimushchestvo carries out a valuation of the shares of FGC and IDGC Holding for consolidation purposes
The Government approves the Strategy for the Development of the Power Grid Complex in Russia up to 2030
JSC Russian Grids publishes its IFRS financial statements for 2012
Functions of a guarantee supplier in the Tver Region and the Republic of Buryatia to be transferred to JSC Russian Grids
The Ministry of Economic Development suggests reducing the indexation of gas prices in 2014 and 2015 from 15% to 5% for businesses, from 9-10% to 6% for grid companies
The Board of Directors of IDGC of Centre recommends the shareholders to make a decision on dividend payments totalling RUB 0.02044 per ordinary share at the annual GSM
Book closure before the annual GSM
The dividend rate of Russian state-owned companies may be increased from 25% to 35%
The Ministry of Energy and the FTS are developing a method for benchmarking three types of expenses for grid distribution companies
JSC Russian Grids is excluded from the MSCI Russia Index
The Russian President demands that the 'last mile' issue be resolved as soon as possible
The Ministry of Energy proposes a new scheme for abandoning the 'last mile'
The Chairman of FGC's Management Board O. Budargin suggests increasing the scope of Russian Grids' investment program to RUB 250 bn per year, and that of FGC to RUB 200 bn per year through borrowings
The Deputy Minister of Energy M. Kurbatov states that the Ministry of Energy does not support the idea of increasing the total investment program of FGC and Russian Grids
Oleg Budargin is elected General Director of Open Joint-Stock Company Russian Grids
The Russian Ministry of Economic Development and the Non-Profit Partnership Community of Energy Consumers do not support the solution to the 'last mile' issue proposed by the Ministry of Energy
The head of Russian Grids O. Budargin states that it is possible to reduce operating expenses by 15% by optimizing the company's management structure
The Russian President suggests that the rate of increase in the tariffs of natural monopolies should not exceed the inflation rate for five years starting from 2014
The Presidential Administration criticizes the proposal recently made by the Ministry of Energy concerning the 'last mile'
The Federal Commercial Court of the Moscow District reversed the decision of the Moscow Commercial Court and the ruling of the 9th Commercial Appeal Court on the claim of NLMK against IDGC of Centre
x
Dividend history
x

Investment Highlights

1

Operation in 11 regions of Central Russia
with strong prospects for economic growth

5

National Corporate Governance Rating 7+,
the highest corporate governance rating
among peer companies

2

Leader in terms of innovation in the sector

6

S&P credit rating ‘BB’, outlook ‘Stable’

3

Stable financial position

7

Development of additional energy services

4

Approved dividend policy
and good dividend history

8

Additional revenue from performing
the functions of a supplier of last resort

Contents

Overview Strategic Goals KPIs for 2012 Business Model Tariff Regulation Comparative analysis with the Peers Characteristics of Grid Assets Key Performance Indicators
Status of a supplier of last resort Grid Connection Energy Services Key Results under RAS Key Results under IFRS Share Capital Corporate Governance Capital expenditures or Investments Investment Projects in 2013
Credit Rating and Loan Portfolio Dynamics of Quotes & Milestones Investment Highlights Interactive Analysis Main page

limitation of liability

This presentation does not constitute an offer or solicitation of an offer ( advertising) to purchase or subscribe for securities IDGC of Center . Neither the presentation nor any part of it nor the fact of its presentation or distribution form the basis for any contract or investment decision , and the presentation should not rely in this regard. This presentation includes forward-looking statements . Forward-looking statements are not based on factual circumstances , and include statements regarding the intentions, beliefs or current expectations of IDGC of Centre, regarding the results of its operations, financial condition , liquidity, prospects , growth, strategies and the industry in which the Company operates . By their nature, such forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may not happen in the future . The Company cautions that forward-looking statements are not guarantees of future performance and actual results of operations , financial condition and liquidity and the development of the industry in which it operates may differ materially from those presented in the forward- statements contained in this document. Furthermore, even if the results of operations , financial condition and liquidity and the development of the industry in which it operates are consistent with the forward -looking statements contained in this document , these results and developments may not be indicative of results or developments in future. In addition to the official information on the activities of IDGC of Centre , in this presentation contains information received from third parties. This information has been obtained from sources that are believed IDGC of Center , are reliable . Nevertheless , we can not guarantee the accuracy of this information , which may be condensed or incomplete. All opinions and estimates contained herein reflect our opinion of the publication date and are subject to change without notice. IDGC of Centre is not responsible for the consequences of use contained in this presentation opinions or statements or incomplete information . IDGC of Center does not undertake any obligation to review or confirm forward-looking statements and estimates , as well as to update the information contained in the presentation. Despite the fact that up to 31.03.2008, IDGC of Center was operating company , this presentation contains consolidated data for all areas of responsibility RSK IDGC of Centre , including for the period ending 31/03/2008 . Information on financial and production data obtained on the Company , as the sum of 11 indicators RSK acceding to IDGC of Centre. Despite the fact that in 2006 and 2007 under the control of IDGC of Centre ( while IDGC of Centre and North Caucasus ) were more than 11 companies , for correct comparison information for these periods is given by 11 DGC current configuration.

Feedback

1. Which stakeholder group do you represent?

2. Please evaluate the presentation on the following criteria:

Provides answers to your questions

The structure and easy to

Design

3. What additional information would you like to see in the next presentation of "IDGC of Center"?

4. Your comments:

5. Your contact information:

Name

Company

Position

Phone (or e-mail)

Enter the code from the image

Contacts

IGDC of Centre
Office for Relations with shareholders
Head of Department - Ternikov Sergey Aleksandrovich
127018, Moscow, 2 Yamskaya. 4
Phone: +7 (495) 747-92-92, доб. 33-34
Fax: +7 (495) 747-92-95
E-mail: ir@mrsk-1.ru
http://www.mrsk-1.com/en/