QUARTERLY REPORT Quarter 2 of 2012 - Холдинг МРСК

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the internal and external environments. Almost all SDCs of JSC IDGC Holding are included on the register of natural monopolies subject to governmental regulation in accordance with Russian laws. In this connection, federal and regional tariff regulation agencies set and regulate tariffs of services provided by SDCs. For the purpose of keeping down electricity tariffs for ultimate customers, the government is able to limit the tariff growth parameters and, consequently, the profitability indicators of SDCs’ services. Although the transition to RAB regulation reduces the shareholder value risk by mitigating the influence of subjective factors on tariff decisions, this does not eliminates these risk factors completely. To achieve the long-term targets of RAB regulations (including the investment rate of return prescribed by the regulator) is an essential prerequisite for attaining shareholder goals. With the aim of minimizing this factor, the Company and SDCs carry out cost management programs, ensure the well-balanced planning of operations in accordance with approved tariff and balancing decisions, supervise the implementation of the approved business plans of SDCs, and cooperate with local government authorities in formulating territorial development programs coordinated with SDCs’ investments programs in terms of the amount and sources of financing. In addition, a substantial risk factor is competition for tariff-based revenues on the part of regional territorial grid organizations in each constituent entity of the Russian Federation. With a view to minimizing this risk factor, the Strategy for Development of JSC IDGC Holding Until 2015 with Long-Term Plans Until 2020 contains measures to shrink the existing tariff disparities leading to a disproportionate increase in revenues of regional territorial grid organizations. Another substantial risk factor is that SDCs may be held to be in breach of antimonopoly laws. Network connection services provided by SDCs are exposed to antimonopoly regulation risks to the largest extent. Appeals filed by customers with territorial offices of the Federal Antimonopoly Service and followed by proceedings initiated by the antimonopoly authority against the Company with respect to failure to comply with network connection laws may be caused by consumer right violations. Specifically, this may result from refused network connection requests, noncompliance with the statutorily set deadlines for network connections, and a number of other factors. An additional negative factor is that the applicable laws empower the Federal Antimonopoly Service to apply broad interpretations to the notion of product market borders. For instance, a justifiable complaint may lead to a turnover-based penalty calculated on the basis of the total revenues received in the region where a SDC has a presence but not limited to the region where a specific branch of this SDC operates. In order to mitigate the above-mentioned risk factors, SDCs improve their network connection business processes by simplifying their internal procedures and adopting new approaches to customer service, for example, online service techniques. As the principal shareholder, the Russian Federation controls decision making with respect to most issues and has influence over the strategies of the Company and its SDCs. Decisions driven by the economic and social interests of the government may be inconsistent with the interest of other shareholders. Among other things, such decisions can concern dividend policies, mergers and acquisitions, and privatization issues of the Company’s SDCs. Additionally, as the principal shareholder of SDCs, the Company may make decisions that will not be regarded by minority shareholders of such SDCs as consistent with their interests. This may result in minority shareholders’ going to court and their contesting decisions adopted by the executive bodies of SDCs. Conflict of interest risks associated with the functions of JSC IDGC Holding’s sole executive body transferred to JSC FGC UES As part of the Company’s performing the agreement for the transfer of the powers of JSC IDGC Holding’s sole executive body to JSC FGC UES (hereinafter, the “agreement”) and since JSC FGC UES is a party to agreements with the Company’s SDCs, conflict of interest risks may affect the Company and its SDCs on the one part and JSC FGC UES on the other part when managerial decisions are made with respect to: - approval and implementation of tariff and balancing decisions, - formulation and implementation of investment programs, - provision of network connection services, - facilities of the Unified National (All-Russian) Electric Grid leased out by JSC FGC UES to territorial grid organizations, - payments under agreements between JSC FGC UES and the Company’s SDCs. Additionally, conflict of interest risks may affect shareholders at any corporate governance level of the Company, its subsidiaries and dependent companies, and JSC FGC UES. In order to prevent the occurrence of any conflict of interest risks, provisions are incorporated into the agreement in relation to the obligations of JSC FGC UES to act in good faith while exercising the granted powers, not to earn its own profit (except for the fee payable under the agreement), and not to use any obtained advantages to the detriment of the Company or its SDCs. If any conflict of interest occurs, JSC FGC UES and/or the Company are obligated to disclose it to the Company’s Board of Directors and to JSC FGC UES within 5 22
usiness days after such conflict of interest becomes known to them. Under the agreement, any conflict of interest between JSC FGC UES and the Company and/or its SDCs is subject to settlement by a commission of the federal executive authority (the Ministry of Energy of the Russian Federation) with the participation of representatives of minority shareholders of the Company, its SDCs, and JSC FGC UES. Any decisions of the commission are binding on both JSC FGC UES and the Company with due regard to the competence of the boards of directors and general meetings of shareholders of the Company and JSC FGC UES. III. Detailed Information Concerning the Issuer 3.1. Establishment History and Development of the Issuer 3.1.1. Data Concerning the Issuer’s Corporate Name Full corporate name of the issuer: Открытое акционерное общество «Холдинг межрегиональных распределительных сетевых компаний», JSC Interregional Distribution Grid Companies Holding Effective from: December 30, 2008 Short corporate names of the issuer Short corporate name: ОАО «Холдинг МРСК» Effective from: July 1, 2008 Short corporate name: JSC IDGC Holding Effective from: December 30, 2008 The issuer’s Articles of Association specify several short corporate names Full or short company name of the issuer (in the case of a nonprofit organization, its name) is similar to the name of the other corporate entity. Names of such corporate entities: Full and short corporate names of the Company are similar to the names of other corporate entities from among subsidiaries and/or dependent companies of JSC IDGC Holding: - Interregional Distribution Grid Company of Centre, Joint-Stock Company (IDGC of Centre, JSC); - Interregional Distribution Grid Company of Northern Caucasus, Joint-Stock Company (IDGC of Northern Caucasus, JSC); - Interregional Distribution Grid Company of Volga, Joint-Stock Company(IDGC of Volga, JSC); - Interregional Distribution Grid Company of North-West, Joint Stock Company (IDGC of North- West); - Interregional Distribution Grid Company of Urals, Joint Stock Company (IDGC of Urals, JSC); - Interregional Distribution Grid Company of Siberia, Joint Stock Company (IDGC of Siberia, JSC); - Interregional Distribution Grid Company of South, Joint Stock Company (IDGC of South, JSC); - Interregional Distribution Grid Company of Center and Volga Region, Joint Stock Company (IDGC of Center and Volga Region, JSC). Notes necessary to prevent the above-mentioned names from being confused: To prevent the Company’s names from being confused with the names of the interregional distribution grid companies listed above, the Company would like you to draw special attention to the geographical component of the full and short names of such companies. 23
Page 1 and 2: QUARTERLY REPORT JSC Interregional
Page 3 and 4: 3.5. Issuer-Controlled Entities of
Page 5 and 6: Introduction Grounds for the assump
Page 7 and 8: 1.3. Information Concerning the Iss
Page 9 and 10: Location Russia, 105120, Moscow, 3-
Page 11 and 12: As of the last date of the reportin
Page 13 and 14: · a decrease in the Company’s bu
Page 15 and 16: Value of accounts payable: 143,662
Page 17 and 18: performance of securities-related o
Page 19 and 20: whose shares are held by the Compan
Page 21: implementing investment, innovative
Page 25 and 26: 3.1.5. Taxpayer Identification Numb
Page 27 and 28: Total: Expenses related to producti
Page 29 and 30: Anatoly Anatolievich Gavrilenko 0 0
Page 31 and 32: authorized capital of the issuer (%
Page 33 and 34: Type of control: direct control Sta
Page 35 and 36: capital of the issuer (%) by the in
Page 37 and 38: capital of the issuer (%) by the in
Page 39 and 40: Full corporate name: Interregional
Page 41 and 42: Percentage of ordinary shares held
Page 43 and 44: Alexander Viktorovich Shevchuk 0.00
Page 45 and 46: Full Name Stake held by the individ
Page 47 and 48: OGRN (Principal State Registration
Page 49 and 50: Ruslan Kimovich Tsiku 0 0 Mikhail Y
Page 51 and 52: Uncovered loss at balance sheet dat
Page 53 and 54: Changes in indicators describing th
Page 55 and 56: date when the decision to pay such
Page 57 and 58: Number of securities owned by the i
Page 59 and 60: 1) amendment of the Articles of Ass
Page 61 and 62: f) placement of securities of SDCs
Page 63 and 64: consideration by the Board of Direc
Page 65 and 66: Period Entity Title From To 2005 20
Page 67 and 68: 2008 present Association of Lawyers
Page 69 and 70: 2008 2009 OAO Energosetproekt Insti
Page 71 and 72: Stake held by the individual in the
Page 73 and 74:
2009 present OAO Energosetproekt In
Page 75 and 76:
2008 2010 JSC RAO Energy System of
Page 77 and 78:
in the field of economics or offenc
Page 79 and 80:
Full Name: Thomas Hendel Year of Bi
Page 81 and 82:
Directors 2010 2011 Energy Forecast
Page 83 and 84:
The Committees of the Board of Dire
Page 85 and 86:
None of such sanctions were imposed
Page 87 and 88:
Full Name: Aleksey Vladimirovich De
Page 89 and 90:
2008 2009 OAO Irkutsk Power Grids M
Page 91 and 92:
2012 present Rosneft Head of the Pr
Page 93 and 94:
Commission fees 0 Benefits 0 Expens
Page 95 and 96:
Remuneration for participation in t
Page 97 and 98:
term and consists of 16 staff membe
Page 99 and 100:
2006 2008 Federal Agency for State
Page 101 and 102:
Management Board 2009 2010 JSC IDGC
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2011 2012 OAO Kursktopprom Member o
Page 105 and 106:
1998 2009 Russian Fuel Union (part-
Page 107 and 108:
Year of Birth: 1955 Education: high
Page 109 and 110:
chronological order, including part
Page 111 and 112:
Risk Management Department 2010 pre
Page 113 and 114:
The individual did not hold any of
Page 115 and 116:
No stake/ordinary shares held in th
Page 117 and 118:
Full Name: Yulia Anatolyevna Tsindi
Page 119 and 120:
Indicator Description 6 months of 2
Page 121 and 122:
such shares and the Incentive Progr
Page 123 and 124:
Issued on: October 9, 2002 Valid un
Page 125 and 126:
Short corporate name: Russian Feder
Page 127 and 128:
Value of and terms applicable to pa
Page 129 and 130:
Other current assets 1260 7,216 3,9
Page 131 and 132:
7.3. Consolidated Accounting (Conso
Page 133 and 134:
securities market for the placement
Page 135 and 136:
Total par value: 47,871,694,416 Per
Page 137 and 138:
Short corporate name: JSC VNIPIENER
Page 139 and 140:
Location Russia, 620075, Yekaterinb
Page 141 and 142:
Location Russia, 603950, Nizhni Nov
Page 143 and 144:
Russia, 367020, Republic of Dagesta
Page 145 and 146:
INN (Taxpayer Identification Number
Page 147 and 148:
• receive some of the Company’s
Page 149 and 150:
Category (type) of shares: ordinary
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QUARTERLY REPORT Quarter 2 of 2012 - Холдинг МРСК

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