Annual Report 2013

Shares

9.3

Capitalization, bln RUB

А1

Common
shares

Moscow Exchange listing

А2

Traded
bonds

Moscow Exchange listing

+8,4%

РGrowth of the volume of trade17 на on the Moscow Exchange in 2013 vs. 2012

IDGC of Centre shares are traded on the Moscow Exchange and are included in the highest ‘A’ listing of the first tier. The Company’s shares are included in the base for computing the Second Tier Index of MICEX SC and the MICEX PWR index.

PRICE AND CAPITALIZATION AS OF DECEMBER 30, 2013:

Share price (at closing), RUB 0.2186
Share price (at closing), USD 0.007
Capitalization, mln RUB 9,284
Capitalization, mln USD 285

TICKERS AND INDEXES:

Tickers at the main stock exchanges and trading floors Moscow Exchange: MRKC
Bloomberg: MRKC RX
Reuters:  MRKC.MM
Inclusion to the stock indexes Moscow Exchange:
– MICEX PWR,
– MICEX SC.

IDGC OF CENTRE SHARE QUOTATIONS COMPARED WITH CHANGES IN MICEX AND MICEX PWR INDEXES IN 2013:

IDGC of Centre Shares, RUBMICEX IndexMICEX PWR Index
30.12.2013 0.21861,504.081,032.39
28.12.2012 0.601,474.721,707.42
Change -63.6 %2.0 %-39.5 %
MAX (at closing) 14.02.2013:28.01.2013:28.01.2013:
0.64921,562.931,850.32
MIN (at closing) 13.11.2013:13.06.2013:03.12.2013:
  0.20211,281.89938.03

THE MOSCOW EXCHANGE LISTING:

Capitalization of IDGC of Centre in 2013 totaled 9.3 bln RUB and decreased by 62.2% vs. 2012. The past year was complicated for the whole power industry due to the implemented state tariff policy and the regular measures of the Russian government to stop the growth of power prices. Resolution of the ‘last mile’ issue and the problem of uncertainty in the industry also affected the market significantly. Nevertheless, the Company’s management sees the current situation as stimulating the efficiency of current operations even further, which should increase the investment appeal of the Company’s shares.

The change in quotations of the Company’s shares during 2013 with the indication of key events that directly affected the trading outcome is shown below.

IDGC OF CENTRE SHARE QUOTATIONS COMPARED WITH CHANGES IN MICEX AND MICEX PWR INDEXES IN 2013:

KEY EVENTS THAT HAVE HAD A DIRECT IMPACT ON TRADING RESULTS IN 2013:

No News and events Date (dd.mm.yyyy) Source Effect
1 IDGC of Centre was granted the functions of a supplier of last resort in the Bryansk, Orel and Kursk Regions. 24.01.2013 External up
2 Standard & Poor's improved the credit rating of IDGC of Centre to ‘BB/B/ruAA’, with a ‘Stable’ outlook. 25.02.2013 Internal up
3 The Moscow Commercial Court resolved to collect 5.1 bln RUB from IDGC of Centre in favor of NLMK. 27.02.2013 External down
4 IDGC of Centre published its consolidated financial statements under IFRS for 2012. 03.04.2013 Internal up
5 Information was released that the draft of the Russian Power Grid Complex Development Strategy until 2030 limits the power transmission tariff’s share in the final price of electric power. 05.04.2013 External down
6 News was released on providing IDGC of Centre with the functions of a supplier of last resort in the Tver Region. 25.04.2013 External up
7 The Ministry of Economic Development suggested that the tariff indexation for grid companies in 2014-2015 is reduced from 9-10 % to 6 %. 26.04.2013 External down
8 The IDGC of Centre Board of Directors recommended the Annual General Shareholders’ Meeting to pay dividend in the amount of 25 % of the Company’s net profit under RAS. 29.04.2013 Internal up
9 The President of the Russian Federation demanded that the ‘last mile’ issue to be resolved in the shortest time. 21.05.2013 External down
10 The President of the Russian Federation suggested that the tariff growth rates for natural monopolies are restrained by the level of inflation during the next 5 years starting from 2014. 21.06.2013 External down
11 The Federal Commercial Court for the Moscow District revoked the ruling of Moscow Commercial Court and the decree of the Ninth Commercial Court of Appeal under the claim of NLMK to IDGC of Centre. 27.06.2013 External up
12 Highlights of the press conference with Deputy Minister of Energy of the Russian Federation Mikhail Kurbatov devoted to the investment program of JSC Russian Grids, the ‘last mile’ issue and the increase in electric power consumption were released. 18.07.2013 External down
13 Mass media sources reported that the Russian Government was preparing a third solution of the ‘last mile’ problem. 09.08.2013 External down
14 Mass media sources reported that the Prime Minister of the Russian Federation instructed the Ministry of Economic Development, the Ministry of Finance, the Ministry of Transport, the Ministry of Energy and the Federal Tariff Service to submit a draft of the outlook on social and economic development to 2014 and the upcoming 2015-2016 period, providing for zero indexation of tariffs of natural monopolies, to the Government. 06.09.2013 External down
15 The Federal Tariff Service suggested that the RAB and capacity supply agreements should be amended. 18.09.2013 External down
16 IDGC of Centre proceeded to fulfill its functions of a supplier of last resort in the Smolensk Region. 01.10.2013 External up
17 Mass media sources reported that the Ministry of Energy did not exclude the chance of privatization of several interregional distribution grid companies in 2014. 10.10.2013 External up
18 The Ministry of Economic Development released an updated draft of the Outlook on the Long-term Social and Economic Development of the Russian Federation to 2030. 07.11.2013 External down
19 Oleg Budargin said that JSC Russian Grids was considering the possibility of transferring its grid assets to other companies for management. 03.12.2013 External up

THE VOLUME OF TRADING AND AMOUNT OF TRANSACTIONS INVOLVING IDGC OF CENTRE STOCK ON THE MOSCOW EXCHANGE IN 2013:

Indicator 2012 2013
Number of transactions 37,874 33,310
Volume, mln shares 1 979.4 2,146.1
Volume, mln RUB 1 228.2 786.6
Volume, % of free float* 18.7 20.3

KEY INFORMATION ABOUT THE SECURITIES MARKET IN 2011-2013:

Indicators under RAS 2011 2012 2013
Closing price at year end, RUB 0.6167 0.6 0.2186
High for the year, RUB 1.368 0.8756 0.6954
Low for the year, RUB 0.5471 0.3867 0.1803
Average daily trading volume*
mln RUB 5.84 4.82 3.15
mln shares 5.56 7.76 8.58
EPS, RUB 0.12 0.08 0.01
Dividend yield (year-end), %** 1.62 4.07 0.82
EV/EBITDA 3.20 4.08 3.59
P/E  4.83 7.14 31.70