Quarterly report Open Joint Stock Company “Interregional Distribution Grid Company of the South" Issuer’s code: 34956 - Е for quarter III, 2010 (стр. 21 )

	Fixed Assets under Arrest
No	Brief Description of the Property	Basis of Encumbrances	Start Date and End Encumbrances
	Name
1	1) Monitor-4 pc, 2) Processor-4 pc, 3) Key board-4 pc, 4) Computer Mouse-4 pc, 5) Printer-1 pc.	Order of Seizure dated 27.12.2007 in accord with consolidated enforcement proceeding Execution No. 47/07 dated 11.01.2007	Seized since 27.12.2007
2	1) 10 kv HV Branch line from 5/250 Package Transformer Substation with length of 0.8 km laid by Service Team-1, 12 electricity pylons of wood on ferro-concrete, 2.4 km of AC-35 wire 10/0.4-250 kVA PTS; 2) 10 kV HV Branch line from 1/250 kVA “Zernotok” PTS with length of 0.75 km laid by Service Team-1, 4 electricity pylons of wood on ferro-concrete; 3kV HV Branch line from 1/250 kVA PTS with length of 3/6 km laid by Service Team-1, 4 electricity pylons of wood on ferro-concrete;	Order of Seizure dated 06.12.2007 in accord with consolidated enforcement proceeding Execution No. 47/07 dated 11.01.2007	Seized since 27.12.2007
3	1) 35/10 kV Pump Electric Grid Company; 2) 35 kV HV Tavn-Gashunskaya Pump Line; 3) 35/10 kV HV Chernozemelskaya-Zulturganskaya Line; 4) 35/10 kV Kirovskaya Electric Grid Company; 5) 35/10 kV “Improver” Electric Grid Company;	Order of Seizure dated 21.09.2007 in accord with enforcement proceeding Execution No. 934/74 dated 06.02.2007	Seized since 27.12.2007

Fixed Assets Transferred to the Operational Management
No.	Brief Description of the Property	Basis of Encumbrances (Rulings had been made by management body before the moment “Rostovenergo” JSC was affiliated to “IDGC of the South” JSC)	Start Date and End Encumbrances
	Name	Area, sq. m.
1	Building, Letter A, located: 147 2-aya Krasnodarskaya st., Svetskiy dc, Rostov on Don, Rostov region	7354	Basis: Ruling of Board of Directors of “Rostovenergo” JSC dated 26.04.2004, Minutes No. 22 (as to the agenda item No. 14 “Regarding Property Settled on “Energetik” Training Centre”, Non-state Non-commercial Educational Institution on the basis of operational management) (Certificate of State Registration of Rights 61 АГ No. 981624 dated 26.08.2008)	Since 26.08.2008 – without validity period limitation
2	Building, Letter A, location: 147/2 2-aya Krasnodarskaya st., Sovetskiy dc, Rostov on Don, Rostov Region	4789.1	Basis: Ruling of Board of Directors of “Rostovenergo” JSC dated 26.04.2004, Minutes No. 22 (as to the agenda item No. 14 “Regarding Property Settled on “Energetik” Training Centre”, Non-state Non-commercial Educational Institution on the basis of operational management) (Certificate of State Registration of Rights 61 АГ No. 981623 dated 26.08.2008)	Since 26.08.2008 – without validity period limitation
3	Movable Assets to the number of 9531 ea amounting to 2RBS	-	Basis: Ruling of Board of Directors of “Rostovenergo” JSC dated 26.04.2004, Minutes No. 22 (as to the agenda item No. 14 “Regarding Property Settled on “Energetik” Training Centre”, Non-state Non-commercial Educational Institution on the basis of operational management)	Since 01.07.2004 – without validity period limitation
4	Building of Training Centre production base, totaling to .08 RBS, Building No. 65, location: Industrial hub at Thermoelectric Plant-2, Privolzhskiy dc, Astrakhan Region	1158.5	Basis: Ruling of Board of Directors of “Astrakhanenergo” JSC dated 29.04.2003, Minutes No. 100 (as to the agenda item “Regarding Participation of “Astrakhanenergo” JSC in “Astrakhan Training Complex” Non-state Non-commercial Educational Institution by means of property transferred under the operational management), Treaty on the Right of Operational Asset Management No. /37 dated 05.01.2004, Additional Agreement No. 1 dated 24.03.2008 to treaty No. /37 dated 05.01.2004, Certificate of State Registration of Rights 30 CР No. 009108 dated 12.05.2004.	Since 12.05.2004 - without validity period limitation
5	Movable Assets to the number of 100 ea amounting to 36500.47 RBS.	-------	Basis: Ruling of Board of Directors of “Astrakhanenergo” JSC dated 29.04.2003, Minutes No. 100 (as to the agenda item “Regarding Participation of “Astrakhanenergo” JSC in “Astrakhan Training Complex” Non-state Non-commercial Educational Institution by means of property transferred under the operational management), Treaty on the Right of Operational Asset Management No. /35 dated 05.01.2004, Additional Agreement dated 20.12.2006 to treaty No. /35 dated 05.01.2004, Additional Agreement No. 2 dated 24.03.2008 to treaty No. /35 dated 05.01.2004.	Since 05.01.2004 - without validity period limitation
6	Movable Assets to the number of 4 ea amounting to 12988.10 RBS.		Basis: Ruling of Board of Directors of “Astrakhanenergo” JSC dated 29.04.2003, Minutes No. 100 (as to the agenda item “Regarding Participation of “Astrakhanenergo” JSC in “Astrakhan Training Complex” Non-state Non-commercial Educational Institution by means of property transferred under the operational management), Treaty on the Right of Operational Asset Management No. 01-11/03-Д117-1Р dated 29.06.2004, Additional Agreement No. 3 dated 24.03.2008 to treaty No. 01-11/ОЗ-Д117-1Р dated 29.06.2004.	Since 29.06.2004 - without validity period limitation
7	Movable Assets to the number of 2 ea amounting to 21310.43 RBS.	-------	Basis: Ruling of Board of Directors of “Astrakhanenergo” JSC dated 29.04.2003, Minutes No. 100 (as to the agenda item “Regarding Participation of “Astrakhanenergo” JSC in “Astrakhan Training Complex” Non-state Non-commercial Educational Institution by means of property transferred under the operational management), Treaty on the Right of Operational Asset Management No. 01-11/03-Д117-1Р dated 13.08.2004, Additional Agreement No. 4 dated 24.03.2008 to treaty No. 01-11/ОЗ-Д117-1Р dated 13.08.2004.	Since 13.08.2004 - without validity period limitation

IV. Data on Financial and Economic Activities of the Issuer

4.1. Results of Financial and Economic Activities of the Issuer

4.1.1. Profit and Loss

In items of RBS

Name of Indicator	2009. 9 mo	2010. 9 mo
Revenue	13	16
Gross profit	2	2
Clear profit (undistributed profit/ outstanding loss)	-	-
Return on equity, %	-1.9	-2.6
Return on assets, %	-1	-1.3
Ratio of net profit, %	-2.8	-3.2
Profitability of production (sales), %	10.1	9
Capital turnover	0.4	0.5
Uncovered loss amount as of the accounting date
Ratio of uncovered loss rate as of the accounting date to balance-sheet total	0.01	0.01

Economic analysis of the Issuer’s profitability/unprofitability results from the quoted indicators’ dynamics. Data on reasons, which (according to Issuer’s management) led to the Issuer’s losses/profit shown in the accounts as of the moment of accounting quarter end in comparison with corresponding period of the previous year (yeas), is disclosed inter alia:

Revenue from the 9 months of 2010 amounted 16 134 606 000 rbs which is more than indicator of the nine months of 2009 by 16%. Revenue growth is mainly accounted by increase in transmission tariffs (average tariff increase amounted 28%).

Gross profit in the accounting period has decreased on 87 840 000 rbs in comparison with corresponding period of the previous year. Main reason of gross profit decrease is in growth of expenditures for power purchase to compensate power loss. Subsequent to deregulation of the market, share of power purchased at unregulated price is growing, which results in appreciation of electric power.

For 9 months of 2010 net loss has increased by 30% in comparison with corresponding period of the previous year; that is mainly as well the consequence of rising costs of power purchased to compensate power loss.

Return on equity shows the ratio of the Company’s net profit to net worth and characterizes efficient use of own funds invested in the Company. In comparison with 9 months period of the previous year the indicator’s value has increased from minus 1.9% to minus 2.6 % which reflects dynamics of the net profit.

Return on assets characterizes efficient use of own funds that is Issuer’s asset management efficiency expressed in return on each ruble invested in assets, and characterizes the Company’s revenue generation. Indicator’s value has decreased from minus 1.0% to 1.3% in comparison with 9 months period of the previous year.

Ratio of net profit shows share of net profits, remaining at the disposal of the Company, from the total sales revenue. In comparison with nine months period of the previous year the indicator’s value has decreased from minus 2.8% to minus 3.2% in the accounting period.

Net profit ratio of sales characterizes efficiency of industrial and commercial activities, estimates the fraction of the cost of sales, shows operating profit in sales of the Company. This is the main and the most frequently mentioned indicator of profitability. In other words, this coefficient shows profit retained by the Company after covering the cost of production. In comparison with 9 months period of the previous year the indicator has decreased from 10.1% to 9.0%.

Decrease of profitability ratios results from the Issuer’s negative net profit dynamics.

Assets turnover ratio reflects the rate of capital turnover and the rate of Issuer’s fixed liabilities turnover; for the accounting date it equals 0.5; the increase amounted 20% in comparison with 9months period of 2009.

Views of Issuer’s management on the abovementioned reasons and/or on the degree of their influence on indicators of financial and economic activities of the Issuer coincide.

None of the members of the Board of Directors has dissenting opinion as to the abovementioned reasons and/or to the degree of their influence on the indicators of financial and economic activities of the Issuer.

4.1.2. Factors that Had Impact on Change of the Issuer’ Sales, Product, Work and Service Proceeding and on Change of the Issuer’s Income (Loss) from Operations

Name of Indicators	9 mo of 2009	9 mo of 2010
Revenues (net) from sales of products (services), total, RBS	13	16
Cost of products (services), total, RBS	11	14
Gross profit, total, RBS	2	2
Net income (loss)	-	-
ROE (Return on equity, cumulative), %	-1.9	-2.6

Structure of the Issuer’s revenue in the accounting period has developed as follows:

-revenue from the transfer and transit of electricity – 15 548 313 000 rbs or 96.4%;

-revenue from technological connection of consumers – 164 rbs or 1.0%;

-revenue from other activities –  000 rbs or 2.6%.

In comparison with 9 months period of 2009 revenue volume has increased by 15.7% or by 2 187 RBS, including revenue from transfer and transit of electricity increased by 2  000 rbs. The main cause of that is growth of tariffs for power transmission. Revenue from technological connection of consumers has decreased on  000 rbs by reducing incoming applications as well as by changes in legislation which obligates the Issuer to provide small business with benefits (price restriction, providing interest-free installment plan for service payment). Revenue from other activities has decreased on  000 rbs, deviation due to the uneven income of this type of revenue during the year.

Increase in the cost in comparison with corresponding period of the previous year has amounted 2 275 rbs or 19%. Main causes of cost increase are growth of tariffs for power transmission services, the Issuer is provided with by “Federal Grid Company of the Unified Energy System” and third-party grid organizations, rising cost of electric power the Issuer buys to compensate power loss. Income growth is the result of inflation as well.

Decrease in gross and net profit, in return on equity is mainly caused by high rate of increases of price for power purchased to compensate power loss and by decrease in revenues from technological connection as well as decrease in other proceeds which are not connected with power transmission.