Quarterly report Open Joint Stock Company “Interregional Distribution Grid Company of the South" Issuer’s code: 34956 - Е for quarter III, 2010 (стр. 3 )

The Auditor “AAF Auditinform”, CJSC and the Issuer have not been involving in any close business relations. The Issuer has not extended any borrowings to the audit company (executives of the audit company). The Auditor “AAF Auditinform”, CJSC (its executives) does not have (did not have) any stakes in the authorized capital of the Issuer. The Issuer’s executives do not simultaneously occupy positions as Executives of the above mentioned Auditors; neither they are relatives of the Auditors.

1.4. Data on the Appraisers (Appraisers) of the Issuer

The Issuer did not engage appraisers

1.5. Data on the Advisors of the Issuer

The Issuer did not engage financial advisors

1.6. Data on other individuals who signed the Quarterly Report

There are no other individuals who signed the quarterly report

II. Main Information on Financial and Economic Condition of the Issuer

2.1. Financial and Economic Performance Indicators of the Issuer

In rubles

Name of indicator	2009, 6 months	2010, 9 months
Issuer’s net assets value	20	19
Debt to equity ratio, %	96.7	109.4
Amount of short-term obligation to shareholders' funds ratio, %	34.8	43.1
Cover of payments on debt service, %	13.88	18
The rate of overdue debts, %	11.16	55.56
Turnover of accounts receivable, times	1.1	1.3
The share of dividends in the profit, %	0	0
Labor productivity, rubles/person
Amortization related to the volume of revenue, %	11	10.1

The indicator of net assets value is used for appraisal of the Issuer’s financial stability, the rate of its financial reliability.

Thus, net assets show the rate of company assets exceeding its liability (of both short-term and long term character), and therefore permit to appraise the company’s financial solvency.

Basically, net assets may be identified as the sum of company’s equity as long as they show the rate of investment secured with the company assets.

The analysis of the financial state of the Issuer as for September 30, 2010 shows that net assets value got reduced at 1 233 413 thousand RUB or 5% in comparison with the similar period in 2009. This is due to a loss ratio of the Company activity in the reported period.

The relation of assets involved to the sum of funds and reserves defines the share of loan involved and thus illustrates the level of it as used in the total sum of assets invested in the Company.

In comparison with the similar period of 2009, the abovementioned indicator got raised at 13%, which can be accounted by the growth of credit portfolio with simultaneous reducing of capital and reserves due to losses.

The indicator “Relation of short-term liabilities sums to the capital and reserves” shows what percent is comprised by short-term liabilities from own funds of the Issuer.

On condition as is 30.09.2010, the meaning of indicator has increased for 24%, in comparison with the similar period of the last year, in the result of losses suffered.

The Indicator of payment covering for debt service, characterizes the amount of rubles of own resources in relation to one ruble of liabilities, which are subject to pay in the accounting period.

The given Indicator on condition for 9 months 2010 has comprised 18 %.

The level of overdue payment shows a share of unpaid in due time creditor indebtedness in total amount of liabilities of the Company and at 30.09.2010 it comprises 55.56%.

Indicator of accounts receivable turnover characterizes quantity of times of accounts receivable payment, its conversion into money funds for the accounting period. Meaning of the indicator for 9 months 2010 comprises 1.,3 which is higher than the level of 9 months 2009 for 17%.

Labor productivity coefficient is shown for comparability of the data is given in the calculation for one month. For 9 months of 2010 in average per 1 person, 117.2 thousand of rubles comprised revenue per month. That is higher of the level of 9 months of 2009 for 1%.

Depreciation factor to the volume of profit for 9 months of 2010 has reduced for 0.9 % due to positive dynamics of profit in 2010.

Indices disclosed additionally in accordance with the Provisions on Information Policy of “IDGC of the South”, JSC.

Dynamics of indices forming financial result of the Company, RUB.:

Indices	9 months 2009	9 months 2010
Revenues from sales	13	16
Cost	11	14
Total profit	2	2
Income before income tax	-	-
Net profit	-	-

Expenses structure, RUB.:

Indices	9 months 2009	9 months 2010
Material expenses, including	2	3
Purchased power	2	2
Purchased power for production and economic needs
Raw materials and supplies
Works and services of production character	4	4
Expenses for labour costs	2	2
Uniform Social Tax
Non-state pension provision	8	22
Depreciation	1	1
Others, including
Payment for contractor companies services
Expenses for insurance
Taxes and dues	72	88
Expenses for production and selling of products	11	14

Cost behavior:

Period	RUB	Rate of increase %
2nd quarter 2010	4	99.5
3rd quarter 2010	4

Losses reduce in the third quarter of 2010 in comparison to the second for 0.5% is explained mainly by measures fulfillment for reducing the controlled expenses.

Flow of income:

Period	RUB	Rate of increase, %
2nd quarter 2010	5	100.4
3rd quarter 2010	5

Insignificant increase of revenues in the third quarter is described by increase of electric power consumption and increase of volume of works for technological connection of the consumers.

Indices of efficiency, %:

Indicators	9 months 2009	9 months 2010
ROE, return of equity	-1,9	-2,6
ROA, return on assets	-1,0	-1,3
ROTA, Return on Total Assets	-0,6	-0,9

Revenue mix by business directions, RUB:

Name	9 months 2009	9 months 2010
Revenue (net) from sales of goods (services), total	13	16
Production (services) on main activities	13	16
Grid services	13	15
Services of electric power transfer within grids	12	15
Services on technological connection
Other production (services) of main activities
Production (services) of side activities	26	39

2.2. Market Capitalization of the Issuer

Market capitalization is calculated as product of quantity of shares of appropriate category (type) and market price of one share, disclosed by the Organizer of trade at the securities market and determined in accordance with the Order of Calculation for Market Price of Securities Emitting and Investment Shares of Unit Investment Funds, allowed to circulation via trade organizers, approved by Decision of Federal Commission for the Securities Market (FCSM) of Russia, dated 24 December, 2003 No. 03-52 ps