Quarterly Report "Interregional Distribution Grid Company of Centre", Joint-Stock Company Issuer’s code: 10214-A (стр. 11 )

4.1. Results of financial and economic activities of the issuer

4.1.1. Profit and losses

Unit of measure: thousand Rubles

Indicator	2006	2007	2008	2009	2010	2011, 3 months
Proceeds			35	49	60	19
Gross profit	74 899	54 988	5	5	9	4
Net profit	15 158	51 251	2	1	4	2
Return on equity, %	58.18	68.48	5.45	3.21	10.25	5.81
Return on assets, %	4.57	17.02	3.73	2.17	6.63	3.81
Net profit ratio, %	2.04	5.21	6.07	2.7	7.8	14.61
Product profitability (return on sales), %	10.06	5.59	13.52	9.38	12.99	20.32
Capital turnover, times	28.27	12.99	0.76	0.91	0.95	0.3
Amount of uncovered loss as of the reporting date	0	0	0	0	0	0
Relation of uncovered loss as of the reporting date to the total balance	0	0	0	0	0	0

Economic analysis of profitability/loss of the issuer, basing on dynamics of the given indicators. The information is disclosed as well on reasons, which in the opinion of the issuer’s management bodies, resulted in the issuer’s losses/profit, reflected in the accounting statements as of the moment of completion of the reporting quarter in comparison with the same period of the previous year (previous years):

During the analyzed period the revenue and net income indicators of the Company have a positive growth trend, driven by the rising volume of the main activity services, as well as effective cost management of the issuer.

Profitability of the own capital gives opportunity to determine effectiveness of use of capital invested by the owner of the enterprise. This indicator reflects the information regarding how much each ruble earned, that has been invested by the owners of the company. High level of the equity capital profitability in is grounded by relatively small amount of the equity capital. Its growth is grounded by net profit growth from 15 158 thousand Rubles in 2006 tothousand Rubles in 2007. The essential factor that influenced on significant increase of net profit and therefore the equity capital in 2008 is the issuer’s reorganization in the form of affiliation of eleven regional grid companies to it. Reduction of the equity capital profitability in 2009 as compared to 2008 is grounded by reorganizational measures. As of 31.03.2011this indicator amounted to5,81%, that is higher than the same period of the previous year by 2,12%. Increase of value of this indicator is connected with net profit growth by 79,3%.

Net profitability coefficient shows the amount of net profit received from each ruble of the profit. As of March 31, 11 net profit coefficient grew up by 4,51% as compared with the same period of the last year. This increase is connected with net profit growth by 79,3%.

As of 31.12.2006 and till 31.03.2011the issuer has not hadany uncovered loss.

4.1.2. The factors which influenced change of the amount of the receipt by the issuer of the goods, products, works, services, and profit (loss) of the issuer from primary activity.

The essential factor that influenced on 2009 net profit reduction as compared to 2008 by thousand Rubles (38,8%) is the issuer’s reorganization in the form of affiliation of eleven regional grid companies to it on March 31, 08.

In accordance with the resolution of the Board of Directors of IDGC of Centre, JSC No.06/07 dated 16.07.07 the schedule of reforming of IDGC of Centre, JSC into the unified operation company was approved. 11 distribution grid companies and IDGC of Centre, JSC were reformed into the unified operation company on 31 March in compliance with the approved schedule. In this connection according to the accounting policy of IDGC of Centre, JSC and methodology of the accounting, profit and expenses were distributed between the periods (01.01.08-30.03.08) and 31.03.08 in compliance with the terms of execution of the source documents. Reorganized (by means of affiliation to IDGC of Centre, JSC") regional grid companies had been drawing up the final accounting statements since 1 January till 30 March, 2008 and had reflected considerable part of the current expenses, including March 2008, in the accounting, whilst the major part of profit of March 2008 had already been reflected in the statements for the 1st quarter 2008 of the successor of these companies – IDGC of Centre, JSC.

In this connection, analysis of the factors rendering influence on change of the proceeds from sale of goods, products, works, services and profit (loss) of the issuer for2009and the similar period of the preceding year(2008)cannot serve for unbiased estimation of the issuer.

Growth of net profit for the 1st quarter 2011 as compared to the 1st quarter 2010 (by 79,3%) is connected with the growth of the proceeds from electric power transmission by 23,2%. Growth of the proceeds from electric power transmission services is connected with increase of volume of electric power sale to consumers by 1,7% and average tariff by 21,2%.

4.2. Liquidity of the issuer, sufficiency of the capital and circulating assets

Unit of measure: thousand Rubles

Indicator	2006	2007	2008	2009	2010	2011, 3 months
Own circulating assets		16 028
Constant asset index	1.49	0.87	1.27	1.3	1.34	1.27
Current liquidity ratio	0.96	1.05	0.69	1.04	1.25	1.37
Acid ratio	0.94	1.02	0.54	0.8	1.03	1.17
Equity ratio	0.08	0.25	0.68	0.68	0.65	0.66

Economic analysis of liquidity and solvency of the issuer on the grounds of economic analysis of dynamics of the given indicators:

The amount of non-current assets considerably exceeds the amount of own capital since the issuer pursues the policy of financing of the investment program aimed at updating of the fixed production assets, due to attraction of long-term financing that affected values of parameters “Own circulating assets” and “Constant assets index”.

One of the enterprise financial position indicator is its solvency and liquidity, i. e. an opportunity in due time to repay its liabilities.

Coefficients of current and quick liquidity amounted to1,25 and 1,03respectivelyas of 31.12.2010. As of 31.03.2011values of these coefficients increased and amounted to 1,37 and 1,17respectively. Increase of values of these indicators is connected with accounts payable reduction. The coefficient is within the normative value, it witnesses of capability of the enterprise to repay its current short-term obligations by means of the current assets.

Solvency ratio of own funds determines the share of assets of organization, which are covered for the account of the own capital. The higher coefficient value, the enterprise is more financially stable and independent from external creditors. Generally accepted normative value for this indicator is 0,6. Following the results of IDGC of Centre in the 1st quarter 2011thevalue of solvencyis higher the normative value by 0,06.

4.3. Amount and structure of the capital and circulating assets of the issuer

4.3.1. Amount and structure of the capital and circulating assets of the issuer

Unit of measure: thousand Rubles

Indicator	2006	2007	2008	2009	2010	2011, 3 months
Amount of the authorized capital	10 000	10 000	4	4	4	4
Total value of shares (stakes) of the issuer, bought out by the issuer for their subsequent re-sale (transfer)	0	0	0	0	0	0
Interest of shares (stakes) of outstanding shares (authorized capital) of the issuer, bought out by the issuer for their subsequent re-sale (transfer)	0	0	0	0	0	0
Amount of the reserve capital of the issuer, formed for the account of the issuer’s operating surplus	122	500	0
Amount of additional capital of the issuer reflecting assets value surplus revealed following the results of re-estimate as well as the amount of difference between selling price (placing price) and par value of shares (stakes) of the company for the account of sale of shares (stakes) at the price exceeding par value.	0	497	33	33	33	33
Amount of undistributed net profit of the issuer	15 158	51 251	2	3	8	11
Total amount of the issuer’s capital	26 055	74 875	39	41	45	48

The amount of the authorized capital given in this item complies with the issuer’s constituent documents