Results TGC-1 JSC Dear Shareholders,

Transcription

1

2 Dear Shareholders, In 2013, the Gazprom Group significantly strengthened its strategic leadership in Russian electric power industry. As in previous years, while focusing on the absolute priority of our business providing reliable electricity and heat to consumers the Group continued to implement its investment projects and took a number of steps to reduce costs, strengthen our financial situation and improve management mechanisms. At the beginning of last year, the Gazprom Group put the new energy heart of Sochi into operation: the Adlerskaya CHPP. This modern combined heat and power station became a key source of electricity and heat for the main infrastructure of the XII Olympic Winter Games and XI Paralympic Winter Games in Sochi, which were a success for our nation in The major event of 2013 was the entry of Moscow Integrated Power Company (MIPC) into the Gazprom Group. MIPC is the leading infrastructure company of the Russian capital which provides heating and hot water to Moscow and a number of other cities in the Moscow Oblast. With the acquisition of MIPC, Gazprom has become the largest Russian Group in terms of installed heat capacity in addition to its leadership in the country in electric capacity. Increasing energy efficiency and improving the environmental performance of production are the most important components of the Gazprom Group s strategy, which is guided by the principles of the necessity of conserving resources and reducing our environmental impact as much as possible. Thus, 2013 was the Year of Ecology at Gazprom and 2014 has become the Year of Ecologic Culture. At TGC-1, the long-term and large-scale reconstruction of the Vuoksa HPPs Cascade was completed it is now the largest source of clean electric energy in the Karelian Isthmus. The new generating capacity of TGC-1 provides a substantial contribution to the improvement of environmental performance as well as production, financial and economic figures. And so, in 2013 the overall share of new facilities in the revenue of the Group s generating companies reached 15.9% (up from 11.1% in 2012) and continues to grow; TGC-1 is the undisputed leader with a share of 21.2%. The new CCGT units at the Yuzhnaya, Pravoberezhnaya and Pervomayskaya CHPPs in St. Petersburg helped to reduce the volume of production at old, inefficient facilities and provided TGC-1 financial growth one and a half times greater than in 2012 via capacity sales by capacity supply agreements. Further implementation of the cost optimization programme, the improvement of corporate governance, the introduction of energy-saving technology and the upgrading of equipment are the key tasks facing TGC-1. I am confident that these tasks will be successfully accomplished through the effective cooperation of shareholders, the Board of Directors and the Company s Management. Member of the Gazprom Management Board Chairman of the TGC-1 Board of Directors Kirill Seleznev 2

3 Dear Shareholders, For our Company, the year 2013 proved to be rich in important events. On the back of strong performance, TGC-1 secured its place among the leaders of the power generation market in North-West Russia. In our day-to-day business, we remain strongly committed to the core principles of sustainability and efficiency, incorporating them in every strategic project we undertake, be it new capacity construction or production optimization. The geographical breadth of our completed projects is impressive. The most notable event that the Company had been looking forward to for seven years was the completion of the renovation of the Vuoksa HPPs Cascade, a large-scale project involving equipment modernization at two power plants on the border between the Leningrad Oblast and Finland. With eight hydroelectric units upgraded, the Cascade s capacity increased to 240 MW alongside a dramatic improvement in environmental performance. In the Murmansk Oblast, we replaced the first hydroelectric unit at the Iovskaya HPP. We made arrangements that would allow the Apatitskaya CHPP to supply energy to two towns, Kirovsk and Apatity. As a result, the towns were able to close down their boiler houses. That helped not only reduce region s dependence on fuel oil supplies, but also ensure a steady delivery of heat. In St. Petersburg, we constructed a new indoor switchgear at the Centralnaya CHPP s second power plant to ensure stable electricity supply to the city s historic center. We also prepared a site at the Power Plant No. 1 for the construction of a CCGT unit. In addition, we began to build a water-heating facility and a diesel/fuel oil handling facility at the Pervomayskaya CHPP. Benefiting from the results of an operational efficiency improvement programme we implemented in 2013, we were able to reduce our fuel use for electricity and heat production, cut down repair time and improve procurement processes. TGC-1 generated 69.9 billion rubles in consolidated revenue, up 12.4% on the previous year s figure. Profit rose by 8.2% to 6.8 billion rubles. We continued to work on strengthening our financial discipline and reducing receivables. Backed by the regional and local governments, we have almost completed the transition to a settlement system that will allow us to deal with consumers directly in the Murmansk Oblast and in the Leningrad Oblast. A similar project is underway in St. Petersburg. In Petrozavodsk, our specialists teamed up with the municipal administration to develop a draft city heating plan. The quality of life in the regions where TGC-1 conducts its business has always been a top priority for the Company. TGC-1 sponsors sport competitions, research, cultural events and youth-oriented projects on a regular basis. However, when it comes to charity, help to children, elderly people and power industry`s veterans, is what we focus on. We realize that only by sharing out team spirit and working together could we achieve what we achieved and will we be able to do what we plan to do. Managers, shareholders and employees commitment to delivering results, constant search for optimal solutions for complex problems and effective leadership is what allows the Company to stand out among the many and maintain leadership in the region. General Director, Chairman of the TGC-1 Management Board Andrey Filippov 3

4 Events in 2013 January The Matkozhnenskaya HPP celebrated 60 years. A meeting was held in Murmansk between representatives from Russia, Norway, and Finland, dedicated to managing the water regime of Lake Inari and its water resources that are used at TGC-1 s border hydroelectric stations. February The second major reconstruction of the Pervomayskaya CHPP began in St. Petersburg the construction of an integrated auxiliary building. The Yuzhnaya CHPP celebrated 35 years. System of technological data exchange with the automated system of the System Operator was adopted into industrial operation at the Serebryansky HPPs Cascade. Major repairs to the hydroelectric unit were completed at TGC-1 s Niva HPP-3 at the Niva HPPs Cascade. Major repairs to boiler No. 10 were completed at TGC-1 s Apatitskaya CHPP. March The oldest CHPP in Leningrad Oblast Dubrovskaya CHPP celebrated 80 years. Major repairs on the hydroelectric unit at the Niva HPP-2 of TGC-1 s Niva HPPs Cascade was completed. April TGC-1 presented its unique educational game My Energy the first thematic educational application in Russian available in game format for ipads at the Russian International Energy Forum. A series of events Energy without danger was staged in those towns and cities where the Company is currently operating, as part of the All-Russian instruction on basic life safety principles. TGC-1 was awarded the Big Dipper prize for reviving the traditions of charity and philanthropy. The company was awarded the X certificate from the Harlequin anniversary children s arts festival for its significant contribution to the development of the festival and children s arts. May Initial testing of the intra-heating equipment and a section of the heating main began in the city of Kirovsk from the Apatitskaya CHPP. TGC-1 started installation work at the Lesogorskaya HPP of the Vuoksa HPPs Cascade in the Leningrad Oblast stator equipment for the last upgrade of the Cascade s hydroelectric unit arrived at the station. Power plant No. 3 at the Centralnaya CHPP celebrated its 115 th anniversary. June A fish ladder was opened at the Nizhne-Tulomskaya HPP, a unique hydraulic structure, unrivaled in the world in its simplicity and convenience. 4

5 July The first upgraded impeller unit was delivered to the Iovskaya HPP in Murmansk Oblast. August A special meeting was held in Levi (Finland) between hydroelectric power specialists from Russia and Norway as well as ecologists from Finland on the control and management of Lake Inari, a water resource that is used by three countries. The Yuzhnaya Boiler at Murmanskaya CHPP celebrated 40 years in operation. September TGC-1 was included in the top 10 Power Generating Companies: Implementation of Investment Programs by CSA, published by the non-profit partnership the Market Council. A new season of Hour of Energy events on safety and conservation of electricity and heat began in St. Petersburg. A competition among operational staff of TGC-1 s HPPs took place in Murmashi. The Kem HPPs Cascade team took the first place. October At the city s review contest for the best civil refuge defense structure, the Pravoberezhnaya CHPP was awarded 250 points out of a possible 250 and took first place amongst St. Petersburg s industrial companies in the civil defense category. TGC-1 participated in the traditional exhibition The Energy of Karelia (Petrozavodsk). November Comprehensive tests were successfully carried out on the last of the eight reconstructed hydroelectric units of the Vuoksa HPPs Cascade at the Lesogorskaya HPP in the Leningrad Oblast. In the Murmansk Oblast, commissioning was completed on the first modernised hydroelectric unit at the Iovskaya HPP. Based on results from a Ministry of Energy of Russia committee, TGC-1 was awarded an operations certificate for the autumn-winter period. TGC-1 submitted a project to develop Petrozavodsk s heating supply system to the Petrozavodsk District Municipal Administration. Power plant No. 1 at the Centralnaya CHPP turned 115 years. TGC-1 s Nizhne-Svirskaya HPP turned 80 years. December Major reconstruction was completed on the Vuoksa HPPs Cascade in Leningrad Oblast. Comprehensive testing of the first modernised hydroelectric unit was completed at the Iovskaya HPP in the Murmansk Oblast. TGC-1 participated in the traditional charity Tree of Desires at the St. Petersburg Christmas Fair. 5

6 KEY INDICATORS TGC-1 Key Operating Indicators* Δ, % Installed electric capacity, MW 6,870 7, Installed heat capacity, GCal/h 14,497 14, Electricity generation, mln kwh 30,388 29, Electricity useful output, mln kwh 35,018 33, Heat output, thous. GCal 26,438 25, Heat useful output, thous. GCal 26,668 25, * The data are given taking into account the indicators of Murmanskaya CHPP JSC TGC-1 Key Financial Indicators, RAS*, RUR mln Δ, % Revenue 60,145 67, Production cost (55,243) (61,057) 10.5 Gross profit 4,902 6, Income before tax 4,406 4, EBITDA 11,595 13, Net income 3,353 3, Total assets 121, , Earnings per share, RUR * TGC-1 statements as per RAS do not consolidate financial results of the affiliates TGC-1 Key Financial Indicators, IFRS, RUR mln Inclusive of adjusted financial statements from Δ, % Revenue 62,168 69, Operating costs (52,286) (59,962) 14.7 Operating profit 9,882 9, EBITDA* 15,468 16, Adjusted EBITDA** 15,274 17, Income before tax 8,134 7, Profit 6,255 6, Adjusted earnings** 6,099 7, Total assets 147, , * EBITDA = operating profit + amortization of fixed assets, intangible assets and investment property ** Adjusted values for the possible influence of the article Provision / (release) for impairment of account receivable 6

7 PRODUCTION The basis of TGC-1 s production capacity features 55 power plants, including: 41 HPPs and 14 combined heat and power plants (CHPPs), as well as the subsidiary company Murmanskaya CHPP. By the end of 2013, the installed capacity of the Company s power plants amounted to 7,238.1 MW of electric and 14,234.0 GCal/h of heat capacity. Installed electric capacity utilization factor for TGC-1 in 2013 reached 46.1%; for HPPs it remained at 46.7%, and for CHPPs 45.7%. At the end of 2013, TGC-1 s overall specific reference fuel consumption of delivered electricity amounted to g/kwh, which is 3.0% lower than figures for At the same time, reference fuel consumption of delivered heat decreased by 0.7% and amounted to kg/gcal. Reduction of the Company s overall specific reference fuel consumption for delivered electricity was due to commissioning of new CCGT-units with lower reference consumption. Electricity generation, thous. kwh Δ, % Nevsky Branch 18,821,263 19,082, Karelsky Branch 4,334,579 3,688, Kolsky Branch 7,215,516 6,515, TGC-1 30,371,359 29,286, Murmanskaya CHPP 16,963 16, TGC-1 including Murmanskaya CHPP 30,388,322 29,303, Total for CHPPs 16,889,454 17,312, Total for HPPs 13,498,868 11,990, The efficient operation of the new power units and entry onto the wholesale market 450 MW CCGT-unit by the Pravoberezhnaya CHPP had a favourable impact on total generation. The main reasons for the decrease in annual electricity generation were the water level and the warm weather in Q3 and Q4 of Heating output, GCal Δ, % Nevsky Branch 21,322,201 20,431, Karelsky Branch 1,784,658 1,664, Kolsky Branch 1,174,059 1,171, TGC-1 24,280,918 23,268, Murmanskaya CHPP 2,156,616 2,046, TGC-1 including Murmanskaya CHPP 26,437,534 25,315,

8 SALES ACTIVITIES The largest volume of the Company s electricity is sold on the day-ahead market (DAM) in 2012, the DAM share accounted for 73.6% of total sales and 80.2% of total electricity sales revenue, as well as for regulated contracts total sales reached 16% and its share in electricity sales revenue amounted to 9.5%. In 2013, in the structure of capacity sales, 51.8% was accounted by competitive capacity selection (CCS) sales, 26.3% was from sales by regulated contracts and 21.4% of capacity was from capacity supply agreements (CSA) sales. The highest revenue share from capacity sales came from CSAs sales at 51.3%, there was a 33.9% CCS sales contribution into the revenue structure and the share of sales from regulated contracts came in at 13.9%. In 2013, the total amount of electricity purchased totaled 6,502.9 thous. kwh, 4.6% down on 2012, and the purchase of capacity totaled MW/month, 2.9% down on Sales of electricity by market sector in 2013 mln kwh RUR mln Regulated contracts 5,421 2,877.8 Day-ahead market 24,775 24,276.8 Balancing market 1, Unregulated bilateral contracts 1,600 1,333.9 Export Retail TOTAL 33,660 30,277.8 Sales of capacity by market sector in 2013 MW RUR mln Regulated contracts 1,455 1,925.8 Competitive capacity selection 2,870 4,710.2 Capacity supply agreements 1,183 7,125.0 Forced state TOTAL 5,542 13,

9 The unique geographical location of some of TGC-1 s power plants allows the Company to export a part of the generated electricity. Export deliveries are carried out to Finland and Norway. Estonia could also become another direction for exports. Another one-year contract was signed with the concern Fortum Power and Heat Oy for The validity of contracts with the company Scaent Europower Ltd. ended in November of 2012, meanwhile the Company signed a contract under similar terms for with RAO Nordic Oy. While minor amendments were made, the overall framework of the contract remained relatively unchanged. Useful output of heat and revenue from heat sales in 2013 thous. GCal RUR mln Nevsky Branch 20,911 20,526.3 Kolsky Branch 1,609 1,445.7 Karelsky Branch 1,115 1,007.5 TGC-1 23,635 22,979.5 Murmanskaya CHPP 2,080 4,975.5 Fuel Supplies In 2013, the electric power plants of TGC-1, excluding the Murmanskaya CHPP, consumed 6,307.0 mln m³ of gas for heat and electricity output, as well as 1.9 thous. tons of fuel oil and thous. tons of coal. Fuel balance structure in 2013, % Gas Fuel oil Coal Nevsky Branch Karelsky Branch Kolsky Branch TGC Murmanskaya CHPP 100 TGC-1 including Murmanskaya CHPP

10 INVESTMENT ACTIVITIES In 2013, implementation of vast TGC-1 investment programme continued. In 2013, work continued at the following highpriority facilities: the Centralnaya CHPP, Pravoberezhnaya CHPP (unit No. 2), Pervomayskaya CHPP, Vuoksa HPPs Cascade (Lesogorskaya HPP). Investment projects financing, execution and commissioning in 2013 Financing, RUR mln (VAT incl.) Execution, RUR mln (VAT excl.) Commissioning of fixed assets RUR mln (VAT excl.) Investment projects related to capacity supply agreements: 2,065 2, Centralnaya CHPP 1,444 1,640 8 Pravoberezhnaya CHPP (unit No. 2) Pervomayskaya CHPP Vuoksa HPPs Cascade Investment projects not related to commissioning of capacities 4,728 4,313 3,710 TOTAL 6,793 6,655 4,620 Securities The authorized capital of TGC-1 amounts to RUR 38,543,414, and is divided into 3,854,341,416,571 and 3/7 ordinary registered shares of an equal par value of RUR TGC-1 s shares are traded in the main trading area of the Russian securities market the Moscow Exchange. Securities trades are affected on the securities market of the Moscow Exchange in two sectors: Main market (Sector T+2), Classica. TGC-1 s shares are included in the first level of the A1 Quotation List. As of 31 December 2013, the share of GDR in the authorized capital of TGC-1 amounted to 0.05%. Thus, there are at present three bonded debts of TGC-1 (series 02-04) floated on the Moscow Exchange. Equity capital structure as of

11 Analysis of RAS Financial Results In 2013, TGC-1 s revenues increased by 12.2% compared to 2012 and amounted to RUR 67,472 mln. Increase of total revenue is associated with increase of administered and free prices for electricity and power, as well as with commissioning the 450 MW CCGT-unit at the Pravoberezhnaya CHPP under the Capacity Supply Agreement, and with increase in heat tariffs. Revenue structure in Δ RUR mln Share, % RUR mln Share, % % Electricity and capacity 38, , electricity and capacity in regulated sector 4, , electricity and capacity in competitive sector 33, , electricity and capacity for export electricity in the retail market Heat 21, , Other products, works, services Total revenue 60, , The cost value of production and the sale of products, work and services in 2013 amounted to RUR 61,057 mln, which is 10.5% more than in The indicators include the cost of core activities at RUR 60,918 mln and other activities at RUR 139 mln. Compared to 2012 results, the production cost of core activities increased by RUR 5,828 mln. The main reasons for the change in cost value are the increase in fuel prices in connection with a greater volume of production programme at CHPPs, increase of costs of heat energy transfer due to rates increase, and the increase in depreciation charges associated with the commissioning of the 450 MW CCGT-unit at the Pravoberezhnaya CHPP. 11

12 Structure of production cost on core activities in Δ RUR mln Share, % RUR mln Share, % % Production cost on core activities, total 55, , Fuel 24, , Purchased energy 5, , Process water 2, , Fixed assets repair 2, , LCF and UST 4, , Depreciation 5, , Heat transit 5, , Services on the wholesale and retail markets Rental Taxes Miscellaneous 2, , EBITDA for 2013 amounted to RUR 13,484 mln, it is a 16.3% increase. This dynamics show that operational activity of the Company is becoming more effective. TGC-1 profit dynamics in , RUR mln Δ, % Gross profit 4, , Income before tax 4, , Net income 3, ,

13 Analysis of Financial Situation The Company s consolidated revenues for 2013 grew by 12.4% as compared to 2012 and amounted to RUR 69,853 mln. The increase in revenue was influenced by: sales prices growth by 13.8% on the day-ahead market; the launch of the 450 MW CCGT-unit at the Pravoberezhnaya CHPP onto the wholesale market and growth of sales prices at CCS; positive pricing trend for electricity sales at NordPool market; heat supply tariffs raise since July 1, Revenue structure, RUR mln Δ, % Electricity 28,014 25, Capacity 13,876 10, Heat 25,952 23, Export Other sales 1,082 1, Total revenue 69,853 62, In 2013, Company s 12 months operating costs grew by 14.7% year-on-year, totaling RUR 59,962 mln. Creation of RUR 1,137 mln provision for impairment of accounts receivable made significant influence on the amount of fixed costs. Fixed assets adjusted in accordance with this item grew by 1.3% to RUR 13,992 mln. Structure of operating costs, RUR mln Δ, % State subsidies Operating costs: (60,121) (54,668) 10.0 Fixed costs (15,129) (13,617) 11.1 Related costs (38,585) (35,464) 8.8 Amortization of fixed assets, intangible assets and investment property Allowing (restoration) for the deterioration of value of fixed assets for the year (6,407) (5,587) 14.7 (740) Other operating income 462 1, Total operating expenses (59,962) (52,286) 14.7 Operating profits for 2013 increased by 0.1% to RUR 9,891 mln EBITDA is at the level of RUR 16,298 mln, which is 5.4% higher as compared to the same period of the previous year. Profit increased by 8.2% to RUR 6,768 mln. 13

14 Abridged Financial Statement of TGC-1 for 2013 under Russian Accounting Standards BALANCE SHEET as at 31 December 2013 BALANCE SHEET as at 31 December 2013, RUR thous. As at 31 December 2013 As at 31 December 2012 As at 31 December 2011 ASSETS I. FIXED ASSETS Intangible assets 24,028 27,977 31,927 Results of research and development Intangible exploration assets Tangible exploration assets Fixed assets 85,772,923 87,031,461 82,776,802 Income-bearing investments in tangible assets Financial investments 14,167,125 14,153,069 13,752,178 Deferred tax assets 575, ,364 99,358 Other non-current assets 219, , ,408 Total Section I 100,758, ,789,115 97,256,673 II. CURRENT ASSETS Inventories 2,432,422 2,299,413 2,419,383 Value added tax on goods purchased 182, , ,572 Accounts receivable 15,741,351 14,799,007 13,672,084 Financial investments (less cash equivalents) 1,820,198 1,672,693 1,723,632 Cash and cash equivalents 186, , ,187 Other current assets 250, , ,521 Total Section II 20,613,371 19,884,272 18,586,379 TOTAL SECTIONS I and II 121,372, ,673, ,843,052 14

15 BALANCE SHEET as at 31 December 2013, RUR thous. As at 31 December 2013 As at 31 December 2012 As at 31 December 2011 EQUITY AND LIABILITIES III. EQUITY AND RESERVES Charter capital 38,543,414 38,543,414 38,543,414 Own shares buy-back Non-current asset revaluation 9,711,902 9,760,573 10,076,655 Additional capital (without revaluation) 23,285,600 23,285,600 23,285,600 Reserve capital 758, , ,126 Retained earnings (loss) 7,046,864 4,417,195 1,123,429 Total Section III 79,346,443 76,597,774 73,432,224 IV. NON-CURRENT LIABILITIES Borrowings and bank loans 19,852,260 25,498,687 22,242,415 Deferred tax liabilities 5,016,680 3,698,783 2,437,187 Estimated liabilities Other liabilities Total Section IV 24,868,940 29,197,470 24,679,602 V. CURRENT LIABILITIES Borrowings and bank loans 10,488,631 8,851,093 10,244,256 Accounts payable 6,438,774 6,699,772 6,963,811 Income of future periods Estimated liabilities 229, , ,159 Other liabilities Total Section V 17,156,861 15,878,143 17,731,226 TOTAL SECTIONS III, IV, V 121,372, ,673, ,843,052 15

16 STATEMENT OF FINANCIAL RESULTS, RUR thous Sales 67,472,017 60,145,053 Cost of sales (61,056,913) (55,242,773) Gross profit (loss) 6,415,104 4,902,280 Sales expenses General business expenses Profit (loss) from sales 6,415,104 4,902,280 Income from participation in other companies 1,299 Interest receivable 204, ,474 Interest payable (1,976,105) (1,567,258) Other income 3,673,691 4,451,656 Other expenses (4,124,324) (3,570,555) Income (loss) before taxation 4,194,422 4,405,597 Current income tax including permanent tax liabilities (assets) 185, ,828 Changes in deferred tax liabilities (1,317,897) (1,261,596) Changes in deferred tax assets 293, ,649 Other 47,979 (13,235) Net profit (loss) 3,218,147 3,353,415 REFERENCE Result of revaluation of non-current assets not included to the net profit (loss) for the reporting year Results of other transactions not included to the net profit (loss) for the reporting year Cumulative financial result for the year 3,218,147 3,353,415 Basic earnings (loss) per share Diluted earnings (loss) per share 16

17 Abridged Consolidated Financial Statements of TGC-1 for 2013 under International Financial Reporting Standards JSC TERRITORIAL GENERATING COMPANY 1 AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013, RUR thous. 31 December December 2012 ASSETS Non-current assets Property, plant and equipment 130,188, ,056,534 Investment property 91, ,596 Intangible assets 450, ,036 Investments in associatesand joint ventures 441, ,900 Deferred income tax assets 367, ,333 Other non-current assets 199, ,899 Total non-current assets 131,739, ,647,298 Current assets Cash and cash equivalents 243, ,975 Short-term investments 16,800 8,264 Trade and other receivables 15,866,038 13,854,113 Current income tax prepayments 69,721 94,439 Inventories 2,608,380 2,585,733 18,803,944 17,262,524 Non-current assets held for sale 58,325 26,705 Total current assets 18,862,269 17,289,229 TOTAL ASSETS 150,601, ,936,527 17

18 JSC TERRITORIAL GENERATING COMPANY 1 AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013, RUR thous. 31 December December 2012 EQUITY AND LIABILITIES Equity Share capital 38,543,414 38,543,414 Share premium 22,913,678 22,913,678 Merger reserve (6,086,949) (6,086,949) Other reserves (1,209,011) (1,209,011) Effect of remeasurements of post-employment benefits obligations 37,001 11,989 Retained earnings 34,575,950 28,721,743 Equity attributable to the Company s owners 88,774,083 82,894,864 Non-controlling interest 8,340,797 7,899,038 TOTAL EQUITY 97,114,880 90,793,902 LIABILITIES Non-current liabilities Deferred income tax liabilities 10,982,905 10,101,554 Long-term borrowings 21,070,249 26,159,467 Other non-current liabilities 139,958 74,769 Post-employment benefits obligations 854, ,945 Total non-current liabilities 33,047,408 37,219,735 Current liabilities Short-term borrowings 11,678,565 10,586,306 Trade and other payables 7,556,813 8,427,495 Current income tax payable 24,807 1,319 Other taxes payable 1,179, ,770 Total current liabilities 20,439,480 19,922,890 TOTAL LIABILITIES 53,486,888 57,142,625 TOTAL EQUITY AND LIABILITIES 150,601, ,936,527 18

19 JSC TERRITORIAL GENERATING COMPANY 1 AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHERCOMPREHENSIVE INCOME FOR 2013, RUR thous. Year ended 31 December 2013 Year ended 31 December 2012 Revenue Sales of electricity 42,819,556 37,346,956 Sales of heat 25,951,590 23,696,340 Other sales 1,081,880 1,124,479 Total revenue 69,853,026 62,167,775 Government grants 437, ,027 Operating expenses (60,120,586) (54,668,177) Impairment loss (recognized) / reversed during the year (740,427) 549,368 Other operating income 461,519 1,516,905 Total operating expenses (59,962,030) (52,285,877) Operating profit 9,890,996 9,881,898 Finance income 90,845 78,701 Finance costs (2,084,441) (1,826,785) Finance costs, net (1,993,596) (1,748,084) Profit before income tax 7,897,400 8,133,814 Income tax expense (1,129,861) (1,878,317) Profit for the year 6,767,539 6,255,497 Other comprehensive income Items that will not be reclassified to profit or loss: Remeasurements of post-employment benefits obligations 29,734 16,330 Income tax on other comprehensive income (6,817) (3,266) Other comprehensive income for the year 22,917 13,064 Total comprehensive income for the year 6,790,456 6,268,561 Profit is attributable to: Owners of the TGC-1 6,323,685 5,985,168 Non controlling interests 443, ,329 Profit for the year 6,767,539 6,255,497 Total comprehensive income is attributable to: Owners of the TGC-1 6,348,697 5,997,157 Non controlling interests 441, ,404 Total comprehensive income for the year 6,790,456 6,268,561 Earnings per ordinary share for profit attributable to owners of the TGC-1, basic and diluted (in Russian roubles)

20 Contact information: TGC-1 JSC Antonina Maksimova Head of the Corporate Management Department Tel. +7 (812) Svetlana Vashchenko Head of the Share Capital and Investor Relations Sector Tel. + 7 (812) Vaschenko.SA@tgc1.ru Ekaterina Shpungina Head of the Investor Relations Tel. + 7 (812) Shpungina.ES@tgc1.ru Viktor Nesterov Corporate Secretary Head of the Shareholder Relations Tel. +7 (812) Nesterov.VV@tgc1.ru