Address of the Chairman of the Board of Directors

History

DEAR SHAREHOLDERS,

The past year of 2011 proved to be a serious test for JSC “MOESK.” the results we achieved, however, indicate that not only were we able to successfully accomplish the goals we set, but also that the Company is progressively developing.

The start of the year turned out to be very challenging for the Company. Repairing the damage caused by freezing rain, the personnel of JSC “MOESK” and the operating companies of JSC “IDGC Holding” worked in a strenuous, round-the-clock mode in order to restore reliable power supplies in the Moscow area as quickly as possible and uphold the business reputation of JSC “MOESK.” This difficult period hardened the Company’s employees.

The results of 2011 demonstrate that JSC “MOESK” continued to confidently move forward and ended the year with good operational and financial indicators. The company strengthened its positions on the market for electricity supply services. Moscow Mayor Sergei Sobyanin awarded JSC “MOESK” a Certificate of Merit for its contribution to the capital’s power supply system.

« IN 2011, JSC "MOESK" PAID DIVIDENDS FOR 2010 IN THE AMOUNT OF 1.2 BLN RUBLES IN FULL AND ON TIME »

During the reporting year, the Company continued to forge ahead in implementing its priority objectives. The efforts of Company personnel ensured uninterrupted power supplies to consumers, an increase in transmission capacity and the reconstruction of power grids in the Moscow area. Comprehensive work was conducted to improve the Company’s financial and economic performance as well as boost its investment appeal and the transparency of operations. The Company devoted considerable attention to issues concerning innovative development, energy efficiency as well as the reliability and quality of services. Much work was also conducted to increase the availability of power grid infrastructure.

In 2011, officials from JSC “IDGC Holding,” GPB (JSC), JSC “Leader” as well as the Energy Ministry of the Russian Federation and the Moscow Government represented the interests of shareholders on the Board of Directors. The decisions adopted by the Board of Directors were effectively implemented by the general director and Company management.

Throughout 2011, the Board of Directors of JSC “MOESK” regularly considered strategic, production and commercial issues related to the Company’s activities. The board paid particular attention to the approval and monitoring of the implementation of key documents for the Company such as the business plan, including the investment program, for 2011, the program for energy conservation and increased energy efficiency in 2011-2015 and the innovative development program for 2011-2016 and the period until 2020.

« MOSCOW MAYOR SERGEI SOBYANIN AWARDED JSC “MOESK” A CERTIFICATE OF MERIT FOR ITS CONTRIBUTION TO THE CAPITAL’S POWER SUPPLY SYSTEM »

The Company has identified its priority activities in the near future as the felling of trees that have fallen or are a risk to fall on overhead lines with capacity of 6-220 kV, drawing up the innovative development program, ensuring the reliability and quality of its services comply with regulatory legal acts, an energy inspection of the Company’s production and commercial facilities as well as its power grid facilities and introducing a system to manage the construction of the most important investment projects.

In its relations with shareholders, the Company, as it has in the past, strives to adhere to the fundamental principles of corporate governance – accountability, fairness, transparency and responsibility. In 2011, JSC “MOESK” paid out 1.2 billion rubles for dividends in full and on time for 2010.

I am confident that going forward the professionalism of employees and the support of JSC “MOESK” shareholders will make it possible to continue successfully providing reliable power supplies to the consumers of the Moscow area, modernizing power grid facilities, boosting investment appeal and information transparency on the basis of revenue growth, and improving corporate governance.

Respectfully,
Chairman of the Board of Directors
N.N. Shvets