Equity Capital Structure

The authorized capital of TGC-1 amounts to of RUR 38,543,414,165.71 and is divided into 3,854,341,416,571 and 3/7 ordinary registered shares of an equal par value of RUR 0.01. There were no changes in the structure of TGC-1's main shareholders in the course of the year.

As of 19.11.2012 the record date of the extraordinary General Shareholder Meeting of TGC-1, the total number of Company shareholders was 324,293 including:




Securities Trading

Shares

TGC-1's shares are traded in the main trading area of the Russian securities market the Moscow Exchange. Securities trading are performed in three sectors, namely the Main market (T+0 sector), the Standard market and Classica market. TGC-1's shares are included in the first level of the A1 Quotation List.

In 2012, TGC-1 shares traded at the Moscow Exchange under the main market were RUR 3,702.5 million, which is 17.2 % less that the same number in 2011. In the 12 months of 2012, the MICEX and RTS indices increased by 5.2 % and 10.5 % respectively, and the sectoral indices of MICEX Energy Industry and RTC Electricity Industry decreased by 16.8 % and 11.8 % respectively. At the end of the 4th quarter of 2012, the capitalization of TGC-1 amounted to RUR 26,105,454,414.4, which is a 28.2 % reduction in comparison with 2011, which reflects the decline in the Russian electric energy sector during that period.

In response to the negative quotation dynamics, the management of TGC-1 developed and implemented a Programme to Raise the Shareholder Value of the Company in 2012, which aims to cut costs, raise the operational and financial efficiency, and consequently raise the investor appeal of TGC-1 shares.

Dividends and dividend policy

The Company's Dividend Policy was approved by a resolution of the TGC-1 Board of Directors on 24 December 2010. The Company plans to spend 5 % to 35 % of net profits on dividends annually provided that the Reserve Fund is completely established.

At the Annual General Shareholder Meeting of TGC-1 of 18.06.2012, a decision was made to pay dividends on the Company's ordinary shares for the results of 2011 in the amount of RUR 0.000048741 per one ordinary Company share in monetary form within 60 days following the date of the decision. The total declared dividends for 2011 amounted to RUR 187,866 thousand, or 5 % of the net profit. As of 31.12.2012, the amount of dividends paid for the year 2011 was RUR 182,966 thousand, or 97.4 %. The Company's executive bodies did not take any decisions on payment of interim dividends in 2012.

Bonds

On 11 March 2012, TGC-1 bonds of series 04 amounting to RUR 2 billion, was floated on the Moscow Exchange; the first coupon rate was 7.6 % p.a. Due to current capital market conditions, series 05 and 06 bonded debts were not floated. Thus, there are at present four bonded debts of TGC-1 (series 01-04) floated on the Moscow Exchange..

On 14 December 2012, the TGC-1 Board of Directors approved floating at least four bonded debts for no more than RUR 20 billion in 2013 – 2014, with the aim of refinancing the credit portfolio. The plans for floating new bonded debts in 2013 – 2014 imply a coupon interest calculation scheme that is not linked to inflation, which in addition to the increase of operational efficiency will catalyse a rise of investor appeal for the Company's securities.

Depositary Receipts

The programme of global depositary receipts for TGC-1 shares was started on 9 July 2008. The programme was initiated with the aim of securing the rights of the holders of depositary receipts of RAO UES of Russia who, following its liquidation, received securities of the separated companies pro rata their share in the holding company. As of 30 December 2012, the share of GDR in the authorized capital of TGC-1 amounted to 0.07 %, the quantity of GDR according to Reg. 144А was 314,902, and the quantity of GDR according to Reg. S was 234,456. The Bank of New York Mellon was chosen as the depository bank.




Management and Control Bodies

In accordance with the Articles of Association of TGC-1, the General Shareholder Meeting is the supreme management body of the Company. Two Shareholder Meetings were held in 2012, namely the Annual General Shareholder Meeting on 18.06.2012 and an extraordinary General Shareholder Meeting on 25.12.2012.

According to the Statute on the TGC-1 Board of Directors adopted by the Company's Annual General Shareholder Meeting on 18.06.2009, TGC-1's Board of Directors provides general management of the Company's business, controls compliance with General Shareholder Meetings' resolutions, and guarantees the rights and legal interests of the Company's shareholders in accordance with the laws of the Russian Federation. 26 meetings of the Board of Directors were held in 2012.

Members of the TGC-1 Board of Directors in 2012:

Biographical Information on the Members of the Board of Directors

Kirill Seleznev, Chairman of the Board of Directors

Born in 1974. Graduated from Ustinov Baltic State Technical University majoring in "Pulsing Devices and Automatic Rotary Lines" in 1997 and from Saint Petersburg State University with a degree in Finance and Credit in 2002.
1997 – 1998: Manager, Baltic Finance Company.
1998 – 1999: Technical analyst on money market instruments, specialist, senior specialist on securities, Stock Exchange Transaction Department, Investment-Financial Group "Management. Investments. Development".
1999 – 2000: Senior specialist, Investment Activity Coordination Group, Maritime Port Saint Petersburg.
2000 – 2001: Head, Tax Group, Baltic Pipeline System JSC (BPS), then BPS affiliate Upper Volga Oil-Trunk Pipelines.
2001 – 2002: Deputy Administrator of the Board Administration - Aide to the Chairman of the Board, Gazprom JSC.
Since 2002: Board Member, Head, Gas and Liquid Hydrocarbons Processing and Marketing Department, Gazprom JSC.
Since 2003: General Director, Gazprom mezhregiongaz LLC.
Since 2008: Chairman of the Board of Directors, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Denis Fedorov, Deputy Chairman of the Board of Directors

Born in 1978. Graduated from Moscow Bauman State Technology University and postgraduate courses of Moscow Energy Institute, Candidate of Economic Sciences.
2001 – 2003: worked in RAO UES of Russia, then in NPVP Turbocon.
2003 – 2006: Head of Investment Technologies and Production Engineering Projects Office, EuroSibEngineering and Investment Office, Gazenergoprom Corporation LLC.
2006 – 2007: Advisor to General Director, Mezhregiongaz LLC.
2006 – 2008: General Director, Mezhregionsbyt JSC.
Since 2007: Head, Electricity Sector Development and Marketing Office, Gazprom JSC.
Since 2009: General Director, Centrenergoholding JSC.
Since 2009: General Director, Gazprom Energoholding LLC.
Holds no shares of TGC-1 JSC.

Alexander Chuvayev, Deputy Chairman of the Board of Directors

Born in 1960. In 1983 graduated from Moscow Bauman State Technology University majoring in mechanical engineering.
1991 – 1999: various positions in Solar Turbines Europe S.A. in Europe and USA.
1999 – 2005: various positions in General Electric in USA and Canada.
2005 – 2006: Operations Director, OMZ JSC.
2006: General Regional Manager, GE Oil & Gas (Russia and CIS countries).
2006 – 2008: Managing Director, Power Machines JSC.
2008 – 2009: Director for Investment Development, SUEC JSC.
2009: Executive Director, GE Oil & Gas (Russia and CIS countries); General Director, UTSK JSC; General Director, FORTUM ENERGY LLC; General Director, Fortum JSC; Executive Vice President, Member of the Management Board, President of the Russia Division, Head of the representative office of Fortum Corporation in Moscow and Saint Petersburg.
Since 2012: General Director, ChelyabEnergoRemont JSC.
Holds no shares in TGC-1 JSC.

Anatoly Gavrilenko, Member of the Board of Directors

Born in 1972. In 1995 graduated from Moscow Lomonosov State University majoring in economic cybernetics, and in 2001 majoring in civil law. In 2001 graduated from Interbranch Institute For Advanced Training and Re-Training of Administrators and Staff, Plekhanov Russian University of Economics majoring in assessment of the enterprise (Business) cost.
Since 2004: General Director, Leader CJSC.
Holds no shares of TGC-1 JSC.

Irina Grave, Member of the Board of Directors

Born in 1968. In 1992 graduated from Saint Petersburg State University with a law degree and in 2000 with a degree in financial management.
2000 – 2004: Lawyer and Counsellor, Salans Hertzfeld and Heilbronn International.
2005 – 2007: Vice President, Head of Saint Petersburg Office of Fortum Power and Heat Oy (Finland).
2007: Vice President, Fortum Corporation, M&A Russia.
Holds no shares of TGC-1 JSC.

Alexander Dushko, Member of the Board of Directors

Born in 1964. Graduated from Engineering and Economy Academy in Saint Petersburg.
2001 – 2002: Head of Fuel and Energy Complex and Consumer Market Development Office, Gazprom JSC.
2002: Head of Budget Planning Office, Gazprom JSC; Deputy Head of Corporate Finance Department, Gazprom JSC.
Since 2002: Deputy Head, Finance and Economy Department, Gazprom JSC.
Holds no shares of TGC-1 JSC.

Valentin Kazachenkov, Member of the Board of Directors

Born in 1949. In 1972 graduated from Briansk Technology Institute with major in turbomachinery. He worked as Shop Manager and then Director of Power Engineering Industry Plant in Leningrad.
1994 – 1996: Deputy General Director; since 1996: General Director of Sigma-Gaz enterprise.
Since 1999: General Director of Peterburgregiongaz LLC.
Since 2004: General Director, Gazprom mezhregiongaz Saint Petersburg CJSC (previously Peterburgregiongaz CJSC).
Holds no shares of TGC-1 JSC.

Kari Kautinen, Member of the Board of Directors

Born in 1964. In 1989 graduated from the University of Helsinki, Master of Law.
Since 2005: Vice President, Fortum Power and Heat Oy.
From 2007: Vice President, Fortum Corporation, Strategy, M&A.
Holds no shares of TGC-1 JSC.

Vladimir Kukushkin, Member of the Board of Directors

Born in 1954. In 1986 graduated from the Leningrad Water Transport Institute majoring in mechanical engineering.
2005 – 2010: Development Director, Energopromstroy LLC.
2010 – 2012: Deputy Head, Krasnoselsky District administration.
Since 2012: Deputy Chairman, Committee on Energy and Utilities, Government of Saint Petersburg.
Holds no shares of TGC-1 JSC.

Alexey Mityushov, Member of the Board of Directors

Born in 1975. Graduated from Ustinov Baltic State Technology University (Saint Petersburg) majoring in "Pulsing Devices and Automatic Rotary Lines" in 1997, from International Educational Programme Faculty of North-West Extra-Mural Polytechnic Institute in 1999, and Saint Petersburg International Management Institute majoring in business administration in 2008.
1997 – 2003: worked at enterprises of Saint Petersburg (Open Systems CJSC, Kirovsky Zavod JSC, Development of Service Industry CJSC, Electrosila JSC, and Nevka-SPb LLC).
2003 – 2007: Head, Property and Corporate Operation Office, Mezhregiongaz LLC.
2003 – 2007: as a dual activity status, General Director of Mezhregionteploenergo JSC.
2007 – 2012: General Director, Gazpromenergo LLC.
2008 – 2011: General Director, Chairman of the Board, OGK-6 JSC.
2010 – 2012: General Director, Chairman of the Board, OGK-2 JSC.
2012: General Director, Sevinvest LLC.
Holds no shares of TGC-1 JSC.

Andrey Filippov, Member of the Board of Directors

Born in 1959. In 1981, graduated from the Leningrad Higher Naval Engineering School majoring as a military mechanical engineer for power installations; in 2002, graduated from the Ustinov Saint Petersburg Baltic State Technical University majoring in management.
1999 – 2005: held management positions at Lenenergo JSC.
2005: Head of the Nevsky Branch of TGC-1 JSC.
2006 – 2007: Deputy General Director, Peterburgteploenergo LLC.
2007 – 2009: Deputy General Director, Investment and Capital Construction, TGC-1 JSC.
2010 – 2011: Director for Capital Construction, TGC-1 JSC.
2011: General Director, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Committees of the Board of Directors

The objective of the Committee's activity is to ensure efficient operation of the Board of Directors in solving issues referred to its competence. At present, there are four committees of the TGC-1 Board of Directors:

Audit Commission

The major objectives of the Company's Audit Commission are as follows:

Company's financial and economic activities, decrease in financial and operational risks, and improvement of the internal inspection system.

Management Board

The Management Board is a collegial executive body of TGC-1, which manages the Company's current operations within the framework of the competence set forth in TGC-1's Articles of Association. The General Director shall be the sole executive body of the Compnay.

On 22 April 2011, the TGC-1 Board of Directors elected Andrey Filippov to the position of the General Director and Chairman of the Management Board.

Members of the Management Board as of 31 December 2012:

Andrey Filippov (Chairman of the Management Board)

Born in 1959. In 1981, graduated from the Leningrad Higher Naval Engineering School majoring as a military mechanical engineer for power installations; in 2002, graduated from the Ustinov Saint Petersburg Baltic State Technical University majoring in management.
1999 – 2005: held management positions at Lenenergo JSC.
2005: Head of the Nevsky Branch of TGC-1 JSC.
2006 – 2007: Deputy General Director, Peterburgteploenergo LLC.
2007 – 2009: Deputy General Director, Investment and Capital Construction, TGC-1 JSC.
2010 – 2011: Director for Capital Construction, TGC-1 JSC.
2011: General Director, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Sergey Laputko

Born in 1948. Graduated from Leningrad Technology Institute of Pulp and Paper Industry.
2000 – 2005: First Deputy General Director – Chief Engineer; Chief Engineer, Lenenergo JSC.
2005 – 2007: Chief Engineer, TGC-1 JSC.
Since 2007: First Deputy General Director for Engineering Policy – Chief Engineer, TGC-1; Deputy General Director – Chief Engineer of TGC-1, Director of the Nevsky Branch.
Holds 0.000005 % of the shares of TGC-1 JSC.

Mikhail Tuznikov

Born in 1961. In 1985, graduated from Kalinin Leningrad Polytechnical Institute and Saint Petersburg State University in 2004.
2007 – 2012: Director, production center of SevZapVNIPIenergoprom – SevZapEnergomontazhproekt.
Since 2012: Director for Economy and Finance, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Sergey Redkin

Born in 1977. Graduated from Saint Petersburg State University of Technology.
2006 – 2008: Head, Development Department, RAO UES of Russia.
2008 – 2009: Project Director, SPb Upravcom LLC.
Since 2009: Deputy General Director for Development, TGC-1 JSC; Director for Development, TGC-1; Director for Marketing and Sales, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Alexander Antipov

Born in 1953. Graduated from Leningrad Polytechnic Institute.
2005 – 2007: Director of Kolsky Branch, TGC-1 JSC.
Since 2007: First Deputy General Director – Director of the Kolsky Branch, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Raisa Stanishevskaya

Born in 1959. Graduated from Leningrad Institute of Soviet Trade.
1994 – 2005: Senior Specialist of the Methodological Group of Accounting Department; Deputy Chief Accountant; Head of the Consolidated Reporting Department of the Directorate for Economy, Finance and Accounting – Deputy Chief Accountant; Deputy Director – Head of the Audit Office, Audit and Economic Security Department, Lenenergo JSC.
Since 2005: Chief Accountant, TGC-1 JSC.
Holds 0.0000001 % of the shares of TGC-1 JSC.

Yury Marakin

Born in 1960. Graduated from Kaliningrad Higher Naval School.
2008 – 2009: Head, Business Development Department, SOLLERS JSC.
2009 – 2010: Head, Business Development Department, Zavolzhsky Motorny Zavod JSC.
2010 – 2012: Deputy General Director, Security, Moscow United Electric Network Company.
Since 2012: Director for Corporate Security, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Valery Belov

Born in 1972. Graduated from Saint Petersburg State Technology University.
2004: First Deputy Chief Engineer, Karelenergo JSC.
2005: First Deputy General Director – Chief Engineer, Karelenergogeneration JSC.
2005 – 2007: Director of the Karelsky Branch, TGC-1 JSC.
Since 2007: First Deputy General Director – Director of the Karelsky Branch, TGC-1 JSC.
Holds 0.00000002 % of the shares of TGC-1 JSC.

Andrey Sokolov

Born in 1963. Graduated from Leningrad State University.
2005: Deputy General Director for Repairs and Capital Construction, Lenenergo JSC.
2005 – 2008: Deputy Head of the Equipment Supply Department, Head of the Department for Fuel Supplies and Procurement, TGC-1 JSC.
Since 2008: Deputy General Director for Procurement and Logistics, TGC-1 JSC; Director for Logistics, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Vadim Vederchik

Born in 1979. Graduated from the Saint Petersburg State Polytechnical University.
2005 – 2011: held management positions at TGC-1 JSC: Deputy Department Head, Operations and Electric Department, Vyborgskaya CHPP; Deputy Head, Technical Policy and Development Section, Production Planning and Technical Development Department; Head, Technical Policy and Development Section, Perspective Planning and Technical Development Department; Deputy Head, Perspective Planning and Technical Development Department; Deputy Head, Investment and Capital Construction Department; Head, Capital Construction Project Implementation Department.
Since 2011: Director for Capital Construction, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Eduard Lisitsky

Born in 1973. Graduated from Saint Petersburg State Technical University.
2005 – 2010: Head of Production Planning and Technical Development Department, Head of Perspective Planning and Technical Development Department, Head of Investment and Capital Construction Department, Head of Investment Department, TGC-1 JSC.
2010 – 2012: Director of Pravoberezhnaya CHPP, TGC-1 JSC.
Since 2012: Director for Business Development, TGC-1 JSC.
Holds no shares of TGC-1 JSC.

Management changes that took place in 2013

Since 22.04.2013, Sergey Kruglyakov has been appointed Director of Marketing and Sales and was elected member of TGC-1 Management in connection with Sergey Redkin move to a new job.

Sergey Kruglyakov

Born in 1979. Graduated Murmansk State Technical University specialising in finance and credit.
2001 – 2005: held various positions at the Murmansk branch of MENATEP SPb Bank JSC.
2005 – 2010: Deputy Director of Economy and Finance of the Kolsky branch, TGC-1 JSC.
2010 – September 2012: Director of Economy and Finance of the Kolsky branch, TGC-1 JSC.
September 2012 – April 2013: Head of Finance Department, TGC-1 JSC.
Since April 2013: Director for Marketing and Sales, TGC-1 JSC.

Information on Remuneration and Compensation to the Members of the Board of Directors, the Members of the Management Board, and the General Director of TGC-1 JSC (Executive Staff)

In 2012, the Company paid short-term remuneration in money (wages, bonuses, and fringe benefits) to the executive staff for a total amount of RUR 110,947 thousand (in 2011, RUR 130,666 thousand). The sum includes the individual income tax and social charges. No long-term remuneration or loans were granted to the Members of the Board of Directors and Management Board.


Subsidiaries and Affiliates of TGC-1



Murmanskaya CHPP

At present, the Murmanskaya CHPP consists of a combined heat and power plant and two boiler facilities with 1,111 GCal/h installed heat capacity and 12 MW installed electric capacity. The total length of heat network calculated as a single-pipe is 103.5 km.

TGC-1 owns 95.03 % of ordinary shares of the Murmanskaya CHPP, and the share of TGC-1 in the charter capital of the Murmanskaya CHPP is 90.34 %.

In order to optimize the costs of the Murmanskaya CHPP, the Board of Directors of the Murmanskaya CHPP decided on 3 June 2011 to establish Kola Heating Company LLC with 100 % participation of the Murmanskaya CHPP in its capital. Kola Heating Company was registered on 17 June 2011.

On 16 September 2011, the property of the Murmanskaya CHPP, which is used for heat generation (electric boiler houses and heating grids located in Murmashi settlement and Verkhnetulomsky settlement), was transferred as a contribution to the authorized capital of Kola Heating Company. The transfer of this property by the Murmanskaya CHPP enabled its separation from fuel oil facilities. On 27 April 2012, 100 % of the shares of Kola Heating Company were sold to a third party.


Hibiny Heat Company

Hibiny Heat Company was established in order to act as a customer in implementation of the investment project "Renovation of the Apatitskaya CHPP and construction of the heating mains till the city of Kirovsk with installation of a central transformer station", which included commissioning and operation of the heating mains. The founders of Hibiny Heat Company are TGC-1 JSC and Apatit JSC with equal shares.

In 2012, construction of the heating mains that started in 2011 was continued. Reconstruction of the Apatitskaya CHPP of the Kolsky Branch is progressing, having started at the same time as the construction of the heating mains. At present, the scope of work for reconstruction of the Apatitskaya CHPP is more than 90 % complete and it is planned to finish the project in 2013.

On 22 August 2011, FFMS of Russia registered an additional securities issue of HHC in the amount of 800 million shares with a nominal value of 1 ruble each, to be placed by closed subscription. From February to May 2012, TGC-1 paid an additional contribution to the authorized capital of HHC amounting to RUR 400 million, following which the share of TGC-1 remained unchanged because Apatit JSC paid an equivalent contribution. On 2 August 2012, FFMS of Russia registered the report on the results of the additional securities issue of HHC.


St. Petersburg Heating Grid

Creation of St. Petersburg Heating Grid was provided for under a tripartite agreement among the Administration of Saint Petersburg, TGC - 1, and GUP TEC of St. Petersburg to unify the heating grids within the territory of TGC-1 CHPPs.

The operations of Saint Petersburg Heating Grid began on 1 May 1 2010. Agency sales of heat in the areas of heat supply by TGC-1 CHPPs under the right of lease of TGC-1's heating mains and local grids of GUP TEC Saint Petersburg began on 1 July 1 2010.

In December 2010, FFMS of Russia registered an additional issue of shares of Saint Petersburg Heating Grid, to which TGC-1 and GUP TEC St. Petersburg subscribed. On 31 December 2010, TGC-1 and Saint Petersburg Heating Grid entered into contract for the purchase by TGC-1 of ordinary shares in Saint Petersburg Heating Grid, with payment by property accounted on the balance of the Heating Grid enterprise of the Nevsky branch of TGC-1.

The securities placement was completed in December 2011, and the report on the results of an additional issue of Saint Petersburg Heating Grid shares was approved. The Company placed additional ordinary registered shares totalling 31,304,269,380 shares. As a result of the placement, the structure of the authorized capital of Saint Petersburg Heating Grid has changed: TGC-1 owns 74.9997 %, GUP TEC St. Petersburg 25.0003 % of the Company's issued shares. In January 2012, FFMS of Russia registered the report on the results of the additional issue of shares. As a result of the issue, the authorized capital of the Company increased more than 1,000 times and amounted to RUR 31,334 million.


TGC-1-Service

In 2012, in order to optimize and improve the quality of repair works at electric power plants, TGC-1 JSC in cooperation with Electrocentromontage JSC established a specialized repair company – TGC-1-Service LLC. The new company will provide repair of the main and auxiliary equipment of CHPPs and HPPs of TGC-1 and other power companies in the North-Western Region, and render services for commissioning and diagnostics of the equipment, retrofit and renovation of the energy industry facilities. The share of TGC-1 in the charter capital of TGC-1-Service is 26 %.