OREANDA-NEWS. May 13, 2011. Federal Grid Company of Unified Energy System (“Federal Grid Company” or the “Company”) (ticker MICEX, LSE: FEES) released its financial results for 1Q 2011 in accordance with Russian Accounting Standards.

The published results do not include the accounting results of Federal. Grid Company’s subsidiaries

and dependent companies, which act as independent legal entities.

Q1 2011 Highlights

Financials:

— Revenues – RUB 36,590 mln (plus32.5% y-o-y)

— EBITDA – RUB 29,918 mln (plus58.9% y-o-y)

— Profit before taxes – RUB 21,774 mln (plus25.1% y-o-y)

— Operating profit – RUB 19,031 mln (plus74.2% y-o-y)

— Net profit – RUB 17,193 mln (plus19.9 % y-o-y)

Corporate Developments:

— 3 May 2011: Federal Grid Company published its Group IFRS 2010 results

— 29 April 2011: The Company’s Board of Directors approved a decision to place a series

of bond issues for a total sum not to exceed RUB 125 bln

— 13 April 2011: The Federal Tariff Service defined new RAB-regulation parameters

for Federal Grid Company for 2011-2014 with the application of tariff smoothing methodology

— 28 March 2011: Trading of the Company’s DRs started on the London Stock Exchang

— 23 March 2011: The Company’s Extraordinary General Meeting of Shareholders approved an interested party transaction between Federal Grid Company and INTER RAO UES to acquire under placement additional shares of INTER RAO UES in exchange for shares of generating companies owned by the Federal Grid Company.

The Company’s Q1 2011 revenues increased by RUB 8,968 mln (plus32.5% compared with Q1 2010) and totaled RUB 36,590 mln. This increase can be attributed to growth in services rendered for technological connections to the Unified National Electric Grid (UNEG) and electricity transmission services.

For the reporting period, expenses, including administrative costs, increased by RUB 1,359 mln

(plus7.7% y-o-y) and totaled RUB 19,052 mln. This was due to the growth in depreciation for newly commissioned facilities.

EBITDA increased by 58.9 % compared with Q1 2010 and reached RUB 29,918 mln. The key EBITDA growth drivers were growth in profit and depreciation.

Other Q1 2011 incomes increased by RUB 80,811 mln compared with Q1 2010 (plus293.6%) and reached RUB 108,337 mln. This increase was principally the result of realizing a transaction in which shares of generating companies were exchanged for shares of INTER RAO UES.

Other Q1 2011 expenses increased by RUB 84,682 mln (plus413.1%) and totaled RUB 105,182. This increase was principally the result of realizing a transaction in which shares of generating companies were exchanged for shares of INTER RAO UES.

Net profit for 1Q 2011 totaled RUB 17,193 mln. The increase by 19.9% compared to 1Q 2010 was primarily due to higher income from current activity and implementation of Cost efficiency program

Assets

Total assets in Q1 2011 increased by RUB 24,383 mln (plus2.7%), and as of the end of Q1 2011 reached RUB 926,493 mln, including: non-current assets of RUB 794,136 mln and current assets of RUR 132,357 mln.

During Q1 2011 non-current assets increased by RUB 26,984 mln (plus3.5%), primarily due to the growth in uncompleted construction and advance payments distributed under non-current assets under the realization of the corporate investment program.

The Company’s current assets decreased by RUB 2,601 mln (-1.9%), which was caused by a decline in accounts receivables.

In Q1 2011, the Company’s equity increased by RUB 28,386 mln (plus3.6%). This increase can be attributed to an increase in un-distributed net profit and also due to charter capital growth (namely, the registration of the additional share issue in 2010).

As of March 31st, 2011, the Company’s long-term liabilities (credits and loans) reached RUB 50,000 mln.

As of March 31st, 2011, the Company’s short-term liabilities decreased by RUB 4,456 mln (-8.1%). Major factors behind this decrease include: the Q1 2011 registration of the 2010 additional issue (RUB 11,193 mln) and the transfer of debts before participants from accounts payable in charter capital, as well as growth in accounts payable for suppliers and contractors (under Investment Program realization) and growth in debts on taxes and fees (profit tax).

Andrey Kazachenkov, CFO comments Q1 2011 financial results:

We improved our financial performance in 1Q 2011, generating RUB 29,918 million of EBITDA

(58.9% y-o-y growth) and RUB 17,193 million of net profit. These strong results demonstrate that Federal Grid Company continues to deliver its long-term strategy of combining the overall objective of playing its vital role of maintaining the stability of the Russian energy system with delivering value to our investors and shareholders and achievement of high level liquidity and financial stability.