Dear shareholders!

V.N.Rodin

The Chairperson of the Board of Directors

 Our Company has finalized another year of operations. Recent economic fluctuations have challenged Russian economy and its sectors. New macroeconomic environment formulated arduous tasks for utilities but we are confident to state that the Company has accomplished all the plans.

Just as in previous years, Interregional Distributive Grid Company of Urals has demonstrated its outstanding performance and we confirmed our dominating positions at the Urals and Kama energy markets. Our 2014 large net profit and capexCapital Expenditures serve as a perfect illustration of our successful efforts.

Under a severe environment the company was still able to avoid recession in operations and end the year in the black on all key performance indicators. This helps us state that we have chosen rational directions of growth and development priorities. Our solutions, interwoven with our efforts, have laid the groundwork for a success next year that will likely be one of the most complicated years in the history of national power grids. The Company’s Board of Directors and Management Board intend to retain economic resilience, successful performance and corporate citizenship to the benefit of the shareholders and customers.

Our 2014 net profit exceeded RURRussian ruble 2 blnBillion demonstrating a colossal boost on 2013. Investments into reconstruction and upgrade of the regional power grids exceeded RURRussian ruble 7.3 blnBillion. This became possible due to successful and efficient efforts of the Company’s senior managers and personnel. IDGCInterregional Distributive Grid Company of Urals continued to increase its efficiency retaining its strong operating performance by reducing equipment faults, executing repair and exploitation programs in full as well as by connecting consumers to the networks.

The year saw a number of projects working for one strategic goal related to increased access of customers to power grid infrastructure, evolution of customer relations, grid facility reconstruction and construction. In 2014 the Company has accomplished several important regional investment projects crucial for the boost of the Urals economy and its potential. In the Perm region we have built 110/10-kVKilovolt Kochkino substation with 32 MW of output under our agreement with the regional government. The project shows that our commitments to the regional authorities are fulfilled. In the Middle Urals we have completed a large-scale project – 110/10 kVKilovolt Titan substation – that will serve as a power station for enterprises residing at Titan Valley, an exclusive economic zone located in the Middle Urals. It was the first infrastructure facility of the innovative cluster to trigger its growth and development.

Reliability of operations of the power grids in our service area and network development are an important task the Company successfully copes with. Overall capacity of facilities connected to our grids in 2014 exceeded 950 MW. Professionals from our branches have connected over 34.6 thous.Thousand new consumers, their liabilities under the contracts discharged in full. Our competent cooperation with the regional authorities, public organizations and entrepreneurship has facilitated considerable progress in increased connection transparency and improved investment climate all over the service area.

IDGCInterregional Distributive Grid Company of Urals has already implemented a package of measures as a preparation for further operations in severe conditions. In particular, this entails measures covering several directions: increase of production efficiency, modification of the technical policy in terms of import substitution, enhancement of labor productivity, outlining and development of new businesses. All these measures are focused primarily on full optimization of resources due to accurate planning of current demands and full control over resource consumption.

The Company’s current and future achievements are based on a brilliant team of real professionals, fully aware of immense responsibility imposed on the Company to provide reliable and trouble-free supply of the Urals and Kama residents.  

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