The Company’s corporate management system has a well-developed structure with a seamless mechanism of interactions between management and control bodies.

Organizational Structure of the Company’s Management Bodies

The Company's highest management body is the General Meeting of Shareholders. The Board of Directors sets the overall direction of corporate development and supervises the operations of the Company’s Management Board, which carries out the Company’s operational management. The Chairman of the Management Board is the Chief Executive Officer (CEO) of the Company. Under the Board of Directors, there are committees aiming to improve the effectiveness and quality of the Board of Directors. The Company employs an efficient control system, both externally by shareholders (the Independent Auditor and the Audit Commission) and internally (special-purpose bodies for internal audit and control).

General Meeting of Shareholders

Each common share grants shareholder the same scope of rights in accordance with current legislation.

A shareholder is entitled to:

1. Participate personally or through his/her representatives in the General Meeting of Shareholders with the right to vote on all issues within his/her competence;
2. Make proposals for the agenda of the General Meeting of Shareholders in accordance with existing Russian legislation and the Company’s Charter;
3. Receive information on the Company’s operations and to examine documents in accordance with Article 91 of the Russian Federal Law "On Joint Stock Companies";
4. Receive dividends declared by the Company;
5. Engage in the pre-emptive purchase of additional shares and equity securities placed by open subscription convertible into shares in a quantity that is proportional to the number of owned shares of this category (type);
6. Receive a part of the Company’s property in case of its liquidation;
7. Carry out other rights as stipulated by Russian legislation.

Shareholder(s) owning at least 2 percent of the voting shares of the Company shall be entitled to propose issues to the agenda of the annual General Meeting of Shareholders and nominate candidates to the Board of Directors, the Audit Commission, and a candidate for the position of the sole executive body of the Company (CEO). Submission of proposals to the agenda of the annual General Meeting of Shareholders must be received by the Company not later than 90 days after 31 December of the previous year.

Shareholder(s) owning at least 10 percent of voting shares, may call for the mandatory convening of an Extraordinary General Meeting of Shareholders.

In 2012, the Company held one General Meeting of Shareholders. The Annual General Meeting of Shareholders on 29 June approved the 2011 annual report and financial statement, also approved a new version of the Regulations on the Audit Commission and the Regulations on the payment of remuneration and compensation to the Board of Directors, as well as elected the Board of Directors and the Audit Commission, approved the Company’s Auditor, and approved an interested party transaction. Also, the shareholders decided not to pay dividends on common shares for 2011, since based on results of the reporting period the Company incurred a loss.

The Board of Directors

The Board of Directors carries out General Governance of the Company except for issues that fall under the competency of the General Meeting of Shareholders according to either the Federal Law “On Joint Stock Companies” or the Charter of Federal Grid Company to the competency of the General Meeting of Shareholders. In its operations, the Board of Directors is guided by the Federal Law “On Joint Stock Companies”, Russian legislation and internal corporate documents.

The Board of Directors shall be elected by the General Meeting of Shareholders via cumulative voting for a period of one year. The Board shall include 11 members, 6 of whom should be representatives of the State according to the Company's Charter. The Company's Charter stipulates compulsory membership of representatives of the Market Council, a non-profit organization incorporated as a non-profit partnership unifying electric power industry entities and large electric and thermal energy consumers on a membership basis.

Four independent directors are elected to the Board of Directors to ensure an unbiased decision-making process and to maintain balanced interests for different shareholder groups.

Composition of the Board of Directors acting from 29 June 2011 to 29 June 2012 (positions are indicated as of the election date):

1. Ernesto Ferlenghi - Chairman of the Board of Directors;
2. Andrey Malyshev - Deputy Chairman of the Board of Directors;
3. Boris Ayuev;
4. Oleg Budargin;
5. Alexey Makarov;
6. Kirill Lyovin;
7. Dmitry Ponomarev;
8. Yuri Solovyev – Independent Director;
9. Denis Fedorov;
10. Igor Khvalin – Independent Director;
11. Rashid Sharipov – Independent Director.

Composition of the Board of Directors acting from 29 June 2012 (positions are indicated as of the election date):

Board of Directors Activities

In 2012, the Board of Directors held 34 meetings, 6 of which were held in the form of joint attendance, and made resolutions on 148 issues.The Board of Directors considered and approved long-term corporate development programs, including:

1. The non-core Asset Management Program;
2. The Innovative Development Program;
3. The Insurance Protection Program;
4. The 2012 Cost Management Program and Forecast Activities for 2013-2014;
5. Regulations on the Internal Control System;
6. Regulations on the Energy Policy;
7. Anti-corruption Policy;
8. Regulations on the Unified Technical Policy in the Electric Grid Complex of the Russian Federation;
9. New Corporate Governance Code;
10. Regulations on the Procedures for Procuring Goods, Work and Services for the Needs of JSC Federal Grid Company.

The Board of Directors made the following decisions: on the establishment of a branch of Federal Grid Company (Center of Technical Supervision) and on the adjustment of the 2012 Investment Program of Federal Grid Company.

Structure of Issues Addressed at 2012 Board of Directors Meetings

Committees of the Board of Directors

The Committees’ activities aim to boost the performance of the Board of Directors by preliminarily examining the most important issues falling under the competence of the Board of Directors and developing recommendations on such issues.

Four Committees of the Board of Directors operated in 2012:

1. The Strategy Committee;
2. The Investment Committee;
3. The Audit Committee;
4. The HR and Remuneration Committee.

The activities of all Committees shall be governed by relevant Provisions on the Committees that define the composition, competence and operational procedures, as well as the rights and obligations of members of the Committees.

The Strategy Committee

The functions of the Committee include addressing and making recommendations to the Board of Directors on issues related to the development of Russia’s Unified Energy System.

Состав Комитета

1. Vyacheslav Kravchenko
   — Independent Director
   — Chairman of the Committee, member of the Board of Directors of JSC Federal Grid Company;
   — Chairman of the Management Board, member of the Supervisory Board of the Non-Profit Partnership Market Council.
2. Andrey Malyshev
   — Deputy Chairman of the Board of Directors of JSC Federal Grid Company;
   — President, member of the Board of Directors of JSC GROUP E4.
3. Roman Berdnikov
   — First Deputy Chairman of the Management Board of JSC Federal Grid Company.
4. Sergey Vasilyev
   — Director of the Department of Electric Power Industry Development for the Russian Ministry of Energy.
5. Anatoly Dyakov
   — President of the Unified Energy Complex of the Russian Corporation and the Non-Profit Partnership Scientific and Technical Council of UES.
6. Igor Kozhukhovsky
   — General Director of CJSC APBE.
7. Evgeny Miroshnichnko
   — Director of Strategic Development of the Strategy and Investment Alliance of JSC Inter RAO UES.
8. Andrey Naryshkin
   — Deputy Chief of Staff of the Chairman of the Board of Directors of JSC Federal Grid Company.
9. Alexey Sukhov
   — Deputy Chairman of the Management Board of JSC ATS.
10. Alexander Rogov
    — Head of the Energy Sector Development Department at the Energy Sector and Energy Marketing Development Division of JSC Gazprom.
11. Vladimir Fortov
    — Member of the Presidium of the Russian Academy of Sciences (RAS).
12. Igor Khvalin
    — Deputy Strategy Executive Director of JSC Holding of the Inter-regional Distribution Grid Companies.
13. Nikolay Shulginov
    — First Deputy Chairman of the Management Board of JSC SO UES.

The Committee’s 2012 Activities

The Investment Committee

The Committee is responsible for reviewing and submitting to the Board of Directors recommendations on the Company’s investment policy and advising the Board of Directors on any investment risks.

Composition of the Committee:

1. Andrey Malyshev
   — Chairman of the Committee;
   — Deputy Chairman of the Board of Directors of JSC Federal Grid Company;
   — President, member of the Board of Directors of JSC GROUP E4.
2. Alexander Ilyenko
   — Director for UES Asset Management of SO UES.
3. Roman Berdnikov
   — First Deputy Chairman of the Management Board of JSC Federal Grid Company.
4. Andrey Mourov
   — First Deputy Chairman of the Management Board of JSC Federal Grid Company.
5. Valery Goncharov
   — Deputy Chairman of the Management Board of JSC Federal Grid Company.
6. Sergey Vasilyev
   — Director of the Department of Electric Power Industry Development for the Russian Ministry of Energy.
7. Vyacheslav Kravchenko
   — Independent Director
   — Member of the Board of Directors of JSC Federal Grid Company;
   — Chairman of the Management Board, member of the Supervisory Board of the Non-Profit Partnership Market Council.
8. Ilnar Mirsiyapov
   —Member of the Management Board, Head of Strategy and Investment Alliance of JSC Inter RAO UES.
9. Andrey Naryshkin
   — Deputy Chief of Staff of the Chairman of the Board of Directors of JSC Federal Grid Company.
10. Alexander Rogov
    — Head of the Energy Sector Development Department at the Energy Sector and Energy Marketing Development Division of JSC Gazprom.
11. Sergey Serebrennikov
    — Rector of the State Education Institution of Higher Professional Education MPEI (TU).
12. Vladimir Fortov
    — Member of the Presidium of the Russian Academy of Sciences (RAS).

The Committee’s 2012 Activities

The Audit Committee

The Committee is responsible for preparing recommendations to the Board of Directors on selecting an independent audit organization and on upgrading the Company’s reporting system and internal control.

Composition of the Committee:

1. Rashid Sharipov
   — Independent Director
   — Chairman of the Committee;
   — Member of the Board of Directors of JSC Federal Grid Company;
   — Deputy General Director of LLC KFK – Consult.
2. Vladimir Rashevsky
   — Independent Director
   — Member of the Board of Directors of JSC Federal Grid Company;
   — General Director, Chairman of the Management Board of JSC Siberian Coal Energy Company.
3. Elena Titova
   — Independent Director
   — Member of the Board of Directors of JSC Federal Grid Company;
   — President, Chairman of the Management Board of JSC All-Russian Regional Development Bank.
4. Denis Fedorov
   — Member of the Board of Directors of JSC Federal Grid Company;
   — Head of a Division of JSC Gazprom;
   — General Director of LLC Gazpromenergoholding;
   — General Director of JSC Tsentrenergoholding.
5. Ilya Scherbovich
   — Independent Director;
   — Member of the Board of Directors of JSC Federal Grid Company;
   — President of LLC United Capital Partners Advisory;
   — President of the United Capital Partners (UCP) Group of Companies.

The Committee’s 2012 Activities

The HR and Remuneration Committee

The HR and Remuneration Committee is in charge of preparing recommendations to the Board of Directors related to remuneration and incentive schemes for the Company’s and the Audit Commission’s top executives, and for outlining candidate selection criteria for the Company’s management bodies.

Composition of the Committee:

1. Denis Fedorov
   — Chairman of the Committee;
   — Member of the Board of Directors of JSC Federal Grid Company;
   — Head of a Division of JSC Gazprom;
   — General Director of LLC Gazpromenergoholding;
   — General Director of JSC Tsentrenergoholding.
2. Elena Titova
   — Independent Director;
   — Member of the Board of Directors of JSC Federal Grid Company;
   — President, Chairman of the Management Board of JSC All-Russian Regional Development Bank.
3. Ilya Scherbovich
   — Independent Director;
   — Member of the Board of Directors of JSC Federal Grid Company;
   — President of LLC United Capital Partners Advisory;
   — President of the United Capital Partners (UCP) Group of Companies.

The Committee’s 2012 Activities

Board of Directors’ Members Attendance at 2012 Meetings of the Board of Directors and Its Committees

The Management Board

Day-to-day operations of the Company are managed by the Chairman of the Management Board and by the Management Board, which are accountable to the General Shareholders Meeting and to the Board of Directors. In its own operations, the Management Board is governed by the Federal Law “On Joint Stock Companies”, Russian legislation and other internal corporate documents.

The Chairman of the Management Board is the Chief Executive Officer (CEO).

Information on the Management Board’s Compositions in 2012

The Management Board composition below is effective from 1 January 2012 till 11 September 2012:

1. Oleg Budargin – Chairman of the Management Board;
2. Roman Berdnikov;
3. Andrey Cherezov;
4. Valery Chistyakov;
5. Dmitry Gourevich;
6. Andrey Kazachenkov;
7. Yuri Mangarov;
8. Samuil Zilberman;
9. Evgeny Zhuykov.

Changes in the Management Board as of 11 September 2012 (Board of Directors’ Meeting Minutes #172):

1. A Resolution of the Board of Directors terminated the authorities of: Evgeny Zhuykov, Samuil Zilberman and Dmitry Gourevich;
2. A Resolution of the Board of Directors appointed: Andrey Mourov (First Deputy Chairman of the Management Board), Sergey Sergeyev (Deputy Chairman of the Management Board), Vladimir Shukshin (Deputy Chairman of the Management Board) and Nikolay Varlamov (Deputy Chairman of the Management Board) as members of the Management Board.

The below Management Board Composition is effective from 11 September 2012 till 20 October 2012:

1. Oleg Budargin – Chairman of the Management Board;
2. Roman Berdnikov;
3. Andrey Cherezov;
4. Valery Chistyakov;
5. Andrey Kazachenkov;
6. Andrey Mourov;
7. Yuri Mangarov;
8. Sergey Sergeyev;
9. Vladimir Shukshin;
10. Nikolay Varlamov.

Changes in the Management Board as of 20 October 2012:

1. n accordance with the Russian Federal law “On Joint Stock Companies” and the Charter of JSC Federal Grid Company, due to expiration of the employment contract, the authority of Valery Chistyakov was terminated as of 20 October 2012.

Management Board Composition, effective from 20 October 2012 onwards

Information on transactions with the Company’s shares as carried out by members of management bodies in 2012