Effective investor communication channel

Effective investor communication channel

Federal Grid Company is a public company, one of the top blue chips of the Russian energy sector. Our IR Team maintains strong relationships with the investment community.

The key objectives of the IR Team are to raise awareness of the investment community and to provide effective interaction therewith in order to enhance investor confidence and increase demand for the Company’s shares.

We consider an active dialogue with the investment community to be important also for getting feedback from this audience, to understand how certain decisions may impact the investors’ assessment of the Company.

IR Events

In June 2015, as part of preparations for the Annual General Meeting of Shareholders, Federal Grid Company’s management held a meeting with a number of analysts from investment banks and brokerage companies covering the Russian electric energy sector. Following the meeting, the participants agreed to maintain an active dialogue enabling investors to receive all information on the Company’s activities and the Company to get feedback from the industry experts.

In 2015, Federal Grid’s management held a series of one-on-one meetings with investors and analysts from investment banks in line with the Company’s

Further information on the IR events can be found in section Shareholders and Investors / IR releases of our website www.fsk-ees.ru

During the reporting year, the Company’s IFRS financial results for 2014 were presented by the Head of the financial unit through the conference call. Following the publication of Federal Grid Company’s IFRS results for the first half of 2015, the Company’s management held a meeting with representatives of major investment banks and investment companies, thereby facilitating direct dialogue and providing participants with the opportunity to discuss their questions directly with top management of the Company.

In December 2015, the Chairman of the Management Board of Federal Grid Company, Andrey Murov, together with the Company’s key unit heads, held a business breakfast with the analysts and investment community representatives to discuss the Company’s performance in 2015, as well as mid-term plans. There was a third meeting held in such format.

The list of investment analysts monitoring the Company’s performance is available in section Shareholders and Investors / Analysts Coverage of our website www.fsk-ees.ru

Q&A Session Some of the typical questions received from investors and answers thereto

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What is the impact of the Russian rouble exchange rate volatility and a rise in interest rates on the Federal Grid’s financial performance?

The current economic situation in Russia is characterised by stable high volatility in foreign currency exchange rates. Besides, there are restrictions of access to foreign financial markets. All this, of course, has an impact on the operations of our Company, however this is not significant, and the financial position of Federal Grid is stable. The main impact of changes in exchange rates led to increased costs for services on electricity transit through foreign energy systems, which involve settlements in foreign currency, as well as increased cost of purchased imported equipment.

What are the forecasts for the Federal Grid’s operating costs in 2016?

In accordance with the Directive of the RF Government No. 2303p-P13 dated 16 April 2015, our Company strives to reduce operating costs by at least 2–3% annually. The Federal Grid’s Board of Directors approved the Methodology for Calculation and Evaluation of Key Performance Indicators for the Federal Grid’s Senior Management, including a target value for the reduction of unit operating expenses (costs) in 2015 by at least 14.2% compared to 2014. As of the end of the reporting year, we have managed to achieve reduction in specific operating costs by 24%

While implementing the task set by the Government of the Russian Federation, and in accordance with our business plan, by the end of 2016, we intend to reduce unit operating costs by at least 41% compared to 2012, and by 2020 – by 51.9%.

Investor Calendar is available and updated regularly on our website www.fsk-ees.ru in section Investor / Investor Calendar