IDGC of Centre Has Improved Its Corporate Governance Rating

The Consortium of Russian Institute of Directors and RA Expert Rating Agency (RID and RA Expert Consortium) has awarded IDGC of Centre, JSC with Level 7 of Corporate Governance Rating under the scale of the National Governance Rating.

Moscow, Russia, October 11, 2008 --( Improvement of the rating means that IDGC of Centre corporate governance risks are low, the company observes the requirements of the Russian legislation in the field of corporate governance and follows the recommendations of the Russian Corporate Governance Conduct Code and the recommendations of the international advanced corporate governance practice.

In 2007 IDGC of Centre received the Certificate of Level 6+ Corporate Governance Rating under the scale of the National Corporate Governance Rating.

"Since the moment of awarding the National Corporate Governance Rating in July 2007, the Company's corporate governance activities have undergone a number of changes connected with the introduction of major institutions in the field of protection of shareholders’ rights and activities of governance and control authorities," said Ekaterina Nikitchanova, Head of the Expert Centre of Russian Institute of Directors. "Thus, the Expert Centre estimates high IDGC of Centre corporate governance in the field of shareholders' rights protection."

Within this period the company completed the reform process that provided interregional integration of newly created enterprises after the division of the power companies by their business activities. The establishment of IDGC of Centre target structure was completed by the merger of IDGC of Centre and eleven distribution grid companies, that became its subsidiaries, and implementation of the uniform share.

IDGC of Centre is a public company: since 21 May, 2008, the Company's shares have been circulating on the JSC MICEX and JSC RTS stock exchanges.

As a result of the reform, the structure of the Company's share capital has changed significantly: minority shareholders appeared in it. At the present time the Company’s largest shareholder is IDGC Holding, JSC, that has a stake of 50.23% in the Company’s authorized capital.

The Consortium experts outlined the key positive features that influenced the rating level increase. Among them the fact that the proprietorship of the Company’s shares is registered by JSC Central Moscow Depositary independent registrar; IDGC of Centre selects its goods and services suppliers on the competitive basis; the company involves independent appraisers in other cases than those stipulated in the legislation. IDGC of Centre also implements procedures providing high independence of external auditors chosen on the basis of competitive selection.

The experts estimate high the structure and organization of work in IDGC of Centre governance and control bodies. The Consortium experts also noted that the Company’s Board of Directors provides balance of interests necessary for its independence from the top managers. Besides, presence of minority shareholders proves the company’s harmonious structure and functioning and consideration of the interests of all parties concerned. Moreover, the Company’s Board of Directors performs a number of key functions that guarantee the important role of the Board of Directors in the Company's corporate governance system.

The Company has a high level of corporate governance in the field of information disclosure. IDGC of Centre made a number of essential steps to provide transparency of its business activities and continuity of the practice in the future.

Corporate social responsibility practice and consideration of interests of other parties concerned was estimated as good.

For further improvement of its activities, the company is going to prepare social reporting and certify conformity of its environment protection activity to the ISO 14000 standard.

IDGC of Centre
Maxim Landa