JSC Rushydro ANNUAL REPORT 2014

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JSC Rushydro ANNUAL REPORT 2014 To effectively utilize hydro resources, to create the conditions required for the reliable performance of Russia’s Unified Energy System (UES) and to enhance renewable energy source (RES) usage to benefit the Company’s shareholders and society as a whole To be preliminary approved by a decision of the Board of Directors and approved by a decision of the Annual General Shareholders Meeting JSC RusHydro ANNUAL REPORT 2014 Location: 43 Dubrovinskogo Street, Bldg 1, Krasnoyarsk, the Krasnoyarsk Region, Russia, 660017 INN 2460066195 OGRN 1042401810494 Registration date: December 26th, 2004 The Zheleznodorozhsky Inspectorate of the Ministry of Taxation of the Russian Federation, Krasnoyarsk, the Krasnoyarsk Region 1 TABLE OF CONTENTS Responsibility Statement............................................................................................................................................. 5 About RusHydro.......................................................................................................................................................... 6 Business Model ......................................................................................................................................................... 7 RusHydro’s Achievements ........................................................................................................................................ 7 2014 Results .............................................................................................................................................................. 8 Geographic Footprint of the Company ................................................................................................................... 11 2012-2014 Key Corporate Financial and Operating Indicators ............................................................................ 12 Strategy ...................................................................................................................................................................... 14 Chairman’s Statement ............................................................................................................................................ 15 CEO’s Statement ..................................................................................................................................................... 17 Strategic Management System ................................................................................................................................ 18 TСО Companв’s DОvОlopmОnt StratОРв ............................................................................................................. 18 Mechanisms and Results of the Strategy Implementation ................................................................................. 19 TСО RusHвНro Group’s LonР-term Development Program ............................................................................... 19 Investment ............................................................................................................................................................... 26 Investment Policy Principles .............................................................................................................................. 26 2014 Investment Program .................................................................................................................................. 26 Key Investment Projects .................................................................................................................................... 30 2015 Investment Program .................................................................................................................................. 32 Innovative Development ......................................................................................................................................... 33 Innovative Development Program ..................................................................................................................... 33 Interaction with Higher Educational Institutions and Scientific Organizations ................................................. 35 2014 RusHydro Innovative Projects .................................................................................................................. 36 2015 Innovative Plans ........................................................................................................................................ 36 Financial Performance .............................................................................................................................................. 37 Assets, equity and liabilities ................................................................................................................................... 37 Liquidity and Debt Indices ...................................................................................................................................... 38 Revenue and expenses............................................................................................................................................. 41 Profitability indicators............................................................................................................................................ 43 Cash flow ................................................................................................................................................................ 44 DТstrТbutТon of tСО Companв’s nОt profТt ........................................................................................................... 45 Credit rating ....................................................................................................................................................... 45 KPI System .............................................................................................................................................................. 46 2014 KPIs of RusHydro ..................................................................................................................................... 46 Causes of Deviations of Achieved KPIs from Planned Indicators ..................................................................... 47 TСО KPIs of tСО RusHвНro Group’s LonР-term Development Program ............................................................ 47 RusHydro KPIs for 2015 ................................................................................................................................... 48 The Company on the Securities Market .................................................................................................................. 50 Authorized share capital .................................................................................................................................... 50 Circulation of Securities on the Russian Market ................................................................................................ 50 The Company Securities on the international securities markets ....................................................................... 52 Dividend policy .................................................................................................................................................. 54 Report on the payment of declared (accrued) dividends on the Company's shares for 2013 ............................. 54 Bonds ................................................................................................................................................................. 55 Business Overview ..................................................................................................................................................... 56 2 Competitors and Competitive Advantages .............................................................................................................. 56 Price Formation ..................................................................................................................................................... 59 2014 electricity and capacity market overview .................................................................................................. 59 Tariff Formation at RAO Energy System of East Group ................................................................................... 63 2015 Price and Consumption Forecast ............................................................................................................... 63 Total installed capacity and power generation both in Russia and globally ...................................................... 64 Performance Results ............................................................................................................................................... 66 Electricity and Capacity Sales............................................................................................................................ 68 Energy Efficiency .................................................................................................................................................... 70 International Activity .............................................................................................................................................. 72 Corporate Governance Report ................................................................................................................................. 75 Corporate Governance Compliance
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