ORDER CREATING ENERGY

Annual Report JSC Tyumenenergo 2012

JSC Tyumenenergo Annual Report for year 2012 was approved by JSC Tyumenenergo Board of Directors on May 27, 2013 and submitted for approval to JSC Tyumenenergo General Shareholders Meeting

P. A. Mikheev Director General JSC Tyumenenergo

T. I. Salo Chief Accountant JSC Tyumenenergo ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Table of Contents

Address from JSC Tyumenenergo Chairman of the Board Vladimir V. Tatsiy 4 № 05 COMPANY DEVELOPMENT 96 Address from JSC Tyumenenergo Director General Pavel A. Mikheev 6 5.1. Scientific, technological and innovation development 69 № 01 COMPANY PROFILE 14 5.2. Investment activities 74 5.3. Development of communication networks and information technologies 78 1.1. Key indicators for the recent five years 12 1.2. Company position in the industry and region 13 № 06 REPORT ON SOCIAL RESPONSIBILITY 120 1.3. Strategic development. Priority lines of business 13 1.4. Stages of Tyumenenergo reformation 18 6.1. Tyumenenergo Role in the Development of the Regions 83 1.5. History of Tyumen energy system 19 6.2. Cooperation with the Public Community and Authorities. Congress and Exhibition Activities 87 № 02 COMPANY MANAGEMENT 32 6.3. Environment Protection 90 6.4. Emergency Prevention 92 2.1. Internal control and risk management system 23 6.5. Health and Safety 94 2.2. Legal regulation 28 6.6. Human Resources Management 96 2.3. Customer-oriented approach 28 2.4. Quality policy 29 № 07 COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS 144 № 03 CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY 50 7.1. Company property status and financial sources analysis 105 7.2. Company financial performance analysis 108 3.1. Corporate management 35 7.3. Company financial and economic indicators 113 3.1.1. Principles of corporate management 35 7.4. Accounting statements for 2012 116 3.1.2. Information on material transactions 37 3.1.3. Management and control bodies of the Company 37 № 08 HELPFUL INFORMATION FOR SHAREHOLDERS 234 3.1.4. Subsidiaries and Associates 49 3.2. Securities, authorized capital and dividend history 51 Glossary 212 3.2.1. Authorized capital 51 3.2.2. Bonds 51 APPLICATION ON CD 3.2.3. Dividend history 52 1. The main events № 04 PRODUCTION ACTIVITY RESULTS 74 2. Legal regulation 3. Information on Company compliance with 4.1. Electrical energy transmission process arrangement 58 the recommendations of the Corporate Code of Conduct 4.1.1. Transmission facilities 58 4. Information about shares of JSC Tyumenenergo in authorized capitals 4.1.2. Company Income. Breakdown 58 and voting shares in other companies as of 31.12.2012 4.1.3. Proceeds for the Services Provided on Electrical Energy Transmission 58 5. Information about Company participation 4.1.4. Amount of the Electrical Energy Transmitted 59 in non-profit organizations as of 31.12.2012 4.1.5. Actual Losses of the Electrical Energy 59 6. Procurement Activities 4.1.6. Power Saving and Energy Efficiency Improvement 60 7. Repair Program Implementation 4.1.7. Mandatory Energy Audit 60 4.1.8. Consumption of Energy Resources for Production and Process Purposes 61 4.1.9. Tariff Formation. Tariff Breakdown 61 4.2. Organization of the Technological Connection Process 64 4.3. Organization of the Prospective Development Process 65 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Russian Federation enabled JSC Tyumenenergo to join tasks set by governmental policy related to the electric Address from JSC Tyumenenergo two decentralized power supply areas to the energy sys- energy industry and ensure effective work on the priority tem in the very first year of the program implementation lines determined by Power Grid Sector Development Chairman to delete them from the list of regions with high risk of Strategy. supply disconnection in future. In 2012, all the measures of the Board Vladimir V. Tatsiy were taken and technological connection completed un- Faithfully, der 3,481 contracts to the total power of about 550 MWt. Vladimir V. Tatsiy Due to the effective work on technological failure reduc- Chairman of the Board, JSC Tyumenenergo tion in the operation of transforming substations, high- First Vice-President, JSC Gazprombank voltage lines, distribution grids, and on improving power line lightning-surge proofness, compliance with repairs program items, and adhering to the equipment retrofit program, all the JSC Tyumenenergo divisions received certificates of readiness for operation in autumn and winter seasons in due time and completed the period free from any considerable technological failures. JSC Tyumenenergo maintains loss on grids value, which one of the key criteria of energy efficiency for distribution grid companies, at the optimal level of 2.5 %. This is the least figure among JSC IDGC Holding S&A*, comparable to similar figures of the leading West Europe grid com- panies. Company action plan aiming at cost reduction, including loss reduction, makes it possible to hold the low value almost unchanged for several years. In 2012 the Company kept up the winning trend. JSC Tyumen­energo once again gained the lead Rus- sian national professional skill contest held by JSC IDGC Holding with the maximum possible score. This is the evidence of competent HR and career guid- ance policy of the Company. Chairman of the Board, JSC Tyumenenergo High corporate management level is still the critical First Vice-President, JSC Gazprombank V. V. TATSIY competitive edge of the Company. Field specific commit- tees have been established for the elaboration and pre- liminary consideration of the key issues within the Board Dear Ladies and Gentlemen! of Directors competence and development of necessary recommendations. These are Reliability Committee, 2012 was a busy year for Russian electric energy indus- oil and gas bearing regions of the country, which are Committee for Technological Connection to Power Grids try. That year integration processes started in the nation the Khanty-Mansijsk Autonomous District (Yugra), the and Investments Committee. The committees comprise largest power grid companies JSC FGC of UES and Yamalo-Nenets Autonomous District and the Tyumen Board of Directors members and field experts who as- JSC IDGC Holding, which resulted in major restructuring Region. It’s hard to overestimate the importance of sist the Board in making informed on highly specialized of the company management and generally reviewing of reliable electric power supply for the industry which pro- topics. The Board of Directors met 16 times in 2012 to the Russian Federation entire power grid sector develop- duces 64 % of the total Russian oil and 92 % of the Rus- discuss key strategic issues related to Company develop- ment strategy. In pursuance of the Decree of Russian sian gas. In 2012, the Company successfully coped with ment. Stable operations of JSC Tyumenenergo rely upon Federation President Vladimir V. Putin No. 1567 of its primary task by ensuring continuous, reliable and the resolutions passed by Company Board of Directors November 22, 2012 and aiming at further development effective electricity supply to household consumers and and management, and the work performed during the of the Russian Federation power grid sector, coordina- strategic companies such as JSC Gazprom, JSC NK Ros- year. tion of the entire sector management, restraint on the neft, Lukoil – West Siberia Co. Ltd., JSC Surgutneftegaz Today, Russian electric energy industry, and in particu- tariff growth for electric energy end consumers, Russian and JSC Gazpromneft. Annual electric power transmis- lar JSC Tyumenenergo, are facing new challenges. We Grids joint stock company was established and power sion amounted to 69 bln kWh, and annual revenue was are to realize the shaped planes for Company facilities grid sector development strategy was suggested, to be 47 bln rubles. construction, commissioning and modernization, to followed by JSC Tyumenenergo in its long-term future The Company has set several priorities for the nearest continue improvement of the grid reliability, and to pro- activities. future. These are increasing Company operating effi- vide for further growth of the performance and finance Throughout the year, Company Board of Directors ciency, maintaining reliability and ensuring transparency indicators, all in the same round pace. endeavored to maintain interests of the shareholders, of the business. The Company has approved relevant I am sure that under the supervision of Russian Grids improve quality of Company management and satisfy- programs to reach the goals. JSC Tyumenenergo will achieve absolute solution of the ing the key performance indicators. Well-coordinated JSC Tyumenenergo regional presence has preserved and effective work of the shareholder representative and its important role in development. Company long-term ______Company management ensured strengthening of the investment program 2012–2017 elaborated by reference * Following the results of JSC IDGC Holding General Shareholder Meeting of 23.03.2012 the resolution was passed to change the Company name corporate spirit and financial stability in the Company. to the electric energy industry development schemes for JSC Rossiyskie Seti. JSC Tyumenenergo supplies electric energy to the main and programs of the three constituent entities of the

4 5 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

actions were developed that will help the Company to 80 km long Sergino – Punga 110kV OHL with extended Address from JSC Tyumenenergo Director save up to 150 mln rubles per year. Sergino 110 kV outdoor switchgear, and 55.6 km JSC Tyumenenergo continues bringing the idea of power long Igrim – Punga 110 kV OHL with Punga 110/6 kV General efficiency to consumers. In 2012 more than 30 thousand substation. These facilities were built and commissioned smart energy accounting meters were installed, another under the Khanty-Mansijsk Autonomous District (Yugra) Pavel A. Mikheev stage of the energy accounting system modernization program Centralized Electricity Supply for the Khanty- was completed. In order to educate consumers and Mansijsk Autonomous District (Yugra) Settlements for enhance client-centeredness, information campaign 2011–2013 in the Short-Term by 2015. Besides, 82 km was launched with regional mass media covering issues long Kirillovskaya-Tavricheskaya double-circuit 110 kV related to electric energy accounting automation and power line was commissioned in Surgutskiy District to modernization. considerably improve reliability of power supply to oil The Company protected its power facilities from production facilities and to provide connections for new outside interference by state-of-the-art devices. consumers. Khanty-Mansijsk, the new capital of Yugra, Security is known to be one of the most important received a 110/10 kV substation with the Code name factors for ensuring power supply reliability. With this ABZ, with a 110 kV feed line. Also, a power grid circle regard, measures were taken for further development will be built around the city for continuous power supply of JSC Tyumenenergo security systems, Emergency to its any district. Response Center was established for the coordination No doubt, the victory of JSC Tyumenenergo team in the of joint response by JSC Tyumenenergo, JSC FGC of UES Russian national professional skill contest is one of our branch MES of West Siberia, and JSC Engineering and major achievements in 2012. Leadership in professional Construction Management Center of UES branch ECMC contests is the evidence of Company staff qualification of West Siberia. and effective HR policy. JSC Tyumenenergo endeavors to preserve the status The operating results of 2012 prove the correctness of of environmentally responsible company. The Company JSC Tyumenenergo priorities. By pursuing the above uses state-of-the-art equipment and latest engineering trends JSC Tyumenenergo is expected to maintain its developments, however, even the most advanced status of the leader among distribution grid companies technologies require exploitation of natural resources in the region and to build up the image of the company and have impact on environment, although minor. crucial for the sustainable social and economic The primary task for Tyumenenergo environmental development of the Tyumen, Yugra and Yamal. policy is minimization of the permissible impact on JSC Tyumenenergo Director General environment. For the environmental friendly approach, Faithfully, P. A. MIKHEEV JSC Tyumenenergo was awarded with the title of Leader Pavel A. Mikheev of Nature Protection, Russia 2012. Director General Research was continued. One of the project JSC Tyumenenergo Dear Ladies and Gentlemen! In spite of the abnormally unfavorable atmospheric implemented by Bresler Research Center in cooperation conditions in the summer season, we did not do beyond with JSC Tyumenenergo, which is second to none It’s time to summarize Company activities in 2012 and the customer curtailment margin, and shortened in Russia, has been through all the development evaluate the main results, as well as to look into the emergency shutdown time as compared to previous and testing stages and is now ready for commercial near-term trends and prospects of JSC Tyumenenergo. year. Positive results have been achieved in reducing operation. Also, a cutting-edge integral production In 2012 JSC Tyumenenergo achieved good performance controllable causes accident rate, thus the number of safety system was ran up in Surgutskiy District in indicators in commissioning of new capacities and emergency shutdowns caused by tree falling on the January 2013. This is another genuine product of maintained high energy efficiency value. We have power lines reduces almost thrice as against 2011. JSC Tyumenenergo and Prosoft-Systems engineering realized some important investment and innovation The Company has maintained the safe production company. Company innovative activities were marked projects. JSC Tyumenenergo is developing in the tideway trend, for we didn’t have any reported occupational with the victory in Innovative Project of the Year of previously shaped trends in energy and resource injuries within the year. Due to the range of measures nomination of the Russian national contest Russian saving, innovativeness, safety, client-centeredness completed, we have not had any children injuries within Best Power Grid Company, and in the Project of the and providing for the sufficiency of regional energy JSC Tyumenenergo territory of responsibility for two Year nomination of the national award for achievements infrastructure. years already. in electric energy industry Golden Kilowatt 2012, and At the end of the year, we can state that JSC JSC Tyumenenergo successfully continues highly appreciated by III All-Russian youth scientific and Tyumenenergo has fulfilled its primary task and ensured implementation of the energy saving and power technical conference Power Industry Through the Eyes of reliable high-quality energy supply to consumers within efficiency improvement program. Thanks to the Youth held in Ekaterinburg. the Khanty-Mansijsk Autonomous District (Yugra), the program, in 2012 power loss on grids was reduced by By the end of the year, we achieved good results in Yamalo-Nenets Autonomous District and the Tyumen 38.1 mln kWh. In the end of the last year mandatory reliability improvement and power grid extension and Region. Electric power transmission amounted to 69 bln energy survey was completed on all JSC Tyumenenergo development. In 2012, the Company commissioned kWh. facilities, including buildings, transforming substations, 865 MVA of transformer capacity and about 716 km JSC Tyumenenergo maintains its status of an power lines, and Company energy passport was of power lines. In accordance with the investment economically and financially stable company. We have prepared, registered by self-regulated organization program, several power facilities were completed in managed to reduce the level of controllable operation Union of Energy Auditors and Energy Service Companies Yugra districts which had been disconnected from expenses, including administrative expenses, by 5 % and approved by Russian Federation Ministry of Energy. centralized electricity supply. These are 61 km long as compared to previous year, and Company annual According to the energy survey results, energy saving Oktyabrskaya – Peregrebnoye 110 kV overhead power, revenue amounted to 47 bln rubles.

6 7 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

OPERATION TERRITORY 87.5%

Company total share on the electric energy transmission service market

Tyumen Region TYUMENENERGO MEANS: Salekhard Established on August 14th 1944. Area: 1,435,200 sq km. Population: 3,430,196 people. 45,871 km Yamburg Density of population: 2.4 people per sq km. of transmission lines Washed by the Kara sea. Tyumen Region Khanty-Manijsk Yamalo-Nenets Borders with Kazakhstan, Komi Republic, (exclusive of Autonomous Autonomous District Nadym Krasnoyarsk Region, Sverdlovsk, Kurgansk, autonomous districts) District – Yugra 638 Nothern EG Area: 769,250 sq km. Omsk, Tomsk, Arkhangelsk Regions. 35-220 kV substations Area: 160,122 sq km. Area: 534,801 sq km. Population: 541,612 people. Novy Urengoy Population: 1,385,008 people. Population: 1,584,063 people. Density of population: 0.7 people Density of population: 8.64 people Density of population: 2.96 people per sq km. per sq km. per sq km. 7,246 Muravlenko employees Tarko-Sale Energy consumption structure Energy consumption structure by regions, % by consumers, % 26,654 MVA of rated transformer capacity Noyabrsk EG Energokompleks Noyabrsk Nyagan .13 12 5,338 3 6-10/0.4 kV transformer 0 . Yugorsk 4 substations (with 1,092.9 MVA 1 of rated transformer capacity) Surgut EG Khanty-Mansijsk Kogalym 69,1 bln kW/h Surgut Kogalym EG of energy transmitted annually Nefteyugansk EG Nefteyugansk Uray 73.84 Uray EG 11,761 MW Nizhnevartovsk EG of annual maximum load Khanty-Manijsk Autonomous District – Yugra 73.9 – Industrial consumers on Tyumen energy system, Yamalo-Nenets Autonomous District 22.4 – Territorial grid organizations Nizhnevartovsk recorded at 06.00 p.m. Tyumen Region (exclusive of autonomous districts) 1.6 – Non-industrial consumers on December 17th 2012 0.7 – Population and equivalent consumers 0.5 – Agriculture 0.7 – Transport Tobolsk 0.2 – State and municipal organizations, other budget-funded consumers Generating company facilities Tyumen EG Tyumen

1 Noyabrsk combined cycle electric generating plant 120 MW 4 Nyagan GRES (under construction) 7 Tyumen TPP-2 755 MW

2 Urengoy GRES 24 MW 5 Tobolsk TPP 665 MW 8 Surgut GRES-1 3,268 MW Zavodoukovsk 3 Nizhnevartovsk GRES 1 600 MW 6 Tyumen TPP-1 662 MW 9 Surgut GRES-2 5,597 MW Ishim

Large electric energy consumers in Tyumen Region

1 JSC NK Rosneft 14.83 % 4 JSC Surgutneftegaz 11.96 % 7 JSC Gazprom 5.28 %

2 JSC LUKOIL 13.21 % 5 JSC SIBUR Holding 8.91 % 8 JSC Slavneft-Megionneftegaz 4.77 % Generating company facilities Large electric energy consumers JSC Tyumenenergo Grids in Tyumen Region 3 JSC TNK-BP Holding 12.51 % 6 JSC Gazpromneft 6.95 % 9 JSC AK Transneft 2.04 % Tyumen Power Grids JSC Tyumenenergo branches Surgut Settlements 8 9 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

№ 01 COMPANY PROFILE

IN THE ORDER OF THINGS ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY PROFILE COMPANY PROFILE

1.1. .KEY INDICATORS 1.2. COMPANY POSITION FOR THE RECENT FIVE YEARS IN THE INDUSTRY AND REGION

JSC Tyumenenergo takes the leading position on the were formed, for the most part, on the basis of resell- Key 2008 2009 2010 2011 2012 Absolute market of electric energy transmission to end consum- ing businesses established as municipal enterprises indicators deviation* ers among grid companies of the Tyumen energy system to provide services for the municipality consumers /increment % covering the territory of three entities of the Russian and electrical grid facilities of industrial enterprises. 2012 against 2011 Federation (the Yamalo-Nenets Autonomous District, the Khanty-Mansijsk Autonomous District (Yugra) and the Tyu- JSC Tyumenenergo includes nine branches located on the Network spread, k km 44.7 44.90 44.97 45.07 45.87 1.77 men Region). After reorganization, it is the largest power territory of three entities of the Russian Federation: grid in the Ural Federal District. • the Yamalo-Nenets Autonomous District – Northern and Noyabrsk Power Grids; Aggregate transformer 24.18 25.34 25.61 26.34 26.65 1.17 capacity, GW Currently there are three levels of power grid companies • the Khanty-Mansijsk Autonomous District (Yugra) – formed in accordance with technological and administra- Kogalym, Nizhnevartovsk, Surgut, Nefteyugansk, Uray tive-territorial principles: Power Grids and the Energokompleks; Productive supply, GWh 71.8 71.5 71.1 69 69.1 0.14 • the Tyumen region – Tyumen distribution grids Level 1. Federal grid company, which owns 220 kV comprising four territorial production associations Electric power loss, % 2.64 2.5 2.5 2.5 2.5 0.0 and more electric mains forming the Unified National (Tyumen, Tobolsk, Ishim and Southern) Power Grid (UNPG). Such company performs its activ- ities in the territory of the Russian Federation through JSC Tyumenenergo ensures growth of industrial potential Returns, RUR mln 35,193.8 37,245.0 46,146.7 47,449.3 47,069.0 -0.8 its branches located in every region of the country. of Russian paramount region, increases general energy safety of the country, quality any safety of electric energy Net profit, RUR mln 1,080.4 1,668.6 5,515.4 3,565.0 126.9 -96.9 Level 2. Interregional distribution grid company estab- transmission and distribution services in accordance with lished upon reforming of energy joint stock companies world standards, and continues to steadily develop and (including JSC Tyumenenergo). These organizations improve power network of the Tyumen region, the Yama- Net assets, RUR mln 60,955.1 78,324.0 96,865.4 102,784.5 113,756.5 10.6 own 110-0.4 kV grids and render power transmission lo-Nenets Autonomous District and the Khanty-Mansijsk and technological connection services locally, on the Autonomous District. Systematic efforts in the network territory of entities of the Russian Federation. renovation and commissioning of new capacities are still ROE, % 9.17 % 14.45 % 19.13 % 16.56 % 12.28 % -25.8 % a higher priority for JSC Tyumenenergo. Level 3. Local district power grid organizations, which generally own 0.4-10 kV grids. These organizations EBITDA, RUR mln 5,432.8 7,815.3 13,435.3 11,630.30 8,405.5 -28.85

Equity to total assets 0.77 0.78 0.85 0.82 0.80 -1.47 1.3. STRATEGIC DEVELOPMENT. Average weighted interest rate for credits 12.65 12.14 8.09 7.77 7.92 0.15* PRIORITY LINES OF BUSINESS and loans, %

Company Board of Directors resolution of January 27, effective, streamlined and safe power grid complex. Credit portfolio, RUR mln 9,307 11,522 5,522 10,507 13,900 32.29 2012 approved the Plan for JSC IDGC Holding Development We are leading energy and utilities industry on the way Strategy implementation in JSC Tyumenenergo by 2015 of innovative development, power efficiency and energy and in the long term by 2020. The Plan details measures saving. to be taken in such fields as improving quality and reliabil- We take care of each employee and provide them with As a result of departure of the last mile consumers ity of consumer services; preservation of tariff sources of decent conditions for work and professional growth. JSC Tyumenenergo lost a considerable part of its investments into the grid modernization and development; revenues and incurred additional expenses related increasing investment effectiveness; energy saving and loss Strategic goals to regulation of the consumer relations. reduction; facilitating relations with consumers, public and Maintain leading position on regional market of power investors; increasing operating costs effectiveness. grid services and build united network area by integra- However, through cost optimization the Company Thus, the scenario conditions that determine Company tion of distribution network capacities throughout the received net profit in the amount of 127 mln rubles strategic development are set by Company shareholder territory. instead of the expected loss in the amount of 2,210 mln JSC IDGC Holding. Implement government energy policy in the Tyumen rubles. region with emphasis on energy saving, power effective- Mission ness and innovative development. We ensure electric energy transmission and distribution Expand power grip infrastructure in the regions to satisfy reliability, quality and safety for each client in accordance economic and social sphere needs. with highest possible standards. Liquidate areas of decentralized power supply. We guarantee opportunities for free growth of regional Add value to power grid complex management and economy through prompt building and improvement of investment attractiveness.

12 13 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY PROFILE COMPANY PROFILE

Priority trends – reduce wear rate of the network complex and elec- tric energy loss on grids; Power grid reliability – increasing reliability and quality of power supply to – modernization, technical reequipment and recon- Tyumen energy system consumers; struction of power facilities; Events Accomplished in 2012 Planned for 2013 – maintaining the leading positions on the Tyumen – ensure necessary reserve margin, first of all for region market of electric energy transmission socially important sites of the Tyumen region; Reconstruction Main lines of the Reconstruction and Retrofitting Planned volume of financing for the services; – create effective mechanism for cost reduction, and retrofitting Program realized as part of Company Investment realization of the Reconstruction and – achieving high financial, economic, operation and rational use of own and borrowed funds; guidelines Program implementation: Retrofitting Program exceeds 4.7 bln process performances; – implement government power industry safety – Complex reconstruction completed for nine 110 kV rubles. – increasing investment attractiveness and capitaliza- program; substations within Noyabrsk Electric Grids, Koga- Besides basic measures aimed at the tion of the Company; – introduce international quality, occupational health, lym EG, Nefteyugansk EG, Surgut EG, Nizhnevar- renovation of main electrical equipment, – increasing availability of power industry infrastruc- labor security and environment protection stan- tovsk EG and Tyumen Distribution Grids. the Reconstruction and Retrofitting Pro- ture; dards; – .For the purpose of trouble-free autumn and winter gram includes anti terrorism protection – implementation of innovative technologies and – connect energy district of the Tyumen region with season 2011–2012, existing 110 kV OHL within for the Company electric grid facilities power efficiency increase; decentralized power supply to the unified energy Noyabrsk and Nothern EG were modernized, poles and OHL crosscuts extension to the – human capital assets development. network space; reinstalled on new footings, footings reinforced and standard sizes. – study, adopt and implement world best practices, spiral reinforcement mounted. Basic tasks state-of-art technologies and innovations for the – .Power transformers replaced with higher capacity power industry development and increasing energy ones on 110 kV substations within Noyabrsk EG – increase quality, continuity and reliability of power efficiency of the Tyumen region; and Nefteyugansk EG. supply to public and industrial consumers of the – advance corporate management principles, pursue – .Stage 2 of the metering stations arrangement and Tyumen region; open and transparent information policy. modernization completed for electric energy retail – develop electric grid infrastructure to satisfy the market within Tyumen Distribution Grids. More than needs of Tyumen region consumers; 4.7 thousand metering stations installed, 0.4/0.2 kV each. – Reconstruction of the distribution grids of 0.4-10 kV electric grid complex completed to ensure connec- tion in the preferential category to the amount of more than 300 mln rubles. Volume of financing for the Reconstruction and Ret- rofitting Program exceeded 5 bln rubles. Company basic tasks solution, 2012–2013

Power grid reliability Basic mea- Construction of large facilities in Tyumen included: .Complete the following facilities: sures aimed at – Komarovo 110/10 kV substation with a double-cir- – Komarovo 110/10 kV substation with connection of cuit 110 kV power line; a double-circuit 110 kV power line. Events Accomplished in 2012 Planned for 2013 new consum- – Kamyshinskaya 110/10 kV substation with a dou- The project realization is required to ers ble-circuit 110 kV power line; accommodate the growing needs for Basic mea- – The first state of construction of UGRES – Urengoy – .Complete the second stage of con- – Bereznyaki 110/10 kV substation with a supply electric power and energy of house- sures aimed at 110 kV OHL with 110 kV switching station complet- struction of UGRES – Urengoy 110 kV 110 kV power line; hold consumers in Tyumen. reliable con- ed in the area of Limbya-Yaha village (Northern OHL and commission 110 kV switch- – TPP-2 – Ozhogino 1,2 110 kV OHL. – Kamyshinskaya 110/10 kV substation sumer power Electric Grids), with commissioning of 130 km ing station in the area of Limbya-Ya- with a double-circuit 110 kV power supply long 110 kV OHL within the synchronization of JSC ha village. The project realization is – Construction of ABZ 110 kV substation with a supply line. The project realization is re- Tyumenenergo and JSC FGC of UES branch MES of necessary to ensure reliable power 110 kV OHL in Khanty-Mansijsk was completed to quired to cover the power deficit for West Siberia investment programs supply to consumers in Libya-Ya- ensure the power ramp-up possibility for the city housing, social and cultural facilities – .Kirillovskaya – Tavricheskaya 110 kV OHL complet- ha, Korotchaevo and Stary Urengoy consumers. in Tyumen and to reduce the load on ed and commissioned to increase power supply villages. substations with limit load. reliability for consumers in Kogalymskiy District. – Complete reconstruction and power – .For the purpose of reliable power supply to con- transformer replacement for No- Connection of – Construction of Nadym – Salekhard 220 kV OHL sumers within Nefteyugansk Electric grids area of votekhnicheskaya 110 kV substation isolated power is in progress to provide centralized power supply responsibility, two 110 kV switching stations (Pete- and Tarmanyv 110 kV substation districts: from Tyumen Region energy system to consumers linskiy and Prirazlomny) completed and commis- within Tyumen Distribution Grids. - north-west in Salekhard city. sioned. The project realization is necessary part of the to improve reliability and quality of Yamalo-Nenets power supply to agricultural and Autonomous household consumers in the South District; of the Tyumen region and to uphold sales market.

14 15 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY PROFILE COMPANY PROFILE

- the Khan- – Sergino – Punga 110 kV OHL with Punga substation – Continue construction of Nadym – Energy audit In pursuance of the Federal Law concerning energy Measures aiming at energy saving and ty-Mansijsk and Punga – Igrim 110 kV OHL with Igrim substa- Salekhard 220 kV OHL and proceed saving and power efficiency improvement, JSC power efficiency improvement. Autonomous tion extension were completed and commissioned to construction of 220 kV substation Tyunmenenergo arranged mandatory energy survey District (Yugra): to provide centralized power supply from Tyumen in Salekhard. The project realization and energy passport development in the period from Oktyabrskiy, Region energy system to Punga village and Igrim is required to tie in the decentralized 05.09.2011 to 31.12.2012. Berezovskiy, urban type settlement and to provide consumers in power supply sector and to provide The number of facilities surveyed totaled 1,219, Khanty-Man- the localities with power ramp-up opportunities. the possibility for new consumers including 631 electric grid facilities. sijskiy Districts connection. Energy saving and power efficiency improvement (under the – .110 kV outdoor switchgear extended at Oktyabrska- measures were developed, including those to reduce program for ya 110 kV substation and Sergino 110 kV substation. electric energy loss. centralized JSC Tyumenenergo received expert opinion on power supply to compliance with the requirements of self-regulated Yugra localities) organization Union of Energy Auditors and Energy Service Companies dated 24.12.2012. Basic lines of The Reconstruction and Retrofitting Program is Ramping up the reconstruction and reconstruction accomplished. retrofitting using innovative solutions in From the moment of its establishment (state JSC ESCO Tyumenenergo will continue and retrofitting – Reconstruction was performed to the extent of oil- the field of electric energy industry and registration date 12.01.2011), JSC ESCO Tyumenenergo energy surveying and complete filed equipment replacement with advanced hi-tech state-of-the-art high-tech equipment. has become one of the Russian largest companies preparation of financial, investment gas-insulated and vacuum equipment (110 kV – that provide energy survey service and energy saving and legal mechanisms for all types of 37 pcs). measures. energy service contracts and proceed – 11 power transformers replaced with higher capac- In total, the company completed more than 800 energy to the implementation of the energy ity ones. audit projects. Energy efficient solutions base is ready service projects. – .32 reclosers installed in 10 kV grids. for all the energy resources consuming systems, for – .New equipment introduced. the budget-funded and utilities sectors (administrative buildings of any type, boiler houses, pump rooms Repairs and – .Maintenance Program is accomplished. In 2012, In 2013, the planned financing for the etc.), and for industrial plants (factories, industrial Maintenance 3,445.8 mln rubles were allocated for the Repairs Repairs and Maintenance Program is production facilities, airports, energy companies). Program and Maintenance Program implementation, in- 3,465.5 mln rubles including 1,820.9 mln cluding 1,808.8 mln rubles for repairs. Autumn and rubles for repairs. Brain capital For the purpose of development of young staff Young staff of the Company and mem- winter season were closed in routine mode. development management and professional skills, the Company bers of the candidates pool participation participated in KMAD – Yugra business project Point of in Presidential Program 2013–2014. Unlocking Company potential Growth. For the purpose of development of JSC Under JSC Tyumenenergo Program for Young Man- Tyumenenergo reserve staff manage- Events Accomplished in 2012 Planned for 2013 agement Staff Training sets of profession related ment and professional skills, participa- lectures and business trainings were arranged. tion in the second integrated program Innovative 1,984,931.18 thousand rubles were allocated for innova- Realization of the Company Innovative In order to involve young staff in solving urgent issues of Moscow School of Management development tive development in 2012. Development Program 2011-2016. of the electric grid complex, improve their professional Skolkovo. Introduction of state-of-the-art innovative competence and assist them in their career progress, In order to extend cooperation with the The plan for finished innovative product and technology equipment and technical solutions. R&D candidates pool The Young Support of JSC Tyumenen- industry higher education institutions, implementation in JSC Tyumenenergo as a part of the in the sphere of electrical energy industry. ergo was further developed in 2012. make agreements for cooperation with Investment Program was accomplished in 2012 to the JSC Tyumenenergo will continue coop- The reserve staff participated in presidential program region’s leading industry related educa- total amount of 1,754,012.30 thousand rubles, which eration with universities, research and for management staff training and in education events tional establishment. is 12.36 % of the total financing for the Investment production associations, industrial plants, held by Russian leading educational institutions such Program in 2012. research and design institutes to realize as National Research University Higher School of joint R&D projects in accordance with the Economics, Russian Presidential Academy of National Advanced equipment and new technology are used for principles of energy efficiency improve- Economy and Public Administration, Moscow School of the modernization, retrofitting and reconstruction of ment, operating costs optimization, re- Management Skolkovo. basic production assets. duction loss and increasing power supply reliability and safety for 0.4–110/220 kV electric grids.

Research and development projects successfully com- for the purpose of further development of the Russian Power The effect of actions under Power Efficiency and Energy Implementation of the Power Efficiency pleted in 2012 prove high efficiency of JSC Tyumenener- Federation electric grid complex, management efforts efficiency and Saving Improvement Program amounted to 13,183.5 and Energy Saving Improvement Program go innovative activities. coordination and restraint on tariff growth for electric energy saving thousand conditional tons and 96.2 mln rubles, net of 2012–2017. ______energy end consumers. improvement VAT. The total reduction of electric energy loss under the Measures aiming at electric energy loss program was 38.1 mln kWh. Electric energy consumption reduction on grids. ВIn the long-term range, JSC Tyumenenergo will work in JSC Tyumenenergo will continue to apply the entire of for business needs reduced by 0.1 mln kWh. Heat energy Introduction of energy saving equipment. accordance with the Electric Grid Complex Development its technology and human potential and endeavor to consumption for business needs reduced by 195.7 Gcal. Strategy developed under the Decree of Russian Federa- become the leader among interdistrict distribution grid .Actual electric power loss amounted to 2.5 %, which is tion President Vladimir V. Putin, No. 1567 dated Novem- companies, the most reliable, hi-tech and fast growing below the standard (2.6 %). ber 22, 2012 “On the establishment of JSC Russian Grids company in the industry. ______

16 17 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY PROFILE COMPANY PROFILE

1.4. STAGES OF TYUMENENERGO 1.5. HISTORY OF TYUMEN ENERGY SYSTEM

REFORMATION Tyumen energy system named Tyumenenergo was es- extraordinary general meeting of IDGC Holding share- tablished under the order of the USSR Ministry of Energy holders). on May 3, 1979 on the basis of regional energy depart- Today JSC Tyumenenergo is one of the largest distribu- May 3 ment Sverdlovenergo energy enterprises located in the tion grid companies of the country operating on the ter- 1979 Regional energy department Tyumenenergo was established that comprised Tyumen Region. ritory of three constituent entities of the Russian Federa- Sverdlovenergo companies Formation of Tyumen energy system is closely related to tion: the Khanty-Mansijsk Autonomous District (Yugra), the development and exploration of the Middle Priobye oil the Yamalo-Nenets Autonomous District and the Tyumen September 14 fields. Power industry movement northwards and estab- Region. Company area of responsibility covers the terri- 1988 RED Tyumenenergo was renamed into Tyumen Power Engineering and Electrifi- lishment of the centralized power supply system started tory of about one and half million square kilometers with cation Production Union Tyumenenergo in the 70-s of the last century in Surgut, which subse- the population over three million people. quently became a core of the Tyumen energy system. Nine branches of JSC Tyumenenergo comprise 638 March 12 By 2005, the notions of “Tyumen energy system” and 35-220 kV substations with installed transformer Under the privatization program, Russian Federation established public corporation “Tyumenenergo” could be called synonyms. In March capacity of 26,654 MVA. The length of serviced power 1993 of power engineering and electrification Tyumenenergo, which succeeded from 2005 management board of RAO UES of Russia passed transmission lines on circuits is more than 45 thousand Tyumen Power Engineering and Electrification Production Union Tyumenenergo the resolution for JSC Tyumenenergo reorganization kilometers. The Company productive supply is about that implied company division by types of activity, and 70 bln kWh per year, which is 87.5 % of the Tyumen elec- on July 1 JSC Tyumenenergo became a distribution grid tric power transmission service market. December 26 company. History of JSC Tyumenenergo success proves one of its Public Corporation Tyumenenergo was reregistered as open joint stock compa- 1996 On July 1, 2008 in the course of RAO UES of Russia re- key principles: “We ensure reliable power supply and ny of power engineering and electrification Tyumenenergo organization 100 % of JSC Tyumenenergo shares were opportunity for free growth of the regional economy acquired by JSC IDGC Holding (the latter was renamed through timely construction and development of the ef- July 1 as JSC Russian Grids on 23.03.2013 by resolution of fective, streamlined and safe power grid complex”. 2005 JSC Tyumenenergo Distribution Grid Company (upon company division by types of activity)

April 27 2007 JSC Tyumenenergo Interdistrict Distribution Grid Company

18 19 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

№ 02 COMPANY MANAGEMENT

PROPER ORDER ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY MANAGEMENT COMPANY MANAGEMENT

COMPANY MANAGEMENT

The opinion of Sergey Yu. Kvachadze, Deputy Director General of Safety, on JSC Tyumenenergo performance in 2012

Safe operation of electrical grid complex is ensured by of established cooperation with territorial authorities 2.1. INTERNAL CONTROL AND RISK wide list of measures, which include not only measures of FSB, MVD of Russia and the bodies of state power of to improve the anti-terrorist protection of objects, but subjects. MANAGEMENT SYSTEM also the provision of information and economic security, In order to improve the level of preparedness of staff the protection of state and commercial secrets, person- and security personnel to act in case of a threat or nel, property, and transparency of financial and econom- execution of terrorist attacks in 2012 in cooperation The risk management system is the central part of the strategic man- ic activities of the Company. with the territorial authorities of FSB, MVD and MChS of In 2012, the Company continued its work aimed at Russia in JSC Tyumenenergo was performed a series of agement of the Company. JSC Tyumenenergo systematically analyzes ensuring safe and reliable power supply to consumers. exercises and trainings that have shown high degree of the risks of each activity type in order to maximize the efficiency of Particular attention was paid to meeting the require- preparedness of the staff to work in emergency situation ments of the Federal Law of 21.07.2011 No. 256-FZ conditions. each step and, therefore, of all activities in general. "On safety of objects of the fuel and energy complex". Much attention was paid to the work of identifying As a result of activities conducted in conjunction with non-contractual and non-metered electrical power con- The internal control and risk management system (herein- transactions compliance with the legislation, the state authorities, was completed the categorization of sumption: the security service specialists together with after referred to as IC & RM system) of JSC Tyumenenergo Charter, local regulations; an internal audit of the power facilities of JSC Tyumenenergo, thus establishing representatives of law enforcement agencies regularly is an element of Company’s corporate management system efficiency of organization of business processes and differentiated requirements to safety of objects of fuel organize and conduct raids. The results of these raids, which includes a full range of procedures, methods and IC & RM system, control of compliance with corpo- and energy complex with taking into account potential as well as problems of prevention measures and warning control mechanisms that are created by Board of Directors rate ethics, and anti-corruption control. danger of acts of unlawful interference and their possible people about the responsibility and consequences of and executive bodies of the Company to ensure effective consequences. illegal actions against energy facilities are also regularly implementation of internal control over financial and busi- Regulations and normative acts of the Company es- Big work was performed to improve the efficiency and covered by regional media. ness operations of the Company. tablish a "distributed" model of IC & RM system, which transparency of financial and economic activities of the Effective use of the whole complex of measures has defines liability and responsibilities as follows: Company. Were approved and now are being implement- made it possible in 2012 to greatly improve the level Key goals of IC & RM system are:: – The Board of Directors of the Company sets the ed local regulations on management of procedures of of safety of objects of electrical grid complex and to – Effective implementation of strategic and corpora- directions of development of IC & RM system, and timely detection, prevention and resolution of conflicts of contribute to implementation of the fundamental goal tive objectives of the Company; monitors the effectiveness of IC & RM system; interest. Mechanisms for monitoring Company’s activ- of JSC Tyumenenergo, which is ensuring uninterrupted – Improvement of Company’s corporate management – Person responsible for efficiency of IC & RM system, ities’ compliance with the existing legislation are being power supply to consumers. system quality; as well as implementation of local acts of IC & RM improved. – Increase in operational and investment efficiency of system is Director General; Was developed and put in force the Regulation of con- Company’s activities; – The department of internal audit and risk tractors’ inspections for reliability and affiliation. management audits performs audit and direct Within integration processes at the level of JSC FGC of Improvement of IC & RM system is performed at all levels evaluation of the effectiveness of IC & RM system, of UES and JSC IDGC Holding in last year it was decided to of the Company management in the following areas of corporate management system, as well as follow- create the Operational Headquarters to coordinate the control: up control procedures. In addition, it organizes and interaction of security departments of JSC Tyumenener- – preventive control (Risk Management System) coordinates preparation of reports on risks, and go, branch of JSC FGC of UES – MES of West Siberia and includes identification, assessment and manage- provides the provision of information about risks the branch of JSC CECM of UES – Center of Engineering ment of risks (threats and opportunities) in order and internal control procedures in the Company for and Construction Management of West Siberia, which to ensure effective implementation of corporative stakeholders; will allow in the future to develop common approach, to and strategic objectives, as well as identification – The executive bodies of the Company are ensure coordination of operations and improve efficiency and management of risks of economic and energy responsible for organizing the effective security; implementation of procedures of routine and – current (routine) control includes regulation and preventive control, and implementation of local standardization of business processes with defi- regulations of IC & RM system; nition of control procedures and responsibilities – Officials (business process owners) are responsible of participants of business processes by manage- for the establishment and implementation of control ment levels; procedures and risk management activities, as well – follow-up control includes auditing control of reports as for the timely identification and assessment of reliability, of assets safety, of financial and business risks.

22 23 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY MANAGEMENT COMPANY MANAGEMENT

Organizational structure using tariffs for electricity transmission in cases where on the basis of "last mile" contracts, concluded between the GENERAL SHAREHOLDER MEETING Company and JSC FGC of UES, these objects were rent out to JSC Tyumenenergo. In years 2010–2013, in the absence of legislation governing "last mile" contracts, some large Board of Directors Auditing committee industrial consumers have switched to direct contracts with JSC FGC of UES through judicial decisions. According to Director General our estimates, the termination of "last mile" contracts has led to a decrease in revenue of the Company for 1.44 billion rubles in 2012, and may result in lost revenues in 2013 Yamalo-Nenets Khanty-Mansijsk Tyumen Region amounted to 2.76 billion rubles. Autonomous District Autonomous District – Yugra (without autonomous districts) In 2012, the President and the Government of the Rus- sian Federation emphasized the importance of solving North EG Surgut EG Tyumen DG the problem of cross-subsidization in the electric power industry. The Ministry of Energy of the Russian Federation has received instructions on elaboration of mechanisms of Noyabrsk EG Nefteyugansk EG elimination of cross-subsidization. The Company plans to actively participate in the discussion of this problem at the level of the federal government. Nizhnevartovsk EG In accordance with the decision of the Regional Energy The average headcount of staff Kogalym EG Commission of the Tyumen Region, the Khanty-Mansijsk of JSC Tyumenenergo for in appearance of disputed and overdue receivables for Autonomous District, and the Yamalo-Nenets Autonomous the year 2012 amounted to electricity transmission services provided by the Company, District of 30.05.2012, No. 109 (in edited decision of REC Uray EG which leads to decrease in liquidity of the Company and in of the Tyumen Region, the Khanty-Mansijsk Autonomous its financial stability. The Company implements measures District, and the Yamalo-Nenets Autonomous District to eliminate causes of conflicts with customers, to reduce of 15.10.2012 No. 366), for the years 2012–2017 are set people Energy Complex 7,222 long-term regulative parameters for JSC Tyumenenergo, in disputed and overdue receivable for provided services, and ______interacts with the federal government to draft amendments respect of which the tariffs for electricity transmission are to the rules of functioning of the retail market, the forma- set based on the long-term parameters of territorial grid Main factors of risk market, the transition state of the national banking tion of judicial practice and creation of positive precedents. organizations’ activity regulations. The method of long-term system. In addition, the Company is implementing a program ap- indexation implies the possibility of tariff adjustment in the The Company's operations involve risks that inves- proved by the Board of Directors on the long-term develop- period of tariff regulation. This may lead to a shortage of tors should take into account. The information below In order to minimize the impact of the macroeconomic ment of electricity metering systems on the retail electricity tariff funding sources of operating and investing activities. describes the key risk factors, which the Company risks, the Company implements a set of measures aimed market in distribution networks. currently considers as most important ones. at optimizing the share of loans in whole capital structure, One of the Company's regulatory risks is the risk of reduc- raising long-term loans at fixed interest rates, increasing Currently, on territory of the Tyumen Region, the Khan- tion of the demand for electric power transmission and National and regional risks the efficiency of operating and investment expenditures of ty-Mansijsk Autonomous District, and the Yamalo-Nenets technological connection services, compared to planned the Company. Autonomous District is performed common tariff regula- volumes considered by regional bodies when making tariff National and regional risks are caused, first of all, by tion in which transmission tariffs are set the same for all and balance decisions. To reduce this risk, the Company macroeconomic factors, which are manifested at the Regulatory risks (industry-specific risks) consumers, differentiated by voltage level. Significant risk includes into its investment program the electric grid con- global level on a scale of the Russian Federation and in- for JSC Tyumenenergo is separation of single regulatory struction volumes necessary to ensure readiness for the dividual regions. These factors may adversely affect the Main activities of the Company, including the implemen- authority into three independent regulators and the estab- future loads, taking into account the long-term develop- ability to raise debt capital, the liquidity, the investment tation of services for power transition and technological lishment of different tariffs for transmission of electricity ment plans of industrial consumers, in order to make them and operating efficiency and, ultimately, the sharehold- connection to electric networks, are regulated by the in each of 3 subjects of the Russian Federation on territory cancel the construction of their own power generation facil- er value of the Company. In addition, the crisis in the government. of presence of JSC Tyumenenergo. Possible application of ities; performs monitoring of applications (with taking into global economy negatively affects the volume of indus- direct restraint of rates growth would drastically limit the account the geography of growth) and forms on its basis trial production and consumption of electric energy, The policy of tariff regulation is aimed at curbing the in- costs of JSC Tyumenenergo in the rate of (its own nec- the forecast for useful supply of electricity and demand for which leads to a reduction in revenues of the Company. crease in electricity tariffs, which could lead to a restriction essary gross revenue) and jeopardize the funding of the services of technological connection for the following year. of tariff sources for investment and operating activities. necessary volume of investment and operating activities Key factor of macroeconomic risk is the ongoing of the Company and its financial stability. In addition, the Financial risk global crisis affecting key indicators of commodity and In order to minimize these risk factors the Company pur- transition to tariff regulation separately by territories could financial markets, which include prices of fuel, energy sues balanced policy to improve the efficiency of investment lead to faster growth of rates in the tariff in favor of other As part of planned financial and economic model the Com- and other raw materials, cost of capital, rates of foreign and operating activities, aimed at reducing the expenditure local grid companies, which will also lead to a decrease pany is faced with factors that may lead to a shortage of currencies, inflation. and optimal planning of structure of sources of activities’ in the required gross revenue and operating profit of the funds for financing investment and operating activities. funding. Company. The most significant financial risk factors are associated The Russian Federation economy, as well as econo- One of regulatory risk factors is imperfection of retail Significant risk factor is the mechanism of cross-subsidi- with imperfection of the retail electricity market functioning mies of other BRICS countries, is developing economy, electricity market functioning mechanisms, entailing zation by large industrial consumers of other categories mechanisms and are explained in section "Regulatory risks and thus is sensitive to world crises. This is caused disagreements between the power grid and power supply of consumers, including population. A number of large (industry-specific risks)". However, there are a number of by dependence of the economy on energy sources’ companies in respect of volumes of consumption of elec- industrial consumers connected directly to the UNPG, pay risk factors potentially affecting the Company's financial prices, low volume and volatility of the Russian financial tricity and power used in the calculation of tariffs. It results for services of the Company on electricity transmission and economic activities.

24 25 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY MANAGEMENT COMPANY MANAGEMENT

Inflation risks Operational risk Investment (project) risk

The negative impact of inflation on the financial and eco- Geographic and climatic characteristics of the region, The Company is actively make investments aimed at nomic activities of the Company may be due to losses in located in the northern part of Western Siberia, carry the upgrading and expansion of the network infrastructure, the real value of receivables, an increase in interest to pay risk of occurrence of accidents at power plants due to facing the risk of decrease of efficiency and depreciation on borrowed capital, the increased cost of construction of adverse acts of nature (hurricanes, storm and icy rains, of capital investments during performance of investment the investment program objects. Currently existing infla- high waters and floods, snow obstructions, extreme low programs, innovative development programs and research tion rate has no significant effect on the financial position temperatures of air, etc.), which could lead to systemic vi- and development works. of the Company. In accordance with plans of the Central olations of the operability and efficiency of the equipment Bank of Russia to curb inflation and with its predicted of electric distribution complex and disruptions in energy Increasing volumes of investment development programs values for the next period, inflation should not have signif- supply of customers of the Company. require significant financial resources, both own and bor- icant impact on the financial results of the Company. rowed, which is a factor of the investment risk. Even if there Operational and technological risks affecting the reliabil- are volumes of financial resources sufficient for the reali- Currency risks ity of power supply, first of all are connected with high zation of the investment program, there is a probability of physical and moral depreciation of electrical grid assets, violation of the planned timing of implementation of capital JSC Tyumenenergo performs its operations on the territo- breach of operating conditions and modes of power investments and of delayed commissioning of objects of the ry of the Russian Federation, is not an exporter, its coun- supply equipment, noncompliance with repairs program investment program. To reduce the investment risk in plan- terparties are residents of the Russian Federation, the to the necessary extent. In addition, the factors of the ning of investment program, the mandatory requirement of price of services on electricity transmission and connec- operational and technological risks are: inclusion of investment projects is to link it with the plans of tion of consumers to electric networks, as well as assets emergency situations of natural and anthropogenic type; territorial and regional development. In addition, the Com- and liabilities of the Company are denominated in rubles. decrease in the effectiveness of the asset management pany performs monitoring of the implementation of the Given that the range of goods and equipment purchased system of JSC Tyumenenergo (shift in priorities in provi- investment program, its financing, analysis of the causes of Shareholder value risk (corporative risk) by the Company contain imported components, a signif- sion of reliable operation of networks, incorrect ranking deviation of the actual investment program implementation icant increase in currencies exchange rate may lead to of objects to be repaired); parameters from the planned ones. The Company imple- The increase in shareholder value is influenced by many higher prices for purchased products. In this connection, factors related to the operation of the equipment, includ- ments the project management of investment activities factors of the Company's internal and external environ- the Company performs a policy aimed at import substi- ing maximum deviations from the regulatory and tech- (for more details on investment project risk see Quarterly ment. JSC Tyumenenergo is included in the register of tution and signing long-term agreements which do not nical requirements, the excess of acceptable values of report in the "Industry Risks" section). natural monopolies, which are subject to regulation by provide for the growth of prices for purchased products. technological parameters of operation mode of electrical the Government in accordance with Russian law. In order grid equipment, errors of operating personnel, violation Compliance risk to curb the growth in electricity tariffs for consumers, the Interest-rate risks of the dispatch schedule and violation of operational government has the ability to limit the parameters of rates’ discipline. Frequent changes in the legislation of the Russian Fed- growth and, respectively, profitability index of Company's Because for the implementation of its core business the As a result of these risks, significant economic and repu- eration in terms of state regulation of the industry, a wide services. In order to minimize this risk factor, the Company JSC Tyumenenergo performs raise of borrowed funds, tational consequences are possible. In addition, speci- range of regulatory requirements and restrictions are risk is implementing a program of cost management, pro- there are risks of changes in interest rates on loans. The fied risk factors affect the amount of losses in electric factors associated with the Company's failure to comply vides a balanced planning of activities in accordance with slight increase in the CBR refinancing rate to 8.25 % per networks, increasing the expenditure of the Company for with laws and other legal acts, requirements of regulatory approved tariff decisions, performs control over implemen- annum from September 14, 2012, has influenced the the purchase of electricity in order to compensate the and supervisory authorities, as well as Company’s internal tation of the approved business plans, participates in coop- weighted average interest rate on loans, but the Company losses. documents defining internal policies, rules and procedures eration with local authorities in the elaboration of territories believes this increase is not significant. Among measures that can help reduce the likelihood of (compliance risk). development programs with the agreement on amount and Raising rates on borrowed loans can lead to an unplanned operational and technological risks, the Company carries sources of funding of investment programs. increase in the cost of servicing the debt of the Company. out activities aimed at improving the reliability of power The Company's activity is regulated and controlled by A significant risk factor, in addition, is the competition for In order to minimize interest rate risks, the Company supply, and prevention of risks of technological failures various authorities such as Federal Antimonopoly Service, tariff revenue with regional territorial network companies. pursues a balanced credit policy aimed at optimizing the including: Federal Tariff Service, Federal Financial Markets Service, In order to minimize this factor risk, the Company has structure of the loan portfolio and minimizing the cost of design of energy facilities with taking into account char- the Federal Tax Service of Russia, Ministry of Energy, planned measures to reduce existing tariff disproportions servicing the debt. acteristics of the regional climate and geography; clearing Federal Financial Monitoring Service, Federal Service of that lead to a disproportionate increase in revenues of and expansion of 0.4-220 kV overhead lines; reconstruc- Environmental, Technological and Nuclear Supervision, the regional territorial network companies. Liquidity risks tion of electrical grid facilities; expansion of the park Accounts Chamber of the Russian Federation, and others. Also, an important risk factor is the recognition of the of emergency power sources (EPS), auto- and special Besides, being the subsidiary and affiliate of company with Company as violated the antimonopoly legislation. Subject The Company's operations are subject to risk factors that purpose vehicles for the rescue and recovery operations; state participation, the Company performs a number of to antimonopoly regulation risks in the most significant may result in reduced liquidity and financial stability of the comprehensive program of modernization (renovation) of orders of the President and the Government of the Russian degree is activity in the field of technological connection of Company. The most important factors are cross-subsidies electrical grid assets; improvement of systems of infor- Federation. In this regard, compliance risk factors are of consumers’ electrical facilities to electric grids. Requests of between consumer groups and low payment discipline in mation exchange, analysis of technological failures and particular importance. consumers to the territorial offices of Federal Antimonopoly the retail electricity market. predicting their consequences, including the introduction Service and the subsequent initiation by antimonopoly au- of an automated system for managing distributed re- In order to minimize these risks, the Company imple- thority of proceedings on breach by the Company of legisla- As a result of these risk factors, the Company may be sources during conduction of rescue and recovery opera- ments measures to improve compliance control. In 2012, tion in the field of technological connections can be caused unable to meet the financial and other limiting conditions tions; improvement of management system for emergen- the Board of Directors of the Company has approved the by violation of the rights of consumers (particularly, refuses (covenants) specified in the loan agreements. In order cy reserve; increasing the number of mobile emergency local documents aimed at improving the efficiency and in technological connections, failure to comply with statuto- to minimize this risk factor, the Company monitors its repair teams and the quality of their equipment; programs transparency of financial and economic activities of the ry deadlines, etc.). To reduce the influence of these factors, capital structure and determines the optimal parame- to reduce risks of injury at electric grid facilities. Company, and at fighting with corrupt practice. Monitor- the Company improves business processes of technological ters of borrowing, as well as takes measures to reduce In addition, the Company is implementing production as- ing is performed of changes in the current law affecting connection of consumers, simplifying internal procedures, the amount of cross-subsidization and to optimize the set management system based on the index of the actual various aspects of the financial and economic activities of introducing new forms of customer service, such as those working capital. condition of the equipment. the Company. associated with interactive methods of service.

26 27 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY MANAGEMENT COMPANY MANAGEMENT

Customer-oriented approach of JSC Tyumenenergo is Information about these phones is available on the home 2.2. LEGAL REGULATION realized through the establishment and operation of page of website of JSC Tyumenenergo, and also the in- a centralized customer service system, based on the formation about the functioning of the universal number following principles: of Call-center and "Hotline for technological violations" JSC Tyumenenergo as a network organization that provides is constantly updated and published periodically in the services for electic power transmission is a natural monopoly Providing customers with sufficient information about print media issued in the area of responsibility of the the Company and its services. Complete and accurate Company. subject and operates under state control. information about all procedures of interaction with JSC Tyumenenergo is public, is available in an accessi- The website of JSC Tyumenenergo has functional "Inter- The main legal acts regulating activities performed by JSC consumers, federal and regional authorities, as well as ble form for consumer of services: in the media, on the net reception" at the following address http://www.te.ru/ Tyumenenergo to provide services for electric power trans- sanctions by the regulatory authorities. Company's website http://www.te.ru/, on information klientam/internet_priyemnaya/, where anyone can send mission and technological connection of power receivers of stands of the Company. a question directly to a specialist of needed area. consumers of electric energy, electrical grid facilities and In addition, the negative juridical practice on claims of sales facilities for the production of electric energy, are given in organizations and major consumers of electricity to the Territorial accessibility and comfort conditions of face- Since the beginning of 2012 at the corporate website has Annex 2 of this Annual Report on CD-disk. JSC Federal Grid Company of Unified Energy System aimed to-face service. Infrastructure of face-to-face service been implemented an interactive survey of consumers at conclusion of contracts for services on electric power provides territorial accessibility of Company’s service for about the quality of service of JSC Tyumenenergo. In addition to the federal regulations also are applied the transmission and claims of sales organizations to SAC of consumers. following solutions of the regional executive authority in the JSC IDGC Holding for the recovery of unjust enrichment JSC Tyumenenergo provides high level of skill and com- field of regulation of tariffs: Regional Energy Commission based on conclusions on presence of legal significance Availability and efficiency of distance and interac- petence of customer service personnel. of the Tyumen Region, the Khanty-Mansijsk Autonomous for adjudication of unjust enrichment reality / conclusion tive services of the Company. In the Company at the Business processes of consumer service are transpar- District (Yugra), the Yamalo-Nenets Autonomous District: of contracts on a lease of the "last mile"; impossibility to beginning of 2012 was implemented the Call-center of ent, ensuring accountability and controllability of proce- – on establishment of uniform (boiler) tariffs for the provide services using a part of the object of UNPG (cell, JSC Tyumenenergo. dures of interaction with consumers. JSC Tyumenenergo transmission of electric energy for service consum- switch, circuit breaker); and the illegality of the lease of part provides an objective and impartial review of complaints ers in the Tyumen Region, the Khanty-Mansijsk of the object of UNPG technologically associated with the Currently, Call-center of JSC Tyumenenergo supports in a timely manner and the possibility of appealing the Autonomous District (Yugra), the Yamalo-Nenets object of UNPG entail for JSC Tyumenenergo risks for its two phone numbers: 8-800-200-55-02 "Hotline for decisions, about the order of which consumers are Autonomous District; proper operation and functioning, as follows: technological violations" and 8-800-200-55-04 "Universal informed in accordance with the principle of sufficient – on establishment of individual tariffs for the trans- – risks associated with claiming from JSC Tyumene- number of Call-center" which consumers can call for information. mission of electric energy for mutual settlements nergo of the recovery of unjust enrichment in the free. between JSC Tyumenenergo and adjacent network amount paid by the sales organizations in 2010– ______organizations; 2012 for services provided for the delivery points – on establishment of standardized tariff rates, rate from the "last mile"; per unit of maximum power (rubles per KWh) for – risks associated with the presentation by sales the period of regulation, formula of payment for organizations in the interests of large consumers 2.4. QUALITY POLICY technological connection to electric networks of whose power receivers are attached to the objects JSC Tyumenenergo. of the "last mile" of JSC Tyumenenergo of require- ments to JSC FGC of UES to compel a conclusion The Company seeks to reduce the negative impact of the results of JSC Tyumenenergo continuously monitors changes in the of contracts for the transmission of electric energy, its operations on the environment and takes measures to prevent legislation and does not see in the short term the possibility which will lead to impossibility of full implementa- of appearance in its financial and economic activity of any tion the Investment Program of the Company, to the deterioration of the health of personnel and reduce the number significant risks associated with changes in tax and civil non-fulfillment of the task of containing the growth of injuries in the workplaces. law. of rate in the Tyumen Region, including the auton- omous districts, for the electric energy by means However, changes in the industry-specific legislation intro- of cross-subsidies and, as a consequence, an addi- To control the quality of services at the level of ad- hazards in the workplace; duced in the last three years, including those governing the tional increase in the tariff for the transmission of vanced technologies since 2008, the Company operates – constantly improves technology (by introducing technological connection of power reception devices and electrical energy by a rate of 17 % and electricity for in accordance with the requirements of international innovations); other objects of the applicants, as well as activities for the small and medium-sized businesses in the region standards ISO 9001:2008 (Quality Management System), – constantly improves the quality of human re- preparation, approval and reporting on the implementa- by approximately 6.4 % in addition to other factors. ISO 14001:2004 (Environmental Management System) sources. tion of investment programs, create risks of disputes with and OHSAS 18001:2007 (Professional Health and Safety Management System), which in 2011 was confirmed by Managing quality of services according to international recertification audit. standards is the best way to reduce the risk of acci- ______dents, ensure the health of employees and to guarantee 2.3. CUSTOMER-ORIENTED APPROACH compliance with safety regulations in the workplace; it By applying international standards, the Company: promotes better staff involvement in the organization – demonstrates to a consumer the stable high activities and increases the level of culture of the orga- Policy in the field of interaction with consumers of JSC Tyumenenergo is to quality of services provided; nization as a whole. provide customer-oriented approach in its activities. The main purpose of – performs contemporary priority approach to envi- ______ronmental protection during planning and imple- customer-oriented approach is the formation of customers' loyalty to the mentation of activities, which makes it possible organization at the expense of quality service and satisfaction of services’ to reduce costs associated with inefficient use of resources and materials, and other losses; consumers in the short and long term. – performs control and prevention of possible

28 29 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

№ 03 CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY

ORDER IS CREATED ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY

Opinion of Sergey Yu. Gromov, Deputy Director General of Corporate Management, on JSC Tyumenenergo performance in 2012.

The corporate structure of JSC Tyumenenergo is built on Company, such as investment program approval and its In the field of corporate management the Company puts We assume that the main task of property management is a classical scheme; it includes the Board of Directors, correction, annual complex purchasing program (in the much emphasis on asset management or its property. This to provide optimal dynamic correlation between Company’s Committees attached to the Board of Directors and its sole field of investments), target values of annual and quarterly direction is given much attention because we treat it as one main business processes and its property. Hugh-quality executive body, Director General of the Company. key performance indicators of Director General and top of the main resources of the Company. property management in the Company enables to get managers. stability in operational activity and to increase investment The Board of Directors of the Company is composed not Property management in JSC Tyumenenergo is character- attractiveness of the Company. only of administrative officers of the Shareholder, but An essential part of corporate management is information ized by high indicators. The rights for all items of immov- JSC Tyumenenergo pays much attention to its procurement also of four independent Directors. For the purposes of disclosure. The right to know is realized through several able property and land property of the Company are duly activities, the main goal of which is timely effective and effective cooperation between the management bodies of corporate procedures, the main of which are: documented. complex provision of the Company’s activity (Company’s the Company during 2011/2012 corporate year there were – public disclosure by the joint company of corporate branches) with goods, works and services together with the held two meetings of the Board of directors in person that information in accordance with legislation; Beginning with March 17, 2009, the effective date of Gov- required indicators of their price and quality and optimal considered the main businesses of the Company: business – voluntary disclosure by the joint company of optional ernment Regulation No.160 of February 24, 2009, On the conditions of their purchasing. plan approval (including the investment program), target information; Procedure of Introduction of Fenced-off Areas for Power Procurement activity is regulated by the Provision On values of key performance indicators (KPI) for 2012, Energy – information disclosure in the form of annual report. Grid Facilities, JSC Tyumenenergo has been successfully Procurements worked out in accordance with the Federal Saving and Energy Efficiency Enhancement Program of fulfilling its activity on introducing the information on the Law No. 223-FL of July 18, 2011, On Procurement of Goods, JSC Tyumenenergo­ for 2013, and calculation till 2018. JSC Tyumenenergo voluntary discloses information in the boundaries of the fenced-off areas into the State Cadas- Works and Services by Different Types of Legal Entities. form of annual report and reports of important facts even tre according to the amended Program on Registration/ Discussion of the issues in the form of an open dialog by though the obligation to disclose such information was Re-registration of title in real property approved by the In order to meet the requirements of the Federal Law the Board of Directors improves working efficiency of the cancelled due to redemption of corporate bond issuing in Board of Directors, including land property, with respect to No. 223-FL of July 18, 2011, the Provision on Procurements, management bodies of the Company and justification of 2012. the works on fenced-off areas formation. the Procurement Plan for Goods, Works and Services for managerial decisions being taken. 2012 and all the data on purchases was put on the official The Company timely and fully discloses information accord- All the works planned for 2012 have been fulfilled. Taking site of order placement for goods delivery, execution of Our committees represent grounds for deep consideration ing to the current legislation of the Russian Federation on into account the results achieved in 2011–2012, it can be works and provision of services at: www.zakupki.gov.ru, and of some issues and assist in making decisions to the Board its corporate site, in the newsfeed and on Interfax press predicted that the works on introducing the information on on the corporate site of JSC Tyumenenergo: www.te.ru. of Directors of the Company and to Director General. We agency site. the boundaries of the fenced-off areas to linear high-volt- think it is reasonable to discuss important managerial age facilities will be finished in the short term by the end of An annual complex Procurements Program for 2012 issues collegially prior to making decisions. Heads and The Company’s work in disclosing information by issuers 2013. has been fully realized, the efficacy of purchasing activity administrative officers of the Company shall be aware of of securities was highly appraised at the largest federal amounted to 1.3 bln rubles in relation to the initial (ceiling) daily proceeding of the Company, be able to coordinate their contests of annual reports for 2011. The annual report of According to the decision of RF President On the Necessity purchase price. All in all, there were made 973 procure- activities and achieve better effect through such coordina- JSC Tyumenenergo for 2011 – Components of Success: of Step Consolidation of Territorial Grid Companies (the ments in 2012 for the sum of 13.7 bln rubles, including tion. This is a part of the established corporate culture. The There Are No Trifles, There Are Details – won in several Decree of RF President No. 1567 of November 22, 2012 On 817 procurements for the sum of 13.3 bln rubles made Committees attached to the Board of Directors are one of nominations: Open Joint Stock Company Rossiyskie Seti), the Company using an electronic trading platform b2b-mrsk, which the instruments of its realization. – the Best Report in Power Industry at the IX Open formed a long term program of consolidation electrical grid constitutes 96.9 %. Competition of Joint Companies’ Annual Reports, assets for the period of 2012–2017. The main vector of the The Committees include not only the members of the organized by Krasnodarsky Region administration program is to establish a single power grid area by means The efficiency of usage of the Company’s funds is addi- Board of Directors of the Company but also administrative and held within XI International Investment Forum of reduction of the share of independent from the Com- tionally supported by centralization of procurements of officers of the Company possessing the necessary knowl- Sochi-2012; pany volume of NVV and of the amount of territorial grid MTR, equipment, works and services by means of com- edge in a subject area. – the Best Annual Report of the Issuer of the Ural organizations in order to lower final consumer rate on the bining lots of analogous products from all the branches of Federal District of an annual federal contest of an- territory covered by the Company. JSC Tyumenenergo,­ this volume, for the sum of 0.47 bln There are three committees attached to the Board of direc- nual reports and sites (organized by Capital Market rubles, is more attractive for manufactures. tors in JSC Tyumenenergo working in different directions. magazine and CJSC RCB Group); Beginning with 2008 the Company has been successfully Usage of e-commerce means makes it possible to achieve In 2012 the Investments Committee attached to the Board – the Best Information Disclosure to Clients of an an- working in consolidation of municipal power grid property transparency and availability of the procurements process, of Directors of the Company was established for the pur- nual contest of annual reports held by JSC Moscow via concluding Rental Agreements. All the planned, accord- fair competition, considerable saving of labor hours and poses of coordination of investment activity and investment Exchange Market. ing to the long term program of consolidation of power grid cash assets of the Company. projects being realized within its frames. Its competence assets for 2011–2015 approved by the Board of Directors of contains considering and giving recommendations to the We are sure that transparency and availability is an integral the Company, projects on municipal power grid assets rent Protection of rights and interests of the Company is chieved Board of Directors on the most important issues for the part of effective corporate management of the Company. for 2012 have been realized. through regulation of its activity by internal local acts, such

32 33 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

as the Regulation on Contract Work, the Regulation on the Nevertheless, there exist diametrically opposed decisions Work with Receivables and Payables, and other adminis- that cannot be called fair ones. There can be only one result 3.1. CORPORATE MANAGEMENT trative regulatory documents, structuring the procedure of such illegal decisions, which is not favorable for the of conclusion of deals and protection of the Company’s country at all, it is imposing racking tariff burden for people interests by out-of-court and judicial procedures. An inte- and destruction of security of supply in most subjects of the 3.1.1. PRINCIPLES OF CORPORATE MANAGEMENT gral part of the work on saving the Company’s stability is Russian Federation. To prevent such a judicial act from en- realization of guarantees on voluntary medical insurance of tering into force JSC Tyumenenergo addressed a complaint the Company’s personnel and property insurance. to the eighth Arbitration Court of Appeals. JSC Tyumenenergo is striving to improve the corporate management Among judicial disputes of 2012 that can influence the In its work JSC Tyumenenergo apply the law and world system on the basis of the requirements of applicable Russian law Company’s activity is a suit from power supply company tendencies in increasing the Company’s activity transpar- Rusenergoresurs LLC on collection of unjustifiable enrich- ency. Before supplying market with information it is first and best international practice. ment allegedly got by JSC Tyumenenergo under Service of all necessary to conduct effective housekeeping. All the The results of good corporate management are high reputation and Contract on Electric Power Transmission of 2009. This so- business processes must be regulated, and observance of called case concerning “the last mile” – a legal mechanism the Company’s interests and prevention of negative results, investment attractiveness. worked out by the government to keep tariffs for population both for assets and personnel of the Company, must be- and small and medium business down through provision come an essential part of corporate culture. The Company understands corporate management as Company to its shareholder and accountability of of services by regional grid organizations using objects of a set of processes providing governance and control of the executive body of the Company to the Board power grid industry leased out by JSC FGC UES. I do not agree that law must work for business. Law, in our its activity and involving relations between sharehold- of Directors in accordance with applicable law; opinion, must work both in interests of business and all the er(s), the Board of Directors and executive bodies of the – fairness while implementing shareholder’s rights, In majority of analogous cases arbitration courts come to citizens of our country. Company in the interests of a shareholder. effective protection of these rights; conclusion that consumers have no right to appeal from We are sure that effective corporate management in the – transparency and timely disclosure of accurate agreements the party of which they do not constitute and Company is a guarantee of success in management activity The specificities of corporate management in JSC Tyu- information about material facts concerning dismiss their claims against grid organizations for collec- of the Company. menenergo are explained by the fact that there is only Company’s activity, including its financial situa- tion of unjustifiable enrichment. one shareholder of the Company – JSC IDGC Holding*, tion, social and ecological indicators, results of its which owns 100 % shares of the Company. activity, ownership structure and management of Structure of the management bodies in 2012 ______the Company, as well as free access to the neces- sary information for all the interested individuals; Effective corporate management management is a key – accountability to the shareholder and other per- GENERAL MEETING OF SHAREHOLDERS factor in the success of any joint stock company, and sons, willingness to cooperate in order to achieve as a result it determines its reputation and investment financial sustainability and development of the attractiveness. Good corporate management promotes Company. Committee on Technological Revision Commission improves internal efficiency of business processes in Connection to Power Grids the Company and their step to a higher level. JSC Tyumenenergo guarantees the shareholder the opportunity to exercise its rights, protection of which is Therefore, all corporate processes in the Company are achieved by means of: organized in accordance with the interests of its share- – registration of security ownership; Board of Directors Reliability Committee holder. – maintaining and keeping the Register of Share- holders of the Company in accordance with The basic principles of corporate management of the Articles 44, 45 and 47 of Federal Law “On Joint Company are formulated in the Code of Corporate Man- Stock Companies”; Investments Committee agement of JSC Tyumenenergo and are based on the – the right to participate in the management of the norms of Russian law, the Company’s Charter and Code Company through participation in the General of Corporate Conduct recommended for use by the FCSM Meeting of Shareholders of the Company with the Directive of April 4, 2002, No. 421/r, and the principles of right to vote on all the matters within its compe- Director General corporate management recognized by best international tence, participation of shareholder representa- practice (Principles of corporate management of the Or- tives in the Board of Directors as well as in the ganization for Economic Cooperation and Development). work of the Revision Commission. Corporate management hierarchy The report on the observance of the Corporate Manage- ment Code is prepared in accordance with the Directive A Company shareholder has a set of rights in respect to of the Federal Commission for Stock Markets of April 30, the Company, observance and protection of which should JSC IDGC Holding (JSC Rossiyskie seti) 2003, No. 03-849/r “On methodological recommenda- be provided by the Board of Directors of the Company. tions on the contents and format of presentation of infor- The register of shareholders of the Company is kept by

100 % mation in compliance with the Corporate Management an independent registrar (LLC RN-Registry). JSC Tyumenenergo Code in annual reports of joint stock companies” and provided in Appendix 3 to this annual report on CD. The shareholder regularly and timely receives informa- Corporate management in JSC Tyumenenergo is based tion about the activity of the Company in the amount and 51 % on the following principles: manner consistent with the law and internal documents JSC ESCO Tyumenenergo – accountability of the Board of Directors of the of the Company. ______* Following the results of JSC IDGC Holding General Shareholder Meeting of 23.03.2012 the resolution was passed to change the Company name for JSC Rossiyskie Seti.

34 35 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

JSC Tyumenenergo fulfills the requirements of parties, on the one hand, and confidentiality, A sole executive body of the Company, its Director The Company is eager to disclose all the necessary Russian legislation on the field of corporate manage- on the other hand, in order to achieve maxi- General, manages the ongoing activity of the Compa- information in order to comply with legislation and to ment. The Company has adopted and follows internal mum realization of the shareholders’ rights for ny, except for the issues referred to the competence increase investment attractiveness of JSC Rosseti in documents. These documents can also be seen on the receiving information on the Company’s activity, of the General Meeting of Shareholders and the general. corporate website of the Company (www.te.ru) in the provided that the information considered confi- Board of Directors of the Company, and organizes the subsection “Internal Documents” of the section “About dential or insider is protected; fulfillment of the decisions of the General Meeting of The Company confirms its willingness to protect the the Company”. – the principle of regularity and timeliness of Shareholders and the Board of Directors. Effective rights of a broad range of financially interested persons information disclosure that specifies that the cooperation between these bodies and strict delinea- in practice, and demonstrates a high level of corporate Information disclosure Company shall provide the shareholders, credi- tion of authority is one of the key factors in ensuring responsibility. The principles of corporate management policy and practice tors and other interested parties with the infor- sufficient corporate management. are the standard both for the Company and for govern- mation about its activity at the time defined by ment bodies and its subsidiaries. The implemented in the Company information disclo- the regulations of the Russian Federation and ______sure policy mainly aims at ensuring a high level of trust internal documents of the Company. from its shareholders, potential investors, contractors In spite of the fact that on March 29, 2012, since the and other interested parties by means of providing them Company has drawn all the commercial papers (the with the information about the Company, its activity and extent of debenture issue 2.7 bln rub.), JSC Tyumen­ securities to the extent sufficient for passing leveled and energo’s duty on information disclosure in the form 3.1.2. INFORMATION ON MATERIAL TRANSACTIONS grounded decisions on the Company and its shares by of quarterly report and notices on important facts has such persons. been canceled, JSC Tyumenenergo has decided to In 2012 the Company has not entered any significant transactions) subject to approval of the Board of continue to disclose the said information on a vol- transactions (major transactions and related party Directors and the General Meeting shareholders. When disclosing information, the Company is not limited untary basis. Thus, during 2012 the Company timely by the information disclosure of which is provided by the and in full disclosed information on the corporate site regulations of the Russian Federation, and additionally (www.te.ru) in the newsline of “Interfax” press agency discloses other information that ensures a high level of in the form of quarterly reports, annual report for 3.1.3. MANAGEMENT AND CONTROL BODIES OF THE COMPANY Company’s transparency and promotes achievement of 2011, lists of affiliated persons, reports of facts and the goals prescribed by the information disclosure policy. information that may have significant impact on the ______value of the securities of the Company in accordance with applicable legislation of the Russian Federation According to the Charter of JSC Tyumenenergo the Board of directors The Board of Directors approved the Regulation on In- on joint stock companies and capital market. management bodies of the Company are as follows: formation Policy (Minutes of August 23, 2007, No.12/07), – The General Meeting of Shareholders;; The Board of Directors of JSC Tyumenenergo provides which governs the additional voluntary disclosure of in- In accordance with the norms of the continuous – The Board of Directors; overall management of the Company, except for the mat- formation by the Company on its website, in the quarterly legislation of the Russian Federation beginning with – Director General (sole executive body). ters relating to the competence of the General Meeting and annual reports of the Company. September 01, 2012, the Company also discloses of shareholders in compliance with the Federal Law “On The main information is disclosed on the corporate web- its information on one of the pages on the Internet The body controlling the financial and business activity of joint stock companies”. site of the Company: www.te.ru in section “For Share- presented by “Interfax” press agency, the distributor the Company is its Revision Commission. The procedure for electing the Board of Directors is holders and Investors”. of information on capital market (http://www.e-disclo- defined in the Charter of the Company and complies sure.ru/portal/company.aspx?id=5577). General Meeting of Shareholders with the legislation of the Russian Federation. Persons When disclosing information the Company sticks to elected to the Board of Directors may be reelected an the following principles: The responsibility for information disclosure lies with According to section 11.1 Article 11 of the Charter of unlimited number of times. – the principle of completeness and accuracy of the Director General. Members of the Board of Direc- JSC Tyumenenergo, if all the voting shares of the Com- the information disclosed, in accordance with tors disclose information about themselves necessary pany belong to one shareholder, the decisions on the According to section 13.1 Art. 13 of the Charter of JSC which the Company provides all the interested for the Company to disclose information in accordance matters within the competence of the General Meeting Tyumenenergo the quantitative composition of the Board parties with information corresponding to fact, with the regulations of the Russian Federation. of Shareholders shall be adopted by the shareholder (the of Directors is 11 (eleven) people. without avoiding the disclosure of negative in- authorized management body of the shareholder), to be The competence of the Board of Directors is fixed in Art. formation about itself, to the extent that makes Moreover, interested persons may get information made in writing, notifications given to the Company. 12 of the Charter of JSC Tyumenenergo. it possible to get a more complete understand- about the Company’s activity in a press conference ing of the Company and of the results of its format on www.uralpolit.ru website, as well as via In respect of JSC Tyumenenergo, in accordance with In order to work out recommendations on the most activity; federal and regional publications. section 13.2 of the Charter of JSC Rosseti such an important issues the Board of Directors has established – the principle of accessibility of information in authorized management body of the shareholder is the Reliability Committee, the Committee on Technologi- accordance with which the Company uses dis- The Company believes that having a professional Board the collegial executive body, the Management Board of cal Connection to Power Grids and the Investment Com- tribution channels when disclosing information of Directors is an important element of effective corpo- JSC Rosseti, exercising the powers of the supreme man- mittee. The activity of the committees is governed by the on its activity, providing free and easy access rate management. agement body of JSC Tyumenenergo. corresponding Regulations – local regulatory documents for shareholders, creditors and other interested ______of the Company containing provisions on the composi- parties; The competence of the General Meeting of shareholders tion, competence, procedure of the committees, as well – the principle of well-balanced information The Board of Directors influences the results of the is fixed in Art. 10.1 of the Charter of JSC Tyumenenergo. as on the rights and responsibilities of its members. meaning that the Company’s information policy Company’s activity, performing strategic management is based on the reasonable balance of the and control of the work of executive bodies in the inter- The decisions of the General Meeting of shareholders The procedure of the Board of Directors is governed Company’s transparency for all the interested ests of the Company and its shareholders. are published on the official website of the Company. by the Regulation on the procedure of convening and

36 37 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

holding meeting of the Board of Directors of JSC Tyu- – Kryuchkov Evgeny Evgenyevich – Director General The Company’s Board of Directors was menenergo, approved by the General Meeting of Share- of JSC Tyumenenergo; elected on June 30, 2012, by the decision holders of JSC Tyumenenergo on July 30, 2012, Minutes – Kaloyeva Madina Valeryevna – Deputy Director of No. 153 pr/12 (hereinafter Regulation). the Department of economic regulation and prop- of the Board of JSC IDGC Holding as erty relations in TEC Minenergo of Russia; follows (positions are indicated as of In accordance with clause 5.1 of the Regulation, meetings – Golubev Pavel Vladilenovich – Head of the De- election date): of the Board of Directors shall be held when necessary, partment on operation organization and MRO of but at least once a quarter. Plan of activities for a corpo- JSC IDGC Holding; rate year shall be approved during the first meeting of – Ponomarchuk Andrey Fedorovich – Deputy the Board of Directors elected anew during the annual Director General for Economics and Finance of general meeting. JSC SRC UES; – Sannikov Aleksey Valeryevich – Member of the The Secretary of the Board of Directors ensures time- Board, Deputy Director General of JSC IDGC ly receipt by all the directors of complete information Holding; together with the notice about the meeting of the Board of – Inozemtsev Vladimir Vyacheslavovich – Head of Directors. the Department of Transport and Energy Conser- vation of JSC IDGC Holding; In 2012 there were no transactions between the members – Sergutin Aleksey Vladimirovich – Director of Eco- of the Board of Directors and the Company, and no suits nomics of JSC IDGC Holding; were filed against the members of the Board of Directors. – Kurochkin Aleksey Valeryevich – Director of Cor- porate Policy of JSC IDGC Holding; In 2012 the Company did not provide any loans and funds – Kurbatov Mikhail Yuryevich – Member of the for training to the members of the Board of Directors. Board, Deputy Director General of JSC IDGC Holding; Members of the Board of Directors of JSC Tyumenenergo – Vasiliev Sergey Vyacheslavovich – Member of effective from June 28, 2011, to June 30, 2012, (positions the Board, Director of Legal Affairs if JSC IDGC TATSIY VLADIMIR VITALYEVICH Berdnikov Roman Nikolaevich indicated as of the election date): Holding. Chairman of the Board of Directors Vice Chairman of the Board of Directors – Shvets Nikolay Nikolayevich – Chairman, Director of JSC Tyumenenergo. of JSC Tyumenenergo. General of JSC IDGC Holding; Born: 1960. Born: 1973.

Education: Education: Moscow Power Engineering Institute – Cryophysics Higher, Moscow Power Engineering Institute, Engineer engineer (1984); postgraduate study in the Institute of (2002). International Economics and International Relation- ships – International economics (Ph. D. in Economics) Primary employment and work status (as of election (2007–2010). date): Deputy Chairman of the Board of JSC FGC of UES. Primary employment and work status (as of election date): Other work statuses: First Vice President of JSC Gazprombank. 2012 – till now – JSC IDGC Holding, First Deputy of Exec- utive Director. Other work statuses: 2007–2009 – JSC Gazprombank, First Vice President – Is a member of the Non-commercial Partnership “Mar- head of the Deposit Center. ket Board”.

Is a member of the Board of Directors (Supervisory Board) of the following organizations: CJSC Settlement Depository Company (Chairman of the Board of Directors), CJSC St. Petersburg Interna- tional Commodity Exchange (Chairman of the Board of Directors), JSC RusHydro (Chairman of the Board of Directors), JSC ATC (Chairman of the Board of Directors), CJSC Regional Investment Company, Non-banking Credit Company CJSC National Settlement Depository, JSC IDGC Holding, CJSC The Center of Financial Estimate, Moscow Power Engineering Institute (TU) (member of the Board of Guardians).

38 39 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

MANGAROV YURII NIKOLAEVICH HVALIN IGOR VLADIMIROVICH MIKHEEV PAVEL ALEKSANDROVICH KUDRYAVIY VIKTOR VASILYEVICH BORODIN PAVEL ANDREYEVICH Born: 1956. Born: 1974. Born: 1968. Born: 1937. Born: 1971.

Education: Education: Education: Higher. Education: Education: Higher, Moscow Institute of National Higher, State Aeronautical Institute Higher, Ivanovo State Power Institute af- MSU after M. V. Lomonosov (history – 1994, law – 1999, Cand. Sc.-2000). Economy after G. V. Plekhanov, specialty – (Technical university). Engineer, specialty: Work status: 04.02.2013 – till now – ter V. I .Lenin, specialty – "Thermal power Diplomatic Academy of MFA of the Russian Federation (international Economic cybernetics (1978). Computing machines, complexes, sys- Director General of JSC Tyumenenergo. installations of generating stations”, relations – 2005). tems and networks. Cand. Sc. qualification – heating engineer (1961). Primary employment and work status Positions held over the last 5 years: Primary employment and work status (as of election date): (as of election date): Primary employment and work status 2008–2012 – Deputy Director General on Primary employment and work status JSC Vympelcom, Vice President in providing operator performance and JSC FGC of UES, Deputy Chairman of the (as of election date): regional development, First Deputy Direc- (as of election date): work with government bodies. Board – head of the Executive Office. Deputy Chairman of the Board of JSC tor General, Deputy Director General on Adviser to President of CJSC Eurocement FGC of UES. technical issues – chief engineer, acting Group. Positions held over the last 5 years: Other work statuses: Director General of JSC Tyumenenergo. 2008–2011 – CEC RF, member of the EC RF with a deliberative voice of 2007–2009 – private investor. Other work statuses: Positions held over the last 5 years: D. A. Medvedev. 08.2009 – 10.2009 – Deputy director of 2008–2012 – JSC Volga Engineer group, 2004 – till now – Chief research worker of the directorate of financial control and Director General. the 17th category of UTC APCS subde- 2008 – till now – member of the Presidium, Chairman of the Commission internal audit of JSC FGC of UES. partment, Moscow Power Engineering on international cooperation of the Association of Russian lawyers. Is a member of the Board of Directors Institute. 2008–2010 – Deputy Director General of the Russian Housing Develop- 2009–2010 – Director on audit and exam- (the Supervisory Board) of the following ment Foundation. ination activity of JSC FGC of UES. organizations: JSC FGC of UES, JSC IDGC Is a member of the Board of Directors of Holding. JSC IDGC Holding. Is a member of the Board of Directors (the Supervisory Board) of the Is a member of the Board of Directors following organization: JSC IDGC Holding, AC ALROSA (JSC). (the Supervisory Board) of the following organizations: JSC CIUS UES, JSC ESSC UES, JSC YANTARENERGO.

40 41 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

SOLOD ALEKSANDR VIKTOROVICH FADEEV ALEKSANDR NIKOLAEVICH PAVLOV VADIM ALEKSEEVICH TIHONOVA MARIIA GENNADYEVNA Born: 1976. Born: 1949. Born: 1977. Born: 1980.

Education: Education: Education: Education: Higher, South-Russian State Technical University (No- Higher, Engineering Institute of Geodesy, Higher, Rostov State Economical Academy, specialty – Volgo-Vyatsk Academy of government service. Faculty of the State vocherkassk) (1999). Cartography and Aerial Photography, Manager (1999). Municipal government, specialty – Manager (2002). specialty – optoelectronics, qualification: The Academy of National Economy of the Russian Federation Primary employment and work status (as of election optical mechanical engineer (1972). Primary employment and work status (as of election Government. Professional retraining on the program “State economic date): date): development administration (2005). Higher school of economics, Deputy Chief Engineer JSC FGC of UES. Primary employment and work status Head of the Center of Strategies, Development and Program “Business management master”, specialty – finances (2008). (as of election date): Innovations of JSC IDGC Holding. Ph. D. in economics. Positions held over the last 5 years: Security Director on JSC FGC of UES. 2008–2009 – Deputy Chief Engineer of the South depart- Positions held over the last 5 years: Positions held over the last 5 years: ment of JSC Glavsetservis UNPG. Positions held over the last 5 years: 2006–2010 – Head of the Regional service on Tariffs of 2005–2012 – Department of Energy of Russia, Director of the 04.2009 – 10.2009 – Director on Investments and Main- 07.2008 – 12.2008 – Head of the group of the Rostov Region, Rostov-on-Don. Department of corporate management, pricing environment and taining of the assets of the department of JSC FGC of the Project center, JSC IDGC Holding. 2010–2010 – Director General of JSC Donenergo, Rostov- supervision and auditing activity in FEC industries; Director of the UES, Backbone Grids of the South. 2009–2011 – Head of the Department of on-Don. Department of economic regulation and property relations in FEC; 10.2009 – 12.2009 – South department of JSC Glavset- Economic Security of JSC FGC of UES. 2010–2011 – Director of the Department of communal leading specialist, leading specialist-expert, Deputy head of the servis UNPG, Deputy Director General – Executive infrastructure development of JSC Corporation of the department of property relations in FEC in the Judicial support and Director. Is a member of the Board of Directors if Kaluga Region Development, Kaluga. property relations department in FEC of the Federal energy agency. 01.2010 – 11.2010 – Deputy Director General on technical JSC CIUS UES. Head of the department of corporate management and economic service and repair of the department of JSC FGC of UES, Is a member of the Board of Directors (the examination of the Department of economic regulation and property Backbone Grids of the South. Supervisory Board) of the following organizations: relation in FEC of the Department of Energy of Russia. JSC Tyvaenergosbyt, JSC APBE, JSC SIIC of the Volga Is a member of the Board of Directors of JSC Kuban Region. Is the member of the Board of Directors (the Supervisory Board) highway network. of the following organizations: JSC ESCO RusHydro, JSC OESC, JSC Lenenergo, JSC DEC, JSC Institute ENERGOSETPROEKT, JSC NIITeplopribor, JSC Yantarenergo, JSC MUEGC.

42 43 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

The members of the Board have no shares in charter at the meetings of the Board of Directors important capital of JSC Tyumenenergo because the sole Company decisions were adopted, reports of the Director shareholder of the Company id JSC Rosseti. General on the activity of the Company reviewed and ______approved, and several internal documents – programs and regulations regulating the Company’s decisions All the members of the Company Board of Directors have activity-approved. The majority of the issues concerned agreed to disclose this information in the Company’s the notion of strategic development of the Company and annual report and on the corporate website of the control of the working efficiency of the executive bodies. Company. All the requests of the Board of Directors were satisfied.

The most important issues on which the Board of Directors made decisions in 2012

During 2012 the Board of Directors held 16 meetings, including two meetings in the format of joint attendance (in presence); with 228 issues considered. In 2012

The issues considered by the Board of Directors in 2012, by categories

2 % 36 % — Executive bodies performance management – 5 % 3 83 issues % 6 8 % 26 % — Strategic development – 60 issues %

9 14 % — Financial administration – 32 issues 9 % — Personnel administration – 20 issues 1 4 the fenced off area of overhead power transmis- The Company discloses information on the paid remu-

% 8 % — Corporate management of Company S&A – 18 issues sion line. nerations to the members of the Board of Directors in 5 % — Organizational issues – 11 issues public. Complementary to the quarterly report of the 26 % After the election of the new Board of Directors of the issuer, this information is published on the corporate 2 % — Other issues – 4 issues Company, the annual General Meeting of Shareholders website of the Company. of the Company on June 30, 2012, elected Chairman, Deputy Chairman, Secretary of the Board of Directors In 2012 general remuneration amounting to of JSC Tyumenenergo, the members of the Reliability 19,220,586.66 rub. (including PIT 2,498,680.00 rub.) Report on the work of the Company Board of – The decision on the participation of the Company Committee, the Committee for Technological Connec- was paid to the members of the Board of Directors, Directors in 2012 in JSC Kubanenergo is made, JSC TRC. tion to Power Grids within the Board of Directors. The including 13,474,241.67 rub. according to the results – The participation of the Company in the Work Plan of the Board of Directors of JSC Tyumenen- of 2011 (including PIT 1,751,653.00 rub.). In the reporting year the Board of Directors of Non-Commercial Partnership “The National ergo for 2012–2013 was approved. JSC Tyumenenergo approved the following: Committee of SIRED. Electric power distribution Committees within the Board of Directors – The Company’s business plan, including the systems” and in the Non-Commercial The decisions of the Board of Directors of JSC Tyumen­ investment program for 2012-2017. Partnership “The Market Board on organization energo are also published on the official website of the On December 4, 2012, the Board of Directors of JSC – Policy of internal control of JSC Tyumenenergo in of an effective system of distributive electric Company in section “For shareholders and investors/ Tyumenenergo decided to establish the Investment the new edition. energy and power trade” is approved. The decisions of the Board of Directors”. Committee within the Board of Directors, including – The strategy of JSC Tyumenenergo in the field the following members (positions indicated as of the of information technologies, automation and The following issues were identified as priority work Remuneration election date): telecommunications till 2016. areas for the Company’s activity: 1. Balaeva Svetlana Aleksandrovna – the Head – The program of energy conservation and increase – Construction and commissioning of fiber-optic Remuneration of the members of the Board of Direc- of the Investment Department of JSC IDGC of energy efficiency of JSC Tyumenenergo for 2013 communication lines. tors complies with market conditions and is established Holding – Chairman of the Committee. and a forecast till 2018. in a way as to ensure attraction and participation in the 2. Kudryaviy Viktor Vasilyevich – Adviser to Pres- – The regulation on investment activity of JSC When considering priority work areas of the Company, Company’s activity of highly qualified specialists, and ident of CJSC EUROCEMENT Group. Tyumenenergo. the Board of Directors approved the following docu- motivate them to work honestly and effectively. 3. Mangarov Yurii Nikolaevich – Deputy Executive – The regulation on the system of internal technical ments: Director, Chief of Staff of JSC IDGC Holding. control in JSC Tyumenenergo. – The implementation plan of the Company for 2012 The remunerations are paid to the members of the 4. Magadeev Ruslan Raisovich – the Head of the – The conception of creating a unified computer- on construction and commissioning of fiber-optic Board of Directors in accordance with the Regulation Department of process operational manage- based reference data system in the field of communication lines. on Payment of Remunerations and Compensations to ment of JSC IDGC Holding. maintenance management and equipment repair – The standard of assigning for temporary use of the members of the Board of Directors of JSC Tyu- 5. Egoshin Sergey Nikolaevich – Deputy Director of JSC Tyumenenergo. the objects of electrical energy industry for the menenergo approved by the Resolution of the General General on Technical Issues, Chief Engineer of – Establishment of the Investment Committee within purposes of fiber-optic communication lines allo- Meeting of Shareholders (Minutes No. 1868/pr1 of May JSC Tyumenenergo. the Board of Directors of JSC Tyumenenergo. cation of outside investors, including allocation in 6, 2008).

44 45 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

6. Yaskovets Igor Ivanovich – Deputy Director 2005, and the Committee on Technological Connection – The report on the results of the autumn and win- labor contract in accordance with the Charter of the General on Capital Development of JSC Tyu- to Power Grids established on March 6, 2009. ter period of 2011–2012 in JSC Tyumenenergo. Company. menergo. – Activities on implementation of the system of 7. Petrova Tatiana Valerievna – Deputy Direc- On August 7, 2012, the Board of Directors of JSC Tyu- business assets management for 2012. The Board of Directors is at any time entitled to decide tor General on Economics and Finances of menenergo (Minutes No. 06/12) determined the fol- – The conception of creating a unified comput- on terminating the authority of the Director General of JSC Tyumenenrgo. lowing membership for the Committees (positions are er-based reference data system in the field of the Company and on establishing new executive bodies. 8. Pavlov Vladimir Sergeevich – the Head of the given as at the time of election): maintenance management and equipment repair Investment Department of JSC Tyumenener- of JSC Tyumenenergo. Remuneration and performance evaluation. The go. The Reliability Committee – Establishment of the Investment Committee with- remuneration system for the Director General is 9. Tsiku Ruslan Kimovich – the Head of the – Zuykova Olga Valentinovna – the Head of the in the Board of Directors of JSC Tyumenenergo. determined by the Board of Directors. The remuneration Business Planning Department of JSC IDGC Directorate of manufacturing inspection and – The Program on trauma prevention in JSC Tyu- consists of permanent and variable parts, the latter Holding. work safety of JSC IDGC Holding – Chairman of menenergo for 2012–2013. depends on achieving a definite KPI of work of executive 10. Iordanidi Kirill Aleksandrovich – Chief Special- the Committee. – The schedule of implementation of the system of bodies and is connected with their personal input into ist of the Strategy and Development Depart- – Mikheev Pavel Aleksandrovich – Acting Director computer-based engineering overhead line-35 kV ensuring a long-tern development of the Company in the ment of the Center of Strategy and Develop- General of JSC Tyumenenergo. and higher in the Company. interests of its shareholders. ment of JSC IDGC Tyumenenergo. – Petrova Tatiana Valerievna – Deputy Direc- – The report of JSC Tyumenenergo readiness for The indices are understood as a system of financial and tor General on Economics and Finances of a 2012–2013 heating season. non-financial indicators influencing the quantitative and The main issues considered by the Investment Com- JSC Tyumenenergo. – The report on realization of the Schedule of activi- qualitative change of the results towards the strategic mittee in 2012: – Borovitskiy Vasiliy Gennadyevich – Deputy Chief ties on implementation of the system of business goal of the Company. – An updated investment program of JSC Tyume- Engineer of JSC Tyumenenergo. assets management in JSC Tyumenenergo. Beginning with December 24, 2011, the Board of nenergo for 2012–2017. The annual integrated – Daryan Leonid Albertovich – the Head of the Directors elected Mikheev Pavel Aleksandrovich purchasing program (AIPP) of the Company for Department of Technical Development and The most important issues/documents considered and Acting Director General of JSC Tyumenenergo (on 2013 in the field of investment activity. Regulation of JSC IDGC Holding. approved by the Committee on Technological Connec- February, 4, 2013, he was elected Director General of – Target figures of the annual and quarterly key – Pankov Dmitriy Leonidovich – the Director tion to Power Grids within the Board of Directors in JSC Tyumenenergo). He has numerous rewards for performance indicators of the Director General on strategy, development and innovations of 2012 are the following: successful work in electric power industry development, and higher managers of JSC Tyumenenergo for JSC IDGC Holding. – The Report on JSC Tyumenenergo activity on e.g. got acknowledgement of the Ministry of Energy 2013 in the field of investment activity. – Martsinkovskiy Gennady Olegovich – the Head technological connection in 2011. of the Russian Federation and of the Governor of the – The program of energy conservation and of the Capital Construction Department of – The plan of activities on performing agreements Tyumen Region; was awarded with the Certificate of increase of energy efficiency of JSC Tyumenen- OKSC IDGC Holding. on technological connection of applicants, maxi- honor from the Ministry of Regional Development of the ergo for 2013 and a forecast till 2018 in the field mum output 15 kVt. Russian Federation and Letter of gratitude from the of investment activity. The Committee on Technological Connection to Power – The plan of activities on reduction of risks of Director General of JSC IDGC Holding. – The Provision on Investment Activity of Grids On August 7, 2012, the Board of Directors of having complaints from the applicants about Since Director General P. A. Mikheev is also the member JSC Tyumenenergo. JSC Tyumenenergo determined the following mem- JSC Tyumenenergo activity when providing ser- of the Board of Directors of the Company, his biographic – The reports of the Director General of the Com- bership of the Committee on Technological Connec- vices on technological connection for 2012–2013. data and information on remuneration are published in pany were considered: tion to Power Grids (Minutes No. 06/12) (positions subsection “The Board of Directors”. • on execution of the AIPP of the Company for are given as at the time of election): The minutes of the specialized Committees within the the 3d quarter and 9 months of 2012 in the – Kudryaviy Viktor Vasilyevich - Adviser to Presi- Board of Directors are published on the official web- Interaction between the Board of Directors field on investment activity; dent of CJSC EUROCEMENT Group – Chairman site of the Company in section “For shareholders and and the Executive Body of the Company • on execution of the investment program of the Committee. investors”. of the Company for the 3d quarter and – Pyatigor Aleksandr Mikhailovich – the Head of Effective corporate management requires an open 9 months of 2012; the Department of Technological Connection In 2012 the members of the committees within the dialogue between the Board of Directors and the • on execution of KPI of the Company in and Advanced Development of JSC IDGC Hold- Board of Directors were not paid any remuneration. executive body of the Company. the field of investment indicators for the ing. 3d quarter of 2012; – Egoshin Sergey Nikolaevich – Acting Deputy Director General For this purpose the Director General presents to the • on execution of the schedule of realization of Director General on Technical Issues, Chief Board of Directors reports on the results of the Company “PC 220 kV Salekhard with a power overhead Engineer of JSC Tyumenenergo. Director General is the sole executive body of the activity in the manner and format required by the line 220 kV Nadym – Salekhard” project in – Pyaduhov Dmitriy Olegovich – Deputy Director Company. The competence of the Director General internal documents of the Company and the decisions the 3d quarter of 2012; General on Development and Service Realiza- includes all the issues related to management of the of the Board of Directors of the Company. During the • on acquisition by the Company of the elec- tion of JSC Tyumenenergo. Company’s current activities, excluding the issues reporting period the Director General presented to the trical energy industry objects, approval of – Gromov Sergey Yuruevich – Deputy Director attributed to the competence of the General Meeting of Board of Directors the reports on the aspects of the which is not required by the Board of Direc- General on Corporate Management of JSC Tyu- Shareholders or the Board of Directors of the Company. activity of the Company. tors for the 3d quarter of 2012 in the field of menenergo. investment activity; – Mylnikov Yurii Petrovich – Deputy Chairma of The Director General is elected by the Board of • the report on realization of the schedule the Regional Energy Commission of the Tyumen Directors of the Company by a majority of voices of the of activities on implementation of the sys- Region, Khanty-Mansijsk Autonomous District Board of Directors participating in the meeting. tem of business assets management in and Yamalo-Nenetsky Autonomous District. JSC Tyumen­energo for the 2d quarter of 2012. The provisions of the labor contract including the terms During the reporting period the Reliability Committee of the vested authority are determined by the Board Besides that within the Board of Directors there exists considered and recommended for approval by the Board of Directors of the Company or the person authorized the Reliability Committee established on December 16, of Directors the following main issues/documents: by the Board of Directors of the Company to sign the

46 47 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

Reporting of the Director General to the Board of Directors The members of the Revision Commission do not own In accordance with Art.12 of Federal Law on Auditing the shares of JSC Tyumenenergo. In 2012 no deals were Activities, auditor is totally independent from the governing concluded between the Company and the members of bodies of the Company. More detailed information about Frequency of reports Names of reports the Revision Commission. The Company did not make any the auditor, registrar of the Company, is given in section by Director General claims against the members of the Revision Commission “Reference Data”.

on achievement of KPI targets Auditor According to subparagraph 8 paragraph 12.1 of the Charter of the Company, the amount of payment to the auditor on fulfillment of the business plan In accordance with the requirements of the legislation, for carrying on an audit of financial (accounting) reporting the Company shall carry on an annual audit of financial of JSC Tyumenenergo for RAS of 2012 is approved by the on implementation of the investment program (accounting) reporting. According to paragraph 10.2 of the Board of Directors of the Company (Minutes No. 07/12 of Charter of the Company, the General Meeting of Sharehold- August 9, 2012) and amounts to 1,563,460 rub. (including on achievement of the target value (cash flow) ers annually elect an auditor of the Company in order to VAT). revise and approve annual financial (accounting) reporting. on the credit policy Remuneration for reporting audit for IAS of 2012 amounts оn execution of the decisions made during meetings of the Board of Directors of the Company On June 30, 2012, the General Meeting of Shareholders to 3,540,000 rub. (including VAT). of JSC Tyumenenergo elected CJSC CPMG, Moscow, an In 2012 the auditor did not provide any non-auditing ser- Quarterly reporting оn execution of the decisions of the Board of Directors in the field of implementing auditor. Certificate No. 255 dated December 28, 2009, on vices. strategies in respect to non-core assets of the Company Registering of auditors and auditing organizations of the self-governed organization of auditors Non-Commercial on observance of the Provision on information policy Partnership “The Auditor Chamber of Russia” (PSRN: 103011000804). on implementing of AIPP for the Company

оn implementing the Insurance Program

оn implementing the Housing Policy 3.1.4. SUBSIDIARIES AND ASSOCIATES

оn managing the subsidiaries and associates of the Company At present JSC Tyumenenergo owns one subsidiary company:

annual report of the Company Subsidiary/ Core Company Authorized Revenues Financial Data on the Data on the Annual Reporting annual accounting reports Location business share in capital of the result of the registrar auditor of the of the the capital subsidiary subsidiary of the subsidiary report on compliance with the Code of Corporate Management subsidiary of the sub- (thous. (thous. rub) subsidiary sidiary (%) rub.)

JSC ESCO Energy 51 20,000,000 rub. 119,668 7,725 LLC Re- LLC UFA- The Revision Commission of JSC Tyumenenergo – Arhipov Vladimir Nikolaevich – the Head of the Tyumenen- Audit divided into estr-RN , Consulting, Security Department of OJDC IDGC Holding; ergo, 628406, 20,000,000 of 109028, 628406, The Revision Commission is a permanent acting body – Kormushkina Liudmila Dmitrievna – the Head the Tyumen ordinary nomi- Moscow, Surgut, 30 let of internal control of the Company exercising control of the Division of Control and Evaluation of Region, Khan- nal book-entry Podkopa- Pobedy str., over the Company’s financial and business activity as the Department of Internal Audit and Risks ty-Mansijsk shares, nominal yevskiy per., 44/2 to its compliance with the legislation of the Russian Management of JSC IDGC Holding; Autonomous 1 ruble per 2/6, Federation, the Charter of the Company and the internal – Bogachev Igor Yuryevich – the Leading Expert Okrug – 1 share bld. 3-4 documents. of the Division of Control and Evaluation of Yugra, Surgut, the Department of Internal Audit and Risks Universitets- The Revision Commission functions in the interests of the Management of JSC IDGC Holding; kaya str., 4 shareholder of the Company and is accountable to the – Filippova Irina Aleksandrovna – the Leading General Meeting of Shareholders. In accordance with sec- Expert of the Division of Control Evaluation of Subsidiaries do not own shares in the authorized capital of JSC Tyumenenergo tion 19.1 Art. 19 of the Charter of the Company, the size of the Department of Internal Audit and Risks the Revision Commission is determined s 5 members. Management of JSC IDGC Holding. State registration of the subsidiary of JSC Tyumen­ other programs, as well as to implement energy conser- On June 30, 2012, the Board of JSC IDGC Holding Remuneration is paid in accordance with the Provision on energo, JSC Energy Service Company Tyumenenergo vation measures. elected the Revision Commission of JSC Tyumenenergo Remuneration and Compensation Paying to the Mem- (hereinafter JSC ESCP Tyumenenergo) took place on including the following members (positions indicated as bers of the Revision Commission of JSC Tyumenenergo January 12, 2011. The decision to establish the Energy Since the time if its establishment JSC ESCO Tyumenen- of the election date): approved by the annual General Meeting of Shareholders of Service Company was made by the Board of directors of ergo has become one of the largest companies in Russia – Alimuradova Izumrud Aligadzhievna – the Direc- JSC Tyumenenergo of May 6, 2008 (Minute No. 1868pr/1). JSC Tyumenenergo on December 15, 2010. providing services in conducting energy audits and tor on Internal Audit and Risks Management (the implementing energy conservation measures. Head of the Department of Internal Audit and In 2012 general remuneration amounting to 613 800 rub. The main activity of the Energy Service Company is to Risks Management) of JSC IDGC Holding – Chair- (including PIT 79 794 rub.) was paid to the members of the implement a full complex of services for conducting By now the Company has realized more than 800 proj- man of the Revision Commission; Revision Commission. energy audits, compiling energy service, investment and ects on energy audit. The Company has accumulated,

48 49 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

considered and prepared for realization a base of ener- (The authorized capital amounted to 202,073,886 rub., gy-efficient resources both for the budget and residen- and was divided into ordinary nominal book-entry 3.2. SECURITIES, AUTHORIZED CAPITAL tial sectors (administrative buildings of all types, boiler shares, nominal 63 rubles per 1 share). houses and pumping stations) and for the industrial AND DIVIDEND HISTORY enterprises (plants, industrial constructions, airports The Board of Directors of JSC IDGC Holding (Decem- and energy companies). JSC Tyumenenergo has realized ber 29, 2011) and JSC Tyumenenergo (January 1, 2012) 3.2.1. AUTHORIZED CAPITAL big geographically distributed projects on energy audit approved the decision on termination of JSC Tyumene- of about 5,000 buildings and structures of government nergo membership in JSC Tyumenenergoavtotrans by JSC Tyumenenergo’s authorized capital amounts to The shares of the Company are not in circulation on the bodies and institutions of the Tyumen Region and 5 mu- selling its batch of shares. 27,373,895,100 rubles and is divided into 273,738,951 organized securities market. nicipal units of the Tyumen Region. Energy passports ordinary shares with a nominal value of 100 rubles Since July 1, 2008, as a result of JSC RAP UES of Russia of more than 400 state and municipal institutions have On July 16, 2012, there was concluded JSC Tyumenener- each share. Additionally, the Company announced reorganization, JSC IDGC Holding is the sole shareholder successfully passed the expertise in the self-governed goavtotrans share purchase agreement. 3,121,409 pieces of ordinary shares with a nominal value of the Company*. organization NP SRO Union of Energy Auditors and En- of 100 rubles each share. There are no privileged shares. ergy Service Companies. These passports are one of the On September 13, 2012, JSC Tyumenenergo terminated first to have been registered in the Ministry of Energy of its membership in JSC Tyumenenergoavtotrans. Authorized capital profile as of December 31, 2012 the Russian Federation. JSC Tyumenenergo manages its subsidiaries and affil- The Company develops human resources of its person- iate in accordance with the Procedure for relations of nel. The experts of the Company are the only experts in JSC Tyumenenergo with organizations in the Company Russia that have passed additional training and certifica- participates, approved by the Board of Directors of the tion on energy audit of investment grade (IGA), working Company on March17, 2009 in the new edition (Minutes out of the plans of measurement and verification (M&V) No. 03/09). and realization of energy service contracts in accordance 100 % — JSC IDGC Holding with the International Protocol of Measurement and The Company controls the future and current activities Verification (IPMVP). In 2011 by the efforts of ESCO this of subsidiaries and affiliates with the help of the assess- protocol was translated into Russian. ment by the Board of Directors of JSC Tyumenenergo, in accordance with its Charter, of the position of the Com- JSC ESCO Tyumenenergo is a member of self-governed pany concerning the decision-making by the General organization: Meeting of Shareholders of JSC Tyumenenergo and the – NP Union of Energy Auditors and Energy Service Board of Directors of subsidiaries. Companies, received a Certificate of Admission JSC Tyumenenergo owns privileged shares of JSC IDGC Holding. to Works in Energy Audit No. SRO-E-095/025 of JSC Tyumenenergo controls its financial and econom- June 22, 2011; ic activity of its subsidiaries and affiliates by means Information about the shares in cross-holding as of December 31, 2012 – NP ENERGOPROEKT (Minutes No. 48 of February of collection of quarterly reports and inclusion of the 2, 2012; Company’s specialists in the Revision Commission of Issuer Central Bank Nominal JSC Tyumenenergo Nominal value – NP ENERGOSTROY (Minutes of the Council of the subsidiaries for audits. Code Shareholder share, % of one share, Partnership No. 47 of February 3, 2012). rub. The share of JSC Tyumenenergo in the authorized The strategic goal of JSC ESCO Tyumenenergo is to capitals of the target companies in the industry, formed JSC IDGC Holding MRKHP CJSC Sberbank KIB 0.0100 1 become a leading company of the Russian Federation as the result of JSC RAO UES of Russia reorganization, providing complex services in the field of energy conser- is less than 2 %. The information about the share of vation: energy audit, energy service and realization of JSC Tyumenenergo in the authorized capitals and voting energy conservation measures. shares of the Company as of December 31, 2012, and the information about the Company’s participation in 3.2.2. BONDS As to August 31, 2012, JSC Tyumenenergo owned an non-commercial partnerships as of December 31, 2012, associate company JSC Tyumenenergoavtotrans. The is available on the CD in the Appendixes to this annual registration of the report on the results of the bond share of the Company of the capital of the subsidiary was report No. 4 and 5 respectively. As of March 28, 2012, certificated interest-bearing issuing was performed on May 8, 2007. 99,9969 %. non-convertible to bearer JSC Tyumenenergo bonds, The volume of the funded loan amounted to 2.7 billion allocated by public offering, were in circulation (State rubles. The creditors are general public – owners of the Registration Number of the bond issue: 4-02-00 159-F). bonds. The nominal value of one bond of the issue is Allocation of the said bond issue on the MICEX Stock 1,000 rub. Exchange tool place on April 5, 2007, in accordance with The maturity of the bonds is 1,820 days (5 years) with the the decision of the Board of Directors of December 28, possibility of put date in 1,092 days. The maturity date 2006, No. 18/06. for the bonds is March 29, 2012. The interest rate of the The State Registration of the bond issue was performed first coupon paid in October 2007 amounted to 7.7 %. by FFMS of Russia on February 21, 2007, and the state The effective yield of the bonds to the three-year put date amounted to 7.85 % as of the allocation date. ______Order No. 106 of March 19, 2010, of JSC Tyumenenergo * As a result of the extraordinary General Meeting of Shareholders of JSC IDGC Holding of March 23, 2012, the Company was renamed to defined the interest rate for the seventh – tenth coupons JSC Rosseti. of JSC Tyumenenergo bonds of 02 series. The coupon

50 51 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL CORPORATE MANAGEMENT. SECURITIES, EQUITY CAPITAL AND DIVIDEND HISTORY AND DIVIDEND HISTORY

End of table rate amounted to 8.7 % annum, that is 43 rubles 38 JSC Tyumenenergo bonds paid from the 1st to 10th kopecks each bond. coupons amounted to 1,090,422 thousand rubles. As 1 2 3 4 5 a result, JSC Tyumenenergo performed discharged its In 2009 on results dividends not paid – – JSC IDGC Holding Order JSC Tyumenenergo repaid its funded loan to the full and liability to the owners of corporate bonds of the 2d issue of 2008 No. 9r of June 29, 2009 the 10th coupon yield amounting to 117,126 thousand timely and to the full. rubles on March 29, 2012. The total yield amount on ______In 2010 on results 430,000 25.77 1.570839657 Minutes No. 22pr/8 of of 2009 June 29, 2010 In 2011 on results 441,830 8.01 1.614056013 Minutes No. 96pr/12 of 3.2.3. DIVIDEND HISTORY of 2010 June 28, 2011 In 2012 on results 369,548 8.85 1.3500015202 Minutes No. 153pr/12 of The Company’s Dividend Policy principles are fixed in the ensuring the perspectives of the Company’s of 2011 June 30, 2012 Company’s Provision on Dividend Policy, approved by the development; In 2013 on results 31,735 25 0.1159316198 Board of Directors of JSC Tyumenenergo in 2010. – compliance of the practice of calculation and div- of 2012 (planned) idend payout of the Company with the legislation The Company’s Dividend Policy is based on the balance of the Russian Federation and the best standards of interests of the Company and its shareholders, while of corporate behavior; determining the amount of dividend payouts, on respect – an optimum combination of interests of the Com- The dynamics of dividend payouts is shown in the diagram. for and strict observance of the rights of shareholders pany and its shareholders; under the current legislation of the Russian Federation, – the necessity to increase the investment attrac- The dynamics of dividend payouts the Charter and the internal documents of the Company, tiveness of the Company and its capitalization; and is aimed at increasing the Company’s investment – ensuring the transparency (understandability) attractiveness and growth of its market capitalization. of the mechanism of determining the amount of 90,000 339,660 300,0000430,000 441,830 369,548 31,735 dividends and their payouts. The dividend policy is based on the following principles: – calculation of dividends is based on use of profit Under 2011 results, the Company paid dividends on without accounting for the effect of revaluation of its ordinary shares amounting to 1.35 rubles per one financial investments; ordinary share of the Company. The profit retained after – the necessity to maintain the required level of the dividend payout was allocated to the implementation financial and technical state of the Company (the of the investment programs amounting to 3,559,475 2006 2007 2008 2009 2010 2011 2012 2013 (plan) implementation of the investment programs), thousand rubles.

In accordance with the results of 2011, it is planned to allocate 369,548 thousand rubles for dividend payment, which DISTRIBUTION OF COMPANY PROFITS IN ACCORDANCE WITH THE DECISIONS OF THE GENERAL MEETING OF is 8.85 % of the net profit. In accordance with the results for 2012, it is planned to allocate for dividend payment SHAREHOLDERS OF JSC TYUMENENERGO FOR THE PERIOD FROM 2006 TILL 2012 INCLUSIVE: 31,735 thousand rubles.

Change in the share of net profit annually allocated for dividend payouts can be seen in the diagram. Total amount of ac- Share of net profits Dividends per ordinary Minutes date and number crued and paid div- directed to the pay- share (rub.) idends on common ment of dividends, Share of net profit allocated for the dividend payouts, % shares (thousand % rub.) 7.96 19.53 25.53 0 25.77 8.01 8.85 25 1 2 3 4 5 In 2006 on results 90,000 7.96 0.32878 Minutes No. 1473pr/5 of of 2005 June 6, 2006 In 2007 on results 339,660 19.53 1.2408172 Minutes No. 1694pr/1 of of 2006 June 29, 2007 In 2008 on results 300,000 25.53 1.0959346 Minutes No. 1868pr/1 of 2006 2007 2008 2009 2010 2011 2012 2013 (plan) of 2007 May 6, 2008

52 53 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

№ 04 PRODUCTION ACTIVITY RESULTS

TECHNOLOGY OF ORDER ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

PRODUCTION ACTIVITY RESULTS PRODUCTION ACTIVITY RESULTS

PRODUCTION ACTIVITY RESULTS

Opinion of Dmitry O. Pyadukhov, Deputy Director General of Development and Service Sales, JSC Tyumenenergo performance in 2012

JSC Tyumenenergo provides services on electrical en- electrical power engineering development programs JSC Tyumenenergo Electrical Energy Balance – 2012 ergy transmission to the territories of three constituent for the regions of the Russian Federation endorsed by entities of the Russian Federation being the country’s Decree of the Government of the Russian Federation Generation 6.7 billion kWh Grid output Net output Agriculture 0.3 billion kWh key oil- and gas-bearing regions. The main peculiarity of No. 823 dated October 17, 2009. the Company’s coverage area is the high concentration Based on these diagrams and programs JSC Tyumene- FGC 500 11.9 billion kWh 70.9 billion kWh 69.1 billion kWh Large cities 6.3 billion kWh of oil- and gas-production companies as well as diversi- nergo Investment Program for 2012–2017 was aligned; fied system of the natural resources’ export outside the this Program implementation enables prompt develop- FGC 220 50 billion kWh Others 6.0 billion kWh regions. As a result, JSC Tyumenenergo’s main custom- ment of the grid infrastructure and generating facilities, ers providing stable energy consumption in the energy meeting electrical energy and power demand, develop- system are oil- and gas-producing companies with the ment of stable and beneficial conditions for the regions’ Allied grid -0.4 billion kWh Major industrial 56.4 billion kWh output amounting to 64 % of the total Russian oil and development. companies consumers 91 % of the Russian gas. Simultaneously the number of In its activities JSC Tyumenenergo actively uses modern Station Unit 2.7 billion kWh new customers – natural persons, small and medium technologies. In 2012 Interactive Map of Feeder Cen- businesses – is increasing. In 2012 JSC Tyumenener- ters Load was developed which is accessible from the go completed activities and performed technological Company’s corporate web-site. It enables finding of the Electricity Losses 1.8 billion kWh (2.5 %) connection under 3,481 contracts for the total power of feeder center which is nearest to the consumer and de- 548.59 MW. The increment of the number of executed termine the center’s affiliation within the Company thus contracts compared with 2011 is 67.1 %, the total con- speeding up the process of connecting to the electrical nected power grew by 8.7 %. Proceeds from the techno- grids. logical connection services provision amounted to RUR Being a client-targeted Company, Tyumenenergo ex- 1,230.7 million. panding information cooperation continues developing Scope of the technological connection to JSC Tyumenenergo grids In 2012 JSC Tyumenenergo continued works in the relations with the consumers opening up new coopera- framework of Federal Law No. 26 dated November 23, tion techniques, including Internet-based ones, hotlines, Natural Persons Industrial Companies 2009 “On Power Saving and Energy Efficiency Improve- consumer lines and Call-center. 28.8 – MW 145.1 – MW ment”. The Company developed and approved Power To improve the consumers’ face-to-face service provision 3,481 Saving and Energy Efficiency Improvement Program local client service centers are opened. As per the 2012 Connection to JSC for 2012–2017 complying with the legal requirements, marketing study 99.5 % of the consumers are fully satis- Tymenenergo Grids including those concerning loss reduction in grid fied with JSC Tyumenenergo services quality. Territorial Grid Companies Budget Organizations transmission based on the application of energy-sav- Now and in the future, JSC Tyumenenergo is a reliable 117.2 – MW 13.3 – MW ing equipment as well as Smart Metering technology pillar of the region’s economy, sustainably developing, implementation. The implementation of the Program’s client-targeted, socially responsible company open for comprehensive activities electrical energy losses in the innovations and constructive cooperation to the JSC Tyumenenergo grids last year was 38.1 million kWh. maximum extent. 548.6 MW Agriculture Other Consumers Currently the Company has reached optimum level of the 2.4 – MW Connected Capacity 29.7 – MW transportation losses. Besides, in 2012 the first mandatory energy audit of JSC Tyumenenergo was completed, upon the audit results energy passport made in compliance with the Generation Scope current Codes and standards was received. In 2012 in cooperation with the Administrations of 21.2 – MW Tyumen Region, Khanty-Mansijsk Autonomous District (Yugra), Yamalo-Nenets Autonomous District, JSC Tyu- menenergo was involved in the design of the regions’ electrical power engineering development programs as per the Rules of the design of the diagrams and

56 57 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

PRODUCTION ACTIVITY RESULTS PRODUCTION ACTIVITY RESULTS

Proceeds for the electricity transmission services pro- in its turn, was due to the revision of the tariff and con- 4.1. ELECTRICAL ENERGY TRANSMISSION vided by JSC Tyumenenergo in 2012 amounted to RUR tract model for 2012 (MUE Surgut Electric Distribution 53,406.5 million which is 1 % smaller than in 2011. The Grids, JSC Surgutneftegaz, JSC YUTEK-Pokachi, JSC PROCESS ARRANGEMENT proceeds reduction compared with 2011 is due to the TPP Nizhnevartovsk were transferred from income items reduced paid output on income-bearing contracts which, list to expenditure items list). JSC Tyumenenergo core activity is provision of electrical energy transmission services using electrical grid facilities with the 4.1.4. AMOUNT OF THE ELECTRICAL ENERGY TRANSMITTED voltage range of 220-0.4 kV owned on title or another legal basis. In 2012 the total output of electrical energy by the transmitted to the end users and territorial grid compa- The provision of electrical energy transmission services revamp, upgrade, assembly and commissioning, Federal Grid Company, electricity producers and allied nies. Electrical energy losses amounted to 1,808.8 million may be divided into two processes. development of metering and billing facilities, grid companies to JSC Tyumenenergo grids amount- kWh or 2.5 % of the by JSC Tyumenenergo electrical relay protection equipment and emergency control ed to 70,870.0 million kWh. 69,061.2 million kWh was energy output. Technological: systems. – provision of energy equipment serviceability and availability as per the existing Codes, maintenance, Organization: Grid Output, Output from the Grid to the Losses diagnosis and repair of the grids, technological – arrangement of the activities on the provision of million kWh End Users and Territorial communications, metering and billing facilities, streamlined and emergency-free equipment opera- Grid Companies, million kWh million kWh % relay protection equipment, emergency control tion, work with human resources, including training 70,870.0 69,061.2 1,808.8 2.5 systems and other technological equipment related and conversion courses; to the functioning of the electrical grid facilities as – arrangement of contractual work, work on the well as technological control thereof; accounts for the services provided to the consum- – development of the electrical grids and other grid ers, tariff regulation activities, finance and taxation Changes in the Scope of the Electrical Energy Transmission Services in 2011–2012 facilities, including design, survey, construction, activities, legal support etc. Scope of the Electrical Energy Transmission Services Provided, million kWh

Delta 4.1.1. TRANSMISSION FACILITIES 2011 2012 million kWh %

In 2012 JSC Tyumenenergo operational activities were Now the total length of JSC Tyumenenergo overhead grids 68,881.6 69,061.2 179.6 0.26 performed via 9 branches of the electrical grids, including is 45,871 km, cable lines – 525 km. four territorial production divisions comprising Tyumen Number of 35-220 kV substations – 638 with the installed Distribution Grids engaged in the operation and mainte- transformer capacity 26,654 MVA nance of the electrical grids. Number of 6-10/0.4 kV transformer substations – 5,338 Based on the results of JSC Tyumenenergo activities in by 179,6 million kWh or 0.26 %. The growth of the with the installed transformer capacity 1,092.9 MVA. 2012 the output from the grid to the end users and allied electrical energy transmission scope results from the grid companies made 69,061.2 million kWh which com- increased oil production by the customers – JSC Lukoil, pared with 2011 data (68,881.6 million kWh) is increase JSC Gazpromoneft, JSC RN-Yuganskneftegaz. 4.1.2. COMPANY INCOME BREAKDOWN

The largest consumer of the electrical energy trans- JSC Tyumen Grid Company in terms of the accounts for mission services in Tyumen region is JSC Tyumen Grid the electricity transmission services are stable. Over the 4.1.5. ACTUAL LOSSES OF THE ELECTRICAL ENERGY Company which was de-merged through the Com- report period the amount of the electricity transmitted pany re-organization. The share of JSC Tyumen Grid was 20,070.8 million kWh. Reduction of electrical energy losses during its transmission and Company in the breakdown of the proceeds from the The Company made contracts with energy sales com- electricity transmission services sales is about 35 % panies operating at the electricity wholesale and retail distribution is an urgent issue and one of the key energy efficiency or RUR 15,653.3 million (VAT excluded). Relations with markets. areas at JSC Tyumenenergo.

4.1.3. PROCEEDS FOR THE SERVICES PROVIDED Actual Losses of the Electrical Energy 2011–2012 ON ELECTRICAL ENERGY TRANSMISSION Actual 2011 Actual 2012 Delta

Net Output, million kWh Proceeds, VAT included, Average tariff, VAT excluded, million kWh % million kWh % million kWh % RUR million RUR/ kWh 1,789.7 2.5 1,808.8 2.5 19.1 0.0 2011 63,094.6 54,001.6 0.752

2012 62,132.0 53,406.6 0.758

58 59 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

PRODUCTION ACTIVITY RESULTS PRODUCTION ACTIVITY RESULTS

Actual losses of the electrical energy in JSC Tyumenen- JSC Tyumenenergo Grid Assets Consolidation for 4.1.8. CONSUMPTION OF ENERGY RESOURCES FOR PRODUCTION ergo electrical grids amounted to 1,808.8 million kWh or 2011–2015; 2.5 % of the grid output. Compared with similar period – growth of load losses at the expense of the output AND PROCESS PURPOSES in 2011, with the growth of the grid output by 0.28 %, the at the users’ gas-turbine thermal power plants electrical energy losses delta made 19.1 million kWh or (GTTPS) and commissioning of the users’ new 2012 No Units of 0.0 % relative to the output into the grid. facilities; Description – increased transit flows, including those relat- Measurement Plan Actual The losses delta in 2012 is due to the following factors: ed to the repair program of JSC FGC of UES of 1. Energy resources provided on delivery (sales) k RUR * 538,400.5 429,812.8 – construction of the new grid facilities; West Siberian Main Power Transmission Lines, contracts, Total – inclusion of the grid equipment to the bal- shutdown of power units at Priobskaya GTTPS, ance sheet at the expense of the consolidation Tyumen Thermal Power Plant (ЕЗЗ) and Nya- facilities as per the Long-Term Program of ganskaya State District Power Station. k RUR 326,677.7 237,644.4 1.1. Electrical energy kWh*1,000 93,830.1 86,652.5 4.1.6. POWER SAVING AND ENERGY EFFICIENCY IMPROVEMENT k RUR 69,487.5 44,868.7 1.2. Thermal energy GCal 46,990.0 35,127.7 In the area of Power Saving and Energy Efficiency Benefits from the activities in 2012 amounted to: k RUR 9,529.1 8,077.7 improvement JSC Tyumenenergo adopted the following – from organization activities – 19.1 million kWh. 1.3. Cold water supply target indicators: (RUR 45.4 million, VAT excluded); m3*1,000 152.5 105.3 – reduced electrical energy losses; – from engineering activities 1.9 million kWh. (RUR – reduced heat consumption at the production and 2.4 million, VAT excluded); k RUR 0.00 0.00 process facilitie; – from the Program of the Prospective Develop- 1.4. Hot water supply – reduced electrical energy consumption at the ment of Electricity Billing Equipment Systems m3*1,000 0 0 production and process facilities; at – 10.1 million kWh (RUR 33.0 million, VAT – оavailability of the present-day electricity billing excluded); k RUR 7,417.7 5,116.7 equipment at the retail market as per the Pro- – due to the Upgrade and Revamp Program the 1.5. Natural gas m3*1,000 3,214.6 2,327.2 gram of the Prospective Development of Electrici- losses reduced by 7.6 million kWh (RUR 15.0 mil- ty Billing Equipment Systems. lion, VAT excluded). k RUR 125,288.5 134,105.3 1.6. Other (diesel, kerosene, gasoline etc.) In 2012 the benefits amounted to 13,183.5 tons of ref- The activities’ cost was RUR 1,628.2 million, VAT exclud- 7,136.9 5,935.4 erence fuel and RUR 96.2 million (VAT excluded) at the ed. The energy saving program activities were budgeted target values of 11,630.0 tons of reference fuel and RUR from the investment program RUR 1,543.9 million, VAT ______74.8 million (VAT excluded), all in all, on the Program of excluded, repair program – RUR 41.4 million, VAT exclud- * – Total in k RUR, VAT included. electrical energy losses were reduced by 38.1 million ed, other activities financed from the cost price – RUR kWh, electrical energy consumption for process needs – 42.9 million, VAT excluded. by 0.1 million kWh, thermal energy for process needs – 4.1.9. TARIFF FORMATION. TARIFF BREAKDOWN by 195.7 Gcal. The main principle of the Company tariff policy is timely justification 4.1.7. MANDATORY ENERGY AUDIT of the tariffs for the services on the electricity transmission ensuring the Company’s stable financial standing and development for the In pursuance of the requirements of the federal laws The identified potential of Power Saving and Energy in the area of energy saving, mandatory energy audit Efficiency improvement is 100.7k tons of reference fuel reliable and high-quality electricity supply of the users. was performed at JSC Tyumenenergo on September 5 – (RUR 903.7 million), including the potential of electricity December 31, 2012 and the Company energy passport loss reduction is 268.5 million kWh (RUR 817.9 million). was made up. Tariffs for the services on the electricity transmission in setting the economically justified tariffs for the services JSC Tyumenenergo obtained expert statement on the Russia are state-regulated. One of the most important on the transmission of electricity. The total number of the audited facilities is 1,219, compliance of the materials with the requirements areas of JSC Tyumenenergo management is interaction From July 1, 2012 JSC Tyumenenergo applies the including 631 facilities of the electrical grids system. of Self-Regulating Organization (SRO) Non-for-Profit with the executive authorities of the constituent entities method of long-term indexation of the required gross Partnership Union of Energy Auditors and Energy of the Russian Federation: Regional Energy Commis- proceeds for the regulation of prices (tariffs) for the The total number of the worked out actions on Power Service Companies dated December 24, 2012. sion of Tyumen region, Khanty-Mansijsk Autonomous services on the electricity grid transmission. Long- Saving and Energy Efficiency improvement is 1,883, District (Yugra), Yamalo-Nenets Autonomous District, term regulation parameters for JSC Tyumenenergo for including 121 actions on electricity loss prevention. Regional Service for Tariffs of Khanty-Mansijsk Auton- 2012–2017 are set by Resolution of the Regional Energy omous District (Yugra), Department for Prices and Tar- Commission of Tyumen region, Khanty-Mansijsk Au- iffs of Yamalo-Nenets Autonomous District, and federal tonomous District (Yugra), Yamalo-Nenets Autonomous regulating agencies: Russian Federal Service for Tariffs District dated May 30, 2012 No. 109 (as amended on and Ministry of Energy of the Russian Federation, on October 15, 2012, No. 366).

60 61 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

PRODUCTION ACTIVITY RESULTS PRODUCTION ACTIVITY RESULTS

The required gross proceeds of JSC Tyumenenergo (“boiler”) tariffs and 8 % of the proceeds from territorial Breakdown of 2012 Average Unified (“Boiler”) Tariff, %. on the electricity transmission consists of 92 % of the grid companies on individual tariffs. proceeds received from sales companies on unified 3 % 8.2 .1 % 17 Unified (“Boiler”) Tariffs Approved by Resolution of the Regional Energy Commission of Tyumen region, Khanty-Mansijsk Autonomous District (Yugra), Yamalo-Nenets 38.2 % — JSC Tyumenenergo Autonomous District dated December 21, 2011 No. 395 26.4 % — JSC FGC of UES

1

8

. 3 18.3 % — Territorial Grid Companies

Voltage Range Tariffs (VAT excl.) % Units of Tariff Rates 17.1 % — Expenses for the electricity purchase Measurement HV MVI MVII LV to compensate for the process consumption 26.4 % Tariffs in force from Jan. 01, 2012 to June 30, 2012

Double-Rate Tariff

Utilization Rate RUR/MW 518,390.2 802,882.99 883,521.09 510,865.91 Individual tariffs for services on the transmission of “Boiler” tariff for the services on the electricity month electricity for the mutual accounts between territorial transmission in the boundaries of JSC Tyumenenergo Loss Payment Rate RUR/MWh 45.2 125.62 132 269.11 grid companies and JSC Tyumenenergo from January 1, in 2012 was reduced by 2.4 % relative to the similar 2012 and July 1, 2012 are approved by Resolution of the indicator of 2011 due to the reduction of the investment Single-Rate Tariff RUR/MWh 747.74 1,224.70 1,329.38 1,367.36 Regional Energy Commission of Tyumen region, Khanty- component and reduction of the electricity purchase Mansijsk Autonomous District (Yugra), Yamalo-Nenets price to compensate for the losses from JSC Tyumen Tariffs in force from July 01, 2012 to Dec. 31,2012 Autonomous District dated December 21, 2011 No. 400 Energy Sales Company as compared to 2011. Double-Rate Tariff (as amended on February 8, 2012 No. 12, May 30, 2012 ______No. 110, September 28, 2012 No. 283). Utilization Rate RUR/MW 572,123.3 852,332.26 963,700.95 553,967.18 month

Loss Payment Rate RUR/MWh 40.72 118.44 132.96 265.58 JSC Tyumenenergo Tariff Breakdown, %. Single-Rate Tariff RUR/MWh 829.99 1,359.42 1,475.61 1,517.77

Unified (“boiler”) tariffs for the electricity transmission District dated December 21, 2011 No. 395, separately 3 3 Own utilization, investments excluded % 6 % 6 3 4 services for the service consumers in Tyumen region for for the first and second halves of 2012. For the first half % % 3 3 Payment to JSC FGC of UES 2012 were approved by Resolution of the Regional Ener- of 2012 the tariffs were approved at the level of those in gy Commission of Tyumen region, Khanty-Mansijsk Au- force in the second half of 2011, for the second half of Investments tonomous District (Yugra), Yamalo-Nenets Autonomous 2012 – with 11 % increase. Payment for territorial grid companies’ services 8 % 9 Electricity loses compensation % % % JSC Tyumenenergo Proceeds in 2012 9 % 15 8 % 13

2011 2012 % 9 8 2 %

92 % — Proceeds on unified (“boiler”) tariffs The amount of JSC Tyumenenergo own gross revenue Hereby, the investment program including actions aimed 8 % — Proceeds on individual tariffs requirement for the electricity transmission was reduced at the improvement of the reliability and quality of the by 3 % as compared to 2011 which was due to the ne- consumers electricity supply as well as at the avoiding cessity of observance of the limiting growth rate for the of the situation when electrical grid system hinders the transmission tariffs set by the forecast of the Ministry for development of Tyumen region is being implemented Economic Development of the Russian Federation. The completely in accordance with the plan. In 2012 the in- optimization was achieved by reducing tariff financing vestment program was financed from the funds allocat- sources for the Company long-term investment pro- ed within the transmission tariff and from loaned funds. gram. ______

62 63 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

PRODUCTION ACTIVITY RESULTS PRODUCTION ACTIVITY RESULTS

4.2. ORGANIZATION OF Results of the Financial and Economic Activities on the Technological Connection

THE TECHNOLOGICAL CONNECTION PROCESS Indicators Amount, k RUR, VAT excluded

To arrange interaction with the service users in 2007 Scope of the Satisfied Technological Technological Connection Proceeds 1,230,683 JSC Tyumenenergo arranged Customer Service Center Connection Demand operating on “one counter” principle. For more details In 2012 5,444 technological connection contracts for the Technological Connection Costs 305,140 on the JSC Tyumenenergo Customer Service Center see total capacity of 618.583 MW were made. Compared with Customer Orientation Section 2011 the number of the contracts concluded increased Technological Connection Gross Revenue 925,543 by 17.9 %, the capacity on the contracts concluded grew Technological Connection Net Profit 740,434 The process of the technological connection of the by 140.8 %. applicants’ electricity receivers to JSC Tyumenenergo Advance Payments Received 167,013 electrical grid is performed in accordance with the Rus- Implemented Technological Connection Demand sian laws. In 2012 activities were completed and technological connection was performed on 3,473 contracts with the Scope of the Technological Connection Demand total capacity of 336.530 MW. The growth of the total In 2012 JSC Tyumenenergo received 5,874 applications number of the contracts executes compared with 2011 for the technological connection with the total capacity of was 67.1 %, the amount of the tied-in capacity reduced 4.3. ORGANIZATION OF THE PROSPECTIVE 810.089 MW. Compared with similar 2011 indicators the by 11.5 %. number of applications grew by 18.9 %, and the scope of DEVELOPMENT PROCESS the applied capacity increased by 17.4 %. Prospective development process provides implementa- existing in the Company branches, organization tion of the activities in the following areas: of the works on the design of the new prospective Breakdown of the Number of Applications by Industries,% – Participation in the design of the electrical power development diagrams and update of the existing engineering development programs of Tyumen diagrams; Region, Khanty-Mansijsk Autonomous District – Development and conclusion of the Agreements 84.25 % — Housing and Public Utilities companies (Yugra), Yamalo-Nenets Autonomous District with the administrations of the regions providing and natural persons as per the Rules of the design of the diagrams programs of top-priority activities on the develop- 4.73 % — Other areas and electrical power engineering development ment and reliability improvement of electrical grid 2.30 % — Construction programs for the regions of the Russian Feder- systems in the Company branches; ation endorsed by Decree of the Government of – Cooperation with JSC FGC of UES on making 2.21 % — Budget organizations the Russian Federation No. 823 dated October 17, contracts for the technological connection to JSC 1.94 % — Electrical power engineering 2009; FGC of UES electrical grids; (electrical grids of the territorial grid companies) – Design, justification and alignment of – Cooperation with the generating companies on JSC Tyumen­energo Investment Program; the issues of making contracts for the technolog- 1.91 % — Transport and commnunication – Evaluation of the topicality of the diagrams of the ical connection of the generation facilities to the 1.33 % — Agriculture prospective development of the electrical grids Company branches electrical grids. 1.00 % — Fuel industry 0.32 % — Other indistries

Breakdown of the Applied Capacity by Industries,%

41.30 % — Fuel industry 22.44 % — Electrical power engineering (electrical grids of the territorial grid companies) 9.12 % — Other areas 8.75 % — Construction 6.90 % — Housing and Public Utilities companies and natural persons 5.20 % — Other indistries 3.32 % — Budget organizations 2.47 % — Agriculture 0.50 % — Transport and commnunication

64 65 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

№ 05 COMPANY DEVELOPMENT

NEXT-HIGHER ORDER

66 67 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY DEVELOPMENT COMPANY DEVELOPMENT

COMPANY DEVELOPMENT

The opinion of Company’s chief engineer Sergey N. Egoshin, Deputy Director General of Engineering, on JSC Tyumenenergo performance in 2012

The team of JSC Tyumenenergo has successfully com- Implementation of the program of innovation develop- 5.1. SCIENTIFIC, TECHNOLOGICAL pleted the tasks of providing reliable and quality supply ment of the Company for years 2011–2016 is an import- of electricity for consumers on territories of Tyumen ant step in addressing the strategic objective of increas- AND INNOVATION DEVEL O p m E N T Region, the Khanty-Mansijsk Autonomous District ing the level of technological development and achieving (Yugra) and the Yamalo-Nenets Autonomous District. high results in the industry. Funding for research and This fact demonstrates high level of readiness of power development plan in 2012 amounted to more than JSC Tyumenenergo is the modern energy company that Expected final results of implementation of the Pro- systems for operation in harsh climatic and geographical 176 million rubles. is moving towards innovations. In order to implement its gram’s activities: conditions of the region, the competent management investment plans, the Company makes extensive use of 1. Improvement of reliability and quality of services and efficiency of our work, as well as the existence of During the implementation of the program of innova- the latest innovative ideas, relying on the best available for transmission of electrical energy to consum- necessary reliability reserve basic production assets. tion development, JSC Tyumenenergo has received two solutions in respective areas of application. ers connected to electrical networks of JSC Tyu- patents for intellectual property. Innovative projects menenergo. One of the major measures to ensure reliable pow- submitted by the Company to the second All-Russian The Company's management understands that for early 2. Improvement of safety level of equipment’s tech- er supply is timely and high-quality execution of the contest "The Best Russian Electric Grid Company" and solution of problems of energy saving and improvement nical operation. program of repairs and maintenance of network assets, national award contest for achievements in the field of of energy efficiency of the distribution electric grid 3. Increased efficiency of power supply equipment. which are performed at full 100 %. All branches of electric power industry "Golden Kilowatt 2012" (UFD), complex in conditions of considerable moral and physical 4. Reduction of electricity losses during trans- JSC Tyumenenergo had timely received certificates of became the best in the categories "Innovative Project of wear of equipment it is highly required to concentrate mission over electric networks to the level of readiness for operation in the autumn-winter period the Year" and "Project of the Year" respectively. and use wisely all available resources. specific values of similar industry leading foreign 2012–2013. ______companies. JSC Tyumenenergo does not stop at the achieved results 5. Lower costs for provision of services of electricity The volume of emergency stock of equipment and and continuously improves production activities, intro- In modern conditions of electric power industry func- transmission to networks of JSC Tyumenenergo. materials for the emergency repairs of the equipment ducing modern technology decisions and cutting-edge tioning the basis of provision of reliable, high-quality and 6. Reduction of specific volumes of capital invest- of substations and power lines meets the regulatory solutions that enhance the quality of provided services affordable electricity is, amongst others, the introduction ments per unit of input power and power lines of requirements. The necessary repairs of emergency stock and lead to reliable and uninterrupted power supply for of scientific and technological achievements, innovative JSC Tyumenenergo. equipment were completed. consumers. equipment, new and improved technologies. 7. Saving energy resources used for industrial and The Company is implementing Program of innovation de- commercial needs to levels of specific indicators Amount of energy losses in the Tyumen energy system velopment of JSC Tyumenenergo for the period of 2011– of similar industry leading foreign companies. has the least value among the subsidiaries and affiliates 2016 years (approved by the Board of Directors of JSC 8. Increase in labor productivity. of JSC IDGC Holding. Set of measures performed by Tyumenenergo, protocol number 10/11 of 29.07.2011). 9. Improvement of the environmental performance energy system and aimed at reducing costs, including of the energy complex of JSC Tyumenenergo to loss reduction, helps to keep this characteristic virtually Program’s mission is investment and organizational achieve goals of long-term sustainable develop- unchanged during last several years. promotion and implementation of research, development ment. and engineering works, innovative projects relating to In JSC Tyumenenergo a Program if performed aimed at energy conservation, energy efficiency, cost-efficiency The innovative program of JSC Tyumenenergo includes the prevention of injuries for years 2012–2013. Thanks and reliability of power supply in the distribution electric a series of effective measures aimed at the creation of to systematic work on the implementation of activities of grid complex. new values, namely improving the existing production this program in 2012, JSC Tyumenenergo has no occu- and technical systems and business processes of the pational injuries occurred. The priority in the implementation of these projects is Company, the introduction of new technologies, the de- optimization of operating costs and reduction of expendi- velopment of scientific and engineering potential of the Much attention in the Company is paid to professional tures of the Company. industry, the formation of appropriate infrastructure and training of operating personnel. For five years, em- human capacity. ployees of the Company have leading positions in the Program’s goal is to develop an effective mechanism international and national competitions of professional for implementation of the innovation cycle providing For JSC Tyumenenergo year 2012 was a stage of active skills. In 2012, the team of Tyumenenergo has continued favorable conditions for establishment and promotion of implementation of the program of innovation develop- the tradition by winning the All-Russian competition of high-tech equipment and advanced technologies for the ment. Work on the innovation development of JSC Tyu- professional skill of service teams for isolation and surge distribution grid complex menenergo for year 2012 was performed in accordance protection of electrical equipment.

68 69 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY DEVELOPMENT COMPANY DEVELOPMENT

ELECTRIC SUBSTATION

110 / 35 / 10 кV HEN COMMISSIONED, THE SUBSTATION WILL PROVIDE FOR ENERGY SUPPLY TO 8,000 APARTMENTS OR CONNECTION OF 500 SMALL BUSINESSES. APART FROM THAT, IN THE WELL-DEVELOPED 10 KV GRID IT WILL ENSURE MORE RELIABLE RESIDENTIAL POWER SUPPLY.

1. Coupling capacitors 2. High-frequency choke 3. Receiving portal 4. Disconnecting switch 5. High-voltage circuit 6. Power transformer 7. Indoor switchgear breaker A device intended for electric An electric installation used One of the communication An electrical device installed A structure used for an A switch device, which in power transformation in for electric power receipt equipment elements that into the breakage of overhead line connection to the its open position satisfies An electrical switch device power grids and plants used and distribution. An indoor separates communication a power transmission line substation. the requirements for de- with two commutation for electric power receipt and switchgear contains a set devices from 50 Hz high phase conductor, which energization of the whole positions intended for utilization. of switch devices, collecting frequency by transmitting has high resistance in HF or part of the plant by switching in and out electric and connecting buses, the high frequency signals communication channel and disconnecting the plant or circuits. auxiliary relay protection and through communication low resistance in commercial a part thereof from electric emergency controls, and channels. frequency (50 Hz). power source. metering and measurement devices.

70 71 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY DEVELOPMENT COMPANY DEVELOPMENT

with Statute of innovation activities of JSC Tyumenenergo control of wave propagation using the sign of instanta- Successfully implemented in year 2012, research and of insulator strings caused by unknown reasons, (approved by order of JSC Tyumenenergo of 01.08.2011 No. neous power. The principle of protection does not depend development works confirm high efficiency of innovation and development of measures to prevent such 271), in close collaboration with the department of techno- on the mode of neutral grounding and provides the abil- activities of JSC Tyumenenergo. cases in future, executor: JSC NTC FGC of UES – logical development and innovations of JSC IDGC Holding. ity to capture short single phase-to-earth faults, which SibNIIE (Novosibirsk). makes it possible to determine damaged connection In addition, were continued research and development 7. Development of software and hardware tools for Total funding volume for the Program in 2012 at the long before the advent of established single phase-to- works in accordance with technical specifications under diagnostics of constructive part of high-voltage expense of own sources is made in full, with over-fulfill- earth fault by analysis of changes of voltage and current. five passing contracts concluded in 2011: lines 35-220 kV, operating in conditions of Far ment of the planned value by 1.57 % and reached a whole As a result, it dramatically reduces the risk of damaging 1. Design, prototyping and testing of lightweight North of Western Siberia, for quick examination, 1,984,931.18 thousand rubles. distribution grid equipment; time needed to eliminate single-chain and double-chain intermediate evaluation and prediction of changes in the tech- the loopback mode; and most importantly, it eliminates supports made of composite materials with in- nical condition of construction part of high-volt- The plan of introducing ready innovative products and the possibility of accidents related to the breakage of sulating traverses for high-voltage lines (OHL) up age lines 35-220 kV, executor: JSC Institute technologies by JSC Tyumenenergo as part of the invest- 6-35 kV overhead wires. to 110 kV, executor: JSC IDGC NIITs (Moscow) in "Energosetproekt" (Moscow). ment program was performed in year 2012 in full scale, a consortium with CJSC Phoenix 88 (Novosibirsk). 8. Manufacturing, testing and certification of proto- with over-fulfillment of 3.4 % in the amount of 1,754,012.30 A solution of the RosPatent of 21.12.2012 was received 2. Development of wire dance absorber of damping types of unified footings of towers of high-voltage thousand rubles. on issuance of patent for invention "Device of impulse type, executor: CJSC NTC Elektroseti (Moscow). lines 35-220 kV based on open profile metal piles ______protection against single-phase earth faults of overhead 3. Development of Comprehensive system of se- with cross-shaped profile, executor: JSC Institute and cable lines of 6-35 kV distribution networks". Appli- curity and control of works performed on power "Energosetproekt" (Moscow). In accordance with the Company's business plan, approved cants: JSC Tyumenenergo, JSC ENIN, LLC IC Bresler. equipment (KSBiKR), executor: LLC Prosoft-Sys- 9. Development of universal mounting device for by the Board of Directors (protocol No. 11/12 of 01.11.2012), tems (Ekaterinburg). performing works on insulator sets installed on the funding is provided for research and development Second project completed in 2012 (development): 4. Development of system for complex monitoring different types of anchor poles of high-voltage plan of JSC Tyumenenergo in year 2012 for the amount of Development of a branching clamp on the basis of spiral of status of insulation and storm conditions, and lines 35-110 kV, executor: CJSC NTC Elektroseti 176.071 million rubles. protector, executor: СJSC NTC Elektroseti. for location of disconnections of high-voltage (Moscow). lines 110 kV, executor: branch of JSC NTC FGC of 10. Development of broadband vibration dampers, Total funding during year 2012 for research and develop- The optimal version of branching clamp was manufac- UES – SibNIIE (Novosibirsk). executor: CJSC NTC Elektroseti (Moscow). ment topics amounted to 142,856.93 thousand rubles. tured on the basis of spiral protector, which makes it 5. Development of device which determines the 11. Development of hardware and software complex possible to increase the lifetime of a branching clamp, conditions for the emergence wire “dance”, for diagnostics of active parts of transformers, Deviation of 18.86 % from the research and development reduce to a safe level flexural deformations and reduce conduction of research works to identify effective executor: FGBOUVPO National Research Tomsk plan is connected with: contact resistance in the wire branching point. Usage of methods of reducing wire “dance”, executor: Polytechnic University – Institute of Energy" – the economy based on the results of open competi- the developed clamp will reduce the number of acci- CJSC Elektrosetstroyproekt (Moscow). (Tomsk). tive negotiations (0.5 %); dents in electricity networks of JSC Tyumenenergo, the 12. Development of device for continuous control – moving to 2013 of works completion date and cause of which is wind effect on the wire at the exit from Based on the results of performed procurement pro- of humidity of paper-oil insulation in high-volt- financing of the final stage under the contract with a branching clamp and constant vibration. cedures JSC Tyumenenergo in 2012 has signed new age oil-filled electrical equipment, executor: LLC Prosoft-Systems for performance of research contracts under which were launched research, devel- Shatursky branch of the Federal State Budget and development works on topic "Developing Com- Third project completed in 2012 (development): Devel- opment and technological works on twelve projects: Institution of Science Joint Institute for High prehensive system of security and control of works opment of spiral type protectors to protect AC wires at 1. Development of frequency dependent resistor Temperatures, Russian Academy of Sciences performed on power equipment" (7.28 %); the outputs of hardware terminals, executor: СJSC NTC for suppression of high-frequency overvoltage, (JIHT RAS) (Moscow). – the decision of the Scientific and Technical Council Elektroseti. executor: FGBOUVPO Novosibirsk State Techni- of JSC IDGC Holding (protocol dated 17.12.2012) on cal University (Novosibirsk). As of 31.12.2012, main activities planned for 2012 were cancellation of the contest procedure and the deci- The optinal version of spiral protectors was manufac- 2. Creation of automated workstation for special- performed and innovation development program perfor- sion of procurement commission of JSC Tyumene- tured with taking into account the operating conditions ist of relay protection and automatics (RPA) mance indicator values were achieved. nergo (protocol No. 32573/937-3 dated 27.12.2012) of AC wire in terminals, the application of which will service with functions of modeling and selecting on refusal from procurement on research and increase the service life of wires, reduce to a safe level actuation parameters for RPA devices, executor: In order to provide the most promising areas of tech- development topic "Creating experimental model of flexural deformations and prevent breaks of wires of LLC Scientific and Production Enterprise "EKRA" nological development of distribution electrical grid high-voltage and high-speed switch-limiter of volt- current-conducting lays. (Cheboksary). complex, JSC Tyumenenergo offers cooperation to age class 110 kV" associated with revelation during 3. Development of technical and technological doc- higher education institutions, research and production open competitive negotiations of inexpedience of Fourth project completed in 2012 (research and de- umentation and implementation of pilot project associations, industry enterprises, research and design this development for the electrical networks of JSC velopment): The development of a hierarchical system of modernized relay protection for substation of institutes; and is ready to implement joint projects in Tyumenenergo (11.08 %); for collection and viewing emergency information from 110/35/10 kV on principles of system integration the field of research and development design works in diverse distributed sources, executor: LLC Energoprom­ of protection algorithms in a single device, exec- accordance with principles of energy efficiency, optimi- In 2012 were successfully completed 4 projects on the Avtomatizatsiya. utor: LLC IC Bresler (Cheboksary). zation of operating costs, reducing losses and increas- subject of research and development, the results of which 4. Development of technical specifications for ing reliability and security of energy supply for electric were considered at the meetings of the Technical Board of Developed experimental model of a hierarchical system for choice of protection complex for networks networks 220-0.4 kV. JSC Tyumenenergo as positive and effective: collection and viewing emergency information from diverse 6-35 kV, executor: LLC IC Bresler (Cheboksary). ______distributed sources makes it possible to perform analy- 5. Development of software and hardware ACS The first project, completed in 2012 (development): sis and control the process of emergencies development elements for active-adaptive electric power net- Further development of the device for impulse protection in a single window of automated workstation, which will works in the part of simulation of the operation against earth fault of overhead and cable lines 6-35 kV on further allow during the operation of a hierarchical system of RPA, executor: LLC Mekhanotronika RA (Saint the results of trial operation, executor: JSC ENIN. to effectively eliminate technological disturbances and con- Petersburg). The uniqueness of the developed device is its response sequences of accidents, which are defined by two factors: 6. Study of disconnections of high-voltage lines to the transition process in case of damage, with the sufficiency of information and time spent for its analysis. 110 kV in the Tyumen Region due to overlapping

72 73 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY DEVELOPMENT COMPANY DEVELOPMENT

Opinion of Igor I. Yaskovets, Deputy Director General of Сapital Сonstruction on JSC Tyumenenergo perfor- mance in 2012

One of the priority areas of JSC Tyumenenergo activities All planned activitie were completed, which ensure 1. Parameters of the investment activity is implementation of the investment program, which is reliable power supply and trouble-free operation in the aimed at the network complex development and reli- autumn-winter period of years 2012–2013. ability improvement, the growth of network capacity and Activities completed in 2012 are included in a long-term Total volume of investment program of JSC Tyumene- was 10,904.437 million rubles, amounting to 107.5 % of the creation of conditions for connection of new and investment program of JSC Tyumenenergo for years nergo in 2012 is provided in the amount of 10,139.523 the annual plan. increasing power of already connected consumers of 2012–2017 approved by the Ministry of Energy of the million rubles. Actual drawing of investments for 2012 three major regions of the Russian Federation: the Ya- Russian Federation No. 251 dated 11.05.2012, which RUR mln malo-Nenets Autonomous District, the Khanty-Mansijsk is represented by a set of projects for implementation Name 2010 2011 2012 Autonomous District (Yugra) and the Tyumen region. of targeted programs of the Company and schemes of development of electrical power industry of the Tyumen JSC Tyumenenergo 6,567.37 11,974.22 10,904.44 Investments in fixed assets in the form of capital in- Region, agreed with executive bodies of three federal vestments include expenditures on new construction, subjects of the Russian Federation. expansion, reconstruction and technical modernization Funding of long-term investment program for 2012–2017 It should be mentioned when analyzing dynamics of for new construction, 46.5 % for reconstruction, 0.1 % for of existing facilities, purchase of equipment and other is planned in the amount of 69,460.6 million rubles. As JSC Tyumenenergo investment activities in general, acquisition of core assets). expenses of capital nature. As part of the investment a result of the execution of the program it is planned that investments 2011 increased by 45 % as compared The investment program of JSC Tyumenenergo for year program, in 2012 were drawn 15,798.54 million rubles to build and put into operation 1,705.4 km of electrici- to investments 2011 due to Nadym – Salekhard Project 2012 is fulfilled to the extent of capital investments and of capital investments, which allowed commissioning of ty transmission lines and 2,155.7 MVA of transformer entering its active implementation stage supported by fixed assets input. The percentage of completion of 865 MVA of transformer capacity and 715.961 km of pow- capacity. bank credits accommodated for Company investment targets for drawing of capital investments amounts to er lines. All specified tasks are executed in full scale. activities. Capital investments 2012 shrank by 9 % as 107.5 %; for fixed assets input amounts to 115.1 %; for Implementation of long-term investment program of compared to 2011 due to regulation authorities’ rejection commissioning of capacity of MVA – 193%, Km – 150 %. Implementation of the investment program of JSC Tyu- JSC Tyumenenergo will make it possible to provide of JSC Tyumenenergo transition to RAB tariff regulation. menenergo in 2012 has made it possible to provide for: reliable electricity supply for settlements and perform The deviation of actual values from the plan is the result – uninterrupted, high-quality and reliable power the implementation of industrial potential of the Yama- The volume of fixed assets input in 2012 amounted to of outsourcing contracts based on the results of tender supply to electricity consumers of Tyumen energy lo-Nenets Autonomous District, the Khanty-Mansijsk 11,416.88 million rubles (52.3 % of the total investment is procedures conducted in the reporting year. system, both municipal and industrial (JSC Autonomous District (Yugra) and the Tyumen Region in Surgutneftegaz, JSC NK Rosneft, LLC LUKOIL – accordance with plans of the strategic development of Western Siberia, JSC Slavneft – Megionneftegas, the regions. In the reporting period were commissioned the most important, priority area projects of JSC Gazprom Neft, etc.); ______the investment program of the Company – connection to the electrical grid of areas with decentralized electricity supply; Parameters of the Input in fixed assets in year 2012, Commissioning of – fulfillment of obligations on contracts for techno- object million rubles (w/o VAT) construction objects logical connection of consumers to the network of JSC Tyumenenrgo. Estimated Estimated capacity cost, % of Наименование and Capacity and distance of million Plan Fact deviation distance of networks (MVA; km) rubles from plan networks (w/o VAT) 5.2. INVESTMENT ACTIVITIES (MVA; km) km MVA The investment program of JSC Tyumenenergo is reliability and efficiency of existing equipment, and focused on the introduction of new facilities, on providing improving its energy efficiency. Most important proj- 4,019.91 4,289.61 107 699.553 70 ects

New construction of 1,025.80 1,124.35 110 70.33 50 substation 35-330 kV

74 75 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY DEVELOPMENT COMPANY DEVELOPMENT

End of table Expansion of open 640.16 2х16.16 km 475.85 545.67 115 32.32 0 3. Long-term investment program switchgear 110 kV substation 110 kV Investment program of the Company for years 2012–2017 is approved by order of Ministry Oktyabrskaya (energy of Energy of the Russian Federation of May 11, 2012, No. 251 complex) RUR mln 2012 2013 2014 2015 2016 2017 2012–2017 Substation 110 kV "ABZ" 763.23 2х25 MVA, 549.95 578.68 105 38.01 50 with feed OHL 110 kV OHL 110 kV Amount of capital 10,140 12,834 12,772 7,130 9,916 8,625 61,416 (Nefteyugansk ES) - 21.50 km investments, million rubles, w/o VAT New construction of 2,994.11 3,165.26 106 629.23 20.00 power line 35-330 kV Financing amount, 10,659 13,846 14,124 8,954 11,700 10,177 69,461 OHL-110 kV Okty- 595.68 61.09 km 391.70 123.41* 32 61.09 0 million rubles, VAT abrskaya-Peregrebnoe included

Construction of OHL 1,111.14 2х80.253 856.36 608.98* 71 160.51 0 Fixed assets input, 9,918 9,370 22,410 6,565 9,847 8,018 66,128 110 kV Sergino-Punga km million rubles, w/o to substation Punga VAT and substation Sergino MVA 449 453 309 211 305 429 2,156 as an expansion Commissioned capacity OHL 110 kV Igrim-Pun- 898.50 2х55.613 770.53 790.94 103 111.23 20 km 478 179 734 7 8 300 1,705 ga with substation km 110/6 kV Punga MVA 167 283 284 81 169 340 1,324 Capacity growth km 459 179 724 7 8 300 1,676 OHL 110 kV Kirillovska- 1,246.04 2х81.76 km 975.52 579.40* 59 163.52 0 ya-Tavricheskaya In the formation of investment development program for of investment financing in the period from 2012 to 2017 OHL 110 kV Urengoy 1,706.113 132 km 0.00 1,062.53** 132.89 0 years 2012–2017 the priority for main task remained to shall amount to 69,460.6 million rubles (including VAT). State Regional ES – reduce aging of equipment. Also, one of the main areas Implementation of the investment program of JSC Tyu- Urengoy with substa- is to enable the possibility of connection of new loads menenergo for 2012–2017 shall make it possible to tion 110 kV in area of of consumers, as well as to improve the reliability and achieve the following objectives: v.Limbya-Yakha with quality of power supply for current customers. 1. Uninterrupted, high-quality and reliable power sup- entries of OHL 110 kV ply to consumers of electric energy, both municipal and (North ES) As a result of implementation of the investment program industrial ones. for period from 2012 to 2017, the total amount of inputs 2. Outstripping rate of development of electric grid * Activities were implemented using phased commissioning in the **Activities were implemented using phased commissioning in the previous period reporting period will be 66,128 million rubles. Commissioned transformer infrastructure relative to the increase in energy con- capacity for period from 2012 to 2017 shall amount to sumption. 2,155.7 MVA, commissioning of power lines from 2012 to 3. Connection to the Tyumen energy system of remote 2. Long-term financial investments 2017 shall amount to 1,705.4 km. Total volume (amount) power regions with decentralized power supply.

Purchasing stock of shares in JSC Kubanenergo and JSC IDGC Holding. Realization of the transaction will Investment amount dynamics for 2012–2017 is given in the table below and also presented JSC TRK was completed in pursuance of the resolution enable JSC IDGC Holding to improve control over the in the form of a graph of JSC IDGC Holding Board of Directors (minutes No. 78 distribution grid complex, and in particular over JSC dated 04.04.2012) and resolution of JSC Tyumenenergo Kubnenergo which is engaged in implementing the Board of Directors dated 06.04.2012, minutes number government projects related to facilities construction

03/12. and reconstruction as required for hosting the Olympic 1 1 0 0 2 7 9 8 0 7 1 1 ,7 5 , 7 , 8 , 8 , 3 2 ,4 7 6 1 4 9 1 6 1 1 , , 5 3 1 0 2 games in Sochi in 2014. 4 9 8 2 2 , 8 , 9 0 , 6 5 , 3 2 8 0 6 9 9 Purchasing shares of JSC TRK and JSC Kubanenergo 4 was qualified as a long-term investment project aiming The said long-term financial investments were not

4 at the consolidation of stocks of shares of the compa- included into JSC Tyumenenergo approved investment 2 ,1 nies within the distribution grid complex managed by program specified in section 1. 10,659 13,846 14 8,954 11,700 10,177 2012 2013 2014 2015 2016 2017 Index name 2012 Funding mln rub., VAT included Amount of capital investments, million rubles, w/o VAT Long-term financial investments 4,895.02 Financing amount, million rubles with VAT Securities purchase (shares of JSC TRK and Fixed assets setting into operation, RUR mln, VAT excluded JSC Kubanenergo)

76 77 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY DEVELOPMENT COMPANY DEVELOPMENT

Goals of development of communication means and technological management systems 5.3. DEVELOPMENT OF COMMUNICATION of JSC Tyumenenergo for year 2013 NETWORKS AND INFORMATION TECHNOLOGIES Activities Result JSC Tyumenenergo is a modern energy company which in its Development of network control In 2012, a branch of JSC Tyumenenergo, Nefteyugansk EG, has begun works centers. on the reconstruction of the Network Control Center using software and development bets on advanced information technologies. hardware complex PSI Control, was supplied the necessary equipment, was put into operation a system of collective display. In 2013, the reconstruction of the Network Control Center of Nefteyugansk EG shall be completed and the NCC Today the development of the power system of JSC Tyu- In 2012, at the communication facilities of JSC Tyumen­ will be put into commercial operation. Also in 2013 it is planned to reconstruct menenergo is inseparably connected with the develop- energo were carried out the following activities: the Network control center using a system of collective display and reserve in ment of automated technological management systems – 49 power facilities were equipped with superviso- branch of JSC Tyumenenergo, November EG. (ATMS), which are used for the centralized control of ry systems; processes of transmission and distribution of electricity. – were reconstructed fiber optic links at 61 power facilities; Reconstruction of telemechanics In accordance with the investment program of JSC Tyumenenergo, in 2013 Planned development of ATMS in the Company is per- – were built 220 km of fiber optic links on overhead systems it is planned to reconstruct the telemechanics systems constructed on the formed in accordance with ITT strategy of JSC Tyumene- lines; basis of multi-level architecture based on advanced software and hardware nergo, as well as with long-term investment program of – were designed 233 km of fiber optic communica- serial production tools with functions of software lock of switch apparatus development of JSC Tyumenenergo. tion links; protecting it from erroneous actions of personnel at substation 110/35 kV of – were equipped 3 spans of radio-relay links; JSC Tyumenenergo. In 2012, in order to create a comprehensive approach – 3 power facilities were equipped with satellite to solving the problems of automation of technological terminals; Reconstruction of For 2013 it is planned to perform construction of fiber optic communication management processes a objects of JSC Tyumenenergo – was completed modernization of broadband wire- communication and data lines on power lines, including the involvement of communication operators. and to ensure the principles of unified technical policy less base stations at 26 power facilities. transmission channels As a back-up channels of communication satellite terminals will be used. in the field of automated control, in JSC Tyumenenergo and other subsidiaries and affiliated of JSC IDGC Holding As part of the development of automated technological was started the development of target program for ATMS management systems were performed 69 activities to development. The program will cover all projects of au- increase the number of monitored parameters of power tomation of technological management of JSC Tyumen­ facilities, to develop telemechanics at substations, and to Strategy of JSC Tyumenenergo in the field energo and set the pace of development of ATMS of the upgrade the equipment in order to perform transition to Company. the use of modern communication protocols. of information technologies

For provision of tasks of dispatch and technological com- Plans for further development of communication net- munication and maintenance of power systems are used work of JSC Tyumenenergo involve the reconstruction of JSC Tyumenenergo is a modern energy company, the ITT Strategy is an element of the Company's strategic different data transmission systems. automatic telephone stations with the use of IP telepho- effectiveness of which depends substantially on the use management presented in the form of a document ny, the replacement of physically and morally outdated of information technology (IT). containing the program of development of information In JSC Tyumenenergo the following types of communica- equipment with digital equipment. The expansion of technologies in the context of long-term plans arising tion are used: broadband access network based on RadioEthernet The development and implementation of information from the business development strategy of the Company. – Radio-relay communication; technology, increasing the number of optical backbone technologies and telecommunications (ITT) contribute – Cable communication; and data communication lines, will lead to the creation to the improvement of business activity, reengineering The ITT Strategy of the Company highlights the main – Hardwire communication; of common information space, which, in turn, will allow of business processes of activities and to opening of areas of activity in the form of the following programs: – Command-and-search communication; making management decisions in the shortest possible new opportunities for growth and development of the – Program for comprehensive automation of pro- – High-frequency power line communications; time. Company. duction and financial activities. – Radio communication; – Program for development of automated techno- – Landline telephone communication; Using the latest advances in the sphere of information logical management systems. – Trunking radiotelephone communication; technologies allows the Company to maintain a sus- – Program for development of automated electricity – External digital communications based on fiber tainable competitive advantage in conditions of mar- metering systems. optic links; ket-based economy. – Program for optimization and development of ITT – Satellite telephone communication; infrastructure. – Cellular telephone communication. Completed ITT projects become strategic resources of – Program for development of ITT security systems. the Company. – Program for development of telecommunication As of 01.01.2013, the total length of cable lines, includ- facilities. ing fiber optic cables, accounted for 15.28 thousand The Board of Directors of JSC Tyumenenergo No. 08/12 – Program for optimization of activities and ITT kilometers, the length of radio-relay communication of 30.08.2012 has adopted and approved the Strategy of organization management. links – 2.015 thousand kilometers, of radio communica- JSC Tyumenenergo in the field of information technolo- tion links – 129.21 thousand km, high-frequency power gies, automation and telecommunications for the period line communication channels – 45.32 thousand km, tone of up to 2016 (hereinafter referred to as ITT Strategy). frequency channels – 210.32 thousand channel km.

78 79 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

№ 06 REPORT ON SOCIAL RESPONSIBILITY

ORDER OF INTERACTION ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

REPORT ON SOCIAL RESPONSIBILITY

Opinion of Vadim N. Shuvalov, Deputy Director General of Administration, on JSC Tyumenenergo performance in 2012

JSC Tyumenenergo shares the principles of social the champion of the All-Russian competitions on profes- responsibility and supports the state initiatives on the sional skills among the teams of insulation and overvolt- 6.1. TYUMENENERGO ROLE IN THE DEVELOPMENT enhancement of the employers’ role in the social sphere. age protection services in Astrakhan, electricians from Tyumen Distribution Grids – a branch of JSC Tyumenen- OF THE REGIONS To attain maximum production and economic perfor- ergo – became winners in the professional contest “Glory mance in 2012 the Company continued works aimed at to the Man of Labor” in Urals Federal District (Kurgan) The electrical grid system plays a key part in the social stations. The main constraints in their operation in the bringing the interests of the employer and employees in the nomination “The Best Electrician”. The winner of and economic development of the Russian regions and conditions of significant distances and lack of roads are: closer. This is confirmed by the JSC Tyumenenergo the first All-Russian Professional competition, the man the country in general, being a key element of the national – delivery of diesel generators to the communities; bargaining agreement promoting the improvement of the awarded with the title “The Best Electrician in Russia” security. Sustainable growth of the regions’ economy in – seasonal delivery of the diesel oil which is possible employees’ situation compared with the conditions stip- Alexander Lymar also works in a branch of JSC Tyumen­ many ways is determined by the electricity transport qual- only in summer navigation by ships; ulated by Russian laws and electrical power engineering energo – Nizhnevartovsk Electrical Grids. ity and reliability. The main task of the distribution grid – high cost price of the electricity generated by industrial tariff agreement. Thus, the scope of social company – provision of the users’ reliable power-supply – diesel electrical stations; welfare and guarantees provided by the Company in 2012 The Company pays a lot of attention to the staff health- must be performed regardless of the social-economic or – unstable and low-quality electricity supply to the was completely retained which enabled provision of the care and healthy life-style propaganda. In 2012 JSC Tyu- natural factors thus producing the company’s improved end users. employees’ health-care and retaining and growth of their menenergo team won the second place in the All-Rus- reliability for the stability in the regions it operates in. qualification skills. sian Sports Festival of Electrical Grids Systems Industry. Economically justified electricity tariffs in the decentral- In its coverage area JSC Tyumenenergo implements state ized power-supply zone are several times higher than The implementation of the policy aimed at the improve- In all the Company branches Youth Councils have tasks in the area of the power-engineering, develops those for the centralized zone. For this reason, to pro- ment of the staff skills and training, tutorship, work on been established and work. The younger generation and improves efficiency of the distribution grid complex, vide equal social and economic conditions autonomous making succession pool, career-guidance activities at of the power-engineering workers is aimed not only at provides conditions for the process tie-in of small and districts’ budgets compensate for the lost incomes to the region educational institutions enabled the Company the career growth but also at the active life position, medium businesses, large consumers, implements the the companies providing electricity to the end users on to win the prize in the nomination ‘For the Development achievements in science, sports, culture. Veterans who policy of energy and resource saving, generating respon- the centralized zone tariffs. of the Human Resources Potential in the Production even after retirement continue being “in-commission”, sible attitude of the people to the electrical grid facilities. Companies” at the 2012 regional stage of the All-Russian bringing up young, knowledgeable and which is the most Within its competence JSC Tyumenenergo participates in JSC Tyumenenergo investments on this program were Competition “Russian High Social Activity Organization” important – aimed at self-improvement and development the provision of the regions’ stability. targeted at the construction of electrical grid facilities in Khanty-Mansijsk Autonomous District (Yugra). people, – pass over their practical experience to the required to switch the communities in Berezovskiy dis- youth. Every year JSC Tyumenenergo makes significant invest- trict to the centralized power-supply. Timely provision The issues of staff training are top priorities at JSC Tyu- ments in electricity facilities’ upgrade and revamp as well of the power-supply facilities to the major industrial menenergo. In the Company a unified corporate com- Therefore, the Company continues working in the area as in the construction of the electrical grid facilities for consumers is extremely important because reliable prehensive and continuous training system covering all of making a highly skilled, stable, creative, fast-adapt- the tie-in of the new consumers to the electrical grids. power-supply, for example, of the oil and gas fields the staff categories and management levels is in force. able team aimed at further development and upgrade. In 2012 the Company continued working in the area of ultimately determines the region’s economic welfare. To solve this problem cooperation agreements have been JSC Tyumenenergo understands that investments into the development of power-engineering infrastructure made with several regional universities which enables human capital are strategic and most reliable invest- in the industry and social area. One of the most mean- Connection of the territories in Khanty-Mansijsk Auton- not mere participation in the development and imple- ments and serve as the foundation for the future devel- ingful areas in JSC Tyumenenergo activities became the omous District (Yugra) which previously were supplied mentation of joint programs for training new staff but opment. Company’s participation in the implementation of the from decentralized sources is expected to result in the also get the staff involved into the educational process. target program of Khanty-Mansijsk Autonomous District industrial and logistical development of the western (Yugra) "Centralized Electricity Supply to the Communi- part of the autonomous districts with the extension JSC Tyumenenergo will continue working with the ties of Khanty-Mansijsk Autonomous District (Yugra) for to Sverdlovsk and Perm regions. Electrification of the educational institutions on operation staff training, line 2011–2013 with the Prospects to 2015". This program is previously decentralized territories in Yamalo-Nenets managers on dedicated curricula, arranging of the stu- classified as a project that is supposed to provide future Autonomous District will entail investments inflow and dents industrial placement, searching and training of the industrial development of the territories in the scale of ensure implementation of the trans-regional economic potential workers from the newly-graduate employees. federal districts and to catalyze growth of certain indus- projects. tries in the Russian Federation. The high qualification standard of the Company staff is Based on the prospective development of the ener- every year confirmed by the victories in professional con- Electricity to the communities in the decentralized pow- gy system by means of remote areas’ connection in tests at different levels. In 2012 JSC Tyumenenergo was er-supply zone is supplied from diesel and gas-turbine 2012 the authorities in the autonomous districts made

82 83 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

a number of agreements of cooperation with the bor- dering regions – Tomsk and Sverdlovsk regions and Perm In accordance with the latest requirements to the energy land. industry safety all the electrical grid facilities of JSC Tyu- menenergo were brought to compliance with the most Development of the distribution electrical grids in complete electrical safety rules. In 2012 the Company Tyumen region will positively affect construction and experts performed wide-scale work on the classification processing industries, provide extra capabilities for the and making passports of the hazardous energy facilities agricultural production improvement. The last two- which enables the high level of their protection which, in three years have witnessed a stable trend of increased its turn, results in the improved energy safety of Tyumen electricity consumption in the large cities which is due to region and autonomous districts. their expansion and the trend of the growing number of applicants – small and medium businesses. Improvement of the operational efficiency of the energy companies and cost reduction currently remains one VYACHESLAV VAKHRIN EVGENI MISKEVICH VALENTIN GRIPAS DMITRY KUZMENKO JSC Tyumenenergo is classified as a major taxpayer. of the core activities in the energy industry. Reliable Vice-Governor First Vice-Governor of Vice-Governor of Khanty- Chief Federal Inspector in The total taxes paid by the Company amounted in 2012 and high-quality electricity supply to the existing users of Tyumen region Yamalo-Nenets Mansijsk Khanty-Mansijsk Autonomous amounted to RUR 4,004 million, including RUR 1,557 and timely tie-in of the new ones enables saying that Autonomous District Autonomous District (Yugra) District (Yugra) million to the federal budget, RUR 1,978 million to the re- JSC Tyumenenergo is the platform for the development gional budgets and RUR 469 million to the local budgets. of a united electrical grid area, promotion of the inno- Therefore, JSC Tyumenenergo is indirectly involved in the vative technologies and energy efficiency and energy implementation of the programs of the regions’ social saving standards. Having made considerable success and economic development. in the energy efficiency issues, being the pacesetter Tyumen energy system is The construction of Na- As per Decree of the Govern- Tyumenenergo is one of the in the relatively new sphere – energy audit and energy one of the largest systems in dym – Salekhard high-voltage ment of the Russian Feder- first companies which pio- One of the core principles of JSC Tyumenenergo ac- service – Tyumenenergo using its own example trans- the country. It is a stable and power-transmission line con- ation dated October 17, 2009 neered the practice of public tivities is the provision of the sufficiency of the energy lated its positive experience to both energy companies efficient system convenient ducted by JSC Tyumenenergo No. 823 the scheme and pro- discussion of the problem infrastructure for the region and constructive dialog with and end-users aimed at the rational consumption of the for the users and promoting is an important and signifi- gram of the electrical power issues. In the autumn of 2012 the consumers. The harmonized construction principle energy resources. the development of the region cant project for Yamal. It will engineering development in the first round table was became the cornerstone for the investment program economy. This high position enable reliable power-supply Khanty-Mansijsk Autonomous arranged at which environ- development. Through the implementation of the invest- Within its scope of competence JSC Tyumenenergo imposes additional responsi- of the people of several com- District (Yugra) for five-year mental consequences of ment program the Company continued the construction implements all the possible measures to improve in- bility on power-engineering munities in the west of the period was approved. These energy companies’ activities. of new facilities and revamp of the existing facilities, acti- vestment attraction of Tyumen region, Khanty-Mansijsk workers who will have to use autonomous district. Con- documents have been devel- Tyumenenergo was the first vated the implementation of the state policy in the area Autonomous District (Yugra) and Yamalo-Nenets Autono- every effort not to bring down nection of Salekhard energy oped and are updated based company to invite public of energy efficiency and energy saving, identified new mous District. The Company nearest plans include work the work quality. junction including Salekhard on the inputs from electrical organizations, scientific activity areas to the benefit of the regional development coordinated with the authorities of these regions, user and Labytnangi towns and power engineering subjects community, authorities to the prospects. JSC Tyumenenergo cooperation with the communities, other companies on the development of Kharp Settlement to the cen- including JSC Tyumenenergo. dialog. I believe a lot of natural regional authorities is based on the principles of mutual the electrical grid infrastructure based on the devel- tralized grid will provide a new In order to solve the prob- resources’ users could learn benefit, alignment of the interests of all the stakehold- opment plans of the fuel and energy system, transport impetus for the territory lems set forth in the Scheme from the Company’s experi- ers in the social and economic process and plans of infrastructure and programs of the municipalities’ development, implementation and Program in the period ence of solving these issues. the region development which helps the Company avoid territorial planning pursuant to the long-term strategies of the infrastructure projects until 2017 JSC Tyumenen- There are no second-priority excessive construction and distribute the investments in of the development of the constituent entities of the of the state importance and ergo plans to commission tasks in the implementa- a rational manner. Russian Federation. enable making a considerable more than 670 MVA of the tion of the environmental contribution to the solution transformer capacity and policy and, alongside with The year 2012 witnessed a noticeable effect from the im- of energy capacity deficit more than 700 km of the the implementation of new, plementation of activities in the area of orientation at the problem in Yamalo-Nenets power-transmission lines. cutting-edge technologies customers. New aspects in the relations with the custom- Autonomous District. It secures reliable electricity reducing adverse impact on ers, present-day products and forms of cooperation with supply for the existing Yugra the environment and waste the customers promoted enhancement of the Company’s consumers as well as facil- disposal emphasis should influence on the people’s way of life in the coverage area. itates the tie-in of the new be made on the companies’ A number of conferences and meetings with different consumers to the electrical activity transparency, infor- groups of customers enabled making JSC Tyumenenergo grids. mation of its work, training of activities clearer and more transparent. the staff in the new method- ologies. Being guided by the world best practices in the area of Health, Safety and Environment JSC Tyumenenergo in 2012 continued working in its branches in these areas. Tending to the constructive open dialog with all the parties concerned, JSC Tyumenenergo initiated a round table dedicated to the development of the electrical pow- er-engineering in the context of environment protection and presented its activities in the area of environmental safety to the wide community.

84 85 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

6.2. COOPERATION WITH THE PUBLIC COMMUNITY AND AUTHORITIES. CONGRESS AND EXHIBITION ACTIVITIES

JSC Tyumenenergo conducts systemic activities on the table on the issues of energy infrastructure accessibility development of integrated communications, genera- issues was arranged at the premises of JSC Tyumen­ tion of the business reputation and improvement of the energo branch Tyumen Distribution Grids. The meetings Company publicity as a key component of the strategic were attended by the representatives of the business management of the company. Key components of this community, public organizations, including regional management activities are initiation and implementation branches of All-Russian Public Organizations “Business of efficient communications with the representatives of Russia” (Delovaya Rossiya) and “Opora Russia” (Pillar VIKTOR NANAKA YURI MYLNIKOV EVGENI SLYUSAR VITALY RYZHAKOV the professional, business, expert, scientific communities, of Russia), representative from the local governments, Director of the Department Vice-Chairman of the Regio­ Chairman of the Public Orga- Vice-Rector/ External Communi- state authorities and local government, various public consumers. for the Housing and Pub- nal Energy Commission of nization of Khanty-Mansijsk cations and Development of the organizations. Therefore, the Company purposefully works lic Community System and Tyumen region, Khanty-Man- Autonomous District (Yugra) State Budget-Funded Educational at the generation of the communication environment Participation of JSC Tyumenenergo in the session of the Power-Engineering Sector of sijsk Autonomous District on the assistance in solving Institution for Higher Professional which would be maximum favorable for the business Public Council attached to the Department for Ecol- Khanty-Mansijsk Autonomous (Yugra), Yamalo-Nenets environmental problems Education Surgut State University development. ogy of Khanty-Mansijsk Autonomous District (Yugra) District (Yugra) Autonomous District Econadzor of Khanty-Mansijsk Autonomous (June, Khanty-Mansijsk) enabled the Company setting District (Yugra) Communications with the State Authorities constructive business relations with the experts of the Tyumenenergo is the largest JSC Tyumenenergo is the JSC Tyumenenergo became The main area of the interaction and Public Organizations Department for Natural Resources and non-feedstock distribution company in our re- key distribution company one of the first companies in and cooperation of Surgut State economy sector of Department for Ecology of Khan- gion, it is dynamically develop- in Tyumen region. It is this Yugra to streamline coordi- University with JSC Tyumenener- In order to represent JSC Tyumenenergo as a leading ty-Mansijsk Autonomous District (Yugra), Department ing and actively cooperates with company that determines nation with environment-pro- go is development and implemen- electrical grid company in its coverage regions, officials for Ecology of Khanty-Mansijsk Autonomous District the government of the district the region tariff and balance tection public organizations. tation of the policy in the area of from the state authorities and local governments par- (Yugra), Chairman of the Public Chamber of Khan- in many aspects, including scheme. By improving oper- Currently JSC Tyumenenergo professional education aimed at ticipate in the meaningful events of the Company and its ty-Mansijsk Autonomous District (Yugra), leaders of the electricity-supply centralization. ational efficiency JSC Tyu- arranged efficient information the generation of the human re- branches. Public Organization of Khanty-Mansijsk Autonomous We review and align the Com- menenergo reduces current and organization interface sources potential in Khanty-Man- District (Yugra) on the assistance in solving environmen- pany’s investment program, expenses that allows the with the Public Organization sijsk Autonomous District (Yugra). Close cooperation with the press centers of the Govern- tal problems Econadzor, reach agreement on holding the cooperation in this area allowed Company to route the funds of Khanty-Mansijsk Autono- JSC Tyumenenergo is a member ment of Tyumen region, Khanty-Mansijsk Autonomous round table “Development of Electrical Power Engi- to take two energy districts out saved to the development mous District (Yugra) on the of the Board of Trustees of the District (Yugra) and Yamalo-Nenets Autonomous District, neering in Khanty-Mansijsk Autonomous District (Yugra) of the risk area over a short of the production facilities. assistance in solving environ- University. local governments as well as Department of Information and Activities of the Energy Companies in the Area of period of time. This year we Electrical energy losses in mental problems Econadzor. Our cooperation pursues the of the Ministry for Emergency Situations of Russia, de- Observing Ecological Balance” at the premises of JSC will tie in four communities to JSC Tyumenenergo grids JSC Tyumenenergo regularly goals of the graduates’ training partments for propaganda and public relations of the Main Tyumenenergo. The event that was held in Surgut on the centralized power-supply (technological transmission informs the public organiza- quality improvement aimed at Administration of the Ministry for Emergency Situations of October 1 with the support of the Chief Federal Inspector zone, all in all there will be consumption) are endorsed tion of its environment-pro- the employer’s needs, promotion Russia in Tyumen region, Khanty-Mansijsk Autonomous in Khanty-Mansijsk Autonomous District (Yugra) Dmitry sixteen such communities. In by the Russian Federal tection activities with note- of engineering and technical District (Yugra) and Yamalo-Nenets Autonomous District. B. Kuzmenko, Government of the Autonomous district, general, investment programs Service for Tariffs for 2013 worthy openness in the issues professional education, solving Public Council attached to the Department for Ecology of such companies as Tyu- at the level of 2.6 % which is related to the environment issues related to the regulation of In 2012 JSC Tyumenenergo established regional expert of Yugra, resulted in a major public resonance and wide menenergo are aimed at the substantially lower than the protection and its readiness the labor market in Yugra. Surgut community on fuel and energy complex issues. The com- coverage in different-level mass media (federal newspa- improvement of the district average losses in Tyumen for the dialog. State University and JSC Tyu- munity includes representative of the authorities, public per “Energetika”, federal journals “Regions of Russia” well-being, speaking about energy system. Therefore, Econadzor Public Organiza- menenergo made agreement of organizations in charge of fuel and energy complex issues and “Electricity: Transmission and Distribution”, news- power-engineering industry the share of JSC Tyume- tion, in its turn, hopes for the cooperation in the frameworks of in Tyumen region as well as representatives of universities papers “Yugra News” and “AiF-Yugra” (Khanty-Mansijsk it primarily means improved nenergo in the growth of expansion of cooperation with which activities on the university and colleges. Autonomous District (Yugra)), journal “Industry and energy provision. Our cooper- the electricity transmission JSC Tyumenenergo, particu- curricula and education plans In the framework of the previously signed partnership Ecology of the North”, All-Russian State Television and ation has tangible results and tariff from July 1, 2013 will larly Econadzor plans to take are customized to the Company’s agreements the Company continues developing relations Radio Company “Yugoria” (Khanty-Mansijsk Autonomous any aspect of the Company make 2.81 % at the growth an active part in the environ- needs, industrial placement of the with the organizations representing the interests of District (Yugra)). The activity participants appraised JSC activities – be it environment of the average boiler tariff ment-protection activities students is arranged, the Com- the business community: All-Russian Public Organiza- Tyumenenergo activities in the area of electrical engi- or industrial safety – is in the of 11.55 %. This, in its turn, to be implemented by the pany experts hold master classes tions “Business Russia” (Delovaya Rossiya) and “Opora neering development and work on Yugra power-supply focus of the Department and exerts rather a minor impact Company in 2013 which as per and consulting of the University Russia” (Pillar of Russia). In order to support and build centralization, marked the openness of JSC Tyumenen- entire Government. on the growth of the elec- the decree of the President of students and graduates on the up relations with the business community in 2012 JSC ergo in environment protection issues. tricity price for the end user. the Russian Federation was issues of the production process Tyumenenergo arranged a number of activities aimed declared the year of environ- arrangement and energy industry at the accessibility of the electrical grid infrastructure, Cooperating with Econadzor Public Organization the Com- ment protection. career-making techniques. clarification of the tariff-making and technological tie-in pany downloads information on the Company activities in JSC Tyumenenergo makes issues, consumer service quality improvement etc. area of compliance with the environment protection laws a substantial contribution to the and Codes and rules, work on the environment protection, development of the professional Thus, on March 27, round table on the issues of the participation in the target-oriented communication pro- education in Yugra and undoubt- Company cooperation with the electricity users was held gram “Distribution Electrical Grid Complex for the Environ- edly is a socially-responsible at the premises of JSC Tyumenenergo branch North- ment Protection” (Preserve the Forest Energy Event) at the company involved in the process- ern Electrical Grids in Novy Urengoi; on July 27 round website of the public organization – www.econadzor.com. es of enhancement and develop- ment of the region economy.

86 87 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

In 2012 in order to implement the mechanisms of public District (Yugra), lecturer of Surgut State University society for the Assistance to the Army, Air Force and Tyumenenergo as the main, most reliable and efficient supervision and participation in the implementation A. A. Drenin. At this meetings interaction issues, par- Navy) in Khanty-Mansijsk Autonomous District (Yugra), representative of the branch at the territory. of the Strategy of Social and Economic Development ticularly, the participation of the University graduate veterans and youth. of Khanty-Mansijsk Autonomous District (Yugra) until and post-graduate students in the second All-Russian Proceeding from this, JSC Tyumenenergo cooperates 2020 and for the period until 2030 Public Council on Youth Competition of Research-Consuming Innovative In the framework of All-Russian Event “Relay of the with all the main types of mass media. First of all, this is the Strategy Implementation attached to the Governor Ideas and Projects “Power-Engineering of the Future”, Victory Banner” JSC Tyumenenergo in 2012 continued profile (industry), business, public and political editions of Khanty-Mansijsk Autonomous District (Yugra) was interaction of the University student council and the active cooperation with the Center for Patriotic Heritage and electronic information resources operating on feder- established. JSC Tyumenenergo employees are includ- Company Youth Council. of Surgut Local History museum. Several events were al and regional levels (Ural Federal District, Khanty-Man- ed in the industry Public Council attached to the profile held, including “Long-Awaited Sky” (April 25, 2012) and sijsk Autonomous District (Yugra) and Yamalo-Nenets department. Throughout the year tours to the energy facilities and “At the Bivouac” (June 22, 2012), photograph exhibition Autonomous District). Hereby the main emphasis is Company departments were arranged for future pow- “Three Generations” was arranged (June 22, 2012). made on regional level information resources, both Social Communications er-engineering workers from Surgut State University printed and electronic ones (depending on the article and Surgut Professional College, meetings with the Young experts from the executive directorate and types). In 2012 in the framework of implementation of Company leading experts having enormous practi- branches of JSC Tyumenenergo on the eve of the Victory target-oriented communication programs JSC IDGC cal experience in power-engineering industry were Day took part in the motor race “Victory – one for all”, Over the last year JSC Tyumenenergo and its branches Holding and JSC Tyumenenergo on the reduction of arranged. Besides, in July visit to the professional bicycle race “On Yugra Roads” which were organized were mentioned in printed and electronic mass media third parties’ injury rate at the energy facilities, signed skills competition among the teams of insulation and by the territories’ executive authorities and Yugra youth 3,612 times. The number of articles increased by more agreements of cooperation on the improvement of overvoltage protection services from the branches and parliament. than 32 % compared to 2011. The proportion of mes- the electrical safety of the students and pupils of territorial production divisions were arranged, these sages in which JSC Tyumenenergo plays the main part the educational institutions with the Department of competitions were the regional stage of the All-Rus- Therefore, support of the existing and building up of the is kept at the constantly high level – 53.9 % (in 2011 – Education and Science of Tyumen region, Department sian Competition “Best in Trade” in the nomination new business relations with the representatives of the 53.5 %, in 2010 – about 45 %). The number of original of Education of Yamalo-Nenets Autonomous District, “The Best Electrician” (Nizhnevartovsk). The students state authorities and local government, public organiza- articles is 1,766. Department of Education and Youth Policy of Khan- witnessed the difficult work of the power-engineering tions, educational institutions became for JSC Tyumen­ ty-Mansijsk Autonomous District (Yugra) the Company experts and tried it for themselves. energo a powerful component in the business reputation The number materials published in permanent col- experts held more than 500 preventive activities in strengthening. umns “Power Engineering” has grown significantly. The the educational institutions of Tyumen region. The This cooperation resulted in the Thank-You Letter ______number of the materials in the genres of “interview”, Company received a number of thank-you letters from from Surgut State University acknowledging retaining “information article”, “analytical note” on the topics of the managers of educational institutions, summer of the business relations and long-term cooperation. innovations, modernization, reliability improvement, children’s camps where the activities were held. The Communication with Mass Media client-orientation, environmental responsibility as well Company preventive activities in this area are covered In 2012 the work of the Company experts with the as the publications of explanatory nature in regional at the corporate website – www.te.ru, in mass media senior students the educational institutions received a JSC Tyumenenergo communication with mass media editions and other information resources over the year of different levels as well as at the portal for children’s new impetus. The work in this area was performed in is built on the principles of mutual benefit, reasonable has almost tripled. safety “Spas-Extreme” – www.spas-extreme.ru. close cooperation with the active school students and openness, observance of business and professional teachers of Surgut and general-education institutions. ethics rules. Specific nature of the Company activities The activities of JSC Tyumenenergo in communication In 2012 JSC Tyumenenergo continued cooperation provides holding dialog in the mass media with differ- area through mass media in 2012 ensured the brand with the State Budget-Funded Educational Institu- In 2012 JSC Tyumenenergo traditionally supported ent target groups – consumers, public organizations, recognizability growth, increased loyalty of the public tion for Higher Professional Education Surgut State “Journalist of the Year” contest by establishing special authorities. organizations, people, representatives of the authorities University of Khanty-Mansijsk Autonomous District nomination “For the Systemic Coverage of the Pow- and business community. (Yugra) and Surgut Professional College. er-Engineering Issues in Electronic Mass Media”. In JSC Tyumenenergo in a planned manner implements ______the framework of cooperation with Municipal Budget state policy in the area of power-engineering which im- In February the first meeting of the Board of Trustees Educational Institution Inter-School Training Center poses extra responsibility on it in the relations with these of Surgut State University into which Deputy Director “Center for Individual Development” (Surgut) and for groups via mass media. In this context the task of these Congress and Exhibition Activities General – Administration Director of JSC Tyumenen- the purposes of the youth journalism development the communications is not just to inform of the Company’s ergo V. N. Shuvalov was included. In April Surgut State Company established special prize “Young Correspon- activities but also to perform educational functions An important area in the activities on the development of University created a taskforce on the development of dent of the Year”. especially in the area of vocational guidance, prevention brand communications and representation of the Com- the interface of the educational institution and Surgut of electrical injuries and safety of the power-engineering pany as a leading electrical grid company in the regions companies for the training of engineering and techni- An important component of JSC Tyumenenergo in- facilities, formation of energy-saving behavior models of presence as well as on the formation and support of cal experts. The taskforce includes a representative of tegrated communications is work with the youth and and responsible attitude to the energy system. Besides, the unified image of JSC IDGC Holding is congress and the Company. veterans. The Company and branches’ Youth Councils JSC Tyumenenergo must ensure and maintain positive exhibition activities. In 2012 JSC Tyumenenergo partici- actively participate in every area of JSC Tyumenener- image of the state energy sector as a social and environ- pated in more than twenty Federal/regional exhibitions, Throughout the year a number of meetings and go activities, including sports and numerous events: mentally responsible, innovative, efficient, open for the conferences and investment forums on electrical pow- events were held at JSC Tyumenenergo attended by International Memory and Gratitude Relay “Motherland dialog and oriented at the improved quality of life in the er-engineering problems, energy efficiency and innova- Vice-Rector/ External Communications and Devel- of the Heroic Deed to the Motherland of the Hero”, regions of its presence. tions. At these events the Company was introduced to opment of the State Budget-Funded Educational All-Russian Historical and Memorial Event “Relay of the investment and expert community and was repre- Institution for Higher Professional Education Surgut the Victory Banner”, events “Preserve the Energy of Communicating with the external environment via the sented as a major cross-regional distribution electrical State University of Khanty-Mansijsk Autonomous the Forest” (target-oriented communication program mass media JSC Tyumenenergo improves the consum- grid companies going along the way of innovative devel- District (Yugra) Vitaly Ryzhakov, Dean of the Depart- “Distribution Electrical Grid Complex for the Environ- ers’ energy intellect, makes up the target groups’ correct opment, social responsibility and client service. ment of Automatic Systems and Communications ment Protection”), initiated by JSC IDGC Holding and understanding of the main provisions of the state policy I. N. Danilenko, Chairman of the Council of Young Sci- held in cooperation with the regional branch of All-Rus- in the area as well as methods and techniques for the Among the key achievements of the experts’ work in entists and Experts of Khanty-Mansijsk Autonomous sian Public and State Organization DOSAAF (Voluntary implementation thereof by the Company, perception of this area in 2012 is the medal for the promotion of new

88 89 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

Protection of the Protection against Environmental Culture goods, technologies and services (technological tie-in Professional Skills Competition “Glory to the Man of Facilities’ Territory Air Basin Protection Electromagnetic Education to the electrical grids) at the Tyumen regional market Labor” was held in Ural Federal District. Experts from against Wastes Pollution (the medal was received at the specialized exhibition JSC Tyumenenergo branches Tyumen Distribution “Power-Engineering. Power-Engineering Equipment. Grids and Uray Electrical Grids took part in the con- Energy-Saving Technologies” (Tyumen), victory in test nomination “The Best Electrician”. Electricians of the nominations “For Efficient Energy-Saving”, “For Tyumen Distribution Grids branch Alexander Ryabkov Environment Protection Reliable Electricity Supply”, “Innovative Project of the and Igor Makhmutov won the final stage of the contest Year” at the second Russian Contest “The Best Electri- and took the 1st and the 2nd positions, respectively. cal Grid Company in the Russian Federation”; winner Regions’ Environmental Safety diplomas at the VIII All-Russian Contest “Leader in In mid-February 2013 in Ekaterinburg solemn cere- Nature-Preservation Activity in Russia – 2012” and mony of awarding the winners of the contest of the “For the Best Report” at the III Youth All-Russian Sci- First National Prize for the Achievements in Electrical entific and Engineering Conference “Electrical Power Power-Engineering “Golden Kilowatt 2012” arranged Environmental Risks Environmental Costs Protection against Water Resources’ Fauna Protection Engineering Through the Eyes of the Youth” (Ekate­ with the support of the plenipotentiary representative Management Management Noise Pollution Protection rinburg). of the President of the Russian Federation in Ural Federal District. JSC Tyumenenergo was declared The most significant events attended by JSC Tyume- winner in three nominations – “Project of the Year”, The Company performs its activities in complete program states all the activities in such areas as the nenergo experts were Yugra Industrial Forum (Khan- “The Most Open Company” and “The Best Corporate compliance with the adopted Environmental Policy protection of soils, air, water objects, energy saving, ty-Mansijsk), Russian-Danish Conference on Energy Site”. The outcome of the Company participation in the having the following key principles: waste management, preventive measures and resources Saving and Energy Efficiency (Khanty-Mansijsk), national prize is a logical result of the implementation – Observance of the Russian environment- for the liquidation and localization of emergency spills XII International Exhibition Forum “Energy-Saving – of JSC Tyumenenergo development strategy aimed at protection laws; – everything on which the production environment and Strategic Development Vector” (Khanty-Mansijsk), the improvement of the role of innovative technolo- – Observance of the international environment- industrial safety depends. international electrical power-engineering forum gies, better accessibility of the services, expansion of protection laws; “UP Grid 2012” (Moscow), II Congress of Ecologists of the methods of cooperation with the customers and – Transparency of the organization internal In 2012 JSC Tyumenenergo branches ensured the Russia (Moscow), International Research and Engi- information openness. activities; implementation of environment protection activities and neering Conference “Modern Technologies in Founda- – Acknowledgement of the concerned parties’ observance of the set environmental limitations. tion Building for Fuel and Energy Industry” (Moscow), Participation of the Company experts in congress and interests; International Specialized Exhibition “Electrical Grids of exhibition activities is an important component in the – Environmental responsibility principles. Upon the results of 2012 года JSC Tyumenenergo Russia – 2012” (Moscow). process of experience exchange with the colleagues, was awarded diploma of the winner of VIII All-Russian and building relations with the equipment developers, JSC Tyumenenergo performs environmental safety Contest “Leader in Nature-Protection Activity in The Company is actively involved in the activities establishing contacts with the authorities’ represen- activities in accordance with the Environment Protection Russia – 2012”. arranged by the authorities to promote working tatives, business partners, mass media and public Management Program and corporate standards. The trades among the young people. Thus, in October, organizations of different levels. ______JSC Tyumenenergo Costs for the Implementation of Nature-Protection Activities, RUR million

0.54 1.3 3 .8 0.9 .4 5 1 6 1.5 2 .0 3 1. 8 Staff Environmental Education 2 . 4 3 6.3. ENVIRONMENT PROTECTION 2 . 1 Waste Management 16.4 12.7 17.5 The Company is completely aware of its role in the environment Land Resources Protection 5.2 Water Resources Protection 8.5 preservation for the future generations and makes every effort to 8.1 Protection of the atmosphere minimize adverse impact on the environment. 2010 2011 2012

Continuous growth of the energy consumption The main principle of JSC Tyumenenergo activities JSC Tyumenenergo branches dispose of the wastes gener- of the branch facilities having no critical remarks upon the and electrical engineering development dictate is sustainable development understood as stable ated by means of the dedicated processing company which monitoring results (Nizhnevartovsk Electrical Grids, Koga­ enhanced requirements to the reliability, quality and economic growth at the maximum rational use of is primarily aimed at the reduction of the negative environ- lym Electrical Grids, Energocomplex, Northern Electrical environmental safety of the electrical grids. This the natural resources and preservation of the most mental impact. Grids, Nefteyugansk Electrical Grids). Virtually every branch is due, among other things, to the fact that in the favorable environment for future generations. attained positive changes in terms of the reduction of the course of the megalopolises electrical grids are often Another critical component of the present-day approach to number of critical remarks relative to 2011. embedded into the urban infrastructure. the environment protection is the system for environmental production control and monitoring of the production activity Target program “Provision of Environmental Safety of type existing in the Company. According to the statistics of JSC Tyumenenergo in 2011–2013” sustainably implemented the production environment control for 2012 the number in the Company gives tangible results.

90 91 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

Reduction of the negative environmental impact of the environmental education and upbringing. In the Compa- For reliable and trouble-free consumers’ power sup- Siberia, JSC IDGC of the Southern Region were production activities is the strategic task and everyday ny a system for continuous environmental education and ply as well as to prevent and terminate technological concluded; routine of the entire Company staff. instruction is in place. All the plans of the staff environ- disturbances JSC Tyumenenergo cooperates with other – JSC Tyumenenergo branches made agreements ______mental training are fulfilled by Northern Electrical Grids, organizations. with helicopter-operating airlines to use the he- Nizhnevartovsk Electrical Grids, Surgut Electrical Grids, licopters for inspection flights over the overhead Success in the provision of the environmental safety Noyabrsk Electrical Grids and Nefteyugansk Electrical The list of documents on the interaction during techno- lines and to perform emergency and recovery is in many ways e by the level of the staff environ- Grids. Nevertheless, this activity required continuous logical disturbances termination: works (if required); mental culture, measures aimed at the Company staff substantial expansion. 1. “Procedure for the Interaction of the Government – 58 agreements were made with the Ministry for Commission for Electricity-Supply Safety Provi- Emergency Situations, administrations and ex- sion (Federal Headquarters) and Electricity-Sup- ecutive authorities of the constituent entities, to Dynamics of the Company Staff Target Training ply Safety Provision Headquarters”. practice interaction in case of termination of the in Environmental Issues 2. “Procedure for the Interaction of the Headquar- most typical winter emergency modes, 50 joint ters on the Provision of Electricity-Supply Safety exercises were performed completely; 28 44 64 71 86 85 86 86 attached to the Government of Khanty-Mansijsk – Agreements with contractors for emergency Autonomous District (Yugra)”. recovery works, emergency prevention and con- Number of Employees 3. “Procedure of the Activities of Electricity-Supply sequence terminations were made. that Passed Training Safety Provision Headquarters of Yamalo-Nenets in Environmental Issues, Persons Autonomous District”. Over the report period 100 special emergency-prevention 4. “Procedures of Interaction between branch exercises to apply emergency limitation of the consump- of JSC FGC of UES – Main Electrical Grids of tion mode were held in JSC Tyumenenergo branches. Western Siberia, JSC Tyumenenergo and ma- 2005 2006 2007 2008 2009 2010 2011 2012 jor companies of oil- and gas-producing and In JSC Tyumenenergo branches mobile teams were energy-supply companies of Khanty-Mansijsk established which are equipped with all the required Autonomous District (Yugra) and Yamalo-Ne- instruments, tools, vehicles and personal protection nets Autonomous District (JSC Surgutneftegaz, equipment. Comprehensive, commander and HQ and 6.4. EMERGENCY PREVENTION JSC Samotlorneftegaz, JSC NOVATEK, JSCNK special tactical exercises on the previously developed and Rosneft, JSC NNP, Gazpromtransgaz Surgut Ltd. approved schedule as well as headquarters and facility Co., JSC Slavneft-Megionneftegaz, LUKOIL – West emergency-prevention and fire-fighting training practic- Timely work on the upgrade, overhaul, replacement of the worn Siberia Ltd. Co., JSC TNK – Nyagan, LUKOIL – es are held. ELECTRICAL GRIDS Ltd. Co., JSC Gazprom- and obsolete equipment is one of the main areas in the sphere of neft-Khantos) in case of true or threatened According to Decree of the Russian Federation dated No- emergency prevention. power-supply disturbances. Detailed study of the vember 10, 1996 No. 1340 “On the Procedure of Creation options of holding emergency recovery works and Use of the Material Resources for the Termination in case of community electricity supply distur- of Emergencies of Natural and Anthropogenic Nature” Based on the geographical and social-economic char- JSC Tyumenenergo: according to the action plans obsolete bance”. in the Company material and financial reserve for the acteristic in JSC Tyumenenergo area the main emer- VMT and VMP breakers are replaced for modern SF6 and natural and anthropogenic emergencies’ termination gencies which could possibly affect vital activities of the vacuum ones, power transformers and overhead pow- Central Duty Service of JSC Tyumenenergo performs func- was established. employees and their families and electrical equipment er-transmission lines are repaired. New substations are tions of the duty services of the regional headquarters on operation may be: commissioned which enables unloading of the existing power-supply safety ensuring information interaction with Additionally JSC Tyumenenergo branches have the fol- – Emergencies with the explosion at explosion- substations thus improving reliability of the power-supply the situation and analytical center of the Ministry of Energy lowing equipment: and fire-hazard facilities of oil and gas industry of the production and vital-activity facilities. of the Russian Federation and Main Administrations of the – 46 mobile redundant power-supplies (capacity – plants; Ministry for Emergency Situations in Tyumen region, Khan- over 30 kW) with the total capacity of 5.71 MW – Forest and creeping fires near the protection zones; 2012 plan activities in terms of widening the overhead ty-Mansijsk Autonomous District (Yugra) and Yamalo-Ne- enables assurance of the consumers in emergen- – Partial flooding of the territory during spring lines cuttings as per the Rules of the Electrical Instal- nets Autonomous District in case of emergencies. cy situations; high-water season; lations Operation – PUE (7th edition), the cuttings are – mobile outdoor metal-clad switchgear 6(10) kV – – Natural calamities (storm, hurricane wind, heavy completely cleared. To ensure readiness for the termination of the emergen- 2 pcs.; incessant rains, heavy blizzard and excessive cy situations the following activities have been held: – fast-installed temporary overhead line supports snowfall). To provide stable operation of JSC Tyumenenergo – list of critical facilities at the distribution grid was 110-220 kV (RHM – 15 pcs.). electrical grid system, improve response time in the made up, - emergencies at these facilities may In 2012 no mass technological violations and JSC Tyu­ occurrence (threatened occurrence) of the consumer result in negative socially meaningful and anthro- In JSC Tyumenenergo there are four mobile 110 kV menenergo consumer cut-offs resulting from unfavor- power-supply disturbance, minimize process violations pogenic consequences; substations (PTPA-16 MVA – 2 pcs. and MMPS-25 MVA – able natural and climatic conditions were recorded. consequences and time for the post-emergency recovery – an agreement of cooperation between JSC Tyu- 2 pcs.) located at the following branches – Noyabrsk activities JSC Tyumenenergo headquarters were estab- menenergo with the branch of JSC FGC of UES – Electrical Grids, Nizhnevartovsk Electrical Grids, Surgut One of the main areas in the field of emergency pre- lished. Main Electrical Grids of Western Siberia was Electrical Grids, Tyumen Electrical Grids (Tyumen Territo- vention is timely activities on the upgrade, overhaul, concluded to provide actions for the prevention rial Production Department). Their storage locations and replacement of the worn and obsolete equipment, elec- The procedure of the headquarters functioning is deter- and terminate the consequences of emergencies delivery schemes to the facilities are developed. The mo- trical grids and equipment operation monitoring. mined by the Provision of the Headquarters set forth in at electrical engineering facilities; bile substations are prepared for the possible relocation to the Order of JSC FGC of UES and JSC IDGC Holding “On – agreements of cooperation in case of emergency the emergency locations for subsequent commissioning To reduce the risks of mass technological violations and the Organization of the Headquarters’ Activities in Electri- termination with JSC IDGC of Central and Volga (revision performed, required routine maintenance, exer- consumer cut-offs large-scale work is performed in cal Grid System” dated August 2, 2012 No. 445/353. Region, JSC IDGC of Ural Region, JSC IDGC of cises with the substations’ deployment were held).

92 93 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

In JSC Tyumenenergo branches 68 post-emergency The status of the staff and facilities protection against In 2012 in JSC Tyumenenergo “Program of Actions – in pre-school institutions and schools classes on recovery teams with the total staff of 318 workers and natural and anthropogenic emergencies in JSC Tyume- to Prevent Occupational Injuries for 2012-2013” was electrical safety are provided; at the equipment 146 machines and vehicles were created. Based on the nenergo is high and complies with the requirements of developed. All in all 152 actions were planned, including: additional warning posters and safety signs will agreements made with the contractors 69 post-emer- the regulatory Codes. – primary and periodic staff medical examinations; be posted; gency recovery teams with the total staff of 284 workers ______– psycho-physiological tests of the staff before and 82 machines and vehicles were created. employment and during the production activities; All the actions planned for 2012 are completed. In 2013 – staff training in correct and safety work and subsequent years work on the injury prevention Activities on the communication of the facts of tech- techniques at the training facilities; among JSC Tyumenenergo workers and third parties at nological disturbances and restoration timelines via – JSC Tyumenenergo staff training in emergency the Company facilities will be completed. Call-Center with 24/7 hotline were arranged. first aid provision (to be performed by paramedics instructors); In JSC Tyumenenergo Work Safety Days are regularly – familiarization of the staff with potential hazards held, workstations and working teams are checked and risk occurring during the work completion. regularly. Every month HSE Services of the Company – staff training in correct and safe work completion branches perform systemic analysis on the critical techniques at the training facilities, master remarks identified, plan follow-up activities to remedy 6.5. HEALTH AND SAFETY classes of the repair teams. the identified and prevent similar violations. All the – monthly review of the violations identified during workstations of JSC Tyumenenergo, field-operation Power-engineering is one of the most injury-hazardous economy the teams’ work station checks. and repair are equipped with certified protection sectors therefore, JSC Tyumenenergo places a special emphasis – certification of JSC Tyumenenergo workstations, equipment, tools and accessories as per the Codes. In laboratory checks of observance of the sanitary all the branches of JSC Tyumenenergo conditions are on health and safety issues. rules and hygiene Codes at the workstations etc. created for the storage of the protection equipment complying with the requirements of the Guidelines on In 2012 there were no occupational injury or disease the Application and Tests of the Protection Equipment Key issue of JSC Tyumenenergo policy in health stations in compliance with the existing Codes cases in JSC Tyumenenergo which is an evidence of the Used in the Electrical Installations. For the staff and safety area is the provision of the priority of the and rules; efficiency of the selected areas of this Program. safety special arc-resistance overalls are provided. In workers’ life and health preservation over the Company – laboratory control of the observance of the Besides in the Company “Program of Actions to Reduce 2012 to supply the workers with personal protection business performance. sanitary rules and hygiene Codes at the work Injury Risks for third Parties at JSC Tyumenenergo equipment JSC Tyumenenergo spent RUR 66,206.554 k. stations; provision of cleaning and protection Facilities” is in place; it provides The Company widely uses anti-encephalitis overalls The Company constantly tends to reduce the risks of equipment and milk supply to the workers – revamp and overhaul of transformer substations developed by CJSC “FPG Energocontract”. Staff is also occupational diseases and prevention of occupational contacting with hazardous substances; provision and distribution grids in 2010–2015; regularly vaccinated against tick-borne encephalitis. injuries. of the staff with drinking water, medicines’ – work with mass media: placement of video- and purchases; audio clips on electrical shock danger in TV and Costs for the safety protection activities in 2012, In JSC Tyumenenergo “System of Health and Safety – provision of the work stations with modern radio companies; including costs for the provision of the staff with Management” has been developed, is in place and func- certified personal and collective protection – issue and distribution of printed products personal protection equipment, amounted to RUR tioning; it complies with OHSAS 18001:2007 international equipment, including arc-resistant kits; (booklets, posters, calendars, bookmarks) on 101,664.669 k, including per-capita costs – RUR 14.023 k. standard. In the framework of the health and safety sys- – holding of annual contest on health and electrical safety for children – total 27 activities; ______tem functioning “Management of the Health Protection safety and work with the staff among and Safety Provision, Implementation of the Functions JSC Tyumenenergo branches; and Actions Aimed at the Risk Mitigation in the Area – holding professional skills competitions among Changes of Costs for the Health Protection Changes in the Costs for the Staff Personal of Health Protection and Safety Provision” Program is JSC Tyumenenergo branches. Activities in 2010–2012, k RUR Protection Equipment Provision in 2010–2012, k RUR implemented. In 2012 in JSC Tyumenenergo the annual contest on “Management of the Health Protection and Safety health and safety and work with the staff was won by Provision” Program in JSC Tyumenenergo includes the Noyabrsk Electrical Grids team – it won the cup “Health following risk-mitigation functions: and Safety Contest Winner Cup”. The 2nd and 3rd – production control arrangement; positions were shared by JSC Tyumenenergo branches – provision of personal and collective protection Energocomplex and Nefteyugansk Electrical Grids, equipment; respectively. Bonus budget for the contest-winning 77,968.947 102,656.958 101,664.669 51,591.246 60,671.245 66,206.554 – training, briefing and knowledge check in the teams amounted to RUR 3,400,000. area of Health Protection and Safety Provision; 2010 2011 2012 2010 2011 2012 – development and implementation of team In 2012 JSC Tyumenenergo team successfully activities in the area of Health Protection and performed at All-Russian professional skills Changes of Per-Capita Costs for the Implementation of Safety Activities in 2010–2012, k RUR Safety Provision. competitions among the teams of insulation and overvoltage protection services of JSC IDGC Holding The main team activities aimed at the work safety distribution grids complex which simultaneously were Tyumenenergo tends to avoid injury rate at its facilities, improvement are: the federal stage of All-Russian Professional Skills improve responsibility and concern of every worker – work station certification in terms of labor Competition “Best in Trade” in the nomination “The to establish safe work conditions, observance of legal conditions and issue of the certificate of Best Electrician” sponsored by the Government of the Codes and rules. compliance with the work safety requirements, Russian Federation, JSC Tyumenenergo team won ______bringing the work conditions at the work these competitions. 11.21 14.17 14.02 2010 2011 2012

94 95 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

6.6. HUMAN RESOURCES MANAGEMENT Dynamics of the Staff Breakdown into Categories

16 16 16 51 50 50 Human Resources Policy Managers Experts and Employees JSC Tyumenenergo policy in the area of human resourc- Potential, in 2012 work was continued on the following es management is socially oriented and aimed at the areas: Workers staff performance improvement and the workers’ feeling – determination of the workers’ trades retaining of 33 34 34 of ownership in the attaining of the strategic targets set which is of key importance for JSC Tyumenener- by the Company. go; 01.01.2011 01.01.2012 01.01.2013 – development and implementation of the activities The priorities include not only retaining the available to reduce the staff age, especially production staff human resources playing a major part in the Company (workers and engineers); Support of the balance between retirement of elderly of the younger staff and reduction of pre-retirement development, maintenance of its competitive standing – development of the system of interaction with the staff, retaining of the highly skilled staff and employment and retirement age workers’ share. Most numerous is but also improvement of its human resource potential higher and secondary educational institutions of young workers is an important component for retain- the category of workers aged 25–45 (58.9 %) which over through holding targeted work in the area of the staff with the emphasis on profile power-engineering ing and recovery of the Company staff potential. the year grew by 1.3 percentage points. This category of development. educational institutions and departments; workers is characterized by the highest skill and labor – improvement of work with staff reserve; Staff structure by age groups over three years has been capability, they have sufficient job record for the most High-quality, skilled team of workers is the most – enhancement of work on psychophysiological changing insignificantly, mostly we witness the growth efficient performance of their functions. valuable asset and advantage available at the Company, support of the operation staff work safety; therefore investments into “human capital” are strategic – improvement of the staff motivation system and and most reliable ones allowing the Company to create social programs. Dynamics of the Staff Breakdown into Age Groups its development foundation. On each area a system of actions provided in the five- Working pensioners Based on this, as per JSC Tyumenenergo Program for year schedule – until 2014, inclusive – is implemented. 6.8 8.3 5.7 7.7 5.3 7.6 2 2 2 8 9 9 9 6 8 . . . . . 5 .7 7 0 8 2 Maintenance and Development of the Human Resources 2 2 2 Age 45 to retirement Age 35–45 Staff Breakdown and Number Age 25–35 29.4 29.7 30.3 Under 25 As of the end of the report period payroll number of the The human resources policy aimed at the preservation staff is 7,246 people working in 3 constitutive entities of and retaining of the skilled workers and staff perfor- 01.01.2011 01.01.2012 01.01.2013 the Russian Federation, including Yamalo-Nenets Auton- mance motivation results in the stable team. Staff provi- omous District, Khanty-Mansijsk Autonomous District sion in the main production departments in the Company The share of young workers aged under 35 is growing. and development, motivation improvement and career (Yugra) and south of Tyumen region. is 98 %, and staff turnover rate has been constantly As of the end of 2012 it was 33.6 %, in 2012 the share of growth is being conducted. declining for 3 years. Compared with 2012 the staff turn- this category grew by 0.6 percentage points. As of the end of the report period more than two thirds Minor reduction of the payroll number of the staff (by over rate reduced and is 3.1 %. To stimulate the process of the staff age reduction of the workers have professional degrees with 44.6 % 63 persons) in 2012 resulted from business process opti- targeted work on the attraction, adaptation and perma- of the staff – having university degrees, including about mization, mostly – auxiliary business processes. nent employment of the young workers, their training 2 % – with two university degrees or a doctorate degree.

Dynamics of the Staff in Education Level

Dynamics of Active Staff Turnover at JSC Tyumenenergo 2 2 2 Two University degrees, 4 4 3 4 2 4 3 0 3 1 3 3 post-graduate degree Higher Professional (University) 3.4 3.2 3.1 Secondary Professional (college) Secondary 25 24 23 The staff breakdown into categories over 3 years has been relatively stable and is characterized by the domi- 01.01.2010 01.01.2011 01.01.2012 nation of manual workers which is due to the technologi- cal process peculiarities. 2010 2011 2012 Throughout 3 years qualitative growth of the staff educa- a high educational level and by means of the Company tional characteristics has been noticeable, it is provided staff development and training policy. both by means of employment of the skilled staff with

96 97 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

Succession Pool Establishment National Research University "Higher School of Econom- Staff Training and Development ics", Russian Academy of Economics and State Service at- One of the main tasks of JSC Tyumenenergo in the area tached to the President of the Russian Federation, Skolkovo Staff Training knowledge level of the managers of District Electrical of human resources management is establishment and Management Company. Grids and development of their professional compe- training of the succession pool. To improve the level of the production and technological tences in 2012 tests were arranged in cooperation In 2012, 58 employees from the succession pool were staff training required to provide stable operation of the with experts from Federal State Educational Institution The Company works with the managements succession promoted, including 32 workers promoted to the target branches and improved operation quality the Company “Training and Methodology Office” of Rostekhnadzor. The pool and young workers succession pool. positions. adopted and is implementing a unified corporate test results are an input for the generation of the staff comprehensive and continuous training system covering training plans for 2013. Management succession pool is established for prompt In order to involve young employees into the solution of all the staff categories and management levels. Staff and high-quality coverage of the Company need in the urgent problems of the electrical grid system, improve their training and upgrade program provides: In 2012 training costs optimization work was continued employees ready to work at the following management professional competence, assist their career promotion in 1) Workers’ professional training; at the expense of: positions: 2012 the activities on the development of the youth succes- 2) Workers’ skills upgrade; – monitoring of the educational programs pre- – top managers; sion pool was continued. 3) Improved management and experts sented by the educational institutions in order to – line managers (from the department manager qualifications; make agreements at the most beneficial condi- upwards). Throughout the year succession pool members with their 4) Pre-examination training of the managers and tions; tutors worked at the implementation of the Succession experts; – wide application of new innovative training tech- The main criteria for an employee to be enlisted in the Pool Members Development Individual Plans (SPMDIP) 5) Training of the management succession pool niques like remote training (webinars, Internet succession pool are: which stated the main problems and actions promoting staff; classes), resident and remote training; involve- – High production performance; the required professional development of the worker and 6) Arrangement of the industrial placement classes ment of the Company staff into the training of the – Distinct leadership potential, attainment of the target set. This is not only upgrade course for the university and college students. succession pool staff having a high qualification – Good learning capability; training, participation in the workshops and training cours- level and sufficient management experience; wid- – Mobility (the candidate should be ready to move es but also on-the-job self-study, temporary work on the In 2012 the total number of the staff trained on different er use of the simulator facilities for the branch to a different region); target position, participation in the project activities. areas and fields was 6,720 persons, including manage- staff training to arrange pre-examination and – Striving for professional growth and development. ment – 1,540 persons, experts and office employees – emergency-prevention training of the production In the framework of the “Program for Management 1,749 persons, manual workers – 3,431 persons which is and engineering staff; In 2012 the succession pool for the management positions Staff Training” JSC Tyumenenergo arranged training 93 % of the average payroll staff number. – participation in the President program of the of the JSC Tyumenenergo executive administration includ- of the youth succession pool on the urgent topics was management staff training partially funded from ed 47 workers. The Company management succession pool arranged, this training involved highly skilled managers More than 80 % of the total number of the trained staff the district budget. consists of 476 employees. and experts from the Company with a sufficient com- are workers that participated in the educational activities pany job record. From the youth succession pool of the classified as mandatory training. It means operation In the new work conditions top-priority areas in the For the training and development of the succession pool branches and executive administration 27 persons were staff training related to the grade improvement or con- management staff and experts training and upgrade members’ professional and management competences promoted to the target positions, 3 persons were pro- firmation, managers’ and experts’ qualification upgrade, are management of different activities and processes, Russian leading educational institutions are contracted: moted to other positions. pre-examination training and certification according to energy efficiency and energy saving, business planning, industry Rules and Rostekhnadzor (Russian Agency for financial activities, top and line management succession Engineering, Mining and Nuclear Supervision) Rules, pool training. Industrial and Fire Safety Rules, labor safety Codes. Corporate Social Responsibility In 2012, 202 workers, mostly manual ones, were trained In 2012 compared to last year the share of workers at the universities and colleges on remote or part-time JSC Tyumenenergo, like all the leading companies in determined by the Industry Tariff Agreement in the Elec- trained at long-term upgrade courses (over 100 hours) education schemes. Over the same period 117 univer- Russia, shares the principles of social responsibility trical Power-Engineering of the Russian Federation and at the educational institutions with relevant educational sity and college students took industrial placement and adopted in most developed countries and tends to apply bargaining agreement. licenses and accreditations has grown. pre-diploma practical term at JSC Tyumenenergo. them in practice in every area of its activity. From 1994 in JSC Tyumenenergo Program for Non- Bearing in mind the high priority of improving the skills In order to develop and implement joint programs Being a socially oriented Company, JSC Tyumenenergo State-Funded Retirement Provision has been in place, it level of the Company staff in the activity safety provision for young experts’ training, staff involvement into the adheres to the following principles: is aimed at the provision of the decent standard of living area in 2012 close cooperation with Federal State Edu- training process, arrangement of the industrial place- – Non-use of forced labor; for the retired workers. The Company participation in the cational Institution “Training and Methodology Office” of ment and trainee terms at the Company departments – No discrimination in the area of labor relations on Program for Non-State-Funded Retirement Provision Rostekhnadzor in the area of staff training and develop- agreements of cooperation were made with Federal different features: gender, age, ethnicity etc.; strengthens the credit to the employer which affects ment was arranged. At the premises of JSC Tyumenen- State Budget Educational Institution of Higher Pro- – Provision of safe work conditions; both the team stability and staff renewal processes. ergo branches two groups (24 persons each) for training fessional Education “Surgut State University”, Federal – Timely wage/salary payment, as per qualification upgrade program “Rules and Codes State Budget Educational Institution of Higher Profes- – Increase of the staff salaries by indexing tariff Every year the program of recreational children’s and for the Operation of the Electrical Installations. Safe sional Education “Tyumen State Oil and Gas University”, rates and position salaries; family rest aimed at the recovery of the working effi- Performance of the Works Conducted with the Technical Federal State Autonomous Educational Institution of – Availability of monetary and moral bonuses ciency of the staff living in Extreme North and equiva- Operation and Maintenance of the Electrical and Elec- Higher Professional Education “Omsk State Technical system; lent areas. 224 children rested in summer recreational tromechanical Equipment. Diagnosis of the Electrical University”, Federal State Budget Educational Institution – Equal possibilities for personal and professional camps and more than 1,200 workers with their children Power-Engineering Systems’ Electrical Equipment”. of Higher Professional Education “South Urals State growth of the Company workers. took health-care courses in the country’s sanatoria and University” (National Research University), Federal State recreation centers. Besides, the Company every year In the framework of the implementation of the pro- Educational Institution of Higher Professional Education Regulation of the relationships between the Company vaccinates the staff against flu and tick-borne encepha- gram to reduce injury rate, in order to determine the “Tyumen State Agricultural Academy”. and workers in the social and labor sphere shall be litis.

98 99 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

REPORT ON SOCIAL RESPONSIBILITY REPORT ON SOCIAL RESPONSIBILITY

The Company actively assists the employees in the Every year JSC Tyumenenergo team participates in Invariably the Company pays a great deal of attention to system held by JSC IDGC Holding JSC Tyumenenergo improvement of their living conditions. This work is all-Russian competitions where it takes prize-winning the workers’ healthy way of life, thus in 2012 the follow- team took the 2nd position in the general team classifi- performed in accordance with the Provision “Of Cor- positions. In 2012 JSC Tyumenenergo was the champion ing activities were arranged and held: cation. porate Assistance and Support of JSC Tyumenenergo of the All-Russian competitions on professional skills – family sport festivals; Workers in the Improvement of the Living Conditions” among 13 teams of insulation and overvoltage protection – healthy days; The Company actively supports children’s sports devel- approved by the Board of Directors of JSC Tyumenener- services of JSC IDGC Holding subsidiary companies in – corporate sports tournaments. opment. go. The priority is given to the workers badly in need of Astrakhan, having demonstrated stamina at different the living conditions improvement in order to attract and stages, skills in performing different works, innovations Over the long years in JSC Tyumenenergo strong family In 2012 extreme sports competitions among teen-agers permanently employ highly-qualified staff and reduce the implemented and experience. The workers who win the traditions were formed, specialists of the Company were organized in Tyumen. employees’ average age. titles are: “The Best Electrician” – Alexander Lymar – branches every year demonstrate high results in differ- Grade 5 electrician from the insulation and overvoltage ent sports. And sports achievements of some workers In order to build the corporate spirit and propaganda of Over the 4 years of this program implementation more protection service, “The Best Engineer” – Maxim Makru- are acknowledged not only in the Company but also at the creative activities between the teams of JSC Tyume- than 100 persons took part, including foremen, dispatch- shin, Category 2 engineer from insulation and overvolt- annual All-Russian winter and summer sports festi- nenergo departments in 2012 holiday activities dedicated ers, young managers from the succession pool. age protection service, both work at JSC Tyumenener- vals for the workers of distribution grid system held by to the Day of Power-Engineering Worker, music ring go – in Nizhnevartovsk Electrical Grids branch. JSC IDGC Holding. Thus, at the IV All-Russian Summer “Generation Battle”, contest “Hello, We are Looking for A system of the staff insurance including the following Sports Festival for the workers of distribution grid Talents”, “Activity” game tournament. elements is in place: One of the priority areas of JSC Tyumenenergo internal – Voluntary medical insurance; policy invariably is the development of corporate culture – Voluntary insurance against accidents and dis- and streamlining of the communications in the team. eases; Key Tasks for 2013 – Insurance against occupational injuries; More than 70 corporate-level activities were arranged – Insurance of the employees’ health. and held in 2012. They were arranged with the active Retaining of the stable team, its quality improvement Development of the system of interaction with profile participation of the Youth Council and veterans’ organi- through staff development and inflow of young educational institutions in order to train young experts. As per the bargaining agreement of JSC Tyumenenergo zation. We should also mark annual all-Russian action professionals, selection of managers on professional the Company staff is granted extra privileges and social “Victory Banner Relay” held by JSC IDGC Holding as well principles with the involvement of both in-house and Development of staff training and upgrade system, benefits, among other things, the bargaining agree- as “Victory Heirs to the Winners”, meetings with the vet- external candidates. continuation of activities on the establishment, training ment provides monetary donations on both joyful events erans at Surgut Local History museum, all-Russian ac- and development of management and youth succession in the life of the employee and in mournful or hard life tion “Victory Banner” as well as traditional day of elderly Improvement of the system of labor remuneration pool. situations. For example, donations due to the child birth people. JSC Tyumenenergo took part in the II Open chess and staff motivation to attain personal interest of each in 2012 were paid to 282 employees – one worker out tournament of power-engineering workers in memoriam employee in the improved efficiency of the Company Continuation of the work on psychophysiological study of of nine ones aged under 35, like last year. This fact is of M. M. Botvinnik. operation ensuring reliable operation of the electrical the operation staff in the group of risk and staff affected an evidence of the young workers’ confidence in their grid system operation. by occupational hazards. future. The team of active members of JSC Tyumenenergo Youth Council for the second year running won the games Provision of the workers social security. Apart from financial incentives JSC Tyumenenergo (held by JSC IDGC Holding) of the “Club of the Merry and The Company HR policy is aimed at the attaining of the applies a system of moral incentives. Sharp-Witted Power-Engineering Workers”. Young work- Appraisal and motivation of the existing managers upon key targets: ers of the Company also participated in the III Surgut City their performance. Provision of high production performance, improved More than 400 workers of the Company were marked Festival of the Working Youth where they were winners. activity efficiency, high-quality staff management, with state, industry, corporate and regional awards – Retaining of the social benefits level and guarantees to retaining of stable, highly skilled, capable team and its heads of districts, cities and communities. Every year young experts of the Company take training maintain stable team. further development. and exchange at the Festival of the Working Youth of ______For the large contribution in the development of JSC Tyumenenergo. Improvement of the bonus system in terms of changes JSC Tyumenenergo, scientific, inventive, rationaliza- of the key performance indicators as per the priority tion activities and implementation of the activities to Upon the results of 2012 JSC Tyumenenergo youth as- targets and tasks set to the Company. improve the production activities five Company workers sociation received Letter of Acknowledgement from the were awarded silver and golden memorial badges “For Department of Culture, Youth Policy and Sports of the the Merits to Tyumenenergo”. Also in 2012 for the first Administration of Surgut for fruitful cooperation in the time 14 employees were awarded with “Tyumenenergo field of implementation of the youth policy priority areas. Veteran” badges for the major merits in the develop- ment of electrical power-engineering of Tyumen region Actions to support environmental situation in the and long-term work. district were held in all the branches of JSC Tyumene- nergo. In 2012 activities propagating family values were Staff development, knowledge and experience exchange also held, for example: Children’s New Year carnival, takes place in the framework of the professional con- contest of the children’s short stories “My Parents tests attended by workers, experts and managers. Work in Power-Engineering”, annual contest of presen- tations “Heroes of our Motherland” for the children of In 2012 professional contests in the branches were JSC Tyumenenergo workers and the first joint contest held, including contests among fast-response field op- of children’s drawings “United Grid – United Country” eration teams, annual contest “Best in Trade” (among among the children of workers of JSC IDGC Holding and substation electricians), and drivers’ contest. JSC FGC of UES.

100 101 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

№ 07 COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS

ORDER OF COUNTING ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS

The opinion and analytical conclusion of Tatiana V. Petrova, Deputy Director General of Economy and Finance, on JSC Tyumenenergo performance in 2012

For JSC Tyumenenergo and for all the electric grid com- the departure of last mile consumers. The key objective 7.1. COMPANY PROPERTY STATUS panies the year 2012 was not easy. Russian Federation was to escape from economic dependence upon external Ministry of Energy determined the list of RF constituent factors and to effectively use company own resources. AND FINANCIAL SOURCES ANALYSIS entities, including the Tyumen Region, where exclusion In pursuance of the RF President Assignment for annual of the total last mile from productive supply would result 10 % reduction of the expenses on goods, works and in considerable additional increase in tariffs for electric services purchase, JSC Tyumenenergo is continuously This year of the Annual Report contains information JSC Tyumenenergo financial and economic status and power transmission and raise in tariffs for end consum- monitoring cost of goods, work and service procured. on assets, liabilities and analysis of the dynamics of basic performance indicators in 2012. ers above the level set by Ministry of Economic Devel- The resulting saving for the last year amounted to more mln rubles opment. In the conditions of continuing global crisis, than one billion rubles. Besides, as a result of the work Deviation 2012/2010 departure of the last mile consumers with the greatest performed in 2012, the Company reduced the level of 31.12.2010 31.12.2011 31.12.2012 effect on the Tyumen Region, the Company laid down the controllable operation expenses, including administrative mln rubles % aim to improve operating efficiency and to maintain the expenses, by 5 % as compared to 2011. present position on the market of services provided by Net book value (line 1,600) 113,783 125,890 141,400 27,618 24 JSC Tyumenenergo. JSC Tyumenenergo is still an economically stable and financially strong company. An evidence to the Company Net assets 96,865 102,785 113,757 16,891 17 Today, we can positively state that in the difficult condi- financial stability is the fact that we paid the full amount tions the Company successfully coped with the assigned of the RUR 2.7 bln bonded loan in due time. Authorized capital 2,737 27,374 27,374 24,637 900 tasks and ensured continuous electric power supply to consumers and, moreover, received profit instead of the Advanced planning and budgeting methods enabled loss suggested by business plan. the Company to meet the key performance indicators Assets profile as of 31.12.2012 approved by JSC Tyumenenergo Board of Directors for Energy efficiency, power saving and focus on cost 2012. The performance results make it possible to ex- reduction were especially important in 2012 for the press confidence about JSC Tyumenenergo’s observing Company to reach the breakeven point, restrain electric its policy for increasing company profitless and invest- energy tariffs growth for end users and compensate for ment attractiveness in future. 90 % — Fixed assets 1 % — Stocks 2 % — Accounts receivable Cost management program: EBITDA 2 % — Monetary funds – Reduction of expenses on production service purchase; 8,405.47 mln rubles – Reduction of repairs cost due to scheduled procurement; – Reduction of electric energy loss; – Optimization of newly commissioned facility service schemes Liabilities profile as of 31.12.2012

52 % — Capital surplus Cost reduction implementation and effective financial an EBITDA is an indicator of company’s effectiveness. At the economic planning enabled JSC Tyumenenergo to re- year 2012 end, EBITDA amounted to 8,405.47 mln rubles, 19 % — Authorized capital main a profitable and financially stable company in 2012. which means that JSC Tyumenenergo is a financially 9 % — Undistributed profit (uncovered loss) The Company met all the key performance indicators. stable company. 10 % — Long-term liabilities 9 % — Short-term liabilities

104 105 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Dynamics of assets profile, mln rubles Dynamics of Company net assets, mln rubles

7,889 9,902 8,845 Noncurrent assets Current assets

104,938 96,865 102,785 113,757 115,998 133,501 31.12.2010 31.12.2011 31.12.2012

31.12.2010 31.12.2011 31.12.2012 Structure and analysis of Company accounts Dynamics of liabilities profile, mln rubles receivable/payable

Receivables profile as of 31.12.2012 13 ,272 12, 8,4 84 08 6 5 % 9 Short-term liabilities 5 %

1 Long-term liabilities 0 8 , ,50 25 9 9 5 % — Long-term receivables 1 4,372 95 % — Short-term receivables

31.12.2010 31.12.2011 31.12.2012

Due to specific features of the Company activities, Authorized capital. As of 31.12.2012, Company autho- JSC Tyumenenergo assets profile is distinguished by rized capital is in compliance with its constituent instru- high share of noncurrent assets (over 90 %). ments and amounts to 27,373 895.1 thousand rubles. Accounts receivable turnover, times It should be mentioned that considerable part of liabil- In 2010 JSC Tyumenenergo proposed JSC IDGC Holding, ities is made by advances payable for the technological as a shareholder owning 100% of the Company shares, connection. The said liabilities do not require current to increase Company authorized capital by increasing assets backing for they are the source for noncurrent nominal value of the shares on the account of Company assets formation to be paid upon technologic connection property, i.e. additional capital. service completion. In July 2010 JSC IDGC Holding management decided to Assets revaluation. Revaluation is performed in accor- increase authorized capital by increasing nominal value dance with the Accounting Statute “Assets Accounting” of ordinary shares from 10 rubles to 100 rubles per 14 14 15 PBU 6/01 approved by RF Ministry of Finance Order No. share. 31.12.2010 31.12.2011 31.12.2012 26 dated 30.03.2001 and RF Ministry of Finance Order No. 33n dated 20.07.1998 “On the approval of assets Amendments to JSC Tyumenenergo Charter were regis- accounting guidelines”, and for the purpose of bringing tered on February 16, 2011. Accounts receivable turnover is on high level and cost of fixed assets of JSC Tyumenenergo in compliance confirms liquidity of Company current assets. with actual restoration cost. Net assets. JSC Tyumenenergo shares do not circulate on formal securities market, therefore, Company calcu- Within the subject period Company assets were revaluat- lates Net Assets instead of Market Capitalization. ed (latest revaluation as of 31.12.2012). Net assets value exceeds authorized capital value, which Increase in depreciated assets book value as a result is a criterion of stability of Company’s financial situation. of the revaluation amounted 11,215 mln rubles as of 31.12.2012, full appreciation value was credited to Com- The recent three years demonstrate positive increment pany additional capital. on net assets value +17 % (2012 to 2010). ______

106 107 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Company receivables profile Proceeds profile, mln rubles thousand rubles Periods

2010 2011 2012 %) 390 (1 (3 %) %) 578 (1 ) 453 (1% 95 (3 % % ) ,2 1 ) (6 1 23 8 , Accounts receivable, total 3,305,894 3,318,164 3,084,099 8 1 Proceeds from electric ,8 2 energy transmission Long-term receivables 90,188 384,372 164,161 and transit 46,146 47,449 47,069 Proceeds from Short-term receivables 3,215,706 2,933,792 2,919,938 technical connection including: Proceeds from 4 ) 4 ) 2,80 (93 % 5,260 (96 % side activities 5 45 %) buyers and customers 2,493,943 1,841,675 2,394,011 ,764 (96

advances made 660,320 471,162 355,558 2010 2011 2012 other receivables 61,443 620,955 170,369

Proceeds profile of JSC Tyumenenergo remains almost The biggest part of accounts receivable in 2012 is made up by long-term receivables from buy- unchanged, the major share (96 %) being held by electric ers and customers (78 %) and advances made for technical connection (12 %). energy transmission and transit on grids.

Company payables profile thousand rubles PRIME COST Periods

2010 2011 2012 Prime cost of the goods, work and service sold by to higher infrastructure payments and depreciation JSC Tyumenenergo in 2012 was 41,287 mln rubles (+4 % allowances. Accounts payable total 7,339,582 8,109,940 5,746,640 to 2011 level). The growth of prime cost in 2012 is due including:

suppliers and contractors 2,341,135 2,140,185 1,953,571 Prime cost components dynamics, mln rubles

advances received 2,700,255 3,891,263 2,048,057 Cost item 2011 2012 2012 deviation against 2011, % other accounts payable 2,298,192 2,078,492 1,745,012 1. Infrastructure costs: 21,030 21,538 2

1.1. JSC FGC of UES services 13,929 14,275 2 At the 2012, payables to suppliers and contractors (34 %) Control and monitoring of reporting receivables and and advances received for technological connection payables are performed real-time using SAP R/3 1.2. Services of distribution grid companies 3,759 4,160 11 (36 %) have the biggest specific weight in accounts software. payable. ______1.3. Purchased electric energy to compensate losses 3,342 3,103 -7

2. Company own charges: 12,736 13,224 4 7.2. COMPANY FINANCIAL PERFORMANCE ANALYSIS 2.1. Materials, energy for production and business needs 801 821 2 2.2. Contractors’ services for equipment maintenance and PROCEEDS repairs 1,901 1,513 -20 2.3. Labor costs 5,099 5,407 6 JSC Tyumenenergo proceeds 2012 amounted to 47,069 – Proceeds from technological connection services mln rubles and is almost the same as the 2011 figure. amounted to 1,231 mln rubles, which is 64 mln 2.4. Payroll burdens 971 1,226 26 Minor (by 0.8 %) reduction is explained by shortening on rubles less than the 2011 figure. It should be paid productive supply to oil and gas industry enterprises noted that the capacity of 549 MW was connected 2.5. Other costs 3,964 4,257 7 due to commissioning of their own capacities. in 2012, 43.8 MW more than the previous year Proceeds changes, by types of activity: index; 3. Depreciation 5,825 6,525 12 – Proceeds from electric energy transmission and – Proceeds from side services amounted to TOTAL PRIME COST 39,591 41,287 4 transit in 2012 amounted to 45,260 mln rubles 578 mln rubles, which is 188 mln rubles higher (1.1 % reduction against 2011 level); than 2011 level.

108 109 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Basic factors of prime cost changes: – The 20 % reduction of expenses on contractor’s Controllable costs brought to 2010 level, mln rubles – The growth of cost of JSC FGC of UES services is services for equipment maintenance and repairs due to increase of customer contract demand and is because these jobs were performed without rate for maintenance of JSC FGC of UES electric subcontracting in 2012; grid facilities approved by Russian Federal Tariff – The growth of labor costs and payroll burden is due Service; to increase of wage rates and salaries by con- 10,795 10,185 9,682 – The growth of expenses on services of other distri- sumer price index in accordance with the Industry bution grid companies and reduction of expenses Tariff Agreement applicable to Russian Federation on electric energy purchase to compensate loss on electric energy complex, and JSC Tyumenenergo JSC Tyumenenergo grids are due to the reduction in collective agreement. The growth of labor costs is 2010 2011 2012 cross-subsidies transferred through JSC Tyumen­ also due to employment of personnel for equipment energo tariff as a result of changes in the mutual maintenance and repairs without subcontracting, settlements scheme in the region at the individual and changes in insurance premiums accrual in tariffs approved by Regional Energy Commission of accordance with Russian Federation law; As a result of the cost reduction program accomplish- controllable costs” in 2012 by 10.3% against 2010 the Khanty-Mansijsk Autonomous District (Yugra), – In compliance with Company accounting policy, fixed ment, the Company managed to reduce “overhead figure. the Yamalo-Nenets Autonomous District and the assets revaluation was performed as of 31.12.2012, Tyumen Region; which resulted in higher depreciation allowances. JSC Tyumenenergo financial performance mln rubles

Item Actual 2012 deviation against 2011, % Description Prime cost profile, mln rubles No. 2011 2012 + / - %

1 Proceeds from product sales, total, 47,449 47,069 -380 -1 6 %) 5 %) (1 including: (13 %) (1 25 54 25 ,5 ,8 ,8 6 4 5 Infrastructure costs 1.1 Core activity products (service), total 47,059 46,491 -568 -1 37,318 39,591 41,287 Company 1 own charges 2 , 1 2 Product prime cost, total -39,591 -41,287 1,696 4 2 2 1 8 ,7 3 1 3 ,2 Deprecation ) (3 ) 6 2 ) 3 % ( % 4 4 32 3 ( % 3 Gross profit, total 7,858 5,782 -2,076 -26 %) (5 % (5 32 2 20,183 ) 21,030 % (5 ) ,538 21 - profitability of all types of activity 16.56 % 12.28 % -4.28 % -

2010 2011 2012 4 Sales profit 7,858 5,782 -2,076 -26

5 Other income, total 4,095 4,793 698 17 Dynamics of company own charges growth against inflation rate 6 Other expenses, total -6,520 -9,236 2,716 42 8.8 % 6.6 % 7 Profit before tax 5,433 1,339 -4,094 -75 6.1 % 8 Profit tax and other similar mandatory -1,868 -1,212 - 656 -35 deductions

9 Net profit 3,565 127 -3,438 -96 12,736 13,224 Inflation rate 12,281 - % of proceeds 8 % 0.3 % - 7.7 % - +4 % +4 % Company own charges 11 EBITDA 11,630 8,405 -3,225 -28

2010 2011 2012 As a result of departure of the last mile consumers JSC and compensate for the departure of last mile consumers. Tyumenenergo lost a considerable part of its revenues and Profitability of all the types of activity remains high in 2012 incurred additional expenses related to regulation of the and amounts to 12.28 %. In 2012, growth rate of company own charges is 2.6 % consumer relations. Year 2012 required lost and disputed EBITDA 2012 is 8,405 mln rubles (27 % reduction against lower than inflation rate. profit provisions to the total amount of 2,697 mln rubles, 2011 figure) due to net profit reduction. and respective reduction of the profit. Upon payment of tax profit and other similar mandatory de- Focus on increased operating efficiency was especially ductions, Company net profit amounted to 127 mln rubles important in 2012 for the Company to reach the breakeven instead of 2,210 mln rubles loss planned and approved by point, restrain electric energy tariffs growth for end users Company Board of Directors as a part of Business Plan.

110 111 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table JSC Tyumenenergo net profit dynamics 2010–2012, mln rubles 3.3 System indicator of average duration of consumer <1 <1 supply interruption (for feeders 6 kV and more)

4 Investment Program implementation effectiveness to % ≥95 145 the extent of current year (by cost and terms)

3,565 -2,210 127 ______* ROE is calculated by reference to net profit supported by cash flow – writing-off accounts payable (less profit tax); 2011 2012 (planned) 2012 (actual) which corresponds to the net profit amount reduced by adjusted profit – income from revaluation off financial investments, equity securities tax value in the following lines of the annual accounting statements: circulated on securities market; – profit of previous years revealed in the period reported (less profit tax); – writing-off restructured tax penalties and fines.

NET PROFIT DISTRIBUTION Return on equity (ROE) supported by cash flow amount- Investment Program implementation effectiveness to the ed to 0.001 % (net profit supported by cash flow was extent of current year (by cost and term) was 136 % against Net profit distribution at the year 2012 end is shown in 865 thousand rubles, equity as of the beginning of 2012 was ≥ 95 % approved by target figure. the graph below. 102,784,548 thousand rubles). Therefore, all the annual key performance indicators were Net profit distribution in 2010–2012, mln rubles Actual electric energy loss to supply into grid, reduced to achieved in 2012. the conditions comparable to planned figures (with regard to Rusenergoresurs LLC last mile consumer demand)

% % 5 % amounted to 2.49 % in 2012, which is 0.01 points below the 8 % 5 9 Profit allocation for current approved plan figure. % 5 2 year investments Dividends Reserve fund 7.3. COMPANY FINANCIAL AND ECONOMIC INDICATORS 92 % 86 % 70 %

2010 2011 2012 Company liquidity ratio dynamics 2010–2012

In accordance with Federal Law No. 208-FZ “On joint capital). Thus, at the year 2012 end net profit share in the 0 0 .64 .74 51 .58 stock companies” dated 26.12.1995 and Article 8 of the amount of 6 mln rubles is allocated to the Reserve Fund 0 0. Company Charter, Company General Shareholder Meet- and 32 mln rubles for dividend payment. ing decided to form Reserve Fund (5 % of the authorized Current liquidity ratio Quick assets ratio COMPANY KPI AND INFORMATION ON KPI ACHIEVEMENT

Target values of JSC Tyumenenergo key performance Board of Directors (Minutes No. 20/11 dated 27.12.11, indicators (KPI) for 2012 were approved by Company No. 11/12 dated 01.11.2012). 31.12.2011 31.12.2012

2012 The liquidity index analysis performed shows that there Liquidity management is a necessary condition for Item Description Unit is some reduction in the figures as against previous year maintaining the Company financial stability. In order to No. Planned Actual due to the following objective causes: control current liquidity ratio (to not permit emergence – changes in balance sheet structure (long-term of liquidity reduction risk) the Company is monitoring 1 Return on equity (ROE), supported by cash flow* % -2.13 0.001 debts transferred into short-term debts, +28 % and analyzing the index on regular basis. as against 2011) in accordance with law require- ______ments; 2 Electric energy loss to supply into grid % 2.50 2.49 – assessed reserve formation in accordance with Liquidity risk management implies that sufficient funds 3 Reliability criterion, concurrently: Russian Federation legislation and changes in shall be available for fulfillment of liabilities and requires Accounting Statutes (leave reserve, annual fee competent planning and analysis of cash flow both for the 3.1 Nonadmission, over the limit number of accidents number of 0 0 reserve, and reserve for claims asserted as of entire Company and its every branch. defined by paragraph 2.1. of the Instruction accidents 31.12.2012 is 3,873 mln rubles or +129 % as against 2011); 3.2 System indicator of consumer supply failure (for feeders <1 <1 – closing of part of the advances made under con- 6 kV and more) tracts for technological connection.

112 113 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

rubles. Thus, the total volume of paid back credit funds to 13,900 mln rubles (as of the end of 2012). Average Analysis of Company financial stability amounted to 3,522 mln rubles in 2012. weighted interest rate for Company credits and loans remained almost the same as of the end of 2012 and The Company is monitoring a number of financial strategic priorities and long-term tasks, including those In 2012 JSC Tyumenenergo credit portfolio increase amounted to 7.92 % (7.77 % as of the end of 2011). indicators that help to assess the level of realization of related to Company sustainable development. by 32 % from 10,507 mln rubles (as of the end of 2011) ______

Index name 2010 2011 2012 Loan indebtedness and average weighted interest rate dynamics

Equity-assets ratio 0.85 0.82 0.80 8.09 % Equity to borrowed capital ratio 5.70 4.45 4.12 7.92 % 7.77 % Aggregate raised funds to capital and reserve ratio 17.46 22.48 24.30

Long-term debt to long-term debt and equity ratio 0.08 0.09 0.11

Debt coverage by current income (profit) 0.37 0.65 0.83 Average weighted interest rate, % 10,507 13,900 Credits and loans, mln rubles Outstanding debt rate, % 0.01 0.01 1.06 5,522

Equity assets ratio characterizes share of equity The increase of aggregate raised funds to capital and 2010 2011 2012 allocated for Company property formation and rate of reserve ratio in 2012 as against 2011 is due to increase Company dependence upon external funding. in borrowings in 2012 as compared to 2011 by 19 % and capital and reserve growth by 10.7 %. According to the Accounting Policy, JSC Tyumenenergo credit portfolio amounted to 13,900 mln rubles, including Throughout the subject period equity assets ratio value changes its indebtedness profile in 2012 to the extent 10,366 mln rubles (75 %) of long-term credit and loan was at a high level (above the recommended 0.5–0.6). Long-term debt to long-term debt and equity ratio of long-term liabilities redistribution into short-term indebtedness and 3,533 mln rubles (25 %) of short-term reflects to which rate funding of the Company activity is liabilities. Thus, as of 31.12.2012 JSC Tyumenenergo indebtedness. Equity to borrowed capital ratio is an important provided by attracting long-term credits. Growth of the characteristic feature of company stability. At the year index in 2012 1.22 times as against 2011 is explained by end, equity value is 4.5 times higher than borrowed increased share of long-term liabilities. Credit portfolio profile breakdown to creditors, as of 31.12.2012 funds value.

5 16 5 Debt portfolio management JSC Sberbank of Russia 2,600 mln rubles in 2012. Also, in April 2012 interest- JSC Tyumenenergo activity in the field of funds bearing loan agreement was made with JSC IDGC Gazprombank (JSC) borrowing is performed in accordance with the Holding to the value of 2,300 mln rubles at 9 % per JSC IDGC Holding JSC Tyumenenergo approved Provision for Credit Policy annum and return date 10.04.2014. The transaction and standard of JSC IDGC Holding S&A debt position was approved by Company Board of Directors (Minutes 29 management. In accordance with the regulations of JSC Tyumenenergo Board of Directors Meeting No. a system of borrowed capital limits was introduced, 03/12 dated 06.04.12). Within the limit available under which enables the Company to forecast solvency, previously made credit agreement with Gazprombank financial stability and creditworthiness and to determine (JSC), trench in the amount of 2,015 mln rubles was Plans for borrowed funds raising management authorities related to credit operations. raised for funding of the investment activity and refunding of previously incurred investment costs. Thus, In 2012 JSC Tyumenenergo open tenders were held in the total amount of credit resources attracted in 2012 In 2013 JSC Tyumenenergo plans to raise borrowed funds Analysis of JSC Tyumenenergo financial and economic electronic format for the right to make contracts for was 6,915 mln rubles. for financing its investment and current activities in the situation conducted in respect of the year 2012 prove stable nonrevolving credit line accommodation for funding amount of 13,446 mln rubles. The credit funds will be financial situation of the Company. Financial coefficients investment and operating activities. On May 29, 2012 bond loan was paid back in the amount attracted in compliance with Russian Federation legislation are within the standard figures and certify liquidity and of 2,700 mln rubles, and the 10th coupon yield was in an open procurement procedure. solvency of the Company. According to the tender results credit agreements were paid out in the amount of 117.1 mln rubles. Liabilities In 2012 JSC Tyumenenergo management effectively real- made to the total amount of 6,600 mln rubles at rates to holders of the second issue corporate bonds were Partner banks of the Company in the field of crediting are ized financial and credit policies to ensure Company’s cur- below average market ones. discharged in full and in due time. the largest banks of Russia JSC Sberbank of Russia and rent image of a Russian financially stable energy company. ______JSC Gazprombank. Participation of these banks in the Generally, Company financial policy is aimed at maintaining credit portfolio and considerable amount of funds borrowed sufficient funds for financing its investment programs and Under the said agreements credit funds were attracted ТAlso, debt on the nonrevolving credit line 2009 was paid in 2012 on beneficial conditions are the evidences of JSC current activities with regard to the plans for power engi- for funding the Company operations to the amount of ahead of schedule and to the full amount of 822.4 mln Tyumenenergo financial stability and banks’ confidence in neering development in the Tyumen Region. the Company reliability and good standing. ______

114 115 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table Balance Sheet Codes 1 2 3 4 5 6 as of December 31, 2012 All Russia Classifier of Man- 0710001 Income yielding investments into agement Documentation 1160 - - - tangible assets Date (dd/mm/yy) 31.12.2012 Tables 13–14 Financial investmets 1170 4,811,751 322,351 361,642 i Organizations 05770629 Organizition: JSC Tyumenenergo Table 25 Deferred tax assets 1180 800,273 142,141 134,989 Taxpayer identification number: Taxpayer identification number 8602060185 Other noncurrent assets 1190 408,006 452,777 507,243 Activity: electric power transmission ic Activity 40.10.2 Total for section I 1100 133,501,471 115,987,524 104,937,730 Form of inorporation /type of ownership: Forms of Ownership 47/16 Open joint stock company/private All Russia Classifier of Man- II. TANGIBLE ASSETS 384 Measurement unit: thousand rubles agement Units Location (addres): Tyumen Region, Russia, 628406 Table 15 Stocks 1210 972,806 1,228,641 1,054,502 4 Universitetskaya St., Surgut, Khanty-Mansijsk Autonomous District – Yugra

Value added tax on acquired assets 1220 16,582 83,251 86,471 Explanations Index name Line As of Dec. As of Dec. As of Dec. Code 2012 2011 2010 Tables 16–19 Accounts receivable 1230 3,084,099 3,318,164 3,305,894 1 2 3 4 5 6 ASSETS more than 12 months after the bal- I. NONCURRET ASSETS 1231 164,161 384,372 90,188 ance sheet date

Table 4 Intagible assets 1110 - 30 35 within 12 month from the balance 1232 2,919,938 2,933,792 3,215,706 sheet date Tables 5–6 Research and development results 1120 112,576 7,417 4,958

Intagible assets 1130 - - - buyers and customers 123201 2,394,011 1,841,675 2,493,943

Tangible exploration assets 1140 - - - advance made 123202 355,558 471,162 660,320

Tables 7–10 Fixed assets 1150 127,368,865 115,062,808 103,928,863 other accounts receivable 123203 170,369 620,955 61,443

Financial investments (except for 1240 - - - land parcels and nature use objects 1151 40,709 36,592 12,434 money equivalents)

buildings, machinery and equipment, Monerary assets and money equiva- 1152 114,933,529 99,048,777 95,611,229 Form 4 1250 2,998,044 3,887,729 3,355,876 facilities lents

other types of fixed assets 1153 463,305 256,567 143,685 cash 1251 976 2,052 1,532

Table 11 incomplete construction 1154 9,577,408 10,592,184 5,442,773 settlement accounts 1252 2,995,862 1,883,757 1,952,237

other monetary assets 1254 1,206 2,001,920 1,402,107 advance made for capital construc- Table 12 1155 1,183,232 4,213,646 2,718,742 tion and fixed assets acquirement Other current assets 1260 827,432 1,384,269 1,042,051

raw stuff and materials to be used Total for section II 1200 7,898,963 9,902,054 8,844,794 1156 1,170,682 915,042 - for fixed assets build-up BALANCE 1600 141,400,434 125,889,578 113,782,524

116 117 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table End of table 1 2 3 4 5 6 V. SHORT-TERM LIABILITIES Explanations Index name Line As of Dec. As of Dec. As of Dec. Code 2012 2011 2010 Tables 22–23 Borrowed funds 1510 3,540,657 2,763,345 60,303 LIABILITIES III. CAPITAL AND RESERVES Tables 20–21 Accounts payable 1520 5,746,640 8,109,940 7,339,582

Authorized capital (joint-stock capital, suppliers and contractors 1521 1,953,571 2,140,185 2,341,135 Form 1310 27,373,895 27,373,895 2,737,389 authorized fund, partners' inputs) advance received 1522 2,048,057 3,891,263 2,700,255 Table 7 Noncurrent assets revaluation 1340 73,015,751 61,846,041 83,715,346 other accounts payable 1523 1,745,012 2,078,492 2,298,192 Form 3 Reserve capital 1360 609,271 400,375 400,375 Deferred revenues 1530 - - 7 Unappropriated balance (uncovered Form 3 1370 12,757,563 13,164,237 10,012,326 loss) Table 24 Estimated liabilities 1540 3,872,950 1,691,429 748,234 of previous years 1371 12,630,624 13,164,237 10,012,326 Other liabilities 1550 112,088 281,620 259,920 of the period reported 1372 126,939 - - Total for section V 1500 13,272,335 12,846,334 8,408,046 Total for section III 1300 113,756,480 102,784,548 96,865,436 BALANCE 1700 141,400,434 125,889,578 113,782,524 IV. LONGTERM LIABILITIES

Tables 22–23 Borrowed funds 1410 10,366,653 7,807,344 5,522,416 CEO P. A. Mikheev Chief Accountant Т. I. Salo bank credits payable, more than 1411 8,066,653 7,807,344 2,822,416 14 March 2013 12 months after the balance sheet date

loans payable, more than 12 months 1412 2,300,000 - 2,700,000 after the balance sheet date

Table 25 Deferred tax liabilities 1420 2,654,572 2,242,921 2,068,516

Estimated liabilities 1430 - - -

Table 20 Other liabilities 1450 1,350,394 208,431 918,110

Total for section IV 1400 14,371,619 10,258,696 8,509,042

118 119 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table Profit and Loss Report Codes 1 2 3 4 5 for 12 months 2012

All Russia Classifier of Man- Interest payable 2330 (540,837) (372,163) 0710002 agement Documentation Table 27 Other revenues 2340 4,586,055 4,014,422 Date (dd/mm/yy) 31.12.2012

Table 27 Other expenses 2350 (8,695,386) (6,147,286) Organizition: JSC Tyumenenergo i Organizations 05770629

Taxpayer identification number: Taxpayer identification number 8602060185 Table 3 Profit (loss) before tax 2300 1,339,528 5,433,294

Type of economic Activity: electric power transmission ic Activity 40.10.2 Table 3 Current profit tax 2410 (1,458,979) (2,079,880)

Form of inorporation /type of ownership: Forms of Ownership 47/16 Open joint stock company/private Table 3 including recurrent tax liabilities (assets) 2421 1,079,513 823,138 All Russia Classifier of Man- 384 Measurement unit: thousand rubles agement Units Table 3 Changes in deferred tax liabilities 2430 (411,651) 162,931

Table 3 Changes in deferred tax assets 2450 523,211 7,152 Explanations Index name Code For 12 months For 12 months 2012 2011 Table 3 Other 2460 134,830 41,511 1 2 3 4 5 Table 2 Net profit (loss) 2400 126,939 3,565,008 Proceeds 2110 47,068,971 47,449,294

including: proceeds from electric energy sale 2111 45,259,836 45,764,026

proceeds from techical connection 2112 1,230,683 1,295,222 Explanations Index name Code For 12 months For 12 months 2012 2011 other proceeds 2113 578,452 390,046 1 2 3 4 5 Table 1 Cost of sales 2120 (41,286,688) (39,591,404) FOR REFERENCE OLY including: Result of noncurrent assets revaluation, not included cost of electric energy sales 2121 (40,435,351) (39,144,290) Table 7 into net profit (loss) of the period 2510 11,214,541 2,795,934 cost of technical connection 2122 (305,115) (83,874) Aggregate financial result of the period 2500 11,341,480 6,360,942

other cost of sales 2123 (546,222) (363,240) Table 2 Basic profit (loss) per share (rubles) 2900 0.4637 13.0234

Gross profit (loss) 2100 5,782,283 7,857,890 CEO P. A. Mikheev Table 1 Selling costs 2210 (-) (-) Chief Accountant Т. I. Salo 14 March 2013 Table 1 Administrative costs 2220 (-) (-)

Sales profit (loss) 2200 5,782,283 7,857,890

Income from participation in other organizations 2310 3,284 498

Interest receivable 2320 204,129 79,933

120 121 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table Statement of changes in equity Codes 1 2 3 4 5 6 7 8 for 2012

All Russia Classifier of Man- loss attributed directly 0710003 3223 х х (-) х (-) (-) agement Documentation to capital reduction

Date (dd/mm/yy) 31.12.2012 share nominal value 3224 (-) - х х - (-) reduction Organizition: JSC Tyumenenergo i Organizations 05770629 reduction of number of 3225 (-) (-) х х - (-) Taxpayer identification number: Taxpayer identification number 8602060185 shares corporate entity reor- Type of economic Activity: electric power transmission ic Activity 40.10.2 3226 - - - - - (-) ganization Form of inorporation /type of ownership: Forms of Ownership 47/16 Open joint stock company/private dividends 3227 х х х х 441,830 441,830

All Russia Classifier of Man- Change in additional Measurement unit: thousand rubles 384 3230 х х (28,733) х 28,733 х agement Units capital

1. Capital movements Change in reserve capital 3240 х х х - (-) х

Index name Code Authorized Treasury stock Additional Reserve Unappropri- Total Capital value as of De- 3200 27,373,895 (-) 61,846,041 400,375 13,164,237 102,784,548 capital capital capital ated balance / cember 31, 2011 uncovered loss Of 2012 Capital increase – total 3310 - - 11,214,541 - 126,939 11,341,480 1 2 3 4 5 6 7 8 including: Capital value as of 3100 2,737,389 (-) 83,715,346 400,375 10,012,326 96,865,436 net profit 3311 х х х х 126,939 126,939 December 31, 2010 property revaluation 3312 х х 11,214,541 х - 11,214,541 For 2011 Capital increase – total 3210 24,636,506 - 21,840,572 - 3,565,008 6,360,942 income attributed di- 3313 х х - х - - rectly to capital increase including: net profit 3211 х х х х 3,565,008 3,565,008 additional issue of 3314 - - - х х - shares property revaluation 3212 х х 2,795,934 х 2,795,934 increase in share nomi- 3315 - х - х - х income attributed di- nal value 3213 х х - х - - rectly to capital increase corporate entity reor- 3316 ------ganization additional issue of 3214 - - - х х - shares Capital reduction – total: 3320 (-) (-) (-) (-) (369,548) (369,548) increase in share 3215 24,636,506 х (24,636,506) х - х nominal value including: corporate entity reor- 3216 ------loss 3321 х х х х (-) (-) ganization property revaluation 3322 х х (-) х (-) (-) Capital reduction – total: 3220 (-) (-) (-) (-) (441,830) (441,830) loss attributed directly 3323 х х (-) х (-) (-) including: to capital reduction loss 3221 х х х х (-) (-) share nominal value 3324 (-) х х х - (-) property revaluation 3222 х х (-) х (-) (-) reduction

122 123 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table End of table 1 2 3 4 5 6 7 8 Reserve capital 400,375 - - 400,375 reduction of number of 3325 (-) (-) х х - (-) adjustment due to: shares changes in accounting policy 3412 - - - - corporate entity reor- 3326 - - - - - (-) ganization correction of mistakes 3422 10,029,040 - (9,183,017) 846,023

dividends 3327 х х х х (369,548) (369,548) after adjustment 3502 86,853,110 - 2,767,201 89,620,311

Change in additional 3330 х х (44,830) х 44,830 х capital 3. NET ASSETS

Change in reserve capital 3340 х х х 208,896 (208,896) х Index name Code As of December 31, As of December 31, As of December 31, 2012 2011 2010 Capital value as of 3300 27,373,895 (-) 73,015,751 (609,271) 12,757,563 113,756,480 December 31, 2012 Net assets 3600 113,756,480 102,784,548 96,865,443

2. Adjustment due to changes in accounting policy and correction of mistakes CEO P. A. Mikheev Changes in capital for 2011 Chief Accountant Т. I. Salo 14 March 2013 Index name Code As of As of December 31 December 31, 2011 at the account of at the account of 2010 4. Calculation of JSC Tyumenenergo net assets value net profit (loss) other factors Index name Balance sheet As of December 31, As of December 31, As of December 31, Capital – total line Code 2012 2011 2010 before adjustment 3400 88,581,665 4,177,919 11,537,121 104,296,705

adjustment due to: 1 2 3 4 5 changes in accounting policy 3410 - - - I Assets correction of mistakes 3420 8,283,771 (612,911) (9,183,017) (1,512,157)

after adjustment 3500 96,865,436 3,565,008 2,354,104 102,784,548 1. Intangible assets 1110 - 30 35

including: 2. Research and development results 1120 112,576 7,417 4,958 unappropriated balance (uncovered loss): 3401 11,757,595 4,177,919 (413,097) 15,522,417 before adjustment 3. Intangible exploration assets 1130 - - - adjustment due to: - - - changes in accounting policy 3411 4. Tabgible exploration assets 1140 - - - correction of mistakes 3421 (1,745,269) (612,911) - (2,358,180) 5. Fixed assets 1150 127,368,865 115,062,808 103,928,863 after adjustment 3501 10,012,326 3,565,008 (413,097) 13,164,237 Income yielding investments into tangible as- 6. 1160 - - - other adjusted capital items (by item): sets

7. Financial investments 1170 + 1240 4,811,751 322,351 361,642 before adjustment 3402 76,824,070 - 11,950,218 88,774,288 Deferred tax assets ad other noncurrent as- Authorized capital 2,737,389 - 24,636,506 27,373,895 8. 1180 + 1190 1,208,279 594,918 642,232 sets Treasury stock - - - - 9. Stocks 1210 972,806 1,228,641 1,054,502

Additional capital 73,686,306 - (12,686,288) 61,000,018

124 125 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table Cash Flow Statement 1 2 3 4 5 6 Codes for 12 months 2012

10. Value added tax on acquired assets 1220 16,582 83,251 86,471 All Russia Classifier of Man- 0710004 agement Documentation

11. Accounts receivable 1230 3,084,099 3,318,164 3,305,894 Date (dd/mm/yy) 31.12.2012

12. Monetary funds and money equivalents 1250 2,998,044 3,887,729 3,355,876 Organizition: JSC Tyumenenergo i Organizations 05770629

Taxpayer identification number: Taxpayer identification number 8602060185 13. Other current assets 1260 827,432 1,384,269 1,042,051 Type of economic Activity: electric power transmission ic Activity 40.10.2 14. Other assets entered (sum of items 1–13) 141,400,434 125,889,578 113,782,524 Form of inorporation /type of ownership: Open joint stock company/private Forms of Ownership 47/16 II Liabilities All Russia Classifier of Man- Measurement unit: thousand rubles 384 agement Units 15. Long-term borrowed funds 1410 10,366,653 7,807,344 5,522,416

16. Deferred tax liabilities 1420 2,654,572 2,242,921 2,068,516 Index name Code For 12 months For 12 months 2012 2011

17. Estimated liability 1430 + 1540 3,872,950 1,691,429 748,234 1 2 3 4

18. Other long-term liabilities 1450 1,350,394 208,431 918,110 Cash flow from current operations

19. Short-term liabilities 1510 3,540,657 2,763,345 60,303 Receipts – total 4110 48,330,687 48,612,764

20. Accounts payable 1520 5,746,640 8,109,940 7,339,582 including: from sales of products, goods, work and service 4111 44,857,856 48,233,667

21. Other short-term liabilities 1550 112,088 281,620 259,920 including sales of products, goods, work and service to parent com 411101 269 925 panies, subsidiaries and associates 22. Total liabilities entered (sum of items 15–21) 27,643,954 23,105,030 16,917,081 rent payments, license fees, royalty, commissions 4112 135,708 120,822 and other similar payments Joint stock company net assets value (total including rent payments, license fees, royalty, commissions 23. assets entered (line 14) minus total liabilities 113,756,480 102,784,548 96,865,443 and other similar payments from parent companies, subsidiaries 411201 824 1,029 entered (line 22)) and associates

from financial investments resale 4113 - - CEO P. A. Mikheev including financial investments resale to parent companies, Chief Accountant Т. I. Salo 411301 - - 14 March 2013 subsidiaries and associates

other receipts 4119 3,337,123 258,275

including other receipts from parent companies, subsidiaries 411901 - - and associates

Payments – total 4120 (39,721,319) (39,987,382)

including: to suppliers (contractors) for raw stuff, materials, work, service 4121 (26,969,783) (28,258,553)

126 127 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table Сontinuation of the table 1 2 3 4 1 2 3 4

including payments to suppliers (contractors) for raw stuff, materials, including: 412101 (10,951,518) (11,338,093) work, service of parent companies, subsidiaries and associates related to noncurrent assets acquirement, creation, 4221 (7,289,229) (12,614,092) modernization, reconstruction and preparation for use for compensation of wages 4122 (5,344,744) (4,950,715) including payments to parent companies, subsidiaries interest on debt liability 4123 (596,846) (369,110) and associates related to noncurrent assets acquirement, 422101 (-) (-) creation, modernization, reconstruction and preparation for use including interest on debt liability for parent companies, 412301 (150,288) (-) subsidiaries and associates related to purchase of shares of other organizations (partnership shares) 4222 (4,894,957) (10,232) company profit tax 4124 (1,552,175) (1,784,258) including payments to parent companies, subsidiaries other payments 4129 (5,257,771) (4,624,746) and associates related to purchase of shares of other organizations 422201 (-) (10,200) (partnership shares) including other payments for parent companies, subsidiaries 412901 (4,414) (2,808) and associates related to purchase of debt securities (monetary claims against 4223 (-) (-) other persons), providing loans to other persons Balance of cash flow from current operations 4100 8,609,368 8,625,382

including payments to parent companies, subsidiaries Cash flow from investment operations and associates related to purchase of debt securities (monetary 422301 (-) (-) claims against other persons), providing loans to other persons Receipts – total 4210 192,980 78,101

including: interest on debt liabilities included into investment asset value 4224 (409,873) (37,167) from sales of noncurrent assets (except for financial investments) 4211 47,118 27,673 including interest on debt liabilities included into value including receipts from sales pf noncurrent assets (except for 421101 - - of investment assets of parent companies, subsidiaries 422401 (-) (-) financial investments) to parent companies, subsidiaries and associates and associates

from sales of shares of other organizations (partnership shares) 4212 107,550 686 other payments 4229 (121,065) (53,237)

in cluding sales of sharea in other organizations (partnership shares) including other payments to parent companies, subsidiaries 421201 - - 422901 (-) (-) to parent companies, subsidiaries and associates and associates from return of loans provided, from sales of debt securities 4213 - - Balance of cash flow from investment operation 4200 (12,522,144) (12,636,627) (monetary claims against other persons)

including receipts from return of loans provided, from sales of debt Cash flow from financial operations securities (monetary claims against other persons) of parent 421301 - - companies, subsidiaries and associates Receipts – total 4310 6,915,055 6,984,928

including: dividends, interest on debt financial investments and similar 4214 38,312 49,742 credits and loand received 4311 6,915,055 6,984,928 receipts from participation in other organization including credits and loans received from parent companies, 431101 2,300,000 - subsidiaries and associates including receipts from dividends, interest on debt financial investments and similar receipts from participation in other 421401 2,550 - organizations from parent companies, subsidiaries and associates owners' monetary contributions 4312 - -

including monetary contributions of owners of parent 431201 - - other receipts 4219 - - companies, subsidiaries and associates

including receipts from parent companies, subsidiaries 421901 - - from issue of shares, increase of partnership shares 4313 - - and associates including issue of shares, increase of partnership shares 431301 - - Payments – total 4220 (12,715,124) (12,714,728) of parent companies, subsidiaries and associates

128 129 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 1 2 3 4 EXPLANATIONS TO ACCOUNTING BALANCE SHEET AND LOSS AND PROFIT REPORT IN TABULAR FORM from issue of bonds, drafts and other debt securities etc 4314 - - 1. Prime cost of products, work and service from issue of bonds, drafts and other debt securities etc. sold, broken down to cost items 431401 - - of parent companies, subsidiaries and associate Index other receipts 4319 - - For 2012 For 2011 Name Code including other receipts from parent companies, subsidiaries 431901 - - 1 2 3 4 and associates Production costs 6510 40,934,126 39,765,985 Payments – total 4320 (3,891,964) (2,441,830) including including: tangible costs including 6511 10,431,122 10,669,876 to owners (participants) due to shares (partnership shares) redemption 4321 (-) (-) production related work and service 65111 6,490,736 6,514,742 including payments to owners (participants) due to redemption of their shares (participation shares) of the organization or withdrawal 432101 (-) (-) electric energy loss purchase 65112 3,103,238 3,342,468 of parent companies, subsidiaries and associates from the organization electric energy for economic needs 65113 202,771 204,480 for dividends and other distributions in favor of owners (participants) 4322 (369,548) (441,830) heat energy for economic needs 65114 37,425 37,368 for dividends and other distributions in favor of owners (participants) 432201 (369,548) (441,830) of parent companies, subsidiaries and associates raw stuff and mterials 65115 404,529 398,666

related to cancelation (redemption) of drafts and other debt securities, fuel 65116 130,325 118,382 4323 (3,522,416) (2,000,000) repayment of credits and loan other tangibles costs 65117 62,098 53,770 related to cancelation (redemption) of drafts and other debt securities, repayment of credits and loans to parent companies, 432301 (-) (-) compensation for expenses 6512 5,407,006 5,249,846 subsidiaries and associates

other payments 4329 (-) (-) fringe benefit expenses 6513 1,244,797 840,766

including other payments to parent companies, subsidiaries depreciation 6514 6,525,108 5,824,808 432901 (-) (-) and associates JSC FGC electric energy transmission service in UES 6515 14,275,478 13,928,925 Balance of cash flow from financial operations 4300 3,023,091 4,543,098 JSC IDGC Holding service on arangement 6516 281,259 281,259 Balance of cash flow for the report period 4400 (889,685) 531,853 of Russian UES functioning and development

taxes and other fees 6517 231,248 211,892 Opening balance of monetary funds and money equivalents 4450 3,887,729 3,355,876

allocations for non-state pension fund 6518 422,046 422,046 Closing balance of monetary funds and money equivalents 4500 2,998,044 3,887,729 rent 6519 193,791 239,380

CEO P. A. Mikheev passenger transport service 6520 327,127 317,551 Chief Accountant Т. I. Salo 14 March 2013 expenses on property insurance 6521 125,631 125,557

property security service 6522 383,298 242,103

130 131 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table 2. Profit per share, 1 2 3 4 diluted profit per share information service 6523 101,352 103,017 Index For 12 months For 12 months building maintenance service 6524 217,190 218,975 Name Code 2012 2011 other 6525 1,120,235 915,403 1 2 3 4 For reference only: Changes in stovks and reserves 6520 (352,562) 174,581 Net profit (uncovered loss) of the periof reported 6610 126,939 3,565,008 (increment [+], reduction [–]):

including Dividends on preferred shares 6611 (-) (-) incomplete production 6521 (352,406) 174,532 Basic profit (loss) of the period reported 6612 126,939 3,565,008 finished products 6522 (156) 49 Average weighted number of ordinary shares circulated purchased products 6523 - - 6613 273,738,951 273,738,951 within the year reported.

shipped goods 6524 - - Basic profit (loss) per share (rubles) 6620 0.4637 13.0234 auxiliary materials 6525 - - Average weighted cost 6621 - - per ordinary share Total prima cost of products (goods, work, service) sold 6500 41,286,688 39,591,404 Possible increment in profit 6630 х х and average weighted number of cirulated shares including: cost of goods sold 6530 - - As a result of preferred shares conversion 6631 х х into ordinary shares management service outsourced 6540 - - possible increment in profit 66311 - - Seling costs 6550 - - additional number of shares 66312 - - including: tangible costs 6551 - - As a result of bonds conversion into ordinary shares 6632 х х compensation for employees 6552 - - possible increment in profit 66321 - - fringe benefit expenses 6553 - - additional number of shares 66322 - - depreciation 6554 - - As a result of execusion of contracts other costs 6555 - - 6633 х х for share sales and purchase at price below market price

Administration expenses 6560 - - contracted purchase price 66331 - -

including: 6561 - - possible increment in profit 66332 - - tangible costs

compensation for employees 6562 - - additional number of shares 66333 - -

fringe benefit expenses 6563 - - Diluted profit per share (rubles) 6640 - -

depreciation 6564 - - adjusted basic profit value 6641 - - other costs 6565 - - adjusted average weighted 6642 - - number of circulated shares

132 133 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

3. Profit taxation End of table Index Code For 12 months For 12 months 1 2 3 4 2012 2011 Conditional profit tax expenses (income) 6721 267,906 1,086,659 1 2 3 4 Permanent tax liability (asset) 6722 1,079,513 823,138 Profit (loss) before tax 6710 1,339,528 5,433,294 For reference only: changes in deferred taxes attributed 67221 134,921 2,046 including profit (loss) taxable at: to profit and loss 20 % 67101 1,339,528 5,433,294 Deferred tax expenses (income) 6723 111,560 170,083 Permanent differences 6711 5,397,565 4,115,689 including: 67231 523,211 7,152 For reference only: permanent differences corresponding changes in deferred tax asset 67111 - - to temporary differences changes in deferred tax liability 67232 (411,651) 162,931 Changes in temporary subtractive differences 6712 2,616,057 35,760 Current profit tax 6724 (1,458,979) (2,079,880) Changes in temporary taxable differences 6713 (2,058,256) 814,656 Verification of profit tax amounts for previous tax periods 6725 - 41,283 Taxation base 6714 7,294,894 10,399,399 Other tax payments and sanctions payable out of profit 6730 134,830 228 Profit tax expenses (income) 6720 267,906 1,127,942 Profit (loss) from ordinary activities 6740 126,939 3,565,008

4. Intangible assets

Index As of the beginning of the year Changes within the period As of the end of the period

Revaluation Initial / Accumulat- Initial / cur- Accumulat- Impairment Depre- Initial / cur- Accumulat- Initial / cur- Accumulat- current Impairment Depreciated Impairment Impairment Depreciated Name Code Period ed depreci- Received rent market ed depreci- loss ciation rent market ed depreci- rent market ed depreci- market loss cost loss loss cost ation price ation accrued price ation price ation price

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

5100 for 2012 116 (86) - 30 - - - - (30) - - - 116 (116) - - Intangible assets – total 5110 for 2011 116 (81) - 35 - - - - (5) - - - 116 (86) - 30

5101 for 2012 116 (86) - 30 - - - - (30) - - - 116 (116) - - Intellectual property (exclusive rights to intellectual property results) 5111 for 2011 116 (81) - 35 - - - - (5) - - - 116 (86) - 30

inluding:

with patent holder 51011 for 2012 ------to inventions, industrial designs, useful model 51111 for 2011 ------

134 135 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

51012 for 2012 ------with rigth holder to softare, data bases 51112 for 2011 ------

with right holder 51013 for 2012 ------to integrated circuit topographies 51113 for 2011 ------

with owner to trade mark, 51014 for 2012 116 (86) - 30 - - - - (30) - - - 116 (116) - - service mark, name of goods origin 51114 for 2011 116 (81) - 35 - - - - (5) - - - 116 (86) - 30

5102 for 2012 ------Company goodwill 5112 for 2011 ------

5103 for 2012 ------Other 5113 for 2011 ------

5. Results of research and development, technologic work and intangible assets

As of the beginning of the year Changes within the period As of the end of the period

retired part of cost part of cost part of cost expensed as Index name Code Period initial cost expensed as received initial cost part of cost initial cost expensed incurred for the incurred expensed as as incurred incurred period

1 2 3 4 5 6 7 8 9 10 11

5140 for 2012 15,309 (10,292) 14,277 - - (4,358) 29,586 (14,650) R&D – total 5150 for 2011 11,609 (8,151) 3,700 - - (2,141) 15,309 (10,292)

including:

5141 for 2012 12,309 (9,126) 10,917 - - (1,398) 23,226 (10,524) Expenses on R&D with results used for production needs 5151 for 2011 8,609 (7,984) 3,700 - - (1,142) 12,309 (9,126)

5142 for 2012 3,000 (1,166) 3,360 - - (2,960) 6,360 (4,126) Patentable results of R&D performed 5152 for 2011 3,000 (167) - - - (999) 3,000 (1,166)

136 137 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 1 2 3 4 5 6 7 8 9 10 11

5143 for 2012 ------Expenses on in-house R&D 5153 for 2011 ------

5144 for 2012 ------Expenses on outsourced R&D 5154 for 2011 ------

6. Incomplete and unexecuted R&D and incomplete operations for intangible assets acquirement

Index name Code Period As of the beginning of the year Changes within the period As of the end of the period

expenses written off as those entered in records as intangi- expenses for the period without positive result ble assets or R&D

1 2 3 4 5 6 7 8

5160 for 2012 2,400 109,517 (-) (14,277) 97,640 Expenses on incomplete R&D – total 5170 for 2011 1,500 4,600 (-) (3,700) 2,400

including:

5161 for 2012 2,000 13,130 (-) (5,960) 9,170 Research 5171 for 2011 1,500 4,200 (-) (3,700) 2,000

5162 for 2012 400 95,390 (-) (8,317) 87,473 Development 5172 for 2011 - 400 (-) (-) 400

5163 for 2012 - 997 (-) (-) 997 Technologic work 5173 for 2011 - - (-) (-) -

138 139 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

7. Existence and movement of fixed assets

As of the beginning of the year Changes within the period As of the end of the period

retirement revaluation accumulat- produc- ed depre- deprecia- accumulated depreciated tion asets accu- accrued de- accumulated depreciated Index name Code Period initial cost received ciation tion reclas- accumulat- initial cost depreciation cost reclassifi- mulated preciation depreciation cost on items sification initial cost initial cost ed depreci- cation deprecia- received ation tion

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

5200 for 2012 233,965,762 (134,623,826) 99,341,936 11,453,954 (16,554) - - (345,199) 318,955 (6,530,090) 23,769,444 (12,554,903) 268,843,961 (153,406,418) 115,437,543 Fixed assets (exclusive of yield-bearing investments into tangible asets) – total 5210 for 2011 221,403,494 (125,636,146) 95,767,348 6,637,639 - - - (197,755) 167,170 (5,828,400) 6,122,384 (3,326,450) 233,965,762 (134,623,826) 99,341,936

including:

5201 for 2012 233,929,170 (134,623,826) 99,305,344 11,449,837 (16,554) - - (345,199) 318,955 (6,530,090) 23,769,444 (12,554,903) 268,803,252 (153,406,418) 115,396,834 Depreciable fixed assets – total: 5211 for 2011 221,391,060 (125,636,146) 95,754,914 6,613,481 - - - (197,755) 167,170 (5,828,400) 6,122,384 (3,326,450) 233,929,170 (134,623,826) 99,305,344

including:

52011 for 2012 16,650,052 (6,256,121) 10,393,931 924,840 - 2,155 (143) (19,110) 10,484 (453,344) 770,070 (226,896) 18,328,007 (6,926,020) 11,401,987 production buildings 52111 for 2011 12,999,924 (3,971,575) 9,028,349 472,022 - 44,544 (19,993) (27,402) 15,286 (466,422) 3,160,964 (1,813,417) 16,650,052 (6,256,121) 10,393,931

52012 for 2012 15,103,818 (9,466,946) 5,636,872 1,471,790 - (97,224) 71,078 (31,700) 22,133 (437,804) (1,299,508) 964,163 15,147,176 (8,847,376) 6,299,800 constructions exclusive of OHL 52112 for 2011 11,990,684 (7,020,226) 4,970,458 408,456 - (1,325,391) 1,109,595 (20,278) 13,131 (451,492) 4,050,347 (3,117,954) 15,103,818 (9,466,946) 5,636,872

52013 for 2012 133,483,619 (71,340,285) 62,143,334 3,563,924 - 117,423 (20,357) - - (2,938,103) 22,344,269 (11,627,429) 159,509,235 (85,926,174) 73,583,061 OHL and related devices 52113 for 2011 114,198,191 (58,399,880) 55,798,311 3,290,215 - (84,317) 74,136 - - (2,719,277) 16,079,530 (10,295,264) 133,483,619 (71,340,285) 62,143,334

machinery and equipment 52014 for 2012 62,741,426 (44,378,490) 18,362,936 3,302,728 - (38,149) (51,075) (66,649) 60,743 (2,146,747) 2,014,926 (1,694,900) 67,954,282 (48,210,469) 19,743,813 for electric energy production, substations, electric energy transformetion equipment 52114 for 2011 77,065,789 (53,431,216) 23,634,573 1,536,913 - 1,396,152 (1,171,792) (37,073) 32,486 (1,732,805) (17,220,355) 11,924,837 62,741,426 (44,378,490) 18,362,936

52015 for 2012 23,483 (19,952) 3,531 1,363 - 16 (16) (2,574) 2,487 (1,192) - - 22,288 (18,673) 3,615 production stock and household equipment 52115 for 2011 23,231 (18,405) 4,826 538 - 952 (940) (1,238) 1,238 (1,845) - - 23,483 (19,952) 3,531

52016 for 2012 5,926,772 (3,162,032) 2,764,740 2,185,192 (16,554) 15,779 513 (225,166) 223,108 (552,900) (60,313) 30,159 7,842,264 (3,477,706) 4,364,558 Other 52116 for 2011 5,113,241 (2,794,844) 2,318,397 905,337 - (31,940) 8,994 (111,764) 105,029 (456,559) 51,898 (24,652) 5,926,772 (3,162,032) 2,764,740

5202 for 2012 36,592 - 36,592 4,117 ------40,709 - 40,709 Unlimited service life items, undepre- ciable – total 5212 for 2011 12,434 - 12,434 24,158 ------36,592 - 36,592

140 141 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

including:

52021 for 2012 36,592 - 36,592 4,117 40,709 - 40,709 land parcels 52121 for 2011 12,434 - 12,434 24,158 ------36,592 - 36,592

52022 for 2012 ------nature use objects 52122 for 2011 - - - -

5203 for 2012 ------Capital investments into reclamation 5213 for 2011 - - - -

5220 for 2012 ------Entered as part of yield-bearing invest- ments into tangible assets – total 5230 for 2011 ------

including:

5221 for 2012 ------property for leasing 5231 for 2011 - - - -

5222 for 2012 ------property provided under rental contract 5232 for 2011 - - - -

142 143 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 8. Benefcial use terms and depreciation 1 2 3 4 accrual methods including: Index name Code Established Depreciation accrual beneficial use methods OHL and related devices 5271 - - term (per month) constructions exclusive of OHL 5272 (7,659) - 1 2 3 4 machinery and equipment for electric Production buildings 7001 409 linear energy production, substations, electric energy 5273 - (609) transformetion equipment

Constructions exclusive of OHL 7002 323 linear

10. Other use of fixed assets OHL and related devices 7003 342 linear Index name Code As December 31 As December 31 As December 31 Machinery and equipment for electric energy 2012 2011 2010 production, substations, electric energy 7004 221 linear transformation equipment

Production stock and household equipment 7005 103 linear 1 2 3 4 5

Other 7006 87 linear, declining method On balance leased out fixed assets 5280 1,504,152 1,066,413 1,061,548

Off balance leased out fixed assets 5281 3,327 3,487 2,897

9. Changes in fixed assets value as a result of completion, retrofitting, reconstruction and partial liquidatioin On balance leased fixed assets 5282 - - -

Index name Code 2012 2011 Off balance leased fixed assets 5283 17,253,474 13,520,743 12,660,723

1 2 3 4 Real estate received for operation and actually in 5284 10,931,802 5,971,974 532,745 Increase in fixed assets value as a result of use, in the process of state registration 5260 4,769,017 2,454,735 completion, retrofitting, reconstruction – total Prepositioned fixed assets 5285 645,528 197,939 176,748 including:

production buildings 5261 396,435 308,359 Other use of fixed assets (pledge etc.) 5286 - - -

constructions exclusive of OHL 5262 395,973 81,766

OHL and related devices 5263 782,662 829,382

machinery and equipment for electric energy production, substations, electric energy 5264 2,075,512 920,566 transformetion equipment

other 5265 1,118,435 314,662

Reducation of fixed assets value as a result of partial 5270 (7,659) (609) liquidation – total:

144 145 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

11. Incomplete capital investments

Index name Code Period As of the beginnign of the year Changes within the period As of the end of the period

expenses within the recognized as fixed as- written off period sets, or cost increase

1 2 3 4 5 6 7 8

5240 for 2012 10,592,184 12,732,443 (502,330) (13,244,889) 9,577,408 Incomplete construction and incomplete fixed assets acquirement, modernization etc. – total 5250 for 2011 5,442,773 15,567,859 (209,600) (10,208,848) 10,592,184

including:

5241 for 2012 10,592,184 12,732,443 (502,330) (13,244,889) 9,577,408 For production purposes 5251 for 2011 5,442,773 15,567,859 (209,600) (10,208,848) 10,592,184

52411 for 2012 10,061,333 10,475,006 (469,851) (10,869,972) 9,196,516 incomplete construction 52511 for 2011 5,070,187 11,306,144 (147,713) (6,167,285) 10,061,333

52412 for 2012 - 546,911 (-) (546,911) - fixed assets acquirement 52512 for 2011 - 447,929 (-) (447,929) -

52413 for 2012 530,851 1,710,526 (32,479) (1,828,006) 380,892 equipment to be installed 52513 for 2011 372,586 3,813,786 (61,887) (3,593,634) 530,851

5242 for 2012 - - (-) (-) - For non-production purposes 5252 for 2011 - - (-) (-) -

146 147 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

12. Advance made for capital construction and fixed assets acquirement

As of the beginning of the year Changes within the period As of the end of the period

received retired entered as a result other reserve cancellation written off on depreciated as reserve provision entered under provision for under Index name Code Period of business accruals accrual the account financial result replenishment for doubtful contract terms doubtful debts contract transactions of previously debts terms (debt on accrued transaction reserve 1 2 3 4 5 6 7 8 9 10 11 12 13 14

5291 for 2012 4,213,646 (-) 613,178 - (-) (3,643,592) (-) (-) - 1,183,232 (-) Advance made for capital construction 5292 for 2011 2,718,742 (-) 5,836,365 - (-) (4,341,461) (-) (-) - 4,213,646 (-)

including:

52911 for 2012 4,213,646 (-) 504,914 - (-) (3,535,328) (-) (-) - 1,183,232 (-) capital constructioin 52921 for 2011 2,718,742 (-) 5,388,436 - (-) (3,893,532) (-) (-) - 4,213,646 (-)

52912 for 2012 - (-) 108,264 - (-) (108,264) (-) (-) - - (-) fixed assets acquirement 52922 for 2011 - (-) 447,929 - (-) (447,929) (-) (-) - - (-)

13. Financial investments

As of the beginning of the year Changes within the period As of the end of the period

retired (cancelled) interest accrual current accumulated (incuding initial accumulated Index name Code Period initial cost received initial cost accumulated market value initial cost adjustment cost reduction to adjustment adjustment (impairment loss) nominal)

1 2 3 4 5 6 7 8 9 10 11 12

5301 for 2012 402,418 (80,067) 4,894,103 (291,094) 87,675 - (201,284) 5,005,427 (193,676) Long-term financial investments 5311 for 2011 392,728 (31,086) 10,997 (1,307) (454) - (48,527) 402,418 (80,067)

53021 for 2012 402,418 (80,067) 4,894,103 (291,094) 87,675 - (201,284) 5,005,427 (193,676) Contributions into authorized (joint-stock) capitals of other companies – total 53121 for 2011 392,728 (31,086) 10,997 (1,307) (454) - (48,527) 402,418 (80,067)

148 149 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table 1 2 3 4 5 6 7 8 9 10 11 12

including:

530211 for 2012 301,133 (88,696) - (290,933) 88,696 - - 10,200 - subsidiaries 531211 for 2011 290,933 (88,696) 10,200 - - - - 301,133 (88,696)

530212 for 2012 - - 592,416 - - - (41,810) 592,416 (41,810) associates 531212 for 2011 ------

530213 for 2012 101,285 8,629 4,301,687 (161) (1,021) - (159,474) 4,402,811 (151,866) other 531213 for 2011 101,795 57,610 797 (1,307) (454) - (48,527) 101,285 8,629

53022 for 2012 ------State and municipl securities 53122 for 2011 ------

53023 for 2012 ------Securities of other organizations – total 53123 for 2011 ------

including:

530231 for 2012 ------debt securities (bonds, drafts) 531231 for 2011 ------

53024 for 2012 ------Loans provided 53124 for 2011 ------

53025 for 2012 ------Deposits 53125 for 2011 ------

53026 for 2012 ------Other 53126 for 2011 ------

5302 for 2012 101,285 8,629 4,894,103 (161) (1,021) - (201,284) 4,995,227 (193,676) Long-tern financial investments with current market cost 5312 for 2011 101,769 57,610 797 (1,281) (454) - (48,527) 101,285 8,629

53031 for 2012 101,285 8,629 4,894,103 (161) (1,021) - (201,284) 4,995,227 (193,676) Contributions into authorized (joint-stock) capitals of other companies – total 53131 for 2011 101,769 57,610 797 (1,281) (454) - (48,527) 101,285 8,629

150 151 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 1 2 3 4 5 6 7 8 9 10 11 12

including:

530311 for 2012 ------subsidiaries 531311 for 2011 ------

530312 for 2012 - - 592,416 - - - (41,810) 592,416 (41,810) associates 531312 for 2011 ------

530313 for 2012 101,285 8,629 4,301,687 (161) (1,021) - (159,474) 4,402,811 (151,866) other 531313 for 2011 101,769 57,610 797 (1,281) (454) - (48,527) 101,285 8,629

53032 for 2012 ------State and municipl securities 53132 for 2011 ------

53033 for 2012 ------Securities of other organizations – total 53133 for 2011 ------

including:

530331 for 2012 ------debt securities (bonds, drafts) 531331 for 2011 ------

53034 for 2012 ------other 53134 for 2011 ------

5303 for 2012 301,133 (88,696) - (290,933) 88,696 - - 10,200 - Long-term financial investments with undetermined market value – total 5313 for 2011 290,959 (88,696) 10,200 (26) - - - 301,133 (88,696)

152 153 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

14. Adjustments of financial investment valuation Сontinuation of the table Index Changes within the period 1 2 3 4 5 6 7 As of the Name Code Increase Reduction Retirement As of the end including: begining of with financial of the period the year investments subsidiaries 71311 (88,696) 88,696 writing-off associates 71312 -

1 2 3 4 5 6 7 Other 71313 -

Long-term financial investments 7100 (80,067) - (202,305) 88,696 (193,676) State and municipal securities 7132 - Difference between current market value of financial investments and their previous 7110 8,629 - (202,305) - (193,676) Securities of other organizations 7133 - valuation including: including: debt securities (bonds, drafts) 71331 - Contributions into authorized (joint-stock) 7111 8,629 - (202,305) - (193,676) capitals of other companies – total Loans provided 7134 - including: Deposits 7135 - subsidiaries 71111 - Other 7136 - associates 71112 (41,810) (41,810) Short-term financial investments 7200 - - - - - Other 71113 8,629 (160,495) (151,866) Difference between current market value of financial investments and their previous 7210 - - - - - State and municipal securities 7112 - valuation

Securities of other organizations 7113 - including:

including: Contributions into authorized (joint-stock) 7211 - - - - - capitals of other companies – total debt securities 71131 - including: Other 7114 - subsidiaries 72111 - Difference between current market value of 7120 - - - - - debt securities and their previous valuation associates 72112 -

including: Other 72113 -

Securities of other organizations 7121 - Securities of other organizations – total 7212 -

including: including:

debt securities (bonds, drafts) 71211 - debt securities (bonds, drafts) 72121 -

Other 7122 - Other 7213 -

Reserve for impairment loss of financial 7130 (88,696) - - 88,696 - Difference between current market value of investments with undetermined value 7220 - - - - - debt securities and their previous valuation

including: including: Contributions into authorized (joint-stock) 7131 (88,696) - - 88,696 - capitals of other companies – total Securities of other organizations – total 7221 -

154 155 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table End of table 1 2 3 4 5 6 7 1 2 3 4 5 6 7

including: associates 72312 -

debt securities (bonds, drafts) 72211 - Other 72313 -

Other 7222 State and municipal securities 7232 -

Reserve for impairment loss of financial 7230 - - - - - Securities of other organizations – total 7233 - investments with undetermined value including: including: debt securities (bonds, drafts) 72331 - Contributions into authorized (joint-stock) 7231 - - - - - capitals of other companies – total Loans provided 7234 -

including: Depositions 7235

subsidiaries 72311 - Other 7236

15. Inventory

As of the beginning of the year Changes within the period As of the end of the period

retired stock turnover value reduction receipts loss from value value reduction Index name Code Period prime cost prime cost of value reduction among groups prime cost reserve and costs reduction reserve retired inventory reserve (types) of stock

1 2 3 4 5 6 7 8 9 10 11 12

5400 for 2012 1,269,903 (41,262) 749,944 (1,015,693) 9,914 - х 1,004,154 (31,348) Stocks – total 5420 for 2011 1,073,995 (19,493) 1,035,331 (839,423) 7,240 (29,009) х 1,269,903 (41,262)

5401 for 2012 587,731 (41,262) 736,342 (649,529) 9,914 - - 674,544 (31,348) raw stuff and materials 5421 for 2011 566,404 (19,493) 855,647 (834,320) 7,240 (29,009) - 587,731 (41,262)

5402 for 2012 680,395 (-) 9,432 (361,838) - - - 327,989 (-) incomplete production 5422 for 2011 505,863 (-) 174,721 (189) - - - 680,395 (-)

5403 for 2012 - (-) - (-) - - - - (-) goods shipped 5423 for 2011 - (-) - (-) - - - - (-)

5404 for 2012 1,777 (-) 4,170 (4,326) - - - 1,621 (-) finished products and goods 5424 for 2011 1,728 (-) 4,963 (4,914) - - - 1,777 (-)

5405 for 2012 - (-) - (-) - - - - (-) other stocks and costs 5425 for 2011 - (-) - (-) - - - - (-)

156 157 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

16. Existence and movements of accounts receivable

As of the beginning of the year Changes within the period As of the end of the period

received retired transfer from as a result interest, reserve cancellation written off on depreciated reserve re- entered under provision for long-term to entered under provision for Index name Code Period of business penalties and accrual the account as financial plenishment contract terms doubtful debts short-term contract terms doubtful debts transactions other accruals of previously result debt (debt on receivable accrued transaction) reserve 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

5501 for 2012 384,372 (-) 91,969 - - (69,490) (-) (-) - (242,690) 164,161 (-) Long-term accounts payable 5521 for 2011 90,188 (-) 342,425 - - (48,241) (-) (-) - (-) 384,372 (-)

including:

5502 for 2012 - (-) - - - (-) (-) (-) - (-) - (-) Settlements with buyers and customers 5522 for 2011 - (-) - - - (-) (-) (-) - (-) - (-)

5503 for 2012 274,210 (-) 4,154 - - (3,514) (-) (-) - (242,690) 32,160 (-) Avdance made 5523 for 2011 9,788 (-) 264,710 - - (288) (-) (-) - (-) 274,210 (-)

5504 for 2012 - (-) - - - (-) (-) (-) - (-) - (-) Drafts receivable 5524 for 2011 - (-) - - - (-) (-) (-) - (-) - (-)

5505 for 2012 110,162 (-) 87,815 - - (65,976) (-) (-) - (-) 132,001 (-) Other accounts receivable 5525 for 2011 80,400 (-) 77,715 - - (47,953) (-) (-) - (-) 110,162 (-)

5506 for 2012 - (-) - - - (-) (-) (-) - (-) - (-) From the total of long-term accounts payable 5526 for 2011 - (-) - - - (-) (-) (-) - (-) - (-)

55061 for 2012 - (-) - - - (-) (-) (-) - (-) - (-) indebtedness of subsidiaries 55261 for 2011 - (-) - - - (-) (-) (-) - (-) - (-)

5510 for 2012 2,933,792 (-) 64,386,811 - (1,134,632) (63,266,032) (-) (1) - - 4,054,570 (1,134,632) Short-term accounts receivable – total 5530 for 2011 3,215,706 (-) 69,652,827 - - (69,927,911) (-) (6,830) - - 2,933,792 (-)

including:

5511 for 2012 1,841,675 (-) 55,425,639 - (1,134,632) (53,738,671) (-) () - - 3,528,643 (1,134,632) Settlements with buyers and customers 5531 for 2011 2,493,943 (-) 56,640,310 - - (57,291,252) (-) (1,326) - - 1,841,675 (-)

158 159 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

including:

55111 for 2012 1,744,384 (-) 53,406,606 - (1,134,632) (51,756,848) (-) (-) - - 3,394,142 (1,134,632) electric energy transmission 55311 for 2011 2,374,219 (-) 54,003,845 - - (54,633,680) (-) (-) - - 1,744,384 (-)

55112 for 2012 62,324 (-) 1,452,206 - - (1,418,638) (-) (-) - - 95,892 (-) technical connection 55312 for 2011 62,350 (-) 1,528,023 - - (1,528,049) (-) (-) - - 62,324 (-)

55113 for 2012 14,229 (-) 151,213 - - (153,173) (-) (-) - - 12,269 (-) revenues from rent 55313 for 2011 16,191 (-) 141,044 - - (142,243) (-) (763) - - 14,229 (-)

55114 for 2012 20,738 (-) 415,614 - - (410,012) (-) (-) - - 26,340 (-) other 55314 for 2011 41,183 (-) 967,398 - - (987,280) (-) (563) - - 20,738 (-)

5512 for 2012 471,162 (-) 705,059 - - (820,663) (-) (-) - - 355,558 (-) Advance made 5532 for 2011 660,320 (-) 5,041,892 - - (5,227,983) (-) (3,067) - - 471,162 (-)

5513 for 2012 - (-) - - - (0) (-) (-) - - - (-) Drafts receivable 5533 for 2011 - (-) - - - (0) (-) (-) - - - (-)

5514 for 2012 620,955 (-) 8,256,113 - - (8,706,698) (-) (1) - - 170,369 (-) Other accounts receivable 5534 for 2011 61,443 (-) 7,970,625 - - (7,408,676) (-) (2,437) - - 620,955 (-)

including:

55141 for 2012 - (-) - - - (-) (-) (-) - - 0 (-) non-interest-bearing notes 55341 for 2011 - (-) - - - (-) (-) (-) - - 0 (-)

55142 for 2012 542,278 (-) (3,871,426) - - (4,295,107) (-) (-) - - 118,597 (-) taxes and fees overpayment 55342 for 2011 6,224 (-) (3,594,496) - - (3,058,424) (-) (18) - - 542,278 (-)

160 161 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

55143 for 2012 671 (-) 88,943 - - (88,296) (-) (-) - - 1,318 (-) property sale 55343 for 2011 1,679 (-) 71,113 - - (72,121) (-) (-) - - 671 (-)

55144 for 2012 78,006 (-) 4,295,744 - - (4,323,295) (-) (1) - - 50,454 (-) Other 55344 for 2011 53,540 (-) 4,305,016 - - (4,278,131) (-) (2,419) - - 78,006 (-)

5517 for 2012 11,525 (-) 774 - - (12,299) (-) (-) - - - (-) From the total of short-term accounts payabl 5537 for 2011 101 (-) 66,925 - - (55,501) (-) (-) - - 11,525 (-)

55171 for 2012 11,525 (-) 774 - - (12,299) (-) (-) - - - (-) indebtedness of subsidiaries 55371 for 2011 101 (-) 66,925 - - (55,501) (-) (-) - - 11,525 (-)

5500 for 2012 3,318,164 (-) 64,478,780 - (1,134,632) (63,335,522) (-) (1) - (242,690) 4,218,731 (1,134,632) Total 5520 for 2011 3,305,894 (-) 69,995,252 - - (69,976,152) (-) (6,830) - - 3,318,164 (-)

17. Provision for doubtful debts

Index Changes within the period As of the Name Code Reserve Reserve As of the end of beginning of the formation writing-off the period year 1 2 3 4 5 6

Settlements with buyers and customers 7310 - 1,134,632 - 1,134,632

including:

electric energy transmission 7311 - 1,134,632 - 1,134,632

Advance made 7330 - - - -

Other accounts receivable 7320 - - - -

Total 7300 - 1,134,632 - 1,134,632

162 163 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

18. Disputes with sales companies

As of the beginning of the year Changes within the period As of the end of the period

Accrued for the period Paid for the period (debit turnover, (credit turnover, thousand rubles) thousand rubles) Counterpart Company counterpart Company counterpart Company counterpart Company counterpart data data data data data data data data

1 2 3 4 5 6 7 8 9

Mezhregionenergosbyt LLC - - 609,238 70,959 70,959 70,959 538,279 - (Nizhnevartovskiy GPK LLC)

Mezhregionenergosbyt LLC - - 704,732 109,706 109,706 109,706 595,026 - (Belozerny GPK LLC)

19. Overdue accounts receivable

As of December 31, 2012 As of December 31, 2011 As of December 31, 2010

entered under book value (less provision entered under book value (less provision entered under book value (less provision Index name Code contract terms for doubtful debts) contract terms for doubtful debts) contract terms for doubtful debts)

1 2 3 4 5 6 7 8

Total 5540 1,097,080 184,454 81,700 81,700 111,243 111,243

including: Settlements with buyers and customers, 60,722 60,722 98,272 98,272 5541 1,080,862 168,236 including

including: 55411 933,801 21,175 49,005 49,005 44,755 44,755 electric energy transmission

technical connection 55412 147,061 147,061 11,717 11,717 53,517 53,517

Other accounts receivable 5542 16,218 16,218 20,978 20,978 12,971 12,971

164 165 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

20. Exicstence and movements of accounts payable

Changes within the period

received retired transferred from as a result of interest, penalties Balance Balance as of the long-term liabilities Index name Code Period business transactions accrued and other depreciated as as of the end beginning of the year into short-term (debt on transaction) accruals cancellation financial result of the period liabilities

1 2 3 4 5 6 7 8 9 10

5551 for 2012 208,431 1,142,835 - (872) (-) (-) 1,350,394 Long-term accounts payable 5571 for 2011 918,110 64 - (167,296) (-) (542,447) 208,431

including:

5552 for 2012 - - - (-) (-) (-) - accounts payable to suppliers and contractors 5572 for 2011 - - - (-) (-) (-) -

5553 for 2012 208,431 1,142,835 - (872) (-) (-) 1,350,394 Advance received 5573 for 2011 918,110 64 - (167,296) (-) (542,447) 208,431

5554 for 2012 - - - (-) (-) (-) - From the total of long-term accounts payable 5574 for 2011 - - - (-) (-) (-) -

55541 for 2012 - - - (-) (-) (-) - indebtedness to subsidiaries 55741 for 2011 - - - (-) (-) (-) -

5560 for 2012 8,109,940 84,149,328 - (86,512,628) (-) - 5,746,640 Short-term accounts payable, total 5580 for 2011 7,339,582 90,041,736 - (89,813,646) (179) 542,447 8,109,940

including:

5561 for 2012 2,140,185 40,249,360 - (40,435,974) (-) - 1,953,571 Settlements with suppliers and contractors 5581 for 2011 2,341,135 47,205,490 - (47,406,280) (160) - 2,140,185

including:

55611 for 2012 284,357 8,684,411 - (8,601,290) (-) - 367,478 construction 55811 for 2011 466,146 14,319,783 - (14,501,572) (-) - 284,357

166 167 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table 1 2 3 4 5 6 7 8 9 10

55612 for 2012 1,855,828 31,564,949 - (31,834,684) (-) - 1,586,093 other 55812 for 2011 1,874,989 32,885,707 - (32,904,708) (160) - 1,855,828

5562 for 2012 3,891,263 24,949,322 - (26,792,528) (-) (-) 2,048,057 Advance received 5582 for 2011 2,700,255 23,373,493 - (22,724,932) (-) (542,447) 3,891,263

including:

55621 for 2012 22,175 24,638,709 - (24,123,246) (-) - 537,638 electric energy transmission 55821 for 2011 11,674 21,511,640 - (21,501,139) (-) - 22,175

55622 for 2012 3,860,229 257,450 - (2,610,296) (-) - 1,507,383 technical connection 55822 for 2011 2,670,407 1,818,771 - (1,171,396) (-) 542,447 3,860,229

55623 for 2012 4,347 1,591 - (5,927) (-) - 11 rent services 55823 for 2011 4,710 670 - (1,033) (-) - 4,347

55624 for 2012 4,512 51,572 - (53,059) (-) - 3,025 other 55824 for 2011 13,464 42,412 - (51,364) (-) - 4,512

5563 for 2012 - - - (-) (-) - - Indebtedness to participants (founder members) in respect of income payment 5583 for 2011 - - - (-) (-) - -

5564 for 2012 6,756 - - (-) (-) - 6,756 Drafts payable 5584 for 2011 6,756 - - (-) (-) - 6,756

5565 for 2012 27,081 1,347,510 - (1,289,320) (-) - 85,271 Indebtedness to state non-budgetary funds 5585 for 2011 23,056 1,116,592 - (1,112,567) (-) - 27,081

5566 for 2012 358,823 907,311 - (583,273) (-) - 682,861 Settlements in respect of taxes and fees 5586 for 2011 732,265 1,117,810 - (1,491,252) (-) - 358,823

5567 for 2012 144,905 5,075,029 - (5,216,416) (-) - 3,518 Indebtedness to company staff 5587 for 2011 208,307 4,748,349 - (4,811,751) (-) - 144,905

168 169 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 1 2 3 4 5 6 7 8 9 10

5568 for 2012 1,540,927 11,620,796 - (12,195,117) (-) - 966,606 Other accounts payable 5588 for 2011 1,327,808 12,480,002 - (12,266,864) (19) - 1,540,927

5569 for 2012 29,840 163,800 - (192,130) (-) - 1,510 From the total of short-term liabilities 5589 for 2011 7,638 203,780 - (181,578) (-) - 29,840

55691 for 2012 29,840 163,800 - (192,130) (-) - 1,510 indebtedness to subsidiaries 55891 for 2011 7,638 203,780 - (181,578) (-) - 29,840

5550 for 2012 8,318,371 85,292,163 - (86,513,500) (-) - 7,097,034 Total 5570 for 2011 8,257,692 90,041,800 - (89,980,942) (179) - 8,318,371

21. Overdue accounts payable

As of December 31 As of December 31 As of December 31 Index name Code 2012 2011 2010

1 2 3 4 5

Total 5590 292,120 2,192 1,153

including: Settlements with suppliers and contractors 5591 1,032 998 1,153

including: other 55911 1,032 998 1,153

Indebtedness to participants (founder 5592 - - - members) in respect of income payment

Indebtedness to state non-budgetary funds 5593 - - -

Settlements in respect of taxes and fees 5594 - - -

Indebtedness to company staff 5595 - - -

Other accounts payable 5596 291,088 1,194 -

170 171 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

22. Credits and loans

Changes within the period

Index name Code Period As of the beginning Received Interest Principal debt Interest Transfer from long- As of the end of the year accrued payment payment term indebtedness of the period to short-term indebtedness

1 2 3 4 5 6 7 8 9 10

7410 for 2012 7,807,344 6,915,055 - (53,809) - (4,301,937) 10,366,653 Long-term borrowed funds – total 7430 for 2011 5,522,416 6,984,928 - (2,000,000) - (2,700,000) 7,807,344

including:

7411 for 2012 7,807,344 4,615,055 - (53,809) - (4,301,937) 8,066,653 Credits 7431 for 2011 2,822,416 6,984,928 - (2,000,000) - - 7,807,344

7412 for 2012 - 2,300,000 - - - - 2,300,000 Loans 7432 for 2011 2,700,000 - - - - (2,700,000) -

7420 for 2012 2,763,345 - 950,709 (3,468,606) (1,006,728) 4,301,937 3,540,657 Short-term borrowed funds – total 7440 for 2011 60,303 - 409,330 - (406,288) 2,700,000 2,763,345

including:

7421 for 2012 - - - (768,606) - 4,301,937 3,533,331 Credits 7441 for 2011 ------

74211 for 2012 4,782 - 950,709 - (948,165) - 7,326 Interest on credit 74411 for 2011 1,740 - 409,330 - (406,288) - 4,782

7422 for 2012 2,758,563 - - (2,700,000) (58,563) - - Loans 7442 for 2011 58,563 - - - - 2,700,000 2,758,563

172 173 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

23.Expenses on credits and loans 25. Deferred taxes

Index Name Code Subtractable Deferred tax Taxable Deferred tax On long-term credits and ON short-term credits and temporary assets temporary liabilities loans loans Name Code differences differences 1 2 3 4 1 2 3 4 5 6 Total expenses on credits: 7510 629,551 112,307 Balance as of the beginning of the year 7700 710,705 142,141 11,214,604 2,242,921 written-off as other expenses 7511 219,762 112,223 reported

included into assets value 7512 409,789 84 Income 7710 2,616,057 523,211 - - Total expenses on loans: 7520 150,288 58,563 Expense 7720 (-) (-) (2,058,256) (411,651) written-off as other expenses 7521 150,288 58,563 Result of tax rate changes 7730 х - х - From the total of expenses on credits and loans 7530 779,839 170,870 Result of correction of previous years % accrued 7531 779,839 170,870 7740 674,605 134,921 - - mistakes

Permanent differences in cost of assets 7750 - - - - 24. Estimated liabilities and liabilities

Index Balance as of Written-off Balance as Writing-off without tax consequences 7760 (-) (-) (-) (-) Name Code the begining Recognized Cancelled as excess of the end of of the year amount the period Balance as of the end of the period reported 7800 4,001,367 800,273 13,272,860 2,654,572

1 2 3 4 5 6 7

Estimated liabilities – total 5700 1,691,429 3,233,677 (1,037,966) (14,190) 3,872,950 26. Securities

including: Index Payment of future leaves 5701 335,325 745,691 (700,622) - 380,394 As of As of As of December 31, December 31, December 31, Payment of compensation Name Code 2012 2011 2010 5702 351,534 360,552 (337,344) (14,190) 360,552 as a result of the year 1 2 3 4 5 legal proceedings incomplete 5703 1,004,570 1,562,526 - - 2,567,096 as of the balance sheet date Securities – total 5800 373,743 129,531 90,821

tax authorities claims as a result including: of tax inspections, unsettled as of the 5704 - 564,908 - - 564,908 balance sheet date drafts 5801 - - -

other estimated liabilities 5705 - - - - - pledged property 5802 373,743 129,531 90,821 From the total of the estimated including: liabilities accrued:

Formed on the account of expenses on fixed assets 58021 158,724 129,531 90,821 5710 1,071,681 ordinary types of activity securities and other financial investments 58022 - - - Formed on the account of other expenses 5720 2,127,434 other 58023 215,019 Included into asset value 5730 34,562 other securities received 5803 - - -

174 175 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table Сontinuation of the table 1 2 3 4 5 1 2 3 4

Securities issued for company own liabilities – total 5810 - - 9,953 2009 profit revealed in the period reported 8011 59,287 1,007

including: Profit before 01.01.2009 revealed in the reported period 8012 141 270

drafts 5811 - - - Penalties, fines and forfeits recognized, or those in respect of which 8013 5,002 2,908 court judgements (arbitration court awards) were received for collection pledged property 5812 - - - Accounts payable with limitation period expired (over three years) 8014 - 179 including: Exchange difference 8015 - - fixed assets 58121 - - - Property proved to be in excess as a result of stocktaking 8016 7,630 24,359 securities and other financial investments 58122 - - - Assets received without compensation, except for fixed assets 8017 - - other 58123 - - - and intangible assets Income from assets received without compensation determined 8018 - 7 other securities issued 5813 - - 9,953 in accordance with established procedure

Cost of tangibles remaining from writing-off irreparable 8019 7,552 10,356 27. Other revenues and expenses and nonserviceable assets

Index Financial investments revaluation at current market price 8020 3,276 1,374 for 2012 for 2011 Name Code Income from reduction (writing-off) of provisions for 8021 - - 1 2 3 4 doubtful debts

Income from reduction (writing-off) of provisions Other revenues, total 8000 4,586,055 4,014,422 8022 114,756 for estimated liabilities incuding: Income for reduction (writing-off) of reserve for inventory 8023 9,914 7,240 value reduction Sales of fixed assets (except for apartments) 8001 47,263 24,436 Income from claim assignment contracts 8024 - - Apartment sales 8002 1,346 1,049 Income from revealed cases of electric energy 8025 16,977 10,118 Inventory sales 8003 21,113 11,420 consumption without contract

Foreign currency sales 8004 - - Insurance indemnities receivable 8026 32,759 30,440 Income related to participation in authorized capital 8027 - - Intangible assets sales 8005 - - of other organizations

Securities sales 8006 4,107,550 3,620,598 Restoration of previously written-off accounts receivable 8028 - -

Sales of other assets 8007 12,836 26,777 Discounts on drafts 8029 - -

Joint activity 8008 - - Compensation for difference in tariffs (budget funding) 8030 - -

2011 profit revealed in the period reported 8009 2,895 - Income from reduction (writing-off) of reserve 8031 88,696 - or impairment loss 2010 profit revealed in the period reported 8010 91,181 11,795 Final appraisal of fixed assets 8032 - -

176 177 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Сontinuation of the table End of table 1 2 3 4 1 2 3 4

Other revenues 8033 70,637 115,333 State duties for economic contracts 8123 (2,082) (1,256)

Other expenses, total 8100 (8,695,386) (6,147,286) Financial investments revaluation at current market price 8124 (204,560) (49,901)

incuding: Discounts on drafts 8125 - - Sales of fixed assets (except for apartments) 8101 (7,318) (15,832) Expenses on claim assignment contracts 8126 - - Apartment sales 8102 (1,525) (2,590) Nonrefundable VAT 8127 (55,699) (57,092) Inventory sales 8103 (17,027) (11,347) Expenses on revealed cases of electric energy 8128 - - consumption without contract Foreign currency sales 8104 - - Contributions to unions and funds 8129 (24,825) (9,079) Intangible assets sales 8105 - - Accounts receivable with limitation period expired 8130 (57) (6,830) Securities sales 8106 (4,292,922) (3,620,140) (over three years)

Exchange difference 8131 - - Sales of other assets 8107 (7,622) (21,474)

Legal costs 8132 - (6) Other taxes 8108 - -

Thefts, shortages 8133 - (205) Expenses on bank fees 8109 (7,365) (10,008)

Cost of enforcement proceedings 8134 (35) - Expenses on financial investment service 8110 (48) (62)

Payment of staff apartment cost 8135 - - Provision for doubtful debts 8111 (1,134,632) -

Other material (financial) assistance and other 8136 (293,359) (275,550) Reserve for impairment loss 8112 - - payments to employees

Reserve for reduction of tangibles value 8113 - (29,009) Material assistance to pensioners (including lumpsums, 8137 (2,163) (1,271) utility payments compensation) Reserve for discontinuing operation 8114 - -

Expenses on sport events 8138 (6,247) (6,173) Reserve for estimated liabilities 8115 (2,127,434) (1,004,570)

Expenses on cultural and education events 8139 (32,405) (35,415) Retirement of non-interest-bearing assets 8116 (31,380) (158,685)

VAT on property transferred without compensation 8117 (1,416) (623) Charitable contributions 8140 (35,000) (350,000)

Loss 2011 revealed in the period reported 8118 (12,269) - Fixed assets reduced asesment 8141 - -

Loss 2010 revealed in the period reported 8119 (269) (56,557) Other 8142 (395,477) (331,546)

Loss 2009 revealed in the period reported 8120 (551) (5,593)

Loss before 01.01.2009 revealed in the period reported 8121 (82) (485)

Penalties, fines and forfeits recognized, or those in respect of which 8122 (1,617) (85,987) court judgements (arbitration court awards) were received for collection

178 179 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

28. Statement of valuables charged Explanatory Note to JSC Tyumenenergo Balance on off-balance accounts Sheet and Profit and Loss Report 2012

As of December 31, As of December 31, As of December 31, in text and tabular form Index Code 2012 2011 2010

1 2 3 4 5 1. General provisions

Leased fixed assets 8200 17,253,473 13,520,742 12,660,723 1.1. Company registration details including leasehold 82001 - - - Full name: Open Joint Stock Company of Energy and Electrification "Tyumenenergo". Short name: JSC Tyumenenergo Inventory items accepted under custody 8201 - - 21,708 Legal and correspondence address: bld. 4, Universitetskaya Street, Surgut, Khanty-Mansijsk Autonomous District – Yugra, Tyumen Region 628406. Materials accepted for processing 8202 - - - Company was entered into the Unified State Register of Legal Entities under primary state registration number (PSRN) Goods accepted for commission 8203 - - - 1028600587399 as confirmed by Certificate of State Registration series 86 No. 000503856 dated 14.10.2002 issued by Inspection with the Russian Federation Ministry for Taxes and Levies in Surgut City of Khanty-Mansijsk Autonomous Equipment accepted for assembly 8204 - - - District.

Company is registered by Interdistrict Inspection with the Russian Federation Ministry for Taxes and Levies No. 4 Writen-off indebtedness of insolvent debtors 8205 12,021 91,788 168,612 as confirmed by registration certificate 99 No. 000018264 dated 30.06.2004. taxpayer’s identification number (INN) 8602060185, tax registration reason Code (KPP) 997450001, All-Russian Classifier of Political Subdivisions (OKATO) Depreciation of land improvement facilities and 71136000000. 8206 209 209 209 other similar items Company is registered by tax authority at its location within the territory of the Russian Federation as confirmed by Numbered forms 8207 92 1,010 1,005 certificate series 86 No. 001630190, tax registration reason Code (KPP) 860201001.

Company is registered by extra-budgetary funds as confirmed by respective notices. Property in federal ownership 8208 5,178 7,017 7,017

Intangible asset received for use 8209 850,225 443,216 482,707 1.2. Company types of activity and geography

Property transferred into authorized capital as JSC Tyumenenergo is an interdistrict distribution grid company, which is a natural monopoly holder in the sphere of 8210 - - - payment for shares purchased electric power transmission services, acting under government regulation. Company operates on the territory of the following three constituent entities of the Russian Federation: the Khanty-Mansijsk Autonomous District (Yugra), the Yamalo-Nenets Autonomous District and the Tyumen Region. CEO P. A. Mikheev Chief Accountant Т. I. Salo Throughout the reporting period Company performed the following types of activity: 14 March 2013 – electric power receipt and distribution; – technological connection of corporate and natural persons’ power receiving devices to power grids; – operational dispatch management and maintaining power saving and consumption modes; – maintenance, repairs and adjustment of power equipment and power grid facilities; – other types of activity permitted by current legislation of the Russian Federation.

Company primary activities are not subject to licensing.

180 181 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

1.3. Information on Company separate subdivisions 1.5. Management structure

As of 31.12.2012, Company has nine branches that perform functions related to electric power transmission and In accordance with Charter, Company management bodies are as follows: distribution. The branches re properly registered. – General Shareholder Meeting; – Board of Directors; Item Branch name Location – Sole executive body – Director General. No. Mikheev Pavel Aleksandrovich was appointed JSC Tyumenenergo Director General in accordance with Company Charter Bld. 34, 30 Let Pobedy St., Surgut, Khanty-Mansijsk Autono- 1. Surgut Power Grids by Board of Directors resolution, valid from 04.02.2013. mous District (Yugra), Tyumen Region 628403 Membership of Company Board of Directors as of 31.12.2012: Bld. 22, Permskaya St., Nizhnevartovsk, Khanty-Mansijsk 2. Nizhnevartovsk Power Grids – Tatsiy Vladimir Vitalyevich – First Vice President of JSC Gazprombank; Autonomous District (Yugra), Tyumen Region 628600 – Fadeev Aleksandr Nikolaevich – Security Director of JSC FGC of UES; – Hvalin Igor Vladimirovich – Deputy Chairman of the Board of JSC FGC of UES; Bld. 15, Mira St., Nefteyugansk, Khanty-Mansijsk Autono- 3. Nefteyugansk Power Grids – Borodin Pavel Andreyevich – Vice President of JSC Vympelcom; mous District (Yugra), Tyumen Region 628300 – Kudryaviy Viktor Vasilyevich – Adviser to President of CJSC Eurocement Group; – Pavlov Vadim Alekseevich – Head of the Center of Strategies, Development and Innovations of JSC IDGC Holding; North-East Industrial Zone, Novy Urengoy, Yamalo-Nenets 4. Nothern Power Grids Autonomous District, Tyumen Region 629300 – Berdnikov Roman Nikolaevich – Deputy Chairman of the Board of JSC FGC of UES; – Solod Aleksandr Viktorovich – Deputy Chief Engineer JSC FGC of UES; Bld. 70, Energetikov residential district, Nyagan, Khanty-Man- – Mikheev Pavel Aleksandrovich – JSC Tyumenenergo Director General; 5. Energokompleks sijsk Autonomous District (Yugra), Tyumen Region 628187 – Mangarov Yurii Nikolaevich – JSC FGC of UES, Deputy Chairman of the Board; – Tihonova Mariia Gennadyevna – no information provided. Bld. 25, Kholmogorskaya St., Noyabrsk, Yamalo-Nenets Au- 6. Noyabrsk Power Grids tonomous District, Tyument Region 629804 Supervision over Company’s financial and economic activities is performed by Company Revision Commission.

Bld. 5, Prospekt Neftyanikov, Kogalym, Khanty-Mansijsk Membership of Company Revision Commission as of 31.12.2012: 7. Kogalym Power Grids Autonomous District (Yugra), Tyumen Region 628486 – Alimuradova Izumrud Aligadzhievna – Director on Internal Audit and Risks Management (Head of the Department of Internal Audit and Risks Management) of JSC IDGC Holding; Elektroseti village, Uray, Khanty-Mansijsk Autonomous Dis- 8. Uray Power Grids – Arhipov Vladimir Nikolaevich – Head of the Security Department of OJDC IDGC Holding; trict (Yugra), Tyumen Region 628281 – Kormushkina Liudmila Dmitrievna –Head of the Division of Control and Evaluation of the Department of Internal Audit and Risks Management of JSC IDGC Holding; 9. Tyumen Distribution Grids Bld. 44, Daudelnaya St., Tyumen, Tyumen Region 625000 – Bogachev Igor Yurievich – Leading Expert of the Revision and Expert Examination Division of the Department of Internal Audit and Risk Management of JSC IDGC Holding; – Filippova Irina Aleksandrovna – Leading Expert of the Division of Control Evaluation of the Department of Internal Audit and Risks Management of JSC IDGC Holding.

1.4. Information on Company Registrar and Auditor Officers responsible for drawing up accounting statements: Director General – Mikheev Pavel Aleksandrovich, Information on Company Registrar (register keeper) Chief Accountant – Salo Tatyana Ivanovn.

Full name Reestr-RN Limited Liability Company Short name Reestr-RN LLC 1.6. Related information Location Bld. 3-4, 2/6 Podkopaevskiy pereulok, Moscow 109028 Correspondence address PO Box 4, Moscow 115172 Information on staffing number Phone +7 (495) 411-79-11 Fax +7 (495) 411-83-12 2010 2011 2012 License No. 10-000-1-00330, issued by the Federal Financial Markets Service on 16.12.2004 for an indefinite term Average staffing number 6,961 7,243 7,222 Information on Company Auditor

Full name Closed Joint Stock Company KPMG Current revision of the Charter was approved by resolution of JSC IDGC Holding Board of Directors dated 28.06.2011 Short name ZAO KPMG No. 96 pr/12. Location Floor 31, Block C, Presnenskaya naberezhnaya, Moscow 123317 Phone (495) 937-44-77 Company authorized capital consists of 273,738,951 ordinary registered shares with the nominal value 100 rubles each. Fax (495) 937-44-99 Certificate No. 255 dated 28.12.2009 for entry to the register of auditors and audit companies 100 % of Company shares are owned by JSC IDGC Holding. Company shares are not circulated on regulated securities of self-regulating organization Non-Commercial Partnership “Auditor Chamber market. of Russia”, primary record registration number (PRRN): 10301000804

182 183 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

2. Basic accounting policy provisions and Declining balance method is applied to “office equipment” and “furniture” groups, based on fixed asset item depreciated book value as of beginning of year, as well as norms of depreciation calculated by reference to useful life and acceleration coeffi- principles of accounting statements drawing up cient equal to 3. Property in the above mentioned groups is recorded in the accounting statements as other fixed assets.

JSC Tyumenenergo keeps accounting in compliance with the Federal Law “On accounting” No. 129-FZ dated 21.11.1996, Each year, as of December 31, Company performs revaluation of fixed assets with useful life over 5 years (except for non-pro- Regulation on Accounting and Financial Reporting in the Russian Federation adopted on 29.07.1998 by decree No. 34n file fixed assets) included in the following groups: of the RF Ministry of Finance, and current accounting regulations. – Buildings; – Constructions; JSC Tyumenenergo accounting statements were drawn up in pursuance of current accounting and financial reporting – Power machines and equipment. rules of the Russian Federation. Revaluation of fixed assets to current (replacement) asset value is carried out by outsourced independent appraiser. The accounting statements were prepared in accordance with the business continuity principle that implies the possibility for assets sales and fulfillment of liabilities in the normal course of business. Advances made to contractors under construction contracts for construction, reconstruction, modernization of fixed asset items are recorded in the Balance Sheet as part of “Fixed Assets”, VAT excluded, while VAT amount paid to the contractors is recorded as part of current assets.

Provisions of the Accounting Policy 2012 which disclose accounting practices Fixed assets received under letting agreements, except for those under financial lease (lease property) are posted off-balance and representation of certain Balance Sheet lines and Profit and Loss Report in accordance with rent contract terms and conditions to off balance-sheet account 001 “Leased Fixed Assets”; depreciation lines in the accounting statements thereon is accrued by lessor. Land parcels received under letting agreements and for unlimited use are recorded in off balance-sheet account 001 “Leased 2.1. Fixed assets Fixed Assets” by reference to the value equal to their cadastral values.

Company keeps asset accounting in accordance with accounting statute “Asset accounting” PBU 6/01 adopted on 30.03.01 by decree No. 26n of the RF Ministry of Finance and Procedural Guidelines for Asset Accounting adopted on 13.10.2003 by 2.2. Inventories decree No. 91n of the Russian Federation Ministry of Finance. Company keeps inventory accounting in accordance with accounting statute “Inventory accounting” PBU 05/01 adopted Property which satisfies the conditions contemplated by item 4 of PBU 6/01 adopted on 30.03.01 by decree No. 26n of the on 09.06.01 by decree No. 44n of the RF Ministry of Finance and Procedural Guidelines for Inventory Accounting adopted RF Ministry of Finance, with the value up to 40,000 rubles per unit, are posted to a separate subsidiary account to Account on 28.12.2001 by decree No. 119n of the Russian Federation Ministry of Finance. 10 “Raw Stuffs and Materials”. A unit for inventory accounting is a stock number. Property acquired for payment under sales and purchase contracts liable to state registration in cases prescribed by legisla- tion, which satisfies the conditions contemplated by item 4 of PBU 6/01 and is recorded in transfer and acceptance primary Inventories released for production and otherwise retired are estimated at average prime cost. accounting documents, but with title not registered in accordance with procedure determined by law, are entered in account- ing records as fixed assets by posting to account 01 “Fixed Assets” as of the date of property transfer and acceptance report. Property in the form of in-house construction with capital investment completed, appropriate transfer and acceptance pri- 2.3. Financial investments mary accounting documents executed, as well as other documents, but with title not registered in accordance with procedure determined by law, are entered in accounting records as fixed assets as of the property commissioning date. Company keeps financial investment accounting in accordance with accounting statute “Financial investment accounting” Property retirement in cases of sale, transfer as a contribution to authorized capital of other organization and in other retire- PBU 19/02 adopted on 10.12.02 by decree No. 126n of the RF Ministry of Finance. ment cases is recorded for accounting purposes as of the date of property transfer and acceptance report. Units for financial investment accounting are as follows: Fixed asset value (except for office equipment and furniture groups) is amortized by monthly accrual of depreciation by – for individually identifiable financial investments – a certain investment (security, contribution to authorized capital of straight-line method, depending on useful life of the property. a certain organization, loan or deposit under a certain contract);; – for individually unidentifiable financial investments – a block of securities. A block of securities is understood as an Depreciation for fixed asset items entered in accounting records before 01.01.2002 is accrued in accordance with Ordinance aggregate of securities within the same issue (the same issuer, type, circulation period, nominal value etc.) purchased of the USSR Council of Ministers dated 22.10.1990 No. 1072 “On the Unified Norms of Depreciation for Complete Restoration by Company in the same transaction. of the USSR National Economy Fixed Assets”.

All financial investments are entered in accounting records at their initial values. Initial value of financial investments acquired Useful life of the fixed assets entered in accounting records in 2002–2012 was determined by reference to: for payment is thereby understood as amount of actual expenses on the acquirement, except for value added tax and other – expected actual tear and wear depending on operation mode, natural conditions, exposure to aggressive medium, and reimbursable taxes. repairs system; – expected life time of the item in accordance with expected capacity or power; The financial investments for which current market price can be determined in a proper procedure are recorded as of report- – existing regulatory restrictions on the item use. ing year end at their market values by adjustment of their respective estimate values as of previous reporting date. Company carries out the above adjustment on quarterly basis.

Therewith, useful life of the fixed assets entered in accounting records in 2002–2010 are determined within the limits set by If, as of reporting date, current market value cannot be determined for a financial investment item previously estimated by its RF Government Ordinance No. 1 dated 01.01.2002 “On classification of fixed assets included into depreciation groups”. current market value, such financial investment item is recorded by reference to its latest estimated value.

184 185 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Financial investments for which current market value cannot be determined are recorded Company keeps analytical accounting of its estimated liabilities in groups of estimated liabilities with similar nature and – for bookkeeping purposes – at their initial estimated value; uncertainty generated: – for accounting purposes – at their net value (initial estimated value reduced by the value of financial investment im- – Due to legal proceeding pending s of reporting date; pairment allowance provided). – Due to costs to be incurred for payment of employee vacation allowances; – Due to costs to be incurred for payment of employee annual fee; Company performs check for financial investment impairment in accordance with i. 37–40 of accounting statute “Financial – Other. investment accounting” PBU 19/02 adopted on 10.12.02 by decree No. 126n of the RF Ministry of Finance, on annual basis as of December 31 of reporting year. Estimated liability is recorded: – By reference to the value immediately required for discharge (repayment of liability) as of reporting date. If check for impairment confirms considerable reduction of the financial investment value, Company forms financial invest- ment impairment allowance to the amount of difference between book value of such financial investments and their calculat- Upon entering an estimated liability, its value is: ed value. – Taken to expenses on ordinary activities; – Taken to other expenses; – Included into investment asset value. 2.4. Monetary assets and money equivalents

Company records the following assets as part of monetary assets and money equivalents: 2.7. Proceeds and other revenues – Cash balance and demand balance; – Money remittances in transit as of reporting date; Company keeps proceeds and other income accounting in accordance with accounting statute “Revenues of – Highly-marketable financial investments which can be easily converted into cash amount known in advance, and organization” PBU 9/99 adopted on 06.05.99 by decree No. 32n of the RF Ministry of Finance. which are exposed to minor risk of change in value. In particular, Company attributes to money equivalents bank deposits with repayment period up to three months, as well as bank papers, provided that purchase conditions Company revenues are divided into revenues from ordinary activities and other revenues. for such bank papers allow for their presentation for repayment before 90 days from the bank paper issue date; – Money documents. Company recognizes the following to be revenue from ordinary activities: – revenues from electrical power distribution and transmission; – revenues from technological connection to electricity networks; 2.5. Loans and credits – revenues from the provision of services for repair and maintenance of electrical grid facilities; – revenues from the rent of property; Company keeps loan and credit cost accounting in accordance with accounting statute “Loan and credit cost – revenues from the provision of telecommunications services; accounting” PBU 15/2008 adopted on 06.10.08 by decree No. 107n of the RF Ministry of Finance. – revenues from the provision of transport services; – revenues from the provision of services for the transport of water and wastewater; Interest payable on loans and credits are recorded separately for bookkeeping purposes. – revenues from the provision of services for energy audit; – revenues from the sale of other works and services of industrial and non-industrial character. Additional charges related to credit and loan obtaining and service are included into other expenses as a lump sum in the reporting period where they occurred. Proceeds are entered in accounting records in the amount calculated in terms of money equal to the value of the cash and other assets, and (or) the amount of receivables. Interest on loans and credits received, which are related directly to investment asset purchase and (or) building up, is included in the asset value and amortized by accrual of depreciation. Inclusion of interest on loans and credits received In accordance with the accrual principle, Company revenues are recognized in the accounting period in which they into investment asset initial value terminates from the first day of the month subsequent to the month when such asset occur regardless of the actual time of receipt of funds. is entered in accounting records as a fixed asset item.

2.6. Estimated liabilities 2.8. Prime cost and other expenses

Company keeps estimated and contingent liability accounting in accordance with accounting statute “Estimated Company keeps expenditure records in accordance with accounting statute “Expenses of organization” PBU 10/99 liabilities, contingent liabilities and contingent assets” PBU 8/2010 adopted on 13.12.10 by decree No. 167n of the adopted on 06.05.99 by decree No. 33n of the RF Ministry of Finance. RF Ministry of Finance. Company expenses are divided into expenses from ordinary activities and other expenses. Estimated liabilities are entered in accounting records provided that all of the below conditions have been satisfied: – Company has a liability, as a result of its previous business life, for which payment cannot be avoided. Where Company recognizes the following to be expenses from ordinary activities: Compa ny doubts whether such liability was incurred, it recognizes the estimated liability if analysis of all – Power transmission over single national electricity network of JSC "FGC UES"; circumstances and conditions, including expert opinions, show that such liability is more likely to exist that to – Power transmission over networks of other grid organizations; not exist; – Expenses on purchase of electricity to cover losses; – Reduction of economic benefits necessary for Company to fulfill its estimated liability is probable; – Expenses on fixed asset repairs and maintenance; – Estimated liability value can be reasonably estimated. – Employees compensation;

186 187 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

(thousand rubles) – Depreciation; As of 31.12.2010 As of 31.12.2011 – Expenses on property insurance; – Expenses on voluntary medical insurance of Company staff; Index name As per accounting Adjusted As per accounting Adjusted – Expenses on information, audit, consulting services etc.; statements 2011 statements 2011 – Rent for facilities, buildings, machinery, equipment, etc.; – General and administrative expenses; Balance Sheet – Other expenses with similar intended purpose. Fixed assets by replacement 187,333,652 34,069,842 210,787,625 23,178,137 value 2.9. Related parties Accumulated fixed asset 99,850,075 25,786,071 109,933,532 24,690,294 Company discloses information on related parties in accordance with accounting statute “Information on related depreciation parties” PBU 11/2008 adopted on 29.04.08 by decree No. 48n of the RF Ministry of Finance. Depreciated value 87,483,577 8,283,771 100,854,093 (1,512,157)

Non-current asset revaluation 73,686,306 10,029,040 61,000,018 846,023 2.10. Information on segments Undistributed profit of past years 11,757,595 (1,745,269) 11,344,498 (1,745,269) Company does not disclose information on segments in explanatory notes to the accounting statements as it is not an Undistributed profit of reporting issuer of publicly offered securities. 4,177,919 (612,911) period 2.11. Changes in accounting policy Profit and Loss Report Depreciation accrued 4,861,694 - 5,398,542 429,859 Accounting policy 2013 did not make any considerable changes in previously adopted bookkeeping practices and accounting statements drawing up rules. Other revenues 2,513,721 - 4,898,393 (233,205)

Other expenses 2,958,884 - 6,848,205 (50,153) 3. Disclosure of Balance Sheet essential indexes Due to completion, retrofitting and reconstruction of existing fixed asset items, fixed assets value increased by 4,769,017 thousand rubles. 3.1. Fixed assets (Balance Sheet line 1150) Information on change in fixed assets value by group and as compared with previous year, as well as information on Balance Sheet line 1150 “Fixed assets” represents information on fixed assets (Balance Sheet lines 1151–1153), fixed assets use, is given in Table 9 of the Explanatory notes to Balance Sheet and Profit and Loss Report. expenses on incomplete capital construction and reconstruction (Balance Sheet line 1154), advances made to contractors under contracts for capital construction, reconstruction and acquirement of fixed assets (Balance Sheet line 1155), raw stuff and materials to be used for fixed assets build-up (Balance Sheet line 1156). List of totally depreciated items and Company fixed asset item with value not amortized (thousand rubles)

Value Fixed asset items 3.1.1. Fixed assets (Balance Sheet lines 1151–1156). as of 31.12.2012 as of 31.12.2011 as of 31.12.2010 Revaluation of non-current assets (Balance Sheet line 1340) Land parcels 40,709 36,592 12,434

Totally depreciated items (replacement Information on fixed assets availability and movements by group and as compared with previous year, as well as informa- 44,478,772 41,463,067 38,776,088 value) tion on fixed assets use is given in Tables 7, 8 and 10 of the Explanatory notes to Balance Sheet and Profit and Loss Report. Preserved items 645,528 197,939 176,748 In the accounting statements fixed assets are represented by their replacement cost less depreciation accumulated throughout operation time. Fixed asset depreciation according to accounting data as of 31.12.2012, calculated as accumu- lated depreciation to replacement value, is 57.06 %.

As of 31.12.2012, Company revaluated its fixed assets by reference to current market replacement value. The revaluation Leased fixed assets are recorded off balance sheet by value determined in contracts with lessors. Leased land parcels was carried out by outsourced independent appraiser Finekspertiza LLC. As a result of the revaluation, depreciated book are recorded by their cadastral values. value of fixed assets as of 31.12.2012 increase to 11,214,541 thousand rubles. Final appraisal value was taken to fixed asset revaluation. Revenues and expenses related to fixed asset retirement are represented in Profit and Loss Report in abridged form depending on writing-off results, as part of other revenues or other expenses respectively. Due to errors revealed in replacement value calculation method, revaluation data as of 01.01.2011 and 31.12.2011 were reviewed. The errors revealed were recorded in the accounting statements by adjustment as of 31.12.2010 and 31.12.2011. Fixed assets were not acquired in exchange for goods.

188 189 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

3.1.2. Incomplete construction (Balance Sheet line 1154) 3.2. Long-term financial investments (Balance Sheet line 1170)

Information on balance and changes in expenses related to capital investments into fixed asset items is given in Ta- As of 31.12.2012, Company long-term investments amounted to 4,811,751 thousand rubles, including: ble 11 of the Explanatory notes to Balance Sheet and Profit and Loss Report. – shares of fuel and power sector companies circulating on regulated securities market – 80,977 thousand rubles; Construction and reconstruction of fixed asset items is carried out through contracting. – shares of companies within IDGC Holding group of companies – JSC Kubanenergo 4,169,968 thousand rubles and JSC Tomsk Distribution Company 550,606 thousand rubles (shares of the aforementioned companies are Expenses on incomplete construction as of 31.12.2012 amount to 9,577,408 thousand rubles including: circulated on regulated securities market); – 6,815,431 thousand rubles – expenses on new construction and production facility expansion, including – shares in subsidiary JSC ESC Tyumenenergo 10,200 thousand rubles. • construction of Salekhard 220 kV substation with powered 220 kV OHL Nadym – Salekhard, to the amount of 3,237,563 thousand rubles; Financial investments into shares with quotations published are recorded in the accounting statements as of reporting • extension of 110 kV outdoor switchgear of Vostok substation to scheme 110-13 with 110 kV OHL branches, year end at market value level. to the amount of 450,516 thousand rubles; Value of financial investments for which current market value cannot be determined, shares of JSC ESC Tyumenenergo, – 2,761,977 thousand rubles – expenses on incomplete technical upgrading and reconstruction of production is represented by purchase value. facilities, including • reconstruction of Beloyarskaya 110 kV substation, to the amount of 358,139 thousand rub.; In accordance with resolution of JSC Tyumenenergo Board of Directors (Minutes No. 03/12 dated April 6, 2012), in the • reconstruction of Tsentralnaya substation, to the amount of 277,298 thousand rubles; reporting period Company made transaction with LLC Neft-Aktiv for purchasing blocks of shares of JSC Kubanenergo • reconstruction of Novotekhnicheskaya 110/0 kV substation, to the amount of 127,526 thousand rubles. and JSC Tomsk Distribution Company.

The number of JSC Kubanenergo securities purchased is 27,260,040 ordinary shares to the total value of 4,301,688 3.1.3. Advance made for capital construction and fixed asset acquirement thousand rubles. (Balance Sheet line 1155) The number of JSC Tomsk Distribution Company securities purchased is 979,267,684 ordinary shares to the total value of 525,412 thousand rubles and 158,213,911 preferred shares to the total value of 67,004 thousand rubles. Information is given in Table 12 of the Explanatory notes to Balance Sheet and Profit and Loss Report. Since the share in JSC Kubanenergo and JSC Tomsk Distribution Company, with regard to the company shares owned Under contract terms and conditions, Company makes advances to contractors for purchase of equipment with long by Company sole shareholder JSC IDGC Holding is more than 30 %, in pursuance of the Federal Law dated 26.12.1995 time of production which requires assembly, included into construction cost estimate. In the Balance Sheet the data is No. 208-FZ “On joint stock companies” (clause 84.2) JSC Tyumenenergo on 07.12.2012 sent mandatory offers for the represented as amount net of VAT. VAT amount remitted to contractors is recorded as part of other current assets and redemption of ordinary shares to JSC Kubanenergo and JSC Tomsk Distribution Company. is equal to 212,924 thousand rubles. Value of financial investments for securities circulated on regulated securities market as of 31.12.2012 reduced by Interpretation of advance made by contractor: (thousand rubles) 202,305 thousand rubles as compared to the end of December 2011 and as compared to purchase date, which is mostly Name As of 31.12.2012 As of 31.12.2011 As of 31.12.2010 due to drop in share market value.

Advance made, total (VAT included) 1,396,156 4,972,092 3,208,389 Structure and movements of financial investments are given in Tables 13 and 14 of the Explanatory notes to Balance including: Sheet and Profit and Loss Report.

Advance made to contractors: Company’s financial investments are free from any encumbrances. LLC Meridian 201,203 - - JSC EFESk 138,561 189,587 - 3.3. Other non-current assets (Balance Sheet line 1190) LLC SibSpetsStroy 43,265 284,095 - Expenses made by Company in previous periods and in the reporting year related to future reporting periods are recorded JSC TESS-Nizhnevartovsk Branch 33,550 - - as deferred expenses and written off to respective expense accounts uniformly within the period they are attributed to. Deferred expenses include expenses in the form of fixed lump sum payments for the acquirement of non-exclusive rights LLC Elektron 22,592 2,269 - of use in respect to software, reference data bases, as well as expenses related to creation of automated systems and data JSC Engineering Center of UES - 170,938 349,714 bases. Expenses on software products purchase make up essential part (98 %) of the deferred expenses balance as of 31.12.2012, including 312,699 thousand rubles for creation of Company SAP R/3 based automated corporate financial and LLC Energostroyremont - - 525,000 economic activities management system purchased under license agreement. JSC ISK Soyuz-Seti - - 215,010 LLC KROKUS-Stroy - 86,479 98,452 LLC Tavrida Electric Omsk - 78,467 - Investments remitted under investment agreement and customer functions assignment agreement: JSC Yugorsk Territorial Energy Company 887,079 887,079 887,079 LLC Tekhstroy - 2,766,921 1,048,343

190 191 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table 3.4. Stocks (Balance Sheet line 1210) 1 2 3 4

In the Balance Sheet as of the year end stocks amount to 972,806 thousand rubles or 12 % of current assets. Advance made 387,718 745,372 670,108

Stocks mostly consist of the following: including: – materials, spare parts and components for maintenance and current repairs – 411,214 thousand rubles, – fuel – 18,433 thousand rubles, JSC FGC of UES 223,103 392,366 567,407 – special clothing and special gear – 207,350 thousand rubles, – equipment and maintenance accessories – 21,042 thousand rubles, – other stocks – 16,505 thousand rubles. JSC FORTUM 37,604 37,993 389

Stocks are estimated by reference to actual purchase cost and recorded in Balance Sheet in the amount less accrued JSC IDGC Research Center 16,947 35,071 501 allowance for reduction in market value. The allowance for reduction in stocks market value is formed according to stocks physical inventory. As of 31.12.2012 the allowance amounts to 31,348 thousand rubles. Accounts receivable from buyers and customers is recorded net of allowance for doubtful debts accrued mostly for Expenses on incomplete production amount to 327,989 thousand rubles as of 31.12.2012. Expenses on incomplete disputes with sales companies as per Table 18. Accounts receivable include advance made within the frame of contracts production include expenses related to fulfillment of obligations under long-cycle contracts such as contracts for for technological connection. technological connection valid for more than a year. As compared with data as of beginning of the year, expenses on incomplete construction decreased due to completion of work under general contractor agreements and transfer of work stage to the applicant under contract for technological connection. Work completed under general contractor agreements, which were not submitted to customer, are reCoded as part of other current assets. 3.6. Other non-current assets (Balance Sheet line 1260)

Information on stocks availability and movements as compared to 2011 is given in Table 15 of the Explanatory notes to Other non-current assets include amount of value added tax paid to budget on the advance received that will be Balance Sheet and Profit and Loss Report. submitted for deduction from budget in accordance with the provisions of Clause 21 of the RF Tax Code in the period of service rendering / work performance – 518,407 thousand rubles, and VAT amount on advance made for capital No stocks were pledged. construction and fixed assets acquirement – 212,924 thousand rubles.

3.5. Accounts receivable (Balance Sheet line 1230) The said Balance Sheet line represents work under general contractor agreement completed by subcontractor but not submitted to customer, in the amount of 95,627 thousand rubles. Structure and movements of accounts receivable are given in Tables 13-1418-19 of the Explanatory Notes to Balance Sheet and Profit and Loss Report. 3.7. Credits and loans (Balance Sheet lines 1410 and 1510)

Interpretation of accounts receivable made by counterparts (thousand rubles) Information on the structure of borrowed funds as compared with previous year, and on interest accrued is given in Name As of 31.12.2012 As of 31.12.2011 As of 31.12.2010 Tables 22 and 23 of the Explanatory notes to Balance Sheet and Profit and Loss Report. 1 2 3 4 Company attracts borrowed funds for the purpose of financing its investment and current activities. All Company credit Buyers, customers, 2,394,011 1,841,675 2,493,943 funds are raised following results of open tenders and in compliance with Debt Position Management Standard for including: JSC IDGC Holding S&A dated 05.09.2008 and Provision for Credit Policy dated 19.04.2007. Indebtedness under credits recorded as of 31.12.2012: JSC Tyumen Power Sales Company 1,044,430 1,043,484 1,060,594 – 3,999,988 thousand rubles – within nonrevolving credit line accommodation agreement with repayment term LLC Lukoil-energoservis 385,148 - - 2013–2016 at 7.6416 % per annum, for investment activity funding; – 2,499,998 thousand rubles – within nonrevolving credit line accommodation agreement with repayment term LLC Gazpromenergo 266,826 134,423 - 2014–2016 at 7.37 % per annum, for investment activity funding; LLC Surgutenergosbyt 124,775 127,920 - – 2,499,997 thousand rubles – within nonrevolving credit line accommodation agreement with repayment term 2014–2016 at 7.37 % per annum, for investment activity funding; JSC FGC of UES 100,699 - - – 2,600,000 thousand rubles – within nonrevolving credit line accommodation agreement with repayment term JSC Unified Energy Supply Company 78,874 6,980 - 2013–2014 at 8.45 % per annum, for investment activity funding. LLC Noyabrsk combined-cycle electric Credit lines opened by Company but not used as of the year end under contracts with JSC Sberbank of Russia is 4 bln 62,324 62,324 62,324 generating plant rubles including: – nonrevolving credit line opened in December 2012 with the limit of 2 bln rubles, valid for 60 months, at the LLC LUKOIL-ENERGOSETI 13,355 - 731,448 interest rate 10.79 % per annum, drawing period 24 months, to be repaid in equal installments for 36 months LLC MEN 730 5,340 143,565 from the end of drawing up period. – nonrevolving credit line opened in December 2012 with the limit of 2 bln rubles, valid for 60 months, at the LLC RN-Energo 29,039 120,450 120,239 interest rate 10.68 % per annum, drawing period 12 months, to be repaid in equal installments for 33 months LLC Nizhnevartovsk Power Sales from the end of drawing up period. - - 69,451 Company

192 193 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

3.9. Accounts payable (Balance Sheet line 1450 and Balance Sheet line 1520) Liabilities under the credit lines are recorded in the amount of funds received. Short-term accounts payable include liabilities to suppliers and contractors, advance received from buyers and Interest on credits received are entered in accounting records uniformly (on monthly basis) as of reporting month end, customers, liabilities to budget and extra budget funds, payroll liabilities and other liabilities. Structure and movements regardless of whether payment was made. of accounts payable are given in Tables 20 and 21 of the Explanatory Notes to Balance Sheet and Profit and Loss Report. The asset value includes interest on credits and loans received for investment purposes within the period of item construction / extension. Inclusion of interest on loans and credits received into investment asset initial value terminates from the first day of the month subsequent to the month when such asset is entered in accounting records as a fixed asset item. Interpretation of accounts payable by counterpart: (thousand rubles) Interest of credits payable as of 31.12.2012 in the amount of 7,326 thousand rubles is recorded in the Balance Sheet Name As of 31.12.2012 As of 31.12.2011 As of 31.12.2010 as part of indebtedness on short-term credits including 2,326 thousand rubles of interest on short-term credits, and 5,000 thousand rubles of interest on long-term credits. Suppliers and contractors, 1,953,571 2,140,185 2,341,135 Company has no outstanding debts on credits and loans. including:

JSC FGC of UES 714,362 995,316 870,405 3.8. Deferred tax assets and liabilities (Balance Sheet lines 1180 and 1420) JSC UTEK-Regional Grids 151,849 226,415 223,143

Information on deferred taxes is given in Table 25 of the Explanatory notes to Balance Sheet and Profit and Loss Report. SC Yugorsk District Grid Company 119,087 - - Deferred tax liabilities occur as result of difference between cost estimates and useful lives of fixed asset items in accounting and tax accounting. Deferred tax liabilities on fixed assets are determined by balance method. JSC SUENKO 77,073 62,524 45,924

JSC Tyumen Power Sales Company 64,634 264,575 367,943 Deferred tax assets and liabilities are detailed in the accounting statements (thousand rubles) ENERGOAUDITCONTROL 49,683 45,764 - As of 31.12.2012 As of 31.12.2011 As of 31.12.2010 LLC RN-Yuganskneftegaz 31,135 28,750 19,668 Deferred tax assets 800,273 142,141 134,989 LLC Tyumen ATP 22,316 23,777 25,212 – for losses from fixed asset sale 3,202 3,013 3,217 LLC Energostroyremont - - 282,600

– for estimate reserves 788,387 139,128 126,697 JSC Engineering Center of UES - - 120,579

– for losses from securities sale 6,429 - - JSC TESS 24,786 5,388 104,161

– other 2,255 - 5,075 LLC SibSpetsStroy 57,395 44,039 -

Deferred tax liabilities 2,654,572 2,242,921 2,068,516 Advance received, 3,398,451 4,099,694 3,618,365

including: – for depreciated property 2,583,911 2,211,636 2,035,821 JSC Fortum 1,073,286 1,073,286 706,319 – for credit interest capitalization 70,661 31,285 32,695 LLC RN-Energo 514,263 - - In the reporting period upwards adjustment of deferred tax asset was made to the amount of 134,921 thousand rubles in respect of the assessed allowance for 2011 accrued under legal claim by LLC Rusenergoresurs. LLC RN-Purneftegaz 420,221 632,427 632,500

JSC Gazpromneft-Noyabrskneftegaz 281,506 281,506 282,170

194 195 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table employee as a product of the number of carry-over vacation days at month end and average wages of the employee LLC Lukoil – West Siberia 218,917 260,069 117,185 determined in accordance with the procedure applied for vacation allowance and insurance premium amounts.

JSC Slavneft-Megionneftegaz 208,111 205,430 205,430 Estimated liability in respect of payment of annual fee is formed by reference to expected fee amount payable to employees in March 2013. The provisions amount include insurance premiums payable to extra budget funds. LLC Torgplaza-Surgut 201,719 201,719 201,719 Estimated liability related to court proceedings under claim of LLC Rusenergoresurs for recovery of unjustifiable enrichment from JSC Tyumenenergo as a result of power transmission service payment at last mile supply points JSC SUENKO 150,808 158,007 158,365 (1,004,570 thousand rubles as of 31.12.2011) was increased in the reporting period by 195,494 thousand rubles under legal claims for 2009, formed to the total claim value of 1,367,033 thousand rubles under legal claims for 2010, and as JSC Nizhnevartovsk Oil and Gas Production 20 543,928 543,928 of the year end amounts 2,567,096 thousand rubles. Expected execution date is the third quarter 2013. Company Judgment made by the court in favor of LLC Rusenergoresurs will enable JSC Tyumenenergo to file claims against JSC JSC Chernogorenergo 12,056 209,514 197,925 FGC of UES for recalculation of the cost of power transmission service in respect of the Unified National Power Grid to reduce cost of service for the “last mile” facilities to the amount of 523,770 thousand rubles, including 234,762 thousand LLC RN-Yuganskneftegaz 2,674 134,250 96,040 rubles for 2009 and 289,008 thousand rubles for 2010.

Other creditors (net of tax indebtedness included Following the results of field tax inspection for 2009–2010 resolution was passed No. 03-1-31/9 dated February 26, 2013 966,606 1,540,927 1,327,808 into line 1523) where the tax authority states outstanding tax revealed in the amount of 514,674 thousand rubles, fine accrued in the amount of 12,924 thousand rubles and penalty in the amount of 51,460 thousand rubles. As of 31.12.2012, Company including: accrued estimated liability upon the field tax inspection in the amount of 564,908 thousand rubles.

LLC SibSpetsStroy 74,714 109,888 - Expected discharge period is the second quarter 2013.

Other contingent liabilities JSC TESS 46,918 55,893 106,841 Company management believes that the practice of the Company to implement its services as a whole meets the LLC Meridian 39,000 - - requirements of the Russian legislation regulating the transmission of electricity. However, based on the uncertainty of legislation in respect of Federal Grid Company property rented by the Company (the "last mile") there is a risk LLC Remikon 28,194 25,206 8,464 that consumers of the Company appeal against the legal basis of being charged and revenue recognition for power transmission over leased “last mile” networks, and the courts will agree with the position of consumers. The potential amount of claims can be significant, but cannot be measured reliably due to the fact that each individual claim has LLC TechnoEff 25,459 - - individual legal circumstances and the appropriate assessment will require various estimates and assumptions that make it impracticable. LLC M-Setstroy 22,243 20,134 18,899 Company has not recognized reserves as of the reporting date in respect of these potential claims, as it believes that the probability of the outflow of resources or decrease of the inflow of economic benefits is not high. Company believes JSC Engineering Center of UES 20,210 20,210 43,000 that the expected changes in legislation will reduce the risk further.

Target financing of Khanty-Mansijsk Autonomous Taxation - 469,983 472,530 District Russian tax and currency legislation is subject to frequent changes. Company management does not exclude the fact Advance received (line 1522) and other long-term liabilities (line 1450) are mostly represented by advance received that concerning the public or business transactions made in the current and prior periods, there can be future disputes from counterparts under contracts for technological connection of consumer’s power receiving devices to power grids. with regulatory authorities, which can lead to changes in the economic performance. It is possible that transactions Maximum term for technological connection performance in accordance with RF Government Ordinance No. 861 dated and activities, that have not been challenged before, will be disputed. As a consequence, additional taxes, penalties 27.12.2004 is four years. and interest may be assessed. Tax audits can cover three calendar years preceding the year of review. The Company management believes that as of 31.12.2012 the relevant legislation is interpreted correctly and the Company tax and Other accounts payable are mostly formed by deposits received from counterparts under tenders and as a security in currency policy will be sustainable. respect of obligations under contracts made. Company management believes that as of 31.12.2012 respective provisions of the legislation have been interpreted correctly, and Company’s position will be stable in terms of tax and currency laws. 3.10. Estimated liabilities (Balance Sheet line 1540)

Information on estimated liabilities is given in Table 24 of the Explanatory notes to Balance Sheet and Profit and Loss Report.

Provisions for payment of vacation allowances consist of principle provisions amount and insurance premiums payable to extra budget funds in accordance with deduction norms set by legislation. The provisions are calculated for each

196 197 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

3.11. Other short-term liabilities (Balance Sheet line 1550) 4.4. Taking into account profit tax calculation

Other short-term liabilities include amount of value added tax submitted for deduction from the budget in the period of Undistributed profit of the year is calculated with regard to the rules determined by PBU 18/02 “Taking into account advance remittance to suppliers and contractors as contemplated by contracts, which is subject to restoration in the profit tax calculation”. period of receipt of shipment invoices for service rendered and work performed, in compliance with the requirements of Clause 21 of the RF Tax Code. Current profit tax is determined by adjustment of contingent expenditure on profit tax with the amount of permanent tax assets and permanent tax liabilities as well as with the amount of difference between deferred tax assets and deferred tax liabilities recognized and those paid in the reporting period. 3.12. Securities Information on changes in deferred tax assets and deferred tax liabilities, permanent tax liabilities and current profit tax Information on securities issued and received is given in Table 26 of the Explanatory notes to Balance Sheet and Profit is given in Table 3 of the Explanatory notes to Balance Sheet and Profit and Loss Report. and Loss Report.

Turnover for 2012 Turnover for 2011 3.13. Information on off-balance accounts occurred paid occurred paid Information on property posted to off-balance accounts is given in Table 28 of the Explanatory notes to Balance Sheet and Profit and Loss Report. Deferred tax assets 731,146 207,935 29,134 21,982

– for losses from fixed asset 851 661 315 520 sale 4. Disclosure related to Profit and Loss Report – for estimate reserves 721,613 207,274 28,819 16,387 4.1. Recognition of revenues and expenses. – for losses from securities 6,429 - - - Proceeds from product sales, service rendering and work performance on ordinary types of activity and revenues from sale fixed assets and other property sale are recognized by accrual method of accounting. – other 2,253 - - 5,075 Proceeds under contracts with a long cycle of service rendering / work performance are recognized as the service is rendered / work performed. Contracts with a long cycle of service rendering / work performance are contracts for Deferred tax liabilities 454,250 42,599 7,433 170,364 technological connection valid for more than a year.

Business expenses are recorded as part of due to their inessentiality. – for depreciated property 372,275 163,566

Administration expenses are distributed on monthly bases and taken to the prime cost of service in main and other – for credit interest types of activity to form total prime cost for each type of activity 81,975 42,599 7,433 6,798 capitalization

4.2. Revenues and expenses from ordinary types off activities Formation of deferred tax asset in the reporting period is related to accrual of provision for doubtful debts and estimated liability (under legal claims) in book records, related to power transmission to the extent of the “last mile” Revenues and expenses for the reporting year are represented in Profit and Loss Report separately for ordinary types of supply points. On the above basis, deferred tax assets amount was 721,613 thousand rubles in the reporting period. activity and other revenues and expenses. Deferred tax liability is connected with different useful lives in bookkeeping and tax accounting, where interest on Main activities cover power transmission and technological connection. Proceeds from power transmission makes 96 % credit is included in book records into initial cost of investment assets, and with execution of Company’s right to bonus of the total proceeds. depreciation.

Prime cost structure by expense element is given in Table 1 of the Explanatory notes to Balance Sheet and Profit and Permanent tax liability is mostly formed by depreciation of the fixed assets revaluation amount, to the extent of final Loss Report. appraisal carried out by Company on annual basis. On the above basis, permanent tax liability amounted to 733,973 thousand rubles. Apart from that, permanent tax liability for estimated provision was accrued in the current period upon field tax inspection in the amount of 112,981 thousand rubles. 4.3. Other revenues and expenses

Interpretation of other revenues and expenses as compared with 2011 is given in Table 27 of the Explanatory notes to Balance Sheet and Profit and Loss Report. 4.5. Profit per share

Base profit per share represents the part of profit of the reporting period that can be potentially distributed among shareholders of ordinary shares. The profit was calculated as the ration of base profit for the reporting period to

198 199 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

average weighted number of ordinary shares circulated throughout the reporting year. Base profit is equal to net profit – Taxes paid to budget – 374,297 thousand rubles. of the reporting year. – Contributions paid to non-governmental pension fund – 422,046 thousand rubles. Information on profit per share as compared with 2011 is given in Table 2 of the Explanatory notes to Balance Sheet and – Other payments – 772,956 thousand rubles. Profit and Loss Report. No goods, work and service were sold under non-monetary payment terms. 5. Other disclosure related to the accounting statements 5.4. Information on related parties 5.1. Taking inventory of property and liabilities Operation with Company’s related parties For the purpose of obtaining reliable data for annual accounting statements, inventory of incomplete construction, financial investments, R&D, funds on accounts in credit institutions and in Company cash office, accounts receivable Indexes for 2011 and payable is taken as of reporting year end. Fixed assets inventory is taken once in three years as of October 31. (thousand rubles) Stocks inventory is taken annually, as of October 31. Results of annual property and liabilities inventory control are Operation Settlement Settlement completion subject to approval by Director General. Related party Type of operation amount (VAT balance terms and conditions included)

Proceeds and other revenues 5.2. Events after the reporting date JSC ESC Tyumenenergo Rent, others 1,259 - Essential events after the reporting date are as follows: – On January 10, 2013 JSC Tyumenenergo received a legal claim from LLC Rusenergoresurs for recovery of unjustifiable enrichment and interest for others’ funds use in the amount of 1,367,033 thousand rubles, including JSC Payment in cash, in Q1 Property lease 1,435 353 1,142,684 thousand rubles of unjustifiable enrichment from power transmission service at “last mile” supply Tyumenenergoavtotrans 2012 points under contract for power transmission No. 014 dated 26.11.2007 for 2010 and 224,349 thousand rubles of interest for others’ funds use. Procurement and other expenses – On March 5, 2013 resolution of interdistrict inspectorate No. 4 for larger taxpayers was received, No.03-1-31/9 dated February 26, 2013 following results of field tax inspection for 2009–2010, where under the tax authority Services on arrangement Payment in cash, in charged additional taxes in the amount of 514,674 thousand rubles, fines in the amount of 12,924 thousand JSC IDGC Holding of the Unified Energy 331,886 (16,594) January 2012 rubles and penalty in the amount of 51,460 thousand rubles. System functioning – In the period from January to March 6, 2013, within the frame of mandatory offer dated 07.12.2012 for redemption of ordinary shares of JSC Kubanenergo and JSC Tomsk Distribution Company, JSC Tyumenenergo purchased 3,666,761 shares of JSC Kubanenergo to the amount of 578,622 thousand rubles and 346,157,200 JSC IDGC Holding Dividends paid 441,830 - shares of JSC Tomsk Distribution Company to the amount of 185,725 thousand rubles. Transport services, There are no other essential events after the reporting date which can influence Company financial situation, cash flow JSC Tyumenenergo- transport maintenance Payment in cash, in Q1 107,841 (10,027) and performance as of the accounting statements signing date. Avtotrans and current repairs, 2012 others

(advances) Acceptance of work 5.3. Cash Flow Statement 113,335 11,172 performed is expected in 2012. Money equivalents are understood as bank papers, where purchase conditions for such bank papers allow for their JSC ESC Tyumenenergo Energy audit services presentation for repayment before 90 days from the bank paper issue date. (19,813) Accounts payable settled Cash flow in foreign currency is recalculated in rubles at the RF Central Bank exchange rate. There were no receipts in in cash in 2012 foreign currency in the reporting period. Payments in foreign currency were single and in minor amounts. Management fees Other receipts are mostly represented by deposits received from counterparts under tenders and as a security in respect of obligations under contracts made, to the amount of 1,717,783 thousand rubles, and folded VAT cash flow in the amount of 866,700 thousand rubles, calculate as difference between VAT amounts received from buyers and Board of Directors Fee payment 16,099 - customers and those remitted to suppliers and contractors, and payments to RF budget and others in the amount of 752,640 thousand rubles. There were no other folded cash flow in the reporting period. Other payments are represented by: – deposit returns under tenders and security returns under contracts made – 1,770,247 thousand rubles. – Personal income tax paid to budget – 790,481 thousand rubles. – Insurance premiums paid to extra budget funds – 1,127,744 thousand rubles.

200 201 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

Indexes for 2012 Operations with related parties were settled in cash. Reserves for doubtful debts were not formed in respect of related (thousand rubles) parties. Operation Settlement Settlement completion Related party Type of operation amount (VAT JSC IDGC Holding provide Company with a loan for funding Company’s current activity in the amount of 2,300,000 balance terms and conditions included) thousand rubles with repayment period till 10.04.2014, at 9 % per annum. Interest is paid on quarterly basis. Interest accrued and paid in the reporting period amounted to 150,288 thousand rubles. Proceeds and other revenuesы Fees to Company top managers paid in 2012 amounted to 144,425 thousand rubles. Fees payable in 2013 following Rent, communication 2012 results is planned in the amount of 50,389 thousand rubles. Contributions under contracts for non-governmental JSC ESC Tyumenenergo 611 - - services pension coverage made in favor of top managers upon their employment expiration amount to 159,932 thousand rubles.

Fee to Director General is paid under employment agreement. JSC ESC Tyumenenergo Dividends received 2,550 - -

JSC Tyumenenergo- Rent, communication Operations with corporate persons regulated by government, which are Company related Avtotrans (related party 143 - - services parties, through Company sole shareholder JSC IDGC Holding before 30.08.2012) Company proceeds from corporate persons regulated by government amounted to 59 % of the Company total proceeds Power receipt and no operations for 2012 (against 64 % in 2011). JSC Kubanenergo - - transmission carried out Services rendered to Company by made up 50 % of the Company prime cost for 2012 (against 51 % in 2011).

JSC Tomsk Distribution Power receipt and no operations Company accounts receivable from corporate persons regulated by government made up 63 % of the Company total - - Company transmission carried out receivables and advance made for capital construction and fixed assets acquirement as of 31.12.2012 (37 % as of 31.12.2011, 44 % as of 31.12.2010). Procurement and other expenses Company accounts payable to corporate persons regulated by government made up 56 % of the Company total payables Services on arrangement as of 31.12.2012 (50 % as of 31.12.2011, 43 % as of 31.12.2010). Payment in cash, January JSC IDGC Holding of the Unified Energy 331,886 (16,594) 2013 System functioning Company indebtedness under credits as of 31.12.2012, 31.12.2011 and 31.12.2010 is totally represented by indebtedness to banks regulated by government. JSC IDGC Holding Dividends paid 369,548 - - Funds placed on accounts n banks regulated by government, and money equivalents represented by papers of banks regulated by government, made up 86 % of the total amount of monetary assets and money equivalents as of 31.12.2012 Payment in cash, January JSC ESC Tyumenenergo Energy audit services 87,221 (1,510) (99.9 % as of 31.12.2011 and 31.12.2010). 2013

JSC Tyumenenergo- Avtotrans (related party Other services 40,702 - - 5.5. Data comparability before 30.08.2012)

Loans Due to changes in structure of the balance sheet line “Fixed assets” in the reporting period, in particular, inclusion of Payment in cash, January information on stocks intended for construction in the line, reclassification of advance made for capital construction and JSC IDGC Holding Loan receipt 2,300,000 (2,300,000) 2013 fixed assets acquirement, and also due to errors revealed in the method of fixed assets depreciated value calculation in previous periods and related review of the results of previous made estimates, changes were made to balances as of 31.12.2010 and 31.12.2011 in the accounting statements. JSC IDGC Holding Interest on loan 150,288 - -

Management fee

Board of Directors Fee accrued 19,221 - -

202 203 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

(thousand rubles) Data in Profit and Loss Report for the previous year were adjusted with revealed mistakes of previous periods:

As of 31.12.2010 As of 31.12.2011 (thousand rubles) Index name Line In accounting Adjusted In accounting In accounting Adjusted In accounting Line As per report As per report 2012, Code statements statements statements statements Index name Adjusted 2011 2012 2011 2012 Code 2011 “previous period” column

Fixed assets 1150 94,756,666 9,172,197 103,928,863 113,315,075 1,747,733 115,062,808 Prime cost 2120 39,161,545 429,859 39,591,404

Buildings, machinery and 1152 87,327,458 8,283,771 95,611,229 100,560,934 (1,512,157) 99,048,777 equipment, constructions Including depreciation 5,394,949 429,859 5,824,808

Other revenues 2340 4,898,393 (883,971) 4,014,422 Advance made for capital 1155 1,830,316 888,426 2,718,742 1,868,798 2,344,848 4,213,646 construction Including final appraisal of fixed assets 233,205 (233,205) -

- amount of depreciated reserves on Raw stuff and material to 650,766 (650,766) - be used for fixed assets 1156 - - - - 915,042 915,042 doubtful debts build up Other expenses 2350 6,848,205 (700,919) 6,147,286 Total for section I 1100 95,765,533 9,172,197 104,937,730 114,239,791 1,747,733 115,987,524 Including reduced assessment of fixed 50,153 (50,153) - assets Stocks 1210 1,054,502 - 1,054,502 2,143,682 (915,042) 1,228,641 - amount of accrued reserves on 650,766 (650,766) - Accounts receivable 1230 4,354,237 (1,048,343) 3,305,894 6,085,085 (2,766,921) 3,318,164 doubtful debts

Profit before tax 2300 6,046,205 (612,911) 5,433,294 Advance made 123202 1,708,663 (1,048,343) 660,320 3,238,083 (2,766,921) 471,162

Other current assets 1260 882,134 159,917 1,042,051 962,197 422,073 1,384,269 Contingent expenditure 1,209,241 (122,582) 1,086,659

Total for section II 1200 9,733,220 (888,426) 8,844,794 13,161,944 (3,259,890) 9,902,054 Permanent tax liability 2421 700,556 122,582 823,138

Balance 1600 105,498,753 8,283,771 113,782,524 127,401,735 (1,512,157) 125,889,578 Net profit 2400 4,177,919 (612,911) 3,565,008

Non-current assets 1340 73,686,306 10,029,040 83,715,346 61,000,018 846,023 61,846,041 revaluation 5.6. Financial situation Undistributed profit of 1371 11,757,595 (1,745,269) 10,012,326 11,344,498 (1,745,269) previous years Coefficients were calculated for the purpose of financial situation analysis in accordance with Federal Financial Markets Service guidance adopted by decree No. 11-46/pz-n dated 04.10.2011 and presented in the Table below: Undistributed profit of 1372 - - - 4,177,919 (612,911) 13,164,237 reporting year Indexes 2010 2011 2012

Return on equity (ROE), % 5.69 3.47 0.11 Total for section III 1300 88,581,665 8,283,771 96,865,436 104,296,705 (1,512,157) 102,784,548

Borrowed funds 1510 - 60,303 60,303 2,700,000 63,345 2,763,345 Current liquidity 1.04 0.74 0.58

Accounts payable 1520 7,399,885 (60,303) 7,339,582 8,173,285 (63,345) 8,109,940 Term liquidity 0.91 0.64 0.51

Debt-to-equity ratio 0.17 0.22 0.24 Other account payable 1523 2,358,495 (60,303) 2,298,192 2,141,837 (63,345) 2,078,492 Leverage ratio 0.85 0.82 0.80 Total for section V 1500 8,408,046 - 8,408,046 12,846,334 - 12,846,334

Balance 1700 105,498,753 8,283,771 113,782,524 127,401,735 (1,512,157) 125,889,578

204 205 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

COMPANY FINANCIAL SITUATION COMPANY FINANCIAL SITUATION AND PERFORMANCE ANALYSIS AND PERFORMANCE ANALYSIS

End of table Auditor’s Opinion

Accounts receivable as of period end (thousand rub.) 3,305,894 3,318,164 3,084,099 To shareholder Open Joint Stock Company of Energy and Electrification "Tyumenenergo" Accounts payable as of period end (thousand rub.) 7,339,582 8,109,940 5,746,640 Auditor’s Opinion – Cash Flow Statement for 2012; on the accounting statements of Open Joint Stock Company of Energy and – Explanatory Note to Balance Sheet and Loss and Profit Report. Electrification "Tyumenenergo" for the year 2012. In the subject period profitability of Company financial and economic activities decreased. Company is performing its Company’s responsibility for accounting statements current obligations, however increase in estimated liabilities under “last mile’ related claims resulted in lower liquidity Information on the Auditor Company management is responsible for preparation and validity of the accounting values. The debt-to-equity ratio demonstrates Company low dependence on borrowed funds and varies within the Name: statements and their compliance with the regulations on drawing up accounting Closed Joint Stock Company KPMG. statements in the Russian Federation, and for the internal control system as recommended range (<0.7). Leverage ratio is also at rather high level (higher than recommended 0.5–0.6). necessary for preparation of accounting statements free from any material misrepresentations due to fraudulent actions or errors. Location (legal address) Room 3035, bld. 18/1, Olimpiyskiy Prospekt, Moscow 129110. Auditor’s responsibility

Correspondence address We are responsible for expressing our opinion on the validity of the accounting 5.7. Extraordinary economic events and consequences thereof Floor 31, Block C, bld. 10, Presnenskaya Naberezhnaya, Moscow 123317. statements in all material aspects on the basis of the audit performed. We carried out the audit in compliance with federal audit standards. The standards require State registration compliance with the applicable principles of professional ethics, and audit planning There were extraordinary economic events in the reporting period with consequences that had no sufficient influence Registered by Moscow Registration Chamber. Certificate dated May 25, 1992 and performing in such a way as to obtain reasonable assurance in the fact that the on Company’s financial situation. No. 011.585. accounting statements are free from any material misrepresentations. Record made to the Unified State Register of Legal Entities by Interdistrict The audit included audit procedures aimed at obtaining audit evidences verifying Inspection with the Russian Federation Ministry for Taxes and Levies No. 39 in index numbers displayed in the accounting statements and information disclosed Primary activity on power transmission is connected with operation of hazardous production facilities in aggressive Moscow City, No. 1027700125628 dated August 13, 2002. Certificate series 77 therein. The audit procedures were selected upon our own judgment based on medium. No. 005721432. the evaluation of exposure to material misrepresentations due to fraudulent actions or errors. In the course of evaluation of the said exposure we examined the internal control system that provides for preparation and validity of the accounting Company has concluded a voluntary insurance agreement in case of occurrence of any extraordinary events. Under Membership in auditor self-regulating organization Member of non-commercial partnership Auditor Chamber of Russia. statements, in order to select appropriate audit procedures and with no purpose to the agreement insurance premiums are paid, and in case of extraordinary event Company will receive reimbursement Primary registration number of record in State Register of Auditors and Auditor express opinion on efficiency of the internal control system. against losses incurred. In 2012 reimbursement amounted to 32,759 thousand rubles. Organizations 10301000804. Apart from the above, the audit covered evaluation of the appropriateness of the accounting policy applied and soundness of the estimated figures obtained by Information on the Auditee Company management, as well as assessment of the accounting statements Name: presentation on the whole. Open Joint Stock Company of Energy and Electrification "Tyumenenergo". We believe the audit evidences obtained in the course of the audit provide sufficient grounds to express our opinion on the validity of the accounting statements. 5.8. Expenditures of power resources Location (legal address) (thousand rubles) Opinion bld. 4, Universitetskaya Street, Surgut, Khanty-Mansijsk Autonomous District – Index name 2010 2011 2012 Yugra, Tyumen Region 628406. reliably in all material aspects its financial position as of December 31, 2012, its performance and cash flow for 2012, in compliance with the regulations on drawing Correspondence address up accounting statements in the Russian Federation. Power for business needs 233,644 241,848 241,196 bld. 4, Universitetskaya Street, Surgut, Khanty-Mansijsk Autonomous District – Related information Yugra, Tyumen Region 628406. The audit of the accounting statements for the year 2011 was performed by another Electric energy 193,733 204,480 202,771 State registration: auditor who expressed his unmodified opinion in Audit Report dated February 28, Registered by Administration of Surgut City, Khanty-Mansijsk Autonomous District. 2012. Certificate dated December 26, 1996 No. 07-4784. Heat energy 39,871 37,368 38,425 Record made to the Unified State Register of Legal Entities by Inspection with the Important circumstances Russian Federation Ministry for Taxes and Levies in Surgut City of Khanty-Mansijsk Without changing our opinion on validity of the accounting statements we point Autonomous District, No. 1028600587399 dated October 14, 2002. Certificate attention to the information on corrections made by Company to the accounting series 86 No. 000503856. statement as of December 31, 2010 and for the period ended on December 31, 2011, as per items 3.1 and 5.5 of the Explanatory Note to Accounting Balance Sheet and Director General P. A. Mikheev Auditor’s Opinion Loss and Profit Report, for the purpose of eliminating the errors revealed in 2012 Chief Accountant T. I. Salo Open Joint Stock Company of Energy and Electrification "Tyumenenergo" and related to previous periods. In the course of audit we performed respective We have perform audit of the herein enclosed accounting statements of Open audit procedures in respect of the said corrections. March 14, 2013 Joint Stock Company of Energy and Electrification "Tyumenenergo" (hereinafter Company) for the year 2012. The accounting statements on 72 pages contain: – Accounting Balance Sheet as of December 31, 2012; – Loss and Profit Report for 2012; – Appendixes to Balance Sheet and Loss and Profit Report including: – Statement of Changes in Equity for 2012;

Deputy Director K. V. Koryakina CJSC KPMG Yekaterinburg Branch Ural Regional Center (Power of Attorney dated October 12, 2012 No. 41/12)

March 22, 2013

206 207 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

№ 08 HELPFUL INFORMATION FOR SHAREHOLDERS

IN AN ORDERLY MANNER ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Helpful information for shareholders Helpful information for shareholders

JSC Tyumenenergo location JSC Tyumenenergo Registrar and postal address Register of the issuer’s registered shareholders is kept by the registrar. 4 Universitetskaya Str., Surgut, Khanty-Mansijsk Autonomous District (Yugra), Full name of Registrar Reestr-RN Limited Liability Company Tyumen Region 628406, Russia. Short bane of Registrar Reestr-RN LLC Information about state registration Location of Registrar Bld. 3-4, 2/6 Podkopaevskiy pereulok, Moscow 109028 In accordance with data given in the Certificate of State Registration of legal entity registered before July 1, 2002: Postal address PO Box 4, Moscow 115172 Phone / Fax (495) 411-79-11 / (495) 411-83-12

State registration number of legal entity: 07-4784 E-mail [email protected]

Date of registration: March 12, 1993 Web address http://www.reestrrn.ru/

Name of state registration authority: Surgut Administration Number of Registrar’s license for keeping security 10-000-1-00330 holder registers

In accordance with data given in Certificate of Record in the Unified State Register of Legal Entities about legal Issue date 16.12.2004 entity registered before July 1, 2002: Valid till unlimited

Issuing authority Federal Service for Financial Markets Primary state registration number of legal entity: 1028600587399 Register of the issuer’s registered share holders is 16.12.2010 kept by the Registrar from Date of registration: October 14, 2002

Name of state registration authority: Russian Ministry of Taxes and Levies Inspection in Surgut city of the Khanty-Mansijsk Autonomous District JSC Tyumenenergo Auditor On June 30, 2012, JSC Tyumenenergo General Meeting Registration of Auditors and Auditor Organizations Bank details of Shareholders approved ZAO KPMG, Moscow, as an of the self-regulated auditor organization Non-Com- Auditor. mercial Partnership Russian Auditor Board (GRRN: A/с 40702810267170101719 Certificate No. 255 of December 28, 2009, on 103011000804). West Siberian Bank of the Russian Federation Savings Bank, Tyumen Corresponding account 30101810800000000651 Full name of Auditor Closed Joint-Stock Company KPMG TIN/CRR 8602060185 / 997450001 BIC 047102651 Short name of Auditor ZAO KPMG Contacts Location Office 3035, bld. 18/1, Olimpiiskii prospect, Moscow 129110. Phone: +7 (3462) 77-63-59, 77-63-10. Postal address: Floor 31, block C, Presnenskaya nab., bld.10, Fax: +7 (3462) 77-66-77 Moscow, Russia 123317 Ask question: http://www.te.ru/asc_question/ e-mail: [email protected] Phone +7 495 937 4477 www.te.ru Fax +7 495 937 4499

E-mail [email protected]

Financial year (years) of issuer’s financial Audit of Annual Report under Russian (accounting) statements and bookkeeping subject to Accounting Standards for 2012 and International independent inspection by Auditor Accounting Standards for 2012

210 211 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Helpful information for shareholders Helpful information for shareholders

GLOSSARY

Federal State Educational Institution for Further Vocational Education Saint Peters- ABBREVIATIONS FSEI FVE SPb EIFE burg Energetic Institute for Further Education ABACS Automated business activity control system FSFM of Russia Federal Service for Financial Markets of Russia ABMS Automated budget management system State Academy for Occupational Retraining and Professional Development of Executive AC Authorized capital GASIS Employees and Investment Specialists ACC Area control centre GMC Grid monitoring centre ACPP Annual complex purchasing program HFC High-frequency communication ADC Associated dependent company HMAD-Yugra Khanty-Mansijsk Autonomous District-Yugra ADCS Automated dispatcher control system HPP Heat and power plant ADMS CAER Automated data measurement system for control and accounting of energy resources HV High voltage AEPCS Automated engineering process control system ICN Integrated communication network ANPO PTC Autonomous Non-Profit Organization Professional Training Centre ID Executive direction of JSC Tyumenenergo APMS Automated process management system IDGC Holding, JSC Open Joint-Stock Company International Distribution Grid Companies Holding AR Automatic reclosing IDGC Interregional Distribution Grid Company ASEECA Automated system for electric energy commercial accounting IFE for Public Employees Institute for Further Education of Public Employees ASFEAA Automated system for financial and economic activity accounting IMS Integrated management system ASMDF Automated system for managerial document flow IP Investment program ATCB Automatic transfer circuit-breaker ISO International Standardization Organization ATE Automatic telephone exchange IT Information technologies AV Average voltage ITI Internal technical inspection Information analysis and trade operative system “Market of products, services and B2B JSB Sberbank of Russia Joint-Stock Bank Sberbank of the Russian Federation technologies for power industry” KPI Key performance indicators CA Capital assets LAN Local area network CAGR Compound annual growth rate LLC Limited Liability Company CCP Combined-cycle plant LV Low voltage CF Cash flow M Maintenance CI Capital investments MAE Maximum allowable emission CICS Corporate information control system MD (EGE) Manufacturing department (electric grid enterprise) CJSC Closed Joint-Stock Company MPL Maximum permissible level CPL Cable power lines MR Maintenance and repair CS Closed switchgear NATR Northern areas of Tyumen Region CSR Controlled shunt reactor NC New construction DB Dispatch boards NPG National power grid DE Design estimates OCB Oil circuit breakers DGC Distribution grid company ODS Operative dispatch service DPC Data processing centre OFT Operative field team DZ Distribution zone JSC Open Joint-Stock Company EBITDA Earnings before interest, taxes, depreciation and amortization OPTL Overhead power transmission line EMP Electromagnetic field OS Outdoor switchgear FA Fixed assets PTS Packaged transformer substation FCS of Russia Federal Commission on Securities of Russia RAB Regulatory asset base FEC Fuel-energy complex RAO UES of Russia, JSC Russian Open Joint-Stock Company of Power and Electrification UES of Russia FGC UES, JSC Open Joint-Stock Company Federal Grid Company of Unified Energy System RDA Research and development activity FSE Hygiene and Epidemi- Federal State Enterprise Hygiene and Epidemiology Centre RDC Regional dispatcher control ology Center REC Regional Energy Commission

212 213 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Helpful information for shareholders Helpful information for shareholders

REIC of Ural Regional engineering inspection centres of Ural TS Transformer substation RL Relay line TUC, JSC Open Joint-Stock Company Tyumen Utilities Company ROE Return on equity TUR Technical upgrade and reconstruction RPA Relay protection and automation TZS Elektra Competitive bidding information support system RPA Regional power authority UST Unified social tax S Substation VAT Value-Added Tax S Separators VIPKenergo All-Russia Institute for Further Education SanPiN Sanitary regulations and standards WGC Wholesale generating company SBIC Self-bearing insulated conductors YNAD Yamalo-Nenets Autonomous District SC Short circuiters SCB Static compensator battery MEASUREMENT UNITS SCB Stabilizing condenser battery A/m Amperes per meter. Electromagnetic field electric component measurement unit SDPP State district power plant GW Gigawatt. Transformer capacity measurement unit SE MICE Stock Exchange Moscow Interbank Currency Exchange Gcal Gigacalorie. Thermal energy measurement unit SED Substation electrician on duty Gcal/hour Gigacalorie/hour. Thermal capacity measurement unit SEI HPE Tyumen State State Educational Institution for Higher Professional Education Tyumen State Hz Hertz. Frequency measurement unit University University dB(A) Decibel. Noise measurement unit SEI HPE Yuzhno-Ural State State Educational Institution for Higher Professional Education Yuzhno-Ural State kV Kilovolt. Voltage measurement unit University University kV/m Kilovolts per meter. Electromagnetic field magnetic component measurement unit SF Salary fund kWh Kilowatt-hour. Electric energy measurement unit SLA Service level agreement MW Megawatt. Electric power measurement unit SMMS Stability margin monitoring system MWh Megawatt-hour. Electric energy measurement unit. 1 MWh = 1,000 kWh SN 2.2.4/2.1.562-96 Sanitary standards MVA Megavolt-ampere. Transformer capacity measurement unit SO UES, JSC Open Joint-Stock Company System Operator of Unified Energy System of Russia MVar Megavar. Reactive power measurement unit SRI Supporting rod insulation Mbit/s Megabits per second SS Surge suppressors TWh Terawatt-hour = 1 bln. kWh SS Switching substation TGK Territorial generating company TL Transmission line TNO Territorial network organization TOFTS Tax Office of the Federal Tax Service TRDM Tyumen regional dispatch management

214 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Design and print www.pt78.ru 217 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

APPLICATION № 1 Application № 1

110 kW substation in Punga. New power facilities, put Company. Earlier, within the International Investment THE MAIN EVENTS into operation under the program called Centralized Forum Sochi-2012, Tyumenenergo Company’s annual Power Supply for the Localities of the Khanty-Mansijsk report became the best one in the nomination called Autonomous District and Yugra in 2011–2013 years and Energetics of the Federal Contest of Joint-Stock This year focus: In 2012 one of the most expected power accounting statement, annual company statement till 2015 in long term perspective, will sustainably supply Companies’ Annual Reports, which was held in facilities in the Yamal-Nenets Autonomous District, for 2011 year were fixed and decision about net profit Yugra’s Oktyabrskiy and Berezovskiy districts. cooperation with the Krasnodar Territory’s authorities. which is 359 km long, 220 kW high voltage line Nadim – distribution and divident payout was made. Salekhard passed into the active building phase. Puting OCTOBER this project into operation will give an opportunity In the second All-Russia contest called the Best Russian Tyumenenegro Company was awarded with the winner's to conect the north-west parts of the Yamal-Nenets Power Supply Network Company, the Tyumenenergo On October the 1st in Surgut a round table called certificate of VIII all-Russia contest called The leader of Autonomous District to the main power grid, especially Company was awarded in nominations like Reliable Development of Electrical Power Supply Industry in the Nature Protection Activities in Russia-2012. The award the district’s capital, the Salekhard city, moreover, future Power Supplier, Effective Power Supplier and Innovative Khanty-Mansijsk Autonomous District, Yugra and Effect was presented at Russian Environmentalist Congress. delevoping of gas extracting companies will become Project of the Year. of Power Supply Companies Activities on Environmental more promising. Indeed this year some localities of the Balance. During this round table Tyumenenergo as Tyumenenegro Company’s activity in personnel potential Khanty-Mansijsk Autonomous District, Yugra, which do Tyumenenergo Company is the first company in Russia one of the first large Yugra companies presented its development was noticed by the jury of all-Russia not have centralized power supply, were integrated into to equip its power supply facilities, the Savuyskaya environmental activities. contest called Russian Organization with High Social the unified power grid. Tyumenenergo Company has substation, with 110 kW VRS vacuum circuit breaker of Efficiency in the Khanty-Mansijsk Autonomous District, finished 110 kW power line Sergino – Punga and Punga – serial production. On October 17th Comission of Russian Energy Yugra. Igrim with their electrical sub-station in Punga. They Department presented Tyumenenergo Company with were built under the target district program Centralized JULY certificate of readiness to autumn and winter seasons of DECEMBER Power Supply for the Localities of the Khanty-Mansijsk 2012–2013 year. The equipment condition and company Autonomous District and Yurga in 2011–2013 years and Under Tyumenenegro Compamy’s initiative an employees professional skills were highly appreciated. 25th Anniversary of Tyumenenergo Company’s branch till 2015 in long term perspective. open meeting on the topic of Making Power Supply Getting ready to the next winter, Tyumenenergo company Kogalymskiye Elektricheskiye Seti (Kogalym Infrastacture More Aaffordable was held in Tumen. performed a large repair compaign of more than Electric Grids). EVENTS 2012 Representatives of regional executive power, public 1.8 billion roubles. This money were spent on repairing organization Delovaya Rossia’s regional office (Business more than 1.5 thousand km of 0,4-220 kW overhead Tyumenenergo Company’s energy performance FEBRUARY Russia), house maintatance and utility comnpanies, real- lines, general equipment of fourty nine 35-220 kW certificate was registered at self-regulatory organization estate companies participated in the round table. sub-stations and one hundred twenty 6-10/0,4 kW Union of auditors in energetic and energy service The innovative project called Developement of the transformer sub-stations, clearing of more than companies. Complex Security and Control System for Power AUGUST 5 thousand hectare of line routes. Equipping Works, developed for Tyumenenergo Tyumenenergo Company has finished building of 110 kW Company by Prosoft-Systems Company was awarded in Tyumenenrgo solemnly put into operation a new power Tyumenenergo Company’s branch company sub-station ABZ in Khanti-Mansijsk. Energy object nomination called Security for Russian Distribution Grid object for oil ad gas complex, which is 110 kw switching Nefteyuganskiye Elektricheskiye Seti (Nefteyugansk will sustainably supply building of the district capital’s Complex in the first all-Russia youth contest of scientific station Merkuriy (Mercury). Two 110 kW substations Electric Grids) put into operation 110 kW substation Vostochniy microdistrict. innovative ideas and projects called Energetics of the Kamchinskaya and Parfenovskaya were connected to Siberia (Sibir) (the name in the investment plan is Future. this new switching station. This year oil company is 110 kW switching station Petelenskiy). The sub-station FEBRUARY 2013 planning to consume 18 megawatt. Seven 35/6 kW sub- will come to full capasity step by step within two or three MARCH stations of RN-Uganskneftegaz Company with gross years, while oil compnies will be opening Petelenskiy Tyumenenergo Company was awarded as a winner in installed capacity of more than 100 MVA will be supplied deposit. “This sub-station is designed to be able to nominations like Project of the Year, The best Open Tyumenenergo Company payed off 02 serial bonds (state with power. Up to 2015 year the company in Yugansk cover more capacity. Therefore, new pads are planned Company and The best Corporate Web-site, the first registration number 4-02-00159-F) of 2.7 billion roubles will increase gross installed capacity of sub-stations to be drilled, at the present moment, this is solvation national award in power sector Golden Kilowatt 2012, together with the 10th warrant income payment of 117.1 Kamchinskaya and Parfenovskaya up to 72 megawatt, for us”, the Head of RN-Nefteyugansk Company’s established by Russian Information Agency Energetics million roubles. Total warrant payment amount within that will supply more than 15 sub-stations with gross Energetics Department Andrey Peremitin shares with and House Maintenance (Energetika i ZHKH) and the whole loan period is more than 1 billion roubles. installed capacity of more that 200 MVA. us. After Sibir is put into operation electrical enegry will Energopolis journal with assistance of the Presidential become much cheaper than disel fuel for oil companies, Envoy in the Ural Federal District. MAY SEPTEMBER since that RN-Nefteyugansk Company is determined to have further close coopation with Tyumenenergo’s 24 hour informational line for emergency and schedule Tyumenenergo Company’s team became a winner in Nefteyuganskiye Elektricheskiye Seti. power outage at Tyumenenergo objects got started. All-Russia Contest of Electrical Equipment Isolation and Surge Voltage Protection in Distribution Grid Complex NOVEMBER Tumenenegro Company’s team Transformers 3D held by JSC IDGC Holding and in All-Russia contest became the winner among the teams of Russian called The Best Professional. Tyumen Power Grid was Tyumenenergo Company’s annual report called Distribution Grid Complex in the games of the Club of the presented in All-Russia contest by Nizhnevartovskiye Ingredients for Success: not trifle, but details was Funny and Inventive (KVN). Elektricheskiye Seti (Nizhnevartovsk Electric Grids) awarded as the Best annual report of Ural Federal Branch Company. Alexandr Lymar was awarded as the District’s issuer within the framwork of XV Annual JUNE best electrician. Federal Contest of Annual Reports and Web-sites and became a winner in the nomination called The Best Within General Shareholder Meeting a new director Tyumenenegro Company has finished building of 110 kW Information Disclosure for Customers of Annual Report board and a compay’s auditor were elected, annual power line Sergino – Punga and Punga – Igrim with Contest held by Moksovskya Birzha (Moscow Exchange)

218 219 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 2 Application № 2

Сontinuation of the table

LEGAL REGULATION – organizations holding events in the field of energy saving and increase of power efficiency, financed entirely or partly from federal budget re- The main laws and regulations governing the activity connection of power accepting devices of electric energy sources, budgets of constituent entities of the Russian Federation, local carrying out by JSC Tyumenenergo on rendering consumers, transmission facilities and objects on budgets. services in transfer of electric energy and technological production of electric energy, are: – puts into civil circulation energy service agreement under which performers will increase energy efficiency of use of energy resources by the customer. – introduces planned inspections of observance of energy saving require- Federal Law of 17.08.1995 The law determines legal fundamentals of federal policy in respect of natural ments and increase of power efficiency, they will be carried out 2 times and No 147-FZ "On natural monopo- monopolies in the Russian Federation and is directed on the achievement of more within 3 years. lies" (as amended on 30.12.2012 balance of consumers’ interests and subjects of the natural monopolies, pro- – provides an obligatory transition to a long-term regulation of tariffs in elec- No 291-FZ) viding the availability of goods realized by them for consumers and the effective tric power industry: functioning of subjects of natural monopolies. – for JSC FGC of UES (Federal Grid Company of Unified Energy System) – from January 1, 2010. Federal Law of 26.03.2003 The law establishes legal fundamentals of the economic relations in the field of – for network companies JSC IDGC Holding – within 2010, but not later No 35-FZ "On electric pow- electric power industry, including: than January 1, 2011. er industry" (as amended – powers of public authorities on regulation of these relations; – for other electronetwork companies, as well as in heat supply system – on 30.12.2012 No 291-FZ) – main rights and duties of subjects of electric power industry while carrying from January 1, 2012. out activities in the field of electric power industry and consumers of electric energy; – guarantees of reliable providing consumers with electric energy; Federal law of 26.07.2006 The law defines organizational and legal fundamentals of protection of compe- – responsibility of the network organizations to consumers for reliability and No 135-FZ "On protection of tition, including warnings and suppressions: quality of electric energy; competition" (as amended – monopolistic activity and unfair competition; – responsibility for maintenance and operation of power assets; on 30.12.2012 No 318-FZ) – prevention, restrictions, elimination of the competition by federal executive – coordination of investment programmes of subjects of electric power indus- authorities, public authorities of constituent entities of the Russian Feder- try by the Government of the Russian Federation and executive authorities of ation, local governments, other institutions or organizations carrying out constituent entities of the Russian Federation. functions of the specified bodies, as well as the state non-budgetary funds, the Central bank of the Russian Federation. Federal law of 26.03.2003 The law establishes: No 36-FZ "On features of electric – expiration date of the transition period of reforming (on July 1, 2008); power industry functioning in a – stage-by-stage liberalization of the market till 2011 Federal law of 25.02.1999 The law defines legal and economic fundamentals of the investment activity transition period and on modi- – control by the Russian Federation of activity of the territorial network orga- No 39-FZ "On investment ac- which is carried out in the form of capital investments, in the territory of the fication of some legislative acts nizations being subjects of natural monopolies till 2011; tivity in the Russian Federation Russian Federation, and it also establishes guarantees of equal protection of of the Russian Federation and – ban from April 1, 2006 of combination of activity on transfer of electric carried out in the form of cap- the rights, interests and property of entities involved in the investment activity repeal the annulment of certain energy and supervisory control in electric power industry with activities on ital investments" (as amended that is carried out in the form of capital investments, irrespective of their form legislative acts of the Russian production and purchase and sale of electric energy. on 12.12.2011 No 427-FZ) of ownership. Federation in connection with the adoption of Federal Law "On Elec- tric Power Industry" (as amended Government Decree of the Rus- The decree approved two documents: on 06.12.2011 No 401-FZ) sian Federation of 04.05.2012 – Basic provisions of functioning of electric energy retail markets; No 442 "On functioning of retail – Rules of full and (or) partial restriction of use conditions of electric energy Federal law of 23.11.2009 The law: markets of the electric energy, full No 261-FZ "On energy saving and – regulates the relations on energy saving and increase of energy efficiency; and (or) partial restriction of use Basic provisions of functioning of electric energy retail markets establish: increase of energy efficiency and – determines the minimum requirements to the programmes on energy sav- conditions of electric energy (as – legal fundamentals of functioning of electric energy retail markets; on modification of some legisla- ing and the increase of energy efficiency made by all state companies, the amended on 30.01.2013 No 67) – rules of activity of guaranteeing suppliers; tive acts of the Russian Federa- budgetary institutions regulated by the organizations, as well as regions and – order of award of a guaranteeing supplier status, definitions and (or) chang- tion" (as amended on 25.12.2012 municipalities; es of activity areas of guaranteeing suppliers; No 270-FZ) – determines an obligation on fulfillment of energy inspections for: – features of rendering services in transfer of electric energy and payment of – public authorities, the local governments lodged with powers of legal losses of electric power in retail markets; entities; – basic provisions of the organization of the commercial accounting of electric – rganizations with participation of the state or municipal formation; energy in the retail market. – organizations carrying out regulated business activities; – organizations carrying out production and (or) transportation of water, Rules of full and (or) partial restriction of use conditions of electric energy natural gas, thermal energy, electric energy, extraction of natural gas, establish: oil, coal, production of oil products, processing of natural gas, oil, trans- – fundamentals and order of a full and (or) partial restriction and renewal of portation of oil, oil products; use conditions of electric energy. – organizations that cumulative costs on consumption of natural gas, die- sel and other fuel, fuel oil, thermal energy, coal, electric energy exceed ten million rubles for a calendar year;

220 221 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 2 Application № 2

Сontinuation of the table End of table

Government Decree of the Rus- The decree approved four regulatory enactments, the most essential for Order of Federal Tariff Service Methodical instructions are intended for the use by regulators (federal sian Federation of 27.12.2004 network organizations are the following: of the Russian Federation of executive authority on regulation of natural monopolies and executive No 861 " On adoption of regula- – regulations of a non-discriminatory access to the services in transfer of 06.08.2004 No 20-e/2 "On ap- authorities of constituent entities of the Russian Federation in the field of state tions of a non-discriminatory electric energy and rendering these services; proval of methodical instructions regulation of tariffs), the local governments regulated by the organizations access to the services in transfer – regulations of the technological connection of power receivers of electric concerning calculation of regu- for calculation by a method of economically reasonable expenses of regulated of electric energy and rendering energy (electric power plants) of legal entities and individuals to electric lated tariffs and prices for electric tariffs levels and prices on the retail (consumer) market of electric energy these services, Regulations of networks. (thermal) energy on the retail (power) and thermal energy (power). a non-discriminatory access to Regulations of a non-discriminatory access to the services in transfer of (consumer market)" (as amended services in supervisory control electric energy and rendering these services determine general principles and on 26.12.2011 No 823-e) in electric power industry and the order of a non-discriminatory access to services on transfer of electric rendering these services, Regu- energy as well as rendering these services. Regulations define an order of the Order of Federal Tariff Ser- Methodical instructions determine basic provisions concerning calculation of lations of a non-discriminatory execution and performance of the agreement on rendering services in transfer vice of the Russian Federation charge amount for the technological connection of power receiver of electric access to services of a trad- of electric energy, an order of access to electric networks in the conditions of of 11.09.2012 No 209-e/1 "On energy consumers, power supply network facilities, and other transmission ing system administrator of the their limited capacity. approval of methodical instruc- facilities belonging to the network organizations and other persons, to wholesale market and rendering Regulations of the technological connection of power receivers of electric tions concerning determination transmission facilities of the network organizations, and are intended for the these services and Regulations energy (electric power plants) of legal entities and individuals to electric of charge amount for the tech- use by Federal Tariff Service, executive authorities of constituent entities of of the technological connection networks decide the order of the technological connection of power receivers nological connection to electric the Russian Federation in the field of state regulation of tariffs, the network of consumers’ power receivers of electric energy (electric power plants) of legal entities and individuals, define networks" organizations, as well as persons who have addressed to network organizations of electric energy, and objects the essential terms of the agreement on implementation of the technological with claims for the technological connection. on production of electric energy, connection to electric networks, establish requirements for delivery of as well as power supply network individual specifications for access to electric networks and criteria of facilities belonging to the network existence (lack) of technical capability of technological connection. organizations and other persons, to electric networks" (as amended on 20.12.2012 No 1354)

Government Decree of the Rus- Standards establish structure of information disclosing by entities of wholesale sian Federation of 21.01.2004 and retail markets of electric energy, as well as an order, ways and terms of its No 24 "On approval of standards disclosure. of disclosure of information by entities of wholesale and retail markets of electric energy" (as amended on 04.05.2012 No 442)

Government Decree of the Rus- The decree establishes an order of the approval of investment programmes. sian Federation of 01.12.2009 Depending on certain criteria, investment programmes of entities of electric No 977 "On investment pro- power industry are approved: grammes of electric power – Ministry of Energy of the Russian Federation; industry entities " (together with – regional authorities.. Regulations of the approval of in- The decree also establishes an order of control of investment programmes vestment programmes of electric implementation. power industry entities where the The decree approved two documents: state and network organizations – Basic principles of pricing the field of regulated prices (tariffs) in electric own authorized capitals, Regula- power industry; tions of the control of investment – rules of government regulation (revision, remarks) of prices (tariffs) in programmes implementation by electric power industry. entities of electric power industry) In the first document the basic principles and methods of tariffs (prices) (as amended on 22.03.2012 No regulation in electric power industry are defined, in the second – the 231) fundamentals and an establishment order (revision, remarks) of such tariffs. In pricing basic principles activities on which the organizations carrying out Government Decree of the Rus- regulated types of activity are obliged to keep the separate accounts are listed. sian Federation of 29.12.2011 No 1178 "On pricing in the field of regulated prices (tariffs) in electric power industry" as amended on 30.12.2012 No 1482)

222 223 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 3 Application № 3

Сontinuation of the table INFORMATION ON COMPANY COMPLIANCE WITH 5 Presence in the Charter or internal Partially observed The Charter and internal documents of the documents of the joint company of the Company do not provide this provision. THE RECOMMENDATIONS OF THE CORPORATE CODE requirement of obligatory presence at a General Shareholder Meeting of the OF CONDUCT General Director, members of the board, members of the board of directors, members of the Revision Commission (Prepared according to the Order of the Federal Commission on Securities Market of April 4, 2003, No. 03-849/r “On and joint company auditor. methodological recommendations on the contents and presentation of information on compliance with the Corporate Obligatory presence of candidates when Not observed The Charter and internal documents of the Com- Code of Conduct in annual reports of joint stock companies”) 6 considering at a General Shareholder pany do not provide this provision. Meeting of the issues on the election of members of the board, General Director, № Provision of the Corporate Code of Observed or not Comments members of the board, members of the Conduct observed Revision Commission, and the issue of approval of the Company auditor. General Shareholder Meeting 7 The description of the procedure of regis- Not observed The Charter and internal documents of the Com- 1 Notice to the shareholders of the Gen- Not observed The sole shareholder of JSC Tyumenenergo is tration of participants in internal docu- pany do not provide this provision. eral Shareholder Meeting not later than JSC IDGC Holding. In accordance with sec- ments of the Company. 30 days prior to the date of the meeting tion 11.1 of the Charter of the Company, if all The Board of Directors regardless of the issues on its agenda, the voting shares of the Company belong to one unless the law provides for a longer shareholder, the decisions on the matters within 8 The authority of the Board of Directors to Observed Subparagraph 13 of paragraph 12.1 of Article 12 period. the competence of the General Shareholder annually approve the financial and busi- of the Charter of the Company provides approval Meeting of the Company shall be made by this ness plan of the joint company, provided of the business plan (adjusted business plan) shareholder (the Authorized governing body of for in the Charter of the Company. including the investment program and quarterly the shareholder) in writing and notified to the report on the outcome of their performance. Company. 9 The joint Company risk management Observed The Company Risk Management Policy was ap- procedure approved by the Board of proved by the decision of the Board of Directors 2 The possibility of the shareholders to Not observed .The list of persons entitled to participate Directors. on 7.30.2010. check the list of persons entitled to in the General Shareholder Meeting is not The right of the Board of Directors to Observed According to subparagraph 7 of paragraph 12.1 participate in the General Sharehold- made. 10 decide on suspension of powers of the of Article 12 of the Charter of the Company, er Meeting beginning from the date General Director appointed by the General election of the General Director of the Company of notice of the General Shareholder Shareholder Meeting, provided for in the and early termination of its powers, including the Meeting till the closing of the onsite Charter of the Company. decision on early termination of the employment General Shareholder Meeting, and, agreement with its is within the competence of in the case of the distance General the Board of Directors. Shareholder Meeting, before the clos- ing date for receipt of ballots. 11 The right of the Board of Directors to Partially observed According to paragraph 18.6 Article 18 of the establish requirements for qualifications Charter of the Company, condition of the labor and size of remuneration of the General contract, including in the term of the General 3 The possibility of shareholders to check Observed The Charter and the internal documents of the Director, board members, heads of ma- Director of the Company, shall be determined by information (materials) to be provided Company do not provide this provision. jor structural divisions of the Company the Board of Directors of the Company or a per- while preparing for a General Shareholder The information (materials) to be provided while provided for by the Charter. son authorized by the Board of Directors of the Meeting by electronic means, including preparing for a General Shareholder Meeting is Company to sign the labor contract. the Internet. sent to a shareholder in due course by electronic Also the decision of the Board of Directors means. of the Company of July 7, 2011, approved the Regulation on financial incentives and remuner- 4 The possibility of a shareholder to put Not observed The sole shareholder of JSC Tyumenenergo ation of top executives of the Company, which a question on agenda of the General is JSC IDGC Holding. In accordance with sec- determines the remuneration system of top Shareholder Meeting or to require the tion 11.1 of the Charter of the Company, if all managers of the Company (Deputy Director convening of the General Shareholder the voting shares of the Company belong to General, Chief Accountant, and Directors of the Meeting without providing extracts one shareholder, the decisions on the mat- branches). On December 29, 2012, the Board of from the register of shareholders, of ters within the competence of the General Directors of the Company changed the Regu- his/her rights to shares are accounted Shareholder Meeting of the Company shall lation on financial incentives and remuneration for on the custody account – suffi- be made by this shareholder (the Authorized of top managers of the Company, according to ciency of the extract from the custody governing body of the shareholder) in writing which the Regulation was brought in balance account for implementation of the and notified to the Company. with a new system of KPI approved by the Board above rights. of Directors of the Company on October 10, 2012. The Board is not provided by the Charter.

224 225 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 3 Application № 3

Сontinuation of the table Сontinuation of the table

12 The right of the Board of Directors to Partially observed According to paragraph 18.6 Article 18 of the 19 The duty of members of the Board of Observed Provided for in paragraph 4.1 paragraph 4 of approve terms if agreements with the Charter of the Company, conditions of a labor Directors provided for by the internal the Regulation on Insider Information of the General Director and board members contract, including for the term of employment documents of the Company to notify Company. provided by for the Charter of the of the General Director of the Company, shall in writing the Board of Directors In accordance with subparagraph “c” Company. be determined by the Board of Directors of the of intention to effect transactions of paragraph 2 of Appendix No. 5 to the Company or a person authorized by the Board with securities of the Company, the Regulation on Insider Information of the of Directors to sign the labor contract. The members of which they are, or its Company, insiders of category 1 (the Board is not provided by the Charter. subsidiaries (affiliates), as well as to General Director of the Company or a person disclose information on transactions performing its duties, people that own at 13 The requirement provided for by the Not observed The Charter and internal documents of the with securities already made. least 25 percent of the votes in the supreme Charter or internal documents of Company do not provide this provision. The governing body of the Company, members of the Company that when approving Board is not provided by the Charter. the Board of Directors of the Company) shall conditions of agreements with within 30 days of the end of the reporting the General Director (managing quarter provide written confirmation of the organization, CEO) and members of the number of the insider financial instruments Board, votes of the Board of Directors of the Company belonging to it by the end who are the General Director or Board of the accounting quarter and transactions members are not counted in counting made by it for the quarter (either directly of votes. or through other persons acting on its behalf) with insider financial instruments 14 The presence in the Board of Observed In the Board of Directors at least 3 (three) of the Company to the Department of Risks Directors of the Company of at least independent directors are elected. Management and Organization of Internal 3 independent directors meeting the Control of the Company. requirements of the Corporate Code of Conduct. 20 The requirement to hold meetings of the Not observed Performed in practice. 15 Absence in the Board of Directors of Observed There are no such people in the Board of Board of Directors at least once every According to paragraph 5.1 Article 5 the Company of people who were found Directors. six weeks provided for by the internal of the Regulation on the Procedure for guilty of committing crimes in the field documents of the Company. Convening and Holding Meetings of the of economic activity or crimes against Board of Directors of the Company, the the state government, interests of public meetings of the Board of Directors are held service and service in local government, in accordance with the approved schedule or people to which administrative of the Board of Directors, and in the need penalties for violations in the filed of arises, but at least once a quarter. business or finances, taxes and levies, and security market were imposed. 21 Meeting of the Board of Directors of the Observed In the accounting year of 2012 meetings of Company during the year for which the the Board of Directors of the Company were 16 Absence in the Board of Directors of the Observed The Board of Directors of the Company does annual report of the Company is made, held at least once every six weeks (a total of Company of people who a member, the not include people who are members, General with regularity of at least once every six 16 meetings held). General Director (manager), member Directors (managers), members of the weeks. of the governing body or employee governing bodies or employees of a legal entity of a legal entity competing with the competing with the Company. Company. 22 The procedure of holding meetings of Observed Provided in Articles 6, 7, 8 and 10 of the the Board of Directors provided for by Regulation on the Procedure for Convening the internal documents of the Company. and Holding Meetings of the Board of 17 The requirements for election of the Not observed The Charter of the Company does not provide Directors of the Company. Board if Directors by cumulative voting this provision. provided for by the Charter of the 23 The provision on the necessity for Observed According to subparagraph “a” of Company. approval by the Board of Directors of the subparagraph 37 article 12 of the Charter of Company transactions to a sun of 10 or the Company, the competence of the Board 18 The duty of members of the Board of Observed Provided for in subparagraph 4.1.6 para- more percent of the value of Company of Directors of the Company includes prior Directors provided for by the internal graph 4.1 Article 4 of the Corporate Manage- assets, except for transactions made approval of decisions on transactions the documents of the Company to abstain ment Code of the Company. in the course of ordinary business, subject of which are non-current assets of from actions that will or may poten- provided for by the internal documents the Company in the amount greater than ten tially lead to a conflict between their of the Company. (ten) percent of the carrying value of these interests and interests of the Compa- assets of the Company according to the ny, and in the case of such a conflict, financial statements of the last accounting the duty to disclose information on date. this conflict to the Board of Directors.

226 227 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 3 Application № 3

Сontinuation of the table Сontinuation of the table 24 The right of members of the Board of Partially observed According to paragraph 3.3. Article 3 of the 34 Establishment of the Board Committee Not observed The Company did not establish the Committee Directors provided for by the internal Regulation on the Procedure for Convening and on Corporate Conflicts Regulation or for Corporate Conflict Settlement. documents of the Company to obtain Holding Meetings of the Board of Directors of the assignment of its functions to another information they need to perform their Company, a member of the Board of Directors of Committee (except for the Audit Commit- functions from executive authorities the Company may in writing request documents tee and the Committee on Personnel and and heads of major structural divisions and information necessary to make a decision on Remuneration). of the Company, as well as liability for the competence of the Board of Directors, either failure to provide such information. directly with the General Director of the Compa- 35 The absence of officials of the Company Not observed The Company did not establish the Committee ny (other person performing the functions of the in the Committee on Corporate Conflicts for Corporate Conflict Settlement. sole executive body of the Company), or with the Settlement. Secretary of the Board of Directors. 36 Management of the Committee on Corpo- Not observed The Company did not establish the Committee 25 The presence of the Board Committee Not observed The Company did not establish the Committee rate Conflicts Settlement by independent for Corporate Conflict Settlement. on Strategic Planning and assigning on Strategic Planning. The functions of director. of functions of this Committee to this Committee are not assigned to other 37 The presence of approved by the Board of Observed Decisions of the Board of Directors of the Com- another Committee (except for the committees within the Board of Directors of Directors of the Company internal docu- pany approved the following Regulations: Audit Committee and the Committee for the Company. ments, providing the order of formation – the Regulation on the Reliability Committee Personnel and Remuneration). and functioning of the committees of the within the Board of Directors of JSC Tyumen­ 26 The presence of the Board Committee Not observed The Company did not establish the Audit Board of Directors. energo; (the Audit Committee) recommending Committee. – the Regulation on the Committee on Techno- the auditor of the Company to the Board logical Connection to Power Grids within the of Directors and interacts with it and the Board of Directors of JSC Tyumenenergo; Revision Commission of the Company. – the Regulation on the Investment Committee within the Board of Directors of JSC Tyumen­ 27 Independent and non-executive Not observed The Company did not establish the Audit energo. directors only in the Audit Committee. Committee. 38 The procedure for determining the Not observed There are no requirements to the procedure of quorum of the Board of Directors which determining the quorum of the Board of Direc- 28 Management of the Audit Committee by Not observed The Company did not establish the Audit allows to provide obligatory participa- tors that allows to provide obligatory participa- the independent director. Committee. tion of independent directors in Board tion of independent directors in meetings of the meeting, provided for by the Charter of Board of Directors of the Company in the Charter 29 The right of all members of the Audit Not observed The Company did not establish the Audit the Company. of the Company. Committee provided for by the internal Committee. The Charter of the Company was developed on documents of the Company to access the basis of Russian legislation according to any documents and information of the which a quorum for a meting of the Board of Company subject to non-disclosure of Directors of the Company is determined by the confidential information. Charter of the Company, but shall not be less than half of elected members of the Board of 30 Establishment of the Board Committee Not observed The Company did not establish the Committee Directors of the Company. (the Committee for Personnel and for Personnel and Remuneration. According to paragraph 15.12 Article 15 of the Remuneration) whose function is Charter of the Company the quorum for a meet- to determine selection criteria for ing of the Board of Directors shall not be less members of the Board of Directors, and than half of the elected members of the Board of development of policy of the Company in Directors of the Company. the field of remuneration. The Executive Bodies 31 Management of the Committee on Not observed The Company did not establish the Committee Personnel and Remuneration by for Personnel and Remuneration. 39 The presence of collegial executive body Not observed The Board is not provided by the Charter. independent director. (the Board) of the Company. 32 Absence of officials of the Company Not observed The Company did not establish the Committee on the Committee on Personnel and for Personnel and Remuneration. 40 The Regulation on the necessity for ap- Not observed The Board is not provided by the Charter. Remuneration. proval by the Board of real estate transac- 33 Establishment of the Board Risk Not observed The Company did not establish the Risks tions, obtaining loans by the Company, if Committee or assignment of its Committee. such transactions do not belong to major functions to another Committee transactions and their performance is not (except for the Audit Committee and related to ordinary business activity of the the Committee on Personnel and Company, provided for by the Charter or Remuneration). internal documents of the Company.

228 229 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 3 Application № 3

Сontinuation of the table Сontinuation of the table

41 An approval procedure for transac- Observed Provided for by Article 3 of the Rules of the 47 Provided for in subparagraph 4.2.7 Partially observed According to subparagraph 2 paragraph 18.1 tions that go beyond the financial Company’s Business Planning. The Rules of paragraph 4.2 Article 4 of the Corporate Article 18 of the Charter of the Company, the and business plan of the Company, the Company’s Business Planning were ap- Management Code of the Company. General Director of the Company is accountable provided for by the internal documents proved by the Board of Directors on February to the General Shareholder Meeting and the of the Company. 4, 2008. Board of Directors of the Company. According to paragraph 4.3 Article 4 of the Corporate Management Code of the Company, 42 the General Director submits quarterly reports Absence in the executive bodies of Observed The General Director of the Company is not on its activity to the Board of Directors. people who are parties, general di- a member, General Director (manager), Moreover, the reports are submitted in accor- rectors (managers), members of the member of the governing body or employee dance with current legislation of the Russian governing body or employees of a legal of a legal entity competing with the Company. Federation, activity plan of the Board of Direc- entity competing with the Company. The Board is not provided by the Charter of tors, and in cases stipulated by definite deci- the Company. sions of the Board of Directors of the Company.

48 The Charter and internal documents of Observed The agreement between the Company and the 43 Absence in the executive bodies of the Observed The General Director of the Company was the Company do not provide this provi- General Director includes this provision. Company of people who were found not found guilty of committing crimes in the sion. The Board is not provided by the Charter. guilty of committing crimes in the field field of economic activity or crimes against of economic activity or crimes against the state government, interests of public The Secretary of the Company the state government, public ser- service and service in local government, or vice and service in local government, crimes fro which administrative penalties in 49 The presence of a special official (Sec- Partially observed According to paragraph 4.1 Article 4 of the or people to whom administrative the field of business or finances, taxes and retary of the Company) in the Company Regulation on the Procedure for Convening and penalties for violations in the filed of levies, and securities market were imposed. whose task is to ensure that the author- Holding of Meetings of the Board of Directors business or finances, taxes and levies, ities and officials of the Company follow of the Company, the Secretary of the Board of and security market. If the functions the procedural requirements that provide Directors performs the functions of organiza- of a sole executive body are performed execution of rights and legal interests of tional and information support of the Board of by managing organization or manager, the Company’s shareholders. Directors of the Company. compliance of the General Director The issue of ensuring compliance of bodies and Board members of the manag- and officials of the Company with the proce- ing organization or manager with the dural requirements providing realization of the requirements to the General Director rights and legal interests of shareholders of the and Board members of the Company. Company is carried out by the Department of Corporate Policy of the Company. 44 The prohibition to the managing orga- Not observed The Charter and internal documents of the 50 The procedure of appointment (election) Observed Provided for by Article 17 of the Charter of the nization (manager) to perform similar Company do not provide this provision. of the Secretary of the Company and its Company and paragraphs 4.2–4.3 Article 4 of functions in a competing company, duties, provided for by the Charter or the Regulation on the Procedure of Convening and to be in any other property rela- internal documents of the Company. and Holding Meetings of the Board of Directors tions with the Company, in addition of the Company. to providing services of the managing organization (manager), provided for 51 The requirements for a candidature of Not observed The Charter of the Company does not provide by the Charter or internal documents the Secretary of the Company provided this provision. of the Company. for by the Charter of the Company.

45 The duty of the executive bodies Observed Provided for in subparagraph 4.2.7 para- Significant corporate actions provided for the internal documents of graph 4.2 Article 4 of the Corporate Manage- the Company to abstain from activity ment Code of the Company. 52 The requirement for approval of a major Observed The Charter of the Company includes in the that will or may potentially lead to transaction prior to its conclusion provid- competence of the regulating bodies of the a conflict between their interests and ed for by the Charter or internal docu- Company (the General Shareholder Meeting interests of the Company, in case of ments of the Company. and the Board of Directors) decision-making such a conflict, the duty to inform the on approval of major transactions in the cases Board of Directors about this conflict. stipulated by Chapter X of the Deferral Law On Joint Stock Companies (subparagraph 16 46 paragraph 12.1 Article 12 of the Charter of the Selection criteria of the managing Not observed The Charter and internal documents of the Company) and Article 79 of the Federal Law organization (manager) provided for by Company do not provide this provision. On Joint Stock Companies (subparagraph 17 the Charter or internal documents of paragraph 10.2 Article 10 of the Charter of the the Company. Company).

230 231 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 3 Application № 3

Сontinuation of the table Сontinuation of the table

53 Mandatory involvement of an indepen- Observed Performed in practice in accordance with the 59 The requirement to disclose information Partially observed Information disclosure is carried out in dent appraiser to estimate a market requirements of the Federal Law On Joint about purposes of placement of shares, accordance with the requirements of Russian value of the property that is the sub- Stock Companies. people who are going to buy placed legislation and the Regulation on Information ject of a major transaction. shares, including a large block, as well Policy of the Company. as information about whether senior officials of the Company will participate 54 The prohibition on taking during Not observed The Charter of the Company does not pro- in buying of placed shares of the acquisition of large blocks of shares vide this provision. Company, provided for by the internal of the Company (takeover) any actions documents of the Company. aimed at protecting the interests of the executive bodies (members of 60 The list of information, documents and Not observed The internal documents of the Company do not these bodies) and members of the materials to be provided to shareholders provide this provision. Board of Directors of the Company, to resolve the issues submitted for the and worsening the position of share- General Shareholder Meeting, provided holders as compared to the existing for by the internal documents of the one (in particular, the prohibition on Company. making by the Board of Directors be- fore the expected date of acquisition if 61 The Company website on the Internet Observed Provided for in paragraph 6.4 Article 6 of shares of the Company the decision to and regular disclosure of the Company the Regulation on Information Policy of the issue additional securities convertible information on this website. Company. into shares or securities granting the All the disclosed information is published on right to buy shares of the Company, the official website of the Company www.te.ru, even if the right of such a decision is and on the page on the Internet: http://www.e- granted to it by the Charter), provided disclosure.ru/portal/company.aspx?id=5577. for by the Charter. 62 The requirement, provided by the Observed Provided for in subparagraph 5.2.10.5 internal documents of the Company, to paragraph 5.2.10 paragraph 5.2 Article 5 of 55 The requirement of mandatory involve- Not observed The Charter of the Company does not pro- disclose information about Company the Regulation on Information Policy of the ment of an independent appraiser to vide this provision. Performed in practice in transactions with people belonging Company. assess the current market value of accordance with the Federal Law On Joint to, according to the Charter, to the shares and possible changes of their Stock Companies. senior officials of the Company, as market value as a result of takeover, well as Company transactions with provided for by the Charter of the organizations in which senior officials of Company. the Company directly or indirectly own 20 or more percent of the authorized capital, or to which such people may 56 The absence in the Charter of the Observed The Charter of the Company does not pro- otherwise have a material effect. Company of release of the purchaser vide this provision. from the obligation to offer to share- 63 The requirement to disclose information Observed Information disclosure is carried out in holders to sell their ordinary shares of about all transactions that may affect accordance with the requirements of Russian the Company (equity shares convert- the market value of the shares of the legislation and the Regulation on Information ible into ordinary shares) in the case Company, provided for by the internal Policy of the Company. of takeover. documents of the Company.

57 64 The internal document approved by Observed On December 29, 2011, the Board of Directors The requirement of mandatory involve- Not observed The Charter and internal documents of the the Board of Directors on the use of the Company approved the Regulation on ment of an independent appraiser to Company do not provide this provision. Per- of important information about the Insider Information of the Company. determine the ratio of conversion of formed in practice in accordance with the activities of the Company, shares and shares during reorganization, provided Federal Law On Joint Stock Companies. other securities and transactions with for by the Charter and internal docu- them, which is not public and disclosure ments of the Company. of which could have a significant impact on the market value of the shares and Disclosure of Information other securities of the Company.

58 Directors defining the rules and ap- Observed On August 23, 2007, the Board of Directors Monitoring of Financial and Economic Activity proaches of the Company to infor- of the Company approved the Regulation on mation disclosure (the Regulation on Information Policy of the Company. 65 The presence of procedures of internal Observed On July 30, 2010, the Board of Directors of Information Policy). control over financial and economic the Company approved the Policy of Internal activities of the Company approved by Control. the Board of Directors.

232 233 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 3 Application № 3

Сontinuation of the table End of table

66 The presence of a special subdivision Observed The Company established the Department of 73 The procedure of approval of a Observed Non-standard operations (operations beyond of the Company providing compliance Internal Audit and Risks Management of the non-standard transaction with the the frames of the financial and business with the procedures of internal control Company. Board of Directors provided for by the plan) shall be included into the corrections (control and audit service). internal documents of the Company. of the business plan cash flow. According to subparagraph 13 paragraph 67 The requirement for determining Not observed The internal documents of the Company do 12.1 Article 12 of the Charter, approval of the the structure and composition of the not provide this provision. corrected business plan is included in the Control and Revision Service of the According to the internal documents, the competence of the Board of Directors. Company by the Board of Directors, staff list of the Department of Internal Audit According to paragraph 5.2.1 of the Regula- provided for by the internal documents and Risks Management of the Company tion on Cash Flow Management, the correct- of the Company. is approved by the General Director of the ed cash flow of the Company is subject to Company. the approval by the Board of Directors of the Company. 68 Absence in the Control and Audit Ser- Observed There are no such persons in the Depart- vice of people who were found guilty of ment of Internal Audit and Risks Manage- 74 The internal document approved by Observed On July 10, 2002, the Regulation on the committing crimes in the field of eco- ment. the Board of Directors that defines Revision Commission of the Company was nomic activity or crimes against the the procedure for conducting audits of approved by the decision of the sole share- state government, public service and financial and business activity of the holder of the Company. service in local government, or people Company by the Revision Commission. to which administrative penalties for violations in the field of business or finances, taxes and levies, securities 75 Assessment by the Audit Committee of Not observed The Company did not establish the Audit market were imposed. the auditor’s report before submitting Commission. it to shareholders at a General Share- 69 Absence in the Control and Audit Observed There are no such persons in the Depart- holder Meeting. Service of people who are members of ment of Internal Audit and Risks Manage- the executive bodies of the Company, ment. and people who are members, the Dividends General Director (manager), members of the governing bodies or employees 76 The internal document approved by Observed On August 27, 2010, the Board of Directors of a legal entity competing with the the Board of Directors that guides the of the Company approved the Regulation on Company. Board of Directors when making rec- Dividend Policy of the Company. ommendations about the amount of 70 The date of submission to the Control Partially observed In accordance with paragraph 7.4 Article 7 of dividends (the Regulation on Dividend and Audit Service of documents and the Regulation on the Revision Commission Policy). materials to assess the implementa- of JSC Tyumenenergo the required docu- tion of a financial and business trans- ments and materials shall be submitted to 77 The presence of Regulation on Divi- Observed Provided for in Articles 3, 4 and 5 of the Reg- action, as well as the responsibility of the members of the Revision Commission of dend Policy of the procedure for deter- ulation on Dividend Policy of the Company. officials and employees of the Com- the Company within 2 (two) days after receiv- mining the minimum share of net pany for the failure to submit them ing the request. profit of the Company, allocated for prior to this date, provided for by the dividend payouts, and the conditions internal documents of the Company. under which dividends on preferred shares are not paid or partially paid, the dividend of which is defined in the 71 The duty, provided for by the internal Observed Provided for in paragraph 4.4 Article 4 of the Charter of the Company. documents of the Company, of the Policy of Internal Control of the Company. Control and Audit Service to report on violations to the Audit Committee, and 78 Publication of information about Partially observed Information on dividend policy of the Com- in case of its absence, to the Board of the Company’s dividend policy and pany and changes therein are published on Directors. changes therein in a periodical edition the website of the Company on the Internet provided by the Charter of the Com- according to the Regulation on Information 72 The requirement for preliminary Not observed The Charter and internal documents of the pany for publishing notices of the Policy of the Company. assessment of the Control and Audit Company do not provide this provision. General Meetings of Shareholders, as Publication of notices of general meetings of Service of appropriateness of trans- well as posting of the said information shareholders is not provided by the Charter actions, not covered by the financial on the website of the Company on the of the Company. and business plan of the Company Internet. (non-standard transactions), provided for by the Charter of the Company.

234 235 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 4 Application № 4

End of table INFORMATION ABOUT SHARES OF JSC TYUMENENERGO 9 JSC Enel OGK-5, Russian Production and disposal 0.037 0.037 Federation, Sverdlovskaya oblast’, of electric and heat IN AUTHORIZED CAPITALS Ekaterinburg, Lenina str., 38 power AND VOTING SHARES IN OTHER COMPANIES 10 JSC SFERA TV Company, Provision of mass media 0.5925 0.5925 AS OF 31.12.2012 628606, Tyumen oblast’, Khanty- services Mansijsk autonomous district, Nizhnevartovsk, Lenina str., 2p

11 JSC Territorial Generation Company Production and disposal 0.0045 0.0045 № 1, 191186, Russian Federation, of electric and heat № Name and location of the company Main activity Share of JSC Share of voices of JSC St.Petersburg, Marsovo pole, 1 power Tyumenenergo in the Tyumenenergo in the company, % companies, % 12 JSC Territorial Generation Company Production and disposal 0.004 0.004 1 JSC Energy Service Company Energy audit 51.000 51.000 № 2, 150040, Russia, Yaroslavl, pr. of electric and heat Tyumenenergo, 628406, Tyumen Oktyabrya, 42 power Region, Khanty-Mansijsk au- tonomous district – Yugra, Surgut, Universitetskaya str., 4 13 JSC Quadra, 300600, Russian Production and disposal 0.0037 0.0037 Federation, Tula, Timiryazev str., 99v of electric and heat 2 JSC Federal Grid Company of the Managing the Unified 0.0037 0.0037 power United Energy System, 117630, National (All-Russian) Russia, Moscow, Akademika Power Grid (UNPG) Chelomeya str., 5a, bld. A 14 JSC Territorial Generation Company Production and disposal 0.0351 0.0351 № 5, 428029, Russia, Chuvash of electric and heat 3 JSC RusHydro, Krasnoyarsk Production and dis- 0.0054 0.0054 Republic, Cheboksary, pr. Yakovleva, power Region, Krasnoyarsk, Respubliki posal of electric power 4/4/ str., 51 15 JSC Territorial Generation Company Production and disposal 0.0038 0.0038 4 JSC INTER RAO UES, Russian Fed- Export and import of 0.0036 0.0036 № 6, 603960, Russian Federation, of electric and heat eration, 123610, Moscow, Krasno- electric power Nizhny Novgorod, Alekseevskaya power presnenskaya nab, 12, entrance 7 str., 10/16 16 JSC Volga Territorial Generation Production and disposal 0.0051 0.0051 5 JSC Holding of Interregional Activities on the man- 0.0111 0.0116 Company, 443100, Russia, Samara, of electric and heat Distribution Network Companies, agement of holding Mayakovskogo str., 15 power 107996, Moscow, Ulan pereulok, companies 26, bld. 1 17 JSC Territorial Generation Company Production and disposal 0.0039 0.0039 6 JSC for Power and Electrifica- Production and dis- 0.0039 0.0039 № 9, 614990, Russia, Perm, of electric and heat tion Mosenergo, 115035, Moscow, posal of electric and Komsomolsky prospect, 48 power Raushskaya naberezhnaya, 8 heat power

7 JSC Second Generation Company Production and 0.0076 0.0076 18 JSC RAO Energy System of Activities on the 0.0116 0.0122 of Wholesale Electricity Market, disposal of electric and East, 675000, Amur Region, management of holding Russian Federation, Stavropol heat power Blagoveshchensk, Shevchenko, 28 companies Territory, Izobilnensky district, Solnechnodolsk village 19 JSC Tomsk Distribution Company, Production and disposal General – 22.2763 General – 25.6399 8 JSC Fourth Generation Company Production and 0.0075 0.0075 634041, Russian Federation, Tomsk, of electric and heat Preferred – 3.5990 Preferred – 27.4347 of Wholesale Electricity Market, disposal of electric and pr. Kirova, 36 power Russian Federation, Tyumen heat power Region, Khanty-Mansijsk 20 JSC Kubanenergo, 350033, Production and disposal 19.07 19.07 autonomous district – Yugra, Krasnodar, Stavropolskaya str., 2 of electric and heat Surgut, Energostroiteley str., 23, power bld. 34

236 237 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 5 Application № 6

INFORMATION ABOUT COMPANY PARTICIPATION PROCUREMENT ACTIVITIES

IN NON-PROFIT ORGANIZATIONS The main provisions of the company’s policy in the field of and Material Readiness Management – for planning and procurement activity operational management of procurement activity. The staff AS OF 31.12.2012 Beginning with 01.01.2012 Federal Law 223-FZ dated of the department are trained and certified in accordance 18.07.2011 On Procurement of Goods, Works and Services with S-UES ZD 5-2005 standard System of standards on by Certain Types of Legal Entities has come into force, and procurement activity management. Personnel training. Name and location of non-profit Date of resolution for Primary activities of the non-profit JSC Tyumenenergo is its regulation subject. organization joining the non-profit organization In 2012 the electronic training platform (ETP) b2b-mrsk has organization The main provisions of the policy of JSC Tyumenenergo in been actively used for competitive procedures. The share of the field of procurement activity is reflected in the Regu- the purchases held on ETP in 2012 amounted to 96.89 %. All-Russian Industry Union of Employers 05.01.2004 Representation of industry employers, protec- lations on the procedures governing the procurement of in Electric Power Industry (RAEL Union) tion of their rights in government authorities, goods, works and services for the needs of JSC Tyumene- Information on the main indicators of the annual compre- 119526, Russian Federation, Moscow, local self-government authorities, in relations nergo (hereinafter the Procurement regulation), which, as hensive procurement program (ACPP) prospect Vernadskogo, 101, bld. 3, office with trade unions, their associations and other it is required by 223-FZ, is published on the official site of Annual comprehensive procurement program of JSC Tyu- 0607 employee organizations. the Company and the official site of the Russian Federation. menenergo is made in full. All the competitive procedures The Procurement regulation is approved by the Board of are conducted in accordance with the Procurement regula- Non-commercial Partnership Tyumen 29.06.2006 Training, retraining and professional develop- Directors of JSC Tyumenenergo (Record No. 21/11 dated tion. The volume of regulated procurement of JSC Tyume- Training Center (CONC NP) ment of energy companies’ personnel. 29.12.2011) and establishes procedures for procurement of nenergo amounted to 13,724,931 thousand rubles. The any goods, works and services (hereinafter products) worth volume of open procedures amounted to 13,454,490 thou- Non-commercial Partnership Scientific 13.11.2008 Professional organizations’ activity. over 500,000 rubles including VAT at the expense of the sand rubles or 98.03 %. The volume of purchases made and Technical Council of the Unified Energy Company. from a single source was 270,441 thousand rubles or System (UES NP) 109044, Moscow, Voront- 1.87 %. Moreover, in 2012 there were made 119 semi-fixed sovskiy pereulok, 2, bld. 1, office 420 JSC Tyumenenergo created Central Purchasing Body, as purchases (in accordance with art.1.2.4 of the Procurement well as the staffing structural department – Department regulation) in the amount of 1,171,633 thousand rubles. Non-commercial Partnership Association 14.10.2009 Joining efforts of the Partnership members for of Regulated Procurement (DRP) in the office of Logistics of Organizations Performing Construc- strengthening and development of construc- tion, Reconstruction and Major Repairs tion and installation industry of the Russian № Type of purchase The number of procedures Value of purchase (thousand of Power Facilities, Grids and Substations Federation, representation and protection of taken place in 2011 rubles) in 2011 ENERGOSTROY the Partnership members’ rights and legal 1 Open competition (ОC) 369 9,355,961 (ENERGOSTROY NP) interests. Russia, 107996, Moscow, 1.1 including ETP 362 9,294,322 Ulanskiy pereulok, 26, bld. 1 2 Indoor competition (IC) 1 10,540 2.1 including ETP 1 10,540 Non-commercial Partnership Association 24.12.2009 Development and approval of the Partnership of Organizations Performing the Develop- regulatory documents binding on all the mem- 3 Open request for quotations (RFQ) 98 136,308 ment of Project Documentation of Power bers, including the requirements prescribed 3.1 including ETP 94 127,704 Facilities, Grids and Substations ENERGO- by Cl. 55.5 of the Russian Federation Civil Code 4 Open request for proposals (RFP) 261 802,216 PROEKT (ENERGOPROEKT NP) for issuance of certificates of admission to Russian Federation, 125362, Moscow, works on preparation of project documenta- 4.1 including ETP 236 767,942 Stroitelny proezd, 7a, bld. 6 tion having effect on capital construction 5 Open competitive negotiations (ОCN) 58 829,324 safety, self-regulation control rules, discipli- 5.1 including ETP 54 807,843 nary measures system for members of the Partnership, the Partnership’s standards and 6 Closed request for quotations based on the re- 76 449,611 self-regulation rules, as well as supervision sults of the framework agreement conclusion of compliance with the requirements among 6.1 including ETP 59 436,187 members of the Partnership. 7 Purchase from a single source (PFSS) 95 265,779 Non-commercial Partnership Union of En- 14.10.2010 The purpose of the Partnership is to assist its 8 Purchase from a single source based on the 15 1,875,192 ergy Auditors and Power Service Compa- members in improving the quality of works in results of the failed procurement procedures nies Russian Federation, 125171, Moscow, the field of energy audit and provision of power 8.1 including ETP 11 1,854,201 Leningrad highway, 8, bld. 2, office 36 services. In total 973 13,724,931 Non-commercial Partnership SIRED 19.06.2012 Performing scientific and technical, including ETP 817 13,298,739 National Committee. Power Distribution technologic, engineering, design research and Grids Russian Federation, 193024, information research and development, as well St. Petersburg, Nevsky prospect, 147, 17n as replicating and development of software The effectiveness of procurement procedures carried out the Company and, under the instructions of the Company, and science-intensive products with its future (excluding semi-fixed procurement from a single source) by the Department of Procurement Activity in JSC IDGC commissioning. amounted to 1,284,489 thousand rubles VAT or 8.6 %. Holding on the basis of the service contract on RF UES The procurement of products for the needs of JSC Tyume- functioning and development management in the field of nenergo in 2012 was carried out by trained specialists of the distributive complex No. 1279 dated 10.03.2011.

238 239 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012 ORDER CREATING ENERGY JSC Tyumenenergo | www.te.ru Annual Report 2012

Application № 7 Application № 7

Implementation of the repair program for basic – Repair of 35 kV overhead power lines – 108 km; REPAIR PROGRAM IMPLEMENTATION electrical equipment of substations and overhead power – Repair of 10 kV overhead power lines – 69.9 km; lines of JSC Tyumenenergo in 2012 expressed in physical – Repair of 0.4 kV overhead power lines – 42.2 km; terms: – Clearing up the line – 5,128.5 hа; To provide reliable uninterrupted power supply to con- and regulations for maintenance and repair, timely diag- – Repair of 35-110 kV line transformers – 51 units; – Repair of 10/0.4 kV transformer substations – sumers it is important to maintain existing equipment in nosis and assignment of the volume and timing of repair – Repair of circuit breakers – 240 units; 102 units. a good working condition. Readiness for accident-free for technical condition of the equipment. – Repair of 110 kV overhead power lines – 1, 334 km; load bearing is achieved by strict adherence to the timing

Analysis of repair costs in 2011–2013 By the end of 2012 the Company’s repair program has Repair costs, mln rubles been fully implemented 2011 actual 2012 actual 2013 planned Total 2,205.1 1,808.8 1,820.9 Expenses for repair and maintenance of basic produc- subcontracting (using Company’s own resources) Using own resources 303.9 296.2 747.8 tion assets in the Company as a whole amounted to amounted to 296.2 mln rubles, the cost of the works 3,445.8 mln rubles in 2012, including the repair costs of carried out by means of subcontracting made up a sum By means of subcontracting 1,901.2 1,512.6 1,073.1 1,808.8 mln rubles. of 1,512.6 mln rubles. In such a case the repair costs carried out without

% mln rubles 16

.9 .2 8 03 96 7. Using Company own resources 3 2 74 Using its own resources By means of subcontracting By means of subcontracting

2 8 .1 1. 2. 3 90 51 ,07 % 1, 1, 1 84

2011 actual 2012 actual 2013 planned

Implementation of the repair program for basic electrical equipment of substations and overhead power lines of In 2013 it is planned to allocate 3,466.5 mln rubles for repair program implementation and maintenance, including JSC Tyumenenergo in 2012, mln rubles in terms of value: 1,820.9 mln rubles for repair.

Name Actual volume in 2012, mln rubles excluding VAT

including Total Using own resources By means of subcontracting

TOTAL 1,808.8 296.2 1,512.6

including:

1.1. Repair of power lines 407.9 51.3 356.6

1.2. Repair of substations equipment 850.2 125.6 724.6

1.3. Buildings and constructions 328.9 21.6 307.3

1.4. Other objects 221.8 97.7 124.1

240 241