Mrkp-2008-Eng.Pdf
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Preliminarily approved by the decision of the Board of Directors of IDGC of Centre and Volga Region, JSC; Minutes No.38 as of 08 May 2009 Annual Report of “Interregional Distribution Grid Company of Centre and Volga Region”, Joint Stock Company for 2008 General Director of IDGC of Centre and Volga Region, JSC E. V. Ushakov Chief accountant of IDGC of Centre and Volga Region, JSC I. U. Rodionova 2 Contents Contents 4 Liability Limitation 10 General Information 12 Service Territory 5 Address to Shareholders 14 General Data 6 Address of Chairman 15 Mission and Strategy of Board of Directors 15 Priority Areas of Activities 8 Address of General Director 16 Basic Results of Activities 18 Short History of Development 20 Calendar of Events 23 Risk Management 26 Quality Policy 28 Corporate Governance 30 Structure and Principles of Corporate Governance 69 Securities and Share Capital 76 Main Indicators of Accounting Statements and Review of Financial Results 78 Main Provisions of Accounting Policy 81 Analysis of Business Results and Financial Position Dynamics 95 Credit Policy 97 Tariff Policy 100 Profit Distribution and Dividend Policy 104 Industrial Activities 106 Key Industrial Indicators 107 Operational Process Management 128 Connection to Power Grids Process Organization 137 Future Development Process Organization 140 Investment Activities 142 Investment Activities Parameters 144 Direction and Pattern of Investments 152 Investment Program Financing Sources 3 160 Technical Re-equipment and Development 241 Appendices 162 Development Dynamics 242 Accounting Reports for 2008 165 Repair Program, Reconstruction and Re-equipment 278 Auditor’s Report of IDGC 169 Realization of Reactive Power Flow of Centre and Volga Region, JSC Management Programs 282 Report of the Audit Commission of IDGC of Centre and Volga Region, JSC 174 Position in the Sector. Market Share 284 Information on IDGC of Centre and Volga Region, JSC, Compliance 182 Industrial Control and Labor Protection with the Corporate Conduct Code 306 Information on Interested-Party Transac- 190 Personnel Policy and Social Partnership tions Recognized as Such in Accordance with the RF Laws, which were Completed 196 Environmental Protection by IDGC of Centre and Volga Region, JSC, in 2008 206 Purchasing Activities 358 Information on Participation 208 Main Provisions of the Policy in the Field of IDGC of Centre and Volga Region, of Purchasing Activities JSC, in Nonprofit Organizations 208 Description of Applied Purchase Ways 362 Amounts of, and Tariffs for Technological and Terms of Their Selection Connection Submitted to Tariff Regulatory 212 Description of Electronic Commerce Application Body in the Reporting Year 2008 212 Procedure of ACPP Formation and Realization and for the Year 2009, and Tariffs 213 The Annual Reporting on Purchasing Activities for Technological Connection Approved Regarding Categories of Activities and Purchase Ways by Regulatory Body 386 Information on Implementation of Annual 214 Information Technologies Comprehensive Program of Purchases 218 Implementation of Automated Information 2008 and Measurement System of Commercial Accounting of Electric Energy 404 Contact Information 219 Telecommunications 219 Automation System 409 Glossary of Control and Process Management 221 The Most Important Results of the Company’s IT Infrastructure Development 222 The Most Important Results of IT Infrastructure Development at Branches of the Company 225 Projects on IT Infrastructure Development Offered for Implementation in 2009 226 Statement of Opinions and Conclusions of the Management 234 Strategic Mission and Outlook 4 Liability Limitation Liability Limitation This Annual report of IDGC of Centre and Volga ties as a result of using the projected statements Region, JSC, for 2008 (herein after referred to as of this Annual Report by any reason, directly or in- Annual Report) is prepared using the information directly. available for the Company at the moment of its com- piling. The Company does not undertake obligations con- cerning the revision and approval of the expecta- This Annual report contains projected statements tions and assessments as well as update publishing which are not based on actual circumstances and change of the Annual Report projected state- and include statements concerning intentions, ments due to the future events or new information. opinions or current expectations of the Company with regard to the results of its activities, finan- cial position, liquidity, growth potential, strategy, as well as development of the industrial sector the Company is engaged in. Due to their origin, such projected statements shall be marked by the presence of risks and uncertainty factors, as far as they pertain to the events and depend on the circumstances which are not necessarily to happen in the future. Such words as “is going to”, “aims at”, “expects”, “evaluates as”, “plans”, “thinks”, “supposes”, “can”, “should”, “will”, “will continue” and other words simi- lar to this group, as a rule, show the projected nature of the statements. The Company warns that the projected statements are not a guarantee for the future indices. Actual re- sults of the Company’s activities, its financial posi- tion and liquidity as well as the sector development it works in, can sustainably be different form those presented in the projected statements contained in this document. Besides, even if the abovemen- tioned indices will correspond to the forecast state- ments contained in this document, these results and events are not the marks of the same results and events in the future. The Company does not give any direct or sup- posed assurances and guarantees and does not bear any responsibility in case of losses which can be incurred by physical persons or legal enti- Address to Shareholders 6 Address to Shareholders Chairman of the Board of Directors of IDGC of Centre and Volga Region, JSC P. I. Okley Dear Shareholders! The year 2008 has become for IDGC of Centre and panies to complete the process of reorganization Volga Region, JSC a significant period. Last year within the framework of the Russian distribution the power systems of the country went through grid complex restructuring. After IDGC assets con- the global structural changes: on 1 July of the past solidation, the Company became one of the major year the activities of RAO “UES of Russia” were power companies. Due to this, today the Company stopped, at the same moment, a record was made is able to carry out the large scale investment to the Uniform State Register of Legal Entities program and implement the long term development on establishment of IDGC Holding, JSC. strategy of the Company. The priority of the po- wer company Board of Directors’ activities in 2008 Besides, during the year, Russian economy as well was securing of rights and interests of investors as other economic systems of the world experi- and shareholders, improvement of the industrial enced negative changes. Because of this, many long and financial indices of the Company as well term plans of the regional governments, investment as efficiency and reliability of the power gird community, consumers and power companies were complex. subjected to correction. During the year, 24 meetings of IDGC of Centre During the time of its establishment, IDGC of Cen- and Volga Region, JSC Board of Directors were tre and Volga Region, JSC, managed not only carried out. The Board of Directors took the stra- to adequately size its possibilities at power mar- tegically important decisions for the Company: ket, but show its own worth in new conditions. on approval of the business plan and the invest- ment program for 2008, on election of the mem- In February 2008, IDGC of Centre and Volga bers of the Management Board, on rendering Region, JSC was the first of the interregional com- of the beneficent help, on approval of interested 7 party transactions (94 transactions were approved companies’ shares growth planned earlier, will be- for the total amount of RUR 3,224,984,203). gin since the moment when the investment com- All in all, 296 important issues were considered munity acknowledges that the crisis apogee has at the meetings of the Board of Directors. been passed. To provide the effective control over the joint stock The major result of the Company’s activities company activities, there were established several in 2008 is reaching of all planned financial in- committees under the Board of Directors: strategy dices. Thus, the amount of profit was increased and development, technological connection to power in comparison with 2007 by 20% and accounted girds, audit, personnel and remuneration committee. for RUR 31.7 billion. The Company’s net profit The committees included representatives of IDGC accounted for more than RUR 1.4 billion which of Centre and Volga Region, JSC, and Company’s also meets the planned figures. shareholders representatives. Last year IDGC of Centre and Volga Region, Last year, the Company did a great job helping JSC made serious work directed to reinforce- IDGC of Centre and Volga Region, JSC shares enter ment of its positions at the market and creation the stock market. Since April 2008, the Com- of the strong foundation for a growth and deve- pany’s shares were admitted to trading at MICEX lopment in the future. and RTS stock exchanges. In July, The Federal Fi- nancial Markets Service of Russia combined major I am sure that the activities of IDGC of Centre (first) and additional issues of shares of IDGC and Volga Region, JSC will be as transparent of Centre and Volga Region, JSC. In August, RTS as possible both for shareholders and general pub- stock exchange took a decision to include the Com- lic. Constant information exchange, constructive pany’s shares in the index calculation base “RTS-2” dialogue and active interaction of management and “RTS-Power”. and shareholders are a guarantee for a successful development of the Сompany. I am sure that with At that time the stock turnover of IDGC of Cen- your support, the Company’s personnel will solve tre and Volga Region, JSC for one month at all the tasks assigned to them and fortify the MICEX exceeded RUR 272.8 million.