CONTENTS
CORPORATE GOVERNANCE ...... 4 Letter to Shareholders by the Chairman of the Board of Directors ...... 6 Letter to Shareholders by the General Director ...... 7 TGC 9 Highlights of 2007 ...... 8 TGC 9 Progress and New Challenges ...... 15 TGC 9 General Information ...... 17 TGC 9 Organizational Structure ...... 19 Competitive Environment and Risk Factors ...... 24 Corporate Governance ...... 29 TGC 9 Management and Control Bodies ...... 30 General Meeting of Shareholders ...... 30 Board of Directors ...... 33 Committees of the Board of Directors ...... 41 Internal Audit Committee ...... 47 General Director ...... 48 Management Board ...... 50 Shareholders' Equity ...... 57
PRODUCTION ...... 65 TGC 9 Production Figures ...... 65 Energy Supply ...... 76 Environmental Policy ...... 80
PROCUREMENT ...... 81 Procurement Policy Summary ...... 81 Results of Purchasing Products, Works and Services ...... 85
FINANCE ...... 89 TGC 9 Key Financial Highlights and Figures of Financial Statements for 2007 ...... 89 Auditor ...... 92 Financial Performance ...... 98
INVESTMENT ...... 105 Investment Operations ...... 105 Investment Program for Next Three Years ...... 111
PERSONNEL ...... 113 Personnel and Social Policy ...... 113
FUTURE DEVELOPMENT ...... 123 TGC 9 Future Development ...... 123
REFERENCE INFORMATION FOR SHAREHOLDERS ...... 125
3
Letter to Shareholders by the Chairman of the Board of Directors of the Open Joint Stock Company Territorial Generating Company #9
Dear Shareholders,
2007 was the year when ref ormation of the Russian In order to bring more assets for implementation of the in power industry reached vestment projects a decision was made to emit additional its final stage. TGC 9 always TGC 9 shares. being among the pioneers of the reform continued July 9, the TGC 9 Board of Directors relying on the Resolu its successful movement in tion of the Extraordinary General Meeting of the Sharehol the forefront of the transfor ders to increase authorized capital, ratified the Resolution mation. on Additional Share Emission.
Among the major events of the previous year one should The placing price of the TGC 9 shares was determined by mention the merger of OJSC Komi Regional Generating the TGC 9 Board of Directors on December 10 2007 at the Company on February 1, 2007, which marked the comple rate of 0.00801 RUB per share. On January 25, 2008 the tion of the TGC 9 target structure. TGC 9 Board of Directors decided to accept LLC IES Hol ding offer to purchase total stock of additional issue In 2007, the Board of Directors continued to improve the shares. organizational structure of TGC 9. It was resolved to create affiliate branches using the nodal approach which implies December 2007, RAO UES of Russia sold 33,94% of the that each territorial branch includes all technologically in TGC 9 shares that belonged to the energy holding and terrelated power stations and heating systems that supply was accounted for the state. As a result, participation of one industrial hub. These territorially and technologically RAO UES in TGC 9 authorized capital dropped from interrelated power node branches were meant to increase 50.05% to 16.11%. The RAO UES Tender committee ac controllability and efficiency of TGC 9 and to cut general cepted the offer of the buyer — IES Holding. The TGC 9 and administrative expenses. shares that are still owned by RAO UES will be distributed among shareholders of the energy holding during the final An important achievement of the year of 2007 was the in reorganization. clusion of TGC 9 shares in the quotation list B of the Rus sian Trading System Stock Exchange. Securities included in Placement of additional emission and sale of the TGC 9 quotation lists A1, A2 and B are the most accredited instru shares that belonged to RAO UES are literally the key ments that meet the strict information disclosure require events for TGC 9. RAO UES that established TGC 9 stopped ments an