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ANNUAL REPORT
INNOVATIONS IN OPERATION
JSC IDGC OF CENTER AND VOLGA REGION
2011
Preliminary approvedby the decision of the Board of Directors
of JSC IDGC of Center and Volga Region
Minutes № 101 as of May 10, 2012
General Directorof JSC IDGC of Center and Volga Region
E.V. Ushakov
Chief accountant – The Head of Accountingand Tax Reporting Departmentof JSC IDGC of Center and Volga Region
I.Yu. Rodionova
JSC IDGC of Center and Volga Region management is performed in conformity
with the requirements of ISO 9001, OHSAS 18001 and ISO 14001.
ANNUAL REPORT OF JOINT STOCK COMPANY
INTERREGIONAL DISTRIBUTING GRID COMPANY OF CENTER AND VOLGA REGION
FOR 2011
NIZHNY NOVGOROD, 2012
2 3JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
THE ELECTRONIC VER SION
Liability Limitation
Information on the Company
Address to Shareholders
Map of New Innovative Capacity, 2011
4
5
10
14
History of Industry and the Company
Position in the Industry and Operations
Company Structure
Strategic Priorities and Development Prospects
Board of Directors Report on Priority Areas
18
20
24
32
36
BUSINESS OVERVIEW 171
Accounting Policy
Analysis of Financial Performance
Distribution of Profit
Credit Policy
Tariff Policy
Non-Current Assets
40
42
47
48
51
61
392 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
Technical Policy
Development and Innovations
Repair and Operational Activities
Perspective Development
Operative and Technological Process Control
Development of IT Infrastructure and Information Technologies
98
100
106
110
117
122
TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
974
General Information
Key Performance Indicators
Energy Transmission
Technological Connection to Grids
Reliability Provision
Energy Saving and Improvement of Energy Efficiency
Power Consumption for Production and Economic Needs in 2011
Customer Policy
Quality Policy
68
72
72
78
85
86
88
90
95
BUSINESS ACTIVITIES REVIEW 673
CONTENTS
Audit Commission
Auditor
198
201
AUDIT COMMISSION AND THE AUDITOR 1979
Internal Control System
Risk Management
Risk overview
Human Resources Policy
Social Policy and Charity
Labor Protection
Prevention and Liquidation of Emergency Situations at Distribution Power Grid Complex Facilities
Environmental Protection
Taxation
Non-Financial Reporting
206
210
210
220
230
235
240
243
248
249
INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
PUBLIC RELATIONS, GOVERNMENT AUTHORITIES, INTERNATIONAL COOPERATION, CONGRESS AND EXHIBITION ACTIVITIES
205
219
251
10
11
12
GLOSSARY 259
REFERENCE INFORMATION 264
Parameters of Investment Activities
Direction and Structure of Capital Investments
Long-Term Investment Program
128
130
145
INVESTMENT ACTIVITIES 1275
Structure and Principles of Corporate Governance
Management Bodies
General Shareholder Meeting
Board of Directors
Remuneration to the Members of the Board of Directors
Committees of the Board of Directors
Management Board
Remuneration to the Members of the Management Board
General Director
Remuneration to the General Director
Information on the Transactions Made by the Company in 2011 which are Recognized by the Legislation of the Russian Federation as Transactions in which there is Interest, and Major Transactions
Participation in Non-Commercial Organizations
170
174
174
176
182
184
186
191
193
194
195
195
CORPORATE GOVERNANCE 1698
Stakeholders
Interaction with Shareholders and Investors
Disclosure of Information
162
166
166
INTERACTION WITH STAKEHOLDERS 1617
Securities
Shareholders
Shares of the Company on the Stock Market
Dividend Policy
Dividend Payout
149
151
152
158
159
SHAREHOLDERS’ CAPITAL 1476
SUPPLEMENTS
1. Conclusion of the Internal Audit Commission
2. RAS Accounting (Financial) Reporting for 2011, including Independent Auditor’s Opinion
3. IFRS Consolidated Financial Statements for 2011, including Independent Auditor’s Report
4. Detailed data on members of the Board of Directors, Committees of the Board of Directors, Management Board and Audit Commission
5. Information on the Company’s Compliance with the Corporate Conduct Code
6. Interested Party Transactions Completed in 2011
7. Information on Participation in Commercial Organizations with the share of less than 50%
8. Information on the Structure of the Property and its Changes
9. Information on Land Plots
10. Key Rights of the Shareholders
Supplements are placed at USB data stick, attached to the Annual Report.
QR-CODE
QR-code (from English Quick Response) – electronic
«barcode».
Digital version of Annual Report or its separate sec-
tion is available after scanning of QR-code by mo-
bile phone using programs QR Reader for iPhone, QR
Droid (for ANDROID), QuickMark (for Windows Mo-
bile) , KAYWA (for any telephone) and others.
4 5JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The present Annual Report of JSC IDGC of Center and
Volga Region for 2011 (hereinafter referred to as the An-
nual Report) has been prepared on the basis of information
available to the Company at the moment of preparation of
the Annual Report.
The Annual Report contains information on the results
of 2011, as well as forward-looking statements and
declarations concerning intentions, opinions and cur-
rent expectations of the Company in regard of the re-
sults of the Company activities, its financial condition,
liquidity, growth prospects, strategy and the develop-
ment of the industry the Company is engaged in. Due
to their nature, such forward-looking statements are
characterized 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 hap-
pen in the future.
The words “intends”, “strives”, “expects”, “assesses”,
“plans”, “considers”, “assumes”, “can”, “should”, “would”,
“will continue” and the like are used, as a rule, to indicate
the forward-looking nature of statements and may sug-
gest the risk of non-occurrence of events or actions speci-
fied, depending on a variety of factors.
The Company warns that the forward-looking statements
do not guarantee future results. Actual results of the ac-
tivity of the Company, its financial condition and liquid-
ity, as well as the development of the industry of which
the Company is a member, may differ considerably from
those presented in the forward-looking statements herein.
Besides, even if said values correspond to the pro-forma
statements contained in this Annual Report, they are not
indicative of similar results and events in the future.
The Company does not give any direct or supposed as-
surances and guarantees and does not bear any respon-
sibility in case of losses which can be incurred by natural
persons or legal entities as a result of using the forward-
looking statements of this Annual Report by any reason,
directly or indirectly. The specified persons should not
rely on the forward-looking statements, containing in the
Annual report, as they are not the unique possible suc-
cession of events.
Except in cases stipulated by the law, the Company shall
not be obliged to re-consider or confirm its expectations
or assessments, or to publish updates and changes of the
forward-looking statements contained in the Annual Re-
port in connection with subsequent events or the receipt
of new data.
LIABILITY LIMITATION COMPANY OVERVIEW
Joint Stock Company Interregional Distribution Grid Com-
pany of Center and Volga Region (JSC IDGC of Center and
Volga Region) is a subsidiary company of JSC IDGC Holding,
the largest Russian energy company. JSC IDGC of Center
and Volga Region is the key supplier of power distribu-
tion and technological connection services in nine regions
of the Russian Federation – Vladimir, Ivanovo, Kaluga,
Kirov, Nizhny Novgorod, Ryazan, Tula Regions, Mariy El
and Udmurtia Republics.
JSC IDGC of Center and Volga Region includes branch-
es – Vladimirenergo, Ivenergo, Kalugaenergo, Kiroven-
ergo, Marienergo, Nizhnovenergo, Ryazanenergo, Tule-
nergo, and Udmurtenergo. They supply power to over
13 million residents of the Central and Volga Federal
Districts, covering over 408 thousand sq. km.
The company operates:
• 1,548 high-voltage feeding centers 35/110/220 kV
with the total capacity of 29,354 MVA
• 44,205 km of power transmission lines 35 - 220 kV
• 26.63 km of high-voltage of cable lines with the volt-
age of 35 - 110 kV
• 263,391 km of distribution power grids
• 59,053 of transformer substations 6-35/0.4 kV
Consumers of the Company are: over 300 thousand enti-
ties in oil recovery, engineering, metal, woodworking and
chemical industries, railway transport, agriculture, con-
struction businesses, housing, utilities and social infra-
structure companies; and over 13 million of private con-
sumers (population).
RUB 11.3 billion
263,391 km59,053 pcs.
9 branches >13 mln residents >408 thousand km2
CHARTER CAPITAL OF THE COMPANY IS:
Distribution power grids:Transformer substations 6-35/0.4 kV:
Includes: JSC IDGC of Ceter amd Volga Region provides electricy:
6 7JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
10,958
2441,269
4,232
627
876
1,531
3,184
3,480
4,056
800
988
1,139
6,6134,855
2009 2010 2011
EBITDA, RUB mln
Interest to be paid
Depreciation
Profits tax
Net profit
2009 2009 20092010 2010 20102011 2011 2011
REVENUE, RUB mln NET PROFIT, RUB mln NET ASSETS, RUB mln
54,395
1,269 41,17647,191
24439,920
64,404 4,232 45,297
Indicator Unit 2009 * 2010 * 2011 2011/2010 (absolute increase)
2011/2010 (relative increase), %
Total revenue, incl.
Power transmission
Technological connection
Other sources
RUB million
RUB million
RUB million
RUB million
47,191
45,689
1,175
328
54,395
53,106
954
335
64,404
63,249
816
339
10,009
10,143
-139
4
18
19
-15
1
Capitalization RUB million 20,455 34,181 16,581 -17,195 -51
EBITDA RUB million 4,855 6,613 10,958 4,346 66
Net profit RUB million 244 1,269 4,232 2,963 234
Net assets RUB million 39,920 41,176 45,297 4,121 10
Profit per share RUB 0.0022 0.0113 0.0376 0.0263 234
Dividend per share RUB 0 0.00125 0.00280 0.0015 124
Share price at year end RUB/share 0.1815 0.3033 0.1471 -0.1562 -51
FINANCIAL PERFORMANCE
* Since January 01, 2011, company accounting and reporting were amended (Orders of the Russian Ministry of Finance №66n of July 02, 2010 and №186n of December 24, 2010). To align the data, we presented 2009-2010 indicators in accordance with the adjusted reporting for 2009-2010.
Indicator Unit 2009 2010 2011 2011/2010 (absolute increase)
2011/2010 (relative increase), %
Number of 35 kV and higher SS units 1,542 1,541 1,548 7 +0.45
Capacity of 35 kV and higher SS thousand MVA 28.49 28.61 29.35 1 +2.59
Number of TSS (DSS) of 6-35/0.4 kV units 58,639 58,845 59,621 776 1.32
Length of power transmission line circuits, networks
km 261,972 262,320 263,391 1,071 +0.41
Length of power transmission line circuits, routes
km 251,581 251,930 253,106 1,176 +0.47
Output to grid million kWh 56,175 59,492 59,653 161 +0.27
Productive supply million kWh 50,889 54,100 54,299 199 +0.37
Total losses million kWh 5,286 5,392 5,354 -38 -0.71
Total losses % 9.41 9.06 8.97 -53 -0.09
Power connected per technological connection agreements
MW 362.06 331.01 364.09 33.08 +10
Number of electric grids employees (payroll)
persons 21,559 22,074 22,269 195 +0.01
2009 20092010 20102011 2011
OUTPUT TO GRID, mln kWh POWER LOSSES, %
59,492
56,175
59,6539.41
9.068.97
SHARE CAPITAL STRUCTURE
16.82%GENHOLD LIMITED 20.64%
Other5.4%
Energosouz Holdings Limited
6.74%ENERGYO SOLUTIONS
RUSSIA (CYPRUS) LIMITED
50.4%JSC IDGC Holding
PRODUCTION PERFORMANCE
SHAREHOLDERS’ CAPITALas of May, 14 2012
8 9
Length of power transmission line circuits, km
Number of 35 kV and higher SS, units
Number of TSS (DSS) of 6-35/0.4 kV, units
Capacity of 35 kV and higher SS, thousand MVA
LEGEND
JSC WGC-3 Cherepetskaya SDPP / 1,285 MW Suvorov, Tula Region04
JSC WGC-2 Ryazanskaya SDPP / 2,650 MW Novomichurinsk, Ryazan Region05
Ryazan branch of Novoryazanskaya CHPP Ltd.
Novoryazanskaya CHPP / 425 MW Ryazan07
JSC RusHydro Nizhegorodskaya HPP / 520 MW Zavolzhye, Nizhny Novgorod Region08
JSC GAZ CHPP GAZ / 580 MW Nizhny Novgorod09
Ivanovskiye CCGTs branch of JSC INTER RAO UES
Ivanovskiye CCGTs branch of JSC INTER RAO UES / 650 MW
Komsomolsk, Ivanovo Region06
JSC Udmurtneft JSC SIBUR-Neftekhim JSC Kirovo-Chepetsk Chemical Plant1,145 863 697~2% ~2% ~1%05 07 09
JSC LUKOIL-Nizhegorodnefteorgsintez JSC Belkamneft JSC Schekinoazot908 767 529~2% ~1% ~1%06 08 10
38,584 km
224 units
0301 0902
KIROVENERGO
25,296 km
219 units
5,673 units
3.68 ths. MVA
050301 0802
UDMURTENERGO
12,412 km
88 units
2,969 units
1.13 ths. MVA
02 0302
MARIENERGO
59,530 km
259 units
14,255 units
5.20 ths. MVA
02
06
01
04
03
07
0801
09
NIZHNOVENERGO
263,391 km
1,548 units
59,621 units
29.35 ths. MVA
TOTAL
27,061 km
152 units
6,319 units
2.92 ths. MVA
0103
KALUGAENERGO
LARGEST GENERATING COMPANIES OF THE COMPANY’S FOOT-PRINT, PROVIDING CAPACITY TO GRIDS OF THE COMPANY
JSC TGC-6 Ivanovskaya CHPP-3 / 330.0 MW Ivanovo
Vladimirskaya CHPP-2 / 400.5 MW VladimirNovogorkovskaya CHPP / 305.0 MW Kstovo, Nizhny Novgorod RegionSormovskaya CHPP / 340.0 MW Nizhny NovgorodDzerzhinskaya CHPP / 580.0 MW Dzerzhinsk, Nizhny Novgorod Region
JSC TGC-5 Kirovskaya CHPP-3 / 160.0 MW Kirovo-Chepetsk, Kirov Region
Kirovskaya CHPP-4 / 320.0 MW KirovYoshkar-Olinskaya CHPP-1 / 195.0 MW Yoshkar-Ola, Mariy El RepublicIzhevskaya CHPP-1 / 78.0 MW IzhevskIzhevskaya CHPP-2 / 390.0 MW Izhevsk
JSC Kvadra Dyagilevskaya CHPP / 110 MW Ryazan
Novomoskovskaya SDPP / 261 MW Novomoskovsk, Tula RegionKaluzhskaya CHPP-1 / 48.9 MW Kaluga
01
02
03
LARGEST INDUSTRIAL CONSUMERS
JSC RZD (Russian Railways) 3,710
Share of the Company’s productive supply, % Consumption volume, million kWh
Gazprom Transgaz Nizhny Novgorod Ltd.
Name of Plants
Generating company
Generating company
Name of Plants/ /Installed
capacityInstalled capacity
Location Location
3,708
01 JSC Transneft1,571~3%~7% 03
JSC Volga1,328~2%~7% 0402
32,047 km
172 units
7,155 units
4.10 ths. MVA
01 100403
TULENERGO
15,283 km
141 units
3,806 units
2.62 ths. MVA
030601
IVENERGO
21,967 km
139 units
4,713 units
3.30 ths. MVA
01 0301
VLADIMIRENERGO
31,211 km
154 units
6,014 units
3.45 ths. MVA
01 0305 0703
RYAZANENERGO
8,717 units
2.94 ths. MVA
Kirov
Izhevsk
Yoshkar-Ola
Nizhny Novgorod
Ivanovo
Vladimir
Ryazan
Tula
Kaluga
10 11
ADDRESS TO SHAREHOLDERS.
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In 2011, JSC IDGC of Center and Volga Region made a sig-
nificant step towards an innovative and efficient distribu-
tion grid infrastructure in the operations area.
The Company’s successful performance in the report-
ing period has had a positive effect on the year-end fi-
nancial results. In 2011, the Company’s revenue totaled
RUB 64.4 billion, with gross profits amounting to RUB
7.3 billion.
In 2011, the Company’s Board of Directors convened
25 meetings, bringing up for discussion more than 320 is-
sues vital for the strategic development of the distribution
grids. Approval of the programs of innovative develop-
ment and consolidation of the Company’s power grid as-
sets is literally a milestone in the modernization of the
Russian power industry.
While growth rates of the world and Russian economy
were declining, the Company took efforts to maintain li-
quidity of its shares and fuel investor’s interest. In June
2011, the profits were distributed among the Company’s
shareholders for the first time. At the year-end 2010, the
dividends paid totaled RUB 141 million. In 2011, the Com-
pany published its first social report for 2009-2010.
The measures taken to improve investment attractive-
ness produced a positive effect on the Company’s securi-
ties. At the beginning of 2012, the Company’s shares were
transferred to the MICEX quotation list A Level 1, the capi-
talization totaling RUB 16.6 billion at the year-end 2011.
In 2012, the Company will keep on researching and im-
plementing knowledge and expertise gained by the IDGC
holding power distribution grids and its strategic partners,
as well as advancements of the fundamental, applied and
industry-related science in order to enhance competitive-
ness of the national economy and meet the targets of the
socio-economic development of the Russian Federation.
I would like to thank the Company’s management
and employees, shareholders and members of the Board
of Directors for their valuable contribution to main-
taining the Company’s goodwill and upholding high
standards of corporate culture, ensuring sustainable
development and financial stability. I am convinced
that JSC IDGC of Center and Volga Region will achieve
all its goals and its contribution to the strengthening
of the distribution power grid complex of Russia will re-
main notable.
Sincerely, Chairman of the Board of Directors
of JSC IDGC of Center and Volga Region
Aleksey Perepelkin
IN 2011, JSC IDGC OF CENTER AND VOLGA REGION
MADE A SIGNIFICANT STEP TOWARDS AN INNOVATIVE
AND EFFICIENT DISTRIBUTION GRID INFRASTRUC-
TURE IN THE OPERATIONS AREA.
DEAR SHAREHOLDERS!
12 13
ADDRESS TO SHAREHOLDERS.
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
LAST YEAR THE COMPANY MADE A SIGNIFI-
CANT STEP TOWARDS SMART POWER INDUSTRY.
FULL TRANSITION OF ALL ITS BRANCHES
TO THE RAB METHOD CREATED A STEADY
PLATFORM FOR THAT.
In 2011, the Company set its top priority on forming a new
grid infrastructure of the innovative distribution power
complex.
Last year the Company made a significant step towards
smart power industry. Full transition of all its branches
to the RAB method created a steady platform for the
latter as the Company’s investment program for the re-porting period increased 1.6 times amounting to RUB 13.6 billion. The Company managed to carry out proj-
ects of large scale and vital importance for the region.
Launching of the first start-up facility of the SS Sozvezdie
220/110/10 kV in the Kaluga region increased reliability
of the power supply in the whole Obninsk energy cluster.
In the Udmurtia Republic, the first line of the grid with
the Smart Grid elements was constructed. In the Vladimir
region, the Company launched SS Pokrov 110/35/10 kV,
where, along with the capacitor bank, controlled shunt
operator was installed, which has so far been the only
one in power systems of 110 kV in the Central Russia.
The Company’s program of innovative development for 2011-2016 provides for increasing power efficiency and
ecological safety of the power transmission and distribu-
tion as well as introduction of the new generation grid –
Smart Grid.
In 2011, the Company put into operation new power fa-
cilities which were required for the development of the
regions. New power capacities totaled 1,263.9 MVA.
On the whole, over the last year the Company connected more than 19 thousand consumers.
In the reporting year, the Company fulfilled its repair
program entirely. Facilities repaired included 225 substa-
tions with voltage ranging from 35 to 110 kV, 36 thou-
sand kilometers of 0.4-110 kV overhead electric lines and
more than 8 thousand distribution points and 6-10/0.4 kV
transformer substations. Actual repair costs totaled RUB 2.8 billion.
The Company attaches great importance to the profes-
sional training, enhancement of the talent pool, social
responsibility towards its consumers and society on the
whole, integrated communications and international co-
operation.
In 2011, the Company received a Diploma from the Gov-
ernment of the Russian Federation for its outstanding
achievements in terms of quality of the power transmis-
sion and distribution services. The fact that the Company’s
performance is marked by the Government second year
in a row proves that the Company moves in the right devel-
opment direction which is aimed at increasing reliability
of the power supply.
I believe that the Company’s achievements in 2011 are
largely due to honest management and success-driven
employees. Undoubtedly, with such an asset as a coordi-
nated and goal-motivated team the Company will reach all
the objectives necessary to create an integral innovative
state-of-the-art power grid infrastructure.
Sincerely, General Directorof JSC IDGC of Center and Volga RegionEvgeny Ushakov
DEAR SHAREHOLDERS!
14 15JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Vladimirenergo branch
Renovation of SS 110/35/10 kV Pokrov (Volginsky, Petushki District, Vladimir Region)Capacity of capacitor bank - controlled shunt reactor: 25 MvarLaunched October 25, 2011
Project aims and objectives: Introduction of the controlled shunt reactor led to establishment of capacitor bank - controlled shunt reactor system for the volt-age of 110 kV with the capacity of 25 Mvar with sliding control of reactive power to increase the transmission capacity of power grids, maintain normal voltage level and reduce power losses.
Innovative component:Innovative portion financing amounts to RUB 39,230.9 thousand. Renovation included instal-lation of the first controlled shunt reactor RTDU 25000/110-UHL-1 at JSC IDGC of Center and Volga Region with the capacity of 25 Mvar. The planned ecomonic effect jointly with the capacitor bank 110 kV is RUB 1,802 thousand.
Ivenergo branch
Construction of SS 110/6 kV Ivanovskaya-15 (1st launch phase)(Ivanovo, Ivanovo Region) SS capacity: 40 MVA Launched December 27, 2011
Project aims and objectives: Implementation of the project will eliminate capacity deficit in the central part of the city and create an opportunity to connect new power consimers to grids of Ivenergo branch, as well as enable even distribution of load among the existing substations to enhance reliability of comsumer power supply and reduction of technical losses.
Innovative component:Innovative portion financing amounts to RUB 15,104 thousand. Construction employed innovative materials: SF6 circuit breakers LTB-145 D1/В, dry-type transformers TSZ-630/6 U1 with the capacity of 630 kVА for the system of own needs with the voltage of 6/0.4 kV, polymer-shelled overvoltage limiters, motor disconnecting switches RGPZ.
Kalugaenergo branch
Construction of SS 220/110/10 kV Sozvezdie (1st launch phase)(Borovsk district, Kaluga Region, near Dobrino)SS capacity: 250 MVALaunched November 08, 2011
Project aims and objectives: Power supply to Industrial Park Vorsino – a cluster of plants to produce various goods – and increased reliability of power aupply to consumers at 110 kV grid.
Innovative component:Innovative portion financing amounts to RUB 26,401.4 thousand. Construction included installation of ATDTsTN-250000/220У1 autotype transformer with the capacity of 250 MVA produced by OAO ZTR. Advanced SF6 circuit breakers 220 kV HPL 245B1 and 110 kV VEB-110-II-40/2500 UHL1 were used, as well as mea-suring current transformers 220 and 110 kV TG, voltage trans-formers 220 kV and 110 kV SRV, state-of-the-art disconnecting switches 220 kV RG and 110 kV RGP. Fiberglass was used for the main communications channel and transmission of TM, TU, TS and TI signals.
Udmurtenergo branch
Construction of SS 110/10kV Soyuznaya with overhead access lines 110 kV (Ustinovsky district, Izhevsk, Udmurtia Republic)SS capacity: 80 MVALaunched November 03, 2011
Project aims and objectives: National programs on housing and plans for comprehensive de-velopment of Izhevsk vacant areas stipulate construction of new microdistricts Aeroport and Vostochny, including new residential areas, office buildings, retail and entertainment centers, utilities, social facilities and infrastructure. Project implementation will provide power to newly built districts of the city, increase the number of feeding centers with the secondary voltage of 10 kV, ensure reservation for the current grids of 10 kV.
Innovative component:Innovative portion financing amounts to RUB 27,000 thousand. Construction employed innovative equipment: SF6 circuit break-ers 110 kV VEB-110, microporcessor relay protection and auto-mation devices Sirius, vacuum circuit breakers 10 kV BB/TEL-10, advanced systems of teleautomation and automation.
Ryazanenergo branch
Renovation of SS 110/10 kV Esenino (Fedyakino, Rybnoe District, Ryazan Region)SS capacity: 20 MVA Launched November 22, 2011
Project aims and objectives: Increased power supply reliability. Decision on renovation was made on the basis of joint draft Agreement № 34-1/4 «On in-teraction of the Ryazan Region Government and JSC RAO UES of Russia for development of Ryazan Region power system and assurance of reliable supply to consumers» dated February 18, 2008. The project was implemented within the time set by the Agreement.
Innovative component:Innovative portion financing amounts to RUB 29,043.7 thousand. Renovation included the following innovative equipment: SF6 dead-tank circuit breakers VEB-110-40/2500 UHL1, relay protec-tion and automation boxes ShE produced by CJSC Radius Avtoma-tika, SF6 current transformers TGFM-110 U1, SF6 voltage trans-formers ZNG-110 U1, vacuum circuit breakers BB/TEL-10.
MAP OF NEW INNOVATIVE CAPACITY, 2011
Kirov
Izhevsk
Yoshkar-Ola
Nizhny Novgorod
Ivanovo
Vladimir
Ryazan
Tula
Kaluga
BUSINESS OVERVIEW01
Automated information system of energy metering and control (AISEMC) with Smart
Grid elements, implemented in the village of Karakulino, the Udmurt Republic, en-
ables implementation of control over consumption of energy resources, and obtain-
ing of authentic data from metering tools, which serve as a basis for development
of energy saving actions
18 19
01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
HISTORY OF INDUSTRY AND THE COMPANY
KEY STAGES OF INDUSTRY DEVELOPMENT
1.1
A country-wide unified energy infrastructure was established.
The signs of slowdown in the development of the industry began to show in, with the upgrade
of production facilities lagging behind the electric power consumption growth.
The power industry was privatized, followed by the establishment of the territorial power com-
panies. JSC RAO UES of Russia was established to control 118 subsidiary and dependent com-
panies, or practically all electrical energy assets of the country.
The necessity for urgent large-scale transformations contributing to the upgrade of basic ca-
pacities, the increase in industry efficiency and the improvement of reliability and safety of
consumer power supply became evident.
Large-scale electrification of the country according to the Plan adopted by the State Com-
mission on the Electrification of Russia was performed accompanied by the construction of
regional heat power and hydro-electric stations.
Major steps were taken to develop heavy and energy industry, including the electricity
distribution sector.
Post-war restoration of the destroyed electric power grid complex of the country was performed.
Unified Energy System was established, accompanied by implementation of major state-support-
ed energy projects, including the developments in the field of atomic energy and the construction
of nuclear power stations.
Early 20th century
Late 1980s
1990s
Late 1990s
1920s–1930s
1930s
1940s
1960s
Formation of Russian Electric Power Industry
Privatization and Reform
20TH CENTURY
The reform of the industry was launched. Aims and objectives of the reform are defined by Order
№ 526 of the Government of the Russian Federation “On the Reform of Electric Power Industry
of the Russian Federation” dated July 11, 2001. The reform involved changes in the structure of
the power industry, which included the separation of naturally monopolistic (electrical energy
transmission and operative dispatch control) and potentially competitive (production and sale
of energy, repair and service) functions. The vertically integrated companies which performed
these functions were replaced by organizations specializing in selected activities. The com-
panies were integrated by their activities and operations areas. The reorganization took place
from 2001 to 2008, RAO UES of Russia was dismissed on July 01, 2008.
As a result of reorganization of JSC RAO UES of Russia, JSC IDGC Holding was spun off
www.holding-mrsk.ru. It owns 50.4% of shares of JSC IDGC of Center and Volga Region and
the controlling interest in more than ten interregional distribution grid companies and other
subsidiary and dependent companies.
The data on new target structure of the industry after the reform are shown at the web site
of JSC RAO UES of Russia www.rao-ees.ru under Power Industry Reform.
Details of power industry reforms are also available at the Company’s web site www.mrsk-cp.ru
under “About the Company / Power Industry Reform” and the official site of the Russian Ministry
of Energy www.minenergo.gov.ru under “Activities / Power Industry / State of the Industry”.
Early 21st century
21TH CENTURY
20 21
01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
JSC Vladimirenergo
JSC Ivenergo
JSC Kalugaenergo
JSC Kirovenergo
JSC Marienergo
JSC Nizhnovenergo
JSC Ryazanenergo
JSC Tulenergo
JSC Udmurtenergo
Charter capital RUB 10 million
JSC IDGC of Center and Volga Region / Charter capital RUB 11.3 billion
Branches: Vladimirenergo, Ivenergo, Kalugaenergo, Kirovenergo, Marienergo, Nizhnovenergo, Ryazanenergo, Tulenergo, Udmurtenergo
Completion of reorganization
as affiliation
Extraordinary General Sharehold-xtraordinary General Sharehold-
ers Meetings of nine DGC and JSC
IDGC of Center and Volga Region
on affiliation
The new configuration of IDGC
approved by the Government of
Russia
Agreements concluded with nine
DGCs on the transfer of functions
of the sole executive body (CEO)
JSC IDGC of Center
and Volga Region is registered
FEBRUARY 29, 2008
JUNE 28, 2007
Q3 2007
FEBRUARY 19, 2007
DECEMBER 2007
CEODetails of the Company his-
tory are shown at the Compa-
ny’s web site www.mrsk-cp.ru
under “About the Company /
History of the Company”
The establishment of JSC IDGC of Center and Volga Region is an integral part of the reform of the Russian electric power industry.
HISTORY OF THE COMPANY
POSITION IN THE INDUSTRY AND OPERATIONS1.2
Pow
er r
etai
l com
pani
es
WHOLESALE ELECTRIC POWER MARKET
RETAIL ELECTRONIC POWER MARKET
JSC FGC UES
JSC IDGC of Center and Volga Region
Territorial grid companies
Comsumer of the power supply
Allied power systems
Consumers of the wholesale market TGC, WGC
Electric power flows
Elecrtic power transmission
Elecrtic power transmission
Elecrtic power transmission
Elecrtic power transmission
Elecrtic power transmission
Purchase of elecrtic power
Purchase of power losses
Purchase of power losses
Purchase of elecrtic power
Elecrtic power transmission
Direction of financial payments
Today JSC IDGC of Center and Volga Region is the largest
grid organization in the areas of its presence. Its core
business is transmission of power.
REVENUE BREAKDOWN BY TYPE OF ACTIVITY IN 2011
0.53%Ower activities
98.21%Transmission
of power
1.27%Technological connection to grids
22 23
01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
JSC IDGC of Center and Volga Region is a natural monopo-
list. Subject to Order № 263-e of the Federal Tariff Ser-
vice dated June 27, 2008, the Company is included into the
registry of subjects of natural monopoly in the fuel and
energy industry, regulated and controlled by the state.
The tariffs (prices) for the services of the Company are
set by the regulatory bodies of the corresponding regions
of the Russian Federation.
The key trend of the power industry in the recent two
years has been increased power supply to consumers
due to post-crisis restoration of the country’s economy
and improved macroeconomic indicators. In the previous
year, GDP growth was estimated by Rosstat as 4.3%, and
industrial production growth as 4.7% year on year. Power
consumption grew by 1% to 1,030.5 billion kWh in 2011.
Performance of JSC IDGC of Center and Volga Region large-
ly corresponds to the general trends in industry develop-
ment. In the reporting year, productive supply of power
by the Company increased by 0.4% against 2010, and the
number of technological connections grew by 21.1%, their
capacity increasing by 10%. More detailed description of
macroeconomic factors influencing JSC IDGC of Center
and Volga Region performance is available at the Com-
pany’s web site www.mrsk-cp.ru under “For Shareholders
and Investors / Information about the Company’s finan-
cial-economical activity / Review of macroeconomic
factors and risks”.
JSC IDGC of Center and Volga Region holds a domineering
position on the market in the regions of its footprint, both
in power transmission and in technological connection
of consumers’ power receivers to grids. The major share
of power supplied to consumers passes along the grids
owned by the Company.
As estimated by JSC IDGC of Center and Volga Region, the
overall volume of the power transmission market of 2011
comprised 52,581 million kWh in natural terms, the share
of JSC IDGC of Center and Volga Region being 60%.
INDUSTRY OVERVIEW
MARKET SHARE OF THE COMPANY
YEAR ON YEAR GROWTH OF KEY PRODUCTION INDICATORS IN 2011
+0.4%
+21.1%+10.0%
PRODUCTIVE POWER SUPPLY
NUMBER
TECHNOLOGICAL CONNECTIONS
CAPACITY
Note: Productive supply of the Company is stated in relation to the consumers, connected directly to the grids of the
Company’s branches.
The major companies engaged in similar activities in
the Company’s operations areas include the following
territorial grid organizations:
• JSC Vladimir Region Electric Power Company, Vladimir;
• Municipal Unitary Enterprise Gorelektroset, Murom,
the Vladimir Region;
• Municipal Unitary Enterprise Gorelektroset, Kirov;
• Municipal Enterprise Gorseti, Obninsk, the Kaluga
Region;
• Regional Grid Company Ltd, Kirov;
• Gazpromenergo Ltd, Nizhny Novgorod;
• JSC GAZ, Nizhny Novgorod;
• Municipal Unitary Enterprise Ryazan Municipal
Power Grids;
• JSC Russian Railways - in all operations areas;
• JSC Tula Municipal Power Grids;
• Udmurtenergoneft, Izhevsk.
Services of JSC IDGC of Center and Volga Region are in-
tended for direct consumers on the wholesale and retail
markets – organizations and individuals, as well as re-
tail companies (major consumers), supplying power to
end users. The Company works with the following large
retail companies:
• JSC Vladimirenergosbyt;
• JSC Ivenergosbyt;
• JSC Kaluga Retail Company;
• JSC Kirovenergosbyt;
• JSC Marienergosbyt;
• JSC Nizhny Novgorod Retail Company;
• JSC Ryazan Retail Company;
• JSC Tula Retail Company;
• JSC Udmurtia Retail Company;
• Rusenergosbyt Ltd in six operations areas.
92% of the technological connection customers is made by preferential customers connected to the grids of up to 15 kW.
Since 2009, the number of applications from preferen-
tial consumers grew more than twice.
The year 2011 saw a considerable increase in the de-
mand for technological connection from large consum-
ers (over 750 kVA). In a number of regions, the tech-
nological connection tariff was adopted without
the investment component; as a result, the number
of applications and the total contracted capacity of this
category increased twice against the previous year.
CONSUMERS OF SERVICES
POWER TRANSMISSION MARKET IN 2011 (VOLUME OF PRODUCTIV SUPPLY TO CONSUMERS)
60%31,335 млн кВтч
JSC IDGC of Center and Volga Region
40% 21,246 млн кВтч Other territorial grid organizations (TGO)
24 25
01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
JSC IDGC OF CENTER AND VOLG A REGION E XECUTIV BODY
JSC Berendeevskoye (100%)
JSC Luchinskoye (100%)JSC Sanatorium -
preventorium «Energetik» (100%)
JSC IEC EnergoefficiencyTechnologies (51%)
JSC ATU (100%) CJSC Svet (100%)JSC Tulenergokomplekt (50%)
NINEO Educational Center «Energetik»
(Kirov)
NEI PPSE Educational Course Center
(Tula)
NEI EducationalCenter «Energetik»
(Izhevsk)
Educational Center «Energetik»
(Kaluga)
PEI Vladimir Educational Center
«Energetik»(Vladimir)
NEI IvanovoEducational Center
(Ivanovo)
PEI Educational Center «Energetik-NN»
(Nizhny Novgorod)
PD: Production Departaments RPG: Regions of power grid
PD: 4 RPG: 19
VladimirenergoBranch
PD: 3 RPG: 20
IvenergoBranch
PD: 9 RPG: 57
NizhnovenergoBranch
PD: 4 RPG: 26
RyazanenergoBranch
PD: 4 RPG: 28
TulenergoBranch
PD: 3 RPG: 27
UdmurtenergoBranch
PD: 5 RPG: 41
KirovenergoBranch
PD: 3 RPG: 14
MarienergoBranch
PD: 4 RPG: 26
KalugaenergoBranch
Network of CorporateEducatonfl Ctnters
SubsidiariesDependentcompanies
COMPANY STRUCTURE1.3
• Reliability and responsibility. The Company is
a part of a single power system, providing 24/7 for
the activity of seven regions and two republics of
the Central and Volga Federal Districts. The Com-
pany is responsible to consumers, and decisions
made by its employees are primarily based on the
principle of reliable power supply to customers.
• Client-oriented approach. Economic development
of the regions in which the Company operates pre-
supposes increased requirements of consumers
to the level of service and quality. The Company
is always oriented at the interests of consumers and
strives to satisfy their needs.
• Teamwork. Professionalism, mentoring and involve-
ment of employees in ongoing improvements are the
Company’s key advantages.
The underlying principles of the Company are permanent
performance improvement with a view to successful
business development, growth in shareholders’
and employees’ welfare, responsibility of the Company
to the country in terms of seamless power supply.
SYSTEM OF VALUES
STRATEGIC PRIORITIES AND DEVELOPMENT PROSPECTS
1.4
WE ARE RESPONSIBLE IN OUR WORK TO THE COUNTRY, PARTNERS,
EMPLOYEES AND SHAREHOLDERS.
“
”
WE ARE TARGET-ORIENTED PEOPLE WHO SET WELL-DEFINED GOALS AND ATTAIN THEM.
INTEGRITY, RELIABILITY AND PROFESSIONALISM ARE THE BASIS
OF RELATIONS WITH OUR BUSINESS PARTNERS.
WE ARE FRIENDLY, HONEST AND OPEN IN OUR MUTUAL RELATIONS.
THE BASIS OF OUR CULTURE IS A PERMANENT DRIVE TOWARDS PERFECTION.
26 27
01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
MID-TERM GOALS
Increased operational and investment efficiency
Improved relations with consumers, society and investors
Company growth (value added)
Increased level of quality and reliability of power supply
Retention of tariff sources of investment into grid upgrade and development
1. Reduced costs of repair, operation, control and auxil-
iary functions per consumer
2. Introduction of reliable metering of the volume and
cost of commercial and technical power losses and
their reduction programmes
3. High load of introduced capacity, increase in responsi-
bility of regional authorities and investors for loading
capacities built for them
4. Increased return on investment due to effective rang-
ing and selection of projects and results tracking
5. Reduction of unit cost of construction due to intro-
duction of standard solutions, increased transparency
of unit costs
6. Increased quality of project implementation due to
introduction of project management principles
7. Personnel development
1. Targeted policy to enhance trust to the Company 2. Increased transparency of operations, implementation
of the pronciple “tariffs for quality and reliability”
1. Introduction of innovative equipment and
technologies
2. Improved business process management
1. Establishment of a system of reliable assessment of
power supply quality and reliability
2. Increased responsibility for achievement of targets in
quality and reliability
1. Retention of RAB system and adjustment of its
parameters
2. Building a government position on the necessity to
reduce the number of territorial grid organizations
3. Systemic solution to the problem of cross-subsidy and
retention of the Company’s revenues
4. Solution to the problem of non-payment by retail
companies
IMPLEMENTATION TOOLS
RELIABLE HIGH-QUALITY SUPPLY OF POWER
FOR GROWING DEMANDS OF THE ECONOMY
AND THE SOCIAL SECTOR OF THE FOOTPRINT
REGIONS AT SERVICE RATES ACCEPTABLE FOR
CONSUMERS
MISSION, GOALS AND TOOLS OF THEIR IMPLEMENTATION
28 29
01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
STRATEGY DEVELOPMENT
JSC IDGC of Center and Volga Region and expectations of the key market stakeholders
JSC IDGC of Center and Volga Region is a part of the
Russian power distribution grid system. The key share-
holder of the Company is JSC IDGC Holding, with the
53.7% share of the government in it.
JSC IDGC Holding is a governmental agent for manage-
ment of distribution grids and the industry leader. As a
backbone organization, JSC IDGC Holding performs gen-
eral industry tasks within the framework of the subsid-
iary companies controlled by it, sets unified standards
of work and ensures development and promotion of op-
timum industry regulation mechanisms.
November 22, 2011, decision of the JSC IDGC Holding
Board of Directors approved the Strategy of JSC IDGC
Holding Development till 2015 and prospective devel-
opment till 2020.
JSC IDGC of Center and Volga Region, being a subsidiary
of JSC IDGC Holding, follows this Strategy. The Company
develops and follows the Plan of its Implementation till
2015 and Prospective Development till 2020. Expecta-
tions of all key market stakeholders towards JSC IDGC of
Center and Volga Region are taken into account.
Investment community
Consumers
JSC FGC UES
Regions and local authorities
Personnel
Securities of JSC IDGC of Center and Volga Region are an efficient instrument
of investment, ensuring their refundability, reliability, yield and liquidity
JSC IDGC of Center and Volga Region covers the economy’s needs of distribution capacities, being a reliable partner to executive bodies of Russian regions in planning and implementation of regional territorial development programs, a conscientious taxpayer and employer
JSC IDGC of Center and Volga Region is an effectively organized company with a transparent and clear system of corporate governance, offering opportunities for maximum unlocking of the employees’ potential
JSC IDGC of Center and Volga Region is a company aimed at high-quality services – reliable and uninterrupted power supply, timely and transparent technological connection to power grids at affordable prices
JSC IDGC of Center and Volga Region is a reliable partner ensuring coordinated
development of power grid system of the region and pursuing unified technical policy
SHORT-TERM STRATEGY AS VIEWED BY THE MANAGEMENT
LADA PODOLSKAYADEPUTY GENERAL DIRECTOR FOR CORPORATE GOVERNANCE
“We pay considerable attention to sustaining the
high level of corporate management and information
openness. Transition of our Company to first-level
quotation list A in February 2012 proves that this
work is efficient. Increased capitalization and ensuring
shareholders’ rights have always been a key task of our
company development.
Increase in social responsibility of business is also
important for us. In 2011, we issued the Company’s first
Social Report for 2009–2010.
Considering the nature of our business, an important
aspect is development of the Company’s talent
pool. In the reporting year, we developed programs
for recruitment and induction of young employees,
the system of mentoring was reintroduced. In 2012,
we plan to develop programs for development of
management potential of the most promising young
employees and implement a number of other social
projects.
A promising area of the Company’s property development
is consolidation of local power grid systems within the
Company’s footprint. To implement this task, we plan
to acquire territorial grid companies owning these
systems or to sign long-term lease contracts with them.
Considerable attention will still be paid to construction
of new power grid facilities.”
OLGA TIKHOMIROVADEPUTY GENERAL DIRECTOR FOR ECONOMICS AND FINANCE
“The main event of 2011 in the sphere of tariff regulation
for power distribution services was complete transition
of the Company’s branches to long-term RAB-based tariff
regulation, which, inter alia, enables considerable increase
in investment to power grid facilities development.
At the same time, the document governing the Company’s
economy in the short term is Order №1172 of the Russian
Government dated December 27, 2010, according to which,
starting May 01, 2011, tariffs for power transmission for
2011 must be reviewed on the basis of increase in the
average regional tariff no more than 15%. As a result,
the amount of the required gross revenue of JSC IDGC
30 31
01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
of Center and Volga Region considered in defining the
single (boiler) tariffs for power transmission in 2011
was reduced by RUB 3,047 million. It was largely due to
reallocation of the required gross revenue of branches by
years within the limits of the long-tram regulation period.
To fulfill this task and to ensure even growth in tariffs in
the nearest years, a decision was taken for Vladimirenergo
and Kalugaenergo branches to extend the period of long-
term regulation from three to five years.
The current rules of long-term tariff regulation encourage
the Company to improve its efficiency and reduce operating
costs, which will remain a priority for our Company in the
nearest years.
In 2011, within the framework of this task, we already
implemented a wide range of measures aimed at
improvement of business processes, reduction in power
losses, optimization of procurement and increase in
energy efficiency without impact on the quality of
power grid servicing. The efforts made by the Company
employees in various functional areas were beneficial for
its financial performance – in 2011, net profit amounted
to RUB 4.2 billion, which is almost three times as much
as the pre-crisis year 2008. While regulating authorities
keep restricting the power tariff growth, the Company
will continue performing its obligations and rationally
using assets to retain financial stability”.
VLADIMIR SHITTSDEPUTY GENERAL DIRECTOR FOR CAPITAL CONSTRUCTION
“In 2011, our Company implemented an investment
program in the amount of RUB 13,569 million. It is the
largest yearly investment in the history of the Com-
pany. Approximately 19,840 new consumers were con-
nected with the total capacity of 364.09 MVA. Such
capital investments were possible largely due to com-
plete transition of all our branches to RAB regulation.
The Company received an opportunity to increase pow-
er facilities construction and renovation volume, grad-
ually solve the problems of distributing grids deprecia-
tion, upgrade the grid infrastructure, thus contributing
to social and economic development of the regions it
covers. In 2011, new facilities were introduced, cur-
rent ones renovated, first facilities with smart-grid
elements were introduced in several regions, project
management of capital construction was launched.
In the nearest future, the Company will continue invest-ing in increased reliability of consumer power supply, reduction in fixed assets depreciation, building condi-tions for connection of new capacities and regional de-velopment”.
SERGEY ANDRUS
DEPUTY GENERAL DIRECTOR
FOR TECHNICAL ISSUES – CHIEF ENGINEER
“In 2011, the Company increased productive supply of power
against the previous year. Moreover, we increased the vol-
ume of maintenance and repairs program, considerable
funds were sent to finance clearing and expansion of routes,
we completed implementation of pilot projects for distribut-
ing grids with new topology of power transformers.
We follow the drive to upgrade of the grid facilities and
establishment of the new power grid infrastructure in
the basis of large-scale technological renovation and
construction of new-generation grids.
Our plans include integration of advanced achievements
of industry and academic science in the distributing
power grid system. Transition to “smart” power industry
will reduce costs of technical operation of grids, reduce
losses and increase productive supply. The Program for
the Company’s Innovative Development for 2011–2016
adopted in July 2011, stipulates introduction of inno-
vative equipment, technologies and materials, as well
as implementation of a large number of research and
development technologies. It will further enhance the
Company’s market position.
Moreover, a key objective of the Company’s develop-
ment in the nearest future is gradual removal of restric-
tions on the transmission capacity of distributing grids.
We believe that the key means to perform this task are
to ensure economic efficiency of the decisions made, to
employ new technological solutions, to arrange coor-
dinated development of distributing and main grids, as
well as generating facilities. Such comprehensive ap-
proach will eventually enable free connection of new
consumers, boost power supply reliability for the cur-
rent ones, meet the average mid-term demand for pow-
er and capacity, and develop stable and favorable condi-
tions for additional investment in the regions.
As far as client relations are concerned, the Company
will continue implementation of a client-oriented ap-
proach. We aim at increasing consumer loyalty by im-
provement in the service quality, including provision
and development of remote and interactive services and
ensuring territorial accessibility of services”.
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01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
STRATEGIC OBJECTIVES AND THEIR IMPLEMENTATION
№ Priorities, objectives and measures for their implementation
Results of 2011 Plan for 2012 and later
1. Increase in reliability and quality of the services provided
1.1. Training of Customer Service Centers employees. Completed in accordance with the adopted training program. Improvement in the client service by ensuring better competence of employees.
1.2 Standardization of consumer service processes in the Company and increase in the service quality.
The following Standards were adopted: • Consumer satisfaction. Requirements to organization of assessment and
analysis of consumer satisfaction degree;• Consumer relations management system. Corporate design of Customer
Service Centers and single dress code for Customer Service Centers employees, business ethics principles;
• System of centralized service for consumers.
Development of the Standard on consumer relations system. Requirements for client relations during restoration of technical specifications and alignment of supplements to power supply contracts.
Alignment of customer service system with the Standard on the system of centralized service for consumers.
1.3. Ensuring efficient work of «Clients / Internet reception» section at the Company’s web site and development of new information sections to meet client needs.
The structure of «Clients / Internet reception» section was updated and new information sections at the Company’s web site were introduced: «Planned disconnection schedule» and «Current data on emergency disconnection».
Arrangements for regular updating of «Clients / Internet reception» section and analysis of feedback from consumers.Creation of «Power Saving» section at the Company’s web site.
Update of questionnaires at sites of branches.
1.4 Extension of client service network.Opening new customer service centers.
Three new Customer Service Centers opened:• in Petushki (Vladimirenergo branch);• in Navashino (Nizhnovenergo branch);• in Karakulino (Udmurtenergo branch).
Opening of the Unified Information Center (held January 23, 2012) and Customer Service Center in Balakhna (Nizhnovenergo branch).
1.5. Compliance with service reliability indicatorsapproved by territorial regulators.
Deviations from the approved indicators by reliability of services rendered did not exceed the acceptable level.Planned reliability indicators were achieved.
Measures to achieve the approved targets of service reliability.
1.6. Timely and high-quality completion of repairs. Repair and maintenance program was fully completed in the amountof RUB 2,844.25 million, which is 10% higher than the level of 2010.
Performance of repair program for 2012 in the amount of RUB 2,629.1 million.
1.7. Standardization of repair and maintenance procedures.
A new Standard issued: “Requirements for Organization and Management of Repairs and Maintenance at JSC IDGC of Center and Volga Region” STO 01–015–2011.
Analysis of production processes.Identification of the need to update certain provisions of the Standard “Requirements for Organization and Management of Repairsand Maintenance at JSC IDGC of Center and Volga Region” STO 01–015–2011.
1.8. Business process optimization for the Companyby quality management tools.
25 new standards for the Company were made. Development of nine organization standards and four production instructions in 2012.Update of 18 standards.
2. Increased operational and investment efficiency
2.1. Regulation of cost estimates in capital construction on the basis of new technical specifications and regulating documents in cost estimates.
Regulatory documents implemented. Alignment of processes to the documents issued and update of the documents when required.
2.2. Transition to project managementin capital construction.
Works performed to introduce project management and the respective software. Implementation and improvement of project management.
2.3. Construction control in accordance with requirements of regulators.
Construction control was carried out in accordance with requirements of regulatory documents.The Company’s regulatory documents were updated.
Alignment of processes to the documents issued and update of the documents when required.
2.4. Introduction of an integrated system of internal control and risk management.
Methodological Recommendations for risk management were adopted.Provisions on control environment and business process risks were adopted in the following areas:• commercial metering and sales of power transmission services;• procurement;• sales of technological connection services;• operations.The Company’s General Director issued orders on implementation and adjustment of these provisions.
Ensuring effective functioning of the system of internal control and risk management.
2.5. Introduction of the system of production assets management.
The necessary methodology, regulations and instruments were made, templates created for collection of data on the Company equipment.The pilot branch, Kirovenergo, fully completed data collection for the main grid equipment, data collection for the distributing grid started.The company began introduction of production assets management system on the basis of SAP ERP at other branches of the Company.In 2011, technical places and over half of the equipment units of the Company’s main grid were introduced into SAP ERP.
Completion (in 2012) of SAP ERP introduction of main and distributing grids equipment, implementation of calculation for equipment status and failure consequences, as well as implementation of production program planning.
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01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
№ Priorities, objectives and measures for their implementation
Results of 2011 Plan for 2012 and later
2.6. Operations efficiency increase. EBITDA growth rate exceeded the Company revenue growth rate against 2010.(EBITDA grew by 66%, revenue – by 18%).
Further implementation of a set of measures to boost operations efficiency, including reduction of power losses, administrative costsand inventory optimization.
3. Increased investment attractiveness
3.1. Transition to long-term RAB-based tariff regulation. Starting January 01, 2011 all Company branches use long-term RAB-based tariff regulation.
Further activities, including cooperation with regulatory bodies aimed at tariff approval on the basis of installed long-term parametersand regulations of the current legislation.
3.2. Achievement of planned return on equity ensured by cash flow.
The Company’s return on equity is 10.19% (the planned indicator was 7.49%). Achievement of planned return on equity set by the Board of Directors.
3.3. Maintenance of impeccable credit history. In 2011, liabilities to pay the principal amount, interest and other expenses related to servicing borrowed funds were fully and in due time met by the Company.
Unconditioned performance of the Company’s liabilities within the framework of contracts with creditors.
3.4. Efficient IR program. Establishment and maintenance of long-term relations with shareholders and investors.
IR Program for 2011 was implemented.Company shares were transferred to quotation list А, second level at MICEX stock exchange.Dividend was accrued and paid for the Company shares.
Implementation of the IR Program for 2012 approved by the General Director.Assurance of the Company’s informational transparency considering the needs of investment community.Transfer of Company shares to quotation list А of the first level at MICEX (completed February 20, 2012).
3.5. Development of the corporate governance system. Following best practices of corporate governance.
New versions of the Charter and internal documents of the Company regulating management activities were executed and adopted.Efficient operations of the Company management were ensured, including committees of the Board of Directors.
Corporate procedures in accordance with the effective Russian legislation.Update of the Company’s internal documents in line with the legislative requirements and control of their efficient implementation.
4. Increased energy efficiency and innovative development
4.1. Development of programs for power saving and increase in energy efficiency of branches in accordance with requirements of regional regulatory authorities.
The programs were developed fully and approved by the Company’s Board of Directors. Mandatory energy examination of the Company’s branches was made.
Unconditioned compliance with the target indicators of the Program for Power Saving and Energy Efficiency for 2012–2016.Update of the Company branches’ programs for power saving and energy efficiency.Receipt of the Company’s single energy passport.
4.2. Upgrade of consumer power metering points. The plan for the reporting year was competed by 100% – 29,597 metering pointswere upgraded.
Compliance with the Company’s Program of Perspective Development of the Billing Systems.
4.3. Reduction in the power resources spendingon production and administrative needs; reductionof power losses.
The planned measures were fully completed. Planned activities and reduction in power resources spending by over 10% by 2017.
4.4. Development of the Program of Innovative Development for 2011 – 2016.
The Program of Innovative Development was drafted and approved by the Company’s Board of Directors in July 2011.Innovative development indicators for 2011 were largely met.
Adjustment of the Program of Innovative Development in 2011–2016 and compliance with the planned indicators of 2012.
5. Increased availability of power grid infrastructure
5.1. Provision of information to potential consumers to estimate the main parameters and risks of business projects considering technological connection opportunities.
The Company’s web site shows data on the current capacity reserve by supply source.
Monthly update of the information disclosed by the Company and response to consumer inquiries.
5.2. Provision of information on the procedure of works to examine new power receivers.
The Company’s web site shows the Procedure of Works to Examine New Power Receivers with the Capacity of up to 15 kW for individuals and up to 100 kW for legal entities or individual entrepreneurs with power supply from one source.
Increased awareness of consumers on the procedures for connection of their receivers (for individuals – up to 15 kW, legal entitiesor individual entrepreneurs with the capacity of 15 to 100 kW, one power supply source).
6. Human capital development
6.1. Performance of employer’s obligations under Collective Labor Agreement between JSC IDGCof Center and Volga Region and its employees.
Employer’s obligations under Collective Labor Agreement between JSC IDGCof Center and Volga Region and its employees for 2009–2011 are met.
Full compliance of the Company with obligations under Collective Labor Agreement for 2009–2011, considering Agreement on amendmentsand additions to that agreement and its extension for 2012. Development and approval of the Collective Labor Agreement for subsequent periods.
6.2. Compliance with the indicator of staffing level (standard is 90%).
The Company’s indicator of staffing level is 96.36%. Maintenance of stable staffing levels and prevention of their decrease below the standard.
6.3. Achievement of the planned level of the number of employees involved in various programs of training, retraining and vocational training.
191% of the average headcount of the Company’s employees were trained. Compliance with approved plans of training.
36 37
01 BUSINESS OVERVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
1. Transition to RAB-based tariff regulation (Minutes
№44 of the Board of Directors dated September 15,
2009)1.
Within this priority area, in 2011, the Board of Directors
considered the report of the Company’s General Direc-
tor on fulfillment of the Board of Directors instructions
on transition to RAB-based tariff regulation (Minutes
№70 dated February 28, 2011).
2. Registration of title for real estate, registration/
re-registration of land plot use for the period of
2011–2014 including processing of data on borders
of protective areas of grid facilities (Minutes of the
Board of Directors №64 dated November 01, 2010).
Within this priority area, in 2011, the Board of Directors
made the following decisions:
• considered information of the Company’s General Di-
rector on registration of title for real estate, registra-
tion/re-registration of land plot use for 2010 (Minutes
№72 dated March 30, 2011);
• approved the adjusted program for registration of title
for real estate, registration/re-registration of land plot
use for the period of 2011–2014 including processing
of data on borders of protective areas of grid facilities
(Minutes №90 dated November 25, 2011).
3. Development of the Program of Innovative Develop-
ment (Minutes of the Board of Directors №70 dated
February 28, 2011).
Within this priority area, the Program of Innovative De-
velopment was executed and approved by the Board of
Directors (Minutes №81 dated July 27, 2011). Moreover,
the Board of Directors ordered the General Director the
following:
• to ensure adjustment of the Program’s parameters
in line with the updated business plan indicators (in-
cluding those of the investment program), including
unit-by-unit synchronization of the Program’s target
activities with capital construction facilities in invest-
ment programs approved in accordance with the leg-
islation;
• to submit a report on the Program implementation for
consideration of the Board of Directors quarterly.
December 27, 2011, the Board of Directors considered
a report on the Program of Innovative Development
implementation in 9 months of 2011 (Minutes №93).
4. Compliance by the Company with the level of reli-
ability and quality of the services rendered set by the
regulations (Minutes №84 of the Board of Directors
dated August 30, 2011).
Within this decision, the Board of Directors also or-
dered the following to the Company’s General Director:
• to provide information to the Board of Directors on re-
liability levels and quality of the services by all Com-
pany branches subject to tariff regulation on the basis
of long-term regulation parameters in the previous re-
porting year (estimate period of tariff regulation);
• to provide proposals to the Board of Directors
on planned reliability levels and quality of the services
by all Company branches по for each year (estimate
period of tariff regulation) within the long-term tariff
regulation period;
• in case of adjustment of the required gross revenue
forming the basis for tariff calculation, considering the
achievement of the indicators set by the regulator, to
provide proposals on adjustment of the planned reli-
ability and quality indicators to the Board of Directors
at the end of the reporting year;
BOARD OF DIRECTORS REPORT ON PRIORITY AREAS
1 Hereinafter in the section, for each priority area we indicate the decision of the Board of Directors which indicated this area as a priority.
• to submit reports to the Board of Directors of compli-
ance with regulatory documents for setting indicators
of reliability and quality of services rendered by the
Company branches.
5. Implementation of construction management sys-
tem for key investment projects (Minutes №86
of the Board of Directors dated September 30, 2011).
Under this priority area, the Order of the General
Director approved the Regulations for implementation
of the construction management of the Company’s key
investment projects.
December 27, 2011, the Board of Directors considered
the report on the results of the construction manage-
ment system implementation for key investment proj-
ects and the launch of the system (Minutes №93).
6. Approval of the Program for Consolidation of Power
Grid Assets (Minutes №88 of the Board of Directors
dated October 31, 2011).
Under this decision of the Board of Directors, the Pro-
gram for Consolidation of Power Grid Assets of JSC
IDGC of Center and Volga Region was approved for
2011–2015, the General Director was ordered to im-
plement target indicators of the Program and report
to the Board of Directors on its implementation an-
nually.
ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
02
Mobile electric laboratory LVI-3MG (high-voltage tests laboratory) is intended
to hold tests of electric equipment of substations and power electric cables,
and localize damages in cables using the equipment of preliminary and exact
localization
40 41
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The accounting methods and the accounting policy used
by the Company in 2011 are specified in the Policy on
Accounting of the Company for 2011 approved by Order
№489 of the General Director of the Company dated De-
cember 31, 2010, with the amendments introduced under
Orders №255 dated June 14, 2011 and №462 October 04,
2011.
Accounting is performed in compliance with the unified
guidelines and rules, based on the unified accounting
technologies for all business operations of the Company.
The Company’s accounting records form an organized sys-
tem of collecting, registering and generalizing monetary
data concerning the Company’s assets and liabilities and
their movement. Accounting is performed by continuous-
ly and comprehensively registering and documenting all
business operations of the Company on the basis of and in
ACCOUNTING POLICY2.1
compliance with the requirements of the current legisla-
tion of the Russian Federation.
For the purposes of accounting the sales of products
(works, services) and assets of the Company to third-party
organizations are reflected in the accounting records as
the products (works, services, assets) are shipped (per-
formed, rendered, transferred), and upon the presentation
by the buyers of settlement documents. For the purposes
of taxation the receipts and costs are recognized by the
accrual method.
The Accounting Statement of the Company has been based
on the Russian regulatory documents on accounting,
namely the following: Federal Law №129-FZ “On Account-
ing” dated November 21, 1996, the Policy on Account-
ing and Reporting in the Russian Federation, approved
by Order №34n of the Ministry of Finance of the Russian
Federation dated July 29, 1998, the Provisions for the Ac-
counting approved by orders of the Ministry of Finance of
the Russian Federation, by Order №66n of the Ministry of
Finance of the Russian Federation “On the Forms of Ac-
counting Statements of Organizations” dated July 02, 2010
(as revised on October 05, 2011), the Plan of Bookkeeping
Accounts of Financial and Economic Activities and the In-
struction for its Use, approved by Order №94n of the Min-
istry of Finance of the Russian Federation dated October
31, 2000 (in the current version).
The main provisions of the accounting policy are set out
on the website of the Company at www.mrsk-cp.ru in the
section «Disclosure of the information and the accounting
information / The financial information and the reporting».
Four branches of JSC IDGC of Center and Volga Region
– Ivenergo, Kirovenergo, Marienergo and Nizhnoven-
ergo, adopted a new RAB-based tariff regulation sys-
tem. Thus, all branches of the Company completed the
phased transition to RAB-based regulation.
KEY EVENTS OF THE YEAR
JANUARY
january february march april may june july august september october november december
42 43
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The revenues of JSC IDGC of Center and Volga Region
in 2011 totaled RUB 64,404 million, the year-on-year
increase amounting to 18%. The key factors contributing
to the growth in revenue included an increase in
productive supply of electric power to consumers due
to an overall growth of industrial production and a
consequent increase in power consumption, as well as
an increase in tariffs for power transmission services set
for the Company by the regulatory bodies.
* As of January 01, 2011, amendments have been introduced into the accounting and reporting of organizations (Orders of the Ministry of Finance of the Russian Federation №66n dated July 02, 2010 and №186n dated December 24, 2010). To ensure the comparability of the data, the indices for 2009-2010 are presented in accordance with the adjusted accounting statements for 2009-2010.
Financial performance, 2009-2011
ANALYSIS OF FINANCIAL PERFORMANCE2.2
Index Unit of meas-urement
2009* 2010* 2010 vs 2009 (absolute increase)
2010 vs 2009 (relative increase), %
2011 2011 vs 2010 (absolute increase)
2011 vs 2010 (relative increase), %
Revenues, including RUB million
47,191 54,395 7,204 15 64,404 10,009 18
from electric power transmission
RUB million
45,689 53,106 7,417 16 63,249 10,143 19
from technological connection
RUB million
1,175 954 -220 -19 816 -139 -15
from otheractivities
RUB million
328 335 7 2 339 4 1
Costs RUB million
44,369 50,422 6,053 14 57,089 6,667 13
Gross profit, including RUB million
2,822 3,973 1,151 41 7,315 3,342 84
from electric power transmission
RUB million
1,712 3,052 1,340 78 6,649 3,597 118
from technological connection
RUB million
911 724 -187 -21 492 -232 -32
from otheractivities
RUB million
199 197 -2 -1 174 -23 -12
Net profit RUB million
244 1,269 1,025 421 4 232 2 963 234
EBITDA RUB million
4,855 6 613 1,757 36 10,958 4,346 66
Return on assets % 0.40 1.94 1.55 389 5,34 3.39 175
Returnon equity
% 0.61 3.08 2.47 405 9,34 6.26 203
The costs (cost value) of the Company in 2011 increased
by RUB 6,667 million, representing a 13% increase
compared to 2010. This happened mainly due to an
increase in mandatory costs, namely a considerable
growth of the costs related to compensating for
energy losses and the costs associated with power
transmission services rendered by the distribution grid
companies of JSC FGC UES. The increase in these costs
was caused by an increase in volumes of electric power
transmission and in tariffs established by the regulatory
bodies. Besides, there was a considerable increase in
depreciation costs due to the commissioning of fixed
assets under a large-scale investment program.
As the cost growth rate was slower than that of the
revenues, this resulted in an increase in EBITDA, as well
as in gross and net profit of the Company. Net profit in
2011 was 3.3 times higher than in 2010 and totaled RUB
4,232 million.
The growth of profit resulted in a considerable increase
in the indices of profitability describing the return on
assets and equity of the Company.
CAPITAL STRUCTURE OF THE COMPANY1
ASSETS STRUCTURE, RUB million
65,687
13,607
As of Dec 31, 2011
56,031
9,257
As of Dec 31, 2010
51,361
9,945
As of Dec 31, 2009
Current assets
Non-current assets
1 As of January 01, 2011, amendments have been introduced into the accounting and accounting statements of organizations (Orders of the Ministry of Finance of the Russian Federation № 66n dated July 02, 2010 and № 186n dated December 24, 2010). To ensure the comparability of the data, the indices for 2009-2010 are presented in accordance with the adjusted accounting statements for 2009-2010.
THE YEAR-ON-YEAR GROWTH
OF THE MAIN FINANCIAL INDICES IN 2011
+234%+66%+18%
NETPROFIT
EBITDA
REVENUES
0%
100%
20%
40%
60%
80%
44 45
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The assets structure of the Company is characterized
by a significant share of non-current assets amounting
to 83% as of the end of the reporting year. This is due
to the implementation of an investment program aimed
at upgrading the fixed assets. Non-current assets are
comprised mainly of fixed assets (91%) and construction
in progress (7%). The share of the former increased
compared to the previous year, while the share of the
latter decreased.
The major share of the Company’s liabilities is comprised
of equity (capital and reserves) accounting for 57% as of
the end of the reporting year. 2009-2011 saw a gradual
decrease in this share as the Company raised long-term
borrowings in order to fund its investment program. As of
the end of the reporting year, long-term debt accounted
for 32% of the Company’s liabilities. In 2011, all branches
of the Company adopted a RAB-based tariff regulation
system, which in the long run will ensure the return of the
funds used for investment activity.
The share of short-term debt within the structure of
liabilities demonstrated a year-on year decrease from
12% to 11%. Accounts payable comprise the major share
of short-term debt (72%); short-term credits and loans
used for financing the Company’s current needs account
for 21%.
EQUITY AND DEBT STRUCTURE, RUB million
45,297
25,462
8,535
As of Dec 31, 2011
41,148
16,631
7,509
As of Dec 31, 2010
39,887
9,521
11,899
As of Dec 31, 2009
Short-term debt
Long-term debt
Equity
100%
20%
40%
60%
80%
0%
Financial ratios
During the reporting year, the debt/equity ratio describ-
ing the degree of the Company’s dependence on borrow-
ings and determining the amount of risk to the creditors
increased from 58.67% to 75.05%. This happened mainly
because the Company raised long-term credits and loans
for the implementation of its investment program.
In the reporting period, the cover of debt servicing pay-
ments, which is calculated as a ratio of net profit and de-
preciation during the period to the amount of liabilities
and interest on them to be repaid in the reporting period,
increased from 187.65% to 442.24% due to an increase in
sources of debt coverage, namely the undistributed profit
for the reporting year and depreciation charges accrued in
the reporting period.
Overdue long and short-term debt amounted to 0.16%
in the reporting period. Its low level proves that the Com-
pany shows good financial discipline.
The Company’s working capital and quick assets ratios,
which describe its ability to redeem its liabilities by means
of current assets, conform to the norm. As of the end
of the reporting period, they amounted to 1.59 and 1.46
respectively.
The equity/assets ratio, which shows the share of equity
in the total funds of the Company, was also normal; in the
reporting period it amounted to 0.57.
The Company’s net assets are calculated under the procedure for calculating net assets of a joint-stock company established
by Order №10n of the Ministry of Finance of the Russian Federation and Order №03-6/pz of the Federal Service for Financial
Markets of the Russian Federation dated January 29, 2003.
As of the end of 2011, the Company’s net assets totaled RUB 45,297 million, demonstrating a year-on-year increase
by RUB 4,121 million, or 10%. This growth resulted from an increase in undistributed profit in the reporting year.
Index Unit of measurement
2009* 2010* 2011
Net assets RUB million 39,920 41,176 45,297
Debt to equity ratio % 53.70 58.67 75.05
Cover of debt servicing payments % 227.28 187.65 442.24
Overdue accounts payable % 1.42 0.03 0.16
Quick assets ratio - 0.75 1.11 1.46
Working capital ratio - 0.82 1.22 1.59
Equity/assets ratio - 0.65 0.63 0.57
Equity to debt ratio - 1.87 1.71 1.33
Receivables turnover times 7.78 11.39 11.30
* As of January 01, 2011, amendments have been introduced into the accounting and reporting of organizations (Orders of the Ministry of Finance of the Russian Federation №66n dated July 02, 2010 and №186n dated December 24, 2010). To ensure the comparability of the data, the indices for 2009-2010 are presented in accordance with the adjusted accounting statements for 2009-2010.
46 47
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Company’s financial stability is also described by the
equity to debt ratio. During the reporting period it de-
creased from 1.71 to 1.33 due to an increase in the share
of borrowings within the Company’s capital structure.
The receivables turnover, which shows how fast the buyers
pay back their debts to the Company, was characterized by
a slight year-on-year decrease from 11.39 to 11.30 due to
an increase in accounts receivable.
Overall, as of the end of 2011, the financial condition of
JSC IDGC of Center and Volga Region can be described as
stable, its financial ratios being normal, which proves the
Company’s liquidity and solvency. The Company’s opera-
tional efficiency is high by the standards of the power in-
dustry. Moreover, the Company is actively developing by
implementing a large-scale investment program financed
both from the Company’s own sources and from long-term
borrowings.
In the reporting year JSC IDGC of Center and Volga
Region achieved all target values of the Key Performance Indicators (KPIs) approved by the Board of Directors of
the Company on September 20, 2011 (Minutes №85).
KPIS OF THE COMPANY AND INFORMATION ON THEIR IMPLEMENTATION
Indicator Unit of measurement
2011
Planned Actual
Return on Equity (ROE)secured by cash flow*
% 7.49 10.19
Losses of energy intended for supply % 9.11** 8.97
Investment program implementation efficiencyduring current quarter (in terms of period and cost)
% ≥ 95 103
Prevention of the number of accidents exceeding the limitfor the accidents complying with p.2.1. of the Instruction
- 0 0
Systemic indicator of interruption of consumer powersupply (for 6kV feeders and higher)
- < 1 < 1
Systemic indicator of the average duration of powersupply interruptions (for 6kV feeders and higher)
- < 1 < 1
* ROE is calculated from the net profit secured by cash flow, which corresponds to the net profit (line 2 400 of the Profit and Loss Statement) minus the difference of the following items of the annual accounting statement adjusted for the profit tax:
- the profit of the past years identified in the reporting period (minus profit tax);- the writing off of accounts payable (minus profit tax);
- the income from the re-evaluation of financial investments and equity securities circulated on the stock market;- the writing off of restructured tax penalties and fines.
** The indicator is calculated including 30% of the volume of services provided to the “last mile” consumers on the basis of a court decision and/or direct agreements they have concluded with JSC FGC UES; if these volumes are excluded, the losses of energy amounts to 9.14%.
Implementation of KPIs in 2011
The net profit of JSC IDGC of Center and Volga Region for 2011 totaled RUB 4,232,120 thousand. The net profit is calculated based on the data from the Company’s accounting statements. In compliance with the Articles
of Association of the Company, the decision on the distribution of profit is made by the General Shareholders Meeting.
Under Article 8 of the Articles of Association the Com-
pany has established a Reserve Fund designated for cov-
ering losses, redeeming the bonds and repurchasing the
shares of the Company if no other funds are available.
The Articles of Association stipulate that the amount of
obligatory annual contributions to the Reserve Fund shall
amount to 5% of the net profit until it reaches the amount
of 5% of the Company’s charter capital. As of the end of
the reporting period, the Reserve Fund comprised RUB
517.149 thousand, accounting for 4.6% of the charter capi-
tal. 2012 will see the completion of the formation of the
Reserve Fund; to achieve this, it is planned to contribute RUB 46,340 thousand.
Since the establishment of JSC IDGC of Center and Volga
Region, a substantial share of its net profit has been al-
located annually for production development, which in-
volves the implementation of an investment program
aimed at enhancing the reliability and quality of supplying
electric power to consumers. Based on the 2011 results,
it is planned to allocate RUB 3,870,226 thousand for the development of the Company.
In the reporting year, a decision on dividend payout was
made for the first time in the history of the Company. The
amount of net profit allocated for dividend payouts for
2010 totaled RUB 141.000 thousand. The report on divi-
dend payment can be found in the section “Shareholders’
Capital” on page 159 of the Annual Report. The Company
plans to allocate RUB 315,554 thousand for dividend pay-outs for 2011.
Index 2008 ** 2009 2010 2011 planned
Undistributed net profit 1,428,560 426,939 1,397,757 4,232,120
Reserve fund 71,428 21,347 69,888 46,340
Production development 1,357,132 405,592 1,186,869 3,870,226
Dividends 0 0 141,000 315,554
* The distribution of net profit for 2008-2010 is presented in accordance with the decisions of the General Shareholders Meeting of the Company. The amount of undistributed net profit corresponds to the data in the accounting statements as of the end of the reporting year.** Due to reorganization of the Company in the form of affiliation of distribution grid companies with the Company, which was completed on February 29, 2008, the total net profit for 2008 includes the following:
the net profit of JSC IDGC of Center and Volga Region as the management company for the period from January 01, 2008 till February 28, 2008;
the net profits of regional grid companies affiliated with reorganized JSC IDGC of Center and Volga Region for the period from February 29, 2008 till December 31, 2008;
the net profit of the executive body of reorganized JSC IDGC of Center and Volga Region for the period from February 29, 2008 till December 31, 2008.
Distribution of net profit for 2008-2011*, RUB thousand
DISTRIBUTION OF PROFIT2.3
THE AMOUNT OF DIVIDEND PAYMENTS FOR 2010
THE FIRST DECISION ON DIVIDEND PAYMENT IN THE HISTORY OF THE COMPANY
RUB 141,000 thousand
48 49
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
CREDIT POLICY2.4
In 2011, the total amount of borrowings raised by the
Company exceeded RUB 10.5 billion, including more
than RUB 6.7 billion designated for financing investment
activity. All these funds were raised without any pledge from the Company.
Currently the payments under all loan agreements
constituting the Company’s credit portfolio involve
only interest payments (while previously the terms and
conditions of loan agreements included a variety of fees
and payments, such as fees for providing the credit,
payment for opening a credit line, payment for reserving
borrowed funds, credit servicing payments, etc.).
The Company seeks to minimize the interest rates on
borrowed funds by constantly cooperating with partner
banks. As of January 01, 2011, the average rate for the
Company’s credit portfolio amounted to 8.04% p.a.
Starting with the second half of 2011, there appeared a
trend towards an increase in the cost of borrowed funds
in financial markets, which is clearly demonstrated by the
dynamics of the MosPrime 6M rate. During the reporting
year this rate grew by almost 3 percentage points reaching
the level of 7.33% p.a. However, the change in the average
rate for the Company’s credit portfolio amounted to less
than 0.5 percentage points, as the rate increased from
8.04% to 8.46% p.a. The average rate for the Company’s
credit portfolio grew mainly in Q4 of the reporting year.
The refinancing rate in 2011 changed three times: the rate
increased twice, up to 8.25% p.a.; however, at the end of
the year it was reduced to 8.0% p.a.
Amount outstanding as of December 31, 2010
Raisedin 2011
Redeemedin 2011
Interestaccrued in
2011
Interestpaid in 2011
Reclassificationof debt **
Amount outstanding as of December 31, 2011
Long-term borrowings 13,893,377 10,535,766 - 1,325,389 1,273,890 -3,067,290 21,413,353
Reserves* - 1,436,819 - 29,184 29,184 - 1,436,819
Refinancing of credit portfolio 4,828,732 2,410,702 - 406,453 356,536 -2,012,716 5,276,635
Financing of investment activity 9,064,645 6 ,688,245 - 889,751 888,169 -1,054,574 14,699,899
Short-term borrowings 1,602,005 - 2,955,657 54,968 55,298 3,067,290 1,713,307
Refinancing of credit portfolio 1,189,170 - 2,055,874 36,459 36,745 2,012,716 1,145,726
Financing of investment activity 412,836 - 899,784 18,509 18,554 1,054,574 567,581
TOTAL 15,495,383 10,535,766 2,955,657 1,380,356 1,329,188 - 23,126,659
* The transformation of debt from long-term to short-term with a repayment period of less than one year.
Information on the changes in the credit portfolio in 2011, RUB thousand
** The funds were raised in 2011 in order to refinance the credit portfolio and finance the investments in 2012.
DINAMICS OF INTEREST RATES IN 2011
4.38 4.31
4.40
6.72
8.258.25
8.00
7.757.937.99
8.028.04
7.33
8.00
8.46
Jan 01, 2011 Apr 01, 2011 July 01, 2011 Oct 01, 2011 Jan 01, 2012
The average weighted rate for the credit portfolio of JSC IDGC of Centerand Volga Region
The MostPrime 6M rate
The refinancing rate of the Central Bank of the Russin Federation
50 51
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
As of December 31, 2011, JSC IDGC of Center and Volga
Region has no overdue debts relating to the redemption
of the principal amount, interests and the credit servicing
payments.
The Company expects to be assigned a credit rating by
one of the leading international rating agencies in the
nearest future.
THE STRUCTURE OF THE CREDIT PORTFOLIO BY BANKS AS OF DECEMBER 31, 2011
21%Sviaz Bank
9%Barclays Bank PLC
10%Sberbank of Russia
58%Gazprombank2%
Bank of Moscow
AS OF THE END OF THE YEAR ARE THE KEY PARAMETERS OF THE CREDIT POLICY IN 2011
OF BORROWINGS RAISED FOR FINANCING INVESTMENTS,
THE AVERAGE RATE FOR THE CREDIT PORTFOLIO AMOUNTING TO 8.46% P.A.
> RUB 6.7 billionTariffs for power transmission services are established by
executive bodies of the federal subjects of Russia in the
sphere of state tariff regulation.
Under Federal Law №35-FZ “On Power Industry” dated
March 26, 2003, from January 01, 2011 the state regula-
tion of tariffs for power transmission services provided
by territorial grid companies created through reorganiza-
tion of joint-stock electric power companies is performed
based on long-term regulation parameters.
The long-term parameters of state regulation of tariffs
in the power industry include: the degree of reliability
and quality of services in line with long-term invest-
ment programs, the basic level of operational costs, the
amount of invested capital, the rate of return, the pay-
back period, etc.
In the reporting year the branches of JSC IDGC of Center
and Volga Region completed a phased transition to the
long-term regulation of tariffs for power transmission ser-
vices based on the Regulatory Asset Base (RAB):
• from January 01, 2009 – Ryazanenergo and Tulenergo
branches;
• from January 01, 2010 – Vladimirenergo, Kalugae-
nergo and Udmurtenergo branches;
• from January 01, 2011 – Nizhnovenergo, Ivenergo,
Kirovenergo and Marienergo branches.
The adoption of RAB-based regulation has been approved
by the resolutions of the Federal Tariff Service (FTS) of the
Russian Federation.
This method of long-term tariff regulation enables to at-
tract long-term investments, improve the reliability and
quality of services and optimize operational costs.
TARIFFS FOR POWER TRANSMISSION SERVICES
The tariff policy adopted by JSC IDGC of Center and Volga
Region is aimed at efficient management of controllable
activities, namely electric power transmission and
technological connection services. The key principles
of the Company’s tariff policy comprise establishing
optimal tariffs and ensuring the high quality of services.
TARIFF POLICY2.5
AT TR AC TING LONG-TERM IN V ESTMENT S
IMPROVING THE RELIABIL IT Y AND QUALIT Y OF SERVICES
OP TIMIZ INGOPER ATIONAL COST S
THE EXPECTED IMPACTOF RAB-BASED REGULATION
52 53
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Branch Year Basic level of operational costs
Operational costs efficiency index
Amount of invested capital
Net working capital
Rate of return on invested capital
on the capital invested prior to RAB-based regulation
on newly invested capital
RUB million % RUB million RUB million % %
RAB-based regulation since January 01, 2009
Ryaz
anen
ergo
2009 1,097.6 - 5,713 82 6 12
2010 1 9 12
2011 1 12 12
2012 1 12 12
2013 1 11 11
Tule
nerg
o 2009 1,269.7 - 8,813 183 6 12
2010 1 9 12
2011 1 12 12
RAB-based regulation since January 01, 2010
Vlad
imire
nerg
o
2010 1,135.7 - 7,210 140.2 6 12
2011 1,13 9 12
2012 1,13 12 12
2013 1,13 11 11
2014 1,13 11 11
Kalu
gaen
ergo
2010 922.7 - 9,818 134.3 6 12
2011 1 9 12
2012 1 12 12
2013 1 11 11
2014 1 11 11
Udm
urte
nerg
o 2010 970.9 - 5,639 124.8 6 12
2011 1 9 12
2012 1 12 12
RAB-BASED REGULATION PARAMETERS IN THE BRANCHES OF JSC IDGC OF CENTER AND VOLGA REGION
Branch Year Basic level of operational costs
Operational costs efficiency index
Amount of invested capital
Net working capital
Rate of return on invested capital
on the capital invested prior to RAB-based regulation
on newly invested capital
RUB million % RUB million RUB million % %
RAB-based regulation since January 01, 2011
Iven
ergo
2011 669.2 - 3,847 80.5 6 12
2012 1,5 9 12
2013 1,5 11 11
2014 1,5 11 11
2015 1,5 11 11
Kiro
vene
rgo
2011 1,472 - 5,498 121.4 6 12
2012 1 9 12
2013 1,5 11 11
2014 2 11 11
2015 2,5 11 11
Mar
iene
rgo
2011 513.7 - 4,047 87 6 12
2012 1 9 12
2013 1 11 11
2014 1 11 11
2015 1 11 11
Niz
hnov
ener
go
2011 4,356.8 - 31,094 768.3 6 12
2012 1 9 12
2013 1 11 11
2014 1 11 11
2015 1 11 11
54 55
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
DINAMICSOF THE AVERAGE TARIFF IN 2010-2011 kop./kWh
2010 2011 2011*
* Taking into account the revised tariff resolutions in compliance with the Order №1172 of the Government of the Russian Federationdated December 27, 2010
Tariff Resolutions on Electric Power Transmission Services for 2011
In compliance with the current legislation, before the
beginning of the year the regulatory bodies of the fed-
eral subjects of Russia in the operations area of JSC
IDGC of Center and Volga Region adopted the following
tariff resolutions for 2011:
• the average tariff for power transmission services
amounted to 120.2 kopecks per kWh, which exceeds
the 2010 tariff by 24%;
• the approved required gross revenue (RGR) amounts to
RUB 71,025 million, which exceeds the 2010 revenue by
33%.
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
108.7138.9
125.0
64.8
94.2
129.3
92.6
108.2
80.0
91.1
113.4
77.9
115.1
101.9
128.1
176.1
133.0
141.9
99.4
71.8
108.4
101.1
127.3
148.6
106.5
124.5
88.2
Branch 2010 2011 2011* 2011 vs 2010 (relative increase), %
2011* vs 2010 (relative increase), %
Vladimirenergo 108.7 138.9 125.0 28 15
Ivenergo 64.8 77.9 71.8 20 11
Kalugaenergo 129.3 176.1 148.6 36 15
Kirovenergo 91.1 101.9 101.1 12 11
Marienergo 108.2 141.9 124.5 31 15
Nizhnovenergo 94.2 115.1 108.4 22 15
Ryazanenergo 92.6 133.0 106.5 44 15
Tulenergo 113.4 128.1 127.3 13 12
Udmurtenergo 80.0 99.4 88.2 24 10
JSC IDGC of Center and Volga Region
96.7 120.2 109.9 24 14
Average tariffs in 2010-2011, kop./kWh
* Taking into account the revised tariff resolutions in compliance with the Order №1172 of the Government of the Russian Federation dated December 27, 2010
Note: the average tariff for power transmission services
has been calculated in accordance with the new tariff
resolutions of the regulatory bodies and excluding the
cross-subsidization of Nizhnovenergo and Tulenergo
branches.
However, in order to contain the growth of tariffs for the
services provided by natural monopolies, in compliance
with the Order №1172 of the Government of the Russian
Federation dated December 27, 2010, the regulatory bod-
ies of the subjects of the Russian Federation were instruct-
ed to revise the 2011 tariffs for power transmission ser-
vices from May 01, 2011 assuming that the year-on-year
growth of the average single-rate tariff shall not exceed
15%.
In accordance with the instruction of the Government of
the Russian Federation, the regulatory bodies adopted the
following new tariff resolutions for 2011:
• the average tariff for power transmission services
amounts to 109.9 kopecks per kWh, which exceeds the 2010 tariff by 14%;
• the approved required gross revenue (RGR) amounts
to RUB 65,708 million, which exceeds the 2010 rev-
enue by 23%. In 2011, the Federal Tariff Service made a decision to
extend the long-term regulation period for Vladimi-
renergo and Kalugaenergo branches from three to five
years (2010-2014).
56 57
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
RAB-BASED METHOD: THE STRUCTURE OF THE REQUIRED GROSS REVENUE
INITIALLY INVESTED CAPITAL BASE NEW INVESTMENTS
PAYBACK+ RETURN ON CAPITAL MANDATORY COSTS OPERATIONAL COSTS
Regulatory asset base
Required gross revenue
PAYBACK PERIOD35 YEARS
Used for financing mandatory costs (federal factors,rent, leasing, taxes, etc.)
Used for financing core activities (operations) Expected to decrease in the long term due to the use of efficiency index
PAYBACK PERIOD35 YEARS
Rate of return on initial capital 6.9 and 12 % (from 2013 – 11%)
Rate of returntill 2013 - 12%
from 2013 – 11%
Allocated for:• development (under the obligations on the approved development
investment program)• dividends, interests on credits, social expenses
REQUIRED GROSSREVENUE GROWTHIN 2011COMPARED TO 2010
37% 23%38% 8%
25% 15%
30% 25%
22% 25%
48% 25%
53% 22%
44% 26%
30% 15%
20% 15%
34% 33%
23% 23%
57% 16%
47% 10%
79% 37%
43% 29%
7% 7%20% 19%
Taking into account the revised tariff resolu-tions in compliance with the Order №1172 of the Government of the Russian Federation dated December 27, 2010
Without taking into account the tariff solutions’ revision
Total RGR RGR for grid maintenance
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
58 59
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Branch Total RGR RGR for the maintenance of grids (excluding the services of JSC FGC UES, energy to compensate for energy losses, the services of territorial grid organizations)
2010 2011 2011* 2011 vs 2010 (relative increase), %
2011* vs 2010 (relative increase), %
2010 2011 2011* 2011 vs 2010 (relative increase), %
2011* vs 2010 (relative increase), %
Vladimirenergo 5,456 7,457 6,714 37 23 2,192 3,015 2,375 38 8
Ivenergo 1,954 2,446 2,252 25 15 936 1,126 1,076 20 15
Kalugaenergo 4,514 6,676 5,636 48 25 2,425 3,797 2,803 57 16
Kirovenergo 4,831 5,801 5,756 20 19 2,148 2,305 2,305 7 7
Marienergo 2,080 2,994 2,625 44 26 650 1,165 889 79 37
Nizhnovenergo 18,717 24,424 23 454 30 25 6,947 9,297 9,214 34 33
Ryazanenergo 4,240 6,473 5,184 53 22 2,063 3,024 2,259 47 10
Tulenergo 6,308 7,727 7,854 22 25 3,326 4,087 4,087 23 23
Udmurtenergo 5,416 7,026 6,233 30 15 1,665 2,389 2,149 43 29
TOTAL for the Company
53,517 71,025 65,708 33 23 22,351 30,205 27,157 35 22
Growth of required gross revenue in 2010-2011, RUB million
* Taking into account the revised tariff resolutions in compliance with the Order №1172 of the Government of the Russian Federation dated December 27, 2010
TARIFFS FOR TECHNOLOGICAL CONNECTION SERVICES
Under Article 23.2 of Federal Law №35-FZ «On Power In-
dustry» dated March 26, 2003, from January 01, 2011 the
payment for technological connection shall not include in-
vestment expenses related to renovation of electrical grid
facilities, including the connections between the facilities
of territorial grid organizations and the facilities compris-
ing the unified national (all-Russian) electric grid, except
for the costs associated with construction of electrical grid
facilities, ranging from existing electrical grid facilities to
power receivers to be connected.
These costs are taken into account when establishing the
tariffs for power transmission services.
In compliance with the above-mentioned law, during
2011, the regulatory bodies of the subjects of the Russian
Federation revised the amount of payment for the follow-
ing branches of the Company: Vladimirenergo, Ivenergo,
Kalugaenergo, Kirovenergo, Marienergo, Nizhnovenergo
and Ryazanenergo branches.
DINAMICS OF THE AVEREGEPAYMENT FOR TEHNOLOGICAL CONNECTION IN 2010-2011, RUB/kW
Notes:
• Vladimirenergo: the diagram (2011-2012) reflects the
average approved standard rate used for calculating
the amount of payment for operations that do not
involve investment-related costs.
• Kirovenergo: the tariffs for technological connection
for 2010 were differentiated by territory (city and
region). This differentiation is not valid from 2011.
• Marienergo and Ryazanenergo: from 2011, two
variants of the tariff for technological connection have
been established, including and excluding investment-
related costs.
• Ivenergo: from 2011, the tariff for technological
connection does not include investment-related costs.
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
10,655955955
9,248
11,503
11,300
7,351
1,860
364
226
4,271
7,998
486
7,685
1,409
7,775
11,075
56
1,409
400
70
486
119
583
773
7,344
54
583
400
70 2010 2011 2012
The sity of Kirov
The Kirov region
7,685119
8,0261,400
60 61
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Dynamics of the Average Tariff for Technological Connection to the Grids of JSC IDGC of Center and Volga Region
7,669 -59% -30%3,155 2,202
2010 2011 2012
RUB/kW RUB/kW RUB/kW
The decrease in the average tariff for technological con-
nection to power grids was caused mainly by the fact that
investment-related costs, including those related to the
development of the existing infrastructure, had been ex-
cluded from the tariff.
The adopted tariff resolutions on technological connec-
tion to the grids of JSC IDGC of Center and Volga Region
stipulate favorable terms of payment for the services pro-
vided: if the customer contract demand does not exceed 15
kW (including the power previously connected in the given
connection point), the customer owns facilities belonging
to the third category of power supply reliability (per one
power source) and the distance from the boundaries of the
customer’s land plot and the electrical grid facilities of the
relevant voltage class operated by the grid organization
to which the request has been submitted does not exceed
300 m in cities, towns and urban-type villages or 500 m
in the rural area, the tariff for technological connection of
such customer shall not exceed RUB 550.
The shortfalls in revenue from the connection of such cus-
tomers are taken into account when setting the tariff for
power transmission services.
TARIFFS FOR TECHNOLOGICAL CONNECTION SETON THE BASIS OF STANDARD TARIFF RATES
In 2011, the following standard tariff rates used for calcu-
lating the tariffs for technological connection have been
set for Vladimirenergo branch:
• tariffs for the operations that do not include invest-
ment-related costs are calculated in RUB/kW (this rate is
differentiated by voltage and connected power range);
• tariffs for construction of 1 km of overhead and cable lines
depending on the cable type and the method of cable
laying (in a trench or in a pipe) are calculated in RUB/km;
• tariffs for construction of substations, per line depend-
ing on the voltage of the transformer to be installed,
are calculated in RUB.
TARIFFS FOR CUSTOM-TAILORED TECHNOLOGICAL CONNECTION
The main part of the property of JSC IDGC of Center and
Volga Region is comprised of electrical grid complexes and
independent power assets with the voltage of 110 kV and
lower, which are used for transmission, distribution and
transformation of electric power.
In 2011, the Company acquired facilities mainly through
new construction under the investment program.
In the reporting year, the fixed assets were upgraded
mainly by renovation.
In the cases stipulated by the existing legislation, the
tariffs for technological connection are calculated on an
individual basis.
The total number of custom-tailored technological
connections performed by the Company in 2011 was
3.8 times higher than in 2010, mainly due to the fact that
in certain subjects of the Russian Federation investment-
related costs had been excluded from the tariffs for
technological connection.
Overview of technological connections at standard tariff rates in 2011
Overview of custom-tailored technological connections in 2010-2011
Numberof contracts
Customer contractdemand, MW
Payment underthe contract, RUB million
Total, including 189 52.9 39.2
includinginvestments
19 14.5 33.2
net ofinvestments
170 38.4 6.0
Period Number of custom-tailored technological connections
Customer contract demand, MW
Number of approved technological connections *
Tariff for technological connection set by the regulatory body, RUB million
2010 109 192.8 61 947.8
2011 413 451.9 389 1,152.8
* The tariff for custom-tailored technological connection submitted to regulatory bodies that was not approved in 2011 will be set in 2012.
NON-CURRENT ASSETS2.6
PROPERTY COMPLEX2.6.1
62 63
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The share of rented assets within the Company’s fixed
assets is small. The Company rents medium and low-
voltage power grids owned by local authorities. The
rental agreements are concluded in order to ensure
reliable power supply to electricity consumers.
In 2011, the Company continued to use the equipment
held on a lease. The facilities operated on a leasehold
basis are acquired by the Company in compliance with
the terms and conditions of the agreements.
In order to terminate non-core activities, in the
reporting period JSC IDGC of Center and Volga Region
continued to follow the Regulations on the Procedure
for Operation of the Housing and Utilities approved by
the resolutions of the Board of Directors (Minutes №50
dated December 25, 2009, Minutes №88 dated October
31, 2011). Under this program, during the reporting year
26 facilities provided to residents for accommodation
before 2004 passed into their ownership.
The information on the structure of the Company’s
property complex and the changes therein during 2011
is provided in Supplement №8 to the Annual Report.
The key activities of the Company in the sphere of
land ownership in 2011 included creating land plots
for existing line facilities pertaining to power grids
in compliance with the requirements of Federal Law
№137-FZ «On Effecting the Land Code of the Russian
Federation» dated October 25, 2001. The rental
agreements have been concluded for land plots with
a total area exceeding 72 ha.
The information on the land plots used by the Company
in the reporting period is provided in Supplement №9 to
the Annual Report.
JSC IDGC of Center and Volga Region makes long-term
financial investments in the form of joint ventures and
investments in shares and ownership interests of other
companies.
The Company has agreements on joint ventures that do not
imply the subsequent registration of results in the form of
ownership of shares or interest in the charter capital.
These investments are aimed at generating income after
the facilities under construction are commissioned and/or
ensuring the operation of grid facilities to generate profit.
The information on the joint ventures of the Company
is disclosed in the issuer’s quarterly reports for 2011 (p.
3.2.6.), which can be found on the Company’s website
at www.mrsk-cp.ru in the section «Disclosure of the
information and the accounting information / Quarterly
reports».
JOINT VENTURES
LONG-TERM FINANCIAL INVESTMENTS2.6.2
The corporate governance system of JSC IDGC of Center
and Volga Region includes six subsidiaries and one depen-
dent company. Six of these companies were established
prior to the establishment of the Company, and JSC IDGC
of Center and Volga Region became the successor in title
to the shares of these companies through the affiliation of
nine distribution grid companies. One more company was
established by the Company together with other parties
in 2010.
The Board of Directors of the Company approved the
Procedure for the Interaction of JSC IDGC of Center and
Volga Region with Companies whose Shares and Interests
are Owned by the Company (Minutes №35 dated March
25, 2009). The full text of the document can be found on
the Company’s website at www.mrsk-cp.ru in the section
«About the Company / Internal documents» . The Pro-
cedure regulates the key issues of corporate interaction
between the Company and its subsidiary and dependent
companies, specifies the procedures for making key deci-
sions and exercising corporate control.
The detailed information on the subsidiary and dependent
companies of the Company is disclosed on the Company’s
website at www.mrsk-cp.ru in the section «About the Com-
pany / Information on the subsidiary and dependent compa-
nies of the Company».
SUBSIDIARY AND DEPENDENT COMPANIES
FORMS OF CORPORATE CONTROL OVER THE SUBSIDIARY AND DEPENDENT COMPANIES
SHAREHOLDERS’ CONTROL
FINANCIALCONTROL
Developing and implementing unified business processes,
internal documents and reports in the subsidiary and
dependent companies
Planning and overseeing the financial and business
operations of the subsidiary and dependent companies
Formulating the HR policy of the subsidiary and dependent companies and overseeing its
implementation
Formulating the development strategy of the subsidiary and
dependent companies and overseeing its implementation
Participation of the Company’s representatives in the
management bodies of the subsidiary and dependent
companies
MANAGERIALCONTROL
64 65
02 ANALYSIS OF THE FINANCIAL CONDITION AND PERFORMANCE RESULTS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
As of December 31, 2011 participating in core activities; other subsidiary and
dependent companies are engaged in non-core activities.
* The share of the Company in the charter capital of the subsidiary and dependent companies equals to the share of the Company’s voting shares in these companies.
SUBSIDIARY AND DEPENDENT COMPANIES
№ Full and abbreviated name and locationof subsidiary and dependent companies
Registration date Key activities Chartercapital, RUB
The Company’s ownership interest in the charter capital of subsidiary and dependent companies*, %
Revenue,RUB thousand
Net profit/loss, RUB thousand
Subs
idia
ry c
ompa
nies
1 Closed Joint-Stock Company Svet (CJSC Svet), 8 Lunacharsky Street, Bor town, Nizhny Novgorod Region
March 06, 1998 Electric power transmission. 2,402,883 100 27,832 915
2 Open Joint Stock Company Berendeevskoye (JSC Berendeevskoye), Berendeevka settlement, Lyskovo District, Nizhny Novgorod Region
February 06, 2004 Production, processing and marketingof agricultural products.
54,670,600 100 30,394 1,548
3 Open Joint Stock Company Luchinskoye (JSC Luchinskoye), Luchinskoye settlement, Sobinsky District, Vladimir Region
June 27, 2003 Production, processing and marketingof agricultural products.
58,630,410 100 7,909 -7,274
4 Open Joint Stock Company Automobile Transport Unit (JSC ATU),50 Yuzhnaya Street, Orichi settlement, Orichevsky District, Kirov Region
October 14, 2003 Transportation services, motor vehicle servicing, maintenance and repair, services for re-equipment and assessment of motor vehicles.
205,063,407 100 722,877 11,854
5 Open Joint Stock Company Sanatorium-preventorium «Energetik» (JSC Sanatorium-preventorium «Energetik»),10 Aviatsionnaya Street, Izhevsk, Republic of Udmurtia
January 10, 2003 Healthcare, medical treatment,accommodations and catering services.
46,953,097 100 33,766 -674
6 Open Joint Stock Company Interrigional Energoservice Company Energoefficiency Technologies (JSC IEC Energoefficiency Technologies),6 Proviantskaya Street,Nizhny Novgorod
December 27, 2010 Energy services. 20,000,000 51 55,300 2,770
Dep
ende
nt
com
pany 7 Open Joint Stock Company Tulenergokomplekt (JSC Tulenergokomplekt),
101a Timiryazev Street, TulaJune 19, 2002 Material supply, operation and servicing
of motor transport, transportation services.83,333,000 50 32 -42,679
FINANCIAL INVESTMENTS IN OTHER SHARES AND INTERESTS
The information on the Company’s participation in
commercial organizations in which the Company’s
interest is less than 50% is provided in Supplement № 7
to the Annual Report.
BUSINESS ACTIVITIES REVIEW
03
Complex CB-CSR (capacitor banks — controlled shunt reactor) at S 110/35/10 kV “Pokrov”
enables controlling reactive power flows in the transit between the Vladimir and Moscow
energy systems. It is a unique for the present and the most powerful (25 MVAr) compensating
tool in the energy systems of the Central Russia as regards 110 kV voltage
68 69
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
NOVEMBER 29
New Customer Service Centers were opened in the Navashino city, Novgorod region (the Nizhnoven-ergo Branch).
MARCH 10 APRIL 15,DECEMBER 27 AUGUST 30
New Customer Service Centers were opened in the Petushki city, Vladimir region (Vladimirenergo Branch).
OCTOBER 25
At the SS Pokrov in the Vladimiren-ergo Branch a controlled reactive power source for 25 MVAr in power systems of 110 kV was installed, which has so far been the only one in the Central Russia (BSK-UShR).
Programs of Energy Saving and Im-provement of Energy Efficiency for 2011, 2012 and 2013-2016 were ap-proved by the Board of Directors.
New Customer Service Centers were opened in the Karakulino village, Udmurtia Republic (the Udmurten-ergo Branch).
KEY EVENTS OF THE YEAR
january february march april may june july august september october november december
Key activities of JSC IDGC of Center and Volga Region are
the following:
• Energy transmission via Company’s electrical grid
facilities with the voltage range from 220-0.4 kV
(owned by as a property or on other legal grounds);
• Services of technological connection to the Company’s
power grids.
Company’s tariff policy is regulated by the following state
regulatory authorities: the Federal Tariff Service of the
Russian Federation and executive bodies in the regions
of the Russian Federation engaged in the state tariff regu-
lation.
GENERALINFORMATION
3.1Main Characteristics of the Company’s Power Grid Facilities
Branch Length of powertransmission line, km
Number of SSwith the voltage of 35 kV and higher
Capacity of SS with the voltage of 35 kV and higher, MVA thousand
Numberof 6-10kV DPs
Number of 6-35/0.4 kVTSSs
Networks Route
Vladimirenergo 21,967 20,754 139 3.30 4 4,709
Ivenergo 15,283 14,267 141 2.62 6 3,800
Kalugaenergo 27,061 26,274 152 2.92 59 6,260
Kirovenergo 38,584 37,374 224 2.94 17 8,700
Marienergo 12,412 11,924 88 1.13 13 2,956
Nizhnovenergo 59,530 57,491 259 5.20 227 14,028
Ryazanenergo 31,211 29,871 154 3.45 42 5,972
Tulenergo 32,047 30,661 172 4.10 182 6,973
Udmurtenergo 25,296 24,490 219 3.68 18 5,655
TOTAL 263,391 253,106 1,548 29.35 568 59,053
70 71
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Electric power from the power plants to the customers
is transmitted via power grids.
In 2011, total power volume of 59,653 million kWh were supplied via Company’s grid from the grids of the JSC FGC UES and allied power grid systems. 54,299 million kWh were transmitted to the customers and regional grid companies. Energy losses totaled 5,354 million
kWh which accounted for 8.97% of the power supplied to the Company’s grids.
Key Power Supply Indicators of in 2011
To fulfill its obligations to the retail companies the Com-
pany is the consumer of the services rendered by:
• JSC FGC UES, according to the agreements with it the
grids of Unified National Electric Grid are used for
power supply to the distribution grid;
• Territorial Grid Organizations, according with
agreements with them their grids are used for power
supply to the end consumers.
In order to offset energy losses in the Branches’ grids,
agreements to purchase the losses are concluded. They
can be also included in the agreements on power trans-
mission services with energy retail companies.
The following agreements are concluded to provide ser-
vices to the Company’s consumers, namely more than
140 thousand legal entities and 2.5 million utility consum-
ers, directly connected to the branch grids. In 2011, out
of total 506 agreements, 9 were concluded with JSC FGC
UES, 18 and 479 with direct consumers and Territorial Grid
Organizations respectively.
* P.p. – percentage point.
IN 2011, 59,653 mln kW OF ELECTRIC POWER IN TOTAL WERE SUPPLIED IN THE COM-PANY’S GRID FROM THE GRIDS OF JSC «UES FGC» FROM THE PRODUCERS OF ELECTRIC POWER AND NEIGHBORING GRID COMPANIES.
POWER TRANSMISSION
Unit of measure
2009 2010 2011 2011/2010 (absolute increase)
2011/2010 (relative increase, %)
Power output kWh million 56,175 59,492 59,653 161 0.27
Productive Supply kWh million 50,889 54,100 54,299 199 0.37
Losses kWh million 5,286 5,391 5,354 -37 -0.69
% 9.41 9.06 8.97 - 0.09 P.p.* -0.99
Technological Connection (TC) is a set of technical and
organizational measures, which ensure actual connec-
tion of the customers’ facilities to the power grid facili-
ties of the grid company.
The procedure of technological connection complies
with the Regulations on Technological Connection of
Consumer Power Receivers, Energy Production Facili-
ties and Power Grid Facilities Owned by Organizations
and Other Persons to the Power Grids, approved by the
Decree No. 861 of the Government of the Russian Fed-
eration, dated December 27, 2004 (in the version of the
Decree No. 1178 of the Government of the Russian Fed-
eration, dated December 29, 2011).
Scope of the Regulations:
• connection power receivers put into operation for
the first time;
• increasing capacity of the already connected power
receivers under construction;
• modifying category of the power supply reliability,
changing connection points or type of production
activity of the already connected power receivers
which do not require reconsideration of the
connected power volume, but do modify the scheme
of the external power supply.
In 2011, the Company concluded 44,050 agreements on
technological connection with total connected power of
1,147.45 MW and carried out 19,840 connections of the
customers’ power receivers with total connected power
of 364.09 MW.
The Company’s other activities include maintenance
and repair of the power grid facilities owned by the
third companies, testing of power equipment, repair and
replacement of the energy metering devices, property
leasing, services of placement of advertisement and
telecommunications equipment on the power grid fa-
cilities, etc.
TECHNOLOGICAL CONNECTION
OTHER ACTIVITIES
54,299 million kWh
44,050 1,147.45 MW
PRODUCTIVESUPPLY
Agreementsfor technological connection with total power volume of
KEY INDICATORS IN 2011 IN THE MAIN OPERATIONS OF JSC IDGC OF CENTER AND VOLGA REGION
72 73
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Branch Planned Actual Planned to Actual (relative increase), %
PowerOutput
Productive Supplyon the territory of the Company / branch
Losses PowerOutput
Productive Supply on the territory of the Company / branch
Losses Power Output
Productive Supplyon the territory of the Company/ branch
Losses
Volume % of outputto grid
Volume % of outputto grid
Volume % of output to grid
Vladimirenergo 6,533 5,865 668 10.23 6,431 5,788 643 9.99 -1.6 -1.3 -3.8 -0.2
Ivenergo 3,390 3,240 150 4.42 3,359 3,220 139 4.14 -0.9 -0,6 -7.2 -0.3
Kalugaenergo 4,581 3,907 674 14.72 4,544 3,770 774 17.04 -0.8 -3.5 14.8 2.3
Kirovenergo 5,591 5,166 426 7.61 5,519 5,117 402 7.28 -1.3 -0.9 -5.7 -0.3
Marienergo 2,713 2,488 225 8.31 2,740 2,535 204 7.46 1.0 1.9 -9.4 -0.9
Nizhnovenergo 18,347 16,460 1,887 10.28 18,444 16,608 1,836 9.95 0.5 0.9 -2.7 -0.3
Ryazanenergo 4,556 4,239 317 6.95 4,518 4,235 283 6.27 -0.8 -0.1 -10.6 -0.7
Tulenergo 6,435 5,730 705 10.96 6,251 5,577 674 10.78 -2.9 -2.7 -4,4 -0.2
Udmurtenergo 7,790 7,382 408 5.24 7,848 7,449 399 5.08 0.7 0.9 -2.3 -0.2
TOTAL 59,935 54,475 5,460 9.11 59,653 54,299 5,354 8.97 -0.5 -0.3 -1.9 -0.1
Key Power Transmission Indicators in 2011, kWh million
PRODUCTION PERFOMANCE IN 2009-2011
2009 2010 2011
LOSSES, %
9.41
9.068.97
At the year-end 2011, power transmission totaled 54,299 million kWh which is 198 million kWh (0.37%) more than the previous year.
KEY PERFORMANCE INDICATORS3.2
ENERGY TRANSMISSION3.2.1
20112010
59,49259,653
54,100 54,299
5,391 5,354
Power output
Productiv supply
Losses
2009
56,17550,889
5,286
Volume of Power Transmission Services in 2010-2011, kWh million
Branch 2010 2011 2011/2010, (ab-solute increase)
2011/2010, (rela-tive increase), %
Vladimirenergo 5,764 5,788 24 0.42
Ivenergo 3,327 3,220 -107 -3.22
Kalugaenergo 3,768 3,770 2 0.04
Kirovenergo 5,276 5,117 -159 -3.01
Marienergo 2,559 2,535 -24 -0.92
Nizhnovenergo 16,225 16,608 383 2.36
Ryazanenergo 4,193 4,235 41 0.99
Tulenergo 5,804 5,577 -227 -3.91
Udmurtenergo 7,184 7,449 265 3.68
TOTAL 54,100 54,299 198 0.37
74 75
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JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Actual Energy Losses in 2010-2011
Branch 2010 2011 2011/2010
kWh million
%* kWh million
% (absolute increase),kWh million
(relative in-crease), %
Vladimirenergo 649 10.11 643 9.99 -6 -0.12
Ivenergo 150 4.36 139 4.14 -11 -0.22
Kalugaenergo 654 14.80 774 17.04 120 2.24
Kirovenergo 401 7.45 402 7.28 1 -0.18
Marienergo 216 8.12 204 7.46 -12 -0.67
Nizhnovenergo 1,902 10.60 1,836 9.95 -66 -0.65
Ryazanenergo 300 6.67 283 6.27 -17 -0.41
Tulenergo 719 11.02 674 10.78 -45 -0.24
Udmurtenergo 401 5.38 399 5.08 -2 -0.30
TOTAL 5,391 9.18 5,354 8.97 -38 -0.21
* In 2010, conditions were comparable to those in 2011(except for the last mile facilities in the Branches Ivenergo, Kirovenergo, Marien-ergo, Nizhnovenergo, Udmurtenergo, which had direct agreements with JSC FGC UES in 2011)
Actual energy losses in the Company’s electrical grids
totaled 5,354 million kWh which accounted for 8.97%
of the energy intended for supply. As compared to 2010,
energy losses decreased by 38 million kWh (0.21%) tak-
ing into account 2% increase of the supply (in 2010, sup-
ply in the comparable conditions totaled 58,178 million
kWh). It is due to the Company’s persistent efforts that
losses are decreasing.
In 2011 the biggest part in the Company’s total pro-
ductive supply to end consumers was accounted for by
industrial customers (29%), who were followed by the
population (7%). Supply to the Territorial Grid Organiza-
tions totaled 49%. Structure of power consumption by
groups of customers has been stable over the years. Sig-
nificant share of high voltage energy transmission (63%)
is due consumption by large industrial customers.
COMPANY’S POWER SUPPLY BY VOLTAGE IN 2011
14%LV
17%MV2
63%HV
6%MV1
Earnings Generated from Power Transmission Services
In 2011, the Company’s earnings generated from power
transmission services totaled RUB 63,249 million less
VAT which is 0.1% more than had been planned in the
business-plan. It is RUB 10,143 million (19%) more than
the previous year and RUB 17,560 million (38%) than the
earnings in 2009.
In 2011, providers of last resort (POLR) accounted for
77% (RUB 49,263 million less VAT) of the earnings thus
taking the first place and outstripping energy retail or-
ganizations with 19% (RUB 11,952 million less VAT), end
consumers with 3% (RUB 1,619 million less VAT), and
related territorial grid companies with 1% (RUB 415 mil-
lion less VAT).
STRUCTURE OF REVENUES GENERATED FROM POWER TRANSMISSION
SERVICES PER CONSUMER GROUPS IN 2011
COMPANY’S POWER SUPPLY BY CONSUMER GROUPS IN 2011
5%Transport
2%Agriculture
29%Industrial
7%Population and equalentities
4%Non-industrial customers
49%Territorial grid organizations
3%State and municipal organizationsand ower budget consumers
3%Over consumers
19%Energy retail companies
77%POLR
1%Territorial grid organizations
76 77
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Information on the Accounts Receivable from Power
Transmission
As of December 31, 2011 the Company’s accounts re-
ceivable totaled RUB 4,836 million, including current
debt of RUB 3,585 million (74%) and overdue debt of
RUB 1,252 million (26%). Receivables turnover in the
reporting period totaled 24 days. Overdue debt to the
total earnings generated from energy transmission ser-
vices ratio was 1.68%.
Accounts Receivable (Debt) for Power Transmission Services , RUB million
Branch Consumer debt (including VAT)as of December 31, 2010
Consumer debt (including VAT)as of December 31, 2011
Total Current Overdue Total Overdue Including disput-able debts
Total Including disputable debts
Total Including disputable debts
Vladimirenergo 336 251 85 38 741 437 304 235
Ivenergo 194 109 85 49 236 174 62 2
Kalugaenergo 328 264 64 6 175 169 6 6
Kirovenergo 570 439 131 0 503 503 0 0
Marienergo 269 211 58 35 400 238 161 161
Nizhnovenergo 1,031 471 561 557 830 567 263 0
Ryazanenergo 275 275 0 0 247 247 0 0
Tulenergo 661 653 8 1 1,097 757 340 339
Udmurtenergo 519 431 88 56 607 491 116 55
TOTAL 4,184 3,104 1,080 742 4,836 3,585 1,252 798
STRUCTURE OF ACCOUNTS RECEIVABLE FROM POWER
TRANSMISSION SERVICES IN 2010-2011, RUB mln
742 798
338 454
3,104
3,585
As of December 31, 2011
As of December 31, 2010
Current
Overdue (less disputable)
Disputable
In 2011, consumer debts for energy transmission ser-
vices increased by RUB 652 million.
Receivables turnover did not change as compared to
2010 level. Overdue debt to the total earnings gen-
erated from energy transmission services ratio de-
creased by 0.02%.
Increase in the current debt in the reporting period was
due to the rise of the tariff rates for power transmission
services as weight average one-part tariff rate increased
by 19% in 2011 as compared to the previous year.
Four of the Company’s branches managed to reduce
overdue debt. These are Ivanenergo (by RUB 20.18 mil-
lion), Kalugaenergo (by RUB 58.12 million), Kirovener-
go (by RUB 130.8 million) and Nizhnovenergo (by RUB
297.94 million).
Growth of the Company’s total overdue debt was due to its
increase in the following four branches: Vladimirenergo
(by RUB 218.63 million), Marienergo (by RUB 107.45 mil-
lion), Tulenergo (by RUB 332.18 million) and Udmurten-
ergo (by RUB 33.56 million).
The increase in the overdue accounts receivable was
caused by consumers’ disputes and breach (in the case
of two branches) of the terms of payment stated in
the contract.
As of December 31, 2011 disputable debt totaled RUB
798.39 million.
STRUCTURE OF DISPUTED DEBT PER
CONSUMER GROUPS IN 2011
0%End consumers
11%Energy retail companies
0%Territorial
grid organizations
89%POLR
78 79
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JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
STRUCTURE OF DISPUTED DEBT BY CAUSES OF DISAGREEMENT
In 2011, as a result of processing claims for collection of
debts the Company’s claims for total sum of RUB 608.93
million were upheld in court. The Company won 97.08% of
the claims which is 2.28% less than in 2010.
As of December 31, 2011, 3.49% of the overdue debt was
restructured, 60% are enforced by legal action, 9.48% are
claimed for collection (new overdue debt) and 21.63% are
under bankruptcy proceedings initiated against the cus-
tomers.
In 2011, the Company received 50,244 applications for
technological connection of power receivers to the Com-
pany’s grids; total customer contract demand amounted to
1,719 MW.
All the branches experience steady increase in the number
of applications, growth registered in 2010 and 2011 was
49% and 47% respectively. As compared to 2009 the num-
ber of applications more than doubled. The Company also
received three applications for technological connection
of generating facilities with total power of 92 MW.
TECHNOLOGICAL CONNECTION TO GRIDS3.2.2
NUMBER OF APPLICATIONS
FOR TEHNOLOGICAL CONNECTION
IN 2009-2011
2%Energy losses in the grids
of Territorial Grid Organizations
2%Volume of power transmitted
to the legal entities and persons
6%Type of tariff
(one-part/two-part tariff)
6%Volume of power transmitted to the apartment building (including public utilities)
84%Capacity used in calculations
22,858
2009 2010 2011
34,134
50,244
DISTRIBUTION OF CUSTOMER CONTRACT
BY CATEGORIES OF CONNECTION
Note: applications for generating facilities are not included
Totally, connection categories ‘over 750 кW (0.4-20 кV)’
and ‘up to 15 kW’ account for the biggest part (40% and
27% respectively). The category ‘over 750 кW (35-110
кV)’ accounts for the smallest share of 4%.
Branch 2009 2010 2011
Number ofapplications
Total cus-tomercontract de-mand, MW
Number ofapplications
Total cus-tomercontract de-mand, MW
Number ofapplications
Total cus-tomercontract demand, MW
Vladimirenergo 2,695 41.16 3,890 71.49 4,948 177.97
Ivenergo 828 92.22 1,219 67.15 1,730 57.55
Kalugaenergo 3,993 167.94 5,697 133.64 8,662 288.27
Kirovenergo 2,523 41.10 3,953 74.06 5,451 112.37
Marienergo 853 20.82 1,475 23.49 1,882 31.47
Nizhnovenergo 6,450 205.55 8,916 220.51 13,851 531.08
Ryazanenergo 1,400 54.20 2,259 50.50 3,266 96.71
Tulenergo 1,848 168.12 3,523 141.90 6,634 292.78
Udmurtenergo 2,268 73.90 3,202 90.97 3,820 131.21
TOTAL 22,858 865.01 34,134 873.71 50,244 1,719.41
Customer Contract Demand and the Number of Applications by Branches in 2009-2011
4%68 MW over 750 kW (35-110 kV)
22%375 MW from 100 to 750 kV (0.4-20 kV)
7%127 MW
from 15 to 100 kW (0.4-20 kV)
27%456 MW
up to 15 kW (0.4-20 kV)
40%693 MW over 750 kW (0.4-20 kV)
80 81
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JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
DISTRIBUTION OF THE CUSTOMER DEMAND BY TYPES OF ECONOMIC ACTIVITY
ACROSS THE BRANCHES OF JSC IDGC OF CENTER AND VOLGA REGION, MW
In 2011, the Company concluded the total number of
44,050 agreements on technological connection of
power receivers with total connected power of 1,147.45
MW. 93% of the contracts were concluded with prefer-
ential consumers (both legal and physical entities) re-
questing the power range of up to 15 kV.
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
11 5
120 42
3 1
41 13
12 19
181 76
6 2
55 50
6 3
13 9
5 2
419 105
14 8
58 16
66 24
134 69
11 5
86 30
Industry Agriculture
Communiti and social sphere Physical persons
Growth in the number of applications is accompanied by
the corresponding growth in the number of concluded
contracts for technological connection. In 2010, the in-
crease was 48% as compared to the previous year, and
in 2011 the respective growth was 46%.
In 2009 and 2010, customer contract demand did not
change significantly as it totaled 610 MW and 601 MW
respectively. However tariff rates, lowered in 2011,
led to 91% increase (as compared to the previous year)
in the customer contract demand under contracts for
technological connection.
The Number of Concluded Contracts for TC and Customer Contract Demand in 2009-2011
COMPARATIVE ANALYSIS OF CONTACTS CONCLUDED IN 2010–2011
IN TERM OF NUMBER AND POWER RANGE
Branch 2009 2010 2011
Number of Contracts
Total ContractDemand, MW
Number of Contracts
Total ContractDemand, MW
Number of Contracts
Total ContractDemand, MW
Vladimirenergo 2,419 35.24 3,633 48.13 4,422 107.71
Ivenergo 774 52.23 1,012 56.31 1,485 35.60
Kalugaenergo 3,407 98.87 4,935 102.19 7,031 150,10
Kirovenergo 2,268 33.16 3,373 56.05 4,817 90.01
Marienergo 830 19.86 1,369 18.83 1,775 23.71
Nizhnovenergo 5,459 127.67 7,754 125.35 12,337 367.97
Ryazanenergo 1,333 48.39 2,093 41.09 2,823 81.22
Tulenergo 1,747 133.92 3,031 84.24 5,873 184.63
Udmurtenergo 2,108 61.08 2,906 69.33 3,487 106.50
TOTAL 20,345 610.42 30,106 601.52 44,050 1,147.45
Note: contracts for generating facilities are not included
up to 15 kW
144163
2011/2010 Quantitive Comparison
2011/2010 Power Comparison
from 15 to 100 kW
183 181
from 100 to 750 kW
212222
over 750 kW
227211
82 83
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
NUMBER OF CONTRACTS CONCLUDED BY TECHNOLOGICAL CONNECTION
VOLUME OF CONNECTED POWER UNDER TC CONTRACTS CONCLUDED IN 2011, MW
The largest share of concluded contracts and customer
contract demand falls within ‘up to 15 kV’ category.THE POWER CONNECTED IN 2011, MW
170over 750 kW (0.4–20 kV)
109from 15 to 100 kW (0.4–20 kV)
3over 750 kW (35–110 kV)
17over 750 kW (35–110 kV)
1,996from 15 to 100 kW (0.4–20 kV)
346over 750 kW (0.4–20 kV)
922from 100 to 750 kW (0.4–20 kV)
276from 100 to 750 kW (0.4–20 kV)
40,959up to 15 kW (0.4–20 kV)
399up to 15 kW (0.4–20 kV)
364
2009 2010 2011
331
362
TOTAL POWER CONNECTED UNDER TC CONTRACTS IN 2011, MW
Totally, categories ‘up to 15kV’ and ‘from 100 to 750 kV’
account for the biggest share of the connected power.
156
40
87
69
12
up to 15 kW (0.4–20 kV)
from 15 to 100 kW(0.4–20 kV)
from 100 to 750 kW(0.4–20 kV)
over 750 kW (0.4–20 kV)
over 750 kW (35–110 kV)
TECHNOLOGICAL CONNECTION RESULTS
FOR 2009-2011, number
20112010
34,134
50,244
30,106
44,050
16,38219,840
Applications filed
Contracts concluded
Connections
2009
22,85820,345
15,363
In the reporting period the trend of refusals from offers
and contract termination persisted. Physical persons ac-
count for the most part of such refusals and contract
terminations.
84 85
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
As compared to 2010, the number of contracts termi-
nated at the applicant’s initiative increased by 26%. The
number of applicants’ refusals from offers experienced
31% increase which is due to the rise in the number
of concluded contracts.
Technological Connections Performance Against the Plan
NUMBER OF TERMINATED CONTRACTS AND REFUSALS
FROM OFFERS BY TC CONTRACTS IN 2011
618
1,748
Contracts Terminated Refusals from Offers
up to 15 kW (0.4–20 kV)
legal entities
up to 15 kW (0.4–20 kV)phys. pers.
from15 to 100 kW(0.4–20 kV)
from 100 to 750 kW
(0.4–20 kV)
over 750 kW (0.4–20 kV)
212
520
179
402
143
314
43
84
45
TOTAL POWER CONNECTED IN 2011, MW
Planned Actual
300
364
NUMBER OF CONNECTIONS IN 2011, number
Planned Actual
16,600
19,840
Key Performance Indicators (KPI) used by the Company
to assess efficiency of management of the distribution
power grid complex include the following indicators in
terms of reliability:
• systemic indicator of interruption of consumer
power supply (total power undersupply in case of
power system disturbances (kWh) to productive
supply ratio for the reporting period);
• systemic indicator for the average duration of power
supply interruptions (total duration of power system
disturbances to the total number of disturbances ratio).
From year to year the Company is significantly im-
proving its KPI.
In 2011, as compared to the previous periods, the
Company’s overall disturbance rate has shown a sta-
ble declining trend, which is due to the timely and ef-
fective measures devised on the basis of an analytical
survey into the causes of disturbances, as well as to
implementation of the Company’s repair and invest-
ment programs.
Reliability Indicators
Note: the information contains no data on power system
disturbances registered due to severe weather conditions
and excluded from the KPIs calculations.
AVERAGE DURATION OF POWER SYSTEM NUMBER OF DISTURBANCES IN 2009-2011
DISTRUBANCES IN 2009-2011, hours
RELIABILITY PROVISION3.3
Unit of Measure
2009 2010 2011 2011/2010 (absolute increase)
2011/2010, (relative increase),%
Number of powersystem disturbances
2,732 2,711 2,695 -16 -0.59
Undersupply of power kWh thousand
2,605 2,213 2,184 -29 -1.31
Average duration of power system disturbances
hours 5.7 5.0 4.9 -0.1 -2
5.72,732
2009 20092010 20102011 2011
5.0
2,711
4.92,695
over 750 kW (35–110 kV)
86 87
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In 2011, most interruptions of power supply are due to the
following reasons:
• forest trees falling on the power transmission lines;
• aging insulation and equipment material.
In the Company’s programs for energy saving and im-
provement of energy efficiency the following target in-
dicators are used:
1. Energy losses including consumption of the
substations.
2. Power consumption for production and economic
needs.
3. Availability of modern power metering devices in
the retail market in compliance with the Program
of Prospective Development of Metering Systems
(commercial power metering within the branches’
accountability; commercial power metering at the
customers’ power devices; technical power metering
at the branches’ substations).
Following are the target figures of the indicators set for
2011-2016.
Target Energy Saving and Energy Efficiency Indicators in 2011
In 2011, all the targets were achieved to the full extent.
ENERGY SAVING AND IMPROVEMENTOF ENERGY EFFICIENCY
3.4
Target Indicator Unit of Measure
Planned Actual Actual/Planned(absolute increase)
Actual/Planned,(relative increase), %
Energy loss during transmission kWh million
5,460.09 9.11%
5,353.71 8.97%
-106.38 -2
Power consumption for productionand economic needs
kWh million
120.73 119.08 -1.65 -2
Consumption of heat power for productionand economic needs
Gcal 48,905.87 45,646.4 -3,259.47 -7
Consumption of cold and hot waterfor production and economic needs
m3, thousand
584.05 485.09 -98.96 -17
Consumption of natural gas for production and economic needs
m3, thousand
4,080.41 3,695.2 -385.21 -9
POWER UNDERSUPPLY
IN 2009-2011, kWh thousand
2,605
2009 2010 2011
2,2132,184
The Company’s Energy Saving Program consists of the fol-
lowing subprograms:
• Target programs, which include measures to reduce
energy losses such as organizational and technical
measures, reduction of power consumption for
production and economic needs;
• Non-target programs, which include the
development program of the billing systems and
renovation program.
The Company spent total of RUB 599.2 million on the tar-
get programs, RUB 553.3 million on the development pro-
gram of the billing systems and RUB 6,303.1 million on the
renovation program.
Funds for the Energy Saving Program came from the in-
vestment program in the amount of RUB 6,983.3 million
and repair program in the amount of RUB 306.6 million.
Implementation of the Energy Saving and Energy Efficiency Program in 2011
Subprogram Units of mea-sure
Planned Actual Actual/Planned(absolute increase)
Actual/Planned (relative increase), %
Measures to reduce energy losses (organizational and technical measures)
kWh million 24.15 90.73 66.58 276
RUB million 76.9 282.3 205.4 267
Measures to reduce power con-sumption for production and economic needs, including:
RUB million 13.7 20.7 7 51
Electric power kWh million 3.74 4.82 1.08 29
Heat power Gcal 1,643.1 2,079.57 436.47 27
Hot and cold water m3, thousand 15.09 23.06 7.97 53
Natural gas m3, thousand 82.39 117.33 34.94 42
Development Programof the Billing Systems
kWh million 20.09 21.18 1.09 5
RUB million 71.3 77.4 6.1 9
Renovation Program kWh million 1.11 7.1 5.99 540
RUB million 1.9 12.92 11.02 580
88 89
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Power Consumption for Production and Economic Needs in 2011
Note:
• Data is given according to the metering results, in
RUB thousand, including VAT
• No other power sources were used in the reporting
period
• The Company owns buildings and premises with
total area of 732,311.6 square meters and rate of
power consumption of 0.09 TFOE per square meter
Type of Power Source Unit of Mea-sure
Planned Actual Actual/Planned(absolute increase)
Actual/Planned (relative increase),%
Power resources supplied by sup-ply (sales) agreements, including:
RUB, thousand 951,001 879,253 -71,748 -8
Electric power RUB, thousand 507,590 400,030 -107,560 -21
kWh, thousand 120,733 119,076 -1,657 -1
Heat power RUB, thousand 64,173 60,060 -4,113 -6
Gcal 48,905.87 45,646.40 -3,259 -7
Cold water supply RUB, thousand 8,826 8,543 -283 -3
m3, thousand 579.27 480.79 -98 -17
Hot water supply RUB, thousand 436 295 -141 -32
m3, thousand 4.78 4.30 0 -10
Natural gas RUB, thousand 17,090 14,860 -2,230 -13
m3, thousand 4,080.41 3,695.20 -385 -9
Fuel, including RUB, thousand 395.4 395.4 0 0
TFOE 20,870.58 19,830.11 -1,040 -5
gasoline RUB, thousand 301.6 301.6 0 0
TFOE 15,861.64 15,070.88 -790.76 -5
Diesel fuel RUB, thousand 89.4 89.4 0 0
TFOE 4,591.53 4,362.62 -228.91 -5
Residual oil RUB, thousand 4.4 4.4 0 0
TFOE 417.41 396.61 -21 -5
Measures to Reduce Technological Losses in 2011
REDUCTION OF TECHNOLOGICAL ENERGY LOSSES
Measures to reduce power needed for the distribu-
tion process include the following: disconnection of
power transformers at two (or more) (220)110/35/10
kV; 110(35)/10 kV transformer substations at low load
mode; disconnection of 10/0.4 kV package transformer
substations with seasonal load; balancing phase loads
in 0.4 kV grids by redistribution of the connected cus-
tomers; increasing cross-section of the overloaded 10 kV
and 0.4 kV power transmission line cables; replacement
of the overloaded/underloaded power transformers;
optimization of load distribution and working modes
of the distribution power grids. At the year-end 2011,
Company’s total technological losses were reduced by
28.17 million kWh which is 1.31 million kWh less than
the previous year.
Measures Reduction,kWh million
Disconnection of power transformers at two transformer substations and substationswith seasonal load
1.388
Disconnection of a power transformers at the transformer substation with two(or more) transformers at low load mode
10.095
Reduction of power consumption at the substation for its own needs 6.259
Installation of the power-factor correction units 1.412
Balancing phase loads in 0.4 kV grids 1.052
Replacement of overloaded/underloaded transformers 1.009
Reduction of repair time of the power grids equipment 0.179
Replacement of the wires to increase cross-section of the overloaded transmission line cables 2.224
28.2 million kWh 83.1 million kWhOF TECHNOLOGICAL LOSSES OF NON-TECHNIC LOSSES
REDUCTION OF POWER LOSSES IN 2011
90 91
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In the Company’s branches customers are attended to
at the Customer Service Centers (CSC).
Customers are free to chose one of the three inter-
action channels: face-to-face, long-distance and via
web-site, depending on their individual capacities and
preferences.
Customers can be served face-to-face in the CSC and
in the regional power grids and production units in the
presence of authorized persons. Authorized persons in
the production units and regional power grids can con-
sult the customer on technological connection to the
grid and power transmission services. Customers can
also file an application or a claim to the Company as
well as enquire about other power companies operat-
ing in the region.
CUSTOMER POLICY 3.5
CUSTOMER SERVICE CENTERS OPENED IN 2006-2011
REDUCTION OF NON-TECHNIC ENERGY LOSSES
In 2011, the set of measures taken to upgrade the power
metering systems and identify unmetered power con-
sumption resulted in 83.046 million kWh reduction of
other (commercial) energy losses.
Implementation of the Program of Prospective Develop-
ment of Metering Systems. In 2011, 29.597 commercial
thousand metering devices were installed/replaced which
resulted in 21.18 million kWh saved in the reporting pe-
riod.
Replacement of 0.4 kV HVL branch lines to buildings.
In the reporting period, 6.972 thousand naked cable HVL
branch lines to the buildings were replaced with insu-
2006 2007 2008 2009 2010 2011
1. VLADIMIR 1. ALEXANDROV
2. GUS-KHRUSTALNY
3. KOVROV
4. MUROM
5. IVANOVO
6. KINESHMA
7. NIZHNY NOVGOROD
8. RYAZAN
9. TULA
1. TEIKOVO
2. KALUGA
3. OBNINSK
4. KIROV (Kaluga region)
5. KALUGA (2)
6. KIROV
7. SLOBODSKOY
8. YOSHKAR-OLA
9. DZERZHINSK
10. ARZAMAS
11. IZHEVSK
12. SARAPUL
13. GLAZOV
1. KSTOVO 1. SEMENOV
2. ZAVJYALOVO
1. PETUSHKI2. NAVASHINO3. KARAKULINO
For an immediate consultation within the Company’s
competence any customer on Russian Federation terri-
tory can call 8-800-100-33-00. It is a toll-free hot-line
set up to provide centralized long-distance customer
service.
At the Company’s web-site www.mrsk-cp.ru in the ‘Cus-
tomers Relations’ section customers can access the
section ‘Internet Consulting Room’ where they can get
acquainted with laws and regulations applicable to the
Company’s operations, enquire about concluding pub-
lic contracts for technological connection and power
transmission, fill in a questionnaire, ask a question and
receive an answer via mail, email or telephone depend-
ing on their preferences.
lated wire lines. At the same time metering devices were
installed outside buildings thus preventing unmetered
energy consumption, unauthorized energy consumption
and any external interference affecting proper operation
of the device. In the reporting period, these measures
resulted in 0.637 million kWh decrease in energy losses
as compared to 2010.
92 93
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Company’s Customer Service Centers pursue the
following goals and objectives:
• Forming customer loyalty by providing quality
services and ensuring customer satisfaction;
• Tailoring the Company’s operations to the customers’
interests;
• Increasing number of customers by improving the
quality of customer service;
• Establishing individual approach to the customers;
• Ensuring maximum availability of information to the
customer;
• Collecting and processing information on customer
service.
It is one of the main functions of the CSCs to receive,
consult and provide assistance in the submission of ap-
plications for technological connection to the Compa-
ny’s grids as well as to process applications/claims.
Within the framework of the customer-oriented policy
the Company is constantly developing end-to-end cus-
tomer services. In addition to the existing 27 CSCs which
cover the operations area of 9 branches the Company
opened three more CSCs in Petushki (Vladimirenergo),
Navashino (Nizhnovenergo) and Karakulino (Udmurten-
ergo).
In order to ensure customer loyalty by providing qual-
ity customer service the Company has developed unified
requirements for the customer service. In 2011, the fol-
lowing requirements were approved: STO 01-016-2011
on Corporate Design of the Customer Service Centers
and Unified Dress Code, Principles of Professional Eth-
ics, STO 01-025-2011 on the Requirements for Organi-
zation of Evaluation and Analysis of the Customer Satis-
faction, and STO 01-040-2011 on the Requirements for
the Organization of Processing of Customer Applications
(Claims), the System of Centralized Customer Services.
Also in the reporting year the Company devised the set
of measures to enforce compliance of the service sys-
tem with the Standard STO on the System of Centralized
Customer Services approved by the Board of Directors
on August 15, 2011.
In order to inform customers of the planned outages
or power disturbances the Company publishes notifica-
tions in the sections ‘Schedule of the Planned Outages’
and ‘Latest Information on Power Disturbances’ on the
Company’s corporate web-site and main pages of the
branches’ web-sites. For the customers’ information
phone numbers of the Company’s hot-lines are provided
on the web-site.
As a measure to improve infrastructure of customer ser-
vice in the CSCs video monitors were installed in the
CSCs to display visual reference data on technological
connection services, energy saving and power safety.
Information boards were also updated in the CSCs.
3 NEW CSCS,OPENED IN 2011
INCLUDING:
30 CUSTOMER SERVICECENTERS,INCLUDING
In order to collects customers’ feedback and assess their
satisfaction with the quality of customer service in the
Company’s branches, questionnaires were carried out
face-to-face and via the web-site. The number of ques-
tionnaires completed in 2011 equaled 2,063 with the
average mark of 4.8, in 2010 and 2009 the respective
numbers were 1,606 and 1,461, which means that an in-
crease in 2011 and 2010 as compared to 2009 was 41%
and 9.9% respectively. Most customers complimented
availability of technical information and accompany-
ing documents (21%), organization of services provision
(20%), completeness and accessibility of the consulta-
tions (18%).
NUMBER OF RESPONSES MARK
RESULTS OF THE CUSTOMER SATISFACTION QUESTIONNAIRE
WITH THE QUALITY OF SERVICES PROVIDED
BY JSC IDGC OF CENTER AND VOLGA REGION
Compliance with the terms of services provision
Completeness and accessibityof the consultations
Organization of services provision
Politeness of the employeesin the Customer Service Centre
Availability of technical information and accompanyng documents
Transport accessibity
1,444 4.7
1,647 4.8
1,874 4.8
1,293 4.9
1,957 4.8
1,125 4.5
Number of the customers, who have filled in a questionnaire
1,461 2,063
2009 2011
сustomers сustomers
1,606
2010
сustomers
94 95
03 BUSINESS ACTIVITIES REVIEW
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
According to the customer feedback in 2011, operational
efficiency has increased which can be confirmed by the
stable growth of the number of application as compared
to the previous years and increasing usage of different
communications channels to their full extent.
On the basis of 2009-2011 performance a stable growth
of the Company’s customers can be observed as the to-
tal number of applications has increased by 83.69% over
three years (in 2009, the number of applications totaled
160,759, in 2010 – 230,470, and in 2011 – 295,118).
NUMBER OF APPLICATIONS TO BRANCHES OF THE COMPANY IN 2009-2011
32,07944,306
64,031
8,245
34,845
37,380
6,720
5,673
29,123
3,113
3,581
9,808
62,141
11,894
6,565
23,640
15,171
6,950
49,995
12,648
83,254
13,689
11,636
34,315
18,896
9,152
47,497
2009 2010 2011
In 2011, the Company continued to improve operational
efficiency and reliability of energy supply including en-
hancing management practices of the grid complex in
the following spheres:
• quality of management;
• occupational health and labor safety system;
• environmental management.
At the year-end 2011, an independent certifying author-
ity confirmed compliance of the integrated manage-
ment system with the international standards ISO 9001,
ISO 14001 and OHSAS 18001.
In order to increase reliability and efficiency of power
production, develop power transmission services, and
enhance management of business processes the follow-
ing practices are regulated by the Company’s innovative
development program: power quality control, require-
ments for evaluation and analysis of customer satis-
faction, the system of centralized customer services,
customer relations management, rationalizing and in-
ventive activities, innovative activities, relations with
contractors on the question of rescue and recovery op-
erations, management of design estimates, etc. Total of
25 organizational standards were devised.
The Policy on Quality, Occupational Health, Labor Safe-
ty and Environment Protection is the cornerstone of the
Company’s integrated management system. In 2011,
under this policy uttermost attention was devoted to
increasing energy saving and energy efficiency, improv-
ing quality of customer service and maintaining innova-
tive development.
Due to continuous efforts at optimization of the opera-
tions last year saw significant growth in the quality of
the production processes and level of environmental
protection and labor safety.
The Company participated in the annual competition
for the award from the Government of the Russian Fed-
eration in terms of quality. Criteria used for evaluation
of the competing companies motivate them to employ
modern management techniques, which allow increas-
ing efficiency of the operations by seeking new market
segments, making necessary changes and cutting ex-
penses. Due to its significant progress in this sphere the
Company received a Diploma in the competition.
According to the plans for 2012, the Company’s Inte-
grated Management System will be developed by ex-
tending the area of certification to the branches and
confirming appliance of the Company’s power manage-
ment with the international standard 50001.
QUALITY POLICY3.6
ISO 9001 ISO 14001 OHSAS 18001
COMPLIANCE OF THE COMPANY INTEGRATED MANAGEMENT SYSTEMWITH INTERNATIONAL STANDARDS
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
04
Rapidly mounted support for a double-circuit power line, which has been patented by the
Company, is temporarily installed for quick elimination of emergencies related to damages
of supports at 35-110 kV lines. It is unloaded, assembled and mounted without application
of heavy special equipment, it does not demand setting up a foundation
98 99
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Board of Directors approved the Program of Innova-tive Development for 2011-2016.
The target program of information technology and tele-communications development for 2012-2016 was devised
within the framework of the JSC IDGC Holding’s projects.
Pilot projects of Corporate Information Management Sys-tem (CIMS) development were launched in the spheres of
repairs and maintenance automation, financial operations,
accounting and human resources management.
NOVEMBERJULY DECEMBER
KEY EVENTS OF THE YEAR
january february march april may june july august september october november december
In order to develop and achieve high results it is neces-
sary to renew and improve technologies and equipment
used in the Company’s operations on a regular basis.
The guideline to the introduction of new equipment and
technology is the Regulation on Technical Policy of the
JSC IDGC of Center and Volga Region, approved on April
18, 2008. Its updating started in the fourth quarter of
2011. The revised version of the Regulation will be put to
approval by the Board of Directors in April 2012.
TECHNICAL POLICY4.1 The key objectives of the Company’s Technical Policy in the
distribution grid complex include:
• Avoiding depreciation of the fixed assets through mod-
ernization and employment of innovative equipment
and technology in the construction, reconstruction and
technical re-equipment of the grids;
• Adoption of the state-of-the-art technology with the
modern means of diagnostics and monitoring, as well
as information and measuring systems;
• Increasing transmission capacity of the grid; reduction
of energy losses in the distribution power grids in order
to increase their operational efficiency;
• Overcoming the tendency of equipment differentiation
used at the reconstruction and capital construction
sites of one branch without project feasibility study;
• Ensuring compliance with the unified requirements
and approaches to implementation of the Technical
Policy.
100 101
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Program of Innovative Development in the JSC IDGC of Center and Volga Region for 2011-2016 was developed
and approved by the Board of Directors (Minutes No. 81, as
of July 27, 2011).
The main objectives of the Program include:
• Research & Development;
• innovations in the investment program;
• development of IT-infrastructure and information
technology;
• enhancing talent pool;
• improvement of the business processes management.
For the monitoring purposes the Program establishes 11 indicators of innovative development. In 2011, most of the
targets were achieved, including the following:
• one patent (№111566) was received for a pre-engi-
neered double circuit pole for the 35-110 kV over-
head lines designed for temporary use while liqui-
dating emergencies related to the pole damages
in the regions of difficult access, without employing
large-size equipment;
• energy losses totaled 8.97% (compare to the planned
9.17%);
• average duration of the total power supply disturbances
was 0.2536 min (compare to the planned 0.2591 min);
• the level of teleautomation of 35-110 substations was
32%;
• the share of profits generated by innovative services
totaled 0.21% (compare to the planned 0.21%);
• RUB 488.9 thousand were allocated to personnel
training in the sphere of innovations (compare to the
planned sum of RUB 341.3 thousand);
• two new business processes were introduces and six
existing were upgraded in order to improve manage-
ment of the business processes.
In 2011, the following R&D projects were realized:• a pre-engineered double circuit pole for the 35-110 kV
overhead lines has been designed for temporary use
while liquidating emergencies related to the pole dam-
ages in the regions of difficult access, without employ-
ing large-size equipment;
KEY REGULATORY DOCUMENTS
Federal Laws: Decrees of the Government of the Russian Federation :
• Federal Law of the Russian Federation No. 184-FZ on
Technical Regulation, of December 27, 2002;
• Federal Law of the Russian Federation No. 35-FZ on Elec-
tric Energy, of March 26, 2003;
• Federal Law of the Russian Federation No. 261-FZ on
Saving Energy and Increasing Energy Efficiency, and on
Amendments to Certain Legislative Acts of the Russian
Federation on Electric Energy, of November 23, 2009;
• Decrees of the Government of the Russian Federation :• Decree No. 526 on Reforming the Power Industry of the
Russian Federation of July 11, 2001; • Decree No. 977 on the Investment Programs for the
Power Industry (along with the Regulations on Approv-al of the Investment Programs of the Power Industry State-owned Enterprises and Grid Companies, Regula-tions on Control of the Implementation of Investment Programs of the Power Industry Companies), of Decem-ber 01, 2009;
• Decree No. 160 on the Order of Establishment of the Protected Zones Around Power Grid Facilities and Spe-cial Conditions of Land Use Within Such Zones, of Feb-ruary 24, 2009.
DEVELOPMENT AND INNOVATIONSTHE PROGRAM OF INNOVATIVE DEVELOPMENT
4.2
• the method of detecting furan compounds in the trans-
former oil has been developed, certified and launched
into operation;
• the project of feasibility study on the concrete compo-
sition modified with the dispersion of multi-wall car-
bon nanotubes for production of reinforced concrete
poles for 0.4-10 kV overhead lines was developed;
• the project of feasibility study on production of an
electricity cable with non-magnetic core made of high-
nitrogen stainless steel was developed;
• an integral program for calculating efficiency of the
lightening arrester system for the overhead lines was
developed.
Actual investments in R&D in the reporting period totaled RUB 24.18 million. Out of 27 research works 10 were com-
pleted, and the rest 17 are left for 2012.
In 2011, the costs of the program of introduction of the
new equipment, materials and technology during recon-
struction and new construction works totaled RUB 755.32
million, with the economic effect reaching RUB 70.00 mil-
lion. R&D costs amounted to RUB 16.83 million.
Orders of JSC RAO UES of Russia: Regulations of JSC RAO UES of Russia and JSC FGC UES:
• No. 338 on Measures to Reduce Energy Losses in the Pow-
er Grids, of June 01, 2005;
• No. 68 on Approval of the Target of the Functional Mod-
el of Operative Dispatch Control in the Power Industry
of the Russian Federation, of January 30, 2006;
• No. 291, General Provisions (Concept) of the Technical
Policy in the Power Region of the Russian Federation,
of June 19, 2008.
• No. 364r/469r. on Measures to Create the Systems
of Commercial Metering in the Retail Markets in the
DGC, of December 28, 2007;
• No. 199r/171r on Implementation of the Regulations
on Equipment, Technology and Materials Assessment
in the JSC FGC UES, of June 10, 2008;
• The Strategy of Establishing/ Modernizing Billing Sys-
tems of the Retail Energy Market in the Branch Grids of
the JSC IDGC of Center and Volga Region (approved by
the Management Board of the JSC IDGC of Center and
Volga Region ob March 30, 2010).
RUB 70 million
RUB 17 million
RUB 755 millionEconomical effect:
R&D costs:
Total costs:
IMPLEMENTATION OF THE PROGRAM FOR
INTRODUCTION OF NEW EQUIPMENT, MATERIALS
AND TECHNOLOGY DURING RECONSTRUCTION
AND NEW CONSTRUCTION WORKS IN 2011
102 103
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
INTRODUCTION OF EQUIPMENT, TECHNOLOGY
R&D FINANCING IN 2011-2016
AND MATERIALS IN 2009-2011, RUB mln
34 R&D projects are planned for 2012 with total equity
financing of RUB 211.89 million. Total sum intended for
R&D in 2011-2016 exceeds RUB 3.6 billion.
RUB 3,634.05 million2012–2016 гг.
Inciuding RUB 211.89 millionin 2012 г.
RUB 24.18 million2011 г.
39.4 18.557.5
194.6
387.6
694.1
18.5
6.1
3.8
201120102009
New technology
New electricalequipment
New equipment at the dispatcher centers
R&D
252.5
412.2
772.2
0.0 0.0 16.8
TECHNICAL COUNCIL
In 2011, 5 meetings of the Technical Council were sum-
moned in accordance with the yearly plan. The following
issues were discussed:
• organization of operative and technological process
control during emergency recovery works;
• planning access routes to the accident spots. Auton-
omous supply points, reclosers. Establishment of the
protected zones. Emergency reserves.
• organization of clearing of the routes for the over-
head lines, cooperation with the contractors;
• development of the Program of Innovative Develop-
ment for 2011-2016, including R&D program;
• quality of the technical tasks for projecting,
building and construction works under the invest-
ment program and in compliance with technical
regulations. Expertise of the project group leaders
in charge of the priority projects;
• consideration of the Company’s Regulation on Inno-
vative Development;
• special features of the obligatory power inspections
in the power grids in accordance with the Federal
Law No.261-FZ, of November 23, 2009.
23 permanent members of the Technical Council are
comprised of the managers and experts of the executive
bodies and branches of the Company. In 2011, there
were no significant changes in the membership of the
Council.
Within the framework of its innovative activity the Com-
pany strives to unlock innovative potential of the young
people, encourages its creativity and promotes its innova-
tive projects.
In November 2011, the First All-Russian Youth Contest
of the Scientific Innovative Ideas and Projects “Power
Industry of the Future” was launched. It was organized
by the JSC IDGC Holding in cooperation with the Coor-
dination Council for Youth Affairs in the Scientific and
Educational Spheres of the Presidential Council of the
Russian Federation for Science, Technology and Educa-
tion and under the auspices of the Society of the Sup-
porters of Fundamental and Sectoral Sciences Develop-
ment in Favor of the Power Industry “Power Industry of
the Future”.
As a result of the regional round of the contest, the Expert
Group in the Company’s operation area of the Company
chose 5 best projects out of 27, the winners proceeded to
the next, federal round of the contest.
These projects included the following two projects of the
Vladimirenergo Branch:
• prototype of the automatic individual indicator of the
pace voltage;
• R&D work of the prototype of an insulating rod (the
rod for the voltage indicators and installation of the
mobile protective earthing systems, operative rods,
measuring rods and rods for phasing kit) intended for
operation at the open 6-220 kV power grid facilities in
adverse weather conditions (high air humidity).
The other projects were presented by the Ivanovo State
Power University (1 project) and Kazan State Power Engi-
neering University (2 projects).
The Chairman of the Expert Group, General Director of JSC
IDGC of Center and Volga Region Evgeny Ushakov com-
ment on the results: ‘The Power Industry of the Future will
not do without innovations. And our goal is to help the
young generation to put their knowledge to practice and
unlock their creative and scientific potential’.
104 105
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
“We strive to never stop at what we have achieved and
continue working at the new R&D projects so that they
are in demand and applicable in the power industry”,
says Sergey Andrus, the Deputy General Director for
Technical Issues – Chief Engineer of JSC IDGC of Center
and Volga Region.
Development and implementation of the measures on the
control over reactive power flows in the branch power
grids complies with the requirements of the Order of RAO
UES of Russia No. 893 on the Improvement of Stability and
Technical and Economic Efficiency of the Power Distribu-
tion Grids and Consumer Power Supply Systems by Means
of Control of Reactive Power Flows and Normalization of
Voltage Levels, of December 11, 2006.
A proprietary standard STO 0901-008-2010 on the Re-
quirements for the Organization of Reactive Power Flow
Control was approved and put into effect by the Order
of JSC IDGC of Center and Volga Region, dated October
22, 2010.
The Target Programs for the reactive power flow control
in the branch power grids for 2011 were developed and
approved on January 12, 2011.
THE PROGRAMS OF THE CONTROL OVER REACTIVE POWER FLOWS
Members of the Technical Council observe the results of the development of the pre-engineered 35-110 kV pole on March 31, 2011 (on the premises of JSC Muromenergomash, Murom)
Implementation of these Programs resulted in the follow-
ing achievements:
• Installation of 3 capacitor banks with the total capac-
ity of 6.75 MVAr (two of them at the 110/35/6 kV Mozh-
ga substation at the 1st and 2nd bus sections 6 kV of
the Udmertenegro Branch, one capacitor bank at the
SS 110/6 kV Ludinovo substation at the 1 bus section
6 kV);
• At the SS Pokrov 110/35/10 kV along with the 25 MVAr
capacitor bank at 110 kV a 25 MVAr controlled shunt
operator was installed with the voltage of 110 kV and
the capacity of 25 MVAr,along with the capacitor bank
with the voltage of 110 kV and the capacity of 25 MVAr
installed in 2010;
• Design and exploration works for installation of 9
capacitor banks with total capacity of 35.5 MVAr at 6
substations owned by Vladimirenergo, Nizhnovenergo,
Ryazanenergo, Tulenergo, and Udmurtenergo;
• 4,907 metering devices were installed at the substations
owned by the Company’s branches and at the limits of
the consumers’ balance responsibility. The devices for
the metering of active energy were replaced with multi-
functional electronic devices capable of simultaneous
metering of active energy and reactive power;
• 6-110 kV capacitor banks at the branch substations
generated 1,207,339 MVAr·hours which is 121,310
MVAr hours (10.04%) more than in 2010;
• 28 consumers with total capacity of 7.8 MW were con-
nected to the power grids.
As of January 1, 2012, total capacity of capacitor operators
amounted to 268.64 MVAr which is 5.61 MVAr more than
on January 1, 2011.
Launching of 4 new 6-10 kV capacitor operators with total
capacity of 4.8 MVAr at the Vladimirenergo and Tulenergo
substations is planned for 2012.
In 2011, implementation of the Program of the Control
over Reactive Power Flows cost RUB 289,378.63 thou-
sand.
Economic effect from the Target Program implementa-
tion totaled 54,136.1 thousand kWh which accounts for
RUB 94,370.3 thousand.
IMPLEMENTATION OF THE PROGRAM
FOR REACTIVE POWER CONTROL IN 2010-2011, MVar
20112010
263.03268.64
41.95
6.7512.40
35.50
Capacitor banks, installed capacity
Capacitor banks, launched
Сapacitor banks, design and exploration
106 107
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In 2011, target figures set in the Repair Program were
fully achieved.
Costs of the fixed assets repair in the reporting period totaled RUB 2,844.29 million. (RUB 1,571.26 million for non-contracted and RUB 1,273.03 million for contracted repair works), which is 10% more than in 2010.
Repair Costs by the Types of Power Equipment in 2009-2011, RUB million
REPAIR PROGRAM
REPAIR AND OPERATIONAL ACTIVITIES4.3
REPAIR COSTS OF THE POWER GRID FACILITIES IN 2011, RUB million
10%Buildings and facilties RUB 289.3 million16%
35-220 kV overhead linesRUB 448.2 million
8%Other
RUB 222.7 million
48%0.38-10 kV distribution grids RUB 1,364.8 million
18%35-220 kV substations
RUB 519.2 million
Power Equipment 2009 2010 2011 2011/2010, (absolute increase), RUB million
2011/2010, (relative increase),%
35-220 kV substations 424.5 509.9 519.2 9.3 1.82
35-220 kV overhead lines 346.7 376.6 448.2 71.6 19.01
0.38-10 kV distribution grids 1,013.2 1,123.6 1,364.8 241.2 21.47
Buildings and facilities 246.5 290.9 289.3 -1.6 -0.55
Other costs 129.9 278.2 222.7 -55.5 -19.95
In 2011, in order to enhance reliability of the power
grids the Repair Program included clearing of overhead
line routes of 12,791 ha, which has been the largest
such measure in the previous years.
Figures of the 2011 Repair Program exceed those of
2008-2010 program due to redistribution and optimiza-
tion of the costs with respect to energy efficiency of the
operations (transition to non-contracted repair works).
Implementation of the Repair Program in figures, 2011
Works Unit 2011
Thorough maintenance of 35-110 kV substations number 225
Thorough maintenance of 35-220 kV transformers number 657
Clearing of routes for 0.4-220 kV overhead lines ha 12,791
Thorough maintenance of 6-10/0.4 kV transformersubstations (distributing points)
number 8,008
Replacement of defective poles of 0.4–110 kV overhead lines number 32,795
THOROUGH MAINTENANCE OF 35-110 KV
SUBSTATIONS, number
THOROUGH MAINTENANCE OF 6-10/0.4 KV
TRANSFORMER SUBSTATIONS, number
118
7,922212
5,616
2167,952225 8,008
2008 20082009 20092010 20102011 2011
RUB 2,844 million +10%COSTS OF THE FIXED ASSETS REPAIR IN 2011
AS COMPAREDTO 2010
108 109
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
REPLACEMENT OF DEFECTIVE POLES
OF 0.4–110 KV OVERHEAD LINES, number
REPAIR COSTS IN 2008-2012 RUB million
CLEARING OF ROUTES FOR 0.4-220 KV
OVERHEAD LINES, ha
Repair Costs of the Basic Production Assets, RUB million
Repair Costs 2008 2009 2010 2011 2011/2010, (absolute increase),RUB million
2011/2010, (relative increase), %
Total 1,577.0 2,160.8 2,579.2 2,844.3 265.1 10.27
Non-contracted, including 600.0 827.3 1,318.2 1,571.3 253.1 19.2
material and technical resources 303.8 490.4 750,7 827.9 77.2 10.28
Contracted 977.1 1,333.5 1,261.0 1,273.0 12 0.95
In 2011, non-contracted repair costs increased by 19.2% as compared to 2010.
17,850 7,937
24,0529,891
28,73411,824
32,79512,791
2008 20082009 20092010 20102011 2011
1,592
1,037
2012план
1,571
1,273
2011
1,318
1,261
2010
827
1,334
2009
600
977
2008
Non-contracted Contracted
DISBURSEMENT OF CAPITAL INVESTMENTS FOR RECONSTRUCTION
DISBURSEMENT OF CAPITAL INVESTMENTS BY TYPES OF POWER
AND TECHNICAL RE-EQUIPMENT IN 2008-2011 RUB million
GRID FACILITIES IN 2011, RUB million
RECONSTRUCTION AND TECHNICAL RE-EQUIPMENT
In 2011, target figures set in the Reconstruction and Tech-
nical Re-equipment Program were achieved fully.
In 2011, the actual disbursement of capital investments intended for reconstruction and technical re-equipment totaled RUB 9,894.05 million, which is 62% more than in 2010.
9,894.05
2011
6,108.97
2010
4,496.67
2009
5,724.14
2008
5.3%RUB 523.2 millionEAD of future years
18.9%RUB 1,868.6 millionOther
7.4%RUB 728 million
35-220 kV overhead lines
7.0%RUB 696.9 million
Equipment, not included in the construction estimates
26.7%RUB 2,639.1 million
0.38-20 kV distribution grids
34.8%RUB 3,438.3 million35-220 kV substations
110 111
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Company’s perspective development includes measures in
the following spheres:
• Development of the grid infrastructure in order to sat-
isfy long-term and middle-term demand for electric
energy and power;
• analysis of the load capacity of the power facilities and
development of the target measures to be included in
the investment program in order to eliminate the “bot-
tlenecks” in the branch power systems and to ensure
technological connection to the Company’s power grid
of JSC IDGC of Center and Volga Region;
• assessment of relevance of the current schemes and
programs of power grids development, and coordina-
tion of the aforementioned schemes and development
programs with the executive authorities in the regions
of the Russian Federation;
• development and conclusion of agreements with the
authorities of the regions of the Russian Federation,
which stipulate priority measures to develop and im-
prove reliability of the power grid facilities;
• settlement of issues related to technological connec-
tion with JSC FGC UES and the affiliated grid organiza-
tions;
• cooperation with the generating companies to con-
clude agreements on technological connection of the
generating facilities to the power grids;
• cooperation with JSC FGC UES, JSC SO UES, and the ex-
ecutive authorities of the regions of the Russian Feder-
ation on synchronization of the terms of new construc-
tion and reconstruction of the power grid facilities;
• development of schemes for the external power supply
of the IPD facilities and assessment of feasibility of the
suggested measures in order to guarantee the design
and construction terms;
• control of compliance with the federal target pro-
grams;
• cooperation with the local and federal executive au-
thorities on development of the grid infrastructure.
Reconstruction and Technical Re-equipment Works in 2011
Works Units of measure
2011
Replacement of 35-110 kV isolating switchesand shorting plugs for SF6 circuit breakers
number 28
Replacement of 35-110 kV oil circuit breakersfor vacuum and SF6 circuit breakers
number 99
Replacement of 6-10 kV oil circuit breakers for vacuum ones number 415
Reconstruction of 35-110 kV overhead lines km 84.6
Reconstruction of 0.4-10 kV overhead lines km 1,483
Replacement of SN and SK type storage batteries at 110 kV substations SS 21
Installation of 6-10 kV reclosers number 68
Reconstruction of relay protection and automatic equipmentat 35-110 kV, including replacement for microprocessor-based devices
SS 21
PERSPECTIVE DEVELOPMENT4.4
PLANS AND PROGRAMS OF PERSPECTIVE DEVELOPMENT
Stages of Preparation of the Development Program for the Power Industry in the Region of the Russian Federation
Plans and programs for development of power industry
in the regions of the Russian Federation are developed
in accordance with the Decree No. 823 of the Govern-
ment of the Russian Federation, of October 17, 2009 and
are subject to approval by the executive authorities of
the regions for a five-year period.
The main target of the plans and programs is to devel-
op grid infrastructure and generating facilities, satisfy
long-term and middle-term demand for electric energy
and power, form stable and favorable investment cli-
mate in the power construction sphere.
In 2011, development plans and programs were devised
for all the regions within the Company’s operations area.
Specially designated work groups (coordinating coun-
cils) coordinate development of the aforementioned
plans and programs with the executive authorities of
the regions of the Russian Federation. The coordinat-
ing councils are present in all of the regions within the
Company’s operations area.
OUTLINE AND PROGRAM OF THE RUSSIAN REGION POWER SYSTEM DEVELOPMENT
OUTLINE AND PROGRAM OF UNIFIED ELECTRIC
SYSTEM OF RUSSIA
PROJECTION OF POWERAND CAPACITY DEMAND
CONTRACTS AND APPLICATIONS FOR
TECHNOLOGICAL CONNECTION
RELIABILITY ENHANCEMENT
MEASURES
112 113
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Implementation of the Plan
and Program of the Perspective Development
of the Power Industry in the Kaluga Region
Since 2007 Kaluga Region has demonstrated the highest
rates of growth and industry localization in the Company’s
operations area. Significant growth of economic activity is
accounted for by the foreign companies, which locate their
industrial forces in the region.
The work group in charge of power industry development
in the Kaluga Region was established on January 31, 2011.
It is comprised of the representatives of the Kaluga Region
administration, JSC SO UES, JSC FGC UES and JSC IDGC
of Center and Volga Region and chaired by the Governor
of the region.
The main plan for development of the industrial potential
requires construction of industrial parks.
At present, 4 industrial parks equipped with the necessary
infrastructure – Vorsino, Grabtsevo, Rosva, Kaluga-Yug –
are under development. Around 40 investment projects
are implemented there. In Obninsk, a biotechnopark is be-
ing created, the only one in Russia so far.
Over five years of the systematic development of the elec-tric power complex in the Kaluga Region power consump-tion to the full load rose by 27% from 749 MW to 950 МW.
Implementation of the 2011 Development Program in the
Kaluga Region resulted in improvement of the scheme and
operating conditions in the most perspective Kaluga and
Obninsk districts and elimination of the infrastructure re-
strictions.
JSC IDGC of Center and Volga Region tookthe following measures: • 1 quarter 2011 – construction of Mirnaya-Vorsino
110 kV circuit;
• 4 quarter 2011 – construction of Denisovo-Rusinovo
110 kV overhead lines;
• 2011 – construction of new 110 kV SS Detchino, Ros-
va-2, Ahlebshino;
• 4 quarter 2011– transition of the Vorsino SS
to 220 kV — 1st line.
JSC FGC UES took the following measures:• 4 quarter 2011 – reconstruction of 220 kV SS Sputnik
4х125 MVA;
• 4 quarter 2011 – reconstruction of 220 kV SS Mirnaya
4х125 MVA;
• 4 quarter 2011 – construction of 220 kV overhead ac-
cess lines at the Vorsino SS;
• 2014 – reconstruction of SS Orbita 220kV 2х200 MVA;
• 2016 – construction of a new 500 kV power supplier.
In order to adopt a unified approach to the issues con-
cerning perspective development, territorial planning and
implementation of the investment projects of the SMEs
the Company’s branches have developed the power dis-
tribution plans which visualize the load level of 35-110 kV
substations depending on their location.
THE MAP OF THE POWER DISTRIBUTION AMONG THE COMPANY’S BRANCHES
114 115
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In order to facilitate use of the maps, interactive ver-
sions have been introduced in the Nizhnovenergo and
Tulenergo branches.
Interactive versions made on the geodetic base provide
an option of scaling down from the whole region to the
individual settlements and streets.
• Nizhnovenergo branch:
the map on the web-site www.nne.mrsk-cp.ru in the
section Customer Relations/ The map of power load
at the Nizhnovenergo substations.
• Tulenergo:
the link to the map on the web-site www.tulenergo.
ru in the section Customer Relations/ Technological
Connections/ Obligatory Disclosures on the Techno-
logical Connections/ Current and projected reserve
at the power suppliers.
On-line interactive maps allow cooperation with the
regional authorities of the Russian Federation and po-
tential investors on the question of developing the grid
complex depending on the customer demand.
Introduction of the interactive maps in other branches
is planned for the nearest future.
Agreements on the development of the power systems
in the regions of the Russian Federation are concluded
in order to ensure reliable and stable functioning of the
power system in the middle-term, eliminate existing (or
projected) limitations in power supply, implement pro-
grams of comprehensive development of social infra-
structure, satisfy the power demand, implement long-
term development programs and achieve strategic goals
of the power industry.
In 2011, the Company prepared conclusion of the agree-
ments on cooperation between JSC IDGC Holding and
an Administration of the region of the Russian Federa-
tion. As a result in 2011 such agreements were signed
by the President of the Republic of Udmurtia and the
Governor of the Kaluga Region. Agreements with the
administrations of Ryazan, Nizhny Novgorod and Tula
Regions are ready to be signed.
In the reporting period continued implementation
of the previously concluded agreements with the re-
gional administrations. To obtain information on 2011
largest projects refer to the Investment Activity section
of the Annual Report.
In the Company’s operations area there are three generat-
ing companies: JSC TGC-5 and JSC TGC-6 under the super-
vision of the holding company CJSC IES, and JSC Quadra.
CJSC IES implements the priority investment program Dia-
dem which is designed until 2015 and includes the follow-
ing projects:
• The Rubin Project – installation of two gas turbine
units with total capacity of 188 MW as part of the
expansion of the Novogorkovskaya CHPP (Nizhny
Novgorod Region). As projected, one gas turbine will
operate at 220 kV, and another one at 110 kV.
• Topaz Project – installation of the generation facili-
ties with the capacity of 263 MW at 110 kV as part of
the expansion of the Kirovskaya CHPP-3.
• Zircon Project – installation of the generating facili-
ties with the capacity of 220 MW at 110 kV as part of
the expansion of the Izhevskaya CHPP-1.
AGREEMENTS WITH THE ADMINISTRATIONSOF THE REGIONS OF THE RUSSIAN FEDERATION
TECHNOLOGICAL CONNECTION OF THE GENERATING FACILITIES
NEW GENERATION FACILITIES WITHIN THE FOOTPRINTOF JSC IDGC OF CENTER AND VOLGA REGION
TulaKaluga
Vladimir
Ryazan
Yoshkar-OlaIvanovo
Kirov
Izhevsk
Nizhny Novgorod
2011 21.7 MW
Obninskaya CHPP
2013 230.0 MW
Vladimirskaya CHPP
2014 400.0 MW
Avtozavodskaya CHPP
2013 188.0 MW
Kirovskaya CHPP-4
2013 236.0 MW
Kirovskaya CHPP-3
2013 220.0 MW
Izhevskaya CHPP
2014 376.0 MW
Novogorkovskaya CHPP
2017 900.0 MW
Nizhegorodskaya CHPP
2020 1,150.0 MW
NIZHEGORODSKAYA NPP
2011 18.0 MW
GTCHPP
2013 115.0 MW
Dyagilevskaya CHPP
2011 36.9 MW
Kaluzhskaya CHPP
2012 190.0 MW
Novomoskovskaya SDPP
Also CJSC IES launches additional generating facilities
at the Vladimirskaya CHPP-2 with the capacity of 230
MW at 220 kV and 110 kV, and at the Kirov CHPP-4 with
the capacity of 188 MW at 110 kV.
JSC Quadra launches generating facilities at the Novo-
moskovskaya SDPP (Tula Region) with the capacity of
190 MW and Dyagilevskaya CHPP (Ryazan Region) with
the capacity of 115 MW.
In 2011, Kaluzhskaya CHPP-1 was launched. The Com-
pany is fulfilling the agreement on technological con-
nection of the Obninskaya CHPP with the capacity of
21.7 MW with the OJSC “Kaluga Retail Company” and
co-generating facility of 18 MW of GT CHPP Energo Ltd.
116 117
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In 2011, at the new construction and reconstruction
sites 24 applications for technological connection to the
Unified National Electric Grid were prepared and filed to
the JSC FGC UES. 15 agreements on technological con-
nection to the JSC FGC UES grids were concluded.
The UNEG power grid facilities in the Company’s opera-
tions area are distributed among three branches of JSC
FGC UES, namely the Bulk Power System (BPS) of Cen-
ter, the BPS of Ural and the BPS of Volga. 10 out of 82
JSC FGC UES supply points which are situated within the
Company’s operations area have limitations on techno-
logical connection (closed supply points).
Closed supply points are situated in two regions of the
Russian Federation, namely Kaluga Region (SS Kaluzhs-
kaya 500 kV and SS Mirnaya 220 kV) and Nizhny Novgorod
Region (SS Luch 500 kV, SS Zarechnaya 220 kV, SS Bor-
skaya 220 kV, SS Bobylskaya 220 kV, SS Sergach 220 kV, SS
Kudma 220 kV, SS Oka 220 kV and SS Etilen 220 kV).
As a result of synchronization of the investment pro-
grams of JSC FGC UES and JSC IDGC of Center and Volga
Region and in compliance with the agreements con-
cluded with the executive authorities of the Nizhny
Novgorod and Kaluga Regions, JSC FGC UES is eliminat-
ing limitations on additional technological connections
to the 220 kV (500 kV) power suppliers.
In the Kaluga Region two substations — SS Mirnaya
220 kV and SS Sputnik 220 kV — are under reconstruc-
tion, construction of the new SS 550 kV in the Obninsk
energy cluster has started.
In the Nizhny Novgorod Region SS Zarechnaya 220 kV,
SS Borskaya 220 kV, SS Kudma 220 kV, and SS Luch
500 kV are under reconstruction. In order to reinforce
and increase reliability of the power supply in the north-
ern parts of the Nizhny Novgorod Region the Company
resumed construction of overhead electric lines be-
tween SS Semenov 220 kV and SS Uzlovaya.
Implementation of these projects in the Kaluga and
Nizhny Novgorod Regions will help to unlock full indus-
trial potential, increase reliability of power supply and
carry out investment projects of the large companies.
In compliance with the Federal Law No. 161-FZ Con-
cerning Housing Development, of July 24,2008, the
Company cooperates with the Russian Housing Devel-
opment Foundation (RHD Foundation) on the questions
of developing grid infrastructure and technological
connections to the Company’s grids. The Company has
developed the projects of power supply of the capital
construction sites owned by the RHD Foundation in the
Nizhny Novgorod Region (construction sites in the No-
vinki village of the Bogorodsky district), Kirov Region
(construction site in the Shutovschina village of the
Kirovo-Chepetsk district), Ryazan Region (construction
site in the Polkovo village), Republic of Mariy El (con-
struction site in Yoshkar-Ola, Petrova Str., Zagury vil-
lage of the Medvedevsky district) and the Republic of
Udmurtia (construction sites in the Pervomaysky settle-
ment of the Zavyalovsky district and Borisovo village of
the Sarapulsky district).
TECHNOLOGICAL CONNECTION TO THE UNEG FACILITIES
IMPLEMENTATION OF THE FEDERAL TARGET PROGRAMS
Operative and technological process control consists of
nine Grid Control Centers (one in every branch), 39 opera-
tive dispatch services and 252 operative dispatch control
centers created on the basis of the grid districts.
Structure of the OTD of JSC IDGC of Center and Volga Region
OPERATIVE AND TECHNOLOGICAL PROCESS CONTROL4.5
EOC
19 DCC 26 DCC 26 DCC 26 DCC
41 DCC 57 DCC 27 DCC 16 DCC 14 DCC
3 UNIT ODS 4 UNIT ODS 4 UNIT ODS 3 UNIT ODS
5 UNIT ODS 9 UNIT ODS 4 UNIT ODS 4 UNIT ODS 3 UNIT ODS
GCCKIROVENERGO
GCC NIZHNOVENERGO
GCCTULENERGO
GCCMARIENERGO
GCC VLADIMIRENERGO
GCCIVENERGO
GCC KALUGAENERGO
GCC RYAZANENERGO
GCC UDMURTENERGO
118 119
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
All of the branches have well-equipped grid control cen-
ters (GCC) which carry responsibility for operative and
technological process control of the branches’ distribution
power grids and cooperate effectively with the contractors
on the question of operative dispatch and technological
control.
The tasks of GCCs can be divided into operational and non-
operational.
Operational tasks in the operative and technological pro-
cess control include:
• Control over the power grid mode;
• Organization and implementation of emergency pre-
vention activities;
• Organization of repair works and operational mainte-
nance of the power grid facilities.
Non-operation tasks of GCCs which are aimed at research
and analysis include the following:
• Organization of long-term and short-term planning
of the repair works at the overhead lines, power grid
equipment and facilities;
• Development of operational documentation;
• Organization of cooperation with the operative staff in
the branches;
• Organization of the scheduled events;
• Response to the power grid disturbances;
• Cooperation with the GCCs of the allied distribution
power grids, GCCs of the JSC FGC UES branches and
other agents in the power industry, and consumers on
the question of operative power grid control;
• Organization of safe operation at the power transmis-
sion lines, power grid equipment and facilities which
are maintained by the branches, issuing permits for
preparing work places and rights of access to the repair
works of the line crews to the power transmission lines
and equipment of the substations;
• Coordination and control of terms of repair works at
the power transmission lines, power grid equipment
and facilities, including liquidation of emergency situ-
ations;
• Introduction and launching soft/hardware solutions to
the computational and analytical tasks (calculation of
the mode of the power grid, calculating short circuits
and the settings for relay protection and automatics
equipment, assessment of the mode condition, etc.),
training systems, operative informational complexes,
dispatcher ‘adviser’ and others;
• Monitoring and analysis of the technological distur-
bances and damages of the power grid facilities. De-
velopment of the organizational and technological
measures to reduce the causes of the disturbances and
damages.
In order to fulfill the goals and ensure reliability of the
software and hardware facilities in the Company’s GCCs
constant technical assistance and upgrading of the soft-
ware is provided. As part of the development of operative
and informational complexes in the GCCs new software
modules are introduced in order to enhance efficiency of
the dispatcher services and increase response speed in
case of emergency for quick decision-making.
EOC (EMERGENCY OPERATIONS CENTER)
ENSURES ENTRY OF ON-LINE REPORTING
INFORMATION FROM THE COMPANY’S
FACILITIES AND ENABLES TO PERFORM
CENTRALIZED CONTROL AND COOR-
DINATION IN CASE OF AN EMERGENCY
AND WIDE-SCALE BREAKDOWNS.
In 2011, the GCCs of the Vladimirenergo and Nizhnovener-
go branches assumed operational functions. Therefore, all
of the Company’s GCCs have operational functions, which
allows development of the unified hierarchy of the opera-
tive and technological process control in the branches.
Adoption of the one stop principle with the superior dis-
patcher centers ensure reliability and high quality power
supply, elimination of the technological disturbances and
restoration of the power supply in the shortest time pos-
sible.
In order to develop and improve the system of data col-
lection and transfer, analyze technological disturbances
and projections of their progress and consequences, an
Emergency Operations Center of the JSC IDGC of Center
and Volga Region was created in the Company’s executive
body in 2011.
An Emergency Operations Center (EOC) allows timely
receipt of operative and reporting data on emergencies,
technological disturbances, consequences of adverse
weather conditions and acts of God, fires and accidents
at the Company’s facilities. EOC also enabled the Com-
pany to centralize control over resources involved into
the emergency recovery activities, coordinate activity in
the branches and third parties in case of emergencies and
mass disturbances of the power system, and to organize
cooperation of the Company’s executive body with the
branches, authorities and regional and local departments
of EMERCOM. EOC is equipped with office supplies, means
of communication and display of shared information, and
necessary informational materials.
Equipment of GCCs with modern software and means of
display of shared information allows real time tracking
of performance of the branches’ equipment, controlling
equipment of the power grid facilities equipped with
the means of teleautomation and telemetering and con-
nected to the GCC’s software, and controlling voltage,
power load of equipment, electric power flows of 35 kV
and higher in the main grid.
GRID CONTROL CENTERS. DISPATCHER CENTERS EQUIPMENT
Branch GCC type Type of the information display equipment
Kirovenergo Operative Information Com-plex Dispatcher
Video wall DSch-7
Udmurtenergo SK-2003 Clarity Margay DLP 50 display cubes
Marienergo ENMAC Barco OverView 705 display cubes
Nizhnovenergo PSIcontrol Barco OverView c DR+67-DL display cubes
Ivenergo PSIcontrol Video wall SchD-5U4.2
Vladimirenergo PSIcontrol Barco OverView c DR+67-DL display cubes
Ryazanenergo PSIcontrol Barco OverView c DR+67-DL display cubes
Tulenergo PSIcontrol Barco OverView c DR+67-DL display cubes
Kalugaenergo KOTMI-NT Video wall SchD -1
120 121
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In 2011, maintenance of the relay protection and automat-
ics equipment and stability control schemes included the
following measures:
• Total of 2,031 adjustments, 12,327 tests, 1,426 first
preventive inspections, 9,212 preventive inspections
and 11,440 preventive restorations were carried out;
• 3,938 units of electromechanical, microelectronic and
microprocessor protection and automatics equipment
and stability control schemes were commissioned;
• Outdoor bus sections of switchgear and control gear at
6-10 kV were equipped with short circuit protection de-
vices, total of 80 SS (157 bus sections) were equipped
in accordance with the relevant schedule;
• Measures stipulated by the target program for re-
placement of obsolete relay protection and automat-
ics equipment were fulfilled, which complies with the
Company’s technical policy concerning replacement
of the equipment with expired service lives, increas-
ing reliability, efficiency and technical standards of the
particular power grid nodes, implementation of the
measures prescribed by the Company’s informational
letters.
In 2011, total of 1,674 units of equipment were replaced in
compliance with the branches’ target programs.
The Company’s top priority in the nearest future will be re-
placement of relay protection and automatics equipment
which have expired service life mainly with the micropro-
cessor technology in order to reduce total depreciation of
equipment and increase its reliability.
In the sphere of relay protection of devices and automa-
tion the Company strives to pursue the unified technical
policy aimed at stable and reliable functioning of the pow-
er grid facilities owned by the distribution grid companies
within the Company’s operations area in the normal and
emergency mode.
The Company takes the following measures a regular basis:
• maintenance of the existing systems, relay protec-
tion and automatics equipment and stability control
schemes in operable state;
• replacement of obsolete systems, relay protection and
automatics equipment and stability control schemes;
• improvement of systems, relay protection and auto-auto-
matics equipment and stability control schemes.
Relay protection and automatics equipment and stability control schemes as of December 31, 2011
AUTOMATED SYSTEMS OF DISPATCH AND PROCESS CONTROL
Equipment and schemes Number %
Total 150,543 100
Electromechanical devices 130,128 86.4
Microelectronic devices 6,442 4.3
Microprocessor devices 13,973 9.3
Devices with expired service life 83,942 55.7
IN 2011, TOTAL OF 1,674 UNITS OF EQUIPMENT WERE REPLACED IN COMPLIANCE WITH THE BRANCHES’ TARGET PROGRAMS.
In order to increase reliability of the relay protection and
automatics equipment the Company will take the follow-
ing measures:
• Installation of the arc protection equipment and fault
recorders at the substations;
• Upgrading automatic schemes at the power grid fa-
cilities (automatic reclosers, automatic transfer circuit-
breaker, under-frequency load shedding equipment);
• Upgrading gas detector relay of the transformers;
• Upgrading protection equipment on the basis of the
direct-action relay;
• Replacement of the cable lines of the secondary pro-
tection circuits;
• Installation of the fault locators at 35-110 kV overhead
lines;
• Replacement of ART-1N automatic units for the adjust-
ment of voltage of power transformers with the RNM-1
microprocessor terminals.
Besides, the main goal of the maintenance personnel re-
mains conducting of the scheduled preventive inspections
of the relay protection and automatics equipment.
In 2011, development of the Automated Systems of Dis-
patch and Process Control had the following results:
• According to the approved programs for development
of communication and data transfer systems (CDTS)
37 110-35 kV SS were teleautomized and upgraded,
46 additional communication channels were installed;
• Two modern telephone switches were launched in the
Kirovenergo and Tulenergo branches;
• The program for repair of the automated system of dis-
patch and process control (ASDPC) was fulfilled.
At present the Company disposes of 1,623.8 km fiber-optic
communication lines, 814.29 km are owned by the Com-
pany and the rest are under lease. Fiber-optic communica-
tion lines are the most promising communications channel
which meets the modern standards.
To equip the control rooms with operative and information-al complexes, the following technical solutions are used:• GCC level: PSI control, ENМAC AG;
• Unit and distribution zone level: OIC Dispatcher, OIC Kot-
mi NT.
Automated information and measuring system of commer-
cial metering of energy equipment which is used in the
Company is thoroughly maintained.
Operative and Informational Complexes Used by the Company’s Branches
Complex Number of work places
Branches
OIC SK-2003 10 Udmurtenergo
ENMAC AG 19 Marienergo
PSI control 22 Nizhnovenergo, Vladimirenergo, Ivenergo, Ryazanen-ergo, Tulenergo
OIC Dispatcher 133 Kirovenergo, Udmurtenergo, Marienergo, Nizhnoven-ergo, Ryazanenergo, Kalugaenergo
OIC Kotmi NT 56 Tulenergo, Kalugaenergo
OIC Konus 19 Vladimirenergo
122 123
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The main goals of Automated Systems of Process Control
in 2012 are the following:
• Achieving the level of teleautomation at the substa-
tions according to the program of innovative develop-
ment;
• Further development of the Grid Control Centers (GCC)
in order to ensure quality operational functions to be
performed by the branches in the sphere of operation-
al and technological control;
• Further building and upgrading of the main and stand-
by SS - 110 kV communications channels, SS-110 kV
telemechanics systems in compliance with the require-
ments of JSC UES of Russia and implementation of the
coordinated programs for development of the commu-
nication and data transfer systems (CDTS);
• Further improvement of the Corporate Multi-Service
Communications Network (CMSCN) in order to ensure
operable stare to the corporate services in the whole
Company;
• Equipping the Company’s production units with the
state-of-the-art IT, telecommunication and communi-
cation devices and their timely upgrading.
Key achievements in the information technologies sphere in 2011
DEVELOPMENT OF IT INFRASTRUCTUREAND INFORMATION TECHNOLOGIES
4.6
CIMS IT ASPC
Corporate Information Management System
IT infrastructure and telecommunications
ASPCAutomated System of Process Control
1. Pilot SAP-based projects of CIMS
development in the fields of auto-
mation of finance and economic ac-
tivity and personnel management
were fulfilled
2. System of management of large in-
vestment projects based on Oracle
Primavera software was introduced
3. Project on conditioning of the main
equipment of 35kV and higher grids
based on CIMS ТОРО SAP ERP was
fulfilled
1. System of guaranteed electric sup-
ply to the Data Processing Center
(DPS) and Line Equipment Room
including diesel driven generator
was put into operation
2. Super-computer based hardware
and software complex produced in
Sarov was put into operation
3. Structured Cable Network (SCN) of
the Executive body building was
created
1. 37 110–35 kV SS were telemecha-
nized, 46 connection channels were
established
2. Command-staff cars based on the
off-road vehicles were created,
cars of mobile emergency response
teams were re-equipped with the
means of communication
3. Call center and reserve studio of vid-
eo conference communication were
created on the basis of Emergency
Operations Center
MEASURES AND PROJECTS TO INCREASE OBSERVABILITY CONTROLLABILITY
AND RELIABILITY OF ASDPC AND IT INFRASTRUCTURE
In 2011, development of IT infrastructure and informa-
tion technology produced the following results:
1. Within the framework of the JSC IDGC Holding’s com-
mon corporate projects, ITT strategy of JSC IDGC of
Center and Volga Region for 2012-2016 was developed.
2. Telemechanics systems were modernized, 37
SS 110-35 kV were teleautomized, and 46 additional
ASDPC communication channels were established
in compliance with the approved development pro-
grams for communication and data transfer systems
(CDTS).
3. Two up-to-date digital telephone stations (ATS) at
the Kirovenergo and Tulenergo Branches were com-
missioned.
4. The program for repair of the automated system of
dispatch and process control (ASDPC) was fulfilled.
5. The core of the Company’s corporate computer net-
work was upgraded.
6. Exploration and design works were carried out in
compliance with the Federal Law No. 152-FZ on Per-
sonal Data, of July 27, 2006 which regulates person-
al data processing. As part of the EAD works local
computer network of the Company’s executive body
was upgraded. PCs of the users who handle personal
data are united into separate segments (local com-
puter networks) which are connected to the main
computer network via protected switchboards. All
users who handle personal data have special soft-
ware installed on their PC which allows access only
after entering personal password.
7. Exploration and design works (first stage) on intro-
duction of the centralized customer servicing are
fulfilled; it provides an opportunity for twenty-four-
hour receipt of the applications on technological
disturbances in the power grid and provision of in-
formation on emergency recovery works. Customer
Service Centers and Emergency Operations Center
are created and launched into operation.
8. Spare studio for videoconferences is established the
Emergency Operations Center.
9. As part of the measures to ensure reliable and unin-
terrupted operation of ASDPC and liquidation of the
consequences of the emergencies and act of God (icy
rains) mobile emergency response teams were fully
re-equipped.
10. Mobile communications centers are equipped with
cross-country vehicles as command post vehicles in
all the branches and executive body of the Company.
11. The Pilot project of creating and incorporating of the
Corporate Information Management System (CIMS) on
the SAP ERP basis in the Tulenergo branch. A system of
124 125
04 TECHNICAL POLICY AND INNOVATIVE DEVELOPMENT
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
automatic accounting of the financial and operational
performance, personnel and payroll was created and
introduced into the operational process, now it is pre-
pared to be duplicated in other branches.
12. In accordance with the JSC IDGC Holding’s standards
on project control the system of control over large
investment projects on the basis of the Oracle Pri-
mavera software was introduced. This solution was
integrated with the system of automatic computa-
tion and issuing of the estimate documentation.
13. In the Kirovenergo branch the pilot project of creat-
ing and introducing certification of the main facili-
ties in the 35 kV and higher power grid on the basis
of CIMS Repairs and Maintenance SAP ERP.
14. Hardware and software complex was launched into
operation on the basis of the super-computer pro-
duced in Saratov and adapted to the Company’s in-
frastructure including VMware vSphere 4 virtualiza-
tion platform.
15. As part of the upgrading Company’s IT infrastruc-
ture:
• Line equipment room was transferred from the third
to the first floor into the specially equipped room,
structured cabling system of the left wing in the
Company’s executive body building was created;
• The system of uninterrupted power supply in the
data processing center and line equipment room was
established, it includes three uninterrupted power
suppliers and diesel driven generator;
• The system of gaseous fire suppression in the data
processing center was launched into operation;
• The system of data backup measures on the basis
of the tape library was launched into operation.
At present all IT services of crucial importance are
backed up on the magnetic tape which allows its
quick restoration.
16. Computer classes were created in the Company’s
branches in order to increase computer literacy and
provide staff with training on use of informational
technology.
Computer class in the Southern Power
Grids Unit of the Kirovenergo branch
17. Starting from 2011 the Company’ unified domain
structure will include executive body, Nizhnoven-
ergo, Ryazanenergo, Kirovenergo and Tulenergo
branches which provides these units with developed
infrastructure and IT services on the Microsoft Win-
dows Server platform and allows launching of the
unified effective message subsystem on the basis of
Microsoft Exchange.
18. As a result of implementation of the program for cost
reduction cost savings on cellular and long-distance
communication totaled 3.1% and 9.8% respectively.
19. In November 2011, the Udmurtenergo branch fin-
ished the first stage of the project Power Efficient
Facility which introduces the advanced power grid
technology. The Smart Grid project will significantly
increase the quality of power supply in the Karaku-
lino village owing to the state-of-the-art technology
and equipment.
Its main advantage is automatic reaction to any chang-
es in the power system which ensures maximum reli-
able and uninterrupted power supply. Other advantages
of the smart grids include long service life, high stability
and adaptability to adverse weather conditions, safe ex-
ploitation and high level of protection from damages.
Smart Grids Project in the Udmurtenergo Branch
Further development of IT services is planned for 2012 in order to increase efficiency of operation and reduce op-erational costs.
SMART GRID IS A RAMIFIED INSTRUMENTA-
TION AND CONTROL SYSTEM WHICH IS BASED
ON THE UP-TO-DATE INFORMATION
TECHNOLOGY.
DISPATCH BOARD
LONG-PILLAR TRANSFORMER SUBSTATION
KARAKULINO 110/35/10 SSISET CONTROL ROOM
RECLOSERELECTRICITY METERS OF THE CONSUMERS
OPERATIVE INFORMATION COMPLEX «DISPATCHER»
DISPATCHER MULTI FUNCTION DEVICEPOLLING SERVER
GSM
Radi
o ch
anne
l
Remote controlled equipment for load disconnection
System of collection and transmis-sionof telemetrydata from the facility on the state of equipment and operating condition
Radi
o ch
anne
l
ASDS
INVESTMENT ACTIVITIES05
Modern sulfur hexafluoride circuit breakers of 110 kV, used for construction
and modernization of substations, they are completely fire- and explosion-proof,
they have high breaking capacity and long service life
128 129
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
KEY EVENTS OF THE YEAR
The Development Investment Program (DIP) of the JSC
IDGC of Center and Volga Region is formed in accordance
with the development plans of the regions, the techni-
cal condition of power grids and the available sources of
financing formed on the basis of tariff and balance reso-
lutions.
Starting from 2010, the Development Investment Program
is planned, implemented and reported in accordance with
the provisions of the Decree № 977 of the Government
of the Russian Federation “On the Investment Programs
of the Subjects of Power Industry”, dated December 1,
2009.
Disbursement of capital investments in 2011 comprised
RUB 13,568.796 million, including:
• RUB 3,205.172 million for the new construction projects;
• RUB 9,894.043 million for reconstruction and technical
re-equipment;
• RUB 451.601 million for purchase of fixed assets;
• RUB 17.980 million for intangible assets.
Actual commissioning of fixed assets comprised RUB
14,383.675 million. Actual financing comprised RUB
15,913.796 million.
The length of power transmission lines and transformer
capacity put into operation comprised 3,086.45 km and
1,263.88 MVA respectively.
KEY ASPECTS OF FORMATION OF THE DEVELOPMENT INVESTMENT PROGRAM REPORT
PARAMETERS OF INVESTMENT ACTIVITIES5.1
The corrected Investment Program was approved
by the Board of Directors of the Company (as a part
of the business plan) and by the Ministry of Energy of
the Russian Federation. The initial Investment Pro-
gram of the Company for 2011 was approved in the
Q4 of 2010.
Cost and Physical Parameters of Investment Activities in 2011
Branch Disbursement, excluding VAT
Commissioning of fixed assets
Financing, including VAT
Commissioning of capacity
Capacity increase
RUB, million RUB, million RUB, million MVA km MVA km
Vladimirenergo 1,231.85 776.217 1,491.164 32.22 225.59 26.25 71.00
Ivenergo 404.671 502.982 478.844 53.47 46.23 46.27 45.86
Kalugaenergo 2,157.946 2,712.538 2,527.846 421.37 682.96 374.92 486.33
Kirovenergo 638.563 610.954 730.634 45.87 271.97 41.37 223.67
Marienergo 277.211 257.059 319.282 12.54 68.96 12.22 63.31
Nizhnovenergo 3,112.252 3,142.028 3,654.003 117.00 701.49 95.66 452.43
Ryazanenergo 776.999 849.031 910.569 56.90 147.78 29.59 65.97
Tulenergo 4,151.096 4,434.096 4,855.939 419.02 622.27 189.87 39.84
Udmurtenergo 800.228 1,083.820 924.005 105.50 319.20 90.50 206.00
Executive body 17.980 14.950 21.510 0.00 0.00 0.00 0.00
TOTAL for the Company
13,568.796 14,383.675 15,913.796 1,263.88 3,086.45 906.6 1,654.4
SEPTEMBER
january february march april may june july august september october november december
130 131
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
DYNAMICS OF CAPITAL INVESTMENTS, RUB mln
5.2
Vladimirenergo Ivenergo Kalugaenergo Kirovenergo Marienergo Nizhnovenergo
348.503
826.235
1,231.850
119.624 171.467
404.671
1,338.434
1,622.856
2,157.946
340.629
638.563
83.664 159.194277.211
2,348.195
1,643.454
3,112.252
2009 2010 2011
The gap charts
VOLUMES OF DISBURSEMENT OF FIXED CAPITAL INVESTMENTS IN 2011
119.170
Ryazanenergo Tulenergo Udmurtenergo TOTAL for the CompanyExecutive body
1,058.712
673.476776.999
969.974
2,195.308
4,151.096
256.261
768.916800.228
5.937 12.767 17.980
6,648.474
8,414.302
13,568.796
RUB 13,568.796 millionCOMPRISED
The works performed in 2011 to implement the measures
on capital construction include the following:
• Putting into operation of 1,263.88 MVA, including: dur-
ing new construction – 347.6 MVA, during reconstruc-
tion – 916.2 MVA.
• Construction of 592 transformer substations (TSS) and
distribution transformer substation (DTSS) with the in-
stalled power of 130.41 MVA.
• Constructing anew of 44.2 km 110–35 kV HVL, 415.5
km 0.4-10 kV power transmission lines.
• Putting into operation of four power-factor correction
units for the total capacity of 31.75 MVAr.
• Reconstruction of 1,483.03 km of 0.4-10 kV power
transmission lines built in 1975–1989, and 84.6 km
of 35–110 kV HVL, which were in unsatisfactory
or unsuitable technical condition according to the
related normative and technical documents (The
decision to reconstruct the powered facilities was
made based on the analysis of data on the volumes
of power transmitted and the technical condition
of power transmission lines and high social signifi-
cance of these facilities).
• Replacement of oil circuit breakers at 35–110 kV
substation was made in order to improve reliability
of power supply of the consumers, to reduce the op-
eration costs and to sustain the lives and health of the
employees. Items that were replaced:
· MV 110 kV for SF6 circuit breakers 110 kv – 33 items;
· MV 35 kV for SF6 circuit breakers (vacuum circuit
breakers) 35 kV – 64 items;
· MV 6–10 kV for vacuum circuit breakers 6–10 kV –
415 items.
Oil circuit breakers are prone to physical and functional
wear to a greater extent.
According to the measurements, the speed performance of
the majority of oil circuit breakers are below the norm. The
actuating mechanisms of the circuit breakers are unstable
and cannot be adjusted (unstable operation of actuators).
Many features of the circuit breakers do not comply with
RD 34.45-51.300-97 “The Range and Norms of Electrical
Equipment Testing”. The cells equipped with such circuit
breakers are fire and explosion dangerous.
• The replacement of physically and functionally depre-
ciated equipment at SS 35–110 kV (performed in ac-
cordance with the approved target programs) included
the following:
· replacement of isolating switches and shorting
plugs (IS and SP) for SF6 circuit breakers (28 items)
at the 110 kV SS;
· replacement of 110 kV oil-filled bushings for bush-
ings with solid isolation (12 items);
· replacement at SS 110 kV of stick-pedestal porce-
lain insulators for polymeric ones (57 items) at the
SS 110 kV;
· replacement of SN and SK type storage batteries at
21 SS 110 kV;
· reconstruction of relay protection and automatics
equipment at SS 35–110 kV, involving the replace-
ment of physically and functionally depreciated
equipment by the following items:
· replacement of automatic units for the adjust-
ment of voltage of power transformers at 17 SS;
· replacement of microprocessor-based emer-
gency control automatics at 16 SS, including
replacement of under-frequency load shedding
equipment by microprocessor-based equipment
at 12 SS, replacement of 110 kV line protection
panels for microprocessor-based ones (21 item),
and installation of arc protection equipment
at 95 SS.
DIRECTION AND STRUCTURE OF CAPITAL INVESTMENTS
132 133
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
• Reconstruction of SS Pokrov 110/35/10 kV. Installation of controlled shunt reactor RTDU 25000/110-UKhL-1.
Targets and objectives of the project: increase of transmission capacity of the grid, main-
taining of normal levels of voltage and reduction of energy losses.
• Reconstruction of SS 35/6 Plyos with replacement of four power transformers with capac-
ity of 1.8 MVA by two transformers with capacity of 4 MVA.
Targets and objectives of the project: improvement of reliability of power supply of the
consumers and work of the equipment.
• SS 110/35/10 kV Arsaki. Extension of 110 kV outdoor switchgear.
Targets and objectives of the project: improvement of reliability of the equipment and
increase of transmission capacity of the grid.
• Melenki–Fursovo 110 kV HVL. Construction of a new line.
Targets and objectives of the project: increase of transmission capacity of the grid and
improvement of reliability of power supply of the consumers.
• SS 110/6 kV Lizunovo. Construction of SS 110 kV 2х10 MVA.
Targets and objectives of the project: improvement of reliability of power supply of the
consumers and creation of possibility to connect new power supply consumers.
• Construction of the first outdoor start-up facility of the new SS 110/6 kV Ivanovskaya 15 with capacity of 40 MVA with 110 kV HVL.
Targets and objectives of the project: ensuring connection of the new power supply
consumers and even load re-distribution between existent substations for improvement
of reliability of power supply of the consumers and reduction of technical energy losses.
Projects implemented in 2011 include:
Projects implemented in 2011 include:
Projects launched in 2011 include:
Technical re-equipment and reconstruction:
Technical re-equipment and reconstruction:
Technical re-equipment and reconstruction:
New construction:
New construction:
VLADIMIRENERGO BRANCH:
IVENERGO BRANCH:
THE MOST SIGNIFICANT PROJECTS IMPLEMENTED BY THE BRANCHES OF THE COMPANY PUT INTO OPERATION OR LAUNCHED IN 2011
SS Pokrov
SS Ivanovskaya-15
SS Lizunovo
SS Arsaki
134 135
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
• Construction of SS 220/110/10 kV Sozvezdie. Autotransformer ATDTsTN 250000/220U1
with a capacity of 250 MVA has been put into operation at the facility.
Targets and objectives of the project: improvement of reliability of power supply of the
consumers and creation of possibility to connect new power supply consumers (LLC
Vorsino Industrial Park).
• Construction of SS 110/35/10 kV Tovarkovo. Two transformers TDTN 16000/110/35/10
have been established.
Targets and objectives of the project: development of 110/35 kV network, improvement
of reliability of power supply of the consumers, creation of possibility to connect new
power supply consumers.
• Reconstruction of SS 35/10 kV SSK with transfer to 110 kV (1st stage of the 2nd phase).
Targets and objectives of the project: improvement of reliability of power supply
of the consumers of village Raduzhny of Novovyatsky District of Kirov Region, ensuring
connection of the new power supply consumers in the area of intense high-rise and indi-
vidual low-rise construction.
• Reconstruction of 110 kV outdoor switchgear of Sanchursk 110/35/10 kV SS with installa-
tion of 110 kV section circuit breaker.
Targets and objectives of the project: improvement of reliability of power supply of the
consumers and work of the equipment.
• Reconstruction of SS 110 kV Rosva with replacement of 110 kV transformers and transfer
to 220 kV voltage.
Targets and objectives of the project: improvement of reliability of power supply of the
consumers and creation of possibility to connect new power supply consumers.
• Reconstruction of SS 35/10 kV SSK with establishment of T1 with capacity of 16 MVA, in-
stallation of 35 kV HVL access lines and installation of 35 kV indoor switchgear (2nd stage
of the 2nd phase).
Targets and objectives of the project: improvement of reliability of power supply of the
consumers of village Raduzhny of Novovyatsky District of Kirov Region, ensuring connec-
tion of the new power supply consumers in the area of intense high-rise and individual
low-rise construction.
Projects implemented in 2011 include:
Projects implemented in 2011 include:
Projects launched in 2011 include:
Projects launched in 2011 include:
New construction:
Technical re-equipment and reconstruction:
Technical re-equipment and reconstruction:
Technical re-equipment and reconstruction:
KALUGAENERGO BRANCH:
KIROVENERGO BRANCH
SS Sozvezdie
SS SSK
SS TovarkovoSanchursk
SS Rosva
136 137
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
• Reconstruction of SS 110/10 kV Zarechnaya. Targets and objectives of the project: improvement of reliability of work of the equip-
ment and reliability of power supply of the consumers of Zarechny District of Yoshkar-Ola,
including Ice Stadium, Swimming Pool and Sports and Recreation Center Spartak.
• Reconstruction of SS 110/10 kV Medvedevo, SS 110/10 kV Kozmodemiansk, SS 110/35/10 kV Kundysh, SS 110/10 kV Melkovka. Targets and objectives of the project: improvement of reliability of work of the equipment
and power supply of the consumers.
• Reconstruction of SS 35/6 kV Mokroe with replacement of T-2 4 MVA power transformer
by 10 MVA power transformer (2nd phase).
Targets and objectives of the project: improvement of reliability of work of the equipment
and power supply of the consumers.
• Power supply for the area of residential development at the left bank of the Malaya Kok-
shaga River.
Targets and objectives of the project: ensuring of power supply of the consumers of the area
of residential development at the left bank of the Malaya Kokshaga River in Yoshkar-Ola.
• Construction of SS 35/10 kV Uzhovka-2 with installation of 2х4 MVA power transformers.
Targets and objectives of the project: development of 35 kV network, improvement of reli-
ability of power supply of the consumers, creation of possibility to connect new power
supply consumers.
• Construction of SS 35 kV Chernukha with installation of 2х4 MVA power transformers.
Targets and objectives of the project: development of 35 kV network, improvement of reli-
ability of power supply of the consumers, creation of possibility to connect new power
supply consumers.
• Reconstruction of NiGRES–Zavolzhskaya 110 kV HVL, 8.72 km.
Targets and objectives of the project: improvement of reliability of 110 kV network
and power supply of the consumers.
Projects implemented in 2011 include:
Projects implemented in 2011 include:
Projects launched in 2011 include:
Technical re-equipment and reconstruction:
Technical re-equipment and reconstruction:
New construction:
New construction:
Technical re-equipment and reconstruction:
MARIENERGO BRANCH:
NIZHNOVENERGO BRANCH
Power supply of residential development
SS Mokroe SS Uzhovka-2
138 139
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
• Reconstruction of SS 35/10 kV Bolon
with replacement of 1.8 MVA transformer by 5.6 MVA one.
Targets and objectives of the project: improvement of reliability of work of the equipment
and power supply of the consumers of Klepikovsky District of Ryazan Region. Creation of
possibility to connect new power consumers.
• Reconstruction of SS 110 kV Dashki with replacement of the substation equipment (3rd stage).
Targets and objectives of the project: improvement of reliability of work of the equipment
and power supply of the consumers in Ryazan.
• Reconstruction of SS 110 kV Yesenino
with replacement of 2.5 MVA power transformers by 10 MVA.
Targets and objectives of the project: improvement of reliability of work of the equipment
and power supply of the consumers.
• Reconstruction of SS 110 kV Skopin
with replacement of 20 MVA power transformer by 25 MVA one.
Targets and objectives of the project: improvement of reliability of work of the equipment
and power supply of the consumers.
Projects implemented in 2011 include:
Technical re-equipment and reconstruction:
Technical re-equipment and reconstruction:
Measures taken under the Agreement “On Interaction between the Government of Ryazan Region and JSC FGC UES of Russia over Development of the Electric Power System of Ryazan Re-gion and Ensuring Reliable Power Supply for Its Consumers” dated February 18, 2008. № 34 ¼:
RYAZANENERGO BRANCH
• Technical re-equipment of 0.4–10 kV HVL in Karakulino village with replacement of the
wooden poles by those made of reinforced concrete, and cables by insulated wire line,
modernization of reporting system, establishment of ASC of the SS (1st phase).
Targets and objectives of the project: improvement of quality and reliability of power sup-
ply of the consumers of Karakulino village, Udmurtia Republic, ensuring safety of usage
of distribution grids, reduction of energy losses.
• Construction of Soyuznaya 110/10 kV SS with 110 kV HVL access lines in Ustinovsky Districts
of Izhevsk with installation of two 110 kV power transformers with capacity of 2х40 MVA.
Targets and objectives of the project: improvement of reliability of power supply
of the consumers, ensuring power supply of the perspective construction in Aeroport
and Vostochny neighborhoods in Izhevsk.
Projects implemented in 2011 include:
Technical re-equipment and reconstruction:
New construction:
UDMURTENERGO BRANCH
SS Yesenino SS Skopin
HVL in Karakulino village SS Soyuznaya
140 141
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
• Reconstruction of SS 110/10/6 kV Perekop (2nd phase).
• Targets and objectives of the project: improvement of reliability of work of the equipment
and power supply of the consumers; creation of possibility to connect new power supply
consumers and ensuring power supply of the perspective construction in the Center of
Tula.
• Complex reconstruction of SS 110 kV Privokzalnaya with replacement of 2х25 transform-
ers by 2х40 MVA ones.
Targets and objectives of the project: improvement of reliability of power supply of the
consumers of Tula and creation of possibility to connect new power supply consumers.
• Reconstruction of SS 110/35/6 Yasnogorsk with replacement of 2х63 MVA transformers,
reconstruction of 110 kV open switchgear.
Targets and objectives of the project: improvement of reliability of power supply of the
consumers of Yasnogorsky, Zaoksky and Leninsky Districts of Tula Region: creation of pos-
sibility to connect new power supply consumers.
• Reconstruction of SS 110 kV Yuzhnaya with installation of 25 MVA power transformer.
Targets and objectives of the project: improvement of reliability of power supply
of the consumers and ensuring power supply of the perspective construction in Tula.
• Complex reconstruction of SS 35 kV Medvenka with transfer to 110 kV voltage and
with installation of 2х25 MVA transformers, construction of 110 kV open switchgear,
reconstruction of 35 kV open switchgear, installation of the two sections of 6 kV voltage
switchgear and control gear.
Targets and objectives of the project: improvement of reliability of work of the equipment
and power supply of the consumers in Tula.
• Reconstruction of Luzhnoe–Malakhovo 110 kV HVL with replacement of poles, cables,
and insulation, 24.1 km.
Targets and objectives of the project: improvement of reliability of power supply
of the consumers in Dubensky and Schekinsky Districts of the Tula Region.
Projects implemented in 2011 include:
Technical re-equipment and reconstruction:
TULENERGO BRANCH
SS Yasnogorsk
SS Perekop
SS Medvenka
SS Privokzalnaya
SS Yuzhnaya
142 143
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Branch 2011 2012 plan 2013 plan 2014 plan 2015 plan 2016 plan 2017 plan
Vladimirenergo 1,231.850 379.591 1,019.558 1,008.610 1,047.670 1,243.160 1,371.229
TREaR 862.720 233.575 558.329 683.637 784.637 1,110.582 1,074.457
New construction 339.319 142.316 451.229 290.108 233.115 105.809 260.079
Other 29.811 3.700 10.000 34.865 29.918 26.769 36.693
Ivenergo 404.671 409.832 201.879 251.879 271.879 281.878 291.879
TREaR 163.567 348.538 127.714 135.824 188.650 174.548 218.199
New construction 240.131 61.294 65.472 116.055 83.228 107.331 73.679
Other 0.973 0.000 8.694 0.000 0.000 0.000 0.000
Kalugaenergo 2,157.946 1,792.507 1,233.859 1,571.025 1,694.910 2,072.936 2,336.497
TREaR 1,287.148 516.401 452.161 588.833 842.155 1,322.237 1,412.817
New construction 851.886 1,270.341 771.698 975.921 848.780 750.699 923.680
Other 18.912 5.765 10.000 6.271 3.975 0.000 0.000
Kirovenergo 638.563 440.790 720.775 1,130.960 1,308.029 1,427.351 1,410.018
TREaR 589.001 296.573 687.524 723.759 907.342 822.294 830.842
New construction 11.429 116.695 21.661 400.356 367.035 589.767 562.976
Other 38.133 27.522 11.590 6.845 33.652 15.291 16.200
Marienergo 277.211 131.472 412.278 542.479 674.512 921.808 1,010.553
TREaR 150.256 72.852 299.799 439.809 560.885 715.552 649.431
New construction 125.003 58.266 110.881 94.272 108.891 189.530 361.122
Other 1.952 0.354 1.598 8.398 4.736 16.725 0.000
Nizhnovenergo 3,112.252 2,123.904 2,302.549 2,631.650 3,470.237 3,818.461 4,975.182
TREaR 1,550.332 961.906 1,902.103 1,695.951 2,711.169 2,004.278 3,204.692
New construction 1,203.678 1,106.263 340.446 875.699 699.068 1,754.183 1,710.490
Other 358.242 55.736 60.000 60.000 60.000 60.000 60.000
Ryazanenergo 776.999 523.791 501.663 705.767 974.743 1,210.497 1,537.295
TREaR 719.993 501.294 490.771 705.767 962.396 1,210.497 1,537.295
New construction 56.935 22.297 10.892 0.000 12.347 0.000 0.000
Other 0.071 0.200 0.000 0.000 0.000 0.000 0.000
Tulenergo 4,151.096 1,340.000 1,311.235 1,565.216 1,557.820 1,585.039 1,630.719
TREaR 3,943.058 1,200.726 1,224.147 1,538.110 1,362.208 1,417.902 1,573.257
New construction 198.881 136.048 86.411 26.895 195.612 167.137 57.462
Other 9.157 3.226 0.678 0.212 0.000 0.000 0.000
2012–2017 DEVELOPMENT INVESTMENT PROGRAM DISTRIBUTION, AS COMPARED TO 2011, RUB million (excluding VAT)
Branch 2011 2012 plan 2013 plan 2014 plan 2015 plan 2016 plan 2017 plan
Udmurtenergo 800.228 500.350 854.379 1,273.135 1,489.416 1,497.606 1,586.172
TREaR 609.988 401.090 580.722 806.336 945.327 1,067.786 997.372
New construction 177.910 99.260 273.228 464.081 543.339 429.240 587.000
Other 12.330 0.000 0.429 2.717 0.750 0.580 1.800
Executive body 17.980 13.365 13.365 13.365 13.365 13.365 13.365
TREaR 17.980 13.365 13.365 13.365 13.365 13.365 13.365
New construction 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Other 0.000 0.000 0.000 0.000 0.000 0.000 0.000
TOTAL for the Company 13,568.796 7,655.602 8,571.541 10,694.087 12,502.581 14,072.101 16,162.909
TREaR 9,894.043 4,546.320 6,336.634 7,331.391 9,278.134 9,859.041 11,511.728
New construction 3,205.172 3,012.779 2,131.918 3,243.387 3,091.416 4,093.695 4,536.487
Other 469.581 96.503 102.989 119.308 133.031 119.365 114.693
Including programs
Technological connection 3,276.619 4,139.591 2,249.028 2,372.519 2,238.180 2,075.623 1,886.140
Renewal of the main and auxiliary equipment
6,779.644 3,925.327 4,128.000 4,817.627 6,588.097 5,945.574 8,383.271
Energy saving and improvement of energy efficiency
6,901.315 3,146.142 3,907.285 4,859.011 6,470.945 7,330.369 9,427.187
Establishment of systems of emergency and secure automation
212.052 112.470 82.805 231.726 219.566 189.284 305.874
Establishment of sys-tems of teleautomation and communication
380.650 225.146 401.953 426.232 627.746 469.568 499.358
Establishment of devices for regulation of voltage and compensation of reactive power
87.296 11.968 26.262 91.513 88.045 164.703 161.979
Usage of innovative tech-nologies and equipment
1,597.359 1,028.407 1,362.892 1,710.261 2,063.474 2,278.155 2,763.258
Measures on anti-terror-ism security
144.380 132.222 155.597 131.551 114.930 176.297 201.556
Replenishment of the emergency reserve
4.116 0.000 0.000 0.000 0.000 0.000 0.000
144 145
05 INVESTMENT ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Investment Program of the JSC IDGC of Center and Volga
Region for 2011 has been implemented by 99% in the
volume of RUB 13,568.796 million with a plan of RUB
13,766.247 million.
ANALYSIS OF CAPITAL INVESTMENTS STRUCTURE
2011 CAPITAL INVESTMENT STRUCTURE
23.6%New construction
72.9%Technical re-equipment
and reconstruction
3.5%Other
It is assumed that in 2012–2017 the volume of capital
investment disbursement should increase by the aver-
age 16% per year and reach RUB 16,162.909 million in
2017. Total increase for this period should reach RUB
69,858.82 million. It is assumed that the higher levels of
reconstruction and modernization of existent electrical
grid facilities should contribute to the increase of capital
investment cost in 2012–2017. Average annual increase
of technical re-equipment and reconstruction cost should
reach 21%.
DYNAMICS OF CAPITAL INVESTMENT COMMISSIONING ACCORDING
TO 2011–2017 DEVELOPMENT INVESTMENT PROGRAM, RUB million net of VAT
In 2011, Investment Program financing comprised RUB
15,913.796 million (including VAT). In 2012, planned vol-
ume of the Investment Program financing comprises RUB
8,919.223 million (including VAT). In the following years
the volume of financing will increase by the average 16%
per year and reach RUB 18,472.244 million (including
VAT) in 2017, with total RUB 80,744.386 million (includ-
ing VAT) in 2012–2017.
LONG-TERM INVESTMENT PROGRAM5.3
RUB 18,472 million BY 2017 REACHES
16%
PARAMETERS OF THE INVESTMENT PROGRAM FINANCING PLANNED FOR 2012–2017
AVERAGE ANNUAL INCREASE
2011 2012 2013 2014 2015 2016 2017
2,000
0
8,000
14,000
4,000
10,000
16,000
6,000
12,000
Vladimirenergo
Ivenergo
Kalugaenergo
Kirovenergo
Marienergo
Nizhnovenergo
Ryazanenergo
Tulenergo
Udmurtenergo
Executive body
plans:
SHAREHOLDERS’ CAPITAL06
Digital route search receiver ABRIS TM-8 (aviation board radio integration system, (8ch mode))
is aimed to search for power and telephone cables, engineering communications in the ground
148 149
06 SHAREHOLDERS’ CAPITAL
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
KEY EVENTS OF THE YEAR
The Company’s shares were transferred to the MICEX quo-
tation list A Level 2.
The General Shareholders Meeting decided to pay the dividends for the first time. At the year-end 2010, the divi-
dends paid totaled RUB 141 million.
MAY JUNE
The charter capital of JSC IDGC of Center and Volga Region
totals RUB 11,269,781,704.30 (eleven billion, two hun-
dred and sixty nine million, seven hundred and eighty one
thousand, seven hundred and four, point thirty).
The Company has issued and placed 112,697,817,043 (one
hundred billion, six hundred and ninety seven million,
eight hundred seventeen thousand, forty three) ordinary
shares with the nominal value of 10 kopecks each.
The number of authorized shares is 2,182,957 (two million,
one hundred and eighty two thousand, nine hundred and
fifty seven) of ordinary registered shares with the value of
10 kopecks each. These shares are the difference between
the number of authorized shares (112,600,000,000) and
the number of shares (112,597,817,043) issued during the
reorganization of the Company, which took place in 2008
in the form of merger with the distribution grid companies.
The Company issued no preferred shares.
After the reporting date: February 2012.The Company’s shares were transferred to the MICEX quo-
tation list A Level 1.
Company’s shares retained their presence in the MSCI Rus-
sia Small Cap Index structure.
SECURITIES6.1
NOVEMBER FEBRUARY 2012
january february march april may june july august september october november december
150 151
06 SHAREHOLDERS’ CAPITAL
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Company holds shares of JSC IDGC Holding due to the
legal succession of the shares of JSC RAO UES of Russia
from JSC Kirovenergo which was merged with the Com-
pany. During the reorganization of JSC RAO UES of Rus-
sia the shareholders of the latter were given the shares
of a number of power industry companies, including JSC
IDGC Holding.
THE COMPANY’S ISSUES OF SHARES
Cross Holding as of December 31, 2011
Issue Date of the issue registration
State Registration Num-bers of the Issue
Number of shares I the issue
Nominal Value, RUB
Initial (primary) issue August 20, 2007 1-01-12665-Е 100,000,000 0.1
Additional Issue 001 February 21, 2008 1-01-12665-Е-001D 9,933,178,038 0.1
Additional Issue 002 February 21, 2008 1-01-12665-Е-002D 5,238,075,351 0.1
Additional Issue 003 February 21, 2008 1-01-12665-Е-003D 10,154,553,057 0.1
Additional Issue 004 February 21, 2008 1-01-12665-Е-004D 8,579,998,539 0.1
Additional Issue 005 February 21, 2008 1-01-12665-Е-005D 4,095,509,962 0.1
Additional Issue 006 February 21, 2008 1-01-12665-Е-006D 31,184,103,348 0.1
Additional Issue 007 February 21, 2008 1-01-12665-Е-007D 13,343,991,837 0.1
Additional Issue 008 February 21, 2008 1-01-12665-Е-008D 7,567,715,086 0.1
Additional Issue 009 February 21, 2008 1-01-12665-Е-009D 9,990,288,421 0.1
Additional Issue 010 February 21, 2008 1-01-12665-Е-010D 665,242,563 0.1
Additional Issue 011 February 21, 2008 1-01-12665-Е-011D 2,574,822,120 0.1
Additional Issue 012 February 21, 2008 1-01-12665-Е-012D 327,892,112 0.1
Additional Issue 013 February 21, 2008 1-01-12665-Е-013D 7,749,197,134 0.1
Additional Issue 014 February 21, 2008 1-01-12665-Е-014D 1,193,249,475 0.1
Primary and additional issues combined (July 01, 2008)
August 20, 2007 1-01-12665-Е 112,697,817,043 0.1
Total number of shares outstanding 112,697,817,043 0.1
Name of the Share-holder
Number of shares Nominal Value of the Share, RUB
Nominal Value of the Investment, RUB
% of the Charter Capital Ordinary Preferred
Information on the shares of JSC IDGC of Center and Volga Region held by JSC IDGC Holding
JSC IDGC Holding 56,799,338,107 — 0.1 5,679,933,810.7 50.4
Information on the shares of JSC IDGC Holding held by JSC IDGC of Center and Volga Region
JSC IDGC of Center and Volga Region
2,080,389 — 1.0 2,080,389 0.005
* Ow – Owner, NH – Nominee holder. Note: The information above contains no data on the cus-
tomers of nominee holders.
Note: The Company has no data on the existence
of the shareholdings exceeding 5%, except for the above-
mentioned.
STRUCTURE OF THE SHAREHOLDERS’ CAPITAL (5% AND MORE)
STRUCTURE OF THE SHAREHOLDERS’ CAPITAL ON THE DATE OF COMPILING THE LIST OF PERSONS ENTITLED TO PARTICIPATION IN THE ANNUAL SHAREHOLDERS MEETING (EXCEEDING 5%)
Type Full (Abbreviated) name Address % of the Charter Capital
as of December 31, 2010
as of December 31, 2011
Ow Open Joint Stock Company Interregional Distribution Grid Companies Holding (JSC IDGC Holding)
26 Ulansky Lane, Moscow 107996, Russia
50.40 50.40
NH Closed Joint Stock Company Depositary Clearing Company (JSC DCC)
4/7, building 1,Vozdvizhenka Str.,Moscow 125009, Russia
35.83 33.72
NH Closed Joint Stock Company National Depositary Center (JSC NDC)
1/13, building 8,Sredny Kislovsky Lane,Moscow 125009, Russia
— 5.83
Other 13.77 10.05
TOTAL 100 100
Name % of the Charter Capital
as of May 6, 2011 as of May 14, 2012
JSC IDGC Holding 50.40 50.40
Jamica Limited 16.82 0
GENHOLD LIMITED 0 16.82
Energosouz Holdings Limited 5.40 5.40
ENERGYO SOLUTIONS RUSSIA (CY-PRUS) LIMITED
— 6.74
Other 27.38 20.64
TOTAL 100 100
SHAREHOLDERS6.2
152 153
06 SHAREHOLDERS’ CAPITAL
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
SHAREHOLDERS STATISTICS
RIGHTS OF THE SHAREHOLDERS
Type of the Shareholder As of December 31, 2010 As of December 31, 2011
Number of Shareholders
% of the Charter Capital
Number of Shareholders
% of the Charter Capital
Owners – physical persons 19,502 4.281 19,199 4.055
Owners – legal entities 154 0.383 154 0.383
State Property (Russian Federation, regions of the Russian Federation )
4 1.006 4 1.006
Nominee Holders 14 94.330 15 94.556
Beneficial owners 1 < 0.001 1 < 0.001
TOTAL 19,675 100 19,373 100
Type of the Shareholder As of December 31, 2010 As of December 31, 2011
Number of Shareholders
% of the Charter Capital
Number of Shareholders
% of the Charter Capital
Residents of the Russian Federation 19,636 99.920 19,332 99.920
Non-residents of the Russian Fed-eration
39 0.080 41 0.080
TOTAL 19,675 100 19,373 100
Note: The information above contains no data on the cus-
tomers of nominee holders.
Rights of the shareholders are stipulated by the legislation
of the Russian Federation (Federal Laws and other regu-
latory acts) as well as the Charter of JSC IDGC of Center
and Volga Region. The Company guarantees that the rights
of shareholders are properly respected. The basic rights
of shareholders are stated in the Supplement №10 of the
Annual Report.
In 2011, the Company’s shares were traded on the lead-
ing Russian stock exchanges: СJSC MICEX Stock Exchange
(MICEX) and JSC RTS (RTS) (trade code MRKP).
After consolidation of the primary and 14 additional issues
on July 1, 2008 the Company’s shares of the primary (con-
solidated) issue are traded under the registration number
1-01-12665-Е.
SHARES OF THE COMPANY ON THE STOCK MARKET6.3
Stock Market
Starting date without listing procedure
Starting date the quotation list B
Starting date in the quotation list A Level 2
Exclusion from the list of the Quotation list of shares due to closing or RTS *
Starting date inn the quotation list A Level 1
MICEXApril 7, 2008 September 23,
2008
May 18, 2011 — February 27, 2012
RTS — December 19, 2011 —
* JSC RTS closed due to reorganization in the form of merger with CJSC MICEX.
THE COMPANY’S SHARES ARE INCLUDED IN THE FOLLOWING INDICES:
• Since July 15, 2008 — MICEX SC (MICEX Start Cap Index);
• Since September 15, 2008 — RTS-2 Index, RTSeu (Electric Utilities);
• Since October 27, 2008 to July 25, 2010, since January 25, 2011 to July 24, 2011 — MICEX PWR;
• Since November 11, 2009 — MSCI Russia Small Cap Index (MSCI Barra International Analytical Agency).
In 2011, the Company’s capitalization decreased to RUB
16.6 billion which accounted for 50.9% drop as compared
to 2010 due to negative market trend (MICEX Index and
MICEX PWR decreased by 16.9% and 40.2% respectively)
and revision of the tariff rates. Maximum capitalization in
2011 amounted to RUB 37.6 billion; minimum capitaliza-
tion was RUB 16.3 billion.
In 2011, the trading volume of the Company’s shares at
MICEX Stock Exchange reached RUB 1,414.39 million
(6,112.5 million shares), on the RTS Stock Exchange it to-
taled RUB 52.59 million (239.75 million shares).
RUB 1,414.39 million
RUB 52.59 million
IN 2011, THE TRADING VOLUME OF THE COMPANY’S SHARES AT MICEX STOCK EXCHANGE
RTS STOCK EXCHANGE —
RUB 37.6 billion
RUB 16.3 billion
Maximum capitalization in 2011
Minimum capitalization
154 155
06 SHAREHOLDERS’ CAPITAL
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Market Features
Parameter Unit of measure
December 31, 2009*
December 30, 2010*
2010/2009, (absolute increase), %
December 30, 2011
2011/2010, (relative increase), %
Closing Price ** RUB 0.1815 0.3033 67 0.14544 -52
Capitalization RUB million 20,454.7 34,181.2 16,390.8
VWAP (Volume Weighted Average Price)**
RUB 0.182 0.2997 65 0.14713 -51
Capitalization RUB million 20,511.0 33,775.5 16,581.2
EV RUB million 30,734 46,525 51 33,362 -28
EV/EBITDA — 6.33 7.04 11 3.04 -57
P/E (capitalization / net profit) — 83.8 26.9 -68 3.92 -85
P/S (capitalization / revenues) — 0.43 0.63 47 0.26 -59
EV/RAB — — 0.55 — 0.36 -35
* Since January 1, 2011 the Company’s accounting and financial statements were adjusted in accordance with the Order of the Ministry of Fi-nance of the Russian Federation No. 66n, of July 2, 2010 and No.186n of December 24, 2010. In order to ensure comparability of the data, figures for 2009-2010 are presented in accordance with adjusted accounting and financial statements for 2009-2010. ** According to MICEX data
Reduced capitalization in 2011 led to reduction of
the EV – Enterprise Value which equals market capital-
ization plus debt capital less cash and its equivalents.
EV/EBITDA coefficient, which is mostly taken into account
when evaluating investment attractiveness of the Compa-
ny, reduced by 57% due to the decrease in EV and growth
of EBITDA by 66%.
P/E (Price-to-Earnings) ratio shows how much investors
are willing to pay per dollar of earnings. P/S (Price-to-
Sales) ratio reflects market value of the sales unit.
In 2011, growth of the revenues and net profit totaled 18%
and 234% accordingly as compared to 2010. As capitaliza-
tion figured fell, it led to reduction of P/E and P/S ratios.
EV/RAB ratio is used to compare the companies which have
adopted long-term RAB-based tariff regulation. Reduction
of the figures in the reporting period was caused by the
decrease of the Enterprise Value and growth the RAB by
9% following to the growth in investments in 2011.
The Company’s Share Price in 2009-2011, RUB
* According to MICEX data
VWAP (Volume Weighted Average Price)*
2009 2010 2010/2009, (absolute increase), %
2011 2011/2010, (relative increase), %
Maximum of the Year 0.2047 0.3137 53 0.3331 6.2
Minimum of the Year 0.0839 0.1859 122 0.1449 -22
DYNAMICS OF THE COMPANY’S SHARE PRICES AND MICEX INDICES IN 2011
The Company’s Shares MICEX PWR MICEX Index
-60%
-20%
+20%
-40%
0%
December 30,2010
February 13, 2011 March 30, 2011 May 14, 2011 June 28, 2011 August 12, 2011
1 2 3 4
The Main Factors which Determined Stock Exchange
and Share Price Fluctuations in 2011
1. Instruction of the Government of the Russian Federa-
tion to ensure that the consumer prices for electric en-
ergy rise by no more than 15% in 2011;
2. Start of the tariff adjustments for 2011in the Compa-
ny’s branches by the regulatory bodies of the regions
of the Russian Federation.
3. Decision by the Company’s General Shareholders Meet-
ing to pay the dividends at the year-end 2010;
4. Lowering of the credit rating of the USA by Standard
& Poor’s;
5. Information on termination of the direct contracts
by JSC FGC UES, concluded with the large consumers
in 2009-2010 in the number of regions of the Russian
Federation, starting on January 1, 2012. September 26, 2011 November 10, 2011 December 25, 2011
5
156 157
06 SHAREHOLDERS’ CAPITAL
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Trading Volume of the Company’s Shares at MICEX and RTS Stock Exchanges in 2010-2011
Number RUB
2010 2011 2011/2010, (absolute
increase), %
2010 2011 2011/2010, (relative
increase), %
MICEX 5,752,287,700 6,112,502,000 6.3 1,438,681,344 1,414,389,350 -1.7
RTS 690,054,785 239,753,216 -65 166,224,613 52,594,665 -68
TOTAL 6,442,342,485 6,352,255,216 -1.4 1,604,905,957 1,466,984,015 -8.6
The Company has developed and adopted the yearly plan
for interaction with the shareholders and investors.
Throughout the year the Company’s management took
part in the meetings with the investors, shareholders,
and stock exchange analysts at the investment forums,
conferences, round tables, which has improved trans-
parency and openness of the Company and contribut-
ed to the growth of understanding of the Company’s
THE TRADING VOLUME OF THE COMPANY’S SHARES
AT MICEX IN 2011, million pcs.
0
300
600
150
450
750
900
January February March April May June July August September October November December
January February March April May June July August September October November December
DYNAMICS AND NUMBER OF TRANSACTIONS
WITH THE COMPANY’S SHARES AT MICEX IN 2011. number, %
operations and perspectives connected with transfer
to the RAB regulation by the investors.
On February 20, 2012, in accordance with the Order No.
169-r of CJSC MICEX the Company’s shares were trans-
ferred to the MICEX quotation list A Level 1 from the quo-
tation list A Level 2.
Transfer of the shares to the quotation list A Level 1,
which has the highest requirements in terms of corporate
management, information disclosure and liquidity of the
securities, stems from the Company’s hard work of many
years which was aimed at increasing the investment at-
tractiveness.
The fact that the Company’s shares are included in this list
broadens the circle of potential shareholders on account
of institutional investors, pension and insurance funds.
In 2011 as well as in previous years, in order to increase
liquidity of the shares the Company has involved market-
makers at MICEX and RTS Stock Exchanges.
Due to consistent implementation of these measures
we expect the Company’s capitalization to be restored
in 2012-2013 in case of a positive market trend.
QUOTATION LIST A LEVEL 1 SINCE FEBRUARY 2012, THE COMPANY’S SHARES HAVE THE HIGHEST MICEX LISTING
Average number of transactions per day Average bid-offer spread at the closing time
0 0
80 1.0
160 2.0
40 0.5
120 1.5
200 2.5
num. %
158 159
06 SHAREHOLDERS’ CAPITAL
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Company recognizes how important it is for the share-
holders to receive income in the form of the dividends
from their investments made by purchasing the Company’s
shares. The Company has adopted a transparent and acces-
sible to the shareholders mechanism of determining the
sum of dividends and other payments and established the
most convenient for the shareholders procedure of divi-
dend payment. The Company also takes all necessary mea-
sures to rule out incomplete or late payment of dividends
declared.
The Company’s dividend policy aims to recognize and ob-
serve rights of all the shareholders, to provide necessary
conditions for increasing capitalization and investment at-
tractiveness of the Company and to ensure effective bal-
ance between dividend payment and Company develop-
ment.
In order to make sure that the mechanism of determin-
ing the amount and procedure of dividend payment are
transparent the Board of Directors has approved the
Regulation on the Dividend Policy (Minutes No. 61, as
of September 1, 2010) which establishes conditions, pro-
cedure, terms and form of dividend payment. The Regu-
lation can be accessed on the Company’s corporate web-
site www.mrsk-cp.ru in the ‘About the Company/ Internal
Documents’ section.
In accordance with the Regulation on the Dividend Policy
the decision to pay out the dividends can be taken when
the following conditions are observed simultaneously:
availability of net profit less re-evaluation of financial in-
vestments; the year-end debt/EBITDA ratio does not ex-
ceed three (otherwise redemption of the debt is a priority);
the targets for the reliability of power supply are achieved
(otherwise profit is distributed so as to take measures on
enhancing reliability of power supply and services quality).
If all of the abovementioned conditions are observed the
amount of dividend payments is determined as the year-
end remainder of the net profit (less re-evaluation of the
financial investments) after it was allocated for the man-
datory reserves, investments and offsets for the opera-
tional losses of the previous years.
DIVIDEND POLICY6.4
RUB 141 million
THE AMOUNT OF DIVIDENDS AT THE YEAR-END 2010 — THE FIRST EVER DECISION TO PAY THE DIVIDENDS
Note: The figures were calculated on the basis of the year-
end financial statements.
Dividend Yield
Unit of measure
At the year-end 2007
At the year-end 2008
At the year-end 2009
At the year-end 2010
At the year-end 2011 (planned)
Basic earnings per share RUB 0.0007 0.0152 0.0038 0.0124 0.0376
Diluted EPS RUB 0.0007 0.0152 0.0038 0.0124 0.0376
Dividend payout ration % 0 0 0 10.1 7.5
Dividend per share RUB - - - 0.00125 0.00280
* The dividend paid was less than 100% of the dividend accrued due to the absence of the banking and post details of some shareholders in the share register system.
* In the instances stipulated by p.p.1 of p.3 of the Article 284 of the Tax Code of the Russian Federation.
TAX LIABILITIES OF SHAREHOLDERS
Dividend Payout
Tax Rates on the Securities Income, %
The taxes imposed on legal and physical persons in con-
nection with the outstanding equity securities of the
Company are regulated by:
• the Tax Code of the Russian Federation;
• other regulatory and legal documents adopted in ac-
cordance with the Tax Code of the Russian Federation.
The Date of the Decision to Pay the Dividends (the date of the annual General Shareholders Meeting)
Dividends Accrued, RUB million
Dividends Paid as of December 31, 2011, RUB million
% of the Dividends Accrued
June 14, 2011 141.0 139.4 98.87%*
Type of Income Legal Entities Physical Persons
Residents Non-residents Residents Non-residents
Yield 9 or 0 * 15 9 15
Proceeds from securities sales 20 20 13 30
INTERACTION WITH STAKEHOLDERS
07
Independent device “recloser” is used for automatic disconnection and repeated powering in 6-10 kV
distribution grids, analyzes operating modes of the grid and performs its reconfiguration in emergency
modes automatically. It is equipped with means of remote control and operation
162 163
07 INTERACTION WITH STAKEHOLDERS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
KEY EVENTS OF THE YEAR
PRINCIPLES OF THE COMPANY’S INTERACTION WITH STAKEHOLDERS:
• RESPECTOPINIONOFTHESTAKEHOLDERS
• TIMELYINFORMSTAKEHOLDERSANDINTERACTON A REGULARBASIS
• MUTUALLYFULFILLTHEIRLIABILITIES
Work of JSC IDGC of Center and Volga Region is based on
constant interaction with a wide range of stakeholders with
whom the Company maintains an open and constructive dia-
log. Channels of communicating the information are chosen
so that to provide maximum availability of information.
The Company’s success is closely related to the image that
it creates in the business environment. Positive image of
JSC IDGC of Center and Volga Region is a guarantee of trust
of its partners. On August 30, 2007, the order of the Gen-
eral Director of JSC IDGC of Center and Volga Region ap-
proved the CorporateConductCode–a listofprinciplesof theCompany’sactivity, its rules,normsofbehaviorofits employees. Compliance with the Corporate Conduct
Code promotes establishment of single corporate culture
within the Company, as well as efficient interaction be-
tween all its units, and guarantees high level of business
ethics to our partners.
STAKEHOLDERS7.1
JANUARY SEPTEMBERAPRIL SEPTEMBER, NOVEMBERSEPTEMBER NOVEMBER
Participation in the “Forum Rus-sia–2011” Investment Forum held by IC Troika-Dialog.
Participation in the Investment Fo-rum “VTB Capital RUSSIA CALLING: London Session”.
Annual General Shareholders Meet-ing of JSC IDGC of Center and Volga Region made a decisiontopaythedividends for the first time in its history.
The Board of Directors approved the new version of the Policy on Procedure of Regulated Purchase of the Goods and Services changing the procedure of pur-chase in the Company due to significant changes in the legislation of the Russian Federation.
Correspondence of the integrated management sys-tem of JSC IDGC of Center and Volga Region to the requirement of the international standards ISO9001,ISO14001andOHSAS18001 approved.
Winning the industry competition “Organizations of High Social Ef-ficiency in Power Industry–2011” in nomination “TheBest InnovativeProject in the Field of Social Part-nership”.
The Company received a diploma of the competition AwardoftheGov-ernment of the Russian Federationinthefieldofquality for the second time.
Winning the industry competition “Organizations of High Social Ef-ficiency in Power Industry–2011” in nomination “TheBestGridOrga-nizationofHighSocialEfficiencyinPowerIndustry”.
The Annual Report 2010 became the best Annual Report in three contests held on regional and federal levels.
IR–service of the company was rec-ognized as TheBestInteractionwithShareholders and Investors Service of the JSC IDGC Holding group of com-panies.
FEBRUARY 2–4 DECEMBER MAY 31 – JUNE 2 JUNE 14
Gradual transition of all Branches of the Company to RAB-regulation is completed.
january february march april may june july august september october november december
164 165
07 INTERACTION WITH STAKEHOLDERS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
CHANNELSOFINTERACTIONWITHSTAKEHOLDERS
• Setting prices(tariffs) for regulated types of ac-
tivity
• Approval of the investment programs and report-
ing on their implementation
• Teams developing schemes and Program of prod-
pective development of power energy
• Agreements on interaction for development
of power industry in regions
• Reporting to authorities and disclosure of informa-
tion and reporting of the issue in accordance with
current legislation
• Work meetings and mutual activities with repre-
sentatives of the regional authorities
• Taxation
STAKEHOLDERS INTERSTSOFTHESTAKEHOLDERS
• Reliable and sustainable functioning of the energy system
• Efficient incorporation of the Company to the system of state regulation
• Implementation of the programs of complex development of the systems
of social infrastructure
• Implementation of the long-term projectsaimed at development of the
power industry
• Meeting the medium and long term demand for electricity and capacity
• Attraction of additional investments to regions and creation of the new
work places
• Taxation
AUTHORITIES(federal, regional and municipal
authorities of the RF)
• Dynamic growth and development of the Company
• Effectiveness
• Increase of capitalization of the Company
• Transparency activities and management in the Company
SHAREHOLDERSANDINVESTORS
• General Shareholders Meeting
• Annual and Social Reports, informational bro-
chures and leaflets
• Regular meetings, negotiations involving manage-
ment of the Company
• Press conferences, presentation and forums
• Federal and regional media
• Corporate Web-site
• Surveys of shareholders and investors
• Mutually beneficial and long-term collaboration
• Gaining profit
• Timely and exact implementation of the agreements
• Fair competition
PARTNERS(suppliers and contractors)
• Procurement procedures
• Negotiations
• Proposals
• Corporate Web-site
• Federal and regional media
• Workshops and conferences including meetings
of the Technical Committee of the Company
• Social programs in the regions of presence
• Federal and regional media (print, television and
radio)
• Press-conferences, PR-actions, workshops, forums
and competitions
• Meeting of the top managers with veterans, stu-
dents and other social groups
• Corporate Web-site
• Measure to prevent electric shocks
• Social and economic development of the regions of presence
• Environmental protection
• Energy security
• Charity
• Development of Science (R&D)
SOCIETY
• Service centers
• Single Informational Center
• Single federal hotline
• Pools and surveys
• Corporate Web-site (Internet reception)
• Federal and regional media
• Press-conferences, workshops and forums
• Reliable, uninterrupted and quality power supply
• High quality of service
• Transparency and accessibility of information on activities the Company
• Meeting the needs in the services of the Companies
CONSUMERS
• Collective agreement and internal documents
within the framework of social responcibility of the
Company
• Councils of Veterans and Councils of the Young
Specialists
• Trade unions
• Corporate means of communication
• Work with talent pool
• Coaching of the personnel
• Cultural and sports activities
• Decent standard of living
• High level of social protection
• Opportunities for personal and professional growth
• Occupational Safety
• Improving the status of the job of power engineer
PERSONNEL
166 167
07 INTERACTION WITH STAKEHOLDERS
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Company is public and struggles for informational
transparency and openness, taking into consideration best
Russian and world practice in the field.
The Company’s policy on the disclosure of information
is based on the following principles:
• periodicity and timeliness;
• information availability;
• completeness and accuracy of the information dis-
closed;
• reasonable balance between openness and the protec-
tion of the Company’s commercial interests.
Interaction with shareholders and investors is provided by
special IR unit within the JSC IDGC of Center and Volga
Region – Investor and Shareholder Relations Division of
the Corporate Governance Department. Contacts of its
specialists are available at the Web-site of the Company
www.mrsk-cp.ru at the page For Shareholders and Inves-
tors/ Contacts.
18eventsof interactionwithshareholdersandinvestors
were held in 2011, including meetings with the represen-
tatives of the investor community, participation of the
top-managers of the Company in Russian and international
investment forums, presentations, press-conferences, An-
nual General Shareholders Meeting, the Board of Directors
and its Committees meetings conducted in presentio.
The Company pays special attention to establishment of
constructive interactions with minority shareholders and
foreign investors.
Investors from over 20 countries of the world own the
shares of JSC IDGC of Center and Volga Region. In order to
improve its relations with them, the Company struggles
to improve quality of the English version of its Web-site
www.mrsk-cp.ru/en and organizes meetings of the top
management with the foreign investors.
According to the Russian Federation legislation and inter-
nal documents of the Company, the full information for
shareholders and investors is available at the Web-site of
the Company www.mrsk-cp.ru at the page For Sharehold-
ers and Investors.
IR Calendar of the Company for 2012 is available at the
Web-site of the Company www.mrsk-cp.ru at the page For
Shareholders and Investors/ Calendar for Investors.
DISCLOSURE OF INFORMATION7.3
INTERACTION WITH SHAREHOLDERS AND INVESTORS
7.2
DISCLOSUREOFINFORMATION
* Text of the documents is available at the web-site of the Company www.mrsk-cp.ru at the page About the Company/ Internal documents.
RegulatoryDocuments
InformationDisclosureChannels
Legislation of the Russian Federation, norma-tive documents of the controlling and regulatory bodies (FFMS, FAMS, etc.)
The Company’s site at www.mrsk-cp.ru
JSC Interfax newsfeed at http://disclosure.interfax.ru/
Izvestia newspaper, in cases stipulated by The Company’s Charter
Submission to regulatory bodies
Disclosure upon enquiries from persons
Internal documents approved by the Board of Directors:• Code of Corporate Governance• Regulation on information Policy• Regulation for the Indider Information*
The Company’s site at www.mrsk-cp.ru
Meetings, conferences, briefings, Round tables etc.
Leaflets, reports, brochures and other informa-tion materials
Information coverage of activities in mass media (interviews, articles, etc.)
Distrivution of Information among the represen-tatives of the investment community
MANDATORY VOLUNTARY(ADDITIONAL)
CORPORATE GOVERNANCE08
Multipurpose loader crane MLC-200 is equipped with crane, elevating and drilling equipment,
which enables installation of a support of a power line during 20 minutes
170 171
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
KEY EVENTS OF THE YEAR
General Shareholders Meeting was held, where the new
versions of the Charter of the Company and a range of in-
ternal documents regulating the work of the management
bodies were approved.
The Board of Directors made a decision to prolong the powers of the General Director of JSC IDGC of Center and Volga Region, Mr. Evgeny Viktorovich Ushakov for one year and one month more, until July 27, 2012 inclusively, and
to extend the Labor Agreement with him.
JUNE 14 JUNE 27
The Board of Directors of the Company approved the num-
ber of the members of the Committees of the Board of Di-
rectors and appointed employees to them.
The Board of Directors approved the new edition of the Regulation for the Insider Information of the Company.
JULY 18 DECEMBER 27
Corporate governance is a system of processes ensuring
communication between the management bodies of the
Company, shareholders and other stakeholders, reflecting
the balance of their interests and aimed at improvement of
the efficiency of the Company.
The managers of JSC IDGC of Center and Volga Region
continuously analyze the best Russian and international
practices of corporate governance, adhering to the policy
of constant improvement of the corporate governance sys-
tem, ensuring its compliance with the best international
standards.
The Code of Corporate Governance of JSC IDGC of Center
and Volga Region is based on the legislation of the Rus-
sian Federation, the Company’s Charter, the Corporate
Code recommended by Instruction №421/r of the Federal
Financial Markets Service (FFMS), dated April 4, 2002, as
well as on the internationally recognized principles of cor-
porate governance, such as the Principles of Corporate
Governance of the OECD (Organization for Economic Co-
operation and Development).
The text of the Code of Corporate Governance of the Company
is available at the Web-site of the Company www.mrsk-cp.ru
at the page “About the Company/ Internal documents”.
STRUCTURE AND PRINCIPLES OF CORPORATE GOVERNANCE
8.1
DOCUMENTS DEFINING THE PRINCIPLES OF CORPORATE GOVERNANCE
Strictly adhering to the provisions of the Code of Corpo-
rate Governance, the Charter of the Company, and of other
internal documents, the Company confirms its intention to
contribute to the enhancement of the practice of proper
corporate governance.
As instructed by the Board of Directors (Minutes №8 dated
February 18, 2008) the General Director of the Company
submitted the Report on the adherence of the Code of Cor-
porate Governance by the Company. The Report is submit-
ted each 6 months and annually.
On August 30, 2011, the Board of Directors amended its
earlier decision on Approval of the Code of Corporate
Governance of the Company made on February 18, 2008.
According to this document, the General Director of the
Company should annually (in the Annual Report) provide
information on abidance by the Corporate Conduct Code in
form and composition regulated by the federal executive
body for the securities market.
This decision should help the Company to optimize finan-
cial expenses for preparation of the Annual Report of the
Company while abiding by the regulations of the FSFM of
Russia.
Information on abidance by the Corporate Conduct Code
is available in the Supplement №5 to the Annual Report.
january february march april may june july august september october november december
172 173
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
On September 27, 2008 the Consortium of the Russian In-
stitute of Directors and Expert RA rating agency assigned
to JSC IDGC of Center and Volga Region the national rat-ing of corporate governance of “6+” – “Developed Prac-tice of Corporate Governance”. This rating proves that
the Company’s corporate governance risks are low, as the
Company adheres to the requirements of the Russian law
in the field of corporate governance and implements the
majority of recommendations contained in the Russian
Corporate Conduct Code, as well as certain recommenda-
tions of the international best practices of corporate gov-
ernance. The information on the assignment of the rating
and the report on the practices of corporate governance in
the Company are available at the Web-site of the Company
www.mrsk-cp.ru at the page For Shareholders and Inves-
tors/ Information on Evaluation of Corporate Governance
Practice.
JSC IDGC of Center and Volga Region improves its corpo-rate governance practices on an on-going basis:
March 30, 2011 — The Board of Directors of the Company
made a decision to implement changes to the Policy on
HR and Remuneration Committee of the Board of Direc-
tors, which helped to increase the authority of the said
Committee.
June 14, 2011 — The General Shareholders Meeting ad-opted the new version of the Company’s Charter and the
following internal documents regulating activity of the
Company’s management bodies:
• Regulation on the Procedure of Preparation and Hold-
ing the General Shareholders Meeting;
• Regulation on the Order of Convening and Holding the
Meetings of the Board of Directors;
• Regulation on the Management Board.
The key changes in the Charter and said internal docu-
ments relate to the changes of the current legislation
of the Russian Federation.
July 18, 2011 — The Board of Directors of the Company ap-
proved quantitative and personal composition of the Com-
mittees of the Board of Directors. According to this deci-
sion, the number of the members of the Audit Committee
was increased from 5 to 7 people, of HR and Remuneration
Committee – from 5 to 7 people, of the Strategy and De-
velopment Committee – from 11 to 12 people.
The number of minority shareholders of the Company in Committees has increased which positively affected the
process of discussing and making decisions on important
issues which are likely to have an impact on the interests
of shareholders, helped to form an objective opinion on
the discussed issues and contributed to strengthening of
the investors’ confidence to the Company.
December 27, 2011 – The Board of Directors approved a
new version of the Provision on Insider Information of the
Company.
The key targets of this provision are the following:
• ensure implementation of the legislation in the field of
usage of the insider information;
• organize activities to ensure confidentiality of the in-
sider information;
• set basic principles of legitimate usage and protection
of the insider;
• ensure protection of the rights of the shareholders, in-
vestors and participant of organized financial markets.
There are a number of normative documents adopted in
the Company, which regulate the activities of the Com-
pany’s management and control bodies. The texts of the
corporate internal documents are available at the Web-
site of the Company www.mrsk-cp.ru at the page About
the Company/ Internal documents.
ACCOUNTABILITY FAIRNESS TRANSPARENCY RESPONSIBILITY
KEY PRINCIPLES OF CORPORATE GOVERNANCE IMPLEMENTED BY JSC IDGC OF CENTER AND VOLGA REGION
GENERAL INFORMATION ON MANAGEMENT AND CONTROL BODIES
GENERAL SHAREHOLDERS MEETING
App
rova
l
AUDITOR
GENERALDIRECTOR
El
ecti
on
AUDITCOMMISSION
MANAGEMENTBOARD
BOARD OF DIRECTORS
STRATAGY AND DEVELOPMENT
COMMITTEE
HR AND REMUNERATIONS
COMMITTEE
RELIABILITYCOMMITTEE
COMMITTEE FOR TECHNOLOGICAL
CONNECTIONTO POWER GRIDS
AUDIT COMMITTEE
CORPORATESECRETARY
Elec
tion
Repo
rts,
inst
ruct
ions
Reports
Instructions
Conc
lusi
ons,
min
utes
of t
he a
udit
Cert
ifi ca
te o
f Aud
it
Election, instr
uctio
ns
Repo
rts
Cert
ifi ca
te o
f Audit
Reports, instructionsElection, instructions
Organization of activities
Election
Establishment, election
Repo
rts,
inst
ruct
ions
Reports
174 175
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
MANAGEMENT BODIES8.2
The General Shareholders Meeting – supreme manage-
ment body of the Company used by the shareholders to
exercise their rights to participate in the management of
the Company;
The Board of Directors – management body responsible
for the Company’s strategy development and the general
management of the Company’s operations. The Board of
Directors also controls the activities of the executive bod-
ies of the Company;
The Management Board and General Director – executive
bodies of the Company responsible for management of the
Company’s operations. The area of responsibility of these
executive bodies includes all issues pertaining to daily ac-
tivities of the Company, except for the issues which relate
to the responsibility of the General Shareholders Meeting,
or the Board of Directors of the Company. The executive
bodies are accountable to the Company’s Board of Direc-
tors and the General Shareholders Meeting;
The Audit Commission – a body responsible for the control
of financial and economic activities of the Company and
accountable to the General Shareholders Meeting of the
Company.
The Company confirms that the members of management
and control bodies and the Committees of the Board of Di-
rectors of the Company agreed to process personal infor-
mation according to the paragraph 4 article 9 of the Fed-
eral Law №152-FZ “On Personal Information” dated July
27, 2006, in order to disclose information in accordance
with the Federal Law №208-FZ “On Stock Companies” dat-
ed December 26, 1995, Federal Law №39-FZ “On the Stock
Market” dated April 22, 1996 and Statement on Disclosure
of Information by the Issuers of Securities, approved by the
order of Federal Service for Financial Markets of Russia on
October 4, 2011 №11-46/pz-n.
The General Shareholders Meeting is the supreme man-
agement body of the Company, with the authority to deal
with the most significant issues pertaining to the Com-
pany’s operations, as specified in the current legislation
of the Russian Federation and in Article 10of the Charter
of JSC IDGC of Center and Volga Region. The text of the
Charter can be freely accessed at www.mrsk-cp.ru at the
page About the Company/ Internal Documents.
The issues that fall within the area of responsibility of the
General Shareholders Meeting of the Company are the fol-
lowing:
• introduction of modifications and amendments to the
Charter or approval of the new version of the Charter;
• reorganization of the Company;
• liquidation of the Company, appointing the Liquidation
Commission and approval of the intermediate and final
liquidation balance;
• determination of the quantity, nominal value, category
(type) of declared shares and rights granted by these
shares;
• increase of the charter capital of the Company by in-
creasing the nominal value of the shares or by placing
additional shares;
The corporate system of management and control bodies includes:
GENERAL SHAREHOLDERS MEETING8.2.1
• decrease of the charter capital of the Company by
decreasing the nominal value of the shares or by pur-
chasing the Company’s shares to reduce the number of
shares outstanding, or by redeeming the shares pur-
chased or bought back;
• splitting and consolidation of the Company’s shares;
• determination of the quantitative composition of the
Company’s Board of Directors, election of its members
and early termination of their authorities;
• election of the members of the Audit Commission and
early termination of their authorities;
• approval of the Auditor of the Company;
• approval of annual reports, annual accounting state-
ments, including profit and loss statements (the ac-
counts of profits and losses), and the distribution of
profits (including the payment (declaration) of divi-
dends, except for the profit distributed as dividends for
the Q1, H1 and for M9 of the FY) and the Company FY
losses;
• payment (declaration) of dividends for the Q1, H1, and
for M9 of the FY;
• making decisions on the approval of transactions in
cases specified by Federal Law №208 “On Joint Stock
Companies”;
• making decisions on the participation in financial in-
dustrial groups, associations and other unions of com-
mercial organizations;
• dealing with other issues, as specified by Federal Law
“On Joint Stock Companies” and the Company’s Charter.
The Company established the Policy for the Preparation
and Holding of the General Shareholders Meeting of JSC
IDGC of Center and Volga Region regulating in detail the
procedures of the General Shareholders Meetings.
In 2011, one General Shareholders Meeting was held.
On June 14, 2011 the Annual General Shareholders Meet-ing was held (Minutes №4), resulting in the following resolutions:1.1. Approve the Annual Report, the annual accounting
statements, including the Profit and Loss Report based on
the 2010 FY results;
1.2. Approve distribution of profit (losses) of the Company
for 2010 FY;
1.3. Pay the dividends up on common shares of the Com-
pany based on the 2010 FY results;
2. Elect the Board of Directors of the Company;
3. Elect the Audit Commission of the Company;
4. Approve the Auditor of the Company;
5. Approve the new version of the Charter of the Company;
6. Approve new versions of the Regulation on the Proce-
dure of Preparation and Holding the General Shareholders
Meeting, Regulation on the Order of Convening and Hold-
ing the Meetings of the Board of Directors, Regulation on
the Management Board of the Company.
7. Pay the remuneration to the members of the Board of
Directors who are not the civil servants for work within the
Board of Directors in an amount provided for the Regula-
tion on Remuneration to the Members of the Board of Di-
rectors of the JSC IDGC of Center and Volga Region.
There were no extraordinary General Shareholders Meet-
ings in 2011.
The materials and decisions made at the General Share-
holders Meetings can be freely accessed at the Web-site of
the Company www.mrsk-cp.ru at the page “For Sharehold-
ers and Investors/ The General Shareholders Meeting”.
176 177
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Board of Directors of JSC IDGC of Center and Volga
Region operates in accordance with the legislation of the
Russian Federation, the Company’s Charter, and the inter-
nal documents of the Company.
In accordance with Article 15 of the Company’s Charter,
the Board of Directors exercises the general manage-
ment of the Company, except for the issues which relate
to the area of responsibility of the General Shareholders
Meeting.
The main tasks set before the Board of Directors of the
Company are the following:
• definition of the Company’s development strategy
aimed at improvement of its market capitalization and
attractiveness for investors, maximum profitability
and increase of the Company’s assets;
• implementation and protection of the rights and le-
gitimate interests of the shareholders of the Com-
pany as well as assistance in resolution of corporate
conflicts;
• ensuring full, reliable and objective disclosure of infor-
mation about the Company for the shareholders and
stakeholders;
• establishment of effective mechanisms of internal
control;
• regular assessment of the work of executive and man-
agement bodies of the Company.
To implement the tasks mentioned above, the Board of Di-
rectors is guided by the following principles:
• making decisions on the basis of reliable information
about the Company’s activity;
• making no restriction of the rights of shareholders
BOARD OF DIRECTORS8.2.2
4%Issues concerning the activity of the
Committees of the Board of Directors
21%Issues concerning approval of the
transactions with interest
3%Issues concerning approval of the Insurance Companies and Auditors
10%Issues concerning position
of subsidiary and dependent companies
14%Financial and economic issues
13%Issues concerning reports of the
Management Board and the General Director
8%Issues concerning preparation to the AGSM
27%Other issues
MAIN GROUPS OF ISSUES CONSIDERED BY THE BOARD OF DIRECTORS
to participate in the Company’s management, receive
dividends and information about the Company;
• achieving a balance of interests of different groups of
shareholders and the making the most objective deci-
sions by the Board of Directors in the interests of all
shareholders.
The information on the activities of the Board of Directors
and its personal membership is available at the Web-site
of the Company www.mrsk-cp.ru at the page About the
Company/ Management Authorities/ Board of Directors of
the Company.
The operations of the Board of Directors are regulated
by the Policy on the Procedure for the Summoning and
Holding of Meetings of the Board of Directors of JSC IDGC
of Center and Volga Region.
The resolutions at the meetings of the Board of Directors
are carried by the majority of votes of the members of
Board of Directors present at the meeting, except for the
cases specified in the legislation of the Russian Federation
and the Company’s Charter.
The quorum for holding a meeting of the Board of Direc-
tors comprises at least half of the number of the elected
members of the Board of Directors of the Company.
25 meetings of the Board of Directors of JSC IDGC of Cen-
ter and Volga Region were held in 2011 (with two of them
held in presentio and in absentia) dealt with more than
320 issues.
Issues concerning ap-proval of the transactions with interest
Issues concerning the activity of the Committees of the Board of Directors
Issues concerning position of subsidiary and depen-dent companies
Issues concerning reports of the Management Board and the General Director
Financial and economic issues
Issues concerning ap-proval of the Insurance Companies and Auditors
Issues concerning prepa-ration to the AGSM
Other issues
COMPARATIVE ANALYSIS OF THE MAIN GROUPS
OF ISSUES CONSIDERED BY THE BOARD OF DIRECTORS , number
51100
1526
4545
1320
1310
1326
1820
1815
1829
5923
2411
6333
2009 2010 2011
178 179
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The members of the Board of Directors of JSC IDGC of Center and Volga Region, as elected by the Annual General Share-holders Meeting on June 16, 2010 (Minutes №3 dated June 21, 2010)are the following (the positions held by the members are specified at the moment of election):
1. Perepelkin Aleksey Yurievich — the Chairman of the Board of Directors of JSC IDGC of Center and Volga Region, mem-ber of the Management Board, Deputy General Director for Corporate Governance and Property of JSC IDGC Holding.
2. Branis Aleksander Markovich — Director of the Repre-sentative office of the Prosperity Capital Management (RF) Ltd.
3. Inozemtsev Vladimir Vyacheslavovich — Head of the De-partment of Power Transportation and Energy Saving of JSC IDGC Holding.
The acting members of the Board of Directors of JSC IDGC of Center and Volga Region were elected by the General Shareholders Meeting on June 14, 2011 (Minutes №4) (the positions held by the members are specified at the moment of elec-tion):
Perepelkin Aleksey Yurievich member of the Management Board, Deputy General Director for Corporate Governance and Property of JSC IDGC HoldingMr. Perepelkin was elected to the Board of Directors of JSC IDGC of Center and Volga Region twice: on June 16, 2010 and on June 14, 2011.
Ushakov Evgeny Viktorovich General Director of JSC IDGC of Center and Volga RegionMr. Ushakov was elected to the Board of Di-rectors of JSC IDGC of Center and Volga Re-gion three times: on June 22, 2007, on May 30, 2008 and on June 14, 2011.
Sergutin Aleksey VladimirovichDirector for Economy of JSC IDGC Holding
Mr. Sergutin was elected to the Board of Di-rectors of JSC IDGC of Center and Volga Re-gion twice: on June 16, 2010 and on June 14, 2011.
Mekhanoshin Boris IosifovichDeputy General Director – Technical Director of JSC IDGC Holding
Mr. Mekhanoshin was elected to the Board of Directors of JSC IDGC of Center and Volga Re-gion for the first time on June 14, 2011.
Pokrovsky Sergey Vadimovich Expert of the Investor Protection As-sociationMr. Pokrovsky was elected to the Board of Directors of JSC IDGC of Center and Volga Re-gion for the first time on June 14, 2011.
Chairman of the Board of Directors of JSC IDGC of Center and Volga Region
Deputy Chairman of the Board of Directors of JSC IDGC of Center and Volga Region
The full information about the members of the Board of Directors of the Company is presented in the Supplement №4 to the Annual Report.
According to Article 16 of the Com-
pany’s Charter, the quantitative
membership of the Board of Direc-
tors is 11 (eleven) members During
2011 the Board of Directors of the
Company comprised of two mem-
berships.
MEMBERS OF THE BOARD OF DIRECTORS
Mashtakov Sergey Aleksandrovich Deputy Director of the Department of Operative Control and Management in Power Industry and Mobilization Preparation in the Fuel and Energy In-dustry of the Ministry of Energy of the Russian Federation.Mr. Mashtakov was elected to the Board of Directors of JSC IDGC of Center and Volga Re-gion for the first time on June 14, 2011.
Filkin Roman AlekseevichCo-Director, Power Industry and Engi-neering of the Representative office of the Prosperity Capital Management (RF) Ltd.
Mr. Filkin was elected to the Board of Direc-tors of JSC IDGC of Center and Volga Region three times: on June 19, 2009, June 16, 2010 and on June 14, 2011.
Kolesnik Dmitry Grigorievich Assistant of the General Director of JSC IDGC Holding
Mr. Kolesnik was elected to the Board of Directors of JSC IDGC of Center and Volga Region twice: on June 16, 2010 and on June 14, 2011.
Chistyakov Vladimir Sergeevich First Deputy General Director of the CJSC Energy Union Investment Holding
Mr. Chistyakov was elected to the Board of Directors of JSC IDGC of Center and Volga Region three times: on June 19, 2009, June 16, 2010 and on June 14, 2011.
Branis Aleksander Markovich Director of the Representative office of the Prosperity Capital Management (RF) Ltd.
Mr. Branis was elected to the Board of Direc-tors of JSC IDGC of Center and Volga Region three times: on May 30, 2008, on June 16, 2010 and on June 14, 2011.
Sharkova Yulia Eduardovna First Deputy Head of the Department for Electric Energy Transportation and Energy Saving of JSC IDGC Holding.
Mrs. Sharkova was elected to the Board of Di-rectors of JSC IDGC of Center and Volga Region for the first time on June 14, 2011.
4. Kolesnik Dmitry Grigorievich — Assistant of the General Director of JSC IDGC Holding.
5. Okley Pavel Ivanovich — member of the Management Board, Deputy General Director – Technical Director of JSC IDGC Holding.
6. Sergutin Aleksey Vladimirovich — Director for Economy of JSC IDGC Holding.
7. Spirin Denis Aleksandrovich — Director for Corporate Gov-ernance of the Representative office of the Prosperity Capi-tal Management (RF) Ltd.
8. Syutkin Sergey Borisovich — General Director of the Branch of JSC SO UES of the Operative Dispatch Depart-ment of Center.
9. Filkin Roman Alekseevich — Co-Director, Power Industry and Engineering of the Representative office of the Pros-perity Capital Management (RF) Ltd.
10. Chistyakov Vladimir Sergeevich — First Deputy General Di-rector of the CJSC Energy Union Investment Holding.
11. Shogenov Valery Mukhamedovich — Deputy Director of Department of Economic Regulation and Property Rela-tions in Fuel and Energy Industry of the Ministry of Energy of the Russian Federation.
180 181
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Participation of the Members of the Board of Directors in the Meetings of the Board of Directors and the Committees in 2011
Note: the first figure shows the total number of meetings
(for the reporting period), the second figure shows for the
number of meetings attended by the member of the Board
of Directors.
Name Information on Participation in Meetings
Board of Directors Audit Committee Strategy and Development Committee
HR and Remunera- tions Committee
Reliability Committee Committee for Technological Connection to Power Grids
January 1, 2011 – June 14, 2011
Perepelkin Aleksey Yurievich 10/10 4/4 7/7 5/5
Branis Aleksander Markovich 10/10
Inozemtsev Vladimir Vyacheslavovich 10/10 2/2 7/6
Kolesnik Dmitry Grigorievich 10/10 5/5
Okley Pavel Ivanovich 10/10 2/2
Sergutin Aleksey Vladimirovich 10/10 4/4 7/7 5/5
Spirin Denis Aleksandrovich 10/9 5/5 5/5
Syutkin Sergey Borisovich 10/10
Filkin Roman Alekseevich 10/10 4/4 7/7
Chistyakov Vladimir Sergeevich 10/9 4/4 5/5 5/5 2/2
Shogenov Valery Mukhamedovich 10/10 7/7
June 15, 2011 – December 31, 2011
Perepelkin Aleksey Yurievich 15/15 6/5 11/10 5/4
Kolesnik Dmitry Grigorievich 15/15 6/6 5/5
Mashtakov Sergey Aleksandrovich 15/12
Mekhanoshin Boris Iosifovich 15/15 6/6
Sergutin Aleksey Vladimirovich 15/15 6/6 11/11 5/5
Ushakov Evgeny Viktorovich 15/15 11/11
Sharkova Yulia Eduardovna 15/15 5/5
Chistyakov Vladimir Sergeevich 15/11 6/6 5/5 2/2
Pokrovsky Sergey Vadimovich 15/15 6/6 5/4
Branis Aleksander Markovich 15/14
Filkin Roman Alekseevich 15/15 6/6 11/10 5/4
Average percent of participation of the members of the
Board of Directors in the meetings is 96%. More than 70%
of the meetings of the Board of Directors of the Company
were attended by 100% of the Board of Directors.
96%Average percent of participation of the members of the Board of Directors in the meetings
182 183
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
REMUNERATION TO THE MEMBERS OF THE BOARD OF DIRECTORS
According to According to Federal Law №208-FZ “On Joint
Stock Companies” dated December 26, 1995 and the Com-
pany’s Charter, resolutions on the payment of remunera-
tions and/or compensations to the members of the Board of
Directors are carried by the General Shareholders Meeting.
The Annual General Shareholders Meeting approved
a Policy on the Payment of Remunerations and Compen-
sations to the Members of the Board of Directors of JSC
IDGC of Center and Volga Region (Minutes №1, dated May
30, 2008).The Policy determines the criteria for the remu-
neration due to the members of the Board of Directors.
The text of the Policy is available at the Web-site of the
Company www.mrsk-cp.ru at the page About the Compa-
ny/ Internal Documents.
The key criterion for the payment of remuneration to a
member of the Board of Directors is the participation of
the member in the meetings of the Board of Directors. The
members of the Board of Directors may also be entitled to
additional remuneration for the net profit of the Company
recorded in the annual accounting statements approved
by the General Shareholders Meeting, or for the increase
of the market capitalization of the Company during the
period of work of the elected members of the Board of
Directors.
The expenses of a member of the Board of Directors re-
lated to visits to the Company’s facilities, meetings with
shareholders and investors, participation in the General
Shareholders Meetings, and dealing with other issues per-
taining to the functions of the member of the Board of
Directors are subject to compensation.
The internal documents of the Company specify no non-
material remuneration for the members of the Board of
Directors.
General amount of the remuneration paid to the mem-bers of the Board of Directors during 2011 comprised 13,233,142 RUB (without deduction of the income tax for
individuals), including:
• 8,950,452 RUB – for participation in the meetings
of the Board of Directors of the Company;
• 4,282,690 RUB – additional remuneration for the net
profit of the Company recorded in the annual account-
ing statements approved by the General Shareholders
Meeting;
• 0 RUB – additional remuneration for increase of the
market capitalization;
• 0 RUB – compensation of expenses.
TRAINING OF THE MEMBERS OF THE BOARD OF DIRECTORS
There was no training of the members of the Board of Di-
rectors conducted in 2011 at the Company’s cost.
REMUNERATION TO THE MEMBERS OF THE BOARD
OF DIRECTORS IN 2009–2011, RUB mln
Total
11.173
16.298
13.233
2009 2010 2011
CORPORATE SECRETARY OF THE COMPANY
According to Article 20 of the Company’s Charter, to pro-vide for the proper preparation and conducting of General Shareholders Meetings, and to ensure the operation of the Board of Directors, the Board of Directors may elect the Corporate Secretary of the Company.
The Policy on the Corporate Secretary of JSC IDGC of Cen-ter and Volga Region was approved by the Board of Direc-tors of the Company on February 18, 2008 (Minutes №8).
The text of the Policy is available at the Web-site of the Company www.mrsk-cp.ru at the page “About the Compa-ny/ Internal Documents”.
Mrs. Guseva Yulia Stanislavovna, the current Corporate Secretary, was elected according to the resolution of the Board of Directors of the Company (Minutes №58 dated June 25, 2010 and Minutes №79 dated June 27, 2011).
Year of birth: 1975.
Education: higher, professional – the Nizhny Novgorod
Commercial Institute.
Below listed are all positions held by Mrs. Guseva in the Company and other organizations during the last 5 years and presently, including part-time positions:
Mrs. Guseva owns no shares of the Company.
Period Organization Position
from till
2007 Present JSC IDGC of Center and Volga Region
Head of the Corporate Relations Division, Corporate Gover-nance and Relations with Shareholders Department
2010 Present JSC IDGC of Center and Volga Region
Corporate Secretary (part time)
2005 2007 JSC Nizhnovenergo Head of the Corporate Governance Division, Head of the Corporate and Legal Relations Division
For capitalization For net profit For meetings
0 4.455 6.717
9.349 1.397 5.551
0 4.283 8.950
Guseva Yulia Stanislavovna — Head of the Corporate Relations Division of the Corporate Governance and Relations with Shareholders Department of JSC IDGC of Center and Volga Region
184 185
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Audit Committee Strategy and Development Committee HR and Remunerations Committee Reliability Committee Committee for Technological Connec-tion to Power Grids
Web-site containing information on the authorities and composition of the Com-mittee, as well as on the decisions made by it
www.mrsk-cp.ru page About the Company/ Management Authorities/ Board of Directors of the Company/ Committees of the Board of Directors
Established July 31, 2008 July 31, 2008 July 31, 2008 October 12, 2007 February 19, 2009
Regulating documents* Policy on the Audit Committee of the Board of Directors
Policy on the Strategy and Development Committee of the Board of Directors
Policy on the HR and Remunerations Committee of the Board of Directors
Policy on the Reliability Committee of the Board of Directors
Policy on the Committee for Techno-logical Connection to Power Grids of the Board of Directors
Number of the members:• January – June 2011• July – December 2011
57
1112
57
77
55
Acting members of the Committee ap-proved b the Board of Directors on July 18, 2011
1. Perepelkin Aleksey Yurievich 2. Sergutin Aleksey Vladimirovich 3. Kolesnik Dmitry Grigorievich4. Mekhanoshin Boris Iosifovich5. Chistyakov Vladimir Sergeevich 6. Pokrovsky Sergey Vadimovich7. Filkin Roman Alekseevich
1. Kurbatov Mikhail Yurievich 2. Perepelkin Aleksey Yurievich 3. Pankov Dmitry Leonidovich 4. Sergutin Aleksey Vladimirovich 5. Lavrova Marina Aleksandrovna6. Bogacheva Irina Vladimirovna7. Ushakov Evgeny Viktorovich 8. Zharikov Aleksey Nikolaevich9. Bykova Nataliya Aleksandrovna10. Klaptsov Aleksey Vitaliyevich11. Filkin Roman Alekseevich12. Shevchuk Aleksander Viktorovich
1. Perepelkin Aleksey Yurievich2. Kolesnik Dmitry Grigorievich3. Sergutin Aleksey Vladimirovich4. Sharkova Yulia Eduardovna5. Chistyakov Vladimir Sergeevich6. Pokrovsky Sergey Vadimovich7. Filkin Roman Alekseevich
1. Vasiliev Sergey Borisovich2. Dobakhyants Yulia Vladimirovna3. Shvedko Marina Eugenievna4. Andrus Sergey Timofeevich 5. Polovnev Igor Georgievich6. Spirin Denis Aleksandrovich7. Zharikov Aleksey Nikolaevich
1. Chistyakov Vladimir Sergeevich2. Andrus Sergey Timofeevich 3. Podolskaya Lada Aleksandrovna4. Komarov Valentin Mikhailovich5. Polovnev Igor Georgievich
Number of Meetings in 2011. Total, including face-to-face
100
182
100
121
40
Total amount of remuneration paid to the members of Committee in 2011 (RUB)**
278,123.00 842,038.00 271,097.50 323,916.50 113,965.50
* Texts of the Policies on Committees are available at the Web-site of the Company www.mrsk-cp.ru at the page About the Com-pany/ Internal documents.
** The remuneration is paid to the members of the Committee for participation in the meetings in accordance with the budget of the Committee approved by the Board of Directors of the Compa-ny. After the approval of the Board of Directors, the members of the Committee may receive remuneration for expenses related to implementation of their duties. The amount of these remunera-tions, as well as the regulations and terms of the payment are set by the special decisions of the Board of Directors. The internal documents of the Company specify no non-material remunera-tion for the members of the Board of Directors.
COMMITTEES OF THE BOARD OF DIRECTORS8.2.3
The full information about the members of the Board
of Directors of the Company is presented in the Supple-
ment №4 to the Annual Report.
186 187
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
COMPARATIVE ANALYSIS OF THE MAIN GROUPS
OF ISSUES CONSIDERED BY THE MANAGEMENT BOARD, numberMANAGEMENT BOARD8.2.4
The Management Board is the collective executive body
intended to directly manage the Company, as guided by
the resolutions of the General Shareholders Meeting and
the Board of Directors, and acting in accordance with the
law of the Russian Federation, the Company’s Charter and
other internal documents of the Company.
The key tasks of the Company’s Management Board are
the following:
• ensuring the observance of the rights and legitimate
interests of the Company shareholders;
• developing suggestions on the Company’s develop-
ment strategy;
• implementing the Company’s financial and economic
policy, developing decisions on the major issues relat-
ing to the Company’s current economic operations and
coordinating the operation of the Company’s divisions;
• increasing the efficiency of the systems of internal
control and risk monitoring;
• ensuring high level of income from the assets of the
Company and the maximal profit from the Company’s
operations.
The activities of the Company’s Management Board are
regulated by the Company’s Charter, the Policy on the
Management Board, and the Code of Corporate Gover-
nance.
The information on personal composition and authority
of the Management are available at the Web-site of the
Company www.mrsk-cp.ru at the page About the Compa-
ny/ Management Authorities/ Management Board.
54 meetings of the Management Board of the Company
were held in 2011, with 30 of them held in form of absen-
tee vote (via polls) and 24 of them in a form of physical
presence.
During these meetings, decisions on 342 issues falling un-
der the authority of the Management Board were made.
5%Transactions exceeding 1%
of the balance value of assets
29%Financial and economic activities
of subsidiary and dependent companies
5%Other issues
14%Financial and economic activities
of the Company
11%Recommendations to the Board of Directors members
36%Governance of educational centers
THE MAIN GROUPS OF ISSUES CONSIDERED BY THE MANAGEMENT BOARD
To provide for efficient operation of the Company’s Board
of Directors and the making of weighted and substantiated
decisions, the Management Board performed preliminary
consideration and submitted to the Board of Directors the
recommendations on the issues that fall within the frame-
work of reference of the Board of Directors, including the
following:
• strategic and operational priorities of the Company;
• approval of the target (adjusted) values for the Com-
pany’s KPI and the reports on their fulfillment;
• recommendations on the amount of dividend on shares
and the dividend payment procedure;
• approval of candidates for the position of independent
auditors;
• decisions on the Company’s participation in other or-
ganizations;
• pre-approval of transactions relating to the transfer
of the Company’s property free of charge.
The recommendations developed by the Management
Board were taken into account by the Company’s Board
of Directors when making corresponding decisions.
Financial and economic activities of subsidiary and dependent companies
Recommendations to the Board of Directors members
Governance of educational centers
Financial and economic activities of the Company
Transactions exceeding 1% of the balance value of assets
Other issues
23100
3675
4898
5120
2537
1838
9820
21150
17123
2009 2010 2011
188 189
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The membership of the Management Board was approved
by the resolution of the Board of Directors (Minutes №9,
dated March 5, 2008). The modifications were made ac-
cording to the resolutions of the Board of Directors (Min-
utes №10, dated March 24, 2008; Minutes №17, dated June
25, 2008; Minutes №21, dated September 24, 2008 and
Minutes №55, dated April 30, 2010).
The full information about the members of the Management
Board of the Company is presented in the Supplement №4
to the Annual Report.
The current membership of the Management Board con-sists of nine members, namely the following.
Nikitushkin Evgeny VladimirovichHead of the Treasury of JSC IDGC of Center
and Volga Region
Tikhomirova Olga VladimirovnaDeputy General Director for Economics and Fi-
nance of JSC IDGC of Center and Volga Region
Ushakov Evgeny Viktorovich General Director of JSC IDGC of Center and Vol-
ga Region
MEMBERS OF THE MANAGEMENT BOARD Chairman of the Management Board
Yashanina Irina ViktorovnaDeputy General Director – Head of Executive
Office of JSC IDGC of Center and Volga Region
Andrus Sergey Timofeevich Deputy General Director for Technical Issues – Chief Engineer of JSC IDGC of Center and Volga Region
Podolskaya Lada AleksandrovnaDeputy General Director for Corporate Gover-
nance of JSC IDGC of Center and Volga Region
Shitts Vladimir ViktorovichDeputy General Director for Capital Construc-
tion of JSC IDGC of Center and Volga Region
Vedernikov Andrey YurievichDeputy General Director for Development and
Services of JSC IDGC of Center and Volga Re-
gion
Prepodobny Aleksander VasilievichDeputy General Director for Security of JSC
IDGC of Center and Volga Region
Deputy Chairman of the Management Board
190 191
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Participation of the Members of the Management Board in the Meetings of the Management Board and the Committees of the Board of Directors of the Company in 2011
Name Information on the Meetings
Management Board
Strategy and Development Committee
Reliability Com-mittee
Committee for Techno-logical Connection to Power Grids
Ushakov Evgeny Viktorovich 54/45 18/18
Andrus Sergey Timofeevich 54/45 12/8 4/3
Vedernikov Andrey Yurievich 54/49
Nikitushkin Evgeny Vladimirovich 54/45
Podolskaya Lada Aleksandrovna 54/48 4/4
Prepodobny Aleksander Vasilievich 54/50
Tikhomirova Olga Vladimirovna 54/43 7/7
Shitts Vladimir Viktorovich 54/46
Yashanina Irina Viktorovna 54/50
1. The first figure is the total number of meetings a mem-
ber of the Management Board was authorized to partici-
pate in, while the second figure is the number of meetings
actually attended by a member of the Management Board.
2. The members of the Management Board are not the
members of the Audit Committee and HR and Remunera-
tion Committee.
Note:
86.6%Average percent of participation of the members of the Management Board in the meetings
REMUNERATION TO THE MEMBERS OF THE MANAGEMENT BOARD
According to the resolution of the Board of Directors of
JSC IDGC of Center and Volga Region, the Chairman of the
Management Board conditions and signs labor agreements
with the members of the Management Board.
All members of the Management Board are included in
the list of the top managers of JSC IDGC of Center and
Volga Region by the Board of Directors of the Company.
The remunerative incentives for the Top Managers of the
Company are regulated by the Policy on Remunerative
Incentives and Benefits of the Top Managers of JSC IDGC
of Center and Volga Region (new version approved by
the Board of Directors on July 18, 2011, Minutes №80),
which intends to increase the efficiency of management
of the Company’s property and finance.
In the first half of 2011, the members of the Management
Board of the Company were entitled to the monthly re-
muneration for implementation of their duties which de-
pended on the amount of the minimal monthly rate of a
first grade worker (according to the additional agreements
to the labor agreements of the of the Management Board).
Starting from July 18, 2011 according to the new version
of the Policy on Remunerative Incentives and Benefits of
the Top Managers, the members of the Management Board
receive personal monthly addition in the amount of 15% of
the official salary.
The full information on remuneration for the members of
the Management Board is available in the quarterly re-
ports of the issuer (paragraph 5.3) which are available at
the Web-site of the Company www.mrsk-cp.ru at the page
Issuer’s information disclosure / The financial information
and the reporting/ Quarterly reports.
The quarterly and yearly bonuses for the Top Managers
depends on the degree of fulfillment of the KPI set by the
General Director of the Company, which are related to the
Company’s strategy. The KPI are measurable and motivate
an employee to achieve results and ensure objective as-
sessment of the employee results.
Note: sums without deduction of the income tax for individuals.
Remuneration to the Members of the Management Board for 2009–2011
1,519.7 2,031.5 2,782.6
2009 2010 2011
RUB thousand RUB thousand RUB thousand
192 193
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Due to the changes in the legislation on organization
of the procurement in 2011, S. T. Andrus, V. V. Shitts
and A. V. Prepodobny took a part in the seminar Federal
Law №223-FZ dated July 18, 2011 “On procurement of
goods and services by certain kinds of legal entities” as
a guideline. In February 2012, in order to receive the
certificate for compliance with ISO 50001 S. T. Andrus
underwent training in Internal audits of the systems
of energy management based on the ISO 50001:2011
standard.
The information on trainings received by the General
Director is available in the paragraph General Director
of the Annual Report.
Policy on Remunerative Incentives and Benefits of the
Top Managers provides for non-recurrent bonuses for the
essential accomplishments and in case a top manager is
granted an award from the state, the industry, the Min-
istry of Energy of the Russian Federation, or JSC IDGC
Holding.
Due to their high professionalism and personal contri-
bution to development of the power industry, a number
of the members of the Management Board of JSC IDGC
of Center and Volga Region were awarded with indus-
try awards of the Ministry of Energy of the Russian Fed-
eration, corporate awards of the JSC IDGC Holding and
awards of the Government and Governor of the Nizhny
Novgorod Region.
TRAINING OF THE MEMBERS OF THE MANAGEMENT BOARD
KPI provide for the assessment of the following:
• reliability of the power grids;
• level of power losses;
• repair programs;
• investment program
• level of net profit;
• Return on Equity (ROE);
• fulfillment of agreements for technological connec-
tion;
• level of collectability of payments due for the trans-
mission of energy;
• adherence to the schedule of corporate procedures;
• absence of suits lost on procedural grounds;
• absence of economic losses caused by mala fide con-
tractors;
• timeliness of work to collect overdue debts for services
provided in electric power transmission;
• timeliness of submission and the completeness of ac-
counting and tax reports.
In accordance with Article 23 of the Company’s Charter
the issues falling within the framework of reference of the
General Director include all issues pertaining to the man-
agement of the daily operations of the Company, except
for the issues that fall within the competence of the Gen-
eral Shareholders Meeting, the Board of Directors and the
Management Board.
The Company’s General Director presents for the consid-
eration of the Board of Directors the reports on the fulfill-
ment of resolutions (assignments) of the Board of Direc-
tors of JSC IDGC of Center and Volga Region, the quarterly
reports on the operation of the Company’s Management
Board and other reports in compliance with the current
legislation, the operations plan of the Board of Directors
and the internal documents of the Company.
The General Director has fulfilled all assignments of the
Board of Directors of JSC IDGC of Center and Volga Region
for 2011.
GENERAL DIRECTOR8.2.5
Ushakov Evgeny Viktorovich – Chairman of the Manage-
ment Board, General Director of JSC IDGC of Center and
Volga Region (the Company’s Sole Executive Body)
Year of birth: 1964.
Education: higher professional, Lenin Komsomol Chely-
abinsk Polytechnic Institute.
Below listed are all positions held by Mr. Ushakov in the Company and other organizations during the last 5 years
and presently, including part-time positions:
Period Organization Position
From Till
2007 Present JSC IDGC of Center and Volga Region General Director
2008 Present JSC IDGC of Center and Volga Region Chairman of the Management Board
2011 Present JSC IDGC of Center and Volga Region The Member of the Board of Directors
2009 2010 Council of the Veterans of Power Industry Non-Commercial Partnership
The Member of the Supervisory Board
2007 2009 JSC IDGC of Center and Volga Region The Member of the Board of Directors
2007 2008 JSC Nizhnovenergo The Member of the Board of Directors
2007 2008 JSC Ivenergo The Member of the Board of Directors
2007 2008 JSC Kirovenergo The Member of the Board of Directors
2007 2008 JSC Ryazanenergo The Member of the Board of Directors
194 195
08 CORPORATE GOVERNANCE
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
2007 2008 JSC Udmurtenergo The Member of the Board of Directors
2007 2008 JSC Tulenergo The Member of the Board of Directors
2007 2008 JSC Kalugaenergo The Member of the Board of Directors
2005 2007 JSC IDGC of Ural and Volga The First Deputy General Director
Mr. Ushakov was elected the Company’s General Director
on June 28, 2007 for the period of 3 years. The labor agree-
ment with Mr. Ushakov was extended on June 25, 2010
till June 27, 2011, and on June 27, 2011 till July 27, 2012
inclusively.
The labor conditions, the guarantees and compensations
for the General Director during the fulfillment of his duties
are determined by the labor agreement, the conditions of
which are determined by a person authorized by the Com-
pany’s Board of Directors.
The Policy on Remunerative Incentives for the General
Director, which is a supplement to the labor agreement,
regulates the amount of quarterly and yearly bonuses for
the achievement of the target KPI, and envisages non-
recurrent bonuses for the performance of special assign-
ments and for awards received from the State, the Minis-
try of Energy of the Russian Federation, or from JSC IDGC
Holding.
The KPI are formed on the basis of the Company’s develop-
ment strategy. The KPI are used to assess the reliability of
power grids, the implementation of the investment pro-
gram, the net profit received by the Company, the return
on equity, and the level of power losses. The data on KPI
are presented in the paragraph “Analysis of Financial State
and Results of Work” of this Annual Report.
The awards received by Mr. Ushakov for his personal con-
tribution to the development of power industry include:
• The title of the Honorary Worker of the Unified Energy
System of Russia from JSC RAO UES of Russia, 2004
• The title of the Honorary Power Engineer from the
Ministry of Energy of the Russian Federation, 2009
• National Award “Honored Power Engineer of the Rus-
sian Federation”, 2011
Also Mr. Ushakov has the following awards:
• The Letter of Gratitude from the Government of the
Nizhny Novgorod Region, 2007
• The Certificate of Merit from the Governor of the Nizh-
ny Novgorod Region, 2009
• Badge of Honor “For development of the distribution
grid complex” from JSC IDGS Holding, 2011
ASSESSMENT OF THE INPUT
As of December 31, 2010 Mr. Ushakov owned 0.0612% of the ordinary shares of the Company.As of December 31, 2011Mr. Ushakov owned 0.0767% of the ordinary shares of the Company.
The Company has no information about the transactions
on acquisition or alienation of the shares of JSC IDGC
of Center and Volga Region made by Mr. Ushakov in 2011.
In 2011, Mr. Ushakov was included into the Book of Honor
of the JSC IDGC Holding.
On behalf of His Holiness Patriarch of Moscow and All Rus-
sia Mr. Ushakov was awarded the Order of the Reverend
Seraphim of Sarov of the 3rd grade in 2009 and the Order
of the Revered Sergius of Radonezh of the 3rd grade in
2010 for his major contribution to fostering the coopera-
tion with the orthodox establishments.
In accordance with the Policy on the Training of Per-
sonnel of the Company, the General Director passed
the professional development program “Conducting en-
ergy audits to improve efficiency and energy savings”
in 2011.
TRAINING OF THE GENERAL DIRECTOR
In 2011, there were no transactions made by the Company,
which would be recognized by the legislation of the Rus-
sian Federation as major.
All transactions in which there was interest were conduct-
ed by the Company under the general market conditions
and were approved by the Board of Directors. Full informa-
tion on these transactions is available in the Supplement
№6 to the Annual Report.
As on December 31, 2011, the Company in fifteen differ-
ent non-commercial organizations or regional and federal
level, and exercises the functions of the founding member
in seven non-commercial educational organizations in op-
eration areas.
The full information on the non-commercial organiza-
tions in which the Company participates or is a found-
ing member is available at the Web-site of the Company
www.mrsk-cp.ru at the page For Shareholders and Inves-
tors/ List of Non-Commercial Organizations.
Information on the corporate network of the educational
centers of the Company is disclosed in the chapter “Hu-
man Resources policy and Social Responsibility” at the
page 227 of the Annual Report. There were no changes
in the framework of the Company’s participation in the
non-commercial organizations in 2011.
The Company plans to actively participate in non-commer-
cial organizations and to develop the educational centers
where the Company is the founding member.
INFORMATION ON THE TRANSACTIONS MADE BY THE COMPANY IN 2011WHICH ARE RECOGNIZED BY THE LEGISLATION OF THE RUSSIAN FEDERATION
AS TRANSACTIONS IN WHICH THERE IS INTEREST, AND MAJOR TRANSACTIONS
PARTICIPATIONIN NON-COMMERCIAL ORGANIZATIONS
8.3
8.4
REMUNERATION TO THE GENERAL DIRECTOR
AUDIT COMMISSION AND THE AUDITOR
09
No-contact current indicator ILCI EM3008 (independent line current indicator –
electric meter) is used to measure load at electric inputs of apartment houses
in order to eliminate electricity plundering
198 199
09 AUDIT COMMISSION AND THE AUDITOR
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Audit Commission approved the conclusion on the re-
sults of financial and economic audit of the Company
for 2010.
The Audit Commission approved the act of financial
and economic audit of the Company for 2010.
APRIL 11 MAY 16
The Annual General Shareholders Meeting approved the
Company Auditor to carry out audit of financial (account-
ing) statements for 2011 (Limited Liability Company Fin-
Expertiza) and elected new members of the Audit Com-
mission.
The Audit Commission approved the act of financial
and economic audit of the Company for 9 months of 2011.
JUNE 14 DECEMBER 21
KEY EVENTS OF THE YEAR
The Audit Commission is a permanently functioning
body of internal control of the Company, controlling
on a regular basis the financial and economic activi-
ties of the Company, its separate subdivisions, officers
of the Company’s management bodies and structural
divisions of the Company’s executive body for compli-
ance with the legislation of the Russian Federation,
the Company’s Charter and the Company’s internal
documents. The Audit Commission acts in the interests
of the Company’s shareholders. The Audit Commission
is accountable to the Company’s General Shareholders
Meeting.
In accordance with the Federal Law № 208 FZ “On Joint
Stock Companies” dated December 26, 1995, the frame-
AUDIT COMMISSION
9.1 work of reference of the Audit Commission is determined
by the Company’s Charter (Article 24 of the Charter
of JSC IDGC of Center and Volga Region). The functions
of the Audit Commission are also described in the Reg-
ulation on Audit Commission of JSC IDGC of Center and
Volga Region, approved by the resolution of the Com-
pany’s General Shareholders Meeting (Minutes № 1751
pr/2) dated October 05, 2007. The full text of the Char-
ter and the Regulations is available at the Company’s web
site www.mrsk-cp.ru under “About the Company / Charter
and Internal Documents”.
Key objectives of the Audit Commission include:
• controlling the Company’s financial and economic
activities;
• monitoring the compliance of the Company’s financial
and economic operations with the legislation of
the Russian Federation and the Company’s Charter;
• independent assessment of information on the fi-
nancial condition of the Company.
In 2011, the Audit Commission held six meetings in ab-
sentia, with the agenda consisting of eight issues. Minutes
of the meetings are available at the Company’s web site
www.mrsk-cp.ru under “About the Company / Financial
and economic activity control authorities”.
According to the plan of Audit Commission, in the report-
ing year it held two audits of the Company’s financial
and economic activity: for 2010 and 9 months of 2011.
KEY FUNCTIONS
january february march april may june july august september october november december
200 201
09 AUDIT COMMISSION AND THE AUDITOR
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The number of the Company’s Audit Commission members
is determined by p. 24.1 of Article 24 of the Company’s Char-
ter. The Audit Commission consists of 5 (five) members.
During the reporting period there were two compositions
of the Audit Commission.
There were no transactions between the Company and In-
ternal Audit Commission members in 2011.
Details of the Company’s Audit Commission members are
shown in Supplement №4 to the Annual Report.
The Company confirms that the members of the Audit
Commission agree to disclose personal information.
From January 01, 2011 to June 13, 2011, the Audit Com-
mission consisted of persons elected by the Annual Gen-
eral Shareholders Meeting on June 16, 2010
(Minutes №3 dated June 21, 2010) (positions are indi-
cated as of the moment of election):
The current composition of the Audit Commission was
elected by the Annual General Shareholders Meeting on
June 14, 2011
(Minutes №4) (positions are indicated as of the moment
of election):
1. Alimuradova Izumrud Aligadjievna (Head of the Audit
Commission) – Director for Internal Audit and Risk
Management (Head of the Department) of JSC IDGC
Holding;
2. Arkhipov Vladimir Nikolaevich – Head of the Security
Department of JSC IDGC Holding;
3. Rokhlina Olga Vladimirovna – Chief Expert on Audit
Organization of the Department of Internal Audit and
Risk Management of JSC IDGC Holding;
4. Filippova Irina Aleksandrovna – Leading Expert
of the Department for Internal Audit, Revision and Due
Diligence of the Internal Audit and Risk Management
Department of JSC IDGC Holding;
5. Ivanova Ksenia Valerievna – Head of the Division
of Information Disclosure of the Department
of Corporate Governance and Shareholder Relations
of JSC IDGC Holding.
1. Alimuradova Izumrud Aligadjievna (Head of the Audit
Commission) – Director for Internal Audit and Risk
Management (Head of the Department) of JSC IDGC
Holding;
2. Arkhipov Vladimir Nikolaevich – Head of the Security
Department of JSC IDGC Holding;
3. Bogachev Igor Yurievich – Leading Expert of the
Department for Internal Audit, Revision and Due
Diligence of the Internal Audit and Risk Management
Department of JSC IDGC Holding;
4. Filippova Irina Aleksandrovna – Leading Expert
of the Department for Internal Audit, Revision and Due
Diligence of the Internal Audit and Risk Management
Department of JSC IDGC Holding;
5. Stepanov Vitaly Andreevich – Leading Expert
of the Department for Shareholder Relations of the
Corporate Governance and Shareholder Relations
Department of JSC IDGC Holding.
MEMBERS OF THE AUDIT COMMISSION
The Auditor performs independent audit of the Com-
pany’s accounting and financial (accounting) statements
and draws a conclusion on their accuracy and compli-
ance of the accounting procedures with the legislation
of the Russian Federation.
Auditors are selected for audit of RAS financial (account-
ing) statements of JSC IDGC of Center and Volga Region
by JSC IDGC Holding. The Audit Committee of the Board
of Directors assesses the auditor’s qualification, per-
formance and compliance with the requirements of in-
dependence, providing a conclusion on the candidate
auditor. The Company’s Board of Directors proposes
a candidate auditor for consideration and approval
at the General Shareholders Meeting of the Company.
According to the Regulations on Remunerations and Com-
pensations to Members of the Audit Commission of the
Company, as approved by the Annual General Sharehold-
ers Meeting (Minutes № 1, dated May 30, 2008), members
of the Audit Commission are entitled to non-recurrent re-
muneration for the participation in the audit of the Com-
pany’s financial and economic activities. The amount of re-
muneration is equivalent to twenty five minimal monthly
tariff rates of a first grade worker, as established by the
Tariff Agreement for the power industry of the Russian
Federation (hereinafter referred to as the Agreement),
valid for the period of the audit, taking into account the
readjustment established by the Agreement. The amount
of remuneration due to the Chairman of the Company’s
Audit Commission is 50% more. Remunerations to experts
who are not members of the Audit Commission are paid by
the Company on the basis of agreements concluded by the
Company with such experts. The conditions of such agree-
ments are subject to approval by the Company’s Board
of Directors.
In the reporting period, there were no transactions be-
tween the Company and members of the Audit Commis-
sion of JSC IDGC of Center and Volga Region.
Remuneration to Audit Commission membersfor participation in the Audit Commission in 2009-2011, RUB
Note: the amounts are indicated before individual income tax deduction.
REMUNERATION OF THE AUDIT COMMISSION MEMBERS
Payment 2009 2010 2011
Remuneration 1,345,925 345,488 988,200
Compensations 1,200 0 12,616
TOTAL 1,347,125 345,488 1,000,816
AUDITOR9.2
202 203
09 AUDIT COMMISSION AND THE AUDITOR
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Subject to the decision of the Annual General Sharehold-
ers Meeting of the Company dated June 14, 2011 (Minutes
№4), Auditor of JSC IDGC of Center and Volga Region for fi-
nancial (accounting) statements audit in 2011 was Limited
Liability Company FinExpertiza.
LLC FinExpertiza is a member of Audit and Consult-
ing Group FinExpertiza (CPA Associates International),
providing a wide range of services on audit, legal, tax,
financial and investment consulting, valuation, account-
ing and taxation, strategic planning and marketing re-
search, and IFRS application.
LLC FinExpertiza is a member of the following profession-
al communities:
• Non-profit partnership Russian Auditing Chamber
(Certificate №4209)
• Association of Russian Banks (Certificate №1305)
• Non-profit partnership Russian Society of Appraisers
Partnership (Certificate №897)
• Russian Society of Appraisers
(Certificate №0060/77-1111-2001)
• Russian Society of Appraisers
(Certificate №0977/77-1111/06)
• Russian Manager Association.
August 22, 2011, the Company signed Agreement
№495-08-а for audit services with LLC FinExpertiza
in the amount of RUB 2,499.995 thousand with VAT.
LLC FinExpertiza audited RAS financial (amounting)
statements of JSC IDGC of Center and Volga Region
for 6 months of 2011. Fees paid to LLC FinExpertiza
in 2011 amounted to RUB 1,249.998 thousand. No other
(non-audit) services were rendered to the Company by
LLC Fin Expertiza in 2011.
From January 01, 2011 to June 13, 2011, the Auditor, as
approved by the decision of the Annual General Share-
holders Meeting of the Company (Minutes №3) was CJSC
AAF Auditinform (License №Е003505 dated March 04,
2003).
Under Sub-Item 14, Item 15.1., Article 15 of the Company
Charter, the auditor’s fee is approved by the Company’s
Board of Directors. The fee paid to CJSC AAF Auditinform
in 2011 amounted to RUB 1,416 thousand.
AUDIT OF FINANCIAL (ACCOUNTING) STATEMENTS
RUB 1,416 ths.Fee paid to CJSC AAF Auditinform:
RUB 1,250 ths.Fee paid to LLC FinExpertiza:
Auditors are selected for audit of IFRS consolidated finan-
cial statements of JSC IDGC of Center and Volga Region by
JSC IDGC Holding. In 2011, audit of IFRS consolidated fi-
nancial statements of JSC IDGC of Center and Volga Region
was performed by CJSC KPMG.
CJSC KPMG is a member of the following professional
communities:
• Non-profit partnership Russian Auditing Chamber
• Association of European Businesses
• Russo-British Chamber of Commerce
• American Chamber of Commerce
• Japanese Business Club
• International Business Leaders Forum
• US - Russia Business Council
• Canada Eurasia Business Association of Russia
• Association of Russian Banks
• National Council on Corporate Governance
• Russian Union of Industrials and Entrepreneurs
• Russian Private Equity and Venture Capital Association
• Russian-German Chamber of Commerce
• French Chamber of Commerce and Industry in Russia.
The value and procedures of payment for Auditor’s ser-
vices related to audit of IFRS financial (accounting) state-
ments of JSC IDGC of Center and Volga Region are stipu-
lated by a contract between the Company and the Auditor.
In 2011, the following payments were made to CJSC KPMG:
• RUB 9,399 thousand with VAT for audit of IFRS
consolidated financial statements of JSC IDGC
of Center and Volga Region in 2010 (Contract
№C-MSKZ-10-00892 dated October 12, 2010, signed by
JSC IDGC of Center and Volga Region and CJSC KPMG);
• RUB 944 thousand with VAT audit of IFRS
consolidated financial statements of JSC IDGC of
Center and Volga Region in 6 months of 2011 г.
(Contract №C-MSKZ-11-00884 dated September 19,
2011), signed by JSC IDGC of Center and Volga Region
and CJSC KPMG).
AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS
RUB 10,343 ths.Fee paid to CJSC KPMG:
INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM10
Local device of registration of lightning current enables assessment of intensity of storm
activity and taking of steps to increase lightning protection of power lines
206 207
10 INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Audit Committee of the Board of Directors of the Company
approved Methodological Recommendations to Risk Man-
agement of JSC IDGC of Center and Volga Region.
The Board of Directors of the Company approved Regula-
tions on Control Environment and Risks for three key busi-
ness processes: Commercial Metering and Sale of Power
Transmission Services, Purchasing Activities and Techno-
logical Connection.
APRIL 21 JUNE 7
The Board of Directors of the Company approved Regu-
lation on Control Environment and Risks for the business
process Operational Activities.
JULY 18
KEY EVENTS OF THE YEAR
In order that the Company developed properly, the sys-
tem of internal control and risk management (hereinafter
referred to as SIC&RM) of JSC IDGC of Center and Volga
Region is implemented and constantly improved.
The system of internal control of the Company is aimed at
solution of the following tasks:
• ensure management of activity and achievement of the
strategic goals of the Company in the most efficient
way;
• ensure the compliance with the requirements of the leg-
islation of the Russian Federation, industry and other
standards and the Company’s local normative docu-
ments, as well as ensure compliance with legislation on
insider information;
• ensure timely identification and analysis of risks in
the Company’sactivities;
• provide for the accuracy and correctness, of the Com-
pany’sfinancialandmanagementreports;
• ensure the fulfillment of the Company’s financial
and economicplans;
• provide for the investors’ trust to the Company and its
management bodies
• protect the assets of the shareholders and investors;
• protect the assets of the Company and use the Com-
pany’s resources effectively;
• build the optimal organizational and functional struc-
ture of the Company.
INTERNAL CONTROL SYSTEM10.1
The Company developed the following local regulat-
ing documents for the development and improvement of
SIC&RM approved by the Board of Directors of the Com-
pany(Minutes№57datedJune15,2010):
• TheRiskManagementPolicy determines the key prin-
ciples of the organization, implementation and control
of risk management processes in the Company. The
Policy also determines the priorities concerning the
system of risk management.
• TheInternalControlPolicy determines the mandatory key
principles of organization of the system of internal con-
trol and forms a uniform approach to the implementation
of theprocessesofinternalcontrolintheCompany.
InApril2011theAuditCommitteeoftheBoardofDirec-
tors approved Methodological Recommendations to Risk
Management(Minutes№12/14datedApril21,2011).The
document has been developed to establish a uniform ap-
proach and methods of revealing, assessment and minimi-
zation of the risks at all levels of corporative management,
as well as a uniform scale for risk assessment.
InJune–July2011theBoardofDirectorsapprovedRegula-
tions on Control Environment and Risks on the following
business processes:
• Commercial Metering and Sale of Power Transmission
Services, Purchasing Activities and Technological Con-
nection(Minutes№79datedJune7,2011);
• Operational Activities (Minutes№ 80 dated July 18,
2011).
january february march april may june july august september october november december
DOCUMENTSREGULATINGTHESYSTEMOFINTERNALCONTROLANDRISKMANAGEMENT
208 209
10 INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Regulation on Control Environment and Risks of the
business processes is a basis for development of the lo-
cal documents regulating the control environment of the
business processes. It sets responsibility for implementa-
tion of the control procedures and stages of the process
and consists general characteristics of the business pro-
cess: information on the participants and owners of the
business process, list of internal and external regulatory
documentation for the process, targets of the process and
their decomposition, graphic description of the business
process. The Regulation also contains recommendations
on development of the measures for its implementation.
Setting and implementation of these documents to the
work of the Company has helped to solve the following
tasks:
• set responsibility of the management for achieving the
goals of the business processes and implementation
of control procedures at the all levels of management
(Company – Branches);
• define controlling points for the business processes,
identify risks and formalize control procedures;
• control the level of risk ensuring transparency of the
business processes.
To implement the approved local internal control and risk
management norms (Risk Management Policy and Inter-
nal Control Policy) and to provide for functioning and
improvementofefficiencyoftheinternalcontrolproce-
dures, theWork Group for implementation of the Inte-
gratedSystemofRiskManagementandInternalControl
(hereinafter referred to as ISRM and IC) established in
2010 continued itswork on the following directions in
this reporting year:
• quarterly update of the risk passports and monitoring
of the status of implementation of the measures to
minimize risks;
• monitoring of the measures to minimize key system
risks of the Company;
• setting the owners of the key risks on the key business
processes;
• adaptation and introduction of Regulations on control
environment and risks of the business processes ap-
proved by the Board of Directors of JSC IDGC of Center
andVolgaRegionin2011.
In order of further improvement of SIC&RM the work
on assessment,update,monitoringtheexistentandfind-
ing the new risks, development the risk management ac-
tivities and control over their implementation will contin-
ue. The Company plans to implement uniform information
systems and technologies to the control procedures imple-
mentation and preparation of reporting on SIC&RM.
Therearethreetypesofcontrolwithinthesystemof in-
ternal control and risk management of the JSC IDGC
of CenterandVolgaRegion:preventive(precautionary),
current and audit (follow-up).
Preventive control is responsibility of corresponding
departments of the Company. The Report on key risks
is formed on a quarterly basis, the risks are constantly
monitored and assessed, and measures of risk manage-
ment are developed and implemented.
Current control development is performed in the
framework of improvement of control environment of
the business processes through their standardization,
approval Regulations on control environment and risks
of the business processes by the Board of Directors
IMPROVEMENTOFTHESYSTEMOFINTERNALCONTROLANDRISKMANAGEMENT
SUBJECTSOFTHESYSTEMOFINTERNALCONTROLANDRISKMANAGEMENT.DISTRIBUTIONOFRESPONSIBILITY
with preliminary review by the Audit Committee, de-
termination of the control points, risks, internal and
external risk factors and control procedures. Current
control is the responsibility of the specialized de-
partments of the Company. Current control includes
the following:
• monitoringofthebusinessprocessesefficiency;
• control procedures decreasing risks integrated into the
business processes;
• monitoring of the key risk indicators of the business
processes;
• relation of control pints of the business processes and
KPIs of the Company.
Auditcontrol is implemented via control activities and
audits conducted by the Department for Internal Audit
and Risk Management. The audit control includes the
following:
• analysisofthefinancialandeconomicactivitiesofthe
Company;
• verification of the authenticity and integrity of ac-
counting and reporting;
• verificationofcompliancewithlawsandinternalregu-
lations;
• development and implementation of control measures
toeliminateviolationsanddeficienciesidentifieddur-
ing inspections;
• assessment of the effectiveness of internal control and
risk management.
According to the Policies of internal control and risk man-
agement, the processes of SIC&RM are arranged by the
“distribution model”: participants of SIC&RM of the Com-
pany, performing control on different levels, are all em-
ployees of JSC IDGC of Center and Volga Region.
The system of internal control and risk management
is anintegratedpartofthewholemanagementsystemof
the Companyandisaimedat its improvement.SIC&RM
is based on the principle of accountability of all its par-
ticipants.
The management bodies of the Company perform control
of SIC&RM effectiveness through the control bodies.
The Company’s internal control subjects are the following:
• The Board of Directors;
• Audit Committee of the Board of Directors;
• General Director;
• Department for Internal Audit and Risk Management;
• Specialized departments of the Company.
TARGETFUNCTIONSOFTHESYSTEMOFINTERNALCONTROLANDRISKMANAGEMENTOFTHECOMPANY
• ENSURING PROTECTION AND SAFETY OF ASSETS
• MORE EFFICIENT USE OF RESOURCES;
• REDUCTION OF RISKS
• COMPLIANCE WITH RUSSIAN LEGIS-LATION AND LOCAL REGULATIONS;
• INTEGRITY AND RELIABILITY OF DATAOFMANAGEMENTANDAC-COUNTING REPORTING
210 211
10 INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
1Theinformationonauthority,compositionandmeetingsoftheAuditCommitteein2011canbefoundin“CorporateGovernance”Sectiononp.184ofthisAnnualReport.
RISK MANAGEMENT10.2
RISKMANAGEMENTISAPROCESSPERFORMEDBYTHETOPMANAGERSANDSPECIALISTSATALL
LEVELSOFTHECOMPANY’SANDITSSTRUCTURALDEPARTMENTSMANAGEMENT.ITINCLUDES
IDENTIFICATION,ASSESSMENTANDRANKINGOFTHERISKS,ASWELLASTHEIMPACTONTHERISKS
WITHINTHE“RISKAPPETITE”TOPROVIDEREASONABLEASSURANCEREGARDINGTHEACHIEVE-
MENTOFSTRATEGICANDOPERATIONALOBJECTIVESOFTHECOMPANY.
STRATEGICANDENVIRONMENTALRISKS
AKEYCRITERIONFORTHECLASSIFICA-
TIONOFRISKSISTHEFUNCTIONALAREAS
OF THE COMPANY’SOPERATIONS.
REGULATORYRISKS
The Board of Directors approves the internal control policy
andassesses its efficiency.TheBoardofDirectors is re-
sponsible for the approval of the general strategy of in-
ternal control.
The Audit Committee1 of the Board of Directors as-
sesses the effectiveness of the procedures of internal
control in the Company (including monitoring of the
Department for Internal Audit and Risk Management).
The General Director is responsible for development,
introduction and effective functioning of the system
of internal control and risk management of the Com-
pany.
Department for Internal Audit and Risk Management as-
sessestheadequacy,sufficiencyandefficiencyofcontrol
procedures and performs the assessment of the imple-
mentation of control procedures by those involved in the
Company’s business processes. The Department is ac-
countable to the Audit Committee, informing the Commit-
tee on quarterly basis on the violations in financial and
economic activities, including the facts of non-compli-
ance, or improper compliance with the Company’s internal
documents.
Specialized departments of the Company are responsible
for monitoring of the implementation of the control proce-
dures and risk management.
Strategic are the risks related to the development, im-
plementation and monitoring of the Company’s devel-
opmentstrategy.Saidrisksdirectlyinfluencetheimple-
mentation of the Company’s goals.
Risksrelatedtopoliticalandeconomic
situationinthecountryandregion
The forecast of electricity consumption and develop-
ment of energy production in the regions of JSC IDGC
of Center and Volga Region presence is determined by
macroeconomic factors and economic conditions of
the country in general. The company is exposed to the
risksrelatedtothe impactof theworldfinancialcrisis
on the social and economic development of our coun-
try. Abrupt worsening of foreign economic conditions in
2008–2009causedasharpdecreaseofexportandthe
outflowofcapital.Thisresultedinaconsiderabledown-
fall of industrial production, trade and investments. The
decrease in industrial production and the reduction of
energy consumption lead to a decrease in the Company
earnings.
According to the basic variant of development of the
economy in2012–2014, in theconditionof implemen-
tation of the state policy aimed at improvement of the
investmentclimate,competivenessandefficiencyofthe
business, stimulation of the economic growth and mod-
ernization. In relatively favorable conditions, economic
growth in 2012 will comprise 3.7%, in 2013–2014 –
4–4.6%per year. Nevertheless, in spite of recovery of
the country’s economy, its growth rates are still not
sufficientlystable.Takingintoaccounthighlevelofde-
pendence from external economic environment, there
is a possibility of the slowdown of the Russian economy
to1.5–2.5%in2012–2013and3.7%in2014incaseof
worsening of the global economy.
The Company plans a range of measures aimed at im-
proving efficiency in conditions of unstable economic
situation, i.e. reduction of operational costs, optimiza-
tion of contractor relations, optimization of contractual
relations with consumers, and of accounts receivable
collection, and provision for optimal tariff and balance
solutions in the regions of presence.
Risksrelatedtothegeographicalspecifics
ofthecountryandregion
Risks related to the geography of the regions are inter-
ruption of power supply resulting in losses due to unfa-
vorableweather conditions. To decrease the influence
of those risks, the Company implements a range of mea-
sure aimed at preparedness of the power grid complex
to the autumn and winter; preparedness of each branch
of the Company for autumn and winter season is subject
to certification. The branches are experienced in suc-
cessful and timely elimination of consequences of the
acts of God influencing the equipment and infrastruc-
ture of power grids.
Risksrelatedtothetariffregulation
The main regulatory risks are those related to changes
in the state tariff regulation policy. Lately, the Russian
Government has been constraining growth of tariffs for
services of natural monopolies.
212 213
10 INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Risks related to the tariff regulation of the Company’s
operations are the following:
InthepartofimplementationoftheparametersofRAB
regulation:
• review of previously established long-term regulation
parameters;
• reallocation of required gross revenues over the years
of long-term regulatory period in order to restrict the
growth of tariffs;
• introduction of changes to existing legislation, the
consequences of which affect the reduction of previ-
ously established long-term management of the re-
quired gross revenue.
Inthepartofobtainingtariffrevenue:
• shortfall in tariff revenue due to reduction of the ac-
tual energy consumption compared to the discounted
value when approving tariffs for electric power trans-
mission;
• introduction of changes to existing legislation, the
consequences of which affect collection of the tariff
revenue.
In order to reduce the impact of these risk factors the Com-
pany is implementing the following activities:
• interacting with the tariff regulators of the subjects of
theRussianFederationonjustificationtheRGR;
• interacting with the Federal Tariff Service of Russia
onconfirmingtheparametersofbalance(energycon-
sumption, reported capacity, amount of technological
losses) in the Consolidated forecasted balance of pro-
duction and supply of electric energy (power) for the
following year at the level of Company’s offers;
• interacting with the Federal Tariff Service of Russia
on introducing modifications to the Russian legisla-
tion regulating the prices of electric power at various
markets;
• implementing systemic measures on the reduction of
theCompany’scosts,fulfillmentofadoptedliabilities
in implementation of the investment programs and
reaching set indicators of reliability and quality of ser-
vices.
Risksrelatedtotheindustryregulation
Absence of strict regulation of relations between dis-
tribution grid companies and JSC FGC UES may lead to
losses related to the termination of leases of “last mile”
with JSC FGC UES. To minimize that risk, the Company
performs the following activities:
• controlling adherence to contract terms with JSC FGC
UES (by maturity) and the timeliness of extension of
contracts;
• monitors the electric power supply to consumers of
the “last mile” and analyzes changes in technological
losses.
The main consumers of the Company’s services are the
retail companies which perform supply of the power en-
ergy to the end consumers. There is a risk of increase of
the accounts receivable due to violation of the payment
behavior by the end consumers of electric power and a
need for additional credits.
The Company performs weighted credit policy and ac-
counts receivable management in order to optimize its
amount and ensure the debt repayments.
Risksrelatedtotheanti-monopolyregulation
Anti-monopoly regulation sets its own norms for the le-
gal relations such as procedure of transactions on acqui-
sition and restructuring of business entities, the realiza-
tion of large property complexes, etc.
The Company is a natural monopoly and thus is exposed
to the risk of recognition of violation of the anti-mo-
nopoly legislation in provision of its services of power
transmission and of technological connection. To mini-
mize that risk, the Company controls the technological
connection for the compliance with the current law, in-
cluding the observance of the terms for attending to the
applications and enquiries of the consumers and timely
disclosure of information.
Financial risks are the ones related to financial stability
and the structure of the Company’s capital, as well as to
thedecreaseofprofitandliquidity,thefluctuationsofcur-
rency exchange rates, the changes of interest rates and
the credit risks.
Currencyandinterestrisks
The Company actively attracts the loans to be used as
sourcesoffinanceforinvestmentprogram,aswellasfor
daily economic operations, exposing itself to the risk of
losses related to increase of the interest rates on credits
and loans.
To minimize interest rates on the credit portfolio, the Com-
pany performs the following activities:
• attracting to the participation in auctions the major
Russian banks capable of lending much at compara-
tively low interest rates;
• diversifying the credit portfolio, thus enabling the
implementationofaflexiblefundraisingpolicywhich
helps avoiding the involvement with a single major
creditor;
• conducting negotiations on the lowering of inter-
est rates on existing credit agreements in case of a
decrease of interest rates on the banking services
market.
Risksrelatedtotheinflation
TheworkoftheCompanyisexposedtoinflation.Accord-
ingtothedataoftheRussianStatisticalService,theinfla-
tionin2011comprised6.2%,whichislowertheinflation
rateof2010(8.8%).
Thenegativeimpactofinflationonthefinancialandeco-
nomic activities of the Company may be expressed in de-
valuation of accounts receivable in case of a considerable
postponement or a delay of payments, appreciation of
the services of contractor organizations resulting in the
increase of the Company’s costs. To minimize that risk,
the Company performs the following activities to manage
overdue accounts receivable:
• monitoring of delayed and disputable accounts receiv-
able;
• processing claims for the collection of accounts receiv-
able, etc.
Risksrelatedtoinabilityofcontractors
toperformtheirliabilities
The contractor is chosen according to the tender proce-
dures of the Company assessing the terms of agreement,
business reputation and paying capacity of the contractor,
aswellastheriskofnon-fulfillmentofthecontractand
sufficiencyof thecontractor’s resources.Nowtheriskof
non-fulfillmentoftheliabilitiesofthesupplycontract is
assessed by the Company as minor.
The majority of the Company’s contractors are power sup-
ply consumers.
Growth of overdue (uncollectable) accounts receivable
on the energy transmission contracts is a risk related to
non-fulfillmentoftheliabilitiesofpaymentfortheenergy
transmission services.
The Company process claims in order to develop judicial
practice and create positive precedents of recovery of the
disputed debt, controls implementation of the sched-
ule of activities to reduce accounts receivable for energy
transmission services.
FINANCIALRISKS
2010 theinflation 2011
8.80%
6.20%
214 215
10 INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Risksrelatedtotheinabilitytoputintooperationthein-
vestmentsubjects
The implementation of the investment program of the
Companyisexposedtotherisksofnon-fulfillmentofthe
liabilities of putting into operation of the investment ob-
jects. This may be caused by the following reasons:
• worsening of the contractor’s work organization
(change of the leaders of the contractor company, ab-
sence of clear organizational structure, high employee
turnover, absence of own equipment, etc.);
• change of relations between the contractor organi-
zations and subcontractors without approval of the
client;
• receiving important feedback from the coordinating
organizations.
These risks may be decreased by the following measures:
• timely assessment of the quality of work of the con-
tractor organizations;
• approval of attracted subcontractor organizations
at thestageoftenderprocurementprocedures;
• monitoring of compliance with the normative terms
of authorizationtoputtheobjectintooperationfrom
the supervisors and the validity of the imposed com-
ments.
Risksrelatedtoprovisionofsafeusageofproductionfa-
cilitiesandtoenergyefficiency
Inappropriate use of equipment, violations of the rules
ofoccupationalandfiresafety,penetrationoftheout-
sider to the territory of the power grid facilities may
cause accidents and disruptions in the supply of elec-
tricity to consumers. In order to prevent these risks,
the Company requires strict compliance with the rules
of operation of electric plants, performs security mea-
sures ensuring operational safety of the energy objects,
monitors the status of equipment, tools and protection
devices.
Risksrelatedtothereliabilityofthepowersupply
Operational and technological risks affecting reliability
of the energy supply are related to physical and moral
depreciation, violation of operating conditions and op-
eration modes of the power grid equipment, untimely
performance of technical maintenance and repair. Mea-
surestominimizetheserisksareaimedatidentification
of the bottlenecks, grid renovation, implementation of
the target programs on the grid complex reliability im-
provement,continuouscontroloffiresafetyandtheop-
eration of electric plants, equipment, buildings and con-
structions, implementation of the program for the repair
of energy facilities.
Risksrelatedtothepersonnelmanagement
Risks related to the personnel management can be divided
in the following two groups:
• risks of organizational development related to
decrease of efficiency of management decisions,
violation of optimality of the business processes
causing increase of costs of the Company due to in-
efficient organizational structure and dilution the
responsibility;
• risks of personnel management related to low staff-
ing and high personnel turnover, non-fulfillment of
the liabilities taken by the Company under the current
Industry Tariff Agreement and Collective Agreement,
lawsuits from the fired employees, systematic viola-
tion of the labor behavior and decrease of the Com-
pany’sefficiency.
OPERATIONALANDTECHNOLOGICALRISKS
To minimize those risks the Company performs the follow-
ing actions:
• development and establishment of procedures and
regulations for all types of business processes in the
Company;
• monitoring the KPI system for the employees of the
Company in accordance with function performed by
them;
• building constructive partner relations with trade
unions;
• fulfillmentoftheconditionsofthecurrentCollective
Agreement;
• abidance with the labor legislation, solution of the la-
bor arguments in a pre-trial order through the Commis-
sion on labor arguments;
• implementation of the Program for support and devel-
opment of the human resources.
Risksrelatedtothepurchaseactivitiesandlogistics
Functioning of the electric grid complex is affected badly
by the risks related to inefficiencyofpurchaisingopera-
tions, e. g. non-optimal pricing for the supplies of equip-
ment, materials and services rendered/supplied by con-
tractor organizations, violations of the terms of of supply
and contractor agreements, decrease of transparency
of theprocurementprocedures.
To mitigate these risks, the Company monitors compli-
ance with the timeline of purchase procedures, provision
of technical specifications, and execution of contracts.
It alsomonitorspermanentlythepricesformaterialsand
equipment.
ITrisks
Physical and moral depreciation, violation of operating
conditions and operation modes of the corporate comput-
er network (CCN) and violation of the procedure of gaining
access to the information and work in the Company’s infor-
mation systems leads to malfunctions of the information
systems.
TopreventtherisksinthefieldofIT,specializedservices
of the Company are constantly monitoring the CCN, de-
velopment and implementation of the target programs of
increasing reliability of the IT infrastructure, controlling
access and work of the users with the informational sys-
tems of the Company.
The major risks of the operating activities of the Company
are the following risk related to investment operations:
• improper and untimely implementation of investment
projects;
• exceeding the set prices of projects included in the in-
vestment program;
• increasing volumes of construction in progress.
Thebasicmeasuresof riskmanagement in thisfieldare
the following:
• controlling and monitoring the terms of commission-
ing of the facilities included into the annual invest-
ment program;
• controlling the performance of obligations by the con-
tractors;
• fostering the responsibilities for the preparation and
agreement of technical assignments and for the con-
ducting of internal expert assessment of design docu-
ments.
INVESTMENTRISKS
216 217
10 INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Risksrelatedtothecorporategovernance
Risks of the corporate governance are those related to the
interaction between the Company and its shareholders,
and providing them with their rights.
Company estimates the risks related to the complaints
and lawsuits of the shareholders caused by violation
of theirrightswhensigningthecontractsinwhichthere
is interestand inmajor transactionswith theCompany
as negligible.
Risksrelatedtothepropertymanagement
Due to the fact that the most distributed assets of the
Company are located at the land plots of unknown owner-
ship, the Company cannot sign the leases with their own-
ers. It causes emergence of the risks of penalties related
to usageofthoselandplots.
To minimize these risks, the Company developed and
implemented the target program of registration of own-
ership of the residential property, registration/renewal
of the rightsofuseoflandconsideringpreparationof in-
formation about the boundaries of protected zones of pow-
er transmission facilities. Dynamics of the works shows
that the Company will perform full renewal of the earlier
receivedrightofpermanent(perpetual)usageof theland
plots in time set by the current legislation and not taking
the said risks.
The negative changes of external and internal busi-
ness environment, actions of the majority shareholders,
negative scenario of business development of the object
offinancialinvestmentsoftheCompanymaycausethe
risk of losing the right of property (loss of control) re-
gardingtheobjectsoffinancialcapital,depreciationof
itscosts,lose/disputingbythethirdpartiesofthelegal
right of the Company to the assets. In order to minimize
theserisks,theCompanyperformsmonitoring ofthe fi-
nancial condition of the companies in which the Com-
pany is participating and strict accounting of the rights
tofinancialinvestments.
Risksrelatedtothechangesintaxandenvironmentlegis-
lation,aswellasincustomsandcurrencyregulation
Changes in tax legislation and ambiguous interpretation
of certain provisions of the laws may cause legal risks
for the Company. Increase of tax rates or the changes in
the procedure and the terms of calculation and payment
of taxesmayleadtodecreaseoftheCompany’snetprofit
which will result in decrease of the paid dividends. On
the other hand, the latest legislative initiatives of the
state authorities were aimed at easing of the taxation
burden and establishment of themore flexible system
of taxation regulations. In order to minimize these risks,
the Company conducts continuous analysis of the legal
base, including explanations and commentaries on taxa-
tion issues in order to calculate and pay taxes in strict
compliance with the current legislation of the Russian
Federation.
Incaseofsignificantchangestothelegislationontaxes
andfeestheCompanywillplanitsfinancialandeconomic
activities considering such changes.
The probability of emergence of the risks related to the
changes in Environment protection legation is low. The
amendmentstotheFederalLaw№7-FZOnEnvironment
ProtectionasofJanuary10,2002proposedbytheMinis-
tryofNaturalResourcesandEcologyin2008–2010,sup-
pose increased corporate responsibility for violation of the
environment legislation. The Company takes into account
the correspondent ecological regulations when perform-
ing its operations.
Taking into account that the Company does not export its
production to the external markets, the changes in cur-
COMPLIANCERISKS
rency and customs legislation will not have serious impact
on the work of the Company and will not create legal risks
for it.
Taxationrisks
Today, the tax relations in the Russian Federation are reg-
ulated by Tax Code of the RF and a range of federal and
regional laws.
The Company fully complies with the tax laws affecting
its operations and carries out constant monitoring of its
changes, which, however, does not eliminate the potential
risk of disagreement with the relevant authorities on the
matters permitting an ambiguous interpretation.
In the short-term perspective, the Company does not
foresee emergence of any serious risks to its financial
and economic activities related to the changes in the tax
legislation.
Incaseofsignificantchangestothelegislationontaxes
andfeestheCompanywillplanitsfinancialandeconomic
activities considering such changes.
Risksrelatedtothecourtwork
Legal risks management is aimed at minimizing of legal
consequences that could negatively affect the Company’s
operations.
In general, legal risks management is based on the im-
provement of the process of legal registration of the
documents and support of the Company’s activities. To
minimize the legal risks, all Company’s business processes
exposed to those risks should be subjected to the compul-
sory legal expertise.
There are no objective conditions requiring changes of the
legal practice in a fashion that it may cause risk to the
existenceoftheCompany.Incaseofsignificantchangesin
thelegalpracticetheCompanywillplanitsfinancialand
economic activities considering such changes.
HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
11
Pyrometer AKTAKOM AP-2527 allows to check t of heating of contact joints surfaces
in switching centres in the contactless way — from a safe distance and without equip-
ment switching-off
220 221
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
AUGUST
Safety Week in the Company’s branches.
The Company has published Social Report for the first time.
MAY – JUNE
Quick power supply restoration of the territories, subject
to extreme consequences of a very strong atmospheric
cyclone. 147 teams totaling 790 people and 154 units
of special vehicles took part in the emergency recovery
works.
DECEMBER 26JANUARY 5
SEPTEMBER 20-22 DECEMBER 29
The structure of talent pool of young specialists of JSC
IDGC of Center and Volga Region was approved.
The First Festival of KVN of JSC IDGC of Center and Volga
Region took place in Kirov.
The Company took part in training programs on liquida-
tion of electric energy system disturbances, developed
by JSC IDGC Holding and implemented together with other
interregional distribution grid companies.
Conclusion of the Agreement on changes and amend-
ments to the 2009-2011 Collective Labor Agreement
of JSC IDGC of Center and Volga Region and its prolonga-
tion till 2012.
OCTOBERSEPTEMBER
2010 2011
KEY EVENTS OF THE YEAR
Human resources policy of the Company is formed in ac-
cordance with the requirements of the Russian legislation,
Tariff Agreement for the power industry (TA) in 2009-2011,
Collective Labor Agreement of JSC IDGC of Center and Vol-
ga Region in 2009-2011, and OHSAS 18001, ISO 14001,
ISO 9001 standards.
HUMAN RESOURCES POLICY
11.1 The primary objective of the human resources policy is to
meet the Company’s demand for workforce of the required
quality and quantity, fully and promptly. The Company
gives special attention to improving quality and efficiency
of the use of human resources, encouraging personnel to
achieve Company’s objectives and develop its professional
skills. High demands for personnel of power grid complex
require significant investments in social and professional
development of the Company’s employees.
january february march april may june july august september october november december
222 223
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The basic principle of the Company’s human resources
policy is to bring together its own interests and the in-
terests of each employee to achieve maximum production
and economic performance.
One of the main objectives of the Company’s human re-
sources policy is to maintain, supply and develop its human
resources potential in accordance with the development
of the distribution grid complex, specific characteristics of
the regional footprints and social and economic develop-
ment trends of the country.
On the basis of analysis of the current internal and ex-
ternal personnel situation of the Company, the following
main activities of the Company have been stated in the
Program on support and development of human resources
potential for the purpose of maintaining, supplying and
developing human resources potential of JSC IDGC of Cen-
ter and Volga Region:
• To define a specific category of employees whose re-
tention is crucial to the Company;
• To develop and implement measures to increase the
share of young employees, in particular in the produc-
tion departments (workers and engineers);
• To strengthen cooperation with the leading Russian
institutions of secondary and higher education giving
special attention to specialized energy institutions and
university departments;
• To develop a system of training, retraining and ad-
vanced training of personnel using a high potential
of the regional training centers and flexible training
methods;
• To strengthen work with talent pool;
• To strengthen work aimed at ensuring psychophysical
occupational safety of personnel.
In 2011, the average personnel number of JSC IDGC of Cen-
ter and Volga Region amounted to 21,728, a 0.9 percent
increase as compared to 2010 level. The increase in the
average personnel number as compared to the previous
year results from the employment of new personnel in the
Company at the end of 2010 to perform the following du-
ties: to form the volume of rendered services on energy
transmission; to perform non-contracted works on tech-
nological connection of preferential customers; to work
in new Customer Service Centers; to conduct capital con-
struction in connection with an increase in the investment
program.
NUMBER, ROTATION, AND STRUCTURE OF PERSONNEL
21,728 Averege personnel number
2009–2011 PERSONNEL NUMBER, pers.
20,062
2009 2010 2011
21,53421,728
10.3%Ryazanenergo
4.4%Marienergo
11.3%Kalugaenergo
2011 PERSONNEL NUMBER IN THE COMPANY
The analysis of personnel rotation shows that workers
and specialists account for the major part of employees
employed in 2011 (65.3% and 28.0% respectively). The
special attention was given to personnel selection: 42.8%
of employees with higher professional education and
32% of employees with vocational secondary education
were employed.
Efficiency of the current human resources policy is con-
firmed by a consistently low staff turnover throughout
the history of the Company. The Company is not exposed to the risk of mass layoff.
2011 Personnel Rotation
2011 Staff Turnover in the Company
Employed Dismissed
1,473 pers. 1,278 pers.
Total turnover Total turnover
5.9% 0.90%
The staffing level approximates to 100 percent and has
been stable over a period of the last three years.
Staffing level
December 31,2009
December 31,2010
December 31,2011
96.20% 96.60% 96.36%
1.3%Executive body
10.2%Vladimirenergo
6.7%Ivenergo
9.7%Udmurtenergo
11.5%Kirovenergo
11.9%Tulenergo
22.7%Nizhnovenergo
224 225
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The Company’s personnel structure, by categories, is con-
ditioned by the specific operations of distribution grid
companies: workers account for more than a half of the
total personnel number.
The average age of the Company’s employees was 42 years
in 2011. The Company has an optimal human resources
structure by age categories: employees aged 25 to 45 ac-
count for 50% of total personnel number. They show the
highest performance and qualification rates. The analysis
of the structure of employed personnel by age categories
proves the efficiency of the Company’s policy aimed at in-
creasing the share of young employees: 68% of workers
employed in 2011 and 75% of employed specialists and
office workers are under 35; and 69.4% of employed execu-
tives are under 45.
2009–2011 PERSONNEL STRUCTURE, BY CATEGORIES
2009-2011 PERSONNEL STRUCTURE, BY AGE CATEGORIES
56%
5.5%6.0%6.1%
28%
24.3%23.7%22.9%
25.4%25.2%25.9%
35.9%36.5%37.1%
2011
2011
56%
28%
16%
2010
2010
56%
28%
16%
2009
2009
Executives
Specialists and office workers
Workers
Working pensioners
45 to retirement
35 to 45
25 to 35
Under 25
8.9%
100%
100%
0%
0%
8.5%7.9%
16%
The education level of the Company’s employees remains
high for several years, which is conditioned by production
needs and high requirements to personnel qualification.
Dynamics of qualification structure of the Company’s per-
sonnel shows an increase in the share of personnel with
academic degrees and higher professional education
on the one hand, and a decrease in the share of personnel
with low education level on the other hand.
2009-2011 QUALIFICATION STRUCTURE OF PERSONNEL
>41.5 THOUSAND PERS. 191%OR of the average personnel number
THE NUMBER OF TRAINED PERSONNEL OF THE COMPANY IN 2011
Transition of JSC IDGC of Center and Volga Region to the
innovative way of development requires higher demands
for qualification of production personnel. The methods
used by the Company to carry out training and retrain-
ing of personnel with reference to advanced training for
new facilities and implementation of new equipment and
technologies, target training of talent pool and young
specialists, and integration of scientific work into the
PERSONNEL TRAINING AND DEVELOPMENT
2.4%2.1%1.6%
33.8%32.6%32.0%
29.9%29.9%29.6%
32.2%33.3%34.5%
201120102009
Junior secondary
Secondary
Vocational secondary
Higher professional
Candidates and doctors of science, two and more higher professional educations
1.7%2.1%2.3%100%
0%
226 227
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Percentage of employees involved in training, retrain-ing and advanced training programs, % of the average personnel number
Personnel training costs, % of payroll
2009-2011 PERCENTAGE OF TRAINED EMPLOYEES
2011 NUMBER OF TRAINED EMPLOYEES, BY CATEGORIES,
AND PERSONNEL TRAINING COSTS
% OF THE TOTAL NUMBER OF TRAINED EMPLOYEES
training system allow to improve personnel knowledge
and form human resources potential that can ensure
the innovative development of the Company. The train-
ing system is based on the standard requirements of the
Management System for Professional Training, Retrain-
ing and Advanced Training, and Occupational Health and
Safety (STO 0401-148-2010) developed in accordance
with ISO 9001:2000, OHSAS 18001:2007.
Subject to increasing personnel training needs, the
Company selects the most effective, modern and
high-quality training programs from the training ser-
vices available on the market, such as on-site training
with teachers from educational institutions, reduction
of training terms due to self-training and correspon-
dence courses, on-the-job training when tutors share
their professional skills with their trainees, distance
learning (video conferences and Internet classes). These
methods allow to increase the number of trained em-
ployees and optimize training costs.
In 2011, the number of trained personnel amounted
to 41,465 pers., a 23 percent increase as compared to 2010
level; it amounts to 191% of the average personnel num-
ber of the Company.
132%
20092009 20102010 20112011
157%
191%
0.650.60
0.85
18%Executives
65%Workers
17%Specialists and office workers
From year to year, there has been a wider use of potential
of a Network of Corporate Training Centers of the Com-
pany which includes seven licensed non-profit education-
al organizations meeting the demand for technical staff
training.
In 2011, the Company updated the list and contents
of the training programs, modernized the technical basis
of education, implemented new forms of distance learning,
expanded the scope of training licenses issued to train-
ing centers in accordance with the demand for personnel
training, increased the number of retired power engineers
and highly qualified Company’s employees to perform
teaching. Taking into account the demand for technical
staff training concerning market based services provided
by grid companies, the management of the Company has
developed a corporate training program, expanded the
training license to one of the training centers and invit-
ed the teachers from Izhevsk State Technical University.
In 2011, 60% of the trained employees of the Company
completed training programs in a Network of Corporate
Educational Centers.
NEI Ivanovo Educational Center
Tv: 37,463 pers./ hour
Pt: 60%
NST: 8 pers.
NVT: 31 pers.
Educational Centers of the Company
NEI PPSE Tula Educational Course Center
PEI Vladimir Educational Center «Energetik»
PEI Educational Center «Energetik-NN»
NEI Educational Center «Energetik»
Educational Center «Energetik»
Tv: 51,286 pers./ hour
Pt: 69.8%
NST: 12 pers.
NVT: 74 pers.
Tv: 39,891 pers./ hour
Pt: 89.2%
NST: 6 pers.
NVT: 23 pers.
Tv: 51,678 pers./ hour
Pt: 67.2%
NST: 5 pers.
NVT: 54 pers.
Tv: 80,210 pers./ hour
Pt: 93.9%
NST: 11.5 pers.
NVT: 8 pers.
Tv: 258,474 pers./ hour
Pt: 47.3%
NST: 57 pers.
NVT: 42 pers.
Tv: 115,412.5 pers./ hour
Pt: 30.7%
NST: 28 pers.
NVT: 49 pers.
NINEO Educational Center «Energetik»
Tv: Training volume, in 2011
Pt: the Company’s personnel training
NST: The number of staff tutors
NVT: The number of visting tutors
TulaKaluga
Vladimir
Ivanovo
Kirov
Izhevsk
Nizhny Novgorod
228 229
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Educational center Date of Estab-lishment
Location Total area
Training rooms,sq. m.
Administrative premises,sq. m.
Dormitory / num-ber of rooms,sq. m. / items
Educational Center "Energetik"
May 05, 2003 5 Ogarev Street, Kaluga
860.7
345 365.7 150/ 38
NEI PPSE Tula Educational Course Center
June 19, 2002 101a Timiryazeva Street, Tula
278.3
214.4 63.9 no
NINEO Educational Center "Energetik"
December 30, 2002
9 Lomonosov Street, Kirov
8,420.09
2,497.50 2,789.39 3,133.2/ 169
NEI Ivanovo Educa-tional Center
February 16, 2005
3b Suzdalskaya Street, Ivanovo
85.5
59.1 26.4 no
NEI Educational Center "Energetik"
March 28, 2003
22a Voroshilov Street, Izhevsk
2,917.4
966.8 1,406.90 543.7/ 57
PEI Educational Center "Energetik-NN"
November 02, 2009
26 Sormovskoe Shosse, Nizhny Novgorod
527.9
220.1 307.8 no
PEI Vladimir Educational Center "Energetik"
October 29, 2009
91 Bolshaya Nizhegorodskaya Street, Vladimir
157.5
115.1 42.4 no
COOPERATION WITH EDUCATIONAL INSTITUTIONS
For the purpose of expansion of cooperation with the lead-
ing Russian institutions of secondary and higher profes-
sional education, the Company has selected the basic edu-
cational institutions in its regional footprints to perform
training in several specialties that are key specialties for
the distribution grid complex.
The Company carries out cooperation with the institu-
tions of secondary and higher professional education in
the following areas: target training of the Company’s
employees considering the specific characteristics of
the distribution grid complex; support of professional
dynasties – assigning children of the Company’s em-
ployees to educational institutions for the purpose of
receiving higher education in energy specialties in ac-
cordance with the target quota of state-financed places;
participation of the Company’s employees in the train-
ing process; career guidance courses for trainees; job
placement of young specialists; organization of intern-
ship and pre-graduation practice for students and ad-
vanced training courses for tutors for the purpose of
studying the modern power industry and the require-
ments to personnel training.
Four employees of the Company study the target MBA
program International Economic Cooperation in the En-
ergy Sector (program “Economics”, specialization “In-
ternational Energy Sector”) within the framework of co-
operation with Moscow State Institute of International
Relations MFA Russia (MGIMO-University) (Moscow).
TALENT POOL
Under the Program for Support and Development of Hu-
man Resources Potential, the Company continues to form
and develop the talent pool which includes 1,379 candi-
dates in 2011. The talent pool of highly qualified special-
ists allows to establish an effective system of investment
in personnel development, which increases significantly
the non-material motivation of employees and helps to
keep them in the Company.
In 2011, 53 employees of the talent pool were appointed to senior positions.
In 2011, the talent pool of young specialists was formed
on a competitive basis for the purposes of providing op-
portunities for professional development of young spe-
cialists, increasing the level of their professional train-
ing and developing managerial competencies. 1,033
employees of the Company aged under 35 participated
in the contest on formation of the talent pool. All the
candidates passed the selection procedure including the
assessment of managerial competencies and motivation
components: focus on development, desire to prove out,
willingness to changes, responsibility, foresight and per-
spective thinking. Additional selection criteria included
possession of an academic degree, involvement in social
and academic life of the Company, and ability to generate
innovative proposals.
According to the contest results, 383 young specialists
were included in the talent pool of the Company’s branch-
es; 33 most ambitious employees were included in the tal-
ent pool of young specialists of the Company; 17 of them
were included in the talent pool “Young Support of IDGC
Holding”.
The system of talent pool training is based on the indi-
vidual planning for personnel development on key compe-
tencies of the Company. Individual plans for personnel de-
velopment in accordance with the assessment results and
the level of competencies development also include the
following training components: advanced training in the
target position; inclusion in the creative and work groups
to deal with technical and organizational issues; providing
supply for the period when the regular employee is absent;
preparation of drafts of documents, instructions, and re-
ports; involvement as tutors.
In 2011, 61% of employees of the talent pool completed
occupational training in specialized educational institu-
tions on their occupational profiles. In institutions of high-
er education, there is a correspondence target training
program in energy specialties meant for the young spe-
cialists with vocational secondary education included in
the talent pool to be appointed to one of the key positions
of the Company, namely head of regional electric grids in
remote rural areas.
Various training programs of the Company on the devel-
opment of leadership qualities and managerial skills pro-
mote capacity building of employees of the talent pool.
The program is aimed at training masters and managers
with specialization in the international energy sector.
In order to increase the education level of the technical
staff, the Company performs target personnel training in
energy specialties meeting the demands of professional
activity of personnel, within the framework of cooperation
with Kazan State Energy University (Kazan).
In accordance with the existing Presidential Program on
the Preparation of the Managerial Personnel for the Na-
tional Economy of the Russian Federation, the number
of the Company’s managers who completed this training
program in the local educational institutions is constantly
growing.
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11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
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OCCUPATIONAL SKILLS CONTESTS
The Company regularly holds occupational skill contests
to evaluate the professional level of technical staff. Such
contests promote quality performance and occupational
safety in grid equipment maintenance, best practice
sharing and implementation of sophisticated methods
of checking, assessment and personnel training.
In 2011, 1,188 employees of the Company participated in
such contests. Altogether, the Company held 33 contests
including the following:
• skills contests among maintenance personnel of distri-
bution electric grids;
• skills contests among vehicle drivers;
• show contests on fire safety;
• show contests on occupational safety.
Social policy of the Company focuses on the topical is-
sues of social development of employees, improvement of
working conditions, social protection of employees, pro-
viding employees with recreation and medical services.
The Company considers the creation of favorable condi-
tions for effective work and professional growth of em-
ployees and provision of opportunities for fair wages and
development of corporate culture to be the primary objec-
tives of the Company’s social policy.
Along with fair wages, the Company motivates its employ-
ees by providing a broad range of social benefits, guar-
antees, and compensations under the Collective Agree-
ment in addition to those established by the legislation
of the Russian Federation. These benefits, guarantees, and
compensations include the following:
• voluntary health insurance and accident and illness
insurance;
• support of socially vulnerable families;
• financial assistance to employees going on vacation;
• financial assistance to employees on marriage and
baby birth occasions;
• financial assistance on organization of funeral of em-
ployees and non-working pensioners;
• financial assistance to employees on anniversary dates;
• benefits to employees retired on disability pensions;
• benefits to children of parents who lost their lives on
the job;
• providing conditions for recreation and health im-
provement of employees;
• summer camp vouchers and New Year presents to em-
ployees’ children;
• occupational pension plans.
According to the performance of JSC IDGC of Center and
Volga Region in 2011, the Company for the third time
took the prize-winning place in the nomination “The
Best Grid Entity of the Electric Power Industry of High
Social Efficiency” and took the 3rd stage in the nomina-
tion “The Best Innovative Project in the Field of Social
Partnership” of the sector competition “Arrangement of
High Social Efficiency in Electric Power Industry – 2011”.
These achievements show that the Company adheres to
high standards of social responsibility to its employees.
The Company performs in full the obligations fixed by the
legislation of the Russian Federation, Tariff Agreement
for the power industry of the Russian Federation in 2009-
2011, and the current Collective Agreement.
SOCIAL POLICY AND CHARITY11.2
INSURANCE COVERAGE PROGRAM
NON-STATE PENSION PROVISION
The Regulation on Insurance Coverage of JSC IDGC of Cen-
ter and Volga Region contemplates voluntary health insur-
ance (VHI) and accident and illness insurance.
The program on accident and illness insurance of employ-
ees involves payment of compensation in the case of in-
sured accident.
The voluntary health insurance program involves ambu-
latory, hospital and dentist treatment in the specialized
regional and Moscow healthcare centers. The voluntary
health insurance enables employees to select the medi-
cal institution with a view to his/her health problems and
location of the institution, to reduce the period of medical
examination and treatment which, in turn, has a positive
effect on the employees’ performance.
Along with the basic medical services, the voluntary health
insurance program contemplates an annual influenza and
tick-borne encephalitis vaccination, medical examinations
and rehabilitation treatment. In 2011, 300 Company’s em-
ployees received rehabilitation treatment in health resorts
of the Russian Federation.
The occupational pension plan is an important incen-
tive to all categories of employees. In 2011, the Com-
pany continued to implement its Program for Non-state
Pension Provision (NPP) aimed at ensuring the high
standard of living of employees of retirement age and
creating conditions for effective dealing with human
resouces issues related to attraction, retention and mo-
tivation of personnel. NPP of the Company’s employees
is implemented through the Non-Government Energy
Industry Pension Fund.
NPP STRUCTURE
Parity PlanThe employee and the Com-pany fund employee’s pension schedule jointly and severally on pro data basis and under specific rules
Corporate PlanThe Company funds additional employee’s pension provision from its own funds
Co-Financing ProgramThe employee, the Company and the state co-finance employee’s pension schedule under Federal Law №56-FZ dated April 30, 2008
232 233
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The total number of the Company’s employees and pen-
sioners involved in the non-state pension provision
schemes under the Corporate Plan in late 2011 amounted
to 16,000 pers., and the number of the Parity Plan partici-
pants totaled 8,000 pers. The average rate of monthly oc-
cupational pension payable to retired employees in 2011
amounted to RUB 2,511, a 9% increase as compared to
2010 level (RUB 2,295).
HEALTH IMPROVEMENT AND RECREATION OF EMPLOYEES’ CHILDREN
CORPORATE CULTURE DEVELOPMENT
The Company always places emphasis on health improve-
ment and recreation of employees’ children. In 2011, it dis-
tributed 767 children’s summer camp vouchers, which is
138 vouchers more than in the previous year. Payment
was made from employer’s funds and partial compensa-
tion of costs by local government bodies.
The Company places great emphasis on the development
of its corporate culture and maintenance of traditions. Val-
ues and norms of the existing corporate culture are fixed
in the Corporate Code of Ethics of JSC IDGC of Center and
Volga Region which helps to create the spirit of coopera-
tion in the Company and to maintain efficient interaction
among the Company’s units, and guarantees our partners
ethical business practice.
The Company pays special attention to the measures
aimed at commemorating the historic events and preserv-
ing traditions of the Russian power industry, thus ensuring
the continuous development of the Russian distribution
grid complex. The branches of the Company have their
own museums which inform the visitors on the history of
power industry in the regional footprints.
To facilitate the informal communication among the em-
ployees, the Company pays special attention to corporate
events, such as the Power Engineers’ Day, Defender of the
Fatherland Day, International Women’s Day. The employ-
ees of the Company willingly prepare for such events.
The Company celebrates the Power Engineers’ Day by
holding the regular contest of children’s drawings. The
winning pictures were sent to the children’s drawing con-
test held by JSC IDGC Holding and the best drawings were
used to illustrate advertising booklets and calendars.
More than 100 employees of the Company participated in
the Poetry contest devoted to the Power Engineers’ Day.
Eight best poetical works were sent to the second stage of
the contest held by JSC IDGC Holding.
2010
The average rate of monthly occupational pension payable to retired employees
2011
2,295 +9%RUB
2,511RUB
767 CHILDRENof employees were provided with tourist vouchers to children’s holiday camps
VETERANS OUTREACH
YOUTH OUTREACH
In 2011, the Council of Veterans of JSC IDGC of Center and
Volga Region which involves 3,701 employed and 3,460
retired veterans (pensioners) of power industry contin-
ued its work. There are 710 Great Patriotic War veterans,
homefront workers, concentration camps prisoners and
citizens of Leningrad in Blockade. Each veteran has more
than 20-years track record in the energy sector.
The main 2011 events organized and held by the Council
of Veterans included the following:
• taking part in preparing for celebrations of the 66th
anniversary of the victory in Great Patriotic War;
• taking part in the historical and memorial event “Re-
lay Banner of Victory — 2011” held together with the
Board of Young Specialists and in the international re-
lay of the memory and gratitude “Homeland of feat —
To Homeland of Hero”;
• organization of the memorial grief rally with the par-
ticipation of the members of the team of All-Russia
Automobile “Energy Rally” devoted to the 125th an-
niversary of electrification of Russia;
• taking part in preparing and participation in a meeting
with representatives of the Council of war and labor
veterans - power engineering specialists of the Minis-
try of energy of Russia, who had the cruise on the me-
morial places of labor and military glory of the Volga-
Kama cascade;
The members of the Council of Veterans took part in sum-
marizing the results of the first all-Russia youth compe-
tition of high technology innovative ideas and projects
“Power Industry of the Future”.
One of the main objectives of the Company’s human re-
sources policy is involvement and retaining of highly
qualified specialists that possess creative and academic
potential, extensive professional knowledge and clear
views of the latest achievements of Russian and foreign
power industry.
For this purpose, the Company performs regular work in
schools which is aimed at developing and improving the
long-term forms of vocational guidance of students and
selection of the most experienced students to send them
to target training in institutions of higher and secondary
education, providing them with the opportunity of further
job placement in the Company.
In 2011, more than 16,000 students attended career
guidance courses. The Company always participates in
the state certification commissions of universities, in job
placement of the graduates in energy specialties, in se-
lection of the most power industry oriented students to
provide them with internship in the units of the Company.
In 2011, graduates from institutions of higher education
amounted to 7% of the total number of employed person-
nel, more than 500 students did internship and obtained
their degrees in the field of Company’s operations.
To improve efficiency of professional and social adapta-
tion of young employees in the life of the Company un-
der the Program for Support and Development of Human
Resources Potential, the Company developed the Program
for Production Adaptation of Young Specialists. The Com-
pany gives great attention to the development of mentor-
ing programs.
To build efficient relations with its young employees,
the Company established the Board of Young Specialists
which includes young and ambitious employees striving
for career growth and professional development in the
Company, and seeking to take an active part in the deci-
sion-making process on the most important issues.
234 235
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
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The Board of Young Specialists faces the following chal-
lenges: fostering the process of professional and social
adaptation of young employees, providing assistance in
professional development, boosting creative and techni-
cal initiatives of young personnel and encouraging their
participation in business and cultural life of the Company
and its units.
In 2011, the representatives of the Board of Young Special-
ists in the delegation of JSC IDGC Holding participated in
All-Russia Youth Innovation-Related Forum “Seliger 2011”;
they took an active part in discussions on creation of youth
innovation centers and implementation of energy saving
projects, and developed their own projects.
In spring 2011, young energy specialists together with the
Council of Veterans participated in the “Power Grid Com-
plex for the Environmental Protection” Campaign and con-
tributed to restoration of the natural balance disrupted by
hurricanes, fires, and sleets in 2010-2011.
In September of the reporting year, the Board of Young
Specialists organized the First Festival of KVN among the
teams of the Company’s branches and its executive body.
The winners – the team of Kirovenergo branch – repre-
sented JSC IDGC of Center and Volga Region at the first
festival of The Club of Cheerful and Sharp-Witted Energy
Specialists of the distribution grid complex. The festival
was held by JSC IDGC Holding in Kislovodsk.
SPORTS, HEALTH AND FITNESS
CHARITY
JSC IDGC of Center and Volga Region makes health and
fitness promotion efforts and develops mass participa-
tion sports by purchasing vouchers for swimming pool
and sport centers attendance for the purposes of en-
couraging healthy lifestyle of employees. The teams of
branches adequately represent the Company in regional
inter-branch competitions.
In 2011, the Company sponsored the Third All-Russia
Summer and Winter Games of Power Engineers of the
distribution grid complex. The qualifying competitions
of the Company involved 2,100 employees. Based on the
results of the final competitions, the Company formed
the combined teams to participate in the games spon-
sored by JSC IDGC Holding.
2011 Track Record of the Employees of JSC IDGC of Center and Volga Region
Being a socially oriented company, JSC IDGC of Center
and Volga Region is aware of its responsibility to the so-
ciety.
In 2011, employees of the Company organized a fund-
raising campaign and provided targeted assistance to
individuals and organizations on their demand in the
amount of RUB 350 thousand.
In autumn of the reporting year, under the “Illustrated
books for little blind children” program, the Company’s em-
ployees sent 119 sets of picture books, created with a view
to the specific perceptive function of visually impaired chil-
dren, to specialized kindergartens and libraries in nine re-
gional footprints. The funds in the amount of RUB 573.3
thousand necessary for book purchasing were raised by the
Company’s employees at the end of 2010.
Under the Best New Year Tree campaign timed to the Power
Engineers’ Day, the Company’s employees organized New
Year celebrations and gave presents to 56 children in or-
phanages in the regional footprints. The children received
New Year presents, toys, books, sports goods and house-
hold appliances totalling RUB 1,558 thousand.
Sports Place
Summer Games:
team place V
track and field IV
volleyball III
kettlebell lifting V
Sports Place
Winter Games:
team place III
crosscountry skiing II
table tennis III
swimming VI
chess V
LABOR PROTECTION, INJURIES AND DISEASES
One of the important Company’s performance indicators
includes industrial and occupational safety indicators.
In 2011, the following objectives were defined as priorities
for ensuring occupational safety: unconditional compli-
ance with the law requirements; enhancing occupational
safety and social protection of employees; protection of
their life and health at workplace; reducing risks of indus-
trial injuries and diseases.
The work on labor protection performed in the reporting
year resulted in absence of occupational diseases; cut-
ting costs incurred in compensations payable for work-
ing in harmful and dangerous conditions; improved per-
formance, increasing level of social and legal protection
of employees.
Positive results in 2011 were achieved through imple-
menting the Action Plan to Ensure Health and Labor Pro-
tection of Employees in 2011-2013.
LABOR PROTECTION11.3
RUB 272.5 million
2011 INVESTMENT IN HEALTH AND LABOR PROTECTION OF EMPLOYEES OF THE COMPANY
236 237
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
This Action Plan was developed following the results of
analysis of injuries, external and internal audit inspec-
tions, comments and proposals from occupational safety
managers. It is aimed at:
• providing personnel and workplaces with up-to-date
protection facilities and devices;
• accident prevention;
• sanitary and engineering measures to prevent illnesses;
• measures to improve working environment.
Along with enhancing control over compliance with the
occupational safety rules, improving quality of teamwork
spot checks and enhancing disciplinary actions against
violators, the Company contemplates material incentives
to employees for working without violations of the occu-
pational safety rules. The Regulation on Bonus Payment
for Safe and Accident Free Work were developed for the
above mentioned purposes.
The Company also developed and approved local regula-
tory documents containing the requirements to human
resources management and the requirements to selection
and exploitation procedure of individual protective gear
by employees.
In 2011, JSC IDGC of Center and Volga Region channelled
RUB 272.5 million for health and labor protection mea-
sures, including the means of integration into the grid com-
plex of a fundamentally new materials and ideas, meant
to ensure the security of energy specialists in their daily
production activities. In particular, the Company started
the trial operation of shielding sets of safety clothes which
protect personnel working with HVLs under induced volt-
age. Two branches – Kalugaenergo and Udmurtenergo –
implement the trial operation of stationary voltage indi-
cators in switchgear cells. When an employee approaches
the cell under voltage, these indicators produce an audible
warning signal.
2009–2011 LABOR PROTECTION COSTS TRENDS, RUB mln
179.0
226.5
209.022.0
30.537.8
37.7
16.616.5
12.3
13.29.2
201120102009
Working environment improvement
Accident prevention measures
Sanitary and hygienic measures
Providing employees with IPG
251.0
287.0272.5
ASSESSMENT OF WORKPLACES. BRINGING WORKPLACES IN LINE WITH THE APPLICABLE STANDARDS
The personnel is outfitted with tools, safety equipment,
safety clothes and devices to ensure safe work for the pur-
poses of protecting employees from hazardous factors and
ensuring good performance. Today, the Company provides
its employees with all necessary safety equipment in ac-
cordance with the established standards.
In 2011, the Company’s primary objective related to pro-
viding its personnel with individual protective gear was
purchasing special clothes resistant to electric arc. The
Company channelled RUB 184 million for these purposes
or 67.5% of the total labor protection costs and 88% of the
total employees’ individual protection gear costs.
Unit costs of labor protection per employee in 2011
amounted to RUB 12.51 thousand, a 5.7% decrease as com-
pared to 2010 level. Unit costs of employees’ individual
protective gear in 2011 amounted to RUB 9.6 thousand,
The Company carries out regular assessment of work-
places to define working conditions. JSC IDGC of Center
and Volga Region has totally 16,396 workplaces subject
to assessment. It has carried out assessment of 14,768
workplaces and drafted further assessment schedules
for 2012. The assessment detected 6,836 workplaces
of 3.1-3.3 working conditions category and no work-
places of 4th category, and the Company planned to im-
prove working conditions. In 2011, it performed 100%
of projected measures of the total number of 522.
WORKING CONDITIONS CATEGORIES AS A RESULT OF WORKPLACES ASSESSMENT
12%Hazardous (3.2)
2%Hazardous (3.3)
32%Hazardous (3.1)
54%Optimal and acceptable (1 and 2)
OUTFITTING PERSONNEL WITH SAFETY EQUIPMENT, TOOLS AND FITTINGS
238 239
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
a 8.3% decrease as compared to 2010 level. The decrease
in unit costs of labor protection in the reporting year is
achieved under the Cost Management Program (CMP) by
optimization of purchase costs.
Thus, safety clothes and individual protection gear costs
were reduced when fulfilling the quota of safety clothes
distribution.
2009-2011 UNIT COSTS OF LABOR PROTECTION
PER EMPLOYEE, RUB thousand
8.89
10.479.60
3.58 2.80 2.91
201120102009
Other labor protection measures
Providing employees with individual protective gear
12.47 13.27 12.51
When selecting protective equipment, the Company takes
into consideration both protective properties (for example,
electric current protection) and usability. Thus, temporary
ground connections which are installed without lifting to
pylons (from the ground) not only exclude contact with
live conductive parts under voltage but also accumulate
and simplify workplace preparation. The priority is given
to the recent developments of safety equipment previ-
ously not applicable or applicable in limited scope.
EMPLOYEES’ PSYCHOPHYSIOLOGICAL CHECKUPS
Using the methods of psychophysiological checkups (PPC)
provides a comprehensive evaluation of psychophysiologi-
cal fitness of a candidate or employee to perform his/her
professional duties and assessment of his/her functional
status and efficiency. In 2011, 3,236 employees were sub-
ject to PPC and all of them have passed checkups. In 2010
and 2009, the checkup was passed by 2,774 and 2,156 em-
ployees respectively. The number of employees included
in the “risk group” was 409 pers. in the reporting year,
405 pers. in 2010, 346 pers. in 2009. The share of employ-
ees included in the “risk group” decreased from 14.6% to
12.6%. This decrease was due to rehabilitation treatment.
After PPC, each employee is given recommendations on
improving his/her level of psychological adaptation. If
necessary, employees are provided with psychological
consulting and treatment and recommendations for addi-
tional examination by medical specialists under voluntary
health insurance.
PERSONNEL TRAINING
As far as the human factor occupies a major place in af-
fecting a long-term success of the Company, it uses vari-
ous forms of personnel training and development, includ-
ing traditional methods (education, instruction, etc.) and
energy sector-specific ones, in particular, special simula-
tion training and skill drills at training ranges. The units of
the Company are equipped with training ranges and new
computer training aids and simulators. The Company’s
units operate 226 rooms for occupational safety training.
All simulators allow to simulate accidents, generate sce-
narios for their liquidation and fully meet the existing
requirements. The Company employs the following simu-
lators and training systems: TWR-12, TRES, TERS, MODIS,
Fenix, ASOP-Expert, Centurion, Centest and Dopusk. The
reduced average period of liquidation of electric energy
system disturbances proves the efficiency of using soft-
ware systems to train operating and maintenance per-
sonnel.
Special CPR training devices (mainly GOSHA) are used to
train the skills of applying first paramedical aid in acci-
dents.
LABOR PROTECTION FUNDED BY SOCIAL INSURANCE FUND
Labor Protection preventive measures funded by contri-
butions to Social Insurance Fund (SIF) included purchas-
ing safety clothes and shoes (for the amount of RUB 5,613
thousand) and health resort treatment vouchers for em-
ployees working with hazardous and dangerous industrial
factors (for the amount of RUB 512 thousand).
CORPORATE TECHNICAL CONTROL SYSTEM
Corporate technical control system (TCS) operates in the
Company on the basis of the Regulation on the Corporate
Technical Control System in Electric Grid Company within
the operations area of JSC IDGC Holding. Production control
has a multilevel structure and is exercised by the following
operating and maintenance personnel (continuous control):
individuals appointed by branch unts (production depart-
ments) to be responsible for the condition and safe opera-
tion of power plants, buildings and structures; business
units heads and their deputies, specialists, production de-
partment managers (periodic control). The frequency of in-
spections is defined by the approved schedules for branches
and production departments of the Company.
The industrial control and occupational safety service and
management of production departments and business units
control management and efficiency of the production con-
trol in each production department. The industrial control
performance criteria include the following:
• minimizing defects and deficiencies detected by the
government and superior industry bodies and cutting
costs of their elimination;
• reducing technical violations, including personnel er-
rors, and their economic damage;
• reduced number of injuries.
HEALTH PROTECTION AND ENHANCED OCCUPATIONAL SAFETY
All the Company’s efforts in the field of labor protection
are primarily aimed at protecting life and health of our em-
ployees.
The Company meets the challenges of improving work-
ing environment, cutting workplaces with unfavourable
working conditions and promoting healthy lifestyle. The
Action Plan to Ensure Health and Labor Protection of Em-
ployees in 2011-2013 contemplates the close cooperation
between JSC IDGC of Center and Volga Region and the
regional authorities on labor protection issues. This will
allow the Company to implement priority projects of the
government policy on labor protection and social partner-
ship.
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11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
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To improve stable operation of the distribution power grid
complex and minimize risks of emergency situations (ES)
of natural and anthropogenic character, the Company de-
veloped and implemented in 2011 a package of main and
additional organizational and technical measures, which
contemplates the following:
1. Additional extension and cleaning of openings on OL
6-110kV; the total area of cleaned and extended open-
ings on OL accounted for 13,728 ha.
2. Implementation of reclosers to create loop systems
and scheme and operating conditions for reliable
consumer power supply; the Company purchased 74
reclosers in 2011.
3. Additional purchase of reserve sources of power sup-
ply (RSPS); in 2011, the Company purchased 294 units
including 79 units of 30 kW and more. Altogether, the
Company has 627 RSPS and 5 mobile modular substa-
tions (MMSS).
4. Replenishment of communication facilities: in 2011,
the Company purchased 151 radio stations (15 por-
table and 136 auto); 143 navigators (141 portable and
2 auto); 5 satellite phones, 145 mobile phones; 415 SIM
cards of different mobile communication operators; 7
radio masts to extend radius of action of radio station.
5. Replenishment of special all terrain vehicles (ATV); in
2011, the Company purchased 366 units of vehicles
and 8 wagon hostels.
6. Creation of mobile teams; in 2011, the Company formed
76 teams (419 pers.), equipped with 165 units of special
vehicles, packed meal, and small tools and equipment.
7. Contract work. To promote cooperation on prevention
and liquidation of accidents and ES, to minimize the
emergency recovery works (ERW) period, the Company
developed and concluded (prolonged) 328 agreements
(259 with the local authorities in the regions (cities)
and the Ministry of Emergency Situations depart-
ments, 62 with contracting organizations, airlines and
other power industry subjects, 7 agreement with sub-
sidiary and dependent companies of JSC IDGC Holding:
JSC IDGC of the Ural, JSC IDGC of Volga, JSC IDGC of the
North-West, JSC IDGC of Center, JSC IDGC of the South,
as well as JSC Tyumenenergo and JSC MOESK).
8. The Company approved the list of OL 110kV that are
situated in woodland and provide system reliability,
power supply for the most important social and infra-
structure facilities (airports, railways, heat and water
supply facilities, health services, etc.).
9. Creation of a system of temperature control. In 2011,
five branches of the Company inspected 10 OL 110kV,
conducted aerial survey (laser scanning and photog-
raphy), heat monitoring and magnetoscopia of OL ca-
bles, installed temperature sensors and base stations,
installed a server (concentrator) for data collection
and processing. Implementation of this system allows
both to maintain the network mode and to evaluate
operational status, which reduces the risk of accident,
minimizes period of liquidation of the accident, and
optimizes operating costs through timely identification
and elimination of defects of equipment.
10. Creation of the Allocated Resources Management Sys-
tem to perform the emergency recovery works (ARMS
ERW). At the first stage of implementation of the sys-
tem, it is necessary to create a geoinformation system
reflecting the geographical location and key specifica-
tions of OL and SS 35 kV and more. In 2011, the Com-
pany took coordinates of all OL and SS 35 kV and more
PREVENTION AND LIQUIDATION OF EMERGENCY SITUATIONS AT DISTRIBUTION POWER GRID COMPLEX FACILITIES
11.4
2011 MEASURES ON PREVENTION AND LIQUIDATION OF EMERGENCY SITUATIONS
and issued registration certificates of OL and SS 35 kV
and more, of mobile teams (MT) and MT of contracting
organizations, certificates of emergency stock ware-
houses and their nomenclature numbers.
ARMS ERW provides the following:
• Efficiency of managerial decisions on the emergency
recovery works in the power grid complex, control over
their implementation and informing the Management
of JSC IDGC Holding and its subsidiary and depen-
dent companies, the federal executive authorities and
agencies on the procedure of ERW using the Allocated
Resources Management System;
• Automated process of collection, processing, transfer
and storage of operative reported information on the
consequences of accidents and emergency situations
and ERW procedure;
• Visualization of the reported information with the
gridding of ERW location, scaling feature, possibility of
receiving information on power grid equipment, avail-
ability and allocation of resources used in ERW;
• Contol over the vehicle movement of mobile teams in-
volved in ERW.
11. Amending the Resolution on the Emergency Response
Team (ERT) to specify the duties, operating regime and
other changes necessary for ensuring coordinated ac-
tions on ERW. The Company formed 10 ERT that are
provided with special all terrain command and staff
vehicles (CSV) meant for autonomous operations at
ERW location. CSV have all necessary equipment, com-
munication facilities and information material suffi-
cient for efficient work of ERT.
12. Informing population. Hotline numbers of JSC IDGC of
Center and Volga Region and its branches on the is-
sues of consumer power supply are given on the web-
sites of the Company and its branches, as well as in the
mass media. For the purpose of informing population
on electric energy system disturbances and the ERW
procedure, the Company sent contacts of the relevant
managers and operative personnel to executive au-
thorities and local government bodies.
13. Creation of a system of operational financing in cases
of emergency. Heads of the units and chief engineers
of the branches are provided with corporate bank cards
with the limit of RUB 50-100 thousand to meet the ex-
penditures on essential needs.
14. Creation of the reserve bankroll system in the amount
of RUB 56 million (3% of the Repair fund of the Com-
pany), meant for liquidation of ES consequences. The
procedure of creation, storage, use, and replenish-
ment of emergency stock is carried out in accordance
with the approved Resolution on Emergency Stocks of
Material and Technical Resources and Equipment for
Power Grids. At the present time the Company has a
100% emergency stock.
15. Personnel training in the field of civil defense (CD)
and protection from emergency situations; in 2011,
the Company organized the training under the exist-
ing regulatory documents. The following institutions
perform training of personnel of relevant categories:
Advanced Training Institute for Executive Officers and
Specialists of Fuel and Energy Industry, educational
training centers specializing in CD and ES of the re-
gions, inter-regional training courses of CD, on-the-job
training in training groups. The following methods
and techniques are used in the training process: edu-
cational classes, theoretical and practical training, or-
ganization of drills and training programs (command
and staff, staff, tactical and special, integrated). The
following documents are developed and maintained:
• Plans of the main measures in the field of CD and pro-
tection from emergency situations of natural and an-
thropogenic character, ensuring fire safety for a year;
• Records on training of executive officers and personnel
of Volunteer Emergency Response Team of Civil De-
fense in the field of CD and protection from ES;
• Applications for admission to training in the field of CD
and protection from ES for a year.
242 243
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
The training base in the branches and production depart-
ments of the Company allows to perform highly qualified
personnel training in the field of CD and protection from
ES. The branches have 16 special classes devoted to CD
and ES; stands devoted to CD and protection from ES, the
material is regularly renewed; educational materials; tu-
torials on IPG and radiation and chemical survey devices;
electronic materials. Control over preparation and per-
forming training classes was exercised by scheduled in-
spection of the branches. In 2011, the Company performed
169 joint training classes aimed at practicing coordinated
actions during the ES liquidation. Training classes ensured
practicing the following measures: quick transition into
the operational readiness, personnel actions in case of
emergency evacuation from administrative and produc-
tion buildings, fire extinguishing in buildings and at power
industry facilities. According to the total final assessment,
the organization of personnel training meets the neces-
sary requirements.
Joint Research Center operates in the Company. It exer-
cises control and forecasting of possible major electric en-
ergy system disturbances and ES (of natural, anthropogen-
ic and other character) in power industry in nine subjects
of the Russian Federation. The Center provides collection,
processing, exchange and transfer of operative production
information, promotes cooperation between the relevant
power industry subjects, organizations, etc.
Emergency situations of natural character. In 2012, the
forecasted number of ES of natural character is equal to
2009-2010 level. High water conditioned by high level
The List of Measures Taken in 2011 to Maintain the Distribution Power Grid Complex Facilities Required for Stable Func-tioning of the Economy and the Population’s Survival during Wartime
Measures Implementation costs, RUB thousand
Maintenance of OL 0.4-10 kV 981,051.48
Maintenance of OL 35-110 kV 448,228.48
Maintenance of SS 35-110 kV 466,513.20
Cleaning and extension of routes OL 0.4-10 kV 415,652.76
Maintenance of TSS (closed TSS, packaged TSS, distributing SS) 316,298.05
Maintenance of cable lines 0.4-220 kV 67,485.06
Maintenance of relay protection and automatics equipment 52,640.74
Maintenance of the system of dispatch and process control 57,341.75
Maintenance of production buildings 135,372.68
Maintenance of administrative buildings 153,915.06
Measures to improve anti-terrorism security of power grid facilities 141,592.00
2012 FORECASTING OF EMERGENCY SITUATIONS AT THE DISTRIBUTION POWER GRID COMPLEX FACILITIES
of water lifting will arise in conditions of exceeding air
temperature together with the liquid precipitation of more
than 15-20 mm for more than 2-3 days.
In the Volga Federal District (the Udmurtia Republic, the
Mariy El Republic, the Nizhny Novgorod Region and the
Kirov Region), low water levels during the freezing period
and forecasted abnormally low temperatures in January
2012 condition river ice thickness exceeding the aver-
age annual norm by the ice drift period and strong frost
penetration of certain river stretches, which poses threat
of ice blockage. In the case of low level of snow cover
that reduce stream capacity, long-term ice blockages and
high levels of water are likely to occur. The fire hazard
for 2012 will be forecasted after snow cover is accumu-
lated and temperature conditions in the growing season
are specified. In 2012, in the Central Federal District (the
Ivanovo Region, the Vladimir Region, the Ryazan Region,
the Kaluga Region) and in the Volga Federal District
(the Mariy El Republic, the Nizhny Novgorod Region and
the Kirov Region), the process of forest breakdown will
be continuous in plantations disrupted by windbreaks
and forest fires, which increases the risk of trees fall-
ing (including on power transmission lines), extension of
deadwood areas and, therefore, occurrence of fire haz-
ard. The subjects where the risks of forest fires spreading
over to settlements is extremely high are situated in the
Volga Federal District (the Nizhny Novgorod Region) and
in the Central Federal District (the Vladimir Region and
the Ryazan Region). The main reasons for accidents at
power grid facilities under unfavorable weather condi-
tions include falling of trees and their branches on power
transmission lines cables, wind load on power transmis-
sion lines, which increases the risk of mass disturbances
of the power system and occurrence of ES. Dangerous
weather event (such as squally wind, heavy precipitation,
hail, sleet sticking) are forecasted in all regional foot-
prints of the Company.
Emergency situations of anthropogenic character. In 2012,
there is a 12-15% decrease in the forecasted number of
anthropogenic fires in the Russian Federation as compared
to 2011 level. The forecasted risk of accidents at power
grid complex facilities is 1-3% lower than in 2011. There is
a continuously high risk of ES at regional and higher levels
caused by fires and explosions at arsenals of the Ministry
of Defense. The ES risk conditioned by accidents in public
life support systems are forecasted up to intermunicipal
levels in all regional footprints of the Company. In 2011,
electric energy system disturbances at the Company’s fa-
cilities were liquidated as soon as possible and did not
lead to ES.
The measures taken by JSC IDGC of Center and Volga Re-
gion in 2011 on maintenance of power grids (including in
buildings and constructions), measures on improving re-
liability, target programs for modernization and replace-
ment of equipment, implementation of new equipment
and technologies within the framework of investment ac-
tivity will allow to provide reliable and quality consumer
power supply in 2012 and to minimize the liquidation pe-
riod of major electric energy system disturbances.
JSC IDGC of Center and Volga Region considers environ-
mental protection activities to be an integral part of its
obligations, being aware of the necessary maintenance
of ecological balance and ensuring ecologically stable so-
cial and economic development of the Company.
ENVIRONMENTAL PROTECTION11.5
ISO 14001
Compliance of the system of environment management of JSC IDGC of Center and Volga Region with international standards
244 245
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In 2011, the amount of production and consumption waste
generated by JSC IDGC of Center and Volga Region in-
creased due to outdated equipment disposal and repairs
of buildings and structures.
2009-2011 ENVIRONMENTAL PROTECTION COSTS, RUB thousand
2009-2011 PRODUCTION AND CONSUMPTION
WASTE GENERATION, tons
The Company has implemented and successfully operates
the environmental management system subject to ISO
14001 requirements. One of the primary objectives of the
quality, professional health, occupational safety and en-
vironmental protection policies of JSC IDGC of Center and
Volga Region is the rational use and preservation of natu-
ral resources, decreasing negative environmental effects,
and reducing the significance of environmental aspects.
4,968.8
134.0 144.6 134.0
5,351.3 5,717.0
2,691.8
4,174.44,380.3
4,755.1
1,710.9 826.8
4,323.5
1,764.7
2,180.9
2,445.2
7,859.0 8,211.7
2011
2011
2010
2010
2009
2009
Environmental protection from production and consumption waste
Atmospheric air protection
Protection and rational use of water resources
V class
IV class
I–III class
11,984.1
6,073.1
6,705.87,334.3
14,921.2 14,755.5
Waste temporary stored in the departments’ indus-
trial sites have the minimum environmental effect since
the Company makes the following efforts:
• all generated waste is ranged by hazard classes which
define treatment methods;
• the Company appointed officers responsible for pro-
duction and consumption waste recycling;
• Company’s departments have equipped sites for tem-
porary waste collection (sites and containers) subject
to sanitary, hygienic and environmental requirements;
• carrying out regular production environmental control
to prevent negative effects.
IV class waste (65%) and V class waste (33%) account for
the major part of production and consumption waste gen-
erated by JSC IDGC of Center and Volga Region in 2011.
I – III class waste account for 2% only.
2011 WASTES STRUCTURE, BY HAZARD CLASSES, tons
2009–2011 PAYMENTS FOR NEGATIVE
ENVIRONMENTAL EFFECTS, RUB thousand
562.2641.2
929.174.881.5
86.9
3,009.52,857.3
2,761.5
201120102009
Waste disposal payments
Payments for atmospheric air emissons
Payments for waste discharges into water bodies
3,646.53,580.0
3,777.5
33%2,445.2 V class
65%4,755.1IV class
2%134.0 I–III class
246 247
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
In 2011, the Company performed its environment protec-
tion policy under the Program for Environmental Safety
and Reasonable Use of Natural Resources for 2011-2013 ap-
proved by the Company.
In general, JSC IDGC of Center and Volga Region has ful-
filled the 2011 Program for Environmental Safety and Rea-
sonable Use of Natural Resources both in terms of the pro-
jected tasks and funding.
Atmospheric Air Protection.
The Company has regularly carried out analytical control
of compliance with the pollutant emissions standards and
instrumental control of the gas cleaning unit performance.
Water Resource Protection.
The Company carried out instrumental control of pollu-
tion content in rain and melt waters and waste waters
discharged into city sewage systems, monitored the
quality of extracted water in terms of its compliance
with the sanitary and hygiene standards, evaluated sub-
surface water reserves and purchased fluid level gages
for artesian wells.
Land Protection and Rational Land Use.
JSC IDGC of Center and Volga Region is licensed to col-
lect, use, detoxify, transport and dispose of hazardous
waste. In 2011, the Company gave great attention to de-
veloping the sites for temporary waste disposal and pur-
chasing containers; the Company concluded agreements
on waste disposal and recycling with the licensed orga-
nizations. Under the Stockholm Convention on Persistent
Organic Pollutants ratified by the Russian Federation, in
2011, the Company transferred 21,42 tons of capacitors
containing polychlorinated biphenyls to the specialized
agencies for disposal.
Technical Measures include the implementation of new advanced solutions and technologies:• Replacing outdated equipment (oil circuit break-
ers) with up-to-date vacuum breakers with high per-
formance capability, high reliability rates, which
are flameproof and environmentally-friendly.
• The use of self-supporting isolatedwires (SIW) reduces
hazardous effects on the fauna.
Using New Technologies for Environmental Protection in 2010-2011
MAIN AREAS OF OPERATIONS:
Unit 2010 2011 2011/2010 (absolute growth)
2011/2010 (relative growth), %
Vacuum breakers 35 kV number 89 148 59 66
Vacuum breakers 10 kV number 7,445 8,762 1,317 18
SIW on OL 0.4 kV km 2,295.6 3,789.5 1,493.9 65
SIW on OL 6-10 kV km 1,126.3 1,589.5 463.2 41
Fauna Protection
In 2011, the branches of JSC IDGC of Center and Volga Re-
gion continued work on fauna protection from the conse-
quences of production operations.
To strengthen control over the implementation of mea-
sures, all branches developed special Programs for Fauna
Protection in 2011-2013.
The Company constructs barriers around the poles of OL
35-110 kV to eliminate a possibility of bird nesting. SIW
and special bird protection devices are used on OL 6-10 kV.
In 2011, the Company purchased more than 4 thousand of
such devices used mainly on OL covering the territories of
reserves and wildlife preserves.
In the reporting year, under the agreement with the Eco-
logical centre “Dront”, the Company performed work on
planning the fauna protection measures during the opera-
tion of OL 6-10 kV of Nizhnovenergo branch.
The works resulted in the following:
• Length and spacing of OL 6-10 kV was defined within
the territories of ornithological importance for the re-
gion;
• The procedure was defined to implement the fauna
protection measures on OL taking into consideration
the differentiated assessment of risk level of certain
OL parts.
Qualifications of Personnel Responsible
for Environment Protection
Professional training, retraining and advanced training of
specialists in environment protection is performed regu-
larly by attending seminars, advanced training courses at
educational institutions and other organizations holding
the relevant license.
Environmental Audit Information
In 2011, the Company continued to carry out environmen-
tal audits of JSC IDGC of Center and Volga Region to detect
incompliance with the requirements of environment pro-
tection laws and ISO 14001 and define the basic measures
to mitigate the negative environmental effects.
Environmental audits carried out in the reporting year
have shown no material violations in environmental pro-
tection, however there are certain discrepancies. Relying
on the audit results, the Company delivered comments
and recommendations and projected measures to elimi-
nate the detected defects.
In 2011, the Company organized and carried out 15 envi-
ronmental audits.
The primary objectives of Environmental Protection Policy
for 2012 of JSC IDGC of Center and Volga Region include:
• Developing the system of environmental management;
• Implementation of the Program for Environmental
Safety and Reasonable Use of Natural Resources for
2011-2013 and the Program for Fauna Protection in
2011-2013;
• Measures on OL 6-10 kV (use of SIW and special bird
protection devices) to prevent animals and birds
deaths;
• Measures on implementation of up-to-date equipment,
which reduces the risk of negative environmental ef-
fects.
248 249
11 HUMAN RESOURCES POLICY AND SOCIAL RESPONSIBILITY
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
JSC IDGC of Center and Volga Region is a bona fide
and responsible taxpayer which complies with all provi-
sions of tax legislation of the Russian Federation.
In 2011, the Company was an award winner at the
IV Annual International Prize “The Best Taxpayer –
2011”. The Prize was established by Foundation for
Promotion of Entrepreneurship at the initiative of the
State Duma members and is approved by the State
Duma, the Federation Council of Russia, the Accounts
Chamber of the Russian Federation, Ministry of Eco-
nomic Development of the Russian Federation, the
Council of Ministers of the Union State of Russia and
Belarus, Moscow City Duma, Association of Regional
Banks of Russia, and Russian Taxpayers Union.
On the basis of 2011 financial results, the department
of Federal Tax Service of the Russian Federation in the
Nizhny Novgorod Region acknowledged JSC IDGC of Cen-
ter and Volga one of the best responsible taxpayers - legal
entities in the Nizhny Novgorod Region.
Subject to tax legislation of the Russian Federation, the
Company shall pay the following taxes: value added tax;
profit tax; property tax; land tax; other taxes; fees to non-
budget funds of the Russian Federation.
The total amount of taxes and fees paid by the Company
in the reporting year accounted for RUB 6,202 million,
a 14% increase as compared to 2010 level. The changes
in the tax burden are conditioned by an increase in vol-
ume of rendered services on power transmission.
TAXATION11.6
2009-2011 Tax Contributions of the Company, RUB million
Budget levels 2009 2010 2011 2011/2010 (absolute growth)
2011/2010 (relative growth), %
Federal budget 1,375.7 2,161.4 1,760.0 -401.4 -19
Consolidated budget of the Russian Federation
1,444.4 1,706.3 2,159.4 453.1 27
Non-budget funds of the Russian Federation
1,356.9 1,583.1 2,282.6 699.5 44
TOTAL 4,177.0 5,450.8 6,202.0 751.2 14
> RUB 6.2 billion
THE AMOUNT OF TAXES AND FEES PAID BY THE COMPANY IN 2011 IN ACCORDANCE WITH TAX LEGISLATION OF THE RUSSIAN FEDERATION
In 2011, JSC IDGC of Center and Volga Region developed
its first Social Report for 2009-2010 and issued it in the
section Disclosure of Information by the Issuers of Equity
Securities/Social Reports www.mrsk-cp.ru. The Social Re-
port was developed in accordance with АА 1000 AS stan-
dards and GRI guidelines – GRI Application Level B+. Bu-
reau Veritas Certification Russia prepared an independent
certification of social reporting.
Issue of the Social Report demonstrates the positive im-
age of JSC IDGC of Center and Volga Region as a reliable
partner. The Report shall give coverage of corporate so-
cial responsibility of the Company, demonstrate develop-
ment trends and show both the Company’s responsible
approach to its main activity concerning regular consumer
power supply and its great attention and responsibility to
employees and partners of the Company, to environment,
cultural traditions of its regional footprints. Social report-
ing is a part of an integrated development process of the
Company, the process of implementation of the planned
measures and evaluation of their results.
NON-FINANCIAL REPORTING 11.7
2009-2010 SOCIAL REPORT IN ACCORDANCE WITH АА 1000 AS STANDARDS AND GRI
GUIDELINES – GRI APPLICATION LEVEL B+
THE FIRST EXPERIENCE OF THE COMPANY IN PRESENTING REPORT ON SUSTAINABLE DEVELOPMENT
PUBLIC RELATIONS, GOVERNMENT AUTHORITIES, INTERNATIONAL COOPERATION, CONGRESS AND EXHIBITION ACTIVITIES
12
Snow and swamp-going vehicle GAS 34039-32, caterpillar type, is intended for transportation of brigades
of energy specialists in difficult access areas, it is widely used in the grid complex for elimination of conse-
quences of technological breaks as a result of spontaneous natural phenomena
252 253
12 PUBLIC RELATIONS, GOVERNMENT AUTHORITIES, INTERNATIONAL COOPERATION, CONGRESS AND EXHIBITION ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Start of the action “Let’s Preserve
the Forest Energy” for the compen-
sational planting of the trees.
Start of international relay race
dedicated to memory and gratitude
“Homeland of a Deed to the Home-
land of the Hero” in the Tula Region.
“Relay Race of the Victory Flag”.
APRIL 23 MAY 4 MAY 5 – JUNE 22
Press conference dedicated to the
results of the Company’s prepara-
tion to the autumn and winter of
2011–2012.
Participation in the 14th Interna-
tional Industrial Exhibition “Electric
Grids of Russia 2011.”
Summing up the results of the 4th
annual competition “Energy of Cre-
ation” for the best media coverage
of the JSC IDGC of Center and Volga
Region activity in 2010–2011.
NOVEMBER 3 NOVEMBER 29 – DECEMBER 2 DECEMBER 10
KEY EVENTS OF THE YEAR
january february march april may june july august september october november december
Development of integrated communications, increase
of publicity capital (image cost) and implementa-
tion of events within uniform external and internal
corporate information policy of JSC IDGC Holding
and subsidiary and dependent companies are impor-
tant elements of the system of strategic management
of the Company.
Among priority directions of this activity there are
forming ideas, strategies and implementation of
plans on effective communications with representa-
tives of business and expert community, bodies of
state authority and administration, social (including
youth and veteran ones) and religious organizations
and mass media in order to harmonize relations with
external environment and raise the business reputa-
tion of the Company.
D E V E L O P M E N T O F I N T E-G R AT E D CO M M U N I C AT I O N S
I N C R E A S E O F P U B L I C I T Y C A P I TA L
I M P L E M E N TAT I O N O F U N I F O R M E X T E R N A L
A N D I N T E R N A L I N F O R M A-T I O N A L P O L I C Y
PRIORITIES OF THE COMMUNICATION POLICY, A PART OF THE SYSTEM OF STRATEGIC
MANAGEMENT OF THE COMPANY
254 255
12 PUBLIC RELATIONS, GOVERNMENT AUTHORITIES, INTERNATIONAL COOPERATION, CONGRESS AND EXHIBITION ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
During 2011 in order to decrease reputational risks of
the Company and to strengthen its positive image by the
Public Relations Department, the following events were
realized within the target communicational programs and
projects: preventing injuries to third parties in the trans-
mission facilities; preparation and passing autumn-winter
period; introducing the system of centralized servicing of
service consumers and promoting “hot lines” in the dia-
logue with the population; energy conservation and en-
ergy efficiency, including communication campaigns on
equipping apartment and private houses with electric en-
ergy metering devices; compensatory tree planting (within
the target communicational program JSC IDGC Holding
Electricity Distribution Complex – to environmental pro-
tection).
During the reporting year the Company continued to
form favorable communication environment, supporting
informational and organizational interaction with repre-
sentatives of the structures, representing the interests of
certain groups of population. Social responsibility of the
Company and its readiness to have a constructive dialogue
with business community are confirmed by the agreements
on cooperation, signed in 2011 between JSC IDGC of Cen-
ter and Volga Region subsidiaries and regional divisions of
All-Russia Public Organization of Small and Medium En-
terprises OPORA RUSSIA, All-Russia Public Organization
Delovaya Russia, Public Association All Russian Electricity
Trade Union and Federation of Independent Trade Unions
of Russia.
In cooperation with regional divisions of All Russian Or-
ganization for Voluntary Assistance to the Army, Air force
and Navy (AROVAAAN), implementation of communica-
tional events was continued in order to attract the most
motivated, professional and patriotic youth to electric
power industry of the country.
For ensuring continuity of working generations in the
electric grid complex, building traditions of mentoring
and strengthening the stability of the Company devel-
opment, great attention was paid to communication
with industry veterans and youth. JSC IDGC of Center
and Volga Region has conducted a series of events with
the active participation of Council of Young Specialists
and Council of Society Veterans: historical and memo-
rial event «Relay Race of the Victory Flag», Internation-
al relay of memory and gratitude “Homeland of a Deed
to the Homeland of the Hero”, planting trees within eco-
logical campaign “Electricity Distribution Complex –
to environmental protection”.
Employees of the Company have conducted compensatory
plantings of the record among IDGC/DGC number of seed-
lings of coniferous and deciduous trees - more than 400
thousand – at the territory of nine regions in the Center
and Volga Region.
JSC IDGC of Center and Volga Region Council of Young
Specialists also took part in the All-Russian Youth Edu-
cational Forum “Seliger 2011”, in the first All-Russian
Contest of Innovative Ideas and Projects “Energy of the
Future”, organized by the United Council for Youth of
Electricity Distribution Complex in cooperation with Co-
ordinating Council for Youth Issues in Scientific and Ed-
ucational Spheres under the RF President and Scientific
PUBLIC RELATIONS12.1
EMPLOYEES OF THE COMPANY HAVE CONDUCTED COMPENSATORY PLANTINGS OF THE RECORD AMONG IDGC/DGC NUMBER OF SEEDLINGS OF CONIFEROUS AND DECIDUOUS TREES — MORE THAN 400 THOUSAND
Department “Fuel and Energy Complex Security Chal-
lenges”, which was widely and systematically covered
by the Company in the media.
Also in accordance with the instructions of the President
of Russia Dmitry Medvedev, the work on creating Youth
Innovation Centers (YIC) has been started at the terri-
tory of the Company’s activities in the united YIC system
of IDGC holding in order to attract to research activities
creative young specialists of JSC IDGC of Center and Volga
Region, as well as talented studying youth and students,
young scientists and scientific staff of the areas of respon-
sibility to generate ideas and develop innovative solutions
for modernization of the electricity distribution complex
and electric power of Russia.
The staff of Public Relations Divisions of the Company
took an active part in temporary press centers, created
in order to provide full information on the events, relevant
to the industry – All-Russia competition of professional
skills of operational and maintenance personnel of elec-
tricity distribution networks of JSC IDGC Holding in Volog-
da and the 14th International Exhibition “Electric Grids
of Russia - 2011” in Moscow.
In 2011, the Company issued four numbers of the corporate
magazine “The Bright Life”. For team building of JSC IDGC
of Center and Volga Region, other channels of intra-corpo-
rate communication were used as well, including informa-
tion displays, Intranet, the official website www.mrsk-cp.ru,
intellectual game “KVN of Power Engineers”.
In order to position as a leading regional power grid com-
pany and to improve reliability of power supply to JSC
IDGC of Center and Volga Region consumers, construc-
tive cooperation is established with regional and munic-
ipal bodies of governmental authorities and administra-
tion. During 2011, government officials, representatives
of municipalities and local government, cultural and
educational institutions participated in All-Russia En-
vironmental Campaign, initiated and organized by JSC
IDGC Holding, “Electric Grid complex – for the environ-
ment” (“Let’s Preserve the Forest Energy”), in the grand
opening of new and reconstructed power grid facilities
(SS Sozvezdie and SS Tovarkovo in the Kaluga Region,
SS Soyuznaya in the Udmurt Republic, SS Ivanovs-
kaya-15 in the Ivanovo Region, SS Alimkin in the Tula
Region, etc.). In order to ensure reliable power supply
for the consumers, Company representatives also par-
ticipated in the meetings of regional headquarters for
security of energy supply and other events, organized
by the authorities.
COMMUNICATION WITH THE STATE AUTHORITIES
12.2
256 257
12 PUBLIC RELATIONS, GOVERNMENT AUTHORITIES, INTERNATIONAL COOPERATION, CONGRESS AND EXHIBITION ACTIVITIES
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
During 2011 in the federal and regional mass media
21,344 materials have been published with reference to
JSC IDGC of Center and Volga Region and its branches.
More than 70% of reports and publications were prepared
on the basis of the materials, distributed by the Company.
More than 85% of information was posted at the Internet
resources that met the needs of the modern audience. At
that broad geography of the print media and its business
and social orientation contributed to the fact that the in-
formation about different aspects of the Company activi-
ties was communicated to the target audience. All publica-
tions were mostly positive or neutral, contained accurate
and reliable information. Over 55% of the publications in
the print media were made on a free basis, which is a sign
of interest of the media in a long-term partnership with
JSC IDGC of Center and Volga Region.
The main theme of the posts: production activities of JSC
IDGC of Center and Volga Region; introduction of inno-
vative technologies, implementation of production pro-
grams, including introduction of large power facilities;
technical connection of consumers; preparing and passing
the autumn-winter period; increasing energy efficiency;
corporate events; work with youth and veterans; staff
training; human resources development; protection of la-
bor; environmental policy and other topics.
Number of negative articles was less than 0.03% of total
number of materials. Negative materials, related to mass
power outages caused by natural disasters were not iden-
tified.
JSC IDGC of Center and Volga Region is targeted at promo-
tion of international cooperation in order to ensure inte-
gration of best practices and methods, high technologies
in the sphere of transmission and distribution of electricity
into its operational activities.
COMMUNICATIONS WITH THE MEDIA
INTERNATIONAL COOPERATION
12.4
12.5
21,344 MATERIALS 0.03 PERCENTIn federal end regional mass media: Number of negative articles:
<
In order to develop the system of feedback on the website
of the Company and branches, Internet-reception is oper-
ating. During 2011 came more than 550 questions, profes-
sionally considered and given an adequate solution for the
benefit of the applicants.
WORK WITH CITIZENS AND PUBLIC ORGANIZATIONS REQUESTS
12.3
550 QUESTIONS>Internet reception offices have already received:
In order to strengthen the positive image and investment
attractiveness of the Company during 2011, JSC IDGC of
Center and Volga Region participated in five exhibitions,
investment and industry forums. The largest of these was
the 14th International Exhibition “Electric Grids of Rus-
sia – 2011”, in which took part the representatives group
of the Company, consisting of 96 people under the leader-
ship of General Director E. Ushakov in the joint delegation
of IDGC Holding. At the general display of IDGC Holding
the Company signed the Agreement with CJSC Obninsk
Power Technology Company, also during meeting and
negotiations it laid the fundamentals for communica-
tions with more than 10 domestic and foreign enterprises
of electrotechnical industry.
During the reporting year, on the basis of the Kalugae-
nergo branch a Russo-French seminar on the use
of promising approaches of Smart Grid and Smart Me-
tering format took place. The seminar was attended by
leading specialists of European electric grid company
ERDF. This communication allowed to carry out bench-
marking of Russian and European experience of power
supply systems, used when creating JSC IDGC Holding
Development strategy for the period until 2015 and for
the perspective until 2020.
International contacts of JSC IDGC of Center and Volga
Region also made it possible to implement a number
of important social projects. In 2011 the Company start-
ed the International relay of the memory and gratitude
“Homeland of a Deed to the Homeland of the Hero”
in the area of responsibility of the Tulenergo branch,
initiated by the Coordinating Council of the electricity
distribution complex. In Krapivna village of the Tula Re-
gion in May 2011 pilot twin agreements on cooperation
between municipalities Krapivenskoe of the Schekino
District of the Tula Region, Gostomel town of the Kyiv
Region (Ukraine) and Bachki village of the Brestovats
Commune (Republic of Serbia) were concluded.
Patriotic ties are formed based on the fate of the Hero
of the Soviet Union, pre-war electrician of Tulenergo,
D. Zaitsev, who became a worthy example for similar
communications not only IDGC/DGC, but also other Rus-
sian economic entities, both to perpetuate the memory
of the defendants of the Fatherland, the heroes of En-
ergy, and in order to create social and psychological ba-
sis between electric grid companies in CIS and non-CIS
countries in the process of improving cooperative ties.
CONGRESS AND EXHIBITION ACTIVITIES12.6
GLOSSARY AND REFERENCE INFORMATION
Diesel generator is an independent power source — it is intended for reserve supply
of electricity to consumers in case of emergencies
260 261
GLOSSARY AND REFERENCE INFORMATION
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
AIMS CME – Automated Information and Measuring Sys-
tem of Commercial Metering of Energy
ASDPC – Automated System of Dispatch and Process
Control
BGC – Backbone Grid Company
BPS – Bulk Power Systems
CB RF – Central Bank of Russian Federation
CEO – chief executive officer
CHPP – combined heat power plant
CIMS – Corporate Information Management System
CJSC – Closed Joint Stock Company
CL – Cable Line
CMP – Cost Management Program
CMSCN – Corporate Multi-Service Communications
Network
CSC – Client Service Center
DGC – Distribution Grid Company
DTSS – Distributing Transformer Substation
EBITDA – earnings before interest, taxes, depreciation
and amortization
EV – enterprise value
FTS – Federal Tariff Service
GCC – Grid Control Center
GSM – General Shareholders Meeting
GVS – Gas-insulated Vacuum Switch
H1, H2 – Half-year (first and second)
HPP – Heat Power Plant
HR – Human relations, interaction with personnel
HVL – High Voltage Line
IDGC – Interregional Distribution Grid Company
IFRS – International Financial Reporting Standards
IR – Investor Relations
IT – Information Technologies
JSC – Joint Stock Company
JSC FGC UES – Open Joint Stock Company Federal Grid
Company of the Unified Energy System
JSC IDGC Holding – Open Joint Stock Company Interre-
gional Distribution Grid Companies Holding
JSC IDGC of Center and Volga Region – Joint Stock Com-
pany Interregional Distribution Grid Company of Center
and Volga Region
JSC RAO UES of Russia – Russian Joint Stock Company
of Energy and Electrification UES of Russia
JSC SO UES – Open Joint Stock Company System Operator
of the Unified Energy System
KPI – Key Performance Indicators
Ltd. – Limited Inc.
MICEX – Moscow Interbanking Currency Exchange
MSCI Russia Small Cap Index – index of international
analytic agency MSCI Barra
RAB – Regulalatory Asset Base
ABBREVIATIONS
GLOSSARY
NPP – Non-state Pension Provision
NPP – nuclear power plant
OECD – Organization for Economic Cooperation and De-
velopment
OL – Overhead Line
POLR – Provider of Last Resort
R&D – research and development
RAS – Russian Accounting Standards
ROA – return on asset
ROE – return on equity
SAP – integrated automated management system by SAP
AG; before 2005 the full official name was Systems, Ap-
plications and Products in Data Processing
SF6 – sulphur hexafluoride
SS – substation
STR – standard tariff rates
TGC – Territorial Generating Company
TGO – Territorial Grid Organization
TREaR — Technical re-equipment and reconstruction
TSS – transformer substation
VAT – Value Added Tax
VV – Vacuum Switch
WGC – Generating Company of the Wholesale Energy
Market
bln – billion
Gcal gigacalorie – unit of heat measurement
kV kilovolt – voltage measuring unit
kWh kilowatt-hour – unit of measurement of real power
mln – million
RUB – Russian Ruble
USD – US Dollar
VA, kVA, MVA voltampere, kilovoltampere, megavoltam-pere – units of measurement of full electric capacity
Var, kVar, MVar, var, kilovar, megavar – units of measurement
of reactive capacity
W, kW, MW watt, kilowatt, megawatt – units of measurement
of active (real) power
UNITS OF MEASUREMENT
262 263
GLOSSARY AND REFERENCE INFORMATION
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Capitalization – market value of a company. Calculated as
the share price multiplied by their number.
Company – JSC IDGC of Center and Volga Region.
Compensation of reactive power – stimulation of the
balance of reactive power in the grid node to adjust the
voltage. The same stimulation in distribution grids is
exercised to lower the losses of energy.
Consumer/Customer/Client – a recipient of the results of
the business process (products, services). A consumer may
be internal, the one within the organization, who uses the
results (output) of the preceding business process, and
external, the one outside the organization who uses or
consumes the results (output) of the organization.
Distribution Grid Company, DGC – a joint stock company
established in the result of separation of power joint stock
companies per the types of activity on the basis of power
grid facilities which are not included into the unified
national (all-Russian) energy grids.
Dividend – a share of the Company’s net profit allocated
among shareholders.
Electric Energy (Power) System – an electric part of the
energy system and the electric energy receivers united
by the common process of production, transmission,
distribution and consumption of power.
Interregional Distribution Grid Company, IDGC – a joint
stock company formed according to the territorial
principle.
MICEX Index – the composite stock price index weighted
against the market capitalization, which includes 30 most
liquid shares of the Russian issuers listed on MICEX. The
MICEX index is one of the major indicators of the Russian
stock market, calculated from September 22, 1997 (with
the base value of 100 points).
Net Assets – the value determined by way of deduction of
a company’s liabilities from its total assets.
Power Industry – a branch of the Russian economy which
includes economic relations arising during the production
(including the combined production of electric and heat
energy) and transmission of energy, operative dispatch
control, marketing and consumption of energy using
production facilities and other property articles (including
those that form a part of the Unified Energy System
of Russia), which are owned by the subjects of the power
industry or other persons as property or on other legal
grounds set by the federal laws. The power industry is the
basis for the functioning of the economy and sustainment.
Productive supply – the amount of power transmitted
to end consumers connected to the grids of a power grid
organization.
Power transmission line – an electric installation
consisting of wires, cables, insulating elements
and bearing structures, intended to transmit the energy
between two points of energy system with possible
intermediate take-off.
Quotation list – a number of securities listed for trading
and presented as a list structure under separate sections.
Regulatory Asset Base – a system of tariff formation
based on the long-term regulation of tariffs. The system is
intended to attract major investments to the industry. The
system is based on ensuring the return of the Company’s
funds invested in assets in a period which corresponds
to the service life of the assets in order to obtain rated
income. The rate of income determined by the state
should correspond to the level of risks in grid companies
and make the industry attractive for investors.
Residents of RF and Non-residents of RF – Tax-payer
residents are physical persons, who live in the Russian
Federation not less than 183 calendar days during 12
TERMS
months in succession. The period of a physical person
staying in RF does not break during short trips (less than 6
months) with the purpose of taking medical treatment or
studying (p.2 of Article 207 of the Tax Code).
Risk appetite – the amount of risk the Company is ready
to take on.
RTS Index – the free-float stock index of the Russian stock
market. It is calculated on the basis of 50 most liquid
securities of the largest dynamic Russian companies,
whose business is in key sectors of Russian economy
presented at MICEX (before December 19, 2011 – at RTS).
Calculated in USD.
RTS power index (RTSeu) – dollar-based index of power
industry shares. Industry indicators are weighted against
the market capitalization indices of the most liquid shares
of the Russian issuers listed on MICEX (before December
19, 2011 – at RTS).
Smart Grid – an elaborate metering and control system
based on modern information technologies.
Smart Metering – power metering using “smart”
technologies.
Stock Market – a share of financial market covering the
organized trading of securities through different stock
exchanges and OTC market.
Subsidiary and dependent companies – legal entities in
which the Company owns over 20% o voting shares, or due
to a major interest in their authorized capital, or under
a concluded agreement, or in which the Company may
determine the decisions made by these legal entities due
to some other reasons.
Technical Design Assignment – a technical document
which sets a full scope of requirements for the product, its
manufacture, control and acceptance.
Unified National (all-Russian) Energy Grid, UNEG –
a system of power grids and other power grid facilities
owned by the subjects of power industry as property or on
the basis of some other legal grounds set by the federal
laws, which provides for stable power supply to consumers,
the functioning of the wholesale energy market, and the
parallel operation of the Russian energy system and the
energy systems of foreign countries.
264 265
GLOSSARY AND REFERENCE INFORMATION
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Full Name Joint Stock Company Interregional Distribution Grid Company of Center and Volga Region
Abbreviated Name JSC IDGC of Center and Volga Region
Primary State
Registration Number
1075260020043
TIN / TRRN 5260200603 / 997450001
Bank Detains The Branch of Gazprombank (JSC)
in Nizhny Novgorod
Settlement account: 40702810500010001930
RCBIC 042202764
Correspondent account: 30101810700000000764
Location and Postal Address 603950, 33, Rozhdestvenskaya Street, Nizhny Novgorod, Russia
E-mail Address [email protected]
Internet Site www.mrsk-cp.ru
General Director Ushakov Evgeny Viktorovich
Tel. (reception room): +7 (831) 431-83-59
Fax (reception room): +7 (831) 431-85-51
Investor Relations Investor Relations e-mail: [email protected]
Koltunov Vladimir Igorevich, the Head of the Corporate Governance Department
Tel.: +7 (831) 431-83-43
E-mail: [email protected]
Kiseleva Natalia Gennadievna, the Head of the Investor and Shareholder Relations Division
of the Corporate Governance Department
Tel.: +7 (831) 431-74-46
E-mail: [email protected]
Corporate Secretary Guseva Yulia Stanislavovna, the Head of Corporate Relations Division of the Corporate
Governance Department
Tel.: +7 (831) 431-74-30
E-mail: [email protected]
REFERENCE INFORMATION Press Center Novikova Galina Vladimirovna, the Head of the Public Relations Department
Tel.: +7 (4842) 71-63-49
E-mail: [email protected]
Petrovskaya Lydmila Sergeevna, the Head of PR Division of the Public Relations Department
Tel.: +7 (831) 431-74-48
E-mail: [email protected]
Customers’ hot line 8-800-100-33-00
Virtual Reception Room for
Customers
http://www.mrsk-cp.ru/?id=279
Vladimirenergo 600016,106, Bolshaya Nizhegorodskaya Street, Vladimir
Tel.: +7 (4922) 21-57-61 Fax: +7 (4922) 21-55-65
Ivenergo 153000, 8/2, Krutitskaya Street, Ivanovo
Tel.: +7 (4932) 38-63-71 Fax: +7 (4932) 33-99-17
Kalugaenergo 248009, 35, Grabtsevskoye Highway, Kaluga
Tel.: +7 (4842) 71-63-59 Fax: +7 (4842) 56-56-11
Kirovenergo 610000, 51, Drelevskogo Street, Kirov
Tel.: +7 (8332) 64-76-50 Fax: +7 (8332) 69-13-71
Marienergo 424006, 39a, Panfilova Street, Yoshkar-Ola, Mariy El Republic
Tel.: +7 (8362) 42-52-92 Fax: +7 (8362) 41-28-80
Nizhnovenergo 603950, 33, Rozhdestvenskaya Street, Nizhny Novgorod
Tel.: +7 (831) 431-93-59 Fax: +7 (831) 431-93-81
Ryazanenergo 390013,12, MOGES Street, Ryazan
Tel.: +7 (4912) 20-43-50 Fax: +7 (4912) 20-44-30
Tulenergo 300012, 99, Timiryazeva Street, Tula
Tel.: +7 (4872) 32-77-69 Fax: +7 (4872) 32-71-14
Udmurtenergo 426004, 30, Sovetskaya Street, Izhevsk, Republic of Udmurtia
Tel.: +7 (3412) 66-15-66 Fax: +7 (3412) 66-15-22
INFORMATION ON BRANCHES
266 267
GLOSSARY AND REFERENCE INFORMATION
JSC IDGC OF CENTER AND VOLGA REGION ANNUAL REPORT 2011
Full Name Closed Joint Stock Company Joint Stock Auditing Firm Auditinform
Abbreviated Name CJSC JSAF Auditinform
PSRN 1027739185044
Location 129164,4, Yaroslavskaya Street, Moscow, Russia
Postal Address 107078, P/O 150, Moscow
Tel./Fax +7 (495) 933-81-65
Internet Site www.auditinform.ru
Permission to exercise the activities
License № E003505, issued by the Ministry of Finance of the Russian Federation on March 4, 2003 to perform auditing activities. License expiry date: March 4, 2013.
Full Name Limited Liability Company FinExpertiza
Abbreviated Name LLC FinExpertiza
PSRN 1027739127734
Location 69 Prospect Mira, Moscow, 129110, Russia
Postal Address 69 Prospect Mira, Moscow, 129110, Russia
Tel./Fax +7 (495) 775-22-00
Internet Site www.finexpertiza.ru
Permission to exercise the activities
Non-profit partnership Russian Auditing Chamber, №10201028038
INFORMATION ON THE AUDITOR
Since June 14, 2011
Since Jan 01, 2011 to June 14, 2011
Full Name Joint Stock Company Central Moscow Depositary
Abbreviated Name JSC CMD
Location 105082, 34-8, Bolshaya Pochtovaya Street, Moscow
Telephone +7 (495) 221-13-33
Fax +7 (495) 221-13-83
Internet Site www.mcd.ru
E-mail [email protected]
TIN 7708047457
PSRN 1027700095730
Permission to exercise the activities
License № 10-000-1-00255, issued by the Federal Commission on Securities Market on September 13, 2002 to maintain the registry. The License is limitless since Feb 02, 2011
Company Head Agafonova Natalia Viktorovna, the Chairwoman of the Management Board
Full Name Joint Stock Company Registrar R.O.S.T.
Abbreviated Name JSC Registrar R.O.S.T.
Location 107996,18-13 Stromynka Street, Moscow
Telephone +7 (495) 771-73-35
Fax +7 (495) 771-73-35
Internet Site www.rrost.ru
E-mail [email protected]
TIN 7726030449
PSRN 1027739216757
Permission to exercise the activities
License № 010-000-1-00264, issued by the Federal Commission on Securities Market on December 3, 2002 to maintain the registry. The License is limitless
Company Head Zhiznenko Oleg Mikhailovich, the General Director
INFORMATION ON THE REGISTRAR
Prior Dec 16, 2010 the services for the keeping and maintenance of the registry of shareholders of JSC IDGC of Center
and Volga Region were rendered by JSC CMD:
After Dec 16, 2010 the services for keeping and maintenance of the registry of shareholders of JSC IDGC of Center
and Volga Region are rendered by JSC Registrar R.O.S.T.:
WWW.MRSK-CP.RU