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JSC OGK-2 (OGK2)

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Tuesday 18 May, 2010

JSC OGK-2

Annual Financial Report

RNS Number : 0986M
JSC OGK-2
18 May 2010
 



 

 

 

 

 

 

 

 

 

ANNUAL FINANCIAL REPORT 2009

 



Address to the shareholders by the Chairman of the Board of Directors

 

Dear Shareholders

 

 

Year 2009 was a difficult one for the power industry. The economic crisis and decline in the industrial sector caused a considerable fall in demand for electric power. But despite all this, the OJSC "OGK-2" managed to get over the negative trends and even reach impressive results. The Company's capitalization increased by more than 200%, its net profit for the year was 1,7 bln rub as compared to 1,3 bln rub of the previous year. As a result of cost optimization the Company successfully increased financing for production and maintenance, technical re-equipment and reconstruction primarily for the Troitsk GRES.

In 2009 the Board of Directors made numerous decisions aimed at the Company's sustainable development and enforcement for the safety and stability of electric energy production. Implementation of the investment program remains one of the main priorities of the Company's activities. Commissioning of new facilities is the pillar, the basic condition for further successful development of a generating company. Therefore the Board of Directors of the OJSC "OGK-2" pays much attention to controlling implementation of investment projects. It is our mutual priority to start the construction of a new coal-fired power unit of 660 MW at the Troitsk GRES and one combined cycle gas turbine power unit of 400 MW at the Serov GRES.

In the coming year we will continue to resolve the issues aiming to increase the Company's capitalization and its operating efficiency and to ensure production stability. If we maintain the tempo for technical re-equipment and reconstruction of the existing capacities, it will allow us to increase equipment availability, to reduce the number of incidents and improve the specific index for fuel consumption.

I am sure that the great production potential, effective cooperation between shareholders, the Board of Directors and the management of the Company as well as high professionalism and responsibility of the Company's employees is the receipt for success in reaching all intended objectives.

 

 

Chairman of the Board of Directors                                                                                     D.V. Fyodorov



1. General Information

Brief history of the Company

 

The Company was founded in the process of power industry reformation by decision of the sole founder (the OJSC RAO "UES of Russia") and registered on 9th of March 2005 by the Inspectorate of the Federal Tax Service, Izobilnensky municipal district of the Stavropol territory, No. 2607; legal address: Stavropol territory, Izobilnensky municipal district, village of Solnechnodolsk. As per Decree of the Government of the Russian Federation of September 1, 2003 No. 1254-r the Company affiliated the Pskov GRES, the Serov GRES, the Stavropol GRES, the Surgut GRES-1 and the Troitsk GRES.

Contracts on delegation of authority of the executive bodies of the OJSC "Serov GRES", the OJSC "Stavropol GRES", the OJSC "Pskov GRES", the OJSC "Troitsk GRES" and the OJSC "Surgut GRES-1" were conducted by the Company.

As of September 29, 2006, JSC-GRES ceased to exist as separate entities and became branches of the Company.

For the purpose of attracting investments, the Company conducted an additional equity offering, which was made available to all investors including foreign (IPO with a listing of the Company's securities on the Primary market of the London Stock Exchange).

Second reorganization of the Company proceeded in affiliation of the OJSC "OGK-2 Holding", separated from OJSC RAO "UES of Russia", took place on 1st of July, 2008.

 

Mission

·       Leadership in production and sale of electric power among the wholesale heat generation companies.

·       Application of modern production and management technologies.

 

Target

·       Enhancing business efficiency, forming a stable positive development trend, increasing capitalization of the Company.

 

Major objectives:

·       Assurance of reliability and efficiency of the stations operation, development of fuel infrastructure and assurance of the required volume of operating capacity with a high performance level with the aim to sustain the high level of competitiveness;

·       Increase in profit and further growth of other financial indices testifying reliability, stability and administrative efficiency of the Company with the aim to increase the market value of the Company;

·       Implementation of the Investment program (achieving the necessary performance indicators, optimization of target values of the project budget), as well as improvement of heat and energy production technologies;

·       Further expansion of the Company's presence at the heat and energy markets.

 

Organizational structure

 

Market analysis and competitive environment

 

According to the results of year 2009 the OJSC "ÎGK-2" ranks second in out - turn and third in installed capacity among the Russian wholesale heat generation companies. The capacities of the GRESs are in demand at the market, what is confirmed by the high loading level: average ICUF for GRESs of OJSC "OGK-2" was 61,9% in 2009. The reduction by 3,3% compared to 2008 was caused by the decline in energy consumption in the country by 6,3% due to the world economic crisis.

Expertly, energy supply share is 5,9% of aggregate consumption of the 1st price zone, and power supply share is 6,5% of aggregate power supply to the 1st price zone.

Appearance of new competitors in the nearest future will be possible only in case of restructuring of current competitors. Furthermore, change in production share of the Company is possible due to change in installed capacities of the rival companies.

The core competitors of the Company at the wholesale power market are five generation companies (the OJSC "OGK-1", the OJSC "OGK-3", the OJSC "OGK-4", the OJSC "OGK-5", the OJSC "OGK-6"), the OJSC "RusGidro" and the State Corporation "Rosatom". In the process of OJSC RAO "UES of Russia" reform GRESs for of each OGK were selected in such a way that each company had comparable starting conditions at the market (installed capacity, asset value, average equipment wear rate). Each OGK incorporates stations located in different regions of the country, what minimizes potential monopolistic abuse. Independent heat generation companies are the principal competitors on the wholesale energy market. Free competition determines market prices in a great degree.

 Geographic location

 

The Company operates at the Russian wholesale power market, which is a unified market for the whole country.

 

 

Surgut GRES-1

TheSurgut GRES-1 is part of the Ural Integrated Energy System (the Ural OES). It is located in Khanty-Mansi Autonomous Okrug, Tyumen region, village of Kedrovy. Area of Khanty-Mansi Autonomous Okrug: 523 100 sq. km. Population: 1 301 000 thousand people.

Plant age: 37 years (start-up years: 1972-1983).

Fuel balance: gas (100%).

ICUF in 2009 was 85,05%.

The Surgut GRES is located in close vicinity to the major industrial hub with oil and gas supply companies. For the last several years region of location of GRES demonstrated high level of energy consumption growth (about 5% per year). Oppositely to decrease in consumption Ural Integrated Energy system by 6,3% in 2009, the Tyumen energy system resulted in 100% consumption of electric energy offered by the plant at present and in the future.

Core competitors: The Nizhnevartovsk GRES (the OJSC "OGK-1") and the Surgut GRES-2 (the OJSC "OGK-4"). As compared with rivals, the Surgut GRES-2 has the least maneuvering capabilities. However the installed capacity of each competitors' power unit is four times greater than the installed capacity of each power unit of the Surgut GRES-1.

 

Stavropol GRES

The Stavropol GRES is part of the South Integrated Energy system -South OES (Stavropol territory, village of Solnechnodolsk, Izobilnensky region). It is a highly-maneuverable station, which plays a key role in sustaining the system reliability of the South Integrated Energy system. Area of the Stavropol territory: 66 500 sq. km. Population: 1 491,6 thousand people.

Plant age: 34 years (start-up years: 1975-1983).

Fuel balance: gas (97%), black oil (3%).

ICUF in 2009 was 48,57%.

The most significant advantages of the Stavropol GRES are still optimal economic performance, wide-range power regulation capabilities, rates of load increase and load dropping, providing maximal cover of consumption schedule. The Company certified its 7 blocks, which will allow the plant to sell system services at the market. The market specific features are now being developed; the launch of system services sale is expected in the near future.

The load of the power plant makes export supplies to Georgia and Azerbaijan (in transit through Georgia) technologically feasible. This also refers to power interchange support in the backbone power network of the South Integrated Energy System.

At the South Integrated Energy system the Stavropol GRES is in competition with the Nevinnomyssk GRES (the OJSC "OGK-5") and the Novocherkassk GRES (the OJSC "OGK-6").

The Novocherkassk GRES uses coal as primary fuel. The power units of the Nevinnomyssk GRES show a considerable rate of equipment wear rate, lower regulating range, and lower rates of load increase and load dropping.

Two stations running on gas (the Stavropol GRES and the Nevinnomyssk GRES) contribute to a more favorable environmental situation in the region.

 

Troitsk GRES

The Troitsk GRES is part of the Ural Integrated Energy system - the Ural OES (Chelyabinsk region, city of Troitsk-5), located at the energy transfer zone of Yekaterinburg-Chelyabinsk-Magnitogorsk, and along the direct supply line to the Northern Kazakhstan. Area of the Chelyabinsk region: 87 900 sq. km. Population: 3 634 thousand people.

Plant age: 49 years (start-up years: 1960-1976).

Fuel balance: coal (98,3%), black oil (1,7%).

ICUF in 2009 was 43,61%.

The plant is characterized as highly volatile in condition of network limitations. Due to its low fuel component, the plant is in high demand at the wholesale power market. Taking into account an increase in expected rates of gas and coal prices, the situation will remain the same. The OJSC "OGK-2" is conducting large-scale works on general maintenance of the plant's generation equipment in order to improve reliability and increase the volume of electric energy sales at the wholesale power market, with high return on sales.

The Yuzhno-Uralsk GRES (the OJSC "OGK-3") can be pointed out as a primary competitor. At the same time 87% of the installed capacity of the Troitsk GRES is made up by the power units of 300 and 500 MW having a wider range of power loading control. In addition, the Yuzhno-Uralsk GRES has higher energy production cost due to gas fuel for energy production, which is higher than the Ekibastuz coal fuel component used at Troitsk.

 

Serov GRES

The Serov GRES is located in the Severo-Bogoslovsky junction, where aluminum and ferroalloy production facilities are concentrated (Sverdlovsk region, city of Serov). Area of the Sverdlovsk region: 195 000 sq. km. Population: 4 670 thousand people.

Plant age: 55 years (start-up years: 1954-1959).

Fuel balance: gas (32,6%), coal (67,4%).

ICUF in 2009 was 60,61%.

The Serov GRES is the sole and largest station in the junction (the Bogoslovsky combined heat power plant has installed capacity of only 141 MW, it produces energy to satisfy heat demand of the existing consumers), which allows to get a quality of "System generator" within the System operator. The GRES can use gas, coal or a mixture of gas and coal as fuel. In the future, even taking into account setting into operation of VL 500 kW Severnaya-BAZ (which in fact will only improve energy supply reliability of the junction), the need of the station will remain the same. Decrease in gas share in the fuel balance will increase the plant's efficiency at the wholesale power market.

Competitors: The Bogoslovskaya combined heat power plant (the OJSC "TGK-9"), which is more dependant on consumer heat demand and has lesser installed capacity (as compared to the Serov GRES).

 

Pskov GRES

The Pskov GRES is part of the North-Western Integrated Energy system - the North-West OES (Pskov region, village of Dedovichi). Area of the Pskov region: 55 300 sq. km. Population: 747,3 thousand people.

Plant age: 16 years (start-up years: 1993-1996).

Fuel balance: gas (100%).

ICUF in 2009 was 49,4%.

The load ratio and location of the station in the North-West Integrated Energy station make it possible to export to power networks of Belarus and the Baltic states, due to the location of the Pskov GRES in the power grid, which ensures parallel operation of these power networks with the United Energy Systems of Russia.

In accordance with these factors production of power at Pskov GRES is unconditionally dependant on demand for electric energy, also in the Baltic states and Belarus.

The only competitor of the Pskov GRES is the Kirishi GRES (the OJSC "OGK-6") which also has modular condensing equipment at the load centre of the Lenenergo-Pskovenergo-Baltic Integrated Energy System. However, the equipment of the Pskov GRES combines high maneuverability with lower cost indices as compared to the Kirishi GRES, which ensures priority load of this power station with condition of sufficient gas supply.

Risk management

 

The power industry is one of the leading industries of Russian economy, its share in the GDP is 10-11%. Furthermore, the power industry is an infrastructural branch of economy. Most of ultimate consumers of the industry products are in Russian Federation. This is why the state of power industry is governed by other industry sectors to a great extend. The world financial and economic crisis influences the Russian economy in a negative way. The general decline in production is the cause of decrease in energy consumption in the country, and, as a consequence, reason for lower turnover and lower revenue of the power companies. The situation is aggravated by the fact that one of the major industrial consumers of electric energy is the metallurgy industry, which suffered greatly during the crisis. Besides, level of fixed costs of the energy companies is traditionally high and hardly dependant on turnover.

The situation is aggravated by the fact that the Russian power industry feels the lack of investment and experiences problems with credit resources, resulting in adjustment of volumes and dates of commissioning of new facilities.

In order to reduce such risks and ensure reliable energy supply to consumers the Company realizes the following activities:

- timely maintenance, repair, modernization, reconstruction and technical upgrade;

- construction of new generation capacities;

- improvement of operational efficiency and realization of considered financial policy (through economy and optimization of expenses);

- conclusion of long-term contracts for supply of electric and heat energy;

- creating competitive environment in the sphere of procurement and services.



2. Primary results of activities

2.1. Performance indicators

 

Table 1. Dynamics of working capacity and electric energy production of the stations of OJSC "OGK-2" in 2007-2009

Name of Station

Start-up year

Installed capacity, MW

Operating capacity, MW

Electric power generation, mln kWh

2007

2008

2009

2007

2008

2009

Surgut GRES-1

from 1972 till 1983

3280

2 920,8

2 900,3

2 935,5

24 469,3

24 543,3

24 436,7

Stavropol GRES

from 1975 till 1983

2400

2 045,9

2 020,2

2 089,6

9 703,9

11 016,7

10 210,5

Troitsk GRES

from 1960 till 1976

2059

1 483,4

1154,3

1 120,3

9 026,3

9 023,8

7 865,8

Serov GRES

from 1954 till 1959

526

438,2

445,4

452,6

3 087,2

3 348,3

2 792,8

Pskov GRES

from 1993 till 1996

430

339,0

390,8

399,8

1 735,4

1 894,5

1 860,0

Total for OJSC "OGK-2"

8695

7 227,3

6 911,0

6 998,5

48 022,1

49 826,6

47 165,8

 

Table 2. Capacity factor for electric power plants of the branches of OJSC "OGK-2" in the review period, %

#

Branches

2008

2009


Total for OJSC "OGK-2", including:

65,24

61,92

1

Surgut GRES-1

85,19

85,05

2

Stavropol GRES

52,26

48,57

3

Troitsk GRES

49,89

43,61

4

Serov GRES

72,47

60,61

5

Pskov GRES

50,16

49,38

 

In realfigures, in 2009 the total electric energy production amounted to 47 165,8 mln kWh whichis5,34% lower than the volume produced in 2008 (49 826,6  mln kWh). Amongthe major reasons that led to the underutilization of the stations' capacity in the review period, apart from the decrease in sales volumes, can be named the following ones:

· Branch of the OJSC "OGK-2" - SurgutGRES-1: there was no underutilization of equipment in 2009.

· Branch of the OJSC "OGK-2" - Stavropol GRES: the station was utilized by the System operator.

· Branch of the OJSC "OGK-2" - Troitsk GRES: due to the breakdown maintenance and equipment reserve the underutilization in 2009 was 4 005 625 ths kWh.

· Branchofthe OJSC "OGK-2" - Serov GRES: the underperformance is explained by low demand for electric energy due to high selling price compared to other power stations.

· Branch of the OJSC "OGK-2" - Pskov GRES: station discharge initiated by the System operator.

 

 

Table 3. Heat producedby thermal power stations and boilers of the branches of the OJSC "OGK-2" in the review period, ths Gcal 

 

#

Branches

2008

2009

1.

Total for OJSC "OGK-2", including:

2 455,7

2 397,3

1.1.

Surgut GRES-1

1 694,5

1 642,0

1.2.

Stavropol GRES

81,3

68,1

1.3.

Troitsk GRES

492,1

486,4

1.4.

Serov GRES

112,2

119,0

1.5.

Pskov GRES

75,6

81,8

           

Table 4. Energy productive supply, mln kWh

#

Branches

2008

2009

1.

Total for OJSC "OGK-2", including:

47 327

44 763

1.1.

Surgut GRES-1

23 415

23 308

1.2.

Stavropol GRES

10 662

9 887

1.3.

Troitsk GRES

8 377

7 251

1.4.

Serov GRES

3 092

2 569

1.5.

Pskov GRES

1 781

1 748

 

 

Table 5. Specificconsumption of fuel equivalent for energy supply for thermal power stations of the branches of the OJSC "OGK-2" for the review period, gr/kWh

#

Branches

2008 actual

2009

norm

2009 actual

deviation from the norm (-saving, +overspent)

deviation from the previous year

(-saving, +overspent)


Total for OJSC "OGK-2", incl.:

347,5

348,2

347,2

-1,0

-0,3

1

Surgut GRES-1

325,2

327,6

326,0

-1,6

+0,8

2

Stavropol GRES

330,7

329,1

328,5

-0,6

-2,2

3

Troitsk GRES

392,0

403,1

403,0

-0,1

+11,0

4

Serov GRES

463,4

464,4

464,3

-0,1

+0,9

5

Pskov GRES

331,0

332,2

331,9

-0,3

+0,9

 

Specific consumption of fuel equivalent for electric energy was 347,2 gr/kWh (total for the branches of OJSC "OGK-2"), which is by 0,3 gr/kWh belowthe level of 2008 (347,5 gr/kWh).

The major dropdown in the specific consumption takes place at the Stavropol GRES (-2,2 gr/kWh), the major rise was shown at the Troitsk GRES (+11,0 gr/kWh). The specific consumption increase at the Troitsk GRES was caused by the rise of the operation hours of turbines of the second line in the single-case mode and increase of outage hours at the most energy efficient line.

 

Table 6. Specific consumption of fuel equivalent for heat energy supplied of TPS and boilers of the branches of the OJSC "OGK-2" for the review period, kg/Gcal

¹

Branches

2008 actual

2009 norm

2009 actual

deviation from the norm (-saving, +overspent)

deviation from the previous year

(-saving, +overspent)


Total for OJSC "OGK-2", incl.:

152,7

152,7

152,1

-0,6

-0,6

1

Surgut GRES-1

142,8

143,4

142,7

-0,7

-0,1

2

Stavropol GRES

171,2

171,2

171,2

  0

  0

3

Troitsk GRES

173,9

170,8

170,4

-0,4

-3,5

4

Serov GRES

183,9

183,9

183,8

-0,1

-0,1

5

Pskov GRES

171,8

170,6

170,5

-0,1

-1,3

 

The specific fuel consumption for heat energy supply in 2009 is by 0,6 gr/kWh less than in 2008.

2.2. Indices of accident rate and employment injuries

 

No accidents and fires as well as no disturbance due to nonobservance of safe operation conditions for technical equipment at hazardous industrial facilities of the branches of the OJSC "OGK-2" were registered in 2009.

The total number of technological violations in 2009 was 169 as compared to 215 incidents in 2008.

 

Table 7.Statistical data on accident rate at the branches of the OJSC "OGK-2" for the period 2007-2009

Power stations

Accidents

Incidents

2009

2008

2007

2009

2008

2007

Surgut GRES-1

-

-

-

50

55

55

Stavropol GRES

-

-

-

8

10

13

Troitsk GRES

-

-

-

97

84

75

Serov GRES

-

-

-

18

47

69

Pskov GRES

-

-

-

9

6

5

Total for OJSC "OGK-2"

-

-

-

169

215

217

 

Table 8. Comparative analysisof incidentsas to groups of equipment that took place at the stations of the OJSC "OGK-2" in 2009 as compared to 2008

Groups of

Surgut GRES-1

Stavropol GRES

Troitsk GRES

Serov GRES

Pskov GRES

TOTAL:

equipment

2009

2008

2009

2008

2009

2008

2009

2008

2009

2008

2009

2008

Accidents occurred

-

-

-

-

-

-

-

-

-

-

-

-

Total accidents occurred,

50

55

8

10

97

84

18

47

9

6

169

215

including:

at the boiler equipment

22

25

2

1

65

73

7

37

4

0

100

136

at the turbine equipment

23

17

2

3

9

7

5

3

1

0

40

30

at the accessories compartment

0

0

1

2

0

1

0

2

1

0

2

5

at the electrical equipment

5

13

3

4

10

16

5

5

4

6

27

44

at the lifting and transporting equipment

0

0

0

0

0

0

0

0

0

0

0

0

at the gas supply facilities

0

0

0

0

0

0

1

0

0

0

1

0

at the facilities containing hazardous substances

0

0

0

0

0

0

0

0

0

0

0

0

at water development facilities

0

0

0

0

0

0

0

0

0

0

0

0

in buildings and constructions

0

0

0

0

0

0

0

0

0

0

0

0

 

Localaccidents at the generating equipment of the branches were not registered. Currently increased attention is paid to the following matters:

At the Surgut GRES-1:

1. Gas supply systems of boilers No. 1, 4, 7, 8, 10 and 13 do not correspond to the requirements of the new Regulations. Considerable funds and time are needed to repair them (in fact only for basic repair of power generating units). This work is planned for the boiler of station ¹ 4 in 2010.

2. Due to the erosive wear of the metal of the pipes, the tube bundles of turbine condensers of power generating units of stations ¹ 4 and 11 are in a critical state (in operation for more than 30 years). It is required to cover the entry surface of the tube bundles (depending on the degree of wear) and tube plates with a protective paste. This work is planned for the turbine condensers of stations ¹ 4 and 11 in 2010.

At the Troitsk GRES:

1. Damaging of boiler heating surfaces grows due to run-out as a result of the long operating life. In general, most painful for the Company is the increase of incidents that took place due to the damage to the heating surfaces of equipment of line III. It is planned to increase annual volumes of heating surfaces replacement of steam boilers of line III.

At the Pskov GRES:

1. Unsatisfactory performance of protection systems and automatics (4 out of 9 incidents occurred in 2009) can be observed. In July 2009 there was held a meeting with specialists of contractor organizations that had participated in development and installation of the operating automatic process control systems. Currently there are works being done in accordance with decisions made at this meeting.

 

Emergency prevention activities. Personnel development

Emergency prevention activities stated in the acts of investigation of technological violations and in documents on disposition, issued on the results of such investigations, are implemented within the established deadlines.

Personnel development is made in accordance with requirements of Regulations on Personnel development, including:

·   analysis and working-through reasons for technological violations;

·   regularly assessment of the start and shutdown quality of the main equipment;

·   emergency and fire prevention trainings;

· operation meetings.

 

¹

Expenses for activities, ths rub

Surgut GRES-1

Stavropol

GRES

Troitsk

GRES

Serov

GRES

Pskov

GRES

1.

Accident prevention

1 090,0

2 872,8

6 912,9

2 073,0

981,2

2.

Sanitary-hygienic measures

28 427,0

20 081,8

2 676,1

3 147,0

452,0

3.

Improvement of working conditions

0

3 148,4

7 661,3

478,0

0

4.

Personal protective equipment for personnel

2 498,0

2 168,6

2 730,6

3 156,0

1 285,9


Total

32 015,0

28 271,6

19 980,9

8 854,0

2 719,1

Table 9. Expenses for labour protection measures in 2009

 

In order to prevent accidents and to comply with the rules of labour protection the following measures are taken at the branches of the OJSC "OGK-2":

·    induction and refresher trainings on labour safety and fire protection;

·    knowledge examination of labour safety and industrial safety;

·    analytical review of injury rates in electrical energy industry;

·    trainings of personnel on basics of fire safety;

·    responsible managers and specialists of stations and the executive body take rounds and make inspections of working places of the stations' departments and working teams of contractor organizations in accordance with the established terms;

·    practical skills of rendering predictor care to the injured in case of emergency are trained on annual basis in the branches of the Company;

·    for 2010 there is planned competition between multiple-skilled teams of the branches of the OJSC "OGK-2". The competition program includes testing of knowledge of norms and specifications of labour protection, accident prevention and testing of skills of rendering predictor care to the injured in case of emergency.

Working places of all branches were certified in order to eliminate occupational hazards. Measures on possible elimination of harmful factors have been worked out and are being implemented on this assessment.

Social insurance against industrial accidents, occupational illnesses and certification of labour protection programs are implemented in accordance with the Labour Code of the Russian Federation. Furthermore, the OJSC "OGK-2" takes prevention measures on labour protection: there is a Day of labour safety and fire protection, assessment of working places with issuing respective recommendations once a month.

 



Repair program of the OJSC "OGK-2"

Table 10. Results of the repair program of the OJSC "OGK-2" in 2009

Name of equipment

 Full repair

Medium repair

Current repair

Planned for 2009, units

Actual in 2009, units

 %

Planned for 2009, units

Actual in 2009, units

 %

Planned for 2009, units

Actual in 2009, units

 %

8

8

100

9

9

100

48

46

96

4

4

100

8

8

100

31

30

97

4

4

100

8

8

100

31

30

97

1

1

100

0

0

-

31

31

100

 

Branch of the OJSC "OGK-2": the Troitsk GRES:

 - current repairs of the generating set of station 7 is extended for the period from 25.05 till 31.12 to the period from 25.05 till 08.02.2010

 - current repairs of the boiler of station 2A are planned for the period from 01.10 till 16.10 is cancelled.

 

Table 11.   Achievement of annual rates for repairs in 2009 for the branches of the OJSC "OGK-2"

Branch

Plan 2009,

ths. rub

Actual 2009,

ths. rub.

Surgut GRES-1

 

1 097 772

1 220 985

Stavropol GRES

 

561 025

543 811

Troitsk GRES

 

980 140

894 384

Serov GRES

 

192 370

171 871

Pskov GRES

 

116 025

108 607

 

 

Main reasons for the non-fulfillment of the plan for repair expenses were late delivery of the material and technical resources, economy on the Salary Fund/Unified social tax of the own maintenance staff, late conclusion of contract agreements due to repeated procurement procedures, incomplete fulfillment of obligations by the contractor organization on several contracts.

 

Table 12. Actual expenses for repair of principal production funds during the last three years, in prices adjusted to 2009 (ths rub)

Branch

2007

(in prices of 2009)

2008

(in prices of 2009)

2009

(in current prices)

Surgut GRES-1

1 494 722,00

1 465 276,00

1 220 985,00

Stavropol GRES

738 178,00

692 638,00

543 811,00

Troitsk GRES

1 027 622,00

1 242 710,00

894 384,00

Serov GRES

249 790,00

237 309,00

171 871,00

Pskov GRES

151 368,00

140 667,00

108 607,00

Total for OJSC "OGK-2"

3 661 680,00

3 778 600,00

2 939 658,00

 

            During the last three years almost all branches of the OJSC "OGK-2" showed decrease in repair expenses (in prices adjusted to 2009) in accordance with the allocated limits for conditioned and constant repair expenses. Increase in repair expenses at the Troitsk GRES in 2008 was caused by the need to replace electrofilters at power generating unit 5 because of technical and ecological parameters.

2.3. Sale of heat and electric power

Analysis of development trends in wholesale trade of electric power

Electricity and power sale at the wholesale market for electricity and power is the principal activity of the OJSC "OGK-2". The model of the wholesale power market of the transition period was established in 2003, when the FTS (free trade sector) appeared, where wholesale trade of part of electric energy volumes was realized in the form of conclusion and implementation of bilateral sale contracts and in the form of price bids selection from sellers and buyers at non-regulated prices. During the FTS operation each producer could offer up to 15% of the installed capacity (for hydroelectric power plants - not more than 15% of the planned output) at non-regulated prices, and each buyer had the right to buy in the FTS up to 30% of his claimed planned hourly energy consumption. At the same time the buyers had the guarantee to be able to buy the full planned consumption volume that they were not able to buy at the FTS as to the established tariffs of the regulated market (or of the retail market). The producers had the guarantee of selling at the regulated tariffs not less than 85% of the energy volume planned for them by the System operator (the SO) in the preliminary operations load schedule (the POS). This was how electric energy wholesale trade was operated up to September 1, 2006. On September 1, 2006 the government resolved to launch a New model of wholesale power market (NMWPM) which introduced several trade schemes: electrical energy (power) sale at regulated prices (tariffs) based on regulated contracts and electrical energy (power) sale at non-regulated prices defined in the following way:

-          basedon non-regulated bilateral contracts on electrical power sale or non-regulated bilateral contracts on deviations sale;

-          by means of competitive price bids selection from buyers and providers realized one day before the delivery start date;

-          as a resultof competitive bids selection for balancing the system.

The main aim for the NMWPM is to gradually move from the guaranteed consumption of the full electrical energy volume at regulated tariffs to the limited purchase volume of electrical energy based on regulated contracts of limited duration and annually decreasing volumes. The pace for such decrease is defined in the Order of the Government of Russian Federation of April 7, 2007 No. 205 "On amendments to certain acts of the Government of Russian Federation on definition of electrical energy sales volume at non-regulated prices". Since January 1, 2010 the liberalization rate shall be approximately 60%, since January 1, 2011 electrical energy and power shall be delivered in full volume at non-regulated prices, exclusive of community supplies where rates are regulated by the Government.

Implementations of amendments to the liberalization pace may have a considerable impact on the operation of the wholesale electric energy and power market.

Furthermore there are other changes for the MWPM functioning that have a direct impact on the activities of the OJSC "OGK-2":

 

1.         Unit commitment

SinceDecember 2007 and up to July 1, 2008 the day-ahead market used the transitional model. The market players sent their bids for unit commitment voluntarily.

After the Order of the Government of the Russian Federation of July 1, 2008 bids for unit commitment became obligatory for all players of the wholesale market.

Results:

-          for consumers: cost minimization;

-          for suppliers: preliminary notification on unit commitment planned for the coming week;

-          for the system in general: opportunity to assess electrical energy and power balance for the coming week, preliminary unit commitment for heat power stations.

 

2.         Competitive power takeoff

In order to define suppliers that should receive full payment for the electric power within the framework of one of the sales arrangements, the System operator made a competitive power takeoff (CPT).

In 2008 as wellas in 2009 stations of the OJSC "OGK-2" passed a competitive power takeoff for full volumes of the installed capacity.

Free capacity volumes that were not covered by non-regulated bilateral agreements are delivered to the wholesale market at the price of the order which does not exceed the tariff for electric power supply set by the Federal Tariff Service of Russia adjusted for the seasonal factor. The seasonal factor is connected with the irregularity of power consumption by consumers during the regulation period and it leads to a differential monthly distribution of payment for free capacity.

 

3.         Non-regulated Electricity and Capacity Contract (NECC) (over-the-counter)

As a result of liberalization of capacity volumes supplied to the wholesale market, from 01.07.2008 it became possible to make bilateral non-regulated electricity and capacity contracts (NECC) at non-regulated prices. Furthermore, for the capacity approved in 2007 it is possible to make over-the-counter NECCs but only with contractors of regulated contracts (RC) and for the volumes whose total (including the RC) shall not exceed basic volumes of electricity and capacity stated in this RC.

 

4.         Exchange-traded NECC (from 01.01.2009)

A new way of trade at non-regulated prices on the base of exchange was introduced. Exchange house "Arena" offered the opportunity to sell electricity and capacity. 165 members of the wholesale market for electricity and power now take part in the exchange auctions. At the same time opportunity to make exchange-traded NECC without limitations exists only at the free power transfer zone (FPTZ) proper.

Power supply to the marginal FPTZ is limited by the regulations of the wholesale market. The Commercial operator (the OJSC "ATS") uses these regulations to calculate indices for maximum volumes (limits) for supply to other zones of free power transfer.

 

5.         Cost of decrease in free capacity

In orderto confirm availability of the generating equipment for the loading set, rules for payment for capacity that employ an availability factor, used since January 2007, were introduced at the wholesale market.

The financial result of the Company is influenced by the Regulation on payment for decline in the price for free capacity based on the final price of the CPT used for reporting according to the Agreement on availability maintenance. At the same time the final price for the CPT exceeds the tariff set with account of the seasonal factor. This regulation of the wholesale market results in the increase in absolute value for the decrease in power costs for the stations whose availability factor is lower than generally defined for the price zone.

 

6.         Cost of the new capacity

-          For power generation inclusion into the balance is a necessary condition of payment for capacity.

-          The total capacity is supplied at non-regulated prices.

-          Supplier's application for CPT is not limited by the tariff, set by the Federal Tariff Service of Russia.

-          A new requirement for economic feasibility of the price bid for capacity is beingintroduced. Compliance with this requirement is supervised by the non-profit organization "Sovet rynka" that is empowered to turn down a bid that is considered to be economically feasible.

 

Information on tariffs for power and electric energy

 

Table 13.  Tariffs for electric energy and power for 2009 - 2010

¹

Indexes

Measurement unit

2009

Approved for 2010

1

2

3

4

5

1

Surgut GRES-1

Tariff rate for energy

rub/ths kWh

456,94

547,81

Tariff rate for power

rub/MW mnth

86 615,55

72 198,91

2

Stavropol GRES

Tariff rate for energy

rub/ths kWh

757,29

941,37

Tariff rate for power

rub/MW mnth

75 888,14

63 512,07

3

Troitsk GRES

Tariff rate for energy

rub/ths kWh

517,58

575,94

Tariff rate for power

rub/MW mnth

83 692,07

75 978,06

4

Serov GRES

Tariff rate for energy

rub/ths kWh

812,82

885,48

Tariff rate for power

rub/MW mnth

95 589,98

84 198,78

5

Pskov GRES

Tariff rate for energy

rub/ths kWh

682,87

855,89

Tariff rate for power

rub/MW mnth

125 621,24

109 536,31

 

Dynamics of heat and electric power supply

 

 

Volatility of productive supply volumes - volumes of energy sales - is caused by the changes in energy production volumes as well as energy re-sale volumes purchased for securing regulated contracts.

 

 

The general decrease of the heat and electric power productive supply of the OJSC "OGK-2" in 2009 was caused by the decrease in power productive supply at the Surgut GRES-1 and the Stavropol GRES.

The decrease in power productive supply at the Surgut GRES-1 was caused by commissioning of new boilers in the city of Surgut, modernization of heat points, reconstruction and repairs of heat network.

The decrease in power productive supply at the Stavropol GRES was due to the higher temperature of the outdoor air at the station's location in 2009 in comparison with previous periods.

 

Dynamics of electrical energy sales

 

Table 14. Dynamics of electrical energy sales, mln KWh

Station

2007

2008

2009

total

Incl. purchased electric energy

total

Incl. purchased electric energy

total

Incl. purchased electric energy

Surgut GRES-1

25760

2371

27062

3535

25413

1955

Stavropol GRES

10485

1136

11789

1178

10998

1171

Troitsk GRES

14287

5995

12024

3737

8362

1201

Serov GRES

3791

985

3422

374

2773

243

Pskov GRES

2029

390

2117

338

2139

398

OGK-2

56353

10877

56415

9162

49685

4969

 

Table 15. Volumes of electrical energy sale at the wholesale market as to sectors, mln KWh

Station

2007

2008

2009

total

RC

DAM

BM

total

RC

DAM

BM

total

RC

DAM

BM

Surgut GRES-1

25760

20692

4841

228

27062

18535

8279

248

25413

14729

10348

336

Stavropol GRES

10485

8380

1549

555

11789

7317

3997

475

10998

5962

4532

504

Troitsk GRES

14287

5814

8332

142

12024

5169

6712

143

8362

4067

4065

230

Serov GRES

3791

2927

642

222

3422

2618

596

209

2773

2095

581

98

Pskov GRES

2029

1393

507

130

2117

1243

775

99

2139

996

1064

79

OGK-2

56353

39205

15871

1276

56415

34881

20359

1175

49685

27849

20589

1247

 

 

 

 

 

Table 16. Purchase volumes for electrical energy at the wholesale market as to the sectors, mln KWh

Station

2007

2008

2009

total

DAM

BM

total

DAM

BM

total

DAM

BM

Surgut GRES-1

2371

1920

451

3535

2859

677

1955

1219

736

Stavropol GRES

1136

511

625

1178

636

542

1171

714

457

Troitsk GRES

5995

5417

578

3737

3174

562

1201

550

651

Serov GRES

985

853

132

374

298

76

243

185

58

Pskov GRES

390

249

141

338

216

122

398

293

105

OGK-2

10877

8950

1927

9162

7183

1979

4969

2963

2006

 

The volumeof the electric energy sale with regulated contracts decreases due to the increase in the liberalization of the wholesale market of electricity and power.

The volumeof the electric energy sale at the day-ahead market varies due to the decrease in volumes of sales with regulated contracts as well as due to the change in electric energy production volumes.

The change in sales volumes at the basic market shows minor fluctuations which are mainly caused by random factors.

 

Table 17. Structure of capacity sales volumes at the regulated/non-regulated market

Branch

Index

In 2009, MW

Surgut GRES-1

 

regulated market

24 932,3 

non-regulated market

14 157,9 

Stavropol GRES

 

regulated market

18 430,8 

non-regulated market

10 160,1 

Troitsk GRES

 

regulated market

15 743,6 

non-regulated market

8 854,2 

Serov GRES

 

regulated market

4 062,1 

non-regulated market

2 190,7 

Pskov GRES

 

regulated market

3 375,4 

non-regulated market

1 760,3 

OGK-2

 

regulated market

66 544,2 

non-regulated market

37 123,2 

 

Table 18. Main consumers of electric energy and capacity, regulated contracts in 2009

Name of the contractor

Cost of the electric energy and capacity according to regulated contracts incl. VAT, mln rub

Contractor's share in the total volume

Tyumenskaya energosbitovaya kompaniya, OJSC

4 687,1 

19%

Sverdlovenergosbit, OJSC

1 748,4 

7%

Mosenergosbit, OJSC

1 619,7 

6%

Orenburgenergosbit, OJSC

1 157,5 

5%

Kubanskaya energosbitovaya kompaniya, OJSC

1 004,9 

4%

Donenergosbit, LLC

970,4 

4%

Tchelyabenergosbit, OJSC

913,1 

4%

Rusenergosbit, LLC

867,0 

3%

Volgogradenergosbit, OJSC

700,9 

3%

Edinaya energosnabzhayuschaya kompaniya, CJSC

693,3 

3%

Energosbit Rostovenergo, OJSC

626,6 

2%

Ekaterinburgenergosbit

513,2 

2%

RUSENERGORESURS

505,7 

2%

Belgorodskaya sbitovaya kompaniya, OJSC

413,3 

2%

Other

6 258,6 

33%

Total

25 148,8 

100%

2.4. Financial data

 

Information on the Company's assets 

As of December 31, 2009 the Company's assetsamount to 48,955 mln rub and have the following structure:

Table 19. Dynamics and structure of assets of the OJSC "OGK-2" for 2007-2009

Name of index

balance sheet line code

31.12.2007

31.12.2008

31.12.2009

value, mln rub

%

value, mln rub

%

value, mln rub

%

Non-current assets

190

14 517

33%

12 317

27%

14 902

30%

intangible assets

110

0

0%

0

0%

0

0%

fixed assets

120

9 355

21%

9 403

21%

9 006

18%

construction in process

130

1 555

4%

1 256

3%

1 854

4%

income yielding investments into tangible assets

135

7

0%

7

0%

7

0%

long-term financial investments

140

2 130

5%

46

0%

2 549

5%

deferred tax assets

145

84

0%

187

0%

103

0%

other non-current assets

150

1 386

3%

1 418

3%

1 383

3%

Current assets

290

28 958

67%

33 292

73%

34 053

70%

inventory

210

2 224

5%

2 727

6%

2 444

5%

VAT for assets purchased

220

48

0%

63

0%

118

0%

accounts receivable

230, 240

5 006

12%

27 273

60%

26 535

54%

short-term financial investments

250

20 103

46%

1 868

4%

3 405

7%

cash assets

260

1 577

4%

1 361

3%

1 541

3%

other current assets

270

0

0%

0

0%

10

0%

Total

 300

43 475

100%

45 609

100%

48 955

100%

 

As of December 31, 2009 the biggest share in the structure of the Company's assets belongs to current assets (70%) most of which are accounts receivable. As of December 31, 2009 the share of non-current assets in the structure of the Company's assets amounts to 30% most of which are fixed assets (18%).

 

Information on the capital employed of the Company

Table 20.1. Financial indices of the OJSC "OGK-2" for 2007-2009

Index

Units

2007

2008

2009

Balance-sheet total

ths rub

43 475 330

45 608 815

48 955 174

Net assets

ths rub

34 503 664

33 188 592

34 985 545

 

The negative dynamics in the change of net assets in 2008 in comparison with 2007 was causedby outrunning growth of long-term and short-term liabilities of the Company as compared to the growth of the Company's assets.

The positive dynamics in change of net assets in 2009 as compared to 2008 was caused by outrunning growthofthe Company's assets as compared to the growth of the short-termliabilities.

As of December 12, 2009 the net assets of the Company amount to 34,986 mln rub. Calculation of net assets is given in table 20.2:

 

Table 20.2. Dynamics and structure of the Company's net assets in 2007-2009

Name of index

balance sheet line code

31.12.2007, mln rub

31.12.2008, mln rub

31.12.2009, mln rub

Assets

Non-current  assets

190

14 517

12 317

14 902

intangible assets

110

0

0

0

fixed assets

120

9 355

9 403

9 006

construction in process

130

1 555

1 256

1 854

income yielding investments into tangible assets

135

7

7

7

long-term financial investments

140

2 130

46

2 549

deferred tax assets

145

84

187

103

other non-current assets

150

1 386

1 418

1 383

Current assets

290

28 958

33 292

34 053

Inventory

210

2 224

2 727

2 444

VAT for assets purchased

220

48

63

118

accounts receivable

230, 240

5 006

27 273

26 535

short-term financial investments

250

20 103

1 868

3 405

cash assets

260

1 577

1 361

1 541

Accounts receivable for payments into the charter capital

244

0

0

0

Other current assets

270

0

0

10

Total (lines 190+290-244)


43 475

45 609

48 955

Liabilities

Long-term liabilities

590

5 308

5 912

484

loans and credits

510

5 189

5 192

-

deferred tax liabilities

515

119

720

477

other long-term liabilities

520

0

0

7

Short-term liabilities

690

3 689

6 514

13 491

loans and credits

610

1 600

2 503

9 607

accounts payable

620

2 064

4 005

3 878

unpaid dividend

630

0

0

0

deferred income

640

26

6

6

Total (lines 590+690-640)


8 971

12 420

13 969

Cost of net assets


34 504

33 189

34 986

% to total assets


79%

73%

71%

 

Financial highlights of the Company's activities

Table 21. Financial highlights of the activities of the OJSC "OGK-2" in 2007-2009

Indexes

 

2007

2008

2009

Revenue

33 759

40 533

40 712

electric and heat energy

33 677

40 466

40 641

Cost of production

(32 640)

(39 739)

(36 976)

electric and heat energy

(32 554)

(39 670)

(36 898)

Sales profit

1 119

794

3 737

Interest receivable

303

546

322

Interest payable

(437)

(627)

(830)

Other revenues

7 171

1 107

1 695

Other expenses

(7 730)

(2 963)

(2 572)

Profit before tax

426

(1 143)

2 352

Net profit

39

(1 365)

1 708

 

During the last three years dynamics of sales profit shows a positive trend. The mainreason for the growth is increase in share of electric energy and power market liberalization.

The profitgrowth in 2008 in comparison with 2007 (+20,1%) was caused by the increase in electric energy sale volume as well as by increase in sale price mainly at the non-regulated market sector. Despite the decline in electric energy sale volumes in 2009 due to the decrease in energy consumption in the regions of presence of power plants of the OJSC "OGK-2" caused by the crisis, the revenue grew compared to 2008. The rise of the average price for electric energy sale, rise of the average price for capacity sale as well as increase of sale volume for capacity as a result of the competitive capacity outtake and conclusion of non-regulated bilateral contracts provided the revenue in the amount of 40,712 bln rub, which is by 0,44% higher than in 2008.

The growth pace for the cost of production in 2008 outran the growth pace of the Company's revenue by 1,65%. In 2009 expenses went down by 6,95% with the revenue increase, which shows a positive trend.

According to the data from the financial statement the actual net loss in 2008 was 1,365 bln. rub. The main reason for the aggravation of the financial result of the Company in 2008 was due to the increase of other expenses, including write-off of expenses for servicing of the Employee Stock Option Planand creation of reserve funds for doubtful debts. As compared to 2008 the balance of other incomes and expenses in 2009 shows a positive dynamics. The net profit in 2009 amounted to RUR 1,708 bln.rub.

 

Table 22. Comparative figures for 2009

¹

Indexes

2009

1

Return on sales

((l. 050 f.2/l.010 f.2)*100%)

9,18%

2

Total profitability for the reporting period

 ((l.140 f.2/l.010 f.2)*100%)

5,78%

3

Return on equity

 (2*l.190 f.2 /(l.490 f.1 for the beginning of the year + l.490 f.1 for the end of the year ))*100%

5,01%

4

Return on assets

 (2*l.190 f.2/(l.300 f.1 for the beginning of the year + l.300 f.1 for the end of the year))*100%)

3,61%

5

Economic efficiency of core activities (production of electric and heat energy)

((l.011 f.2 + l.012 f.2(heat) - l.021 f.2 - l.022 f.2 (heat))/(l.011 f.2 + l.012 f.2(heat))*100%)

9,21%

 

Returnon equity defines general efficiency index of the Company's resource management. Change of this index testifies to the general tendency of efficiency increase or decrease in all spheres of the Company's activities (finance, investment and main activities of the Company). Return on equity showed a fast growth by the end of 2009 and reached 5,01% (0,18% in 2007, -4,03% in 2008), which was directly influenced by the return on assets of 3,61% (0,13% in 2007, -3,07% in 2008). Fluctuation of this index during the last 3 years was mostly caused by the main activity of the Company whose efficiency is characterized by return on sales.

Return on sales grew and amounted to 9,18% (3,32% in 2007, 1,96% in 2008). Profitability from electric and heat energy production reached 9,21% (3,33% in 2007, 1,97% in 2008). The sharpchanges were caused by the outstripping growth rates of expenses over the revenue increase in 2008 and the situation improvement in 2009 due to the optimal management of expenses: production costs reduction by 6,95% as compared to2008 and increase of sales volumes by 0,44%.

 

Estimation of financial solvency and liquidity

One of the indexes of the financial status of the company is its financial solvency that is ability of timely extinguishment of debts or obligations.

Maingoal of financial solvency and liquidity analysis is to evaluate the Company's ability to generate cash assets in volume and within the time-limit required for carrying-out of estimated expenditures and payments.

 

Table 23. The main financial indices used to estimate solvency and liquidity

¹

 

Index

Normal limitation

Value

For the end of the reporting period (2008)

Value

For the end of the reporting period (2009)

Explanation

1

General index of financial solvency  (L1)

L1 ≥  1

1,8

1,8

Used in integrated assessment of company's financial solvency

2

Absolute liquidity ratio (L2)

L2  ≥  0,2 - 0,7

0,5

0,4

Demonstrates which part of the short-term indebtedness can be redeemed by the organization in the nearest future using cash assets and short-term financial investments

3

Quick ratio

(acid-test ratio, intermediate liquidity ratio) (L3)

permissible

L3  ≈  0,5 - 0,7 desirable

L3 =1

1,2

1,0

Demonstrates which part of the short-term obligations can be paid immediately using the assets in accounts, the funds in the short-term securities and the receipts on payments

4

Current

liquidity ratio (L4)

 

Required value 1,5;

optimum

L4  ≥  2

4,8

2,5

Demonstrates which part of the short-term obligations can be paid by mobilizing all current assets

5

Functioning capital maneuverability ratio (L5)

 

L5 ≥  0

 

0,9

1,0

Demonstrates which part of the functioning capital is immobilized in the inventory and the long-term receivables

6

Share of current assets in assets(L6)

L6  ≥  0,5

 

0,7

0,7

Depends on the company's industry

 

Analysis of the Company's financial solvency through accounting liquidity shows that financial solvency of the OJSC "OGK-2" as of December 31, 2009 can be estimated as capable of discharging its liabilities. The value of the absolute liquidity ratio lies within the recommended limits (0,4), i.e. about 40% of the Company's short-term liabilities can be paid in the near future by the highly liquid assets (cash assets andshort-term financial investments). This is also improved by availability of less liquid assets (inventory, short-term and long-term accounts receivable, other current assets): acid-test ratio and intermediate liquidity ratio are high and make up 1,0 and 2,5 accordingly, which exceeds the set criteria and ensures enough reserve funds for the OJSC "OGK-2" to compensate the loss that may occur in case of liquidation of all current assets. Values of these three liquidity ratios determine a high value of the general index of financial solvency which is 1,8.

Functioning capital maneuverability ratio is 1,0 and shows a positive dynamic.

Share of current assets in assets did not change as compared to the previous year.

 

Evaluation of the financial stability

Analysis of the financial stability for the specific date shows how efficiently own and borrowed funds are managed by the Company during the review period. Actually this is the ability to make due payments, extensively finance own activities, endure unforeseen disturbances and maintain paying capacity in adverse circumstances. Evaluation of financial stability requires an analysis based on the study of absolute and relative indices.

Continuous stock replenishment takes place during the production process. For that purpose own current assets and borrowed funds are used. In process of study of excessive or insufficient funds in stock replenishment the absolute indices of financial stability are determined. For the purpose of detailed presentation of different sources in stock replenishment the system of indices is used, that is, a three-component index of financial stability.

 

Table 24. Types of financial stability indexes

¹

 

Indexes

31.12.2008

 mln rub

31.12.2009

mln rub

1

Total inventory (Zp = l.210)

2 727

2 444

2

Availability of own current assets (SOS = l.490 - l.190)

18 786

20 078

3

Functioning capital (availability of own and long-term borrowed sources of stock-forming)

KF = (l.490 + l.590) - l.190

24 578

20 562

4

Total volume of main sources of stock-forming

VI = (l.490 + l.590 +l.610) - l.190

27 081

30 169

5

Excess (+) or insufficiency (-) of own current assets

±FS = SOS - Zp

16 059

17 634

6

Excess (+) or insufficiency (-) of own and long-term borrowed sources for stock-forming

±FT = KF - Zp

21 851

18 118

7

Excess (+) or insufficiency (-) of total volume of main sources of stock-forming

±FÎ = VI - Zp

24 354

27 725

8

Three-component index of financial situation S (F)

S 1;1;1

S 1;1;1

 

Due to observable excess of own circulating assets, excess of own and long-term borrowed sources of stock-forming, excess of total value of primary sources of stock-forming, three-component index of financial situation type is S(F) = {1;1;1}, which means that the OJSC "OGK-2" is financially stable.

 

Comparative figures of financial stability

Table 25. Comparative figures of financial stability

¹

 

Index

Normal limitation

Value

For the end of the reporting period (2008)

Value

For the end of the reporting period (2009)

Explanation

1

Equity ratioîss)

should be > 0,1

optimum value.: Êîss  ≥  0,5

0,60

0,59

Demonstrates which part of current assets is financed using own funds

2

Equity to Total Assets (ÊFN)

ÊFN   0,5

0,73

0,71

Demonstrates the share of owned assets in assets financing

3

Financial stability ratioFU)

ÊFU   0,7

0,86

0,72

Demonstrates the share of those sources of financing that can be used in the Company's activities for a prolonged period of time

4

Financing ratioF)

ÊF 1,5

2,70

2,50

Demonstrates which parts of the Company's activities are financed using own and borrowed funds

5

Accounts receivable/accounts payable ratio

ÊDKZ     1

6,26

6,82


Equity ratio (Êîss) is 0,59. Thismeans that current assets of the Company can be financed using own sources in the amount of 59%. Equity to Total Assets ratio (ÊFN) is 0,71, whichis rather high: 71% of all assets are financed by own sources. Though financial stability ratio (ÊFU) went down in comparison with 2008, it is still high and complies with the specified criterion. Financing ratio (ÊF) is 2,5, which shows that the Company is capable of covering borrowed funds using own capital in unfavorable circumstances. Accounts receivable/accounts payable ratio is 6,82: accounts receivable is more than 6 times higher than accounts payable.

 

Evaluation of business activity

The business activity indices (indices of asset and liability turnover) determine how effectively a company uses its assets.

The turnover of all assets of the Company shows the rate of their turnover which is measured by the number of turnovers of all assets for the reporting period. Growth of asset turnover for the reporting period as compared to the prior period means asset turnover acceleration. Reduction of asset turnover leads to a slower asset turnover.

Growth of turnover of all assets is rated as positive on condition of the Company's profitability. If return on sales is negative (i.e. the company is unprofitable) then growth of asset turnover results in acceleration of unprofitable activities, that is, to accelerated production of losses.

 

Table 26. Business activities indexes (indexes of assets and liability turnover)

¹

 

Index

 

Value

for 2008

Value

for 2009

Explanation

1

Current assets turnover ratio (ÊÎÀ)

1,35

1,25

Demonstrates the number of full turnovers of current assets for the period under analysis

 

Current assets turnover ÎÀ)

270

292

Characterizes the average period of the current assets turnover in days

2

Return on assets ratio (ÊF)

4,32

4,42

Demonstrates efficiency of the fixed assets utilization in the organization

3

Inventory turnover ratioÎZ)

16,37

15,75

The inventory turnover is high, which is a positive factor

Inventory turnover ÎZ)

22

23

Characterizes inventory turnover period in days

4

Receivables turnover ratioDZ)

2,69

1,58

ÊDZ is equal to 1,58, which testifies to low receivables turnover

Receivables turnover ÎD)

135

231

Receivables turnover is 231 days

5

Payable turnover ratioÊZ)

13,36

10,32

Payable turnover ratio is equal to 10,32, which testifies to the normal payable turnover

Payable turnover

27

35

Demonstrates payback time on the company's current liabilities

6

Ratio of cash turnover and short-term financial investments (KD)

3,25

9,96

Turnover of high liquidity assets is high, which can be viewed as a good factor

Turnover of cash and short-term financial investments (ÎD)

112

37

Characterizes period of cash and short-term financial investments turnover

 

Turnover ratios under consideration mainly show negative dynamics for the reporting period. All current assets of the Company have insufficient turnover. Growth of the Ratio of cashturnover and short-term financial investments (KD) can be considered positive. Return on assets ratio (ÊF) also demonstrates positive dynamics and is equal to 4,32: the Company's fixed assets are used quite efficiently.

 

Parameters of the financial model of the Company

Table 27. Parameters of the financial model of the OJSC "OGK-2",  mln rub

¹

 

 

Parameters

 

2010

 

2011

 

2012

 

2013

1.

Revenue, including

44 009

49 139

57 223

67 253

-electric energy

33 424

38 574

45 157

52 693

-power

7 723

9 444

10 825

13 190

-heat

887

1 012

1 124

1 245

-other

1 975

109

117

125

growth


12%

16%

18%

2.

EBITDA

3 470

3 867

4 897

6 324

growth


11%

27%

29%

profitability

8%

8%

9%

9%

3.

Net profit

1 077

1 428

2 195

3 100

4.

Operating margin

11%

12%

13%

13%

5.

 

Depreciation

772

1 008

1 169

1 480

                growth


30%

16%

27%

6.

Cash flow from operations

2 839

3 553

4 386

5 684

7.

Capital expenditures

4 079

16 191

16 748

13 204

8.

Net debt

-19 898

-19 847

-15 283

-16 540

9.

Operational expenditures (fuel, man power, water, repair etc.)

39 287

43 120

49 990

58 392

 

3. Corporate governance

3.1 Board of Directors

The Board of Directors is a body performing as general management of the Company. Number of Members of Board of Directors of the Company is 11 (eleven).

As per cl. 4 art. 66 of the Federal Law "On Joint Stock Companies", members of the Board of Directors are elected by cumulative voting of the General shareholder meeting where the number of votes of each shareholder is multiplied by the number of persons to be elected to the Board of Directors, and each shareholder has the right to cast his votes for one candidate or share them among two or more candidates. The candidates with the highest vote totals are declared as elected to the Board of Directors.

Issuesof activity and competence of the Board of Directors are determined by the Federal Law "On Joint Stock Companies", by the Charter of the Company and by Provision on the Board of Directors of the OJSC "OGK-2" approved by Resolution of the Shareholders meeting (Minutes No. 2 of June 26, 2009).

 

Line-up of the Board of Directors of OJSC "OGK-2", whose term of power terminated on June 25, 2009

¹

Name of the Board member

Position and place of employment for the moment of termination of powers as a member of the Board of Directors

1

Fyodorov Denis Vladimirovich

Chairman of the Board of Directors, Director for development of the power industry sector and marketing in the power industry of the OJSC "Gazprom"

2

Gavrilenko Anatoly Anatolyevich

Deputy Chairman of the Board of Directors, General Director of the CJSC "Lider"

3

Kulikov Denis Viktorovich

Deputy Executive Director of the Association for protection of investors rights

4

Lipsky Igor Iosifovich

Deputy Director of the Department for asset management and corporate relations of the OJSC "Gazprom"

5

Lisyansky Mikhail Eduardovich

General Director of the LLC «UK Kvarts»

6

Neveynitsyn Stanislav Vitalyevich

General Director of the OJSC «OGK-2»

7

Medvedeva Elena Alekseyevna

General Director of the CJSC «SENRY»

8

Mityushov Aleksey Aleksandrovich

General Director of the OJSC «OGK-6»

9

Opadchiy Fyodor Yurievich

Director for market development and monitoring of the OJSC «SO UES»

10

Khodursky Mikhail Leonidovich

Chairman of the Managing board of the CJSC "Gazenergoprombank"

11

Sharonov Andrej Vladimirovich

Managing Director of the presidential establishment of the CJSC "Investment Company "Troika Dialog"

 

Current Board of Directors (as of June 25, 2009).

1. Name: Fyodorov Denis Vladimirovich

(Chairman)

Year of birth: 1978

Education: higher

Current positions, including part-time:

Company name

Position

OJSC "Mosenergo"

Member of the Board of Directors

OJSC "TGK-1"

Member of the Board of Directors

OJSC "MRSK Holding"

Member of the Board of Directors

OJSC "RAO Energeticheskiye systemi Vostoka"

Member of the Board of Directors

NP "VTI"

Member of the Supervisory Board

CJSC "Gazenergoprombank"

Member of the Board of Directors

OJSC "OGK-6"

Chairman of the Board of Directors

OJSC "Tyumenskaya energosbitovaya kompaniya"

Chairman of the Board of Directors

OJSC "Tsentrenergoholding"

Chairman of the Board of Directors

CJSC "Kaunasskaya termofikatsionnaya stantsiya"

Member of the Managing Board

OJSC "MTenergosbit"

Member of the Board of Directors

OJSC "Mezhregionenergostroy"

Chairman of the Board of Directors

OJSC "TEK Mosenergo"

Chairman of the Board of Directors

CJSC "Fortis Energy"

Member of the Managing Board

OJSC "Gazprom"

Head of the Department

LLC "Gazprom energoholding"

General Director

OJSC "OGK-2"

Chairman of the Board of Directors

 

2. Name: Shatsky Pavel Olegovich

Year of birth: 1972

Education: higher

Current positions, including part-time:

Company name

Position

OJSC "OGK-2"

Deputy Chairman of the Board of Directors

OJSC "OGK-6"

Member of the Board of Directors

OJSC "MRSK Holding"

Member of the Board of Directors

LLC "Tsentrenergoholding"

Member of the Board of Directors

LLC "Gazprom energoholding"

First Deputy General Director

Arbitration Court Non-profit partnership "Sovet Rynka"

Deputy Chairman

 

3. Name: Golenishchev Igor Anatolyevich

Year of birth: 1963

Education: higher

Current positions, including part-time:

Company name

Position

OJSC "Gazprom"

Head of debt and project financing Department

OJSC "Gazprom Kosmicheskiye systemi"

Member of the Board of Directors

OJSC "Tsentrenergoholding"

Member of the Board of Directors

OJSC "OGK-2"

Member of the Board of Directors

LLC "Russkiye energeticheskiye proyekti"

General Director

 

4. Name: Kulikov Denis Viktorovich

Year of birth: 1975

Education: higher

Current positions, including part-time:

Company name

Position

Association for protection of investors' rights

Managing Director

OJSC "YUTK"

Member of the Board of Directors

OJSC "MOEK"

Member of the Board of Directors

OJSC "Severo-Zapadniy Telekom"

Member of the Board of Directors

OJSC "OGK-2"

Member of the Board of Directors

 

5. Name: Mityushov Aleksey Aleksandrovich

Year of birth: 1975

Education: higher

Current positions, including part-time:

Company name

Position

OJSC "OGK-6"

General Director, Chairman of the Managing BoardMember of the Board of Directors

OJSC "TGK-1"

Member of the Board of Directors

OJSC "Mosenergo"

Member of the Board of Directors

OJSC "Gazpromregiongaz"

Member of the Board of Directors

OJSC "Salavatnefteorgsintez"

Member of the Board of Directors

LLC "Gazpromenergo"

General Director

LLC "Pyatigorskteploservis"

Member of the Board of Directors

OJSC "Teploset"

Member of the Board of Directors

OJSC "Mezhregionteploenergo"

Chairman of the Board of Directors

OJSC "Mezhregionenergogaz"

Chairman of the Board of Directors

OJSC "OGK-2"

General Director, Chairman of the Managing Board, Member of the Board of Directors

 

6. Name: Neveynitsyn Stanislav Vitalyevich

Year of birth: 1966

Education: higher

Company name                                   

Position

OJSC "OGK-2"

Member of the Board of Directors

 

7. Name: Opadchy Fyodor Yuryevich

Year of birth: 1974

Education: higher

Current positions, including part-time:

Company name

Position

OJSC "SO UES"

Director for market development and monitoring

OJSC "TGK-2"

Member of the Board of Directors

CJSC "Energorynok"

Member of the Board of Directors

NP "Sovet Rynka"

Member of the Supervisory Board

OJSC "OGK-2"

Member of the Board of Directors

 

8. Name: Khodursky Mikhail Leonidovich

Year of birth: 1971

Education: higher

Current positions, including part-time:

Company name

Position

CJSC "Gazenergoprombank"

Chairman of the Managing Board, Member of the Board of Directors

OJSC "OGK-6"

Member of the Board of Directors

OJSC "Sobinbank"

Chairman of the Board of Directors

JSCB "SOYUZ" (OJSC)

Member of the Supervisory Board

OJSC "OGK-2"

Member of the Board of Directors

 

9. Name: Vainzikher Boris Feliksovich

Year of birth: 1968

Education: higher

Current positions, including part-time:

Company name

Position

OJSC "TGK-1"

General Director, Member of the Managing BoardMember of the Board of Directors

OJSC "OGK-6"

Member of the Board of Directors

OJSC "OGK-2"

Member of the Board of Directors

OJSC "RusGidro"

Member of the Board of Directors

 

10. Name: Shavaleev Damir Akhatovich

Year of birth: 1975

Education: higher

Current positions, including part-time:

Company name

Position

OJSC "Salavatnefteorgsintez"

General Director, Chairman of the Managing Board, Member of the Board of Directors

OJSC "SIBYR - Mineralniye udobreniya"

Member of the Board of Directors

OJSC "OGK-6"

Member of the Board of Directors

OJSC "OGK-2"

Member of the Board of Directors

LLC "Salavatsky neftekhimicheskiy kompleks"

General Director, Member of the Board of Directors

 

11. Name: Gavrilenko Anatoly Anatolyevich

Year of birth: 1972

Education: higher

Current positions, including part-time:

Company name

Position

CJSC "Lider" (Pension Fund Asset Management Company)

General Director, Member of the Board of Directors

OJSC "Mosenergo"

Member of the Board of Directors

OJSC "Moskovskaya obyedinennaya elektrosetevaya kompaniya"

Member of the Board of Directors

"Gazprombank" (Open Joint Stock Company)

Member of the Board of Directors

OJSC "SIBUR Holding"

Member of the Board of Directors

OJSC "Salavatnefteorgsintez"

Member of the Board of Directors

OJSC "OGK-6"

Member of the Board of Directors

OJSC "GAZKON"

Member of the Board of Directors

OJSC "GAZ - service"

Member of the Board of Directors

OJSC "Glavnaya doroga"

Member of the Board of Directors

OJSC "Stolichniy trakt"

Member of the Board of Directors

OJSC "OGK -2"

Member of the Board of Directors

 

Independent directors

According to the definition of an independent director (cl. 2.2.2. chapter 3 of the Corporate Code of Conduct recommended for use by the Instruction of the Federal Commission for the Securities Market of Russia of April 4, 2002, No. 421/r) all directors exclusive of the General Director, Mr. S.V. Neveynitsyn, are independent.

 

Remuneration and compensation for the members of the Board of Directors

Amount and manner of payment of compensation and remuneration to the members of the Board of Directors are stipulated by the Regulations on compensation and remuneration payable to the members of the Board of Directors approved by the resolution of the Shareholders' meeting (Minutes No. 2 of June 26, 2009).

For participation in the Board of Directors' meeting, additional compensation for the net profit ratio of the Company according to the data in the annual accounting reporting approved by the General shareholders' meeting, compensation of expenses are stipulated to be paid to the members of the Board of Directors.

Total amount of compensation paid to the members of the Board of Directors in 2009 was 3 741 954 rubles (three million seven hundred and forty one thousand nine hundred and fifty four rubles) and 50 kopeks.

 

3.2 Committees of the Board of Directors

Committees of the Board of Directors are established by resolution of the Board of Directors (art. 19 of the Charter) and represent consultative and advisory bodies ensuring effective execution of functions by the Board of Directors. In their work Committees are guided by Federal laws, other regulatory acts of the Russian Federation, the Charter, Provisions on order of calling and holding of the Board of Directors, provisions on Committees and resolutions of the Board of Directors.

Currently the following Committees are formed and operate: Strategy and investment Committee, Audit Committee, Personnel and compensation Committee, Committee on reliability.

 

Current Committees of the Board of Directors

Audit Committee of the Board of Directors

The Committee is formed by the Resolution of the Board of Directors of the OJSC "OGK-2" as of July 16, 2009, Minutes No. 1, and shall consist of three members.

Personnel of the Audit Committee of the Board of Directors:

- Golenishchev Igor Anatolyevich, Head of debt and project financing department of OJSC "Gazprom";

- Gavrilenko Anatoly Anatolyevich, General Director of CJSC "Lider";

- Fyodorov Denis Vladimirovich, Director for development of the power industry sector and marketing in the power industry of the OJSC "Gazprom", General Director of the LLC "Gazprom energoholding".

Chairman of the Audit Committee of the Board of Directors of the Company: Golenishchev Igor Anatolyevich.

 

Personnel and compensation Committee of the Board of Directors

The Committee is formed by the Resolution of the Board of Directors of the OJSC "OGK-2" as of July 16, 2009, Minutes No. 1, and shall consist of three members.

Personnel of the Personnel and compensation Committee of the Board of Directors:

- Khodursky Mikhail Leonidovich, Chairman of the Managing Board of the CJSC "Gazenergoprombank";

- Fyodorov Denis Vladimirovich, Director for development of the power industry sector and marketing in the power industry of the OJSC "Gazprom", General Director of the LLC"Gazprom energoholding".

- Shatsky Pavel Olegovich, First Deputy General Director of the LLC "Gazprom energoholding".

Chairman of the Personnel and compensation Committee of the Board of Directors of the Company: Khodursky Mikhail Leonidovich.

 

Committee on reliability of the Board of Directors

 

The Committee is formed by the Resolution of the Board of Directors of the OJSC "OGK-2" as of July 16, 2009, Minutes No. 1, and shall consist of seven members.

Personnel of the Committee on reliability of the Board of Directors:

- Tarasenkov Aleksandr Anatolyevich, Deputy General Director on production, the OJSC "OGK-2", Chief engineer;

- Nikitin Anatoly Alekseevich, Deputy Head of the Centre for the technical control of investment project implementation of the OJSC "SO UES";

- Rozhkov Dmitry Ernstovich, Deputy Head of Production, Head of Production and technical department of the LLC"Gazprom energoholding";

- Rogalev Nikolay Dmitrievich, Deputy General Director of the LLC "Gazprom energoholding";

- BashukDenis Nikolaevich, Head of Production of the LLC "Gazprom energoholding";

- Syrovatkin Dmitry Alekseevich, Chief Specialist of the Department for development of the power industry sector and marketing in the power industry of the OJSC "Gazprom";

- Trinoga Artur Mikhailovich, Director of the Department for development of the power industry sector and marketing in the power industry of the OJSC "Gazprom".

Chairman of the Committee of the Board of Directors of the Company on reliability: Trinoga ArturMikhailovich.

 

Strategy and investment Committee of the Board of Directors

The Committee is formed by the Resolution of the Board of Directors of the OJSC "OGK-2" as of July 16, 2009, Minutes No. 1, and shall consist of eleven members. The number of the Committee members was increased up to 13 members by the Resolution of the Board of Directors of the OJSC "OGK-2" as of February 10, 2010, Minutes No. 8.

Personnel of the Strategy and investment Committee of the Board of Directors:

- Vaitulenis Natalya Vasilyevna, Deputy General Director on economics and finance, the OJSC "OGK-2";

- Sabetsky Roman Nikolaevich, Deputy General Director on capital development of the OJSC "OGK-2";

- BorovAleksey Leonidovich, Leading expert of the Department for investment projects in power industry, the OJSC "SO UES";

- Kulikov Denis Viktorovich, Executive Director of the Association for protection of investors' rights;

- RogovAleksandr Vladimirovich, Director of the Department for development of the power industry sector and marketing in the power industry of the OJSC "Gazprom";

- Shatsky Pavel Olegovich, First Deputy General Director of the LLC "Gazprom energoholding";

- GanzerYana Nikolaevna, Head of the department for reporting and construction control, the LLC "Gazprom energoholding";

- Korobkina Irina Yuryevna, Director of the Department for the development of the power industry sector and marketing in the power industry of the OJSC "Gazprom";

- Zemlyanoy Evgeny Nikolaevich, Chief Specialist of the Department for development of the power industry sector and marketing in the power industry of the OJSC "Gazprom";

- Demina Valentina Aleksandrovna, Leading expert, the CJSC "Lider";

- BashukDenis Nikolaevich, Head of Production of the LLC "Gazprom energoholding";

- NaumovYury Viktorovich, Head of Finance of the LLC "Gazprom energoholding";

- Bikmurzin Albert Fyaritovich, Deputy Director of the Department for asset management and corporate relations of the OJSC "Gazprom energoholding".

Chairman of the Strategy and investment Committee of the Board of Directors of the Company: Shatsky Pavel Olegovich.

 

3.3. Managing Board

 

Issues of activity and competence of the Managing Board are determined by the Federal Law "On Joint Stock Companies", by the Charter of the Company and by the Provision on the Managing Board of the OJSC "OGK-2" approved by the Annual General shareholder meeting of the Company (hereinafter referred to as AGM) of June 25, 2009 (Minutes No. 2 of June 26, 2009).

As to December 31, 2009, 6 (six) members are elected to the Managing Board of the Company.

1.   Neveynitsyn Stanislav Vitalyevich (Chairman of the Managing Board), General Director (till March 31, 2010). Since April 1, 2010 Mityushov Aleksey Aleksandrovich performs functions of the General Director and the Chairman of the Managing Board;

2.   Vaitulenis Natalya Vasilyevna, Deputy General Director on economics and finance;

3.   Merabishvili Teymuraz Petrovich, Deputy General Director on supply of resources;

4.   Sabetsky Roman Nikolaevich, Deputy General Director on capital development;

5.   Svistunov Viktor Viktorovich, Deputy General Director on IT and energy market;

6.   Tarasenkov Aleksandr Anatolyevich, Deputy General Director on production, Chief engineer.

Total amount of compensation paid to the members of the Managing Board in 2009 was 41 570 768 rubles (forty one million five hundred and seventy thousand seven hundred and sixty eight rubles) and 49 kopeks, among which there were the following types of compensation:

 

Compensation, RUR.

76 547,59

Salary, RUR.

28 445 212,02

Bonus, RUR.

12 353 719,33

Expenses compensation, RUR.

695 289,55

TOTAL, RUR.

41 570 768,49

3.4. General Director

Issues of activities and competence of the General Director are determined by the Federal Law "On Joint Stock Companies", by the Charter of the Company, by the Provision "On the General Director of the Company" approved by the AGM of the Company of June 25, 2009 (Minutes No. 2 of June 26, 2009) and the Contract of Employment properly signed by the Company and the General Director.

 

In 2009 Neveynitsyn Stanislav Vitalyevichperformed the functions of the General Director

Year of birth: 1966

Education: higher

Company name

Position

OJSC "OGK-2"

member of the Board of Directors

 

Starting from April 1, 2010 and until present Mityushov Aleksey Aleksandrovich performs the functions of the General Director

Year of birth: 1975

Education: higher

Current positions, including part time:

Company name

Position

OJSC "OGK-2"

General Director, Chairman of the Managing Board, Member of the Board of Directors

OJSC "OGK-6"

General Director, Chairman of the Managing BoardMember of the Board of Directors

OJSC "TGK-1"

Member of the Board of Directors

OJSC "Mosenergo"

Member of the Board of Directors

OJSC "Gazpromregiongaz"

Member of the Board of Directors

OJSC "Salavatnefteorgsintez"

Member of the Board of Directors

LLC "Gazpromenergo"

General Director

LLC "Pyatigorskteploservis"

Member of the Board of Directors

OJSC "Teploset"

Member of the Board of Directors

OJSC "Mezhregionteploenergo"

Chairman of the Board of Directors

OJSC "Mezhregionenergogaz"

Chairman of the Board of Directors

3.5 Audit Commission

Internal Audit Commission is elected by the AGM for the one year period (until the next AGM) to take charge of financial and economic activities of the Company. Number of members in the Audit Commission of the Company is 5 (five).

Operation procedures of the Internal Audit Commission are stipulated by the Provisions on Audit Commission approved by the Board of Directors of the OJSC "Unified Energy System of Russia" (Minutes No. 200 of July 29, 2005).

In accordance with the audit (inspection) decision the Audit Commission has the right to engage for this purpose specialists in law, economics, finance, accounting, management, economic security, etc., as well as specialized organizations.

The audit (inspection) of financial and economic activities of the Company can be carried out also on the initiative of the Company's Internal Audit Commission, by resolution of the General shareholder meeting, of the Board of Directors of the Company or upon demand of a shareholder (shareholders) of the Company owing in total not less than 10% of voting shares of the Company.

Personnel of the Audit Committee of the Board of Directors of the Company:

1.   Mironova Margarita Ivanovna (Chairman of the Audit Commission), Director of the Internal Audit Board of the LLC "Mezhregiongaz"

2.   Zemlyanoy Evgeny Nikolaevich (Deputy Chairman of the Audit Commission), Deputy Director of the Department for development of the power industry sector of the OJSC "Gazprom"

3.   Sorokin Mikhail Vladimirovich, Deputy Director of the Department of power engineering, Department for development of the power industry sector and marketing in the power industry of the OJSC "Gazprom"

4.   Naryshkina Lyudmila Nikolaevna, Director of Department for internal audit and general examination of the LLC "Gazprom energoholding"

 

In accordance with the "Regulations on compensation and remuneration payable to the members of the Internal Audit Commission" approved by the AGM of June 27, 2008 (Minutes No. 1) the members of the Audit Commission had the following payments:

1.   Compensation for expenses connected with participation in sessions of the Internal Audit Commission and inspections using the regulations for compensation of travel expenses for the moment of the corresponding session or inspection.

2.   Remuneration for participation in inspection (audit) of financial and economic activities - in the amount equal to five minimal salaries of a first grade worker for the time of inspection (audit).

3.   The additional remuneration paid for each inspection (audit) of financial and economic activities of the Company - in the amount not exceeding twenty minimal monthly salaries of a first grade worker.

The amount of remuneration payable to the Chairman of the Audit Commission is increased by 50 percent

Remuneration paid to the members of the Audit Commission in 2009 was 260 424,00 (Two hundred and sixty thousand four hundred and twenty four) rubles..

3.6. Authorized capital and issuing activity

 

The authorized capital of the Company is 11 872 827 952,1514 (Eleven billion eight hundred and seventy two million eight hundred and twenty seven thousand nine hundred and fifty two, one thousand five hundred and fourteen) rubles.

The Company placed ordinary registered shares of the same principal amount of 0,3627 rubles per share, in total - 32 734 568 382 (Thirty two billion seven hundred and thirty four million five hundred and sixty eight thousand three hundred and eighty two) shares.

Table 28. Structure of the authorized capital of the OJSC "OGK-2"

Name of placement owner

Share in authorized capital as of:

01.01.2009

31.12.2009

Individuals

2,29%

2,31%

Legal entities

0,05%

0,32%

Nominee holder

97,39%

97,34%

Federal property

0,27%

0,28%

 

Table 29. List of shareholders of the OJSC "OGK-2" owing more than 5% of authorized capital in shares

Name of shareholder owing more than 5% of authorized capital in shares

Share in authorized capital as of:

01.01.2009

31.12.2009

LLC "Depozitarnye i korporativnye tehnologii" (nominee holder)

47,24%

51,87%

           Including ÎÀÎ "Tsentrenergoholding"

44,39%

49,49%

Non-profit partnership "Natsionalny depozitarny tsentr" (nominee holder)

14,16%

13,82%

CJSC "Gazenergoprombank" (nominee holder)

12,84%

8,21%

           including ÎÎÎ "Invest-Generatsiya"

12,22%

7,59%

CJSC "Depozitarno-Kliringovaya Kompaniya" (nominee holder)

9,85%

11,02%

LLC "Deutsche Bank" (nominee holder)

6,19%

4,04%

CJSC "UBS Nominees" (nominee holder)

6,13%

6,13%

3.7. Company's securities

The Company's shares are listed at the Russian stock exchange (Moscow Interbank Currency Exchange and RTS) since July 2006.

In the autumn of 2007 Global depositary receipts (GDR) for shares of the OJSC "OGK-2" were issued. They were officially listed by the Listing department of Great Britain and traded at the primary market of the London Stock Exchange.

For the end of the reporting period the Company's shares are listed at the Russian stock exchange Moscow Interbank Currency Exchange (quotation list "A1") and RTS (quotation list "A2"), and Company's GDR at the primary market of the London Stock Exchange.

 

Table 30. Trading volume and number of transaction at MICEX and RTS

Period

Share trading volume, shares

Number of transactions

Classic RTS market

RTS stock exchange

MICEX (principal issue, primary trading session)

Classic RTS market

RTS stock exchange

MICEX

2007

229 037 307

17 398 035

1 608 053 456

352

230

23 705

2008

142 816 876

9 331 853

4 951 917 261

236

98

105 098

2009

279 291 012

1 272 450

22 398 742 586

200

237

277 853

 

Quotations of the Company's shares for the reporting period:

·    increased from RUR 0,25 to RUR 0,875 at the RTS stock exchange;

·    increased from US$ 0,0079 to US$ 0,0281 $ at the classic RTS market;

·    increased from RUR 0,260 to RUR 0,918 at the Moscow Interbank Currency Exchange (primary trading session).

 

Capitalization for the end of the year was RUR 30,05 bln at the MICEX, US$ 999,4 mln at the Classic RTS market by the end of the year.

The most important factors influencing the stock market of the Company in 2009 were:

·    gradual stabilization and tendency to return to the pre-depression level of the market;

·    the Company's earnings and revenue growth as compared to the losses in 2008;

·    revision of energy consumption forecasts, information on the investment program adjustment.

 

Table 31. Change in price for shares of the Company at MICEX, stock exchange and classic RTS markets for the period of 2007-2009 (last transaction price)

 

By the end of period

Classic RTS market, $

RTS stock exchange, RUR

MICEX, RUR.

$ rate

2007

0,1540

3,7000

3,745

24,5462

2008

0,0103

0,2001

0,258

29,3804

2009

0,0311

0,9101

0,919

29,3804

 

GDR Program

Sponsored program of the Global depositary receipts for shares of the Company (GDR) was established in 2007. Each depositary receipt certifies the right for 100 registered common shares of the Company. GDR and shares grant equal rights. The depositary bank is the Deutsche Bank Trust Company Americas. The GDRs were officially listed by the Listing department of Great Britain. Since October 4, 2007 unconditional trading started at the primary market of the London Stock Exchange under the ticker symbol of OGK2.

The total volume of the GDR program for 2009 decreased by 5,27 mln and by the end of 2009 was 9,41 mln (2,87% of the authorized capital units). On the whole, the number of the GDR reduced throughout the reporting year, which firstly is explained by the securities sales by foreign investors who were short of liquidity due to emergence of the crisis situation.

The GDR program promoted the rights of the owners of depositary receipts of the LLC RAO" Unified Energy System of Russia". Within the process of reorganization of the holding 350 thousand GDR were issued in exchange for the Company's shares (20 000 as per Regulation S and 330 000 as per Rule 144A).

 

Table 32. Number of GDR

For the end of period

GDR issued

as per Regulation S

as per Rule 144A

Total

December 2009

8 645 484

9 413 139

3.8. Dividends

The amount of dividends paid per shares is determined by the General shareholder meeting on recommendation of the Board of Directors and cannot exceed the recommended amount.

 

Table33. Dividend history

Name

Reporting period used in the decision for dividend payout

9 months
of 2005

2005

6 months
of 2006

2006

1st quarter

of  2007

amount of declared dividends per share, RUR

0,006264

0,011836

0,003539

0,001873

0,0015257

amount of declared dividends on all shares, ths RUR

67 462 051,85

127 471 399 ,37

89 597 108,95

49 598 717,87

40 401 902,75

date of shareholders' meeting

23.12.2005

21.04.2006

25.09.2006

22.06.2007

22.06.2007

period assigned for dividend payout

within 60 days from the day the decision on payout was taken

form and other conditions of dividend payout

money

total amount of the dividends paid (adjusted for taxation), ths RUR

67 462 051,85

127 471 399 ,37

89 590 484,32

49 457 987,35

40 286 005,11

 

Cause for non-payment of declared dividends in full amount is absence of full and reliable information on banking details and mailing address in the shareholder register. In accordance with clause 5, Art. 44 of the Federal law "On Joint Stock Companies" a person registered in the shareholder register is obligated to inform the registrar on any change in his particulars in due time. The register of the Company is the OJSC "Central Moscow Depository".

 

The amount of income payable on inconvertible certified invest-banking bonds (payable to the bearer) with obligatory centralized storage, series 01, in monetary value, per one bond and in total for all bonds of issue - 1 through 5th coupon - RUR 38,39 per bond, 6th coupon - RUR 39,24 per bond. On all bonds in total of issues 1 through 5, coupon payments amount to RUR 191 950 000, 6th coupon payout - RUR 196 200 000.

The period of time for payout of income on bonds of issue is the date of coupon period ending. Form and other conditions of dividend payout on bonds are cash assets.

Amount of income paid on all bonds of the issue for each reporting period during which such income was paid:

·    1st coupon period (03.01.2008) - RUR 191 950 000;

·    2nd coupon period (03.07.2008) - RUR 191 950 000;

·    3rd coupon period (01.01.2009) - RUR 191 950 000;

·    4th coupon period (02.07.2009) - RUR 191 950 000;

·    5th coupon period (31.12.2009) - RUR 191 950 000.



4. Social responsibility

4.1. Environmental protection

Degree of the negative impact on the environment by operating activities of OJSC "OGK-2" (intensity of pollutant emissions into the atmosphere and discharges to surface waters; the amount of water taken from the surface water sources and the amount of waste produced) are closely connected with dynamics of electric energy production by the Company's branches, content and condition of the technological equipment of power plants and structure of used fuel: its type (gas/black oil/coal) and quality characteristics (lower heating value, ash content, sulphur content etc.).

In general, compared to the negative impact level of 2008, in 2009 the OJSC "OGK-2" showed a decrease of such indexes as:

·       pollutant emissions into the atmosphere - by 23,9 %.

·       waste production - by 11,3%.

·       amount of water taken from the surface water sources - by 14%.

The Troitsk GRES is running on high-ash Ekibastuz coal. Emissions of coal ash are the main pollutants as they produce the major impact on the environment. After coal is burned at the Troitsk GRES and the Serov GRES there remains coal ash which makes 42,9% of the total pollutant volume from all the branches that gets into the atmosphere. The total amount of solids in the waste: 43,18%.

The content and proportion of the total pollutant emission into the atmosphere of OJSC "OGK-2" in 2009 is given below:

 

Pic. 2. Total pollutant emission of OJSC "OGK-2" in 2009

At all gas stations (the Stavropol GRES, the Pskov GRES, the Surgut GRES-1) and the mixed-fuel station (the Serov GRES) pollutant emissions lie within the set standards of maximum permitted emissions (MPE).

Only ash emissions of the Troitsk GRES exceed the limits of the maximum permitted emissions and lie within the temporary agreed emissions limits.

The OJSC "OGK-2" together with the government of the Chelyabinsk region worked out and approved a long-term "Plan for reduction of pollutant emission into the atmospheric air" for the Troitsk GRES in order to gradually reduce the negative impact on the atmospheric air and thus reach the maximum permitted emissions limits.

Under this plan there was conducted a great scope of works on repairs, reconstruction and replacement of the run-down gas purifying equipment. The following measures were carried out in 2009:

· replacement of 8 electrofilter fields at the 9th power unit.

· replacement of electrofilters at the 5th power unit.

· replacement of the run-down scrubbers of 1A and 2A boiler units by the modern 2nd generation emulsifiers at the 1st section of the power plant.

· capital repair of the aeration devices.

The decrease in electricity production that took place at the end of the last year, along with the carrying out of these works made it possible to reduce the gross emissions from the Troitsk GRES by 26,06% in compares with the previous year.

Besides the mentioned regional plan, in cooperation with the authorized agencies of the Republic of Kazakhstan, the Company implements "The Plan of measures for the branch of the OJSC "OGK-2" - the Troitsk GRES, for reduction of negative impact on the environment of the ash-dump located at the Shobarkul lake and for adjustment the engineering status of the ash-dump with the project parameters in 2008-2010".

In 2009 the following works from this Plan of measures were realized:

· land restoration (1st stage - conservation) of 177,7 ha of the disturbed lands (Republic of Kazakhstan).

· reconstruction of dams, ash-dump sections No. 1-3.

· setting-up and implementation of the ash pond beaches dust suppression system.

· regular operational control and monitoring of the ash-dump impact on the environment.

The current expenses on the environmental protection increased by 18,8% during the year. At the same time the current expenses on the environment protection for the territory of the Republic of Kazakhstan rose by 189%.

 

 

Pic.3. Current expenses on environment protection of the OJSC "OGK-2" in 2005-2009.

 

Water resources are used to cool the equipment in the process of power station operation (the Novotroitskoye reservoir on the Yegorlyk river - the Stavropol GRES; the Toitskoye reservoir on the Uy river - the Troitsk GRES; the reservoir on the Sosva river - the Serov GRES; the reservoir on the Shelon river falling into Ilmen lake - the Pskov GRES, the reservoir on the Chernaya river - the Surgut GRES-1).

The Serov GRES and the Troitsk GRES increased the amount of pollutant emissions into the water during the review period; besides, their major amount exceeds the limits of the permitted emissions limits.

In order to decrease the negative impact on the natural water and in particular, to reduce the amount of pollutant emissions into reservoirs to meet the respective limits, the following activities were started during the review period:

·    construction of wastewater treatment facilities with biologic water purification system at the Serov GRES;

·    reconstruction of wastewater treatment facilities at the Troitsk GRES.

In 2009 there were conducted annual works on biocenose recovery at Novotroitskoye reservoir (Stavropolskaya GRES) and the reservoir on the Shelon river (Pskov GRES).

The Surgut GRES-1 now operating on oil gas serves as a positive example of the rational use of natural sources.

In 2009 there were no breakdowns with consequences for the environment. As part of prevention measures aimed to avert emergency situations with consequences for the environment, water development facilities were repaired and shore protection was reinforced at the reservoir of the Surgut GRES-1.

In the review period the Troitsk GRES received an environmental insurance for its production activities on the territory of the Republic of Kazakhstan. This type of insurance is planned for the current year either.

4.2. Social partnership

The key element of the corporate social responsibility of the Company is ensuring reliable operation and uninterrupted power supply to community facilities, where generating capacities of the Company are located. Stable operation of the GRES and meeting heat and electric energy requirements directly influence the fulfillment of production programs of consumer companies and prevent social disruption. The Company is committed to taking technically sound, economically feasible and effective solutions to maintain heat and electric power balance.

The Company is aware of its responsibility for support of social and economic development in the regions of its operation, that is the North-Western, the Southern, the Ural, the West Siberian federal districts. The Company's activities have an effect on the situation in the regions, where the generation facilities of the Company are located. This influence is diversified and can be traced in different spheres. We can point out three closely connected aspects of influence, i.e. economic, social and environmental (which was viewed earlier). As the major enterprises the power plants of the Company act as initiators of the regional economic activity, providing jobs, also by engaging third-party companies as suppliers/contractors, ensuring uninterruptible power supply, paying sugnificant taxes to local budgets. Operation of the power plants makes the situation in the region more stable and affords an opportunity for the sustainable development of the regional industry.

The Company builds its relationships with partners upon mutual respect, transparency, responsibility and steadfast implementation of laws. The Company adheres to the following principles in its relations with suppliers/contractors:

·    All prospective suppliers of goods and services and the contractors have open access to information on needs of energy production of the OJSC "OGK-2";

·    Creation of competitive environment with optimal choice of partners in its production activities.

Social responsibility determines the strategy and needs of the Company that is sustainable development, modernization of technical facilities, and enhancement of investment appeal.

Implementing the principles of social responsibility the Company aims to ensure:

·    territorial and organizational access to heat and electric energy supply;

·    price accessibility of heat and electric power supply (prices for energy should be economically sound and socially acceptable);

·    power balance for the energy system (working capacity of the power station should correspond to the current and estimated consumer demand);

·    reliability of operation of infrastructure's key elements, including stock regulation, level of required services etc.

·    environmental safety, promoting enhancement of energy efficiency and cost-effective use of resources, simulation of development and distribution of environmentally friendly (safe) technologies.

Social responsibility of the Company means that its activities are based on the disclosure and transparency principles. These principles assume public, comprehensible and open conduct of business. The Company is aiming to provide only reliable information and maintain contacts with all parties concerned. Social responsibility of the Company includes not only charity work, but also informing the general public of the Company's activities and policy directed to public good.

The Company provides principles of corporate responsibility by ensuring:

·    balance of interest of all related parties;

·    implementation and application of the corporate governance standards meeting expectations of the Russian and foreign investors;

·    use of modern management technologies, improvement of management efficiency;

·    improving competitiveness of the Company using cost reduction and implementation of investment programs;

·    realization of principles of free and fair competition and fair price formation.

4.3. Personnel and social policy

Respect of the employees' rights is part of the social policy of the OJSC "OGK-2". Though the business strategy of the Company is aimed at increasing commercial profit, relationship with the personnel in the Executive Board and in the branches is based on the principle of recognition and the employees' life and health priority to the production operation results.

The HR policy of the OJSC "OGK-2" is set on the principle of a system approach to work with the personnel, which predefines the interdependence of optimal selection, placement and personnel rotation within one technical industrial centre.

The Company makes a professional selection of specialists on a competitive basis to fill vacant positions.

Each new employee passes an adaptation program on entering a new role. Employees with a probation period receive an Assignment for the probation. The results of this assignment are discussed during the Assessment of probation successful completion.

In 2009 the Company employed 549 people, among whom 6,37% (35 people) are managers, 17,85% (98 people) are specialists, 0,55% (3 people) are employees, 75,23% (413 people) are workers. During the review period there were dismissed 687 people, among whom 18,34% (126 people) are managers, 34,35% (236 people) are specialists, 0,29% (2 people) are employees, 47,02% (323 people) are workers.

Regular personnel structure. Personnel development system

At the end of December 2009 the OJSC "OGK-2" employed 4 794 people. Therein are:

·    Executive body of the OJSC "OGK-2" - 214 people;

·    Branch of the OJSC "OGK-2" - the Surgut GRES-1 - 1 014 people;

·    Branch of the OJSC "OGK-2" - the Stavropol GRES - 929 people;

·    Branch of the OJSC "OGK-2" - the Troitsk GRES - 1 615 people;

·    Branch of the OJSC "OGK-2" - the Serov GRES - 602 people;

·    Branch of the OJSC "OGK-2" - the Pskov GRES - 420 people.

Two third of the total personnel, 65,96% (3 162 people) are workers, 18,84% (903 people) - specialists and employees, 15,21% - managers (729 people).

Table 34. Personnel age structure of the OJSC "OGK-2" as to the categories.

Age

Number of people

below 30 y.o.

1 353 people

30-50 y.o.

2 276 people

over 50 y.o.

1 165 people

including working pensioners

289 people

By the end of 2009, 34,19% of the total personnel have a higher education (1 639 people) and 38,38% of the employed - vocational secondary education (1 840 people) (i.e. education received at technical schools specializing in energy) and only 25,16% (1 206 people) - secondary education and 2,27% (109 people) - junior secondary education.

In orderto maintain the high professional level of the employed and to prepare them to perform difficult operations functions in the modern work conditions, the OJSC "OGK-2" takes measures to develop, train and upgrade the personnel's qualification.

In 2009 the Company spent 15 475 046 rubles on training and upgrading the qualification of the personnel, out of which 42,69% was paid for management trainings, 15,86% - for the training of the specialists and the employees and 41,45% - for training of the workers.

5. Vision of the future

5.1. Objectives for the future

Core objectives of the Company are break-even activity, profit-making, efficient administration of property and financial management, and reliability of production activities.

The Company has the following objectives:

- execution of the production program, ensuring efficient operation of the power equipment and reliable supply to consumers (including timely and quality repair, technical upgrade and reconstruction, preparation for on-peak demand of autumn/winter season);

- profit-making (by means of efficiency upgrading of market operations and cost optimization);

- reliability enhancement of energy systems operation;

- implementation of investment projects.

 

The following measures are planned by the Company for realization of the specified tasks:

·    Integrated surveys of the power plants and determination of the priority areas of technical upgrading, reconstruction and capital development as concerns power plants, and also of investments required for their realization.

·    Provision and monitoring of implementation of the most important in terms of reliability and efficiency enhancement technical upgrade projects, projects on reconstruction and capital development.

·    Implementation of operational cost reduction technologies.

·    Improvement of energy and repair services quality, cost and expenditure optimization for repair of power equipment, buildings and facilities.

·    Improvement of the receivables and payables system.

·    In order of attracting investments commercial papers issuance is planned.

OJSC "OGK-2" major objectives in the investments attracting and using are to increase the operating capacity and to ensure high reliability of the power plants of the Company, their effectiveness and operation efficiency in general.

5.2. New construction, reconstruction and technical upgrading

Reconstruction and technical upgrading of the stations is a package of measures for enhancement of the production engineering level in accordance with the modern requirements through implementation of new equipment and technologies, mechanization and automation of production processes, modernization and replacement of the run-down equipment, quality improvement and increase of volumes of supplied electrical energy.

Overall volume of investments into new construction in 2009 includes two primary groups of expenditures:

- construction of new power units;

- other power industry facilities.

 

Realization of the investment program on construction of new power units

During several coming years it is planned to realize the following investment projects that are included into the capital construction plans of the Company:

 

Table 35. Construction of the new generating plant

¹

 

Branches of the OJSC "OGK-2"

Capacity, MW

Year of start of works

Year of the unit's commissioning

Estimated costs (w/o VAT), bln.rub.

1

Unit ¹10 of the Troitsk GRES

660

2007

2014

33,1

2

Unit ¹11 of the Troitsk GRES

-

-

-

-

3

Unit ¹9 of the Stavropol GRES

400

2007

2016

17,4

4

Unit ¹10 of the Stavropol GRES

-

-

-

-

5

Unit ¹9 of the Serov GRES

400

2007

2013

20,0

6

Unit ¹10 of the Serov GRES

-

-

-

-

 

In 2009 the Company initiated the proposals aimed at the reduction of the investment program. In accordance with these proposals unit ¹11 of the Troitsk GRES, unit ¹10 of the Stavropol GRES and unit ¹10 of the Serov GRES were excluded from the Company's investment program. The corresponding draft resolution on the reduction of the Copany's investment program was sent for approval to the Ministry of Energy of the Russian Federation.

 

Table 36. Volumes of investments in new construction in 2009 channeled for construction of new power units and other facilities of power industry

¹Item No.

Name of the branch

Groups of activities

New construction

Plan mln. rub. incl VAT

Net mln. rub. incl VAT

Accomplished, %

1

2

3.1

3.2

3.3

1.

Troitsk GRES

2 787,7

549,78

19,7%

1.1.

Construction of two new power units PSU-660 MW, incl.:

2 659,5

428,08

16%

1.1.1.

Main works of construction of two new power units PSU-660MW

1982,5

2,1

0,1%

1.1.2.

Engineering and design work of construction of two new power units PSU-660MW

677,0

425,98

62,9%

1.2.

Other primary facilities of power industry, incl.:

128,3

121,7

94,8%

2.

Stavropol GRES

39,984

8,82

22,1%

2.1.

Construction of two new power units PGU-400MW, incl.:

23,94

5,12

21,4%

2.1.1.

Main works of construction of two new power units PGU-400MW

12,96

5,12

39,5%

2.1.2.

Engineering and design works of construction of two new power units PGU-400ÌW

10,98

0

0%

2.2.

Other primary facilities of power industry, incl.:

16,044

3,7

23,06%

3.

Serov GRES

525,0

49,1

9,35%

3.1.

Construction of two new power units PSU-330ÌW, incl.:

393,4

7,5

1,9%

3.1.1.

Main works of construction of two new power units PSU-330ÌW

106,5

7,5

7,04%

3.1.2.

Engineering and design works of construction of two new power units PSU-330ÌW

286,9

0

0%

3.2.

Other primary facilities of power industry, incl.:

131,6

41,6

31,6%

4.

Pskov GRES

0



5.

Surgut GRES-1

0




TOTAL:

3 352,684

607,7

18,1%

 

Decrease of the net volume of investments into the new construction as compared to the planned volume was due to the decision to reduce the Company's investment program in 2009.

 

Sources of financing for the investment programs in 2009

Table 37. Sources of assimilation of capital expenditures

¹

Name of the branch

Investments PLAN (ths.rub)

 

PLAN, including:

Investments NET (ths.rub)

 

NET, including:

Amorti-zation

Income

Borrowed assets

Issuance of shares

Amorti-zation

Income

Borrowed assets

Issuance of shares

1

Surgut GRES-1

149 435

99 435

50 000

 0

101 053

94 599

6 455

 0

 0

2

Stavropol GRES

272 313

50 913

 0

51 909

169 492

37 766

36 851

 0

915

 0

3

Troitsk GRES

2 912 083

647 799

 0

208 603

2 055 681

783 791

665 165

 0

58 685

59 941

4

Serov GRES

533 396

24 999

 0

508 397

 0

39 755

20 863

 0

18 892

 0

5

Pskov GRES

18 499

18 499

 0

 0

19 597

19 597

 0

 0

 0

6

Executive body

34 049

34 049

 0

 0

 0

30 191

30 191

 0

 0

 0

TOTAL

for OJSC "OGK-2"

3 919 775

875 694

50 000

768 908

2 225 172

1 012 154

867 265

6 455

78 493

59 941

 

Table 38. Financing sources for capital expenditures

¹

ï/ï

 

Name of the branch

Investments PLAN (ths.rub)

 

PLAN, including:

Investments NET (ths.rub)

 

NET, including:

Amorti-zation

Income

Borrowed assets

Issuance of shares

Amorti-zation

Income

Borrowed assets

Issuance of shares

Other

1

Surgut GRES-1

176 379

161 066

0

15 313

 0

157 471

128 033

29 438

0

 0

2

Stavropol GRES

99 937

59 650

 0

40 287

 0

57 669

48 840

 0

8 829

0

 0

3

Troitsk GRES

3 551 478

412 511

 0

1 258 468

1 880 500

1 316 853

557 108

 0

268 961

414 587

76 196

4

Serov GRES

580 856

55 865

 0

524 991

 0

107 349

50 208

 0

57 141

0

 0

5

Pskov GRES

41 142

41 142

 0

 0

 0

41 914

41 914

 0

 0

 0

 0

6

Executive body

42 668

42 668

 0

 0

 0

33 063

33 063

 0

 0

 0

0

TOTAL

for OJSC "OGK-2"

4 492 460

772 901

0

1 839 059

1 880 500

1 714 318

859 166

29 438

334 930

414 587

76 196

 

Realization of the program on reconstruction and technical upgrading

The following most important activities were realized within the program of technical upgrade in 2009:

 

¹

Name of activity

Effect received

Surgut GRES-1

 

1

Reconstruction of the gas supply in unit 2, incl. the project

Reconstruction of the gas supply system in accordance with "Security rules for gas consumption and gas distribution" PB 12-529-03. After replacement of the burner units with low-toxic single-flow units with high inflammation stability in a wide range of air and gas pressure changes it is expected that emissions of the nitrogen oxide in the outgoing waste gases be reduced. Implementation of the software and hardware complex for burner firing management which also contributes to enhancement of operating reliability of the equipment.

 

2

Implementation of the software and hardware complex for the Medium Term Strategic Plan of Use of the primary energy sources

Implementation of the Order of the OJSC RAO "EES of Russia" of October 23, 2007 ¹ 680 "On creation of the monitoring system for stability margin of electric energy system in real time on the territory of the northern districts of the Tyumen region".

 

 

Stavropol GRES

 

1

Replacement of the air-gas channel of the turbo feed pump (AGC TFP) of power unit ¹ 2

Enhancement of operation reliability, reduction of costs for repairs and technical maintenance, increase of the degree of efficiency for TFP by 3%.

 

2

Replacement of the  computer system SM-2

Reliability enhancement of the system for technological information transmission to the operating personnel, of the efficiency of the electric energy production process management, assurance of the uninterrupted operation and reliability of technological information collection from energy units ¹ 6, 7, 8 of the Stavropol GRES.

 

3

Replacement of unit transformer leads for leads with solid insulation

Enhancement of the operation reliability, reduction of costs for repairs and technical maintenance.

 

4

Replacement of voltage transformers for the Open Distribution Unit (ODU) 330 kV (3 items)

Enhancement of the operation reliability, reduction of costs for repairs and technical maintenance. Increase of precision level for the purpose of commercial register (realization of the program on Automated power supply monitoring and control system).

 

5

Replacement of coupling capacitance 500 kV (3 items)

Enhancement of the operation reliability, reduction of costs for repairs and technical maintenance.

Troitsk GRES

 

1

Reconstruction of generator stator coil TGV-500.

Enhancement of reliability and extension of the repair interval.

 

2

Boiler-turbine shop-1. Reconstruction of gas flues of the 1st line

Assurance of uninterrupted operation of gas flues that avert flue gases from boilers of the 1st line (1st stage from the side of boilers 1,2 and 3)

 

3

Electrolythis bath ¹2. Reconstruction with replacement.

Enhancement of the reliable and safe operation of the main equipment

 

4

Boiler-turbine shop-2, power unit ¹5. Replacement of straight-flow land-type boiler lower nuclear island.

Operation reliability of the equipment, decrease in the number of accidents.

 

5

Boiler-turbine shop-1. Reconstruction of  flue gas treatment systems of the 1st line (Ê1À, Ê2À, Ê3B) with replacement of scrubbers for modern gas cleaning equipment.

 The degree of efficiency increased. The scrubber was re-equipped into an emulsifier of the 2nd generation of the battery type through installation of additional titanic components into the main body. Ash collecting degree: 99.0-99.5 %, flue gas concentration in output: less than 350ìg/nm3, efficiency of entering gas (effluent gas): 260m3/h. Decrease of ash emission into the atmosphere from 572-832 kg/h down to the level of ≤ 90 kg/h, which allows to reduce payment for  negative impact on the environment and increase the technical and economic indexes of the Troitsk GRES. (Completion of works on the boilers: 2À - 25.09.09; 1À - 25.10.09ã. 3B - in 2010)

 

6

Compressor ODU-220. Reconstruction of compressor ODU-220 with replacement of compressors 1,2.

Installation of compressed air devices of KP-3020/40 that have a high degree of efficiency, low noise level and do not require constant presence of support personnel. Operation time before the scheduled maintenance service: up to 2 000 machine hours. This allows to twice increase the overhaul life. The two-stage system of oil separation and the final cooling of the compressed air together with moist separator allow to get qualified technological compressed air, which will considerably increase reliable supply of compressed air to air circuit breakers ODU-220 kV.

 

7

Power unit 300MW st. ¹7. Reconstruction of the turbo feed plant with replacement of the wheel space.

Assurance of the reliable and safe operation of turbo feed plant OSPT-1150M TG st. ¹7, decrease in the number of incidents.                  

 

8

Purification plants. Reconstruction and installation of decontaminating equipment and equipment for water treatment.

Assurance of reliable operation of treatment plants.

Decrease in expenses for sewage water treatment.

Register organization for sewage waters discharged into the water reservoir.

Exclusion of water treatment plants from the register of most dangerous objects.

 

9

Paging of the station, modernization of equipment for paging of station KOS-22.

Bringing into compliance with the requirements of Regulations for pipeline technical maintenance (RD 34.20.501-95).

 

10

Creation of the system for access control and management (SACM).

Creation of the system for control and management of access to entrance points to the Troitsk GRES. Automated control of the pass control, limitation to the employees' rights to access the station's premises as to the working hours. Bringing into compliance with RD 78.145-93 "Systems and complexes of security, fire and fire and security alarms. Regulations for conduct and acceptance of works".

 

Serov GRES

 

1

Reconstruction of the levee of the second level of connection (levee connection of the 2nd level by 1 m until the marking of 95,2 m)

 

Creation of additional capacities for ashes and slag waste storage, which allows to increase the object's useful life by 15 months.

 

2

Reconstruction of Open Distribution Unit (ORU) 110 kV with replacement of air circuit breakers for gas and electricity breakers

 

Increase of operation reliability, decrease of costs for repair and technical maintenance. Achievement of a higher level of precision of the built-in current transformers employed in the Automated measuring and information system for electric power fiscal accounting

 

3

Installation of safety relief valves on the gas pipe line of low pressure

Fulfillment of requirements of circular ¹ Ts-03-97(t) p.1.11 Increase of safety for the maintenance and repair personnel

 

 

4

 

Modernization of team paging

 

Provision of the dispatching and technological management of the plant with a reliable and qualitative team paging system. Reconstruction of the worn out and outdated equipment.

 

 

5

Reconstruction of the automated notification system ACS 8-4 (Automated Control System)

Adjustment of the automated notification system to comply with the joint order of the Ministry of Emergency Situations of Russia, Ministry of Notification and Connectivity of Russia and Ministry of Culture of Russia of 25.07.06  ¹ 422/90/376 "On approval of the regulation on people notification systems", decree of the Head of Serov city of 09.07.2005 ¹ 1562 "On order of people notification in Serov city in case of natural and man-made emergency situations", approved plan of the urban district of Serov of 06.02.2009.

 

Pskov GRES

 

1

Purchase and installation of ESP unit ¹3 of energy unit ¹ 2

Availability of a back-up ESP unit on the energy unit ensures the nominal operation parameters of energy unit -215 MW. In case of a breakdown of one of the two pumps, absence of a back-up ESP unit on the energy unit makes it impossible to continue to operate with the load of more than 140 MW.

 

2

Replacement of the current transformers for OPU 330 kV (3 items.)

Decrease of the accident risk in the network of "EES of Russia". Increase of reliability of the station's operation.

 

3

Expansion of the microcellular connection

There was enhanced the quality and reliability of the existing microcellular connection for the prompt management of the production process.

The zone of the stable microcellular connection was expended on the territory of the Pskov GRES.

 

Technical upgrading and reconstruction program results of the (TUR) in 2009.

 

Surgut GRES -1

Investment volume on the TUR program in 2009: 149 435,2 ths.rub.

Assimilated funds: 101 053,3 ths.rub., which makes up 67,6% of the planned indexes.

Stavropol GRES

Investment volume on the TUR program in 2009: 50 912,7 ths.rub.

Assimilated funds: 36 850,7  ths.rub., which makes up 72,4 % of the planned indexes.

Troitsk GRES

Investment volume on the TUR program in 2009: 647 799,1 ths.rub.

Assimilated funds: 665 164,6 ths.rub., which makes up 102,7% of the planned indexes.

Serov GRES

Investment volume on the TUR program in 2009: 24 999,4 ths.rub.

Assimilated funds: 20 855,4 ths.rub., which makes up 83% of the planned indexes.

Pskov GRES

Investment volume on the TUR program in 2009: 18 499,40 ths.rub.

Assimilated funds in 2009: 19 589,9 ths.rub, which makes up 105,9% of the annual plan.

Total for the OJSC "OGK-2": plan: 891 646 ths.rub., fact: 843 521 ths.rub, which makes up 95% of the annual plan.

5.3. Development of information technologies

Major achievements in information technologies:

1.   Implementation of the electronic document management system

Within the framework of development and improvement of the electronic document management system (EDMS) in 2009 the OJSC "OGK-2" started the project on transition to a new version of EDMS where security and scalability problems are eliminated.

2.   Creation of DPC in the new office.

Within the framework of moving into the building of the OJSC "Neftyanoj dom" there was created a modern network infrastructure of the office as well as the new suballocated Data Processing Centre (DPC) equipped with the modern systems for management, monitoring and fire fighting.

3.   Preparation and outsourcing of IT.

During the first six months of 2009 there were made preparations for outsourcing of the IT function. From September 1, 2009 the OJSC "OGK-2" has only the Client IT service and more than 170 IT employees were transferred to the specialized IT company, the LLC "ANT-Inform" that now provides a new level of IT service for the systems of the OJSC "OGK-2".

4.   Telephone communications

Within the framework of expenses optimization the executive body of the Company started to use landline telecommunication services of a unified provider - Gaztelecom, which allowed to reduce expenses on this item of expense and increase reliability of telecommunication.

5.   Implementation of "Monitoring system for stability margin of electric energy system of Northern districts of the Tyumen region (MSSMEES NDTR)" (Order of the RAO "EES of Russia" ¹ 680 of 23.10.2007).

The electric energy system stability margin monitoring system of the northern districts of the Tyumen region (MSSMEES NDTR) was put into commercial operation.

 

Table 39. Activities to develop information technologies in 2009.

¹

 

Branches of the OJSC "OGK-2" /  Name of project

Cash disbursement in 2009 (net), ths.rub.

1

Surgut GRES-1

9 816,4


Implementation of software and hardware complex for the Medium Term Strategic Plan of Use of the primary energy sources


2

Stavropol GRES

0

3

Troitsk GRES

5 091,7


Dispatch system of the station. Modernization of the equipment of the dispatch system of the station KOS-22


4

Serov GRES

6 023,4


Modernization of team paging


5

Pskov GRES

3 948,9


Modernization of LAN

1438,6


Reconstruction of the dispatch system

743,8


Expansion of the Automatic telephone system of the administration and living quarters

749,9


Expansion of the microcellular communication

1016,6

6

OJSC "OGK-2"

23 339,1


Construction and modernization of DPC and Client Service Centre


7

TOTAL:

48 219,5



Reference information

 

Legal address

village of Solnechnodolsk, Izobilnensky region, 356128 Stavropol krai, Russian Federation

Postal address

floors 09-15, 101 prospect Vernadskogo bld.3, 119526 Moscow, Russian Federation

Telephone

Fax

(495) 428-42-22

(495) 428-42-23

General Director

Mityushov Aleksey Aleksandrovich

Web address

www.ogk2.ru

Information on auditors

CJSC BDO Unicon

125 Varshavskoye shosse bld 1, section 11, 117587 Moscow, Russian Federation

Tel: (495) 797-5665 Fax: (495) 797-5660

Information of registrar

OJSC "Tsentralny Moskovsky Depozitariy"

34 ul. Bolshaya Pochtovaya bld. 8, 105082 Moscow, Russian Federation

Contact persons on shareholders and investors relations

Rassmagina Alina Zoriktuyevna

Project Head of the Corporate management Department

Tel: 8 (495) 428-42-22, ext. 411

e-mail: RassmaginaAZ@ogk2.ru

Egorova Elena Nokolaevna

Head of Corporate management Department

Tel: 8 (495) 428-42-22, ext. 648

e-mail: EgorovaEN@ogk2.ru

Declaration of the Board of Management

 

To the best of our knowledge, we resolutely state that the Financial Statements, prepared in accordance with the applicable set of accounting standards, reflect a true and precise state of affairs concerning the assets, liabilities, financial position and profit or loss of the Company, and the Company Management Report provides a fair review of the development and performance of the business and the position of the Company, together with a description of the principal opportunities, risks and uncertainties that they face.


This information is provided by RNS
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