RAO “UES OF RUSSIA” ANNUAL REPORT 2006
RAO “UES OF RUSSIA” ANNUAL REPORT 2006
RAO “UES OF RUSSIA” ANNUAL REPORT 2006
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2 0 0 6 <strong>ANNUAL</strong> <strong>REPORT</strong> <strong>OF</strong> <strong>RAO</strong> <strong>“UES</strong> <strong>OF</strong> <strong>RUSSIA”</strong><br />
Contents<br />
CORPORATE<br />
HIGHLIGHTS 4<br />
STATEMENT<br />
BY BOARD CHAIRMAN<br />
AND MANAGEMENT<br />
BOARD CHAIRMAN<br />
<strong>OF</strong> <strong>RAO</strong> <strong>“UES</strong> <strong>OF</strong> <strong>RUSSIA”</strong> 6<br />
CORPORATE<br />
GOVERNANCE SYSTEM<br />
REFORMING<br />
THE COMPANY<br />
ENSURING RELIABLE<br />
OPERATION<br />
<strong>OF</strong> THE UES <strong>OF</strong> RUSSIA<br />
ELECTRICITY<br />
AND HEAT MARKETS<br />
INVESTMENT<br />
ACTIVITIES<br />
INTERNATIONAL<br />
ACTIVITIES<br />
APPENDIX<br />
ABOUT THE COMPANY 10<br />
CAPITAL<br />
<strong>OF</strong> OAO <strong>RAO</strong> <strong>“UES</strong> <strong>OF</strong> <strong>RUSSIA”</strong> 12<br />
18 36<br />
62<br />
76<br />
96<br />
118<br />
130<br />
Shareholders Meeting 21<br />
Board of Directors 22<br />
Management Board 25<br />
Governance System 26<br />
Results<br />
of the Structural Reform 38<br />
Liberalization of the Electricity<br />
Markets 44<br />
First Phase of the Company’s<br />
Reorganization 45<br />
Reform Plans 46<br />
REGULATORY<br />
ENVIRONMENT<br />
AND MACROECONOMIC<br />
INDICATORS<br />
54<br />
Power Consumption Trends 55<br />
Factors Affecting Pricing<br />
in Electricity Industry 57<br />
Electricity<br />
and Heat Tariffs 59<br />
Operation<br />
of the UES of Russia 63<br />
Тechnical Policy 66<br />
INVESTMENT PHASE<br />
<strong>OF</strong> THE UES DEVELOPMENT<br />
68<br />
Investment Needs<br />
of the UES of Russia 68<br />
Sources of Investment 71<br />
Wholesale<br />
Electricity Market 77<br />
Retail Electricity Markets 84<br />
Heat Market 85<br />
COMPANY’S<br />
FINANCE<br />
PRODUCTION<br />
100<br />
RESULTS<br />
86<br />
Generation 86<br />
Electricity Transmission<br />
and Distribution 92<br />
Electricity Sales 94<br />
Financial Management<br />
and Financial<br />
Market Operations 101<br />
Company’s<br />
Financial Performance 104<br />
Auditor’s Report 110<br />
Statutory Financial Statements<br />
of the Company 114<br />
Opinion Statement<br />
of the Auditing Commission 117<br />
International Cooperation<br />
of <strong>RAO</strong> <strong>“UES</strong> of Russia” 118<br />
Foreign Assets<br />
and Projects 121<br />
Electricity Exports<br />
and Imports 122<br />
CORPORATE<br />
SOCIAL<br />
RESPONSIBILITY<br />
126<br />
Corporate Governance Code<br />
Compliance Report 132<br />
Information<br />
on Members of the Board<br />
of Directors, Management<br />
Board, Committees<br />
and Commissions under<br />
the Board of Directors<br />
of <strong>RAO</strong> <strong>“UES</strong> of Russia” 138<br />
Information on Stakes<br />
and Voting Shares Held<br />
by <strong>RAO</strong> <strong>“UES</strong> of Russia”,<br />
Membership in Not-for-Profit<br />
Organizations 145<br />
<strong>RAO</strong> <strong>“UES</strong> of Russia”<br />
Subsidiaries<br />
with Shares Traded<br />
on Stock Markets 161<br />
Report on Financing<br />
of OAO <strong>RAO</strong> <strong>“UES</strong> of Russia”<br />
Investment Programme<br />
Projects 167<br />
Information<br />
on Transactions Made<br />
by OAO <strong>RAO</strong> <strong>“UES</strong> of Russia” 168<br />
Company Bylaws 172<br />
Major Corporate Events 174<br />
Glossary 180<br />
Contact Information 185
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