2015 Annual Report


Annual report
IDGC of Centre, PJSC

Yury N. Mangarov Chairman of the Board of Directors IDGC of Centre, PJSC YURY N. MANGAROV Chairman of the Board of Directors IDGC of Centre, PJSC
Oleg Yu. Isaev General Director IDGC of Centre, PJSC OLEG YU. ISAEV General Director IDGC of Centre, PJSC

Dear shareholders, partners and colleagues!

Our Company has been providing a reliable power supply to residents of the Central Russia for over 10 years. We are committed to our mission and supporting people to maintain a high level quality of life, contributing to the economic development of our regions.

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Focused on quality

IDGC of Centre is a company whose infrastructure is essential to 11 regions. The main quality indicator of our services is the minimal level of power losses. The reduction of grid power losses is among the highest strategic priorities of the Company’s operations.

Every year, the Company’s Board of Directors approves the Programme of Actions for Power Losses Reduction, introduces new technologies and installs new energy saving equipment. Special attention is paid to the development of the automated information and metering system for electricity metering.

Investments in the future

In 2015, we continued working on the improvement of the Company’s shares liquidity rate, resulting in holding the leading positions for shares trading volumes among distribution companies and the stable trading of IDGC of Centre’s shares in the highest listing of MICEX.

Annual perception study shows the positive dynamic pattern of the Company’s image.

Taking in consideration the significant changes in corporate governance law, we provided a self-evaluation of the corporate governance level by using the methodology approved by the Federal Property Management Agency. The achieved score was 382.5 out of 548, which corresponds to 70%. We are satisfied with these results, as they prove high standards of the Company’s corporate governance. We are planning to improve activities in this area next year.

In 2016, we will continue improving the Company’s investment appeal and information transparency. We strongly believe that these activities shall result in the growth of shares value and the stability of the dividend payment level.

Development of public-private partnership

In 2015, IDGC of Centre concluded a concession agreement with the Administration of the Tambov region for the electrification of the production sites “Tambov Turkey” LLC and OJSC “Tokarevskaya Poultry Plant”. The agreement is concluded for a 20-year period and will be the first experience of public-private partnership in the electric grid sector. It will attract investments for the construction and operation of power grid facilities in the Tambov Region to a volume of RUB 1.2 bln.

The implementation of projects is of great importance for the Tambov Region’s economy and is a significant contribution in the development of agricultural areas, the structure revision of the agricultural system, and switching from low efficiency production plants to up-to-date and innovative ones.

A new level of efficiency

In 2015, we managed to meet the growing needs of the economy and the social sector in power supply at cost efficient tariffs. Furthermore, the Company managed to diversify its credit portfolio and preserve its financial sustainability.

In 2015, the revenue under RAS amounted to RUB 79,817.2 mln, the growth of electric power transmission proceeds amounted to 2.4% over the same period of 2014. Earnings before Interest, Taxation, Depreciation & Amortisation (EBITDA), amounted to RUB 15,219.2 mln, and the profit margin increased to 19.1%. Despite the negative external factors, these results were achieved thanks to the successful implementation of a cost reduction programme resulting in a 8.5% decrease. The main areas of efficiency improvement were the Optimisation of the number of administration staff, improving the control of costs, and the revision of relations with suppliers and contractors in the course of procurement activities.

Sustainable development

Commitment to social business responsibility and sustainable development principles is an essential element of the Company’s corporate policy. Therefore, IDGC of Centre is committed to ensuring the continuous development of its human resources by: expanding the competences of the employees, creating a favourable social and production environment, ensuring the engagement of each employee in its operations to achieve the Company’s targets. The Company is focused on the prevention of third party accidents at electric grids facilities, the adaptation of its professionals, and the improvement of training and skills of the Company’s employees.

IDGC of Centre implements an environmental policy to reduce negative impact on the environment. These actions taken include the Company’s operations in monitoring the transportation of the toxicity of exhaust gases, the monitoring of discharged waste-water and the separate storage of waste at industrial sites.

Using the digital technologies with application of IEC 61850

The project of automation of the substation 110/10 kV “Yartsevo-2”, including relay protection and automation equipment, data collection and exchange systems which comply with IEC 61850 “Communication Networks and Systems in Substations”, was completed at the Smolenskenergo branch.


Reconstruction and automation of the 35 kV grids using simplified technical solutions based on standalone commutation devices (reclosers) 35 kV

In 2015, the Company successfully implemented several projects for the installation of 35 kV switching devices (reclosers) at overhead lines and substations.

Construction of 0.4 kV overhead power transmission lines with steel multisided poles

In 2015, a pilot operation of 0.4 kV steel-anchor multisided poles, which were developed by the Company, was successfully completed.

Training centre on the basis of the energy college — national research university “MPEI” branch in the city of Konakovo

The creation of the training centre (laboratory) became the next step in implementing the preparation plan for specialists under the Cooperation Agreement between IDGC of Centre and National Research University “MPEI”.


Creating 6-10/0.4 kV power grids with the application of a pole mounted transformer substation

In 2015, IDGC of Centre adopted the Guidelines on creating 0.4-10 kV power grids using the pole-mounted 6-10/0.4 kV transformer substations.


Renovation of important energy facilities in the region

Kostroma branch specialists have performed renovation of the substation Kostroma-1. The substation provides electric connection between the substations Motordetal and Kostroma-2 included in the national electric grid, and supplies electricity to the Zavolzhsky District of the Kostroma Region with a population of more than 22 thou. people.

The substation was renovated to cover the capacity shortage in the area and to create opportunities for grid connection of new consumers. Two new 110 kV power transformers of 16 MVA each were installed at the substation during the renovation. Also, new microprocessor protection were put into operation, up-to-date telecontrol system was installed, and high-speed communication channels with fiberoptic lines were commissioned. The state-of-the-art equipment meets modern requirements and allows for the possibility to control the power facility remotely from the Grid Control Centre of Kostromaenergo. The renovation operations were performed without disconnecting consumers, but with a phased decommissioning of the equipment.


Building “smart grids”

The Yarenergo branch launched a project of electricity metering system with remote data collection by installing “smart” meters on the consumers’ sites. This project is implemented pursuant to the agreement signed between PJSC Rosseti and the Russian Direct Investment Fund (RDIF) at the St. Petersburg International Economic Forum in 2014.

Creating this system is aimed at improving the efficiency of electricity transmission, reducing the cost of purchasing losses, organising effective control over the electricity consumption, and decreasing the cost of meter reading. The project will rein in the growth of tariffs, while consumers will be able to plan and control power consumption remotely.


Infrastructure development in the city of Tver

Tverenergo continues connecting new social facilities, and providing them with a reliable power supply. In 2015, connection of RIO Mall to the Tverenergo grids was completed in Tver. To ensure power supply of the new property, Tverenergo experts completed the renovation of the 110 kV substation Excavator Plant. The connected capacity is 3,000 kW.

The Mall is situated in one of the most densely populated areas of the city — the Moskovsky District with about 120 thou. inhabitants, officially. This kind of public amenity opened in the city will not only contribute to the development of infrastructure, but also provides a basis for further evolvement of trade and related businesses.


Energy saving equipment in the streets

Smolenskenergo installed and renovated street lighting in the urban localities of the Smolensk Region. LED luminaires were installed during the upgrade of exterior lighting. In 2015, more than 1400 such LED lights were installed.

Street and highway lighting systems are heavy loaded, so daily operation of the systems is costly. In comparison with traditional light sources, LED luminaires have low energy consumption. Moreover, they are more durable, resistant to low temperatures, and cannot be overheated; they provide uniform illumination of the roadway and their disposal costs are rather low.


Energy saving and electric safety for kids

At the initiative of Bryanskenergo, the websites of Bryansk Region schools will have now electric safety and energy-saving lifestyle sections. As part of the cooperation agreement signed between Bryanskenergo and the Bryansk Region Education Office, energy industry professionals provided the Office with themed posters, cartoons and video clips to be the basis of the new section on the school-related web resources — Electric Safety and Energy Efficiency. In addition, the websites of Bryansk Region schools contain links to materials on electrical safety posted on the website of IDGC of Centre. Teachers use this information during the electric safety and energy efficiency classes.


Development of village

During the implementation of the regional residential construction programme, Kurskenergo supplied electricity to the first phase of a new microdistrict being built in the village of Bolshoye Soldatskoye. The project provides for construction of 40 residential buildings with a total living area of 5,200 m2. 20 houses were built during the first phase; their grid connection was provided by workers of the Kursk branch.

Electricity for the new buildings is supplied from the transformer substation 204 with capacity of 160 kVA. Our energy workers performed installation of the overhead line 0.4 kV in the shortest time; this allowed providing the developer with the required capacity of 120 kW. During the installation operations, modern and safe selfsupporting insulated wires were used with a high level of reliability and long service life.


Grid connection of the restored hydroelectric power plant

The Orel branch provided grid connection of the restored Lykovskaya hydroelectric power plant in the village of Bolshoye Lykovo in the Mtsensky District. The HPP operation was resumed after more than 20 years of downtime. The unique character of this project is in environmental friendliness of the energy generation and recoverability of the energy sources. Its implementation will enable generation of electricity from renewable water resources of the river Zushi.


Power supply of socially significant facilities of the region

The Belgorod branch of IDGC of Centre has supplied electricity to the socially significant budgetary institutions of the Belgorod Region. By the start of the academic year, 27 kindergartens, 8 schools, 2 sports and recreation centres and 2 cultural establishments were provided with electricity. The priority projects included the Druzhba Ice Arena in the settlement of Rakitnoe, the Centre for Cultural Development in Shebekino, the Children’s Regional Hospital in Belgorod, the Medical Centre Generation, and the boiler facility of the maternity department in Stary Oskol.


Reliabirity and safety of electricity supply

Lipetsk energy workers in IDGC of Centre started implementation of two innovative projects at the same time — one for construction of power lines with polymer insulators, and another one for installation of bird protective devices. The line with new polymer insulators will increase safety of energy supply, and in order to prevent birds being killed by electric shock, the energy workers will install modern bird protective devices on each power line support. Polymer insulators differ from the glass and ceramic alternatives in higher insulating ability, mechanical strength, and chemical and thermal stability.


Development of agro-industrial complex

Tambovenergo experts have begun to implement the first public-private partnership project (the PPP Project) in the power grid complex. It is aimed at creating power grid infrastructure for companies engaged in poultry operations — Tambov Turkey, LLC and OJSC Tokarevskaya Poultry Plant. The companies under construction will be the major agro-industrial facilities in the Central Federal District. About 3 thou. new jobs will be provided in the region with the commmissioning of the new facilities.

For implementation of the PPP Project in the Tambov Region, the Company was awarded the National Prize Rosinfra-2015 in nomination of ’The best PPP initiative in the energy sector’. Further, it is planned to share the experience obtained in the PPP sphere with other regions where the Company operates, which will enable increase in the availability of electricity and capacity to consumers and provide development and economic growth.


Assistance in implementation of large residential projects

In the Voronezh Region, which is the third largest player in the Central Federal District for commissioning of newly constructed residential buildings, since the beginning of 2015, energy workers of the Company have connected to the grid 8 residential construction sites with a total connected capacity of over 25 MW. Two of them are sites chosen by regional authorities for implementation of the state programme Housing for Russian Family. Those are apartment buildings being erected in the suburbs of the regional centre — the settlement of Otradnoe in the Novousmansky District, and the first phase of the residential property Ozerki developed in the Levoberezhny District of Voronezh. Also, the residential properties connected to the Company grids in the regional centre include buildings on Perevertkina street (maximum connected capacity — 4.7 MW) and Kukolkina street (2.3 MW).