• Violation of payment discipline by end consumers of electric power and necessity of additional credit resources. In this situation there is a risk of deficiency of cash on the accounts of the Company due to temporary cash gaps between the receipt of the cash from utility companies and necessity of financing of the current operations.
• нарушением платежной дисциплины сбытовых компаний в связи с «нецелевым» использованием денежных средств, то есть, несмотря на то что обязательства по оплате со стороны конечных потребителей перед сбытовыми компаниями выполнены, денежные средства на счета Общества со стороны сбытовых компаний не поступают.

The realisation of this risk will result in the necessity of additional borrowing on the refundable basis for performance of the obligations of the Company which leads to the deterioration of the financial indicators of the Company

• For reduction of the risk probability and mitigation of their consequences the management conducts balanced credit policy, receivables management policy aimed at the optimisation of receivable and debt collection.
• The Company also conducts claim administration work for recovery of overdue receivables, implements the policy of signing of direct agreements with electricity consumers.

• absence of up-to-date plans of economic development indicating the growth of power consumption over certain period in the some subjects of the Russian Federation and municipal entities;
• probability of overall reduction of the power consumption of the Russian economy with the adoption of Federal Law “On Energy Saving and Improvement of the Energy Efficiency and Amendment of Certain Legal Acts of the Russian Federation” dated November 23,2009 No. 261-FZ, commissioning of own generation facilities and units and introduction of social norm of consumption;
• reduction of consumption of electricity in the Russian economy in case of economic recession/crisis;
• reduction of power consumption due to recession in the sales of markets of major industrial consumers;
• decrease of the number of new grid connections or delayed performance of signed contracts;
• reduction of the actual capacity of consumers due to change of the consumption load with a day (shifting of the load to the night hours without reduction of the consumption volume).

• work with government authorities in the field of tariff regulation for development of the consolidated forecast balance of production and consumption of electric power and capacity in the regions of presence of the Company;
• diversification of the portfolio of services of the Company.

• Financial problems or exacerbated perception of the risks of investments in the emerging markets reduced the amount of foreign investments in Russia, caused outflow of the foreign capital and had a negative impact on the Russian economy. Additionally, the Russian economy is especially vulnerable to the fluctuations of the global prices for natural gas and oil. Also there is a problem of transit of Russian gas to Europe across Ukraine. The growth of prices for consumer products in Russia remains to be a problem. The high key rate of the Central Bank of the Russian Federation significantly increase the cost of borrowing. All these events can limit the access of the issue to capital, and have an adverse effect on the purchasing power of the product consumers. Currently, the Government of the Russian Federation pursues the policy of containment of the tariffs products and services of natural monopolies which can result in underfinancing of the investment programme of the Company.
• Additionally, in the mid-term, changes of the legal framework are expected with respect to the measures for resolution of the problem of cross-subsidisation in power generation.
• Currently, the sovereign debt rating of the Russian Federation was downgraded due to the current economic situation to BBB- (in national currency, Standard & Poor’s) with negative outlook, BBB- (Fitch) with negative outlook and Ba1 (Moody’s) with negative outlook.

• Refusal of authorised government tariff regulators to include in the tariffs part of economically justified costs declared by the Company;
• Reduction of power consumption by major industrial companies in the regions.

As a result of measures taken as part of implementation of Efficiency Management Programme of IDGC of Centre, PJSC in 2015 the controllable expenses were reduced by RUB 3.444 mln or by 20.76% of the 2012 level.

• The amount of cross-subsidisation increased due to the tariff policy of the Government aimed at containment of the tariff growth for population. Major consumers with “Last Mile” agreements account for the most significant part of cross-subsidisation. Signing of direct contracts between major industrial consumers and PJSC FSK EESFGC UES leads to a shortfall in income of the Company.
• Law payment discipline of the counterparties of the issue results in the accumulation of significant amount of receivables including overdue receivables. The main factors affecting payment discipline were disputes regarding the declared capacity during settlements with energy utility companies and improper use of cash for supplied electricity by energy utility companies deprived of the status of guaranteeing suppliers.

As a result of the realisation of the named risk factors the Company may be unable to fulfil financial and other constraining conditions specified in the loan agreements.

• Regulations governing the tax legal relations often contain unclear wording or use the terms which do not have specific legal definition. The official explanation of the tax legislation by the Ministry of Finance of the Russian Federation and Federal Tax Service of the Russian Federation are not always complete.
• Development of the rules and mechanisms of preparation and submission of tax accounting pertains to the competence of the tax authorities which are entitled to charge additional tax and fee amounts, to charge penalties, to impose significant fines, and therefore the tax risks increase significantly. The Company fully complies with tax legislation applicable to its business.