Risk management
Risks arising during financial and business activities are managed by the Company in accordance with the Risk Management Policy (minutes of meeting of the Board of Directors dated 22.08.2014 No. 18/14).
The risk map of IDGC of Centre indicating the level of significance of the risk which is a combination of the probability of risk and consequences for the Company in monetary and other terms and the dynamics of the significance of the risk in comparison with 2014 and during 2015 is provided below.
This document is available on the Company’s website.

The number of risk name, rating the significance of the risks and trends | Risk description | Actions to minimise the consequences of the risk |
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Sector risks | ||
![]() Operational (production) risks |
Risks related to insufficient financing of the repair and maintenance programme and investment programme, physical wear, violation of the operating conditions and critical change of operational parameters of power grid equipment which can result in the failure (accidents) of electric equipment and failure of structures. | For minimisation of consequences of operational risks all main operational facilities of the Company are insured. Additionally, there is a number of measures for ensuring the reliability of equipment and structures at the proper level:
Management of risks related to compliance with industrial safety requirements of the Company is ensured by compliance with the Federal legislation in the field of industrial safety and the system of operation control of the compliance with industrial safety requirements. |
![]() Risks related to state regulation of the tariffs for provided services |
Transmission of power by distribution grids and connection to power grids are activities regulated by the state. | The following measures are taken for the minimisation of risks:
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![]() Environmental risks |
Environmental risks comprise possible harmful emissions from stationary units and transport systems. Environmental risks can be also expressed in the probability of leaks of transformer oil at substations in case of absence of oil receptacles with surface wastewater flowing into rivers and lakes which can result in the contamination of fishing water bodies by oil products. |
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![]() Risks of deficiency of income related to payment discipline of utility companies or a decrease of power consumption |
The probability of an increase of receivables due to:
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 |
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![]() The risk of uncertainty of power transmission services limits |
The risk is related to the following circumstances:
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This risk is minimised by the following measures:
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![]() Risks related to possible change of prices for accessories and services used by IDGC of Centre, PJSC in its activities (separately in the domestic and foreign market), their impact on the activities of the Company and fulfilment of security obligations |
In the course of operations, the risks of an increase of prices for accessories, equipment and other materials arise. These risks are mainly attributable to inflation. | The Company implements the following measures for minimisation of the probability of this risk:
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Country and regional risks | ||
![]() Country risks |
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To minimise the named risks IDGC of Centre, PJSC conducts work for reduction of the internal expenses and optimisation of the investment programme, conducts balanced borrowing policy. The political risks are not controlled by the Company due to their scale, but for their minimisation the Company conducts active work with higher-level and regulating authorities in the common interests of the development of the industry. |
![]() Regional risks |
IDGC of Centre, PJSC is mainly exposed to the following regional risks:
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For mitigation of the impact of the regional risks on the investment programme the Company interacts with state authorities and other stakeholders to monitor and control the choices of the stakeholders with respect to their actions in connection with the investment projects of the Company. The Company also implements measures for optimisation of the financing of investment programme through reduction of the internal costs. |
Financial risks | ||
![]() Inflation risks |
Negative impact of inflation on financial and economic performance of the Company can be related to the losses of the real value of the receivables, increase of payable borrowing interests, increase of the cost of construction of investment programme facilities, cost of materials, and third party services required for operation activities. In 2015 the consumer price index in average amounted to 15.55% in comparison with 7.8% in 2014. The growth of inflation can result in the unplanned increase of the OPEX of the Company. | For reduction of the inflation risk, the Company pursues the policy aimed at optimisation of OPEX in accordance with the Efficiency Management Programme and signing of long-term contracts with suppliers and contractors.
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. |
![]() Currency risks |
Adverse variation of foreign currency exchange rates can affect the operating and investment efficiency of the Company | Currency risks do not significantly affect the Company because all settlements with counterparties are made only in the currency of the Russian Federation. Nevertheless, taking into account the fact that products and equipment purchased by the Company contain imported parts, the significant increase of the foreign currency exchange rate can result in growth of the cost of the purchased products. For this reason the Company pursues policy aimed at the import substitution and signing of long-term contracts which do not imply increase of prices for purchased products. |
![]() Interest risks |
The change of the key interest rate by the Central Bank of Russia reflects the macroeconomic situation in the economy and affects the cost of borrowing. An increase of the rates of loans can result in the unplanned increase of the debt repayment costs of the Company. | For reduction of the interest risk the Company pursues a balanced borrowing policy aimed at optimisation of the structure of loan portfolio and minimisation of the debt repayment costs. |
![]() Liquidity risk |
The business of the Company is exposed to risk factors which can result in the weakening of the liquidity and financial stability of the Company. The most significant factors are cross-subsidisation of groups of consumers and low payment discipline in the retail electricity market.
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. |
For minimisation of this risk factor the Company monitors the structure of the capital and determines the optimum parameters of borrowing and takes measures for optimisation of the structure of the working capital. |
Legal risks | ||
![]() Risks related to the change of the tax legislation |
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In case of amendment of the applicable taxation procedure and conditions, the Company will plan its financial and business activities taking into account these changes. |
![]() Risks of challenging of major transactions and related party transactions by shareholders |
Major transaction and related-party transactions without proper approval of the Board of Directors or General Meeting of Shareholders and approval of such transactions with violation of established procedure. | For minimisation of this risk the conclusion of work agreements includes mandatory preliminary legal analysis of the executed transactions to determine the presence of the grounds for corporate procedures envisaged by the applicable legislation and/or the Articles of Association of the Company. If necessary, the respective transactions are submitted to review of the competent management bodies of the Company. |
![]() Shareholder relations risks |
This risk implies the possibility of corporate blackmailing by shareholders and actions committed by hostile shareholders for interruption of the general shareholder meetings in the future. | For minimisation of this risk, the professional registrar Reestr-RN Ltd. keeps the shareholder register. The Company implements a number of measures for information interaction with shareholders and full respect of their legitimate rights and interests: disclosure of information in accordance with procedure stipulated by the normative legal acts, regular meetings of the management of the companies with shareholders for explanation of the matters related to the current operations, compliance with corporate procedures and internal documents. |
Risks related to the activities of the Company | ||
![]() Risks related to the current legal procedures where the Company is involved |
In 2013 a number of energy sales companies operating in the regions of presence of IDGC of Centre, PJSC and using the services of the Company were deprived of the status of guaranteeing supplier. Due to insolvency the insolvency (bankruptcy) proceedings were initiated against the said organisations upon the applications of the lenders and the debtors. | As part of such proceedings IDGC of Centre, PJSC claimed to include the debt of the energy sales company to the Company in the creditor’s list. However, the full satisfaction of the claims of the Company as part of the bankruptcy procedure using the bankruptcy assets is unlikely. |