2.5.5. The risks connected with the issuer’s activity
Below are the risks peculiar exclusively for the issuer.
The risks connected with the current litigations in which the issuer participates.
At the moment, there are no large proceedings initiated by the issuer and/or against the issuer. In this connection, the issuer does not run the risk concerning participation in the current litigations.
The risks connected with absence of an opportunity to prolong terms of the license of the issuer on conducting a certain kind of activity or on use of objects, the availability of which in its turn is limited (including natural resources).
After completion of reorganization of the issuer in the form of its DGC consolidation with the issuer, included in the issuer’s configuration, and obtaining of the status of the operational company the issuer performed procedures on acquisition of a series of licenses, which belonged to RGC previously. The risks connected with non-receipt of the licenses necessary for operational activity of the issuer are estimated as insignificant by the issuer.
The risk connected with the possible responsibility of the issuer under debts of the third parties, including subsidiaries of the issuer is estimated as insignificant by the issuer in connection of absence of the issuer’s corresponding obligations before the third persons.
The risk connected with an opportunity of loss of consumers, the turnover with which is at least 10 percent of the total receipt of products (works, services) the issuer is estimated as insignificant by the issuer in connection of absence of such consumers.
The risks connected with the possible juridical procedures as a result of non-fulfillment of obligations by the third persons before the issuer on the primary type of activity (technological connection and electric power transmission).
The risks connected with the possible juridical procedures as a result of non-fulfillment of obligations by the third persons before the issuer on the primary type of activity (technological connection and electric power transmission) are possible in connection with the economic situation existing at present. In this case the issuer makes necessary efforts (performs pre-trial settlement of disputes, conducts necessary negotiations) on minimization of these risks and dominating damage for the Company. In the issuer’s opinion these risks are insignificant at present.
There are no other risks connected with activity of the issuer peculiar exclusively for the issuer and which the issuer considers necessary to be reflected in this report.
III. Detailed information on the issuer
3.1. Creation and development history of the issuer
3.1.1. Data on company name of the issuer
Full company name of the issuer: Joint-Stock Company "Interregional Distribution Grid Company of Centre"
Abbreviated company name of the issuer: IDGC of Centre, JSC
Full or abbreviated name of the issuer (name for non-commercial organization) is similar to names of other legal entity
Name of such legal entities:
Interregional Distribution Grid Company of Centre and Volga Region, Joint-Stock Company (IDGC of Centre and Volga Region, JSC); Interregional Distribution Grid Company of the Urals, Joint-Stock Company (IDGC of the Urals, JSC); Interregional Distribution Grid Company of Volga, Joint-Stock Company (IDGC of Volga, JSC); Interregional Distribution Grid Company of the South, Joint-Stock Company (IDGC of the South, JSC); Interregional Distribution Grid Company of the North Caucasus, Joint-Stock Company (IDGC of the North Caucasus, JSC); Interregional Distribution Grid Company of Siberia, Joint-Stock Company (IDGC of Siberia, JSC); Interregional Distribution Grid Company of the North-West, Joint-Stock Company (IDGC of North-West, JSC).
Explanations necessary for avoidance of confusion of stated names:
In order to avoid mixture of the specified names, it is necessary to pay special attention of a component of full and abbreviated names of the given organizations specifying regions of their location - Centre, Centre and Volga Region, Urals, Volga, South, North Caucasus, Siberia, North-West.
The issuer’s business name (name for non-commercial organisation) was registered as the trademark or service mark
Information on registration of the indicated trade marks:
On February 11, 2010 the trademark of IDGC of Centre, JSC in Russian was registered (registration certificate No. 400905), on February 18, 2010 г. – in English (registration certificate No. 401660).
All previous names of the issuer within the time period of its existence
Full company name: Joint-Stock Company “Interregional Distribution Grid Company of Centre and North Caucasus”
Abbreviated company name: IDGC of Centre and North Caucasus, JSC
Date of name introduction: 17.12.2004.
Grounds for name introduction:
Order of the Russian joint-stock company of power and electrification UES of Russia No.154-r dated 09.12.2004 (the sole founder) relating to establishment of Joint-Stock Company «Interregional distribution company of Centre and North Caucasus»; The Company is incorporated by Interdistrict inspection of Ministry of Taxation of the Russian Federation No.1 in Tver region – Certificate of State Registration of Legal Entity Series 69 No.000939402 dated 17.12.2004.
Date of introduction of the changed (and existing currently) issuer’s name: 06.08.2007.
Grounds for name introduction: the decision of the General Shareholders Meeting of the Issuer, the functions of which are carried out by the Board of RAO UES of Russia, at the meeting of 18.07.2007 (Minutes No.1703pr/1 of 18.07.2007). The revised Charter of the issuer (in view of change of the name of the issuer) was registered by the Interdistrict IFTS of Russia No. 46 in the city of Moscow - certificate on making an entry in the uniform state register of legal entities of series 77 No. 008165394 of 06.08.2007.
3.1.2. Data on the state registration of the issuer
Primary state registration number of the legal entity: 1046900099498
Date of state registration: 17.12.2004
The name of registering body: Interdistrict inspection of the Ministry of the Russian Federation for taxes and tax collections No. 1 in the Tver area.
3.1.3. Data on creation and development of the issuer
Term of existence of the issuer from the date of its state registration, as well as the term, till which the issuer will exist, if it has been established for an indefinite term or till objective achievement:
Term of existence of the issuer - 5 years and 3 months (since 17.12.2004). The issuer was created for an indefinite term.
Brief description of history of the issuer’s establishment and development. Targets of the issuer’s establishment, the issuer’s mission (if any) and another information on the issuer’s activity significant for decision to acquire the issuer’s securities:
Interregional Distribution Grid Company of Centre, Joint-Stock Company was founded with a view of efficient control over the distribution grid complex of Centre on the basis of Order No. 154r of Russian Joint-Stock Company Of Power And Electrification UES of Russia as of 09.12.2004.
The issuer was registered by the IIMTS of the Russian Federation No. 1 in the Tver area on 17 December 2004. Creation of the issuer was an integral part of the Strategy Concept of RAO UES of Russia "5+5" (approved by the Decision of the Board of Directors of RAO UES of Russia, Minutes No. 168 of 23.04.2004) which provides interregional integration of the newly created enterprises after division of the power companies by kinds of business.
The decision of the Board of RAO UES of Russia of 13.04.2005 (Minutes No.1192pr) approved configuration of the interregional distribution grid companies - IDGC (hereinafter referred to as IDGC). It was originally planned that the structure of IDGC of Centre, JSC should include 31 regional grid companies (hereinafter referred to as DGC) of the Central Region of Russia and Northern Caucasus, the target model of the issuer is a holding.
Within the transition restructuring period - from the moment of creation of the interregional grid company and up to the moment of consolidation of the subordinated DGC with them, the functions of the first consist in rendering consulting services to the subordinated DGC and performance of functions of the sole executive body of the subordinated DGC (management by subordinated DGC).
By the decision of the Board of RAO UES of Russia 1637pr/3 of 23.03.2007, it was recommended to the Board of Directors of RAO UES of Russia to increase amount of IDGC up to 11 (without taking into account IDGC of the Far East) and to determine the target model of IDGC as an operational company. By the same decision of the Board of RAO UES of Russia, a new configuration of IDGC of Centre, JSC was defined made up of 11 DGC: JSC Belgorodenergo, JSC Bryanskenergo, JSC Voronezhenergo, JSC Kostromaenergo, JSC Kurskenergo, JSC Lipetskenergo, JSC Orelenergo, JSC Tambovenergo, JSC Smolenskenergo, JSC Tverenergo, and JSC Yarenergo, and the decision on reorganization of the specified companies - DGC included in the configuration of the issuer in the form of consolidation with the issuer was also made.
By the decision of the Board of Directors of RAO UES of Russia No. 250 of 27 April 2007, the specified new configuration of IDGC (including configuration of IDGC of Centre, JSC) was approved. The basis of configuration of IDGC of Centre, JSC is the principle of territorial interlinking and comparability of the value of assets of DGC forming a part of interregional distribution grid companies.
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Goal of consolidation:
Concentration of competences for taking necessary strategic decisions, an opportunity of fast and effective decision-making;
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Consolidation of investment resources and opportunity of their redistribution;
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Efficient control over financial flows, high financial maneuverability, cost-efficiency of the resources involved by IDGC;
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Opportunity of using scale and sinergetic effects at formation of the management system;
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Effective distribution of functions and business processes in IDGC and its branches;
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Realization of the mission and goals of IDGC activity.
By Order No. 1857-r of the Government of the Russian Federation of 18.12.2007, Minpromenergo (Ministry of Industry and Power) of Russia and Russian Joint-Stock Company Of Power And Electrification "Unified Energy System of Russia" adopted a proposal which was coordinated with the interested federal enforcement authorities, about formation of the interregional distribution grid companies in the forms stipulated by the laws of the Russian Federation till 31 December 2008 on the basis of the shares of joint-stock companies of power and electrification belonging to the Russian Joint-Stock Company And Electrification "Unified Energy System of Russia" for the purpose of maintenance of the control by the Russian Federation over activity of the territorial grid organizations.
The Extraordinary General Shareholders Meeting of the issuer, the functions of which are exercised by the Board of RAO UES of Russia which took place on 25.12.2007 (Minutes as of 25.12.2007 No.1795pr/3), adopted the decision on reorganization of IDGC of Centre, JSC in the form of consolidation of JSC Belgorodenergo, JSC Bryanskenergo, JSC Voronezhenergo, JSC Kostromaenergo, JSC Kurskenergo, JSC Lipetskenergo, JSC Orelenergo, JSC Tambovenergo, JSC Smolenskenergo, JSC Tverenergo, and JSC Yarenergo with it and adoption of the Contract for Consolidation of JSC Belgorodenergo, JSC Bryanskenergo, JSC Voronezhenergo, JSC Kostromaenergo, JSC Kurskenergo, JSC Lipetskenergo, JSC Orelenergo, JSC Tambovenergo, JSC Smolenskenergo, JSC Tverenergo, and JSC Yarenergo with IDGC of Centre, JSC.
The same Extraordinary General Shareholders Meeting of IDGC of Centre, JSC adopted the decision to increase the authorized capital of the Company by placement of additional ordinary shares in amount of 42 118 200 000 (forty-two billion one hundred eighteen million two hundred thousand) pieces of ordinary registered shares at the par value of 10 (ten) kopecks each for a total amount at the par value of 4 211 820 000 (four billion two hundred eleven million eight hundred twenty thousand) Rubles placed by converting of shares of the consolidated companies into additional ordinary shares of IDGC of Centre, JSC in accordance with the procedure stipulated by the Contract for Consolidation.
On 20 March 2008 the Federal Financial Markets Service registered 21 (twenty one) additional issues of ordinary registered uncertificated shares of the issuer placed by converting of shares of consolidated DGC into them, and also the prospectus for securities of the issuer.
From the moment of the creation and up to 31.03.2008, the issuer was a 100 % affiliated company of RAO UES of Russia.
On 31.03.2008 - the date of making an entry in the Uniform state register of legal entities about the termination of activity of consolidated DGC - placement of ordinary registered uncertificated shares of IDGC of Centre took place by converting shares of the consolidated DGC shares into them.
As a result of placement of shares of IDGC of Centre of the additional issues which took place on 31.03.2008, additional shares for the total par value of 4 211 794 146,8 Rubles were placed. On 29 April 2008, the reports on results of additional share issues of IDGC of Centre were registered by FFMS of Russia. On 27 May 2008, changes were made in the Charter of IDGC of Centre connected with increase in the authorized capital of IDGC of Centre as a result of additional issues of securities.
The amount of the registered authorized capital of IDGC of Centre, JSC as of 30 June 2008 is 4 221 794 146,8 Rubles.
At the moment the Issuer in included in the group of companies chaired by Joint-Stock Company “Interregional Distribution Grid Companies Holding” (hereinafter referred to as IDGC Holding, JSC).
Since May 21, 2008 shares of the Company have been circulating in the organized stock market (Stock Exchanges MICEX and RTS). On April 08, 2009 shares of the Company were included in the quotation list “B” of CJSC “Stock Exchange MICEX”.
On November 16, 2009 the International rating agency Standart&Poors awarded “BB-/B/ruAA-“ credit rating to IDGC of Centre, forecast “Stable” that means that risks connected with refinancing, collection of account receivable, large-scale investment program and overexpenditure of funds will be smoothed by such factors as the state support, favorable decisions of the regulating bodies, acceptable liquidity management and moderate financial leverage level.
Currently IDGC of Centre, JSC has the corporate governance rating NRCG 7 (national rating of the corporate governance) “Developed practice of the corporate governance” according to NRCG scale” awarded by the Consortium of the Russian institute of directors and the rating agency “Expert RA” – “RID – Expert RA” on September 23, 2008. This class of the rating valuation proves that the corporate governance practice of IDGC of Centre, JSC is valuated positively. The Company has low corporate governance risks. The Company observes the requirement of the Russia Law in the field of the corporate governance, complies with the greater part of recommendations of the Russian Corporate Conduct Code and separate recommendations of the International advanced corporate governance practice.
The Company conducts work on transfer to RAB tariff making system in the branches of IDGC of Centre. In 2009 3 branches of the Company – Belgorodenergo, Lipetskenergo and Tverenergo were transferred to this system. Since January 01, 2010 – the branches Kurskenergo and Yarenergo. It is planned to transfer all other branches to RAB by July 01, 2010.
Goals of creation and reorganization of the issuer:
- Realization of the state policy in the field of electric power industry;
- Creation of conditions for effective functioning of the distribution grid complex of the Central region of Russia;
- Realization of effective operation and centralized technological management of grid facilities;
- Realization of the uniform strategy in the field of investment and attraction of the capital for solution of common system tasks of development of the distribution grid complex;
- Development and pursuing of scientific and technical policy and introduction of new progressive kinds of techniques and technologies;
- Reception of profit.
Mission of the issuer:
“We are a many-thousand team of professionals united by an overall aim - to bring energy of light to each client.
Using the advanced knowledge and experience in management by the grid complex, we care about quality of human life, family and company. Applying innovations, we render our services more qualitative and more accessible.
We bear responsibility for reliable transfer of the electric power to each client and reception of stable incomes by our shareholders.
The main value for us is people, both working for the company, and those we work for”.
Other information on activity of the issuer which is important for decision-making on purchase of securities of the issuer: none.
3.1.4. Contact information
Location: 4/2 Glukharev Lane, Moscow, Russian Federation 129090
Location of the permanent executive body
4/2 Glukharev Lane, Moscow, Russian Federation 129090
Address for correspondence
4/2 Glukharev Lane, Moscow, Russian Federation 129090
Telephone: (495)747-92-92
Fax: (495)747-92-95
E-mail: posta@mrsk-1.ru
The Internet website where the information on the issuer, securities issued and/or being in the process of issue are available: www.mrsk-1.ru
Name of the issuer’s special subdivision for the work with shareholders and investors of the issuer: Department for Interaction with shareholders, Evgeny Alexandrovich Ochkasov, Head of the Department
Location of subdivision: 4/2 Glukharev Lane, Moscow, 129090
Telephone: (495)7479292, ext. 3033
Fax: (495)747-92-95
E-mail: Оchkasov_EA@mrsk-1.ru
The Internet website: www.mrsk-1.ru
3.1.5. Taxpayer identification number
6901067107
3.1.6. Branches and representative offices of the issuer
The issuer’s branches and representative offices in accordance with its Articles of Association (constituent documents):
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Full name: Branch of IDGC of Centre, JSC - "Belgorodenergo"
Location: the Russian Federation, Belgorod, Preobrazhenskaya St., 42
Opening date: January 18, 2008
Director of the branch (representative office)
Full name: Viktor Ivanovich Filatov
The power of attorney is valid until: March 31, 2013
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Full name: Branch of IDGC of Centre, JSC - "Bryanskenergo"
Location: the Russian Federation, 241000, Bryansk, Sovetskaya St., 35
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Nikolay Vasilyevich Burenok
The power of attorney is valid until: December 31, 2011
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Full name: Branch of IDGC of Centre, JSC - "Voronezhenergo"
Location: the Russian Federation, 394033, Voronezh, Arzamasskaya St., 2
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Ivan Petrovich Kleymenov
The power of attorney is valid until: March 31, 2013
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Full name: Branch of IDGC of Centre, JSC - "Kostromaenergo"
Location: the Russian Federation, 156961, Kostroma, Mir avenue, 53
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Alexandr Sergeevich Glebov
The power of attorney is valid until: March 31, 2013
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Full name: Branch of IDGC of Centre, JSC - "Kurskenergo"
Location: the Russian Federation, 305029, Kursk, K. Marsk St., 27
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Alexandr Viktorovich Pilyugin
The power of attorney is valid until: March 31, 2013
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Full name: Branch of IDGC of Centre, JSC - "Lipetskenergo"
Location: the Russian Federation, 398001, Lipetsk, 50 let NLMK St., 33
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Alexandr Nikolaevich Kopanykhin
The power of attorney is valid until: March 31, 2013
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Full name: Branch of IDGC of Centre, JSC - "Orelenergo"
Location: the Russian Federation, 302030, Orel, Mir square, 2
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Alexandr Vyacheslavovich Letyagin
The power of attorney is valid until: March 31, 2011
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Full name: Branch of IDGC of Centre, JSC - "Smolenskenergo"
Location: the Russian Federation, 214019, Smolensk, Tenisheva St., 33
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Nikolay Vladimirovich Fedorov
The power of attorney is valid until: March 31, 2011
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Full name: Branch of IDGC of Centre, JSC - "Tambovenergo"
Location: the Russian Federation, 392680, Tambov, Morshanskoe highway, 23
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Andrey Viktorovich Kozoderov
The power of attorney is valid until: March 31, 2011
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Full name: Branch of IDGC of Centre, JSC - "Tverenergo"
Location: the Russian Federation, 170006, Tver, Bebel St., 1
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Alexandr Valeryevich Eyst
The power of attorney is valid until: March 31, 2013
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Full name: Branch of IDGC of Centre, JSC - "Yarenergo"
Location: the Russian Federation, 150003, Yaroslavl, Voinov St., 12
Opening sate: January 18, 2008
Director of the branch (representative office)
Full name: Igor Vitalyevich Solonikov
The power of attorney is valid until: March 31, 2013
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