The issuer’s suppliers accounting for at least 10 percent of total raw materials and materials supplies
The suppliers of raw materials (materials) accounting for at least 10 percent of total raw materials and materials supplies: none
Information about changes in the prices of principal materials and goods (raw materials) by more than 10% during the reporting period concerned year-on-year
Changes in the prices of principal materials and goods (raw materials) by more than 10% during the reporting period concerned: none
Import as a percentage of supplies of materials and goods, forecast of future availability of import sources and possible alternative sources
Import supplies: none
3.2.4. Target Markets for the Issuer’s Products (Work, Services)
Principal markets in which the issuer operates:
The Company operates in the Russian Federation.
The current core business of the Company is corporate management of a transmission grid company and interregional and regional distribution grid companies.
The core business of the ROSSETI Group’s companies includes providing electricity distribution and transmission services. The principal markets for such services are the regions where the ROSSETI Group’s grid companies operate. Electricity distribution and transmission services are a monopolistic activity and are performed under a standard form contract.
Consumers of electricity distribution and transmission services are the persons that own by virtue of ownership or otherwise by operation of law the power receiving devices and/or power facilities duly connected to the electric grid (including indirectly), as well as power retailers and suppliers of last resort operating in the interests of their customers.
(* The share in the total revenue from electricity distribution services provided by the ROSSETI Group’s distribution companies)
Factors which can adversely affect the sales of the issuer’s products (work, services) and possible actions of the issuer aimed at mitigating such effect:
The main factor that materially affects the provision of electricity distribution services by the ROSSETI Group’s grid companies is changes in electricity demand. The ROSSETI Group’s grid companies are not able to reduce the impact of this factor.
An equally important factor is the change in the “pool above” payment model currently used in most regions electricity distribution services. In the course of switching over to the “pool below” payment model, the price of services may decrease by an amount related to the volume of services provided by allied territorial grid organizations. Possible measures of the ROSSETI Group’s grid companies to reduce the impact of this factor are to ensure the completeness and timeliness of payments to territorial grid organizations for their electricity distribution services.
Plans for future activities of PJSC ROSSETI are contained in the Strategy for Development of the Electric Grid Sector of the Russian Federation approved by Ordinance of the Government of the Russian Federation No. 511-r of April 3, 2013, (hereinafter, the “Strategy for Development of the Electric Grid Sector”) and specified in the Company’s Long-Term Development Program approved by the Government Commission on the Development of the Electric Power Industry and by the Board of Directors of the Company on December 19, 2014 (Minutes of the Meeting of the Board of Directors No. 174 of December 19, 2014).