RAO UES Board of Directors Holds its Regular Meeting
Moscow, 27 May 2005. The Chairman of the Management Board of RAO
"UES of Russia" Anatoly Chubais made a report to the Board of Directors on the
blackout in the Moscow energy system on 24-25 May 2005 and the measures taken to eliminate
its consequences.
Anatoly Chubais said that a Task Force formed at RAO "UES of
Russia" was conducting an investigation into the causes of the power outage at the
Chagino substation which triggered a cascade effect. According to the commission given to
it, the task force is to complete its work and produce a report within two weeks.
The Board of Directors of RAO "UES of Russia" commissioned
the Management Board Chairman to present the findings of the investigation into the
blackout causes to the Board of Directors.
The Board of Directors gave a favourable assessment of the efforts made
by dispatch operators and technical staff of OAO "Mosenergo" and OAO "UES
System Operator-Central Dispatch Administration" to stop the blackout cascade and to
eliminate its consequences in the shortest possible timeframe. Thanks to the competent
efforts of the personnel and the failure prevention automation, it was possible to prevent
massive physical destruction of energy equipment. These were the major factors that helped
promptly eliminate the consequences of the power failure and restore power to consumers.
The Management Board Chairman Anatoly Chubais emphasized that the outage development had
been stopped in 2 hours and 20 minutes. By 18:00 hours, the energy companies had restored
power to all vital social facilities in the city of Moscow included in the list made by
the Moscow City Government. At 12:00 hours on 26 May, the System Operator had removed all
restrictions on the power supply to consumers. By 18:30 hours on 26 May, power had been
fully restored to all customers.
The Board of Directors commissioned the Management Board to take steps
to minimize the possibility of outages in other areas of the country.
During the summer repair season and preparation for the 2005/2006
autumn-winter peak load, enterprises of RAO "UES of Russia" are to pay special
attention to the comprehensive audit and repairs of the power grid and dispatching
equipment.
* * *
The Board of Directors of RAO "UES of Russia" considered the
issue of the target and transitional models of operation of thermal wholesale generation
companies (thermal WGCs).
The Board of Directors approved the target model for the operation of
thermal WGCs as unified operating companies, which will be created through merger of
AO-power plants relating to the particular thermal WGC with that WGC. Preparations for the
merger of AO-power plants with and into the WGCs are expected to commence in parallel with
the actions to consolidate the WGCs via a share exchange.
The Board of Directors also approved the transitional model for the
operation of thermal WGCs providing for the transfer to the WGCs of the right to dispose
of the electricity (capacity) produced with the generating equipment of the AO-power
plants to be included in the respective WGC. Such transfer would be effected on the basis
of agency agreements between the thermal WGCs and AO-power plants providing for the sale
of electricity (capacity) generated by the AO-power plants on the wholesale market.
To ensure effective formation of the governance structure at AO-power
plants within the respective WGCs, the transitional model also provides that the CEO
powers of the AO-power plants expected to merge with the thermal WGCs are to be
transferred to the WGC concerned. Before that, the Director General of the corresponding
thermal WGC may be appointed Director General of the corresponding AO-power plants.
The basic plan for establishment of WGCs was approved by the Board of
Directors of RAO "UES of Russia" on 29 September 2003. According to that plan,
the WGCs are to be formed using the following procedure:
at the first phase, the WGCs will be established as wholly-owned subsidiaries of RAO
"UES of Russia". The latter will make contributions to the WGCs' share capital
in form of the AO-power plants' property and shares;
at the second phase, RAO "UES of Russia" will contribute its shares in
AO-power plants spun off from the regional energos as consideration for shares in the
WGCs.
The thermal WGCs are to consolidate their subsidiary power plants by inviting minority
shareholders of those power plants to exchange their shares for WGC shares.
By now, all six thermal WGCs to be established pursuant to Direction of
the Russian Government No. 1254-r of 1 September 2003 have been created. Thus, the first
phase of establishment of the thermal WGCs is complete, and measures are underway to
prepare for the implementation of the second phase and consolidate their subsidiaries via
a share exchange.
* * *
The Board of Directors of RAO "UES of Russia" considered the
questions relating to the conduct of the Annual General Meeting of the Company.
The Board of Directors approved the draft Annual Report, and the annual
financial statements of the Company for 2004, and decided to submit them for shareholder
approval at the AGM of RAO "UES of Russia".
Pursuant to Article 56 (1) of the Federal Law "On Joint Stock
Companies", the Board of Directors assigned the functions of the AGM Counting
Commission to the Company's Registrar, OAO "Status Registration Company",
Moscow.
Having considered the question of the AGM working bodies, the Board of
Directors of RAO "UES of Russia" approved the appointment of the AGM Presidium
consisting of the members of the Company's Board of Directors and the AGM Secretariat
consisting of the members of the Company's executive staff.
The AGM of RAO "UES of Russia" will be held on 29 June 2005
in the Zelenograd Palace of Culture located in the administrative district of Zelenograd,
Moscow, Russia. Record date: The list of persons entitled under the laws of the Russian
Federation to take part in the AGM of RAO "UES of Russia" will be made as at 10
May 2005.
* * *
The Board of Directors of RAO "UES of Russia" resolved to
complete the formation of OAO "Territorial Generation Company No. 8" (OAO
"TGC-8")* through merger of OAO "Astrakhan Regional Generation
Company", OAO "Volzhskaya Generation Company", OAO "Rostov Generation
Company", OAO "Dagestan Thermal Generation Company", and OAO
"Stavropol Thermal Generation Company" with and into OAO "TGC-8".
The Board of Directors instructed the Management Board to ensure the
exercise of rights of the RGC shareholders consenting to the procedure for the
establishment of OAO "TGC-8", both the previously approved ones and the proposed
ones, with regard to the acquisition by the shareholders of shares in OAO
"TGC-8" on the agreed terms within the agreed timeframe.
The procedure for the transfer of the generation assets of OAO
"Kubanenergo" to OAO "TGC-8" will be considered after the Board of
Directors determines the timing for its restructuring.
The Management Board of RAO "UES of Russia" was commissioned
to submit for consideration by the Board of Directors, no later than October 2005, the
matters relating to the reorganization of OAO "TGC-8" through merger of regional
generation companies with and into OAO "TGC-8".
* OAO "TGC-8" was registered on 22 March 2005 with the
Inspectorate of the Federal Tax Service of Russia for the Kirovsky District, city of
Astrakhan. As at the time of establishment, the charter capital of OAO "TGC-8"
was RUB 10 million and was divided into 1 billion ordinary shares. Victor Gvozdev was
elected Director General of the Company.
The resolution to establish OAO "TGC-8" as a wholly-owned
subsidiary of RAO "UES of Russia" was approved by the Board of Directors of RAO
"UES of Russia" at its meeting on 29 October 2004.
The Board of Directors of RAO "UES of Russia" approved the
lease by OAO "TGC-8" of the generating assets owned by OAO "Astrakhan
Regional Generation Company", OAO "Volzhskaya Generation Company", OAO
"Kubanenergo" (and, after its reorganization, the generating assets of OAO
"Kuban Generation Company"), OAO "Rostov Generation Company", the
Kaspiyskaya CHPP and Makhachkalinskaya CHPP of OAO "Dagestan Thermal Generation
Company", and the Kislovodskaya CHPP of OAO "Stavropol Thermal Generation
Company".
In accordance with the schedule for the establishment of OAO
"TGC-8", the Company will start its operations on 1 July 2005, with the process
to be completed by 1 May 2006.
* * *
The Board of Directors of RAO "UES of Russia" deemed it
advisable to complete the establishment of OAO "TGC-9"* through merger of OAO
"Perm Generation Company" and OAO "Sverdlovsk Generation Company" with
and into OAO "TGC-9", which will be followed by contribution of shares in the
generation company to be spun off from OAO "Komienergo" as payment for the
additional issue of shares in OAO "TGC-9".
The Board approved the lease by OAO "TGC-9" of the property
from OAO "Komienergo" used for the generation of electricity and heat, and for
heat distribution. Before that, the lease of the generating assets to OAO
"TGC-9" was backed by the minority shareholders of OAO "Komienergo".
The Management Board of RAO "UES of Russia" was commissioned
to submit for consideration by the Board of Directors, no later than September 2005, the
matters relating to the merger of OAO "Perm Generation Company" and OAO
"Sverdlovsk Generation Company" with and into OAO "TGC-9".
The Board of Directors instructed the Company's representatives on the
Board of Directors OAO "Komienergo" to vote at the Board meeting FOR the
adoption of the following agenda of the general meeting of shareholders of OAO
"Komienergo": "Approval of the interested party transaction".
* OAO "TGC-9" was registered on 9 December 2004 with the
Inspectorate of the Ministry for Taxes and Levies of Russia for the Sverdlovsky District,
city of Perm. The Director General of the Company is Valery Rodin. At the time of
establishment, the charter capital of OAO "TGC-9" was RUB4.2 million and was
divided into 1.4 billion ordinary shares.
The resolution to establish OAO "TGC-9" as a wholly-owned
subsidiary of RAO "UES of Russia" was approved by the Board of Directors of RAO
"UES of Russia" on 3 September 2004.
* * *
The Board of Directors of RAO "UES of Russia" approved the
restructuring plan of OAO "Komienergo" in accordance with the "basic"
scenario, which provides for spin-off the following companies from OAO
"Komienergo" (with the current ownership structure preserved):
OAO "Komi Regional Generation Company";
OAO "Electricity Transmission Network of the Republic of Komi", to which the
power grid facilities of OAO " Komienergo" relating to the Unified National
Electricity Grid (UNEG) are to be transferred in accordance with the separation balance
sheet, as well as funds in an amount necessary to compensate for the expenses;
OAO "Komi Energy Retail Company";
According to the restructuring plan, the power distribution networks
that are not part of the UNEG will remain the property of OAO "Komienergo".
In this connection, the Board approved the establishment in 2005 of a
branch of OAO "UES System Operator-Central Dispatch Administration" on the basis
of the Regional Dispatch Administration (RDA) of OAO "Komienergo", with the
functions of control of the networks of 110 kV and less to be allocated between OAO
"UES SO-CDA" and OAO "Komienergo".
Under the restructuring plan, an agreement is to be made in 2005
between OAO "Komienergo" and OAO "Center ITC" on the use of the UNEG
facilities owned by OAO "Komienergo" until the spin-off of OAO "Electricity
Transmission Network of the Republic of Komi" [from OAO "Komienergo"].
The plan provides for the transfer, with effect from 2006, of the UNEG
facilities owned by OAO "Komienergo" for use to OAO "UES Federal Grid
Company", establishment of a transmission tariff for OAO "UES FGC", and
merger of OAO "Electricity Transmission Network of the Republic of Komi" with
and into OAO "Center ITC".
The Board instructed the representatives of RAO "UES of
Russia" to vote FOR the approval of the items of business of board meetings and
shareholder meeting of OAO "Komienergo" and shareholder meetings of the newly
established companies, so as to ensure implementation of the reorganization plan of OAO
"Komienergo".
This resolution of the Board of Directors would come into force upon
signature of the Agreement between OAO RAO "UES of Russia", the Government of
the Republic of Komi, and OAO "Komienergo" on the energy company's
restructuring.
* * *
The Board of Directors of RAO "UES of Russia" considered the
issue of use of the proceeds from the sale of the Company's assets and noted the proposals
made by the management of RAO "UES of Russia". The Board of Directors instructed
the Management Board to further refine these recommendations and submit them for
consideration by the Board of Directors together with the issue of lifting the moratorium
on the sale of core assets.
The Board of Directors of RAO "UES of Russia" considered the
question of the possibility of consolidation of OAO "HydroWGC" and its
subsidiary power plants via a share exchange before the reorganization of OAO RAO
"UES of Russia". The Board of Directors noted the report presented to it on the
possible ways of such consolidation.
The Board of Directors instructed the Management Board to explore the
possible models for participation of the Russian Federation in the authorized capital of
OAO "HydroWGC" and submit this issue for repeated consideration by the Board.
* * *
The Board of Directors of RAO "UES of Russia" approved the
list of individual key performance indicators (KPI) for the top managers (members of the
Management Board) of RAO "UES of Russia" for the year 2005. The Board charged
the Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais with
approval of the KPI values by 27 June 2005.
At the Board meeting held 28 December 2004, the Board of Directors of
RAO "UES of Russia" approved the list of individual KPIs for the top managers
(members of the Management Board) for 2004, and gave the Management Board the task of
hiring a consulting firm with the appropriate expertise to produce recommendations on
improving the KPI system for top managers of RAO "UES of Russia" for 2005.
The analysis performed by independent experts confirmed that the
existing system of KPIs for top managers of RAO "UES of Russia" is, on the
whole, balanced and needs only some changes and adjustments so as to more fully cover
their key functions.
In particular, the ROTA (return on total assets) in 2005 was replaced
with ROE (return on equity). Moreover, in order to include in the KPI system some one-time
tasks that are not part of the functions routinely performed by the members of the
Management Board and not expressed in the KPIs, the indicator of "Absence of
unfulfilled control instructions of the Chairman of the Management Board of RAO "UES
of Russia", and orders and resolutions of the Management Board of RAO "UES of
Russia".
The Holding Company's KPI system is based on the principle of
decomposition of goals, under which the achievement of the KPI by the SDCs of RAO
"UES of Russia" ensures the achievement of the KPIs by the Business Units. The
latter, in their turn, support the KPIs common for the members of the Management Board of
RAO "UES of Russia". The approved individual key performance indicators for the
members of the Management Board, including those that are not heads of the Business Units,
complete the implementation of the goal decomposition principle.
* * *
The Board of Directors of RAO "UES of Russia", performing the
functions of the AGM of OAO "UES System Operator-Central Dispatch
Administration"*, approved the Annual Report, the annual financial statements, the
profit and loss account for 2004, and the profit allocation based on the results of the
previous financial year.
The net profit of OAO "UES SO-CDA" in FY2004 was RUB1,422
million. The Board resolved to allocate the net profit as follows: RUB47.682 million to
the Reserve Fund, RUB1,359 million to the Accumulation Fund, and RUB15 million for the
dividend payment. The dividends on ordinary shares of OAO "UES SO-CDA" are to be
paid at a rate of RUB0.0151093 per share of RUB1 par value by July 27, 2005.
The Board of Directors of RAO "UES of Russia" elected the
Board of Directors of OAO "UES SO-CDA" consisting of:
1
Victor Khristenko
Minister of Industry and Energy of the Russian Federation
2
Boris Ayuyev
Member of the Management Board, RAO "UES of
Russia"; Chairman of the Management Board of OAO "UES SO-CDA"
3
Alexander Voloshin
Chairman of the Board of Directors, RAO "UES of
Russia"
4
German Gref
Minister of Economic Development and Trade of the Russian
Federation
5
Sergey Ivanov
First Deputy Director General, "Rosenergoatom"
6
Dmitry Ponomarev
Chairman of the Management Board, NP "ATS"
7
Andrey Rappoport
Member of the Management Board, Managing Director, RAO
"UES of Russia" (Networks Business Unit); Chairman of the Management Board, OAO
"UES FGC"
8
Yury Udaltsov
Member of the Management Board, Head of the Reform
Management Center, RAO "UES of Russia"
9
Anatoly Chubais
Chairman of the Management Board, RAO "UES of
Russia"
The Board of Directors of RAO "UES of Russia" also
elected the Auditing Commission of OAO "UES System Operator-Central Dispatch
Administration" consisting of:
1
Andrey Gabov
Head of Corporate Department of the
Corporate Center, RAO "UES of Russia"
2
Lyudmila Matyunina
First Deputy Head of the Internal Audit
Department of the Corporate Center, RAO "UES of Russia"
3
Victor Myasnikov
Head of Financial and Economic Examination
Section of the Financial Control and Audit Department, Ministry of Industry and Energy of
Russia
4
Nadezhda Petelina
Leading Expert of the Accounting and
Reporting Department, OAO "UES System Operator-Central Dispatch Administration"
5
Igor Repin
Deputy Executive Director, Investor
Protection Association
The Board of Directors of RAO "UES of Russia" approved
the appointment of ZAO "PricewaterhouseCoopers Audit" as Auditors of OAO
"UES System Operator-Central Dispatch Administration" for the year 2005.
* Under the Charter of OAO "UES System Operator-Central
Dispatch Administration", resolutions on matters relating to the competence of a
General Meeting of shareholders are taken by the Board of Directors of RAO "UES of
Russia" during the period when RAO "UES of Russia" holds 100% of the voting
shares in OAO "UES SO-CDA".
* * *
The Board of Directors approved the Procedure for the declaration of
insider deals in securities of RAO "UES of Russia" and its SDCs by persons
having access to insider information.
The draft Procedure was first considered by the Board of Directors at
its meeting held 28 January 2005, and was revised, in accordance with the Board
resolution, by the Audit Committee with the involvement of interested members of the Board
of Directors.
This document contains definitions of the notions of "insider
dealing" and "insider information", and the procedure for notifying the
Audit Committee under the Board of Directors of RAO "UES of Russia" of any
transactions made by insiders.
The Procedure establishes the filing of notices as a way of disclosure
of insider deals. Thus, insiders are required to declare to the Audit Committee all deals
in securities issued by RAO "UES of Russia" and its SDCs within three days after
the end of the calendar month in which the deal was made.
The previous version of the Procedure used the permission-based
principle of making transactions, when insiders were required to obtain the relevant
permission 5 days before making a securities trade.
The Procedure requires that insiders declare their deals in securities
of RAO "UES of Russia" and its SDCs in the event that they transfer their
securities into trust or in the event that a trade is made by a legal entity in which the
insider is a chief executive officer.
The Board of Directors of RAO "UES of Russia" commissioned
the Management Board to ensure implementation of the basic principles laid down by the
Procedure at the SDCs of RAO "UES of Russia".
russian
