Annual Report JSC E4 Group, 2011

Transcription

Public Joint-Stock Company
E4 Group
Annual report
2011
ANNUAL REPORT
of Public Joint-Stock Company «E4 Group»
2011
Approved by resolution of the sole shareholder of JSC
«E4 Group» №41 dated June 29, 2012.
Preliminarily approved by a resolution of the Board of directors of
JSC «E4 Group» dated May 30, 2012. (Minutes No. 148)
E4 Group is a full-cycle engineering company affiliated with RU-COM business group. E4 Group
offers modern engineering solutions for the power engineering, mining and smelting, chemical, oil and gas
and other industries as well as housing and community sector and infrastructure development. The company
was established in 2006 and consolidated together leading Russian and foreign power and industrial
companies.
The main strategic goals of the Company is to increase the share on the power engineering
market up to 25%, improve quality of the services provided, ensure and comply with the staff qualification
highest standards.
Mission of the Company
Efficient electric power generation, provision of high-quality services to consumers and assistance to
Russian power industry development. Besides, E4 Group promotes for social and economic development in
the areas it works in and ensures sound use of natural resources.
What we do
E4 Group performs complex turn-key works as well as separate kinds of engineering tasks, such as:
Energy auditing
Design
Development of feasibility study
investment projects
Equipment production and supply
and
Construction
Installation
Commissioning
Servicing
Key projects of the Company
• Turn-key construction of the Nyaganskaya GRES 3х418 MW CCPP;
• Turn-key construction of the Krasnodarskaya TPP 410 MW CCPP;
• Turn-key construction of the Kursk North-West district boiler-house 115 MW CCPP;
• Construction of the Serovskaya GRES 420 MW CCPP;
• Construction of the Cherepovetskaya GRES 420 MW CCPP;
• Construction of the Astrakhanskaya GRES 110 MW CCPP (Astrakhan-1 site);
• Expansion of the Astrakhan Central boiler-house with construction of 120 MW CCPP and 115 MW
CCPP (Astrakhan-2 site);
• Modernization of spent fuel pool and construction of spent fuel dry storage facility in
Zheleznogorsk (Krasnoyarsky Region);
• Participation in construction of New Safe Confinement (NSC) under Chernobylskaya NPP;
• Performance of feasibility study, main and basic projects as well as works related to design stage
of the first Vietnam NPP;
• Reconstruction of the Zhodinskaya TPP boiler house №3 in Borisov involving CCPP construction;
• Reconstruction of the Izhevskaya TPP-1 involving 230 MW CCPP construction
• Renewal of the Apatitskaya TPP and construction of heating main to Kirovsk with CHS
installation.
General Director
V.V. Kalinin
Chief Accountant
N.A. Gorchukova
TABLE OF CONTENTS
SECTION 1. MESSAGE FROM THE MANAGEMENT OF THE COMPANY………………………..……………..……...…6
Message from the Chairman of the Board of Directors ..................................................................6
Message from the General Director..............................................................................................7
Key financial and economic indicators...........................................................................................8
Events calendar………………….......................................................................................................9
SECTION 2. COMPANY HISTORY……………………………………………………..…………………………………………….11
SECTION 3. THE COMPANY’S INDUSTRY POSITION…………………………..…..……………………………………….14
3.1. Industry ............................................................................................................................14
3.2. Geography.........................................................................................................................15
3.3. Competition.......................................................................................................................15
SECTION 4. PRIORITY ACTIVITY GOALS AND DEVELOPMENT PROSPECTS OF THE COMPANY AND E4
GROUP COMPANIES…………………………………………………………………..……………….……..…………..…………….19
4.1. Company’s priority activity directions in the accounting and current years………………………......19
4.2. E4 Group priority activity directions in the accounting and current years.................................20
4.3. Development prospects for the Company and E4 Group enterprises.......................................21
SECTION 5. KEY PERFORMANCE INDICATORS…………………..………………………………………………………..….24
5.1. Company’s key projects in 2011..........................................................................................25
5.2. Main financial and economic indicators of E4 GROUP companies...........................................35
5.3. Large projects implemented by E4 GROUP companies in 2011...............................................40
5.4. Brief description of JSC E4 GROUP fixed assets condition and cost……………………….................44
5.5. Fixed assets of JSC E4 GROUP companies……………………………..............................................45
SECTION 6. KEY INDICATORS OF COMPANY ACCOUNTING AND FINANCIAL REPORTING …………………47
6.1. Assessment of Company activity results and financial status..................................................47
6.2. Analysis of Company financial status....................................................................................48
6.3. Analysis of Company business results dynamics....................................................................50
6.4. Main financial factors..........................................................................................................51
6.5. Dynamics of the Company's net assets for the last three completed financial years, including the
reporting year..................................................................................................................................52
SECTION 7. INVESTMENTS ………………………………………………..…………………………………………………….….54
7.1. Company investments, including the ones forwarded for reconstruction, technical upgrade and
acquisition of fixed assets……………………………………………………………………………...................................54
7.2. Investment activity of E4 Group companies for the period from 2009 to 2011……………………...57
7.3. Investment plans...............................................................................................................57
SECTION 8. PROCUREMENT ACTIVITIES .………………………………………………………………………………..…….60
SECTION 9. CORPORATE GOVERNANCE.……………………………………………………………………………….……….64
9.1. Principles of Company corporate governance........................................................................64
9.2. Development of Company corporate governance..................................................................66
9.3. Information about the management and control bodies of the Company................................66
9.3.1. Sole shareholder.......................................................................................................67
9.3.2. Board of Directors....................................................................................................67
9.3.3. The Management.....................................................................................................72
9.3.4. General Director.......................................................................................................78
9.3.5. Audit Committee.......................................................................................................79
9.3.6. Financial Controller...................................................................................................80
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9.4. Remunerations and compensations to the members of the management and control bodies of
the Company…………………………………………….…………………………………………………………….……………….....80
9.5. Corporate Secretary of the Company...................................................................................81
9.6. Auditor of the Company......................................................................................................82
9.7. Securities of the Company...................................................................................................82
9.8. Dividend History.................................................................................................................83
9.9. Participation of JSC E4 Group in other organizations.............................................................83
SECTION 10. HR- AND SOCIAL POLICY.………………………………………………………………………….……..………85
10.1. Primary principles of HR- policy in the Company.................................................................85
10.2. Personnel development tasks for the reporting period and measures taken………………………..85
10.2.1. Personnel training and development in the Company……………………………………….…….85
10.2.2. Training of Customer’s personnel.............................................................................87
10.2.3. Work with young specialists.....................................................................................87
10.3. Employees structure by categories, salary and labour efficiency...........................................88
10.4. Social policy …………………………………………………………………………………………………………………90
10.5. Work safety.....................................................................................................................91
SECTION 11. DEVELOPMENT OF THE QUALITY MANAGEMENT SYSTEM.……………………………….………….93
11.1. Measures in relation to improvement of the QMS in 2011....................................................93
11.2. Assessment of the Company QMS performance in 2011…………………………………………………...96
11.3. Actions in relation to development of the QMS for 2012…………………………………...................96
SECTION 12. INNOVATIONS AND MODERNIZATION.…………………………………………….………….…………….99
12.1. Targets of E4 Group in the sphere of innovations and modernization………………………….........99
12.2. Areas of activities of Е4 Group in the sphere of innovations and modernization …………..……100
12.3. Modern methods of design and management applied and implemented by E4 Group ……....104
12.4. Company’s policy in IT-technologies field …………..............................................................107
SECTION 13. ENERGY SAVING AND POWER EFFICIENCY.……………………………………………..…….…………109
SECTION 14. RISK MANAGEMENT.………………………………………….……………………………………..….…………113
14.1. Risk Management Policy..................................................................................................113
14.2. Risk groups…………………………………………………………………………………….…………………………..115
CONTACT DETAILS………………………………………………………………………………………………….………………...118
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SECTION 1.
MESSAGE FROM THE MANAGEMENT OF THE COMPANY
Dear colleagues! In year 2011 E4 Group showed high
business results and today it is one of the Russian and CIS power
construction leaders being the largest Russian engineering
company ready to implement turn-key projects.
At present the Russian economy is in a serious need of highly
efficient energy complex and E4 Group is the one to apply complete
and consequent approach to construction of new facilities and to
management of the existing infrastructure.
Due to collaboration of the company employees and
partners, the largest power facilities were put in operation in 2011
in which E4 Group was a general contractor. The implemented
projects are highly evaluated by the customers, state
representatives and expert community.
The Board of Directors played a significant role in the
company financial and operating activities. JSC «E4 Group» Board
is highly qualified whereby participation of the directors in the
Company life allows performing effective risk management and
improving permanently business activities. 37 Board meeting
have been arranged in 2011 where the crucial issues related to
financial deals, HR policy as well as internal documentation
adoption have been resolved.
Alexey Lavrov
Due to efficient effective development strategy and stepChairman of the Board of Directors,
by-step implementation of objectives in 2011, the Holding
JSC «E4 Group»
managed to reinforce its leading position on the market and
increase considerably the order portfolio. At present the following
largest Russian and foreign companies are among the E4 Group customers: Lukoil, Fortum, Quadra, KESHolding, GK Rosatom, Gazpromenergoholding, EVN (VietNam Electricity), RUP Minenergo and others.
The trust that potential customers demonstrate towards the Company allowed concluding new
EPC-contracts in 2011. Moreover, we extend our presence at the CIS market, e.g., the Zhodinskaya TPP
project (Republic of Belarus) where the Company executes a set of works on construction of a new CCPP
during the reconstruction of the existing TPP. In 2011 the Company also entered the market of SouthEast Asia; at the end of 2011 we got down to implementing the project on construction of the first NPP in
Vietnam - Ninh-Thuan 1.
The Holding international cooperation with partner companies in terms of, primarily, power
efficiency and high-tech is growing dynamically. During the Sochi investment forum in September, 2011
RU-COM, E4 Group and DEA (Danish Energy Agency) signed an agreement on establishment of an open
strategic alliance for promotion of power service contracts to the Russian regions together with Danish
companies.
Among the factors E4 Group thinks key ones for successful development is constant improvement
of power efficiency of industrial operation what is an integral part of business and an input to the society
stable development.
I am sure we will continue with the positive dynamics of year 2011 while consistent and planned
fulfillment of JSC «E4 Group» tasks will allow us in the near future stepping up steadily.
Chairman of the Board of Directors of JSC «E4 Group»
A.A. Lavrov
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Dear colleagues!
2011 was the year of the Company leading market position growth, of further potential
development and upgrade of efficiency of all the operating and business activity procedures.
During this year we designed and implemented the state-of-the-art process solutions in various
Russian regions considering whereby the territorial peculiarities and observing strictly all environmental
standards. Under general contract activity we have finished implementation of the largest projects that
are strategically important for the power industry and infrastructure development:
- construction of new 110 MW CCPP at Astrakhanskaya GRES has
been completed;
- new 115 MW CCPP construction project at Kursk North-West boiler
house has been executed;
- 410 MW CCPP of Krasnodarskaya TPP, the largest power plant in
the Kuban, has been solemnly started-up;
- the first stage of the unique spent fuel storage facility (SFSF) in
Zheleznogorsk has been commissioned.
- exploration works’ commencement ceremony at the first NPP
construction site in Vietnam has been conducted.
E4 Group is continuing to build three 418 MW CC power units
of the Nyaganskaya GRES in the Khanty-Mansiysk Autonomous
District, implement the project on expansion of the Tsentralnaya
boiler house in Astrakhan involving construction of 120 MW and 115
MW CCPP. Year 2011 renewed development of such construction
projects as the Cherepovetskaya GRES 420 MW CCPP and
Serovskaya GRES 420 MW CCPP.
In 2011 we exceeded target earning yields in all key assets
whereby the Holding financial and market stability has been
Vladimir Kalinin
confirmed by the business geography expansion and considerable
increase of the order portfolio.
General Director of JSC «E4
Group», May 11, 2011- present
Highly professional work of the company employees in 2011
time
contributed to JSC E4 Group winning a number of large-scale tenders
among which the «Reconstruction of the Zhodinskaya TPP boiler
house no.3 (RK-3) in Borisov involving 65 MW construction» project shall be specially mentioned. E4
Group will perform a complete facility construction including equipment supply, testing, design,
installation, commissioning and putting in operation. The company management has decided to establish
the JSC E4 Group representative office in Minsk (Republic of Belarus) for prompt resolution of the issues
concerned with the project implementation. The office will be in charge of the activity arrangement
management and project strategic management as well as of cooperation with RUP Minskenergo and
control of construction performance.
Business social responsiveness issues are also the focus of attention of the JSC E4 Group
management. In 2011 the Holding has implemented a number of socially important projects including
completion of nine houses under the program of resettlement from slum and hazardous dwelling,
commissioning of houses for the GPW veterans; the largest Perinatal center construction in
Blagoveshchensk, the Amur region, has been completed. Besides, the Holding pays attention to ensuring
high-quality living conditions for its employees, improvement of labor conditions and development of
social infrastructure in the operation areas.
I would like to express my special gratitude to all the E4 Group staff for their professionalism, high
commitment and endurance.
Year 2011 has marked a new stage of the Company development. E4 Group has worthily overcome
the 5-year boundary having proved whereby that a young, fast growing Company is able to implement
the most complicated projects. We are looking to the future confidently and going on to move ahead.
General Director
V.V. Kalinin
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KEY FINANCIAL AND ECONOMIC INDICATORS
Planned
2011
Sales revenue (mln.rub.)
Actual
2011
deviation
19 949
19 097
-852
EBITDA (mln.rub.)
447
1 170
722
Net profit (mln.rub.)
100
680
580
Current liquidity ratio
1,67
2,18
0,51
Average weighted profitability of
contracts, %
12,5
19,7
7,2
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EVENTS CALENDAR
QUARTER I
 E4 Group has completed construction of the new airport terminal in Blagoveshchensk.
 Sberbank of Russia opened a revolving credit line of 500 million rubles to E4 Group and
provided bank guarantees exceeding 5 billion rubles.
 Integration test of the «TORNADO-N» SHS for the Krasnodarskaya TPP 410 MW CCPP DCS was
performed successfully.
 E4 Group received a new patent for invention №2411438 «The way to clean the boiler heating
surfaces from ash and slag deposits».
QUARTER II
 E4 Group completed construction of a new 110 MW CCPP at Astrakhanskaya GRES for JSC
YGK TGK-8 (Lukoil).
 The Serovskaya GRES 420 MW CCPP project obtained the Glavgosexpertiza conclusion.
 E4 Group and LOGSTOR signed an agreement on cooperation in energy saving field and power
efficiency increase in power distribution and consumption.
 E4 Group has constructed a new 115 MW CCPP in Kursk for JSC Quadra (ONEXIM Group).
 E4 Group conducted a presentation of «Novosibirsk heating circuits up to year 2030».
QUARTER III
 E4 Group is going on the works at Novovoronezhskaya AES-2.
 E4 Group launched the project of “Student construction teams».
 E4 Group obtained the Glavgosexpertiza conclusion for construction of the Cherepovetskaya
GRES 420 MW CCPP.
 E4 Group launched 3 projects under the program of «Lean production».
 The Blagoveshchensk regional perinatal center was constructed.
 RU-COM group, E4 group and Danish Energy Agency (DEA) пsigned an Agreement on
establishment of an open strategic alliance for promotion of power service contracts to the Russian
regions together with Danish companies.
QUARTER IV
 E4 Group completed construction of the Krasnodarskaya TPP 410 MW CCPP ordered by JSC
YGK TGK-8 (Lukoil).
 E4 Group will perform turn-key construction of the heating line from Apatitskaya TPP to Kirovsk
involving building of the CHS.
 Nyaganskaya GRES gas received gas supply.
 E4 Group concluded an EPC contract for the «Reconstruction of the Zhodinskaya TPP boiler
house no.3 (RK-3) in Borisov involving 65 MW construction» project ordered by RUP Minskenergo».
 E4 Group gets down to constructing the first nuclear power plant in Vietnam- Ninh Thuan 1.
QUARTER I, 2012
 E4 Group built the first stage of the unique spent fuel storage facility (SFSF) in Zheleznogorsk.
 E4 Group concluded an EPC contract for the Izhevskaya TPP reconstruction involving CCPP
construction ordered by JSC KES.
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SECTION 2.
COMPANY HISTORY
JSC E4 Group is the largest Russian engineering company forming a part of the RU-COM business
group. The Group comprises the best industry enterprises, representative offices in Belarus and Vietnam
are established. The Group production assets are located in all the constituent entities of the Russian
Federation, the personnel number is almost 18 thousand people.
Gained competencies, qualified staff, collaboration with leading world power companies, growing
innovation development guarantee high-quality turn-key construction of power facilities on the highest
global level. The company offers modern solutions in main country industries such as heat and nuclear
power industry, housing and public utilities, industrial infrastructure construction, etc.
1924: incorporation of the Moscow division of the state joint-stock company Teplo i Sila (Heat and
Power) that lead to formation of company Centroenergomontazh (now JSC E4-Centrenergomontazh).
1927: as part of the implementation of the State Committee of Electrification of Russia
(GOERLO)'s plan a Scientific and Production Association for Research and Design of Power Equipment in
the name of I.I. Polzunov (NPO TsKTI im. Polzunova) was incorporated (later it became a part of E4
Group) on the initiative of leading scientists of our country A. F. Ioffe, M.V. Kirpichev, M.A. Shatelen, V.N.
Shreter, for the purposes of scientific and technical equipment of domestic power machinery and energy
industries.
1941–1945: during the Great Patriotic War employees of Centroenergomontazh (TsEm)
assembled and commissioned 89 turbo devices with a total capacity of 801 thousand KW.
1954: employees of TsEm participated in the assembly and commissioning of the first ever NPP in
Obninsk.
1955 – 2005: enterprises that later would form the E4 Group companies carried out works on the
territory of the Soviet Union and also participated in construction of power and industrial facilities in Iraq,
Bangladesh, Finland, Pakistan, Iran, Morocco, Syria, Bulgaria, India, China, Romania. In total, with
participation of such enterprises, power-producing facilities with aggregate capacity of more than 29GW
were constructed.
2006: incorporation of JSC E4 Group. The JSC E4 Group design institute became the only
Russian company mentioned in the rating of TOP-200 project organisations of the world, organised by
international magazine ENR.
2006 – 2008: consolidation within E4 Group of the best Russian and foreign enterprises of power
and industrial engineering: JSC Centrenergomontazh, JSC NPO CKTI, JSC KIEP, JSC Siberian ENTTs, JSC
SibCOTES, JSC Dalenergomontazh, JSC Bureyagesstroy, JSC Information Technology and
Communication, JSC Modular Systems Tornado and a range of other enterprises.
2006 – 2007: gain of the Company order portfolio participation in tenders for construction of
“turn-key” power plants, construction of industrial facilities.
2007 – 2008: signing of the largest power plant construction projects with the leading Russian
and international customers (JSC LUKOIL, JSC ONEXIM, JSC Fortum).
2008
Commissioning of the first facilities of E4 Group (plant Listvyanskaya-2, Yaroslavskaya TPP-2 and
other).
E4 Group and Siemens, with Chairman of the Board of Siemens AG Peter Lesher participating,
signed a letter of intent governing the further cooperation of E4 Group and Siemens.
E4 Group becomes the single private company to obtain the GK Rosatom order for for the
construction of “dry” and reconstruction of “wet” storages for spent nuclear fuel in the Krasnoyarsky
Region.
JSC E4 Group acts as one of the founders of the National Association of Engineering Companies
(NAEC).
The International Infrastructure Forum held in Washington listed two projects of E4 Group among
the five largest infrastructure projects in the world.
Following the voting of the Russian Managers Association, E4 Group won the prize in the People
Investor nomination (among companies investing into people category).
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2009
Reconstruction of the Kashirskaya GRES was completed. Following the reconstruction the 300 MW
has an output of 330 MW and is both natural gas- and coal-fired.
Successful completion of work on the facility “Eastern Siberia – Pacific Ocean”. Construction of
railway bridges and an external power supply for Special Sea Oil Port “Kozmino” is one of the largest
projects in this direction.
E4 Group pursuant to the proposal of SC Rosatom acted as one of the founders of SE
Soyuzatomstroy, which later received the status of a self-regulating organisation.
E4 Group commences the active implementation stage of the largest projects in the investment
programme of RAO UES of Russia (Nyaganskaya GRES- construction of 3x420 MW combined-cycle power
units, construction of a CCPP at the Kursk North-West district boiler house, building of the
Krasnodarskaya TPP 410 MW CCPP).
JSC E4 Group is rated number 164 in “Expert-400” rating, number 184 in the rating of “500
Largest Companies of Russia” of the Finance magazine and number 1 in the “Engineering in Russia”
rating of the specialised business magazine Upravlenie Proizvodstvom (Production Management).
2010
E4 Group won tenders for two large “turn-key” projects: construction of a new 420MW CCPP at
Cherepovetskaya GRES (Customer: JSC TGK-6) and construction of a new 420MW CCPP at Serovskaya
GRES (customer: JSC OGK-2).
For the purposes of the development of E4 Group in the areas of power networks and pipeline
construction and repair, and to offer our customers transparent and effective methods of project
implementation, the Board of Directors of E4 Group unanimously decided to incorporate a new subsidiary
of the Company – LLC E4-Magistral.
2011
E4 Group obtained the Glavgosexpertiza conclusion for construction of the SErovskaya GRES 420
MW CCPP. New 110 MW CCPP of the Astrakhansya GRES construction for JSC YGK TGK-8 (Lukoil) was
completed.
E4 Group obtained the Glavgosexpertiza conclusion for construction of the Cherepovetsyaka GRES
420 MW CCPP.
E4 Group completed construction of the Kursk 115 MW CCPP for JSC Quadra (ONEXIM Group).
Termination of the Blagoveshchensk regional perinatal center construction under “Zdorovie”
(Health) federal project.
E4 Group is going on to develop partnership with Danish companies. RU-COM group, JSC E4
Group and Danish Energy Agency (DEA) signed an agreement on establishment of an open strategic
alliance for promotion of power service contracts to the Russian regions together with Danish companies.
E4 Group is finishing construction of the Krasnodarskaya TPP 410 MW CCPP ordered by JSC YGK
TGK-8 (Lukoil). The Krasnodarskaya TPP is the largest power plant in the Kuban. It generates almost a
half of the power consumed in the region. The TPP electric output is 744 MW, annual production is
approximately 5 billion kWh.
E4 Group wins the bid on turn-key construction of a heating line from the Apatitskaya TPP to
Kirovsk involving construction of the CHS ordered by JSC Khibinskaya Heat Company.
E4 Group signed an EPC contract for the “Reconstruction of the Zhodinskaya TPP boiler house №3
in Borisov involving CCPP construction” ordered by MUP Minenergo.
E4 Group gets down to constructing the first NPP in Vietnam- Ninh Thuan 1. Under the primary
works twenty well are passed for production, camps for workers and engineers are fixed, mine clearing
works have been performed. Eight derricks and other auxiliary equipment are in operation.
E4 Group completed the first stage of the unique spent fuel storage facility (SFSF) in
Zheleznogorsk ordered by SC Rosatom. The SFSF consists of two compartments, for storage and
encapsulation, correspondingly, and may contain up to 38 thousand tons of nuclear waste of HPCR and
WCPR which are the main reactor types used today at Russian NPPs.
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SECTION 3.
THE COMPANY’S INDUSTRY POSITION
3.1. Power engineering is a basic industry of the Russian economic providing electric and heat
power for domestic needs of the national economy and population as well as exporting electric energy to
CIS and far-abroad countries. Stable development and reliable industry operation determine to a large
extent security of energy supply for the country and are key factors of its economic growth.
In recent years Russian power engineering radically changed: industry state regulation system has
been modified, electric energy competitive market appeared, new companies have been established, etc.
The industry structure has also changed: naturally monopolistic functions (electric energy transfer,
supervisory control) and potentially competitive ones (generation and sales of power, repair and
maintenance) have been divided; instead of vertically-integrated companies that previously performed all
these functions companies specializing on separate kinds of activities have been established.
In 2011 power market continued its growth accompanied with improvement of industry control
regulatory background. The long-term power market launch was a key change. Five-year investment
program of generating companies is aimed at power capacities’ introduction that exceeds the actual
needs: so, 41.3 GW of new capacities are scheduled to be introduced within 2010-2015 while up to 2020
this figure will amount to 79.9 GW.
Overall more than 6 GW of generating capacities were commissioned in 2011 what is the highest
factor of the domestic power industry since 1985. This is the result of those large-scale programs that had
been earlier approved and are implemented in recent years despite certain problems in overcoming crisis
phenomena of years 2009-2010.
Construction and renovation of large power facilities is performed consistently according to the
program industry documents: Master plan of location of power facilities up to year 2030; Diagram and
program of development of unified energy system of Russia for years 2011-2017. The main task of these
documents is to create an infrastructure base for economic and social development for each region in
particular and for the country in general.
We may definitely say that the country has overcome all crisis phenomena in the power
engineering. Next three years 3 trillion rubles more will be allocated for these purposes. 1 trillion rubles is
supposed to be allocated to the power industry for the mains development within 2012-2014 while 1.9
trillion rubles will be directed for arrangement of new generation sources.
For the last 10 years energy consumption in Russia increased almost by 20%. From the expert
point of view, such a tendency will remain (by 2020 electric energy consumption may increase by 20-22
GW). The Russian economics is growing stably and its development shall be provided with creation of
additional power reserves. Along with construction of new generating facilities serious attention should be
paid to modernization of the so-called “out-of-date” capacity.
At the beginning of year 2011 Prime-minister of the Russian Federation set a task to generating
companies on double increase of introduction of new capacities. We may note that following the results
of 2011 generating companies completed this task, they increased by 1.8 times commissioning of new
capacities as compared with year 2010. The most significant projects from the point of view of capacity
increase in 2011 are Mosenergo TPP-26 420 MW CCPP, Tyumenskaya TPP-1 190 MW
CCPP, Chelyabinskaya TPP-3 200 MW CCPP, Surgutskaya GRES-2 2x400 MW CCPPs, Yuzhnaya TPP-22
425 MW CCPP, Pervomaiskaya TPP-14 180 MW CCPP, Nevinnomysskaya GRES 410 MW CCPP and others.
Commissioning of new facilities in the Russian Federation
9,5
GW
5,8
3,2
GW
GW
2010
2011
2012
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3.2. Geography
E4 Group is a full-cycle engineering company established in 2006 through the consolidation of the
best Russian and foreign enterprises in the industry. E4 Group offers state-of-the-art engineering
concepts for power engineering, mining and smelting, chemical, oil and gas, forest industries, housing
and communal sector and infrastructure development.
The first enterprises of the Company were established in the mid-20s of the last century; therefore,
E4 Group’s experience and key competences have been developed over decades. Today, as a result of
the above, the E4 Group companies have successful experience of implementation of various projects,
including projects executed in permafrost conditions, in the tropical regions and in significantly-distant
regions having very poor transport infrastructure.
The JSC E4 Group headquarters is located in Moscow and specializes in EPC in construction of new
facilities, technical upgrade and modernization of generating facilities as well as in parallel development
of new business directions at nuclear power plants, grid construction, mining and smelting, chemical, oil
and gas, forest industries, etc.
In implementing general contracting projects JSC E4 Group not only manages the project but also
provides for a significant scope of sub-contracting to Group companies.
E4 Group comprises design institutes, construction and installation companies, enterprises
producing process equipment, etc. This allows providing for a full cycle of turn-key works on its own on
the whole area of the Russian Federation. The main sales markets for E4 Group are: the Central, North
West, South, Siberian and Far East Districts of the Russian Federation.
E4 Group’s geographical development as an EPC(M) contractor is targeted towards the CIS
(Ukraine, Belarus, Uzbekistan, Kazakhstan), Asia (Vietnam, India), Middle East and Northern Africa (Iraq,
Algeria, Sudan).
Two E4 Group’s representative offices were established in 2011:
1. JSC E4 Group office in the Socialist Republic of Vietnam for the project execution under the
contract for feasibility study development and construction of Ninh Thuan 1 NPP.
2. JSC E4 Group office in Belarus for the project implementation under the contract for the
Zhodinskaya TPP boiler house no.3 reconstruction involving construction of 65 MW CCPP for RUP
Minskenergo.
E4 Group locations in the Russian Federation.
15
3.3. Competition
JSC E4 Group is among the largest companies in terms of sales results in the power facilities’
construction section. Following the results of 2011 the Company keeps the leading position both on the
engineering market and in terms of the overall capacity under the concluded EPC contracts and those
under execution.
JSC E4 Group
3179
3834
Companies with overall
projects less than 600 MW
Overall capacity under
contracts(MW)
640
GSKSCC VIS
640 МВт
760
JSC 760
Mosenergospetsremont
МВт
810 МВт
1905
810
JSC Tekhnopromexport
JSC Sevzapenergomontazh
1025
JSC Energoproekt
1050
GK KVARZ
The following engineering companies are the main players on the EPC market on construction of
generating facilities in heat power industry:
Russian companies:
JSC Tekhnopromexport
GK KVARZ
JSC Energoproekt
JSC TEK-Mosenergo
GSK VIS
JSC Stroytransgaz
JSC Energostroyinvest-holding
JSC ESK SOYUZ
JSC EMAlliance
JSC IC UES
UK OPEK
Intertechelectro-New Generation group
Foreign companies: Iberinco, ENKA, Siemens, GAMA.
Main competitors of JSC E4 Group on construction of heat power facilities:
1. Design
Engineering centres of former RAO UES of Russia that became part of Russian engineering companies:
ItsE Urala
SevZapNTTs
South ITs
VNIPIEnergoprom
Design institutes within the structure of holding companies:
PiTs UralTEP
JSC Energostroyinvest-Holding
EPC-New Generation
SC Intertechelectro-New Generation
JSC Zarubezhenergoproekt
LLC «EvroSibEnergoengineering
16
Independent engineering enterprises operating locally and in certain segments:
JSC Lonas technology
JSC TEPENGINEERING
JSC Interavtomatika
SC KOTES
Foreign design institutes:
BelVNIPIenergoprom
Dnepr-VNIPIenergoprom
Citec
Enprima
Fichtner
Black&Veatch
Poyry
Bateman
2. Construction and installation works
NPP new construction market:
JSC
JSC
JSC
JSC
Titan-2
Sevzapenergomontazh
Atomstroyexport
Energospetsmontazh
LLC Stroytransgaz
JSC PO CJSC Uralenergomontazh
JSC Elektrocentrmontazh
LLC Volgodonsk Assembly Unit
Retooling and monernization of NPP:
JSC Atomenergoremont
LLC Volgodonsk Assembly Unit
JSC Energospetsmontazh
New construction of power generating facilities (OGK and TGK facilities of the RF):
JSC Zentrenergomontazh
3. Repair of power equipment
Former repair subsidiaries and associates of the power generating companies
JSC
JSC
JSC
JSC
Tulenergoremont
Ivenergoremont
Novgorodenergoservis
Smolenskenergoremont
JSC Kurskenergospezremont
JSC Lipetskenergoremont
JSC Khabarovsk repair and assembly company
Other repair companies
JSC Mosenergoremont
LLC LER-Turbo
SC RMS
JSC Komsomolskenergoremont
17
4
18
SECTION 4.
PRIORITY ACTIVITY GOALS AND DEVELOPMENT PROSPECTS OF
THE COMPANY AND E4 GROUP COMPANIES
4.1. Company’s priority activity directions in the accounting and current
years
The main business directions of JSC E4 Group are:
 ЕРС(М)-contracts’ execution;
 Management of E4 Group companies.
EPC(M)-contracts execution.
The Company development strategic goal to enhance its leading positions in the power engineering
market focusing on compliance with the highest quality standards and application of state-of-the-art
technologies as well as to strengthen its influence on the neighbouring markets.
To achieve these aims the Company strives to meet the following challenges in 2012:
 Increase of sales volumes allowing the Company expanding the power engineering market share
not only in Russia but also abroad.
 Development of strategic partnership with main equipment manufacturers and contractors as well
as recruitment of partners interested in mutually-beneficial business.
 Development of own production and material and technical facilities to perform construction,
installation and commissioning works.
 Ensuring high-grade management of generating capacities’ construction the Company has
already signed the contracts for including proceeding with the project management system
implementation.
 Enhancement of the Company competence in equipment and materials’ supplies as well as
maintaining a transparent purchase system under EPC-projects performance.
Management of E4 Group companies.
The Company strategic target in E4 Group management is to higher profitability of E4 Group of
companies due to establishment of the company efficient management system. To achieve this, the
Group shall settle the following key tasks in 2012:
 Marketing and sales: to diversify the order portfolio in various economics segments and to ensure
a stable cash flow due to permanent contraction with market average prices and marginal profitability of
10-15%.
 Operating activities: Expansion of the business range and development of new competences,
implementation of management system using main production funds, gain of partners manufacturing
major equipment, integration of E4 Group operating activities, and improvement of quality management
system.
 Personnel management: improvement of the staff recruitment and retention system, elaboration
of motivation and labor remuneration, realization of programs for personnel qualification upgrade and
training.
 Financial activity management: change-over to international finance accounting system, finance
administration automation, management accounting and budgeting system, reduction of credit portfolio,
implementation of common credit policy, establishment of insurance coverage of E4 Group companies.
 Corporate governance: flexible and efficient governance in the Group of companies considering
the best practices and being based on the optimum division of competence and responsibility.
Year 2011 was successful for the Company:
As far as the Russian market of heat power industry generating facilities’ construction on OGK and
TGK investment programs is concerned, the following contracts have been signed:
 Renovation of Apatitskaya TPP and construction of a heat main to Kirovsk involving CHS
installation. Customer – JSC Khibinskaya Heat Company;
 Astrakhanskaya GRES – renewal and construction of 110 MW CCPP. Customer- LLC LukoilEnergoengineering.
19
The Company has entered the foreign market of generating capacities’ construction:
 Heat power industry- the contract on “Reconstruction of the Zhodinskaya TPP boiler house №3 in
Borisov involving 65 MW CCPP construction” in Belarus was signed. JSC Belinvestenergosberezheniye is
the customer of this project.
 Nuclear power – the contract on consulting services for the site and feasibility study development
of NPP Ninh Thuan 1 located in the Socialist Republic of Vietnam. Vietnam Electricity is the customer.
The “Kransnodarskaya TPP expansion involving 410 MW CCPP construction» facility has been
commissioned.
Along with that, E4 Group got down to implementing the main stage of the following facilities:
 Construction of the Cherepovetskaya GRES 420 MW CCPP (Vologda region);
 Construction of the Serovskaya GRES 420 MW CCPP (Serov town, Sverdlovsk region).
Large-scale construction and installation works on the Nyaganskaya GRES 3x418 MW CCPP in
Khanty-Mansiysk autonomous district has proceeded.
4.2. E4 Group priority activity directions in the accounting and current
years
The priority business directions for E4 Group companies in 2011 remained as follows:
 Nuclear power industry (design, technical upgrade and reconstruction of NPPs);
 OGK, TGK and RusHydro (R&D, design, new construction, technical upgrade, power equipment
installation and repair, survey and commissioning works).
 Municipal power. Housing and community amenities. Industrial and military infrastructure power
facilities.
If E4 Group companies were interested by 2009 in cooperation mostly with power industry
enterprises, then in 2009-2011 the range of customers expanded substantially. The company managed to
take certain positions in mining, chemical, oil & gas and ship-building industries.
Company of E4 Group
Main counter
parties
Business direction
JSC E4 Group
Installation works
Rosatom
NPP technical upgrade and
repair
JSC E4 Group
GRES design
NPP of Ukraine
NPP design in Ukraine
JSC FSK UES
Design and survey works
JSC Siberian ENTTs
Industrial companies
JSC E4-SibCOTES
Russian and foreign
generating companies
Design and survey works,
development of quotations
TPP
Electric and heat power sales
R&D
R&D for TPP and NPP
JSC E4 Group
Engineering services
TGK
TGK-1, TGK-9: overhaul and
scheduled repair of main and
auxiliary equipment
Rosavtodor
Construction of bridges and
federal routes
JSC E4-Centrenergomontazh
JSC KIEP
JSC NPO CKTI
JSC Sibtekhenergo
JSC E4-Sevzapenergoservis
JSC Dalmostostroy
OSK
Rosatom
JSC Bureyagesstroy
HydroOGK
Dyke construction
Nuclear waste storage
construction
Construction of Boguchanskaya
GRES and Bureyskaya GRES
20
In 2011 E4 Group companies have actively developed business directions earlier mastered
keeping constant attention to quality and terms of the works and services performed and have opened
new markets: one of the top priority directions was development of business relations and cooperation
with power industry and fuel sector companies in South and South-East Asia (Vietnam, India) and Middle
East (Syria) countries.
4.3. Development prospects for the Company and E4 Group enterprises
JSC E4 Group strategic goal for years 2012-2016 is to diversify the order and customer portfolio
in various economic sectors of Russian and global markets and, having become a versatile engineering
company, to occupy not less than 20% of the engineering market on the following directions:
 Large generation (over 100 MW)
 Industrial generation (construction of power facilities in industry sectors: oil & gas, smelting
industry, fertilizer manufacturing, chemical industry, wood processing and cellulose and paper
production);
 Small generation (below 100 MW);
 Grid construction;
 CIW on power and industry facilities ( as subcontractor and general contractor);
 Repair and service works on power and industry facilities.
Innovations and modifications are the basic components of the Company development strategy for
the coming years. Modern engineering solutions we use allow us converting chark and slug wastes of
heat power plants to a valuable strategic raw stock used in road construction, building materials’ concrete
and fertilizers’ production.
The company is actively mastering interesting industry and geographical markets for the purpose
of diversification and order portfolio balancing:
Prospective directions:
 NPP construction in terms of design & survey and construction & installation works;
 Power facility construction in housing and community sector;
 Power efficient technologies;
 Renovation;
 Transport infrastructure construction (roads, bridges, tunnels, railways, sea coast and river
bank infrastructure, airports);
 Long-term repair and maintenance services.
Geographical markets of potential interest are:
 CIS countries (Ukraine, Belarus, Kazakhstan, Uzbekistan);
 Northern Africa;
 Middle East;
 Central Asia;
 South Asia;
 South-East and East Asia.
21
Main projects implemented in 2011 by the Group
PROJECT
Construction of Krasnodarskaya TPP (410 MW)
CUSTOMER
LLC LUKOIL-Kubanenergo (TGK-8)
Construction of Nyaganskaya GRES (3 * 418 MW)
JSC Fortum (TGK-10)
Construction of NWD boiler house, Kursk (117 MW)
JSC Quadra (TGK-4)
Construction of Serovskaya GRES (400 MW)
JSC OGK-2
Construction Cherepovetskaya GRES (420 MW)
JSC OGK-6
Expansion of Astrakhanskaya GRES involving CCPP-410
construction
Construction of Apatitskaya TPP involving CHS construction
LLC LUKOIL-Astrakhanenergo (TGK-8)
JSC Khibinskaya heat company
Design (Construction of Novobogoslovskaya TPP involving
CCPP-230 MW)
JSC TGK-9
Design (Construction of NovoBereznikovskaya HPP involving
CCPP-230 MW construction)
JSC TGK-9
Design (Reconstruction of Izhevskaya TPP-1 involving CCPP230 MW construction)
JSC TGK-5
Design (Reconstruction of Vladimirskaya TPP involving CCPP230 MW construction)
JSC TGK-6
Design (Reconstruction of Bereznikovskaya TPP )
JSC TGK-9
In 2012 E4 Group intends to increase sales results by means of existing and prospective
contraction on the following projects:
PROJECT
CUSTOMER
Construction of Nizheturinskaya GRES (2x230 MW)
JSC KES-Holding (TGK-9)
Construction of 120 MW HPP in Sovetskaya Havan
JSC RAO UES of East
Replacement of two 200 MW units at Belovskaya GRES
JSC Kuzbasenergo
Construction of two 120 MW units at Tom’-Usinskaya GRES
JSC Kuzbasenergo
Reconstruction of Zhodinskaya HPP boiler house no.3 involving 65
MW CCPP construction
JSC Belinvestenergosberezheniye
Construction of 400 MW TPP for JSC OEMK
LLC MC Metalloinvest
Construction of HPP-5 CCPP (city of Ufa)
JSC Bashkirenergo
22
5
23
SECTION 5.
KEY PERFORMANCE INDICATORS
In 2011 determined the procedure of profit and production cost generation in accounting under
construction contracts according to PBU (Accounting regulations) 2/2008 «Accounting of construction
contracts». The profit estimation under construction contracts is done on a monthly basis using a «when
ready» approach and considering a grade of works’ completion on each contract (project) individually. As
a result of the first use of PBU 2/2008 the Company accounting indicators have changed considerably as
of 31.12.2008, 31.12.2009 and 31.12.2010.
Performance of key financial and economic indicators (thous.rub.)
Growth rate
Abs.
Rel.
2009
2010
2011
1 496 159
12 380 914
19 096 625
6 715 711
35,17
Gross profit
-95 503
1 196 219
2 267 990
1 071 771
47,26
Net profit
-606 540
173 500
680 026
506 526
74,49
Sales revenue
24
5.1. COMPANY’S KEY PROJECTS IN 2011
Krasnodarskaya TPP, 410 MW CCPP
Expansion of Krasnodarskaya TPP involving turn-key construction of 410 CCPP, design and main
and auxiliary equipment supply.
Site peculiarities
Construction at the working facility located within the city boundaries of Krasnodar, the regional
center;
Complicated procedure of large-sized equipment transportation considering the existing city
infrastructure;
The most powerful combined cycle cogeneration mono-block unit in Russia, installed capacity being
449 MW;
The first MITSUBISHI project in Russia for GT unit, class F, type M701F4 Nnom=303,54 MW
(ISO 3977-2:1997);
Specially designed UTZ turbine, type Т-113/145-12,4, output is 145,7 MW and installed heat
capacity is 220 Gcal;
The first in Russia HRSG having vertical configuration, natural circulation, manufactured fully in the
RF;
Power efficient water treatment based on integrated membrane technology.
Main process equipment
Dual fuel gas turbine M701F4 303,54 MW (Mitsubishi), statically excited МВN generator, output up
to 350,2 MW, hydrogen cooled
Vertical HRSG (JSC EMAlliance)
Steam turbineТ-113/145-12,5 145.7 MW (JSC Ural Turbine Plant)
Steam turbine generator, TF-160P-2UZ (NPO JSC ELSIB)
CCPP performance indicators
Installed electric capacity (gross) – 449 MW
Rated heat output – 220 Gcal/h in cogeneration mode
Power unit efficiency (gross) in condensation mode – 57,7%
Results:
100% high-quality completion of construction and installation works;
The unit is operating at the electric energy wholesale market;
Load gain and drop tests are successful;
Guarantee testing and reserve fuel tests preparation is launched.
25
Commissioning of Krasnodarskaya TPP 440 MW CCPP cogeneration unit
The Krasnodarskaya TPP is the largest power plant
in the Kuban, which generates almost a half of power
consumed in the region. Commissioning new capacities
is highly important for the dynamically developing
South of Russia on the edge of the winter Olympics2014. CCPP-440 will make it possible to supply heat to
another 200 K square meters of housing.
The companies of E4 Group have completed the
entire work package: engineering, construction,
delivery and installation of equipment.
CCPP-410 efficiency ratio is 57.4%, which is one
and a half times higher than that of conventional
combined power units of existing Russian power plants (32–38%).
The E4 Group experts have managed to integrate the latest feats of engineering by the leading
domestic and foreign power plant and engineering companies, and combination of high-tech solutions
and low construction cost make the facility unique for Russia. The gas turbine M701F4 by Mitsubishi
Heavy Industries (Japan) operates as a set with hydrogen cooled turbo-generators by Mitsubishi Electric
Corporation. This is the first large-scale project by the MITSUBISHI concern in Russia. The powerful CCPP
M701F4 in its cost-effectiveness and environmental compliance is comparable to developments by
ALSTOM, SIEMENS, GE Energy, and is superior to them in its reliability.
The gas compressor station is completed
with equipment by Cameron (USA).
The heat recovery boiler without fuel
afterburning with three circuits of steam
reheat has been designed and manufactured
by JSC EM-Alliance (Russia) in partnership
with AustrianEnergy&Environment. This is the
first heat recovery boiler of vertical
configuration, suspended type, with natural
circulation, fully Russian-sourced. The new
steam turbine Т-113/145-12,4 has been
designed and delivered by JSC The Ural
Turbine Works.
Generator and Steam Turbine of Krasnodarskaya TPP
The complex makeup water system implementing the integrated membrane technology has been
designed and delivered by the Russian innovative enterprise Research and Production Company
MEDIANA-FILTER. Its application makes it possible to produce demineralized water of required quality, to
reduce consumption of reagents, to eliminate formation of high-mineralized drains, provides for a higher
degree of organics and colloid silicic acid removal compared to conventional solutions. The circulating
cooling system of condensers is equipped with highly efficient ventilation cooling towers by GEA Polacel
Cooling Towers B.V. (Germany), operates independently and does no harm to the Kuban River.
In process of construction the project after the state expertise, being fully compliant with
requirements of regulatory documents, has been finalised at the Customer's initiative (JSC LUKOILKubanenergo) to stiffen emission requirements. NOx, CO, SO2 emissions have been reduced 3–18 times
compared to existing boilers of the TPP. The combination of actions taken to reduce environmental
impact has made it possible to avoid increasing the size of the sanitary protective zone (SPZ) on the
background of considerable rise of the Krasnodarskaya TPP capacity.
26
Nyaganskaya GRES 3хCCPP-420 MW
Turnkey construction of 3х420 MW combined cycle gas turbines of the Nyaganskaya GRES
(Khanty-Mansi Autonomous Area), engineering and delivery of main and auxilliary equipment.
Site features
Limited time of outdoor work performance and equipment storage because of severe climate of the
Extreme North
Location of the construction facility at a distance of material and human resources centres,
complicated logistics to deliver freight by sea under severe climatic conditions
The world's No. 1 TPP of 1,256.7 MW rated capacity in the Extreme North (latitude 62·08‘,
temperatures to -49°С);
The heat recovery boiler by JSC EM-Alliance under the license by NOOTER/ERIKSEN (USA) with
steam capacity of 270/317/47 t/hr;
Composition of main process equipment
Three gas turbines of SGT5-4000F type with auxilliary systems by SIEMENS AG
Three steam turbines of condensation type, model SST5-3000, with auxilliary systems and a
condenser of SCon1000 model by SIEMENS AG
Common generator for gas and steam turbines, model SGen5-2000H, with hydrogen cooling
system and static excitation system by SIEMENS AG
Horizontal heat recovery boiler without fuel afterburning with natural circulation in evaporating
circuits of high, medium and low pressure by JSC EM-Alliance
CCPP performance data
Rated power (gross) of one power unit – 418.9 MW;
Power unit efficiency ratio (gross) – 58.75%.
Achieved result:
1 Start-up Complex:
The Office Building has been built and handed over to the Customer
The detailed documentation development has been finalised
The start-up heating boiler has been started with gas
The Main Building of the Unit No. 1 has been erected; the thermal circuit has been closed
The power plant equipment has been delivered and installed
The heat recovery boiler has been delivered and installed
Assembly works on auxilliary equipment, metal structures and pipelines are 80% done
2 and 3 Start-up Complexes:
The detailed documentation development has been finalised
Power plant equipment has been delivered
Heat recovery boilers have been delivered
The Main Building of the Unit No. 2 has been erected; the thermal circuit has been closed
Driving of the piling field of the main building No. 3 has been completed, foundation arrangement is in
process
27
North-West Boiler house, Kursk, CCPP-125 MW
Construction of CCPP-125 MW in the boiler house of the North-West district of Kursk, including
engineering and delivery of the main and auxilliary equipment.
Site features
Two gas turbines LM6000PD Sprint by General Electric with a low-emission combustion chamber,
operating time statistics of 15 million hours
Two vertical heat recovery boilers Pp-75-3,9-440 with fuel afterburning by JSC ZiO
Circulating cooling system with efficient ventilation cooling towers
Erection in conditions of the power plant in operation in a congested area, 500 meters off
residential development
Gas turbines with a low-emission combustion chamber LM6000PD Sprint as a set with turbo
generators (GE PACKAGED POWER INC.) 45.96 MW (2 pcs.)
Vertical heat recovery boilers Pr-75-3,9-440D, JSC Machine-Building Plant ZiO-Podolsk
Steam turbine Т-25/34-3,4/0,12 JSC Kaluga Turbine Works of higher capacity from 12 to 24 MW
Turbo generator Т-32-2V3, manufacturer – Electrotyazhmash-Privod LLC (1 pcs.)
Rated power (gross) – 115 MW
Rated thermal power – 115 Gcal/hr in heat-extraction mode
Specific consumption of equivalent fuel by power release in condensation mode - not more than
246 g of equivalent fuel/kWh
Achieved result
Civil and installation works are 100% complete
Successful comprehensive testing, signed report of finished construction facility acceptance
The unit has been introduced to the wholesale power market
Unit power pickup and shedding tests have been completed
Preparation has been started for warranty tests and tests on back-up fuel
28
Serovskaya GRES 2xCCPP-420 MW
Construction of power units CCPP-420 (st. No. 9, 10) with allocation of the first start-up complex –
power unit st. No. 9 (Sverdlovsk Region), including engineering and delivery of main and auxilliary
equipment.
Site features:
The Serovskaya GRES is located in the industrial Ural region. The power shortfall of the SerovskoBogoslovskiy power centre is 700 MW
Construction under conditions of the coal power plant 538 MW in operation. Year of construction
1954–1959
Severe climatic conditions (abs. minimum -49°С)
Lack of water resources, construction of "dry" ventilation cooling towers
Composition of main process equipment:
Dual fuel gas turbine of SGT5-4000F model with auxilliary systems by SIEMENS AG
Steam turbine of condensation type, model SST5-3000, with auxilliary systems and a condenser of
SCon1000 model by SIEMENS AG
Common generator for gas and steam turbines, model SGen5-2000H, with hydrogen cooling
system and static excitation system by SIEMENS AG
circuits of high, medium and low pressure by JSC EM-Alliance
Rated power (gross) – 419.5 MW
Power unit efficiency ratio (gross) – 58.59%
Achieved result
The temporary circuit of power supply to the Construction Site has been commissioned
The construction office and food services are have been arranged
Masts of lightning protection and lighting of the Construction Site have been installed
Suppliers for auxilliary equipment of long-term manufacturing have been selected
Foundations have been completed for the frame of the main building, heat recovery boiler, Gas
Insulated Switchgear-220
Installation of metal structures of the main building and Gas Insulated Switchgear-220 has been
started
Supply of components (assemblies) of the heat recovery boiler has been started
29
Cherepovetskaya GRES CCGY-420 MW st.No.4
Turnkey construction of a combined cycle gas turbine with unit rated capacity of at least 400 MW
on site of the branch of JSC OGK-6 - Cherepovetskaya GRES (Vologda Region), including engineering and
delivery of main and auxilliary equipment.
Site features
Construction under conditions of the power plant 630 MW in operation.
Circulating cooling system with efficient ventilation cooling towers
Dual fuel gas turbine of SGT5-4000F model with auxilliary systems by SIEMENS AG;
Steam turbine of condensation type, model SST5-3000, with auxilliary systems and a condenser of
SCon1000 model by SIEMENS AG;
Common generator for a gas and steam turbine, model SGen5-2000H, with hydrogen cooling
system and static excitation system by SIEMENS AG;
circuits of high, medium and low pressure by JSC EM-Alliance under the license by NOOTER/ERIKSEN,
INC (USA)
Rated power (gross) – 418.9 MW; Power unit efficiency ratio (gross) – 58.7%.
Achieved result
Positive opinion by the Federal State Institution "RF Glavgosekspertiza (Main State Expert Review
Board)" has been obtained
The construction office has been installed
Suppliers for auxilliary equipment of long-term manufacturing have been selected
Foundations have been arranged for the frame of the main building, foundations have been started
for the heat-recovery boiler, Gas Insulated Switchgear-220, Turning Gear, Circulating Pump Station,
Office Building, gas facilities
Installation of metal structures of the main building and Gas Insulated Switchgear-220 has been
started
The bridge crane of 370 t has been delivered
Supply of components (assemblies) of the heat recovery boiler has been started
Novo-Bogoslovskaya TPP
Site features
Design of the Novo-Bogoslovskaya TPP facilities on the site free of buildings within the town of
Krasnoturinsk, Sverdlovsk Region
Composition of main process equipment (Customer supply)
Gas turbine of GTE-160 type, unit capacity of 173 MW by JSC Power Machines with a turbo
generator of TZFGГ-180-2UZ type
Horizontal heat recovery boiler of two pressures, Е-236/40,5-9,3/1,5-514/299-22,2vv type by JSC
EM-Alliance
Extraction steam turbine T-63/76-8,8 of 63/76 MW unit capacity by CJSC The Ural Turbine Works
Turbo generator of TF-80-2UZ type, delivery by Scientific Production Association Elsib
Gas conditioning station BPPG-SN-94000-3,5-2,4/0,1 with capacity of 94 K nm3/hr
Automated process control system based on hardware and software suite TECON (CJSC E4SibCOTES)
Two steam boilers of E-16-1,4-225G type (JSC Holding Company Energomash-Stroy)
Two water heating boilers of KV-GM-116,3-150 type (JSC Dorogobuzhkotlomash)
Gas Insulated Switchgear-110 kV, supplied by CJSC Alstom Grid
CCPP power unit rated capacity – 236 MW (at outdoor t = - 5.5°С).
Lead-in thermal power of CCPP – 109.1 Gcal/hr (at outdoor t = -5.5°С), water heating boilers –
200 Gcal/hr (at outdoor t = - 37.2°С), steam boilers – 18.3 Gcal/hr (at outdoor t = -37.2°С)
Achieved result
Engineering survey has been completed, Design Documentation (Feasibility Study) has been
developed and sent to the Customer in scope required for submittal to the Federal Autonomous
Establishment "Glavgosekspertiza (Main State Expert Review Board) of Russia" for consideration
30
Astrakhanskaya GRES CCPP-110 MW
Turnkey construction of the facility: "Reconstruction of the Astrakhanskaya GRES with erection of
CCPP-110", including engineering and delivery of main and auxilliary equipment
Site features
Construction is being carried out within the territory of the existing facility
GTU LM 6000 PF-Sprint, capacity of 46.64 MW, by General Eleсtric as a set with a generator
BDAX7-290ERJT
Heat recovery boilers KGT-44/4,6-435-13/0,5-210, by CJSC Energomash (Belgorod)
Steam turbine Т-14/23-4,5/0,18, capacity of 23 MW, by JSC Kaluga Turbine Works
Turbo generator TTK-25-2UHL4
CCPP performance data:
Rated power (gross) – at least 110 MW.
Specific consumption of equivalent fuel for released power – 246 g of equivalent fuel/kWh
Achieved result
Civil and installation works have been completed, the facility has been commissioned
CCPP has been successfully operated in the autumn-winter period
"Central" boiler house in Astrakhan 2хCCPP-110 MW
Supply of "power island" equipment (main equipment – gas and steam turbines with turbo
generators, heat recovery boilers, auxilliary equipment), TPP APCS and performance of erection and
commissioning supervision works
Site features
The project is being implemented on the existing facility
Construction of CCPP in a detached building in accordance with the scheme of two-boiler singleturbine units
Four gas turbines LM6000 PF DF Sprint by General Electric as a set with a generator BDAX7290ERJT, Two steam turbines Т-17/23-4,5/0,18, by JSC Kaluga Turbine Works
Two turbo generators of TTK-25-2UZ-P type, 10.5 kV, by Electrotyazhmash-Privod LLC for joint
operation with steam turbines
Four heat recovery boilers KGT-44/4,6-435-13/0,5-210, by CJSC Energomash (Belgorod) with
smoke stacks of 48.5 m
Rated power – at least 220 MW
Rated thermal power – at least 45 Gcal/hr in heat-extraction mode
Specific consumption of equivalent fuel for released power – not more than 246 g/kWh
Specific consumption of equivalent fuel for thermal power release – not more than 155 kg/Gcal
Achieved result
"Power island" equipment has been made, factory testing has been carried out, as well as
preservation and preparation for shipping
31
Construction of heating main from Apatitskaya TTP to Kirovsk
with installation of central heat supply stations and heat pipelines
Construction features
Construction is being carried out in the Extreme
North at the foothills of Khibinskie mountains. Complicated
arrangement for delivery of lengthy pipeline parts and bulk
equipment with account of installation of a larger part of
the heating main in forest and marsh area, and in Kirovsk
– existing city infrastructure with a developed network of
engineering utilities. The heating main crosses rivers,
railway and motor roads.
Public and social implication
Construction of the Facility is carried out in order to ensure development of heat supply in the
Apatitsko-Kirovskiy district and to improve the environmental condition in the region. Currently the heat
supply of Kirovsk is carried out from a boiler house operating on black oil and located within the sanitary
protection zone of the municipal water intake.
The project of heat pipeline construction to Kirovsk includes changeover of the municipal heat
supply system to heat energy consumption from the coal Apatitskaya TPP. It will make it possible to
displace black oil from the fuel balance of the Kirovsko-Apatitskiy district, and also to increase load and
efficiency of the plant that nowadays has a considerable power reserve. Besides, de-commissioning of old
inefficient black oil boilers in Kirovsk will make it possible to considerably reduce the rates for thermal
energy consumption for population. The heating main will become the first external heat pipeline in
Russia designed for low temperatures specific for the Murmansk Region.
NovoBereznikovskaya TPP
Two units CCPP-115 (2хCCPP-115), each within a gas turbine of PD6111FA type, capacity of
75.87 MW by General Electric
Heat recovery boiler, steam, double-circuit, with fuel afterburning
Steam turbine T-40/50-8,8 of 40.2/49.6 MW unit capacity (CJSC The Ural Turbine Works)
Turbo generator of TF-50-2UHLZ type (JSC Scientific Production Association ELSIB)
Gas conditioning station BPPG, supplier LLC Premium Engineering
Automated process control system based on hardware and software suite TECON (JSC E4SibCOTES)
Two steam boilers of E-25-1,4-225GM type (JSC Holding Company Energomash-Stroy)
Two water heating boilers of KV-GM-116,3-150 type (JSC Dorogobuzhkotlomash)
Gas Insulated Switchgear-110 kV (CJSC Alstom Grid)
Rated capacity of two CCPP power units – 115 MW each
Lead-in thermal capacity of CCPP – 210 Gcal/hr
Achieved result
Land plot planning arrangement scheme and layout have been designed
Works are being carried out on mining and geological substantiation
Comprehensive engineering survey has been completed
Technical Requirements have been developed for main and auxilliary equipment
Design Documentation development is in progress
32
Reconstruction of Izhevskaya TPP-1 with application of CCPP
Site features
Design within the territory of the industrial site of the Izhevskaya TPP-1 in congested conditions
Horizontal heat recovery boiler of two pressures, Е-236/40,5-9,3/1,5-514/299-22,2vv type (JSC
EM-Alliance)
Extraction steam turbine T-63/76–8,8 of 63/76 MW unit capacity (CJSC The Ural Turbine Works)
Turbo generator of TF-80-2UZ type (JSC Scientific Production Association ELSIB)
CCPP power unit rated capacity - 236 MW (at outdoor t = -5.5°С)
CCPP power unit lead-in thermal capacity - 145.8 Gcal/hr (at outdoor t = -5.5°С)
Achieved result
Engineering survey has been completed
Design Documentation has been submitted for consideration to the Federal Autonomous
Establishment "Glavgosekspertiza (Main State Expert Review Board) of Russia", the positive opinion has
been obtained
Reconstruction of Vladimirskaya TPP-2 with installation of
CCPP-230
Site features
Design within the territory of the industrial site of the Vladimirskaya TPP-2 in congested conditions
Horizontal heat recovery boiler of two pressures, Е-236/40,5-9,3/1,5-514/299-22,2vv type (JSC
EM-Alliance)
Extraction steam turbine T-63/76–8,8 of 63/76 MW unit capacity (CJSC The Ural Turbine Works)
Turbo generator of TF-80-2UZ type (JSC Scientific Production Association ELSIB)
Lead-in CCPP power unit power – 230 MW
Lead-in thermal capacity of CCPP – 147.9 Gcal/hr
Achieved result
Engineering survey has been completed
Existing building structures have been inspected
Design Documentation has been submitted for consideration to the Federal Autonomous
Establishment "Glavgosekspertiza (Main State Expert Review Board) of Russia"
33
Construction of boiler at Bereznikovskaya TPP-2
Site features
Design of the Bereznikovskaya TPP-2 boiler house facilities is carried out within the territory of the
existing industrial site of the Bereznikovskaya TPP-2 (Perm Region)
Water heating boiler PTVM-100 (2 pcs.)
Steam boiler of E-16-1,4-225GM type (JSC Holding Company Energomash-Stroy) – 2 pcs.
Water heating boiler of KV-GM-116,3-150 type (JSC Dorogobuzhkotlomash) – 2 pcs.
Performance data
Lead-in thermal capacity for heating, ventilation, hot water supply purposes in Berezniki – 200
Gcal/hr
Lead-in thermal capacity for needs of the Industrial Enterprise AVISMA – 79 Gcal/hr
Achieved result
Land plot planning arrangement scheme and layout have been designed
Works are being carried out on mining and geological substantiation
Comprehensive engineering survey has been completed
Technical Requirements have been developed for main and auxilliary equipment
Design Documentation development is in progress
Reconstruction of boiler house No.3, Zhodinskaya TPP in
Borisov (Belarus) with construction of combined cycle gas turbine
Scope of works
Engineering, Procurement, Construction and Commissioning, including supply of plants, testing,
design, installation, adjustment, completion and commissioning of the facility
Site features
The boiler house area is of complex configuration, with compact planning, full of subsurface and
surface utilities, motor roads
Gas turbine of SGT-800 type, capacity of 45 MW by Siemens
Vertical heat recovery boiler with horizontal heating surfaces of SteamGen 8 type, by Aalborg
Engineering Slovakia, s.r.o.
Condensation gas turbine of SGT-400 type, capacity of 20 MW by Siemens
Rated CCPP power unit power – 65 MW.
Construction of Ninh Thuan NPP 1 (Vietnam)
In November of 2011 in Hanoi, during the meeting of co-chairmen of the Russian-Vietnamese
intergovernmental commission on trading-economic and scientific-technical cooperation, the Ministry of
Finance of Russia and Vietnam, an intergovernmental agreement was signed on granting a State Loan for
erection of the first Vietnamese NPP in accordance with the Russian technology. Moreover, the contracts
have been signed to develop the Site Brief and Feasibility Study of NPP construction, afterwards the
Russian party has immediately started fulfilling its obligations.
In December of 2011 the official ceremony was held to start survey works on the site of NPP Ninh
Thuan 1. Within the first-priority works, twenty wells have been allocated for production on two areas of
the site, camps for workers and engineers have been deployed, demining activities have been completed.
Eight drill towers and other auxilliary equipment have been involved. Contracts have been signed with
local subcontractors, the first-priority scope of works has been identified, and permits have been obtained
from the authorities of the Ninh Thuan province, which are required to enter the site. Works have been
started to select process solutions for further development of the Feasibility Study.
34
5.2. MAIN FINANCIAL AND ECONOMIC INDICATORS
OF E4 GROUP COMPANIES*
K RUR (VAT excluded)
2009
2010
2011
Growth rate
2011/2010
abs.
rel., %
Contracting
14 574 677
14 579 167
12 671 981
-1 907 185
87
Revenues
13 786 363
12 517 143
17 955 217
5 438 074
143
Marginal profit
3 829 697
3 561 151
4 422 600
861 449
124
411 377
229 527
396 346
166 818
173
2,98%
1,83%
2,21%
0,37%
120
804 522
635 160
1 071 267
436 107
169
Net profit
Net profit margin
EBITDA
*JSC Bureyagesstroy (Blagoveschensk)
JSC E4-Centrenergomontazh (Moscow)
JSC Sibtehenergo (Novosibirsk)
LLC E4-Magistral (Moscow)
JSC NPO CKTI named after I.I. Polzunov (St. Petersburg)
JSC Siberian ENTTs (Novosibirsk)
PJSC Kiev Research-and-Development and DesignEngineering Institute Energoprojekt (Ukraine, Kiev)
35
Including by activities
Special construction*
2009
2010
Growth rate
2011/2010
2011
abs.
rel., %
Contracting
7 671 503
5 528 498
1 494 927
-4 033 571
27
Revenues
7 797 958
5 619 000
8 440 575
2 821 575
150
Marginal profit
1 554 461
1 136 677
1 063 454
-73 223
94
193 283
202 663
14 597
-188 066
7
Net profit margin
2,48%
3,61%
0, 17%
-3%
5
EBITDA
37 244
389 356
294 905
-94 451
76
Net profit
8 440 575
7 797 958
7 671 503
5 619 000
Контрактация
Contracting
5 528 498
Выручка
Revenues
1 494 927
193 283
Чистая
прибыль
Net Profit
202 663
14 597
2009
2010
2011
* JSC Bureyagesstroy (Blagoveschensk)
Failure to meet the objective of the key indicator "contracting" is attributable to long-term contracts signed during the
previous period
36
Installation and commissioning works*
2009
2010
2011
Growth rate
2011/2010
abs.
rel., %
Contracting
3 411 170
4 137 711
5 035 814
898 103
122
Revenues
2 598 633
2 846 485
4 259 770
1 413 285
150
Marginal profit
1 008 145
871 710
1 698 502
826 792
195
Net profit
30 716
-262 473
147 027
409,500
256
Net profit margin
1,18%
-9,22%
3,45%
12.67%
237
141 735
-217 088
344 539
561 627
359
EBITDA
5 035 814
4 137 711
4 259 770
Контрактация
Contracting
3 411 170
2 846 485
Выручка
Revenues
2 598 633
147 027
30 716
2009
2010
2011
Net Profit
Чистая
прибыль
-262 473
* JSC E4-Centrenergomontazh (Moscow)
JSC Sibtekhenergo (Novosibirsk)
37
Engineering and design development*
2009
2010
2011
Growth rate
2011/2010
abs.
rel., %
Contracting
3 492 004
4 912 958
6 141 240
1 228 282
125
Revenues
3 389 772
4 051 658
5 254 871
1 203 214
130
Marginal profit
1 267 091
1 552 764
1 660 643
107 879
107
187 378
289 337
234 722
-54 615
81
5,53%
7,14%
4,47%
-2,67%
63
290 543
462 892
431 823
-31 069
93
Net profit
Net profit margin
EBITDA
* JSC E4-SibCOTES (Novosibirsk)
PJSC Kiev Research-and-Development and Design-Engineering Institute Energoprojekt (Ukraine, Kiev)
38
Composition of revenues from E4 Group companies sales* by types of
activities
2009
Total revenues
2011
2010
13 786 363
100%
12 517 143
100%
17 955 217
100%
Special construction
7 797 958
57%
5 619 000
45%
8 440 575
47%
Installation and commissioning
works
2 598 633
19%
2 846 485
23%
4 259 770
24%
Design and engineering
3 389 772
25%
4 051 658
32%
5 254 871
29%
Design and engineering
Installation and commissioning works
Special construction
*
JSC Bureyagesstroy (Blagoveschensk)
JSC E4-Centrenergomontazh (Moscow)
JSC Sibtehenergo (Novosibirsk)
PJSC Kiev Research-and-Development and DesignEngineering Institute Energoprojekt (Ukraine, Kiev)
39
5.3. LARGE PROJECTS IMPLEMENTED BY E4 GROUP COMPANIES
IN 2011
Construction and installation and commissioning companies of E4 Group in 2011 performed works
on erection of hydraulic and heat power engineering facilities, construction of urban infrastructure
facilities, industrial and civil construction.
SPECIAL CONSTRUCTION – JSC BUREYAGESSTROY
Construction of "dry" nuclear waste repository
Zheleznogorsk. Customer – Federal State Unitary Enterprise GHK.
The repository is a complex to receive, reload, tightly package and
store spent nuclear fuel in a specially equipped room. The
repository meets the most stringent requirements of safety, spent
nuclear fuel may be kept in it for up to 100 years. The repository
was commissioned in 2011. The "dry" repository construction will
be fully completed before 2015. Revenues (VAT excluded) from the
project made: 2010 – 2,326.5 million RUR, 2011 – 3,670.5 million
RUR
Erection
of
the
regional
perinatal
center
in
Blagoveshchensk. Customer – State Budget Enterprise Stroitel. The
center includes a five-storeyed building with an apparatus level (in
monolithic execution with total area of 23,000 m2.), a backup
emergency diesel power station, a store-room of cylinders, a
guardhouse, a food unit, a transformer substation. Access lanes
have been provided to each building taking into account the existing
street and road network, landscaping and area fencing have been
also arranged. The facility was commissioned in 2011. Revenues
(VAT excluded) from the project made: 2010 – 441.4 million RUR,
2011 – 423.8 million RUR
Construction of Bureyskaya HPP. Customer – JSC Rushydro.
Having the rated capacity of 2010 MW, the Bureyskaya HPP is
among the ten largest hydraulic power plants of Russia. Currently
bank protection works are being carried out at the downstream of
the Bureyskaya HPP. Completion of all works and acceptance for
operation are scheduled for 2013. Revenues (VAT excluded) from
the project made: 2010 – 1,107.9 million RUR, 2011 – 804.5 million
RUR
Construction of Boguchanskaya HPP. Customer – JSC
Boguchanskaya HPP. The Boguchanskaya HPP is the largest
hydraulic power engineering construction facility in the Eastern
Siberia and Russia. Completion of the hydraulic power plant is of
great importance for development of the Siberian economic region
as a whole. It is planned to use more than a half of power generated
by the HPP at the constructed aluminium plant. Construction
completion is scheduled for 2012. Revenues (VAT excluded) from
the project made: 2010 – 680.2 million RUR, 2011 – 593.3 million
RUR
40
CIVIL, INSTALLATION AND COMMISSIONING WORKS
JSC E4-CEM
JSC SIBTEKHENERGO
LLC E4-MAGISTRAL
K RUR
2009
2010
2011
Growth rate
2011/2010
abs.
rel., %
Revenues
2 598 633
2 846 485
4 259 770
1 413 285
150
JSC E4-CEM
2 347 458
2 482 999
3 490 201
1 007 202
141
251 175
346 695
675 177
328 482
195
-
16 791
94 392
77 601
562
JSC Sibtekhenergo
LLC E4-Magistral
One of the key activities of E4 Group is implementation of turnkey projects of power engineering
facilities construction. The following may be identified among the most important projects completed in
2011:
Power units No. 1, 2, 3 CCPP-410 MW of the Nyaganskaya
GRES JSC Fortum (civil and installation works). The plant will
ensure power safety of the region during sharp rise in rates of oil and
gas production. The Nyaganskaya GRES will become one of the
largest heat power plants in the world, which operate at the latitudes
higher than 62˚. The main equipment is supplied by Siemens.
Commencement of works: October 2010. In 2011 thermal mechanical
equipment was installed, works are in progress to start up the power
unit No.1. Revenues (VAT excluded) from the project made: 2010 –
68 million RUR, 2011 – 1,106 million RUR. In 2012 it is planned to
complete installation of equipment in the power units No. 2, 3 and start
commissioning works.
Power unit 420 MW of Krasnodarskaya TPP LLC LUKOILKubanenergo (civil and installation works). Expansion of the
Krasnodarskaya TPP is designed to meet the demand of the
Krasnodar Territory in power and heat supply with account of rates of
regional economic growth, development of the resort sector, and also
preparation for the Olympics-2014. Works were started in 2010. In
2011 the power unit was commissioned, works are in progress to put
the power unit in operation. Revenues (VAT excluded) from the
project made: 2010 – 309 million RUR, 2011 – 1,192 million RUR
41
ENGINEERING AND DESIGN
JSC E4-SibCOTES
JSC NPO CKTI named after I.I. POLZUNOV
JSC Siberian ENTTs
PJSC KIEP
K RUR
2009
Revenues
2010
2011
Growth rate
2011/2010
abs.
rel., %
3 389 772
4 051 658
5 254 871
1 203 214
130
JSC E4-SibCOTES
937 366
1 084 996
1 685 204
600 209
155
PJSC Kiev Research-and-Development
and Design-Engineering Institute
Energoprojekt
400 697
582 698
445 934
-136 764
77
1 121 852
1 237 809
1 841 725
603 916
149
929 857
1 146 155
1 282 008
135 853
112
JSC Siberian ENTTs
JSC NPO CKTI named after I.I.
POLZUNOV
In 2011 Design Institutes included into the E4 Group developed design and detailed documents, did
designer supervision, performed commissioning works in new construction facilities and repowered
existing facilities, among which we may point out turnkey projects by the E4 Group:
Construction of CCPP-410 MW of Krasnodarskaya TPP LLC
LUKOIL-Kubanenergo
Development of design estimate documents, designer supervision
during construction – JSC E4-SibCOTES. Commencement of works:
2008. The facility was started in 2011. Revenues (VAT excluded) in
2009 – 143 million RUR, 2010 – 215 million RUR, 2011 – 151 million
RUR. In 2012 it is planned to complete designer supervision works.
APCS development work complex. Works were performed by JSC
E4-SibCOTES. Commencement of works: 2009. In 2011 the main
scope of works on APCS delivery, installation and commissioning was
completed. Revenues (VAT excluded) made: 2009 – 3 million RUR, 2010 – 17 million RUR, 2011 – 196
million RUR. In 2012 it is planned to put the APCS into experimental industrial operation.
Complex of commissioning works on main equipment and balance of plant. Works were performed by
JSC Sibtekhenergo. Commencement of works: 2010. Revenues (VAT excluded) in 2010 – 9 million RUR,
in 2011 – 196 million RUR. In 2012 it is planned to do performance tuning and fully complete the works.
Construction of power units No. 1, 2, 3 CCPP-410 MW of
the Nyaganskaya GRES JSC Fortum
APCS development work complex. Works were performed by JSC
E4-SibCOTES. Commencement of works: 2011. Planned timing of
works completion: 2012. In 2011 deliveries were made, the APCS
hardware and software suite was programmed, erection supervision
and mock commissioning of the first start-up complex hardware and
software suite were completed. Revenues (VAT excluded) in 2011 –
189 million RUR. In 2012 deliveries are planned, as well as
programming of the second and third complex hardware and software suite.
Commissioning and engineering support of construction. Works were performed by JSC
Sibtekhenergo. Commencement of works: 2011. Planned completion in 2013. Revenues (VAT excluded)
in 2011 – 85 million RUR
42
Construction of CCPP-420, Cherepovetskaya GRES
Development of technical documents for turnkey construction of a
combined cycle gas turbine with unit rated capacity of at least 400
MW on site of the branch of JSC OGK-6 – Cherepovetskaya GRES and
designer supervision. Works were performed by PJSC KIEP.
Commencement of works: 2010. In August 2011 the positive opinion
by the Federal Autonomous Establishment RF Glavgosekspertiza
(Main State Expert Review Board) on the Design Documents was
obtained. Planned completion of works – 2014. Revenues (VAT
excluded): 2010 – 32.9 million RUR, 2011 – 140.4 million RUR
Besides, in 2011 the Design Institutes of the E4 Group performed works on facilities,
which are not turnkey projects of the Group, such as:
Development of design and estimate documents on the project
"Expansion of Novgorodskaya TPP JSC TGK-2" with a gas turbine
GTE-160 with a steam heat recovery boiler operating to the
existing turbine PT-60-130/13". Works were performed by JSC E4SibCOTES. CCPP was started in 2011. Additional works were
performed in 2011 to design individual assemblies, designer
supervision over civil and installation works was carried out.
Development of design and detailed documents on the facility
"Construction of CCHT-90 at the Omskaya TPP-3 JSC TGK-11". Works were performed by JSC E4SibCOTES. In 2011 works were completed on development of design documentation, the positive opinion
of the state expertise was obtained; the main scope of detailed documentation development was
completed. In 2012 it is planned to complete development of design and estimate documentation and to
do designer supervision over the facility construction.
Complex of commissioning works at the power unit No. 1 of the
Krasnoyarskaya TPP-3 JSC Eniseyskaya TGK. Works were performed
by JSC E4-SibCOTES. In 2011 the power unit was tuned and
comprehensively tested. In 2012 the power unit testing and
equipment adjustment were carried out.
Repowering of units No. 8 ,9 of the Barnaulskaya TPP-2 JSC
Kuzbassenergo. Works were performed by JSC Siberian ENTTs.
Design documentation was developed. The technical specification is
being finalized in accordance with increased work scopes.
Repowering of units No. 4, 6 of the Belovskaya GRES JSC
Kuzbassenergo. Works were performed by JSC Siberian ENTTs.
Design documentation was developed. The technical specification is
being finalized in accordance with correction of the project title.
Development of Feasibility Study of unit capacity of the main generating equipment and total rated
power and heat capacity of TPP, design and detailed documentation for construction of TPP in
Sovetskaya Gavan. Customer – JSC RAO Energy System of East. Works were performed by JSC Siberian
ENTTs. Design Documentation was developed. The project was submitted to the Federal Autonomous
Establishment RF Glavgosekspertiza (Main State Expert Review Board) in January 2012.
43
5.4. BRIEF DESCRIPTION OF JSC E4 GROUP FIXED ASSETS
CONDITION AND COST
The cost of fixed assets of JSC E4 Group as of December 31, 2011 made 259,485 K RUR. The growth of
fixed assets in 2011 made 113,812 K RUR or 78%.
Fixed assets (without incomebearing investments into fixed
assets) – total
including:
Production implements and
maintenance accessories
Office equipment
Machines and equipment (excluding
office equipment)
Transfer devices
Vehicles
Tools
Buildings
Structures
Other types of fixed assets
Taken into account within incomebearing investments into tangible
assets – total
including:
Fixed assets handed over for lease
As of the
beginning of
the year
As of the end of
the year
initial cost
initial cost
abs.
rel.
145 672
259 483
113 811
178
21 026
35 750
14 724
170
50 245
84 499
34 254
168
15 162
62 482
47 320
412
11 382
37 731
1 901
7 752
474
9 020
47 720
2 683
16 201
1 101
29
-2 362
9 989
782
8 449
627
29
79
126
141
209
232
0
268 685
529 086
260 401
197
268 685
529 086
260 401
197
Growth rate
2011/2010
Income-bearing investments include buildings in Novomichurinsk and St. Petersburg with total area
of 21,282 m2.
In 2011 the growth of income-bearing investments was attributable to leasing of a caterpillar crane
with a lattice boom Liebherr LR 1750, weight-lifting capacity of 750 tons, cost of 264,142 K RUR.
Nowadays the crane is used to perform works on the construction site of the Nyaganskaya GRES.
Structure of JSC E4 Group fixed assets
Cost as of January 01,
2011
Cost as of December
31, 2011
Buildings and structures
276 689
67%
282 023
68%
Machines and equipment
15 170
4%
328 636
79%
Transfer devices
11 382
3%
9 020
2%
Office equipment (office appliances)
50 163
12%
82 415
10%
Vehicles
37 731
9%
47 698
6%
Furniture
18 861
5%
33 463
4%
Other
4 361
1%
5 313
1%
Total
414 357
100%
788 569
100%
44
5.5. FIXED ASSETS OF JSC E4 GROUP COMPANIES
Cost of fixed assets of JSC E4 Group companies as of January 01, 2012 makes 4,729,957 K RUR.
Versus January 01, 2011 the fixed assets increased by 328,362 K RUR.
Variation of cost and structure of fixed assets of E4 Group companies
K RUR
as of January 01, 2011
as of December 31, 2011
Growth rate
2011/2010
initial cost
share
initial cost
share
abs.
rel.
2 380 188
54%
2 441 449
52%
61 261
103%
1 282 009
29%
1 464 606
31%
182 597
114%
Vehicles
544 351
12%
622 032
13%
77 680
114%
Other types of fixed
assets
195 046
5%
201 870
4%
6 824
104%
4 401 594
100%
4 729 957
100%
328 362
108%
Buildings and
structures
Machines and
equipment
TOTAL
The main share in the structure of fixed assets is represented by buildings and structures (54%
as of the beginning and 52% as of the end of the year).
The highest growth rate – 114% – for the reporting period was observed on assets of the main
activity (machines and equipment, vehicles). Value of main activity assets versus the beginning of the
year increased by 260,277 K RUR. The specific weight of main activity assets for the reporting period
increased from 41% to 44%.
Building and
structures
Machines and
Equipment
Vehicles
Other Fixed
Assets
45
6
46
SECTION 6.
KEY INDICATORS OF COMPANY ACCOUNTING AND FINANCIAL
REPORTING
6.1. Assessment of Company activity results and financial status
When planning activities for 2011, the Company had 6 turnkey construction projects and
4 projects for design at the stage of implementation with total contract cost of 77,200 million RUR.
During 2011 new contracts were signed for the total cost of 85,786 million RUR.
It was planned to complete works on turnkey projects for 2011:
 "Construction of the boiler house in the North-West district of Kursk"
 "Construction of CCPP-410 MW of the Krasnodarskaya TPP"
The project "Boiler house of the North-West district in Kursk" and the project "Astrakhanskaya
TPP" were actually completed. For the project "Krasnodarskaya TPP" the revenues received were 91%,
the project completion was postponed to 2012.
In 2011 the revenues from implementation of projects made 18,934 million RUR.
In 2011 the Company identified the procedure of revenues and prime cost generation under
construction contracts in the accounting system in accordance with the Russian Accounting Standards
2/2008 "Accounting of construction contracts". As a result of actions carried out to apply the Russian
Accounting Standards 2/2008, accounting indicators of the Company changed substantially as of
December 31, 2008, December 31, 2009, and December 31, 2010.
The main indicators of the Company's activity reflect positive dynamics of business development.
Considerable growth of revenues and net profit is observed.
K RUR
2009
2010
2011
Revenues
1 496 159
12 380 914
19 096 625
EBITDA
-901 848
79 506
1 169 688
Net profit
-606 540
173 500
680 026
KPI
Loss produced as a result of application of the Russian Accounting Standards 2/2008 for the
previous period is attributable to the following:
(а) Non-compliance of dates reflecting works accepted by the customer under turnkey contracts in
the accounting documents and dates reflecting works accepted from subcontractors in the accounting
system. Such instances occurred in the previous reporting periods in connection with long-term approval
and signature of documents received from subcontractors. At the same time the completed works were
accepted by the customers upon completion and were reflected in the accounting system in connection
with receipt of primary documents (KS-2, KS-3) signed by the customers.
(б) Reflection of completed works reports in the accounting system signed by the customers, for
instance, for an agency fee for organization of equipment delivery, in accordance with the schedule of
works financing, which sometimes anticipates reflection of actual costs made by the Company in
connection with performance of such works.
Corrections of accounting data related to recalculation of revenues, prime cost of profits and
deferred taxes as a result of the first application of the Russian Accounting Standards ПБУ 2/2008 are
reflected in accounting of 2011 in the correspondence with the account of undistributed profit. The
accounting data was recalculated retrospectively and is consistent.
47
6.2. Analysis of Company financial status
Vertical analysis of balance sheet assets (in % to balance sheet currency)
2009
2010
2011
Abs.
deviation
2011/2010
Intangible assets
0.00
0.00
0
0.00
Fixed assets
0.15
0.27
0.36
0.09
0.01
0.43
0.38
-0.05
0.04
0.74
1.02
0.28
25.44
16.54
13.82
-2.72
1.58
02.74
3.66
0.92
27.22
20.72
19.24
-1.48
Stocks and costs
8.20
7.72
4.89
-2.83
Accounts receivable
50.09
46.70
53.54
6.83
Cash and cash equivalents
0.13
0.71
0.16
-0.55
Other current assets
14.37
24.14
22.18
-1.97
72.79
79.28
80.76
1.48
100
100
100
0
Balance sheet asset item
I. Non-current assets
Construction in progress
Income-bearing investments into
tangible assets
Long-term financial investments
Other non-current assets
Total for section I
II. Current assets
Total for section II
Total assets
The highest specific weight in the balance sheet currency is represented by current assets –
80.76%. Higher share of current assets is attributable to increased share of accounts receivable. Lower
share of non-current assets is attributable to reduction of the share of long-term financial investments (2.72%). The specified items of the balance sheet assets are the highest in the structure of current and
non-current assets accordingly.
Non-current assets
Inventories
Ratio of main asset groups
Accounts receivable
Other current assets
48
In the structure of liabilities the shares were also redistributed between the capital and obligations
by 1.87%. Reduction in the share of obligations mainly occurred as a result of the share of "other shortterm liabilities" (reverse charge of VAT from outstanding revenues).
The share of equity capital increased as a result of profit share rise by 2.5%.
Vertical analysis of balance sheet liabilities (in % to balance sheet currency)
Balance sheet asset item
I. Equity capital
Chartered capital
Added capital
Reserves
Undistributed profit
Total for section I
II. Liabilities
Long-term liabilities
Short-term liabilities
including:
short-term loans
accounts payable
other short-term liabilities
Total for section II
Total liabilities
2009
2010
2011
Abs.
deviation
2011/2010
2.12
0.00
0.01
-2.94
-0.82
1.36
0
0.07
-3.25
-1.82
1.00
0.00
0.05
-1.00
0.05
-0.36
0.00
-0.02
2.25
1.87
73.68
27.14
74.83
26.98
62.90
37.05
-11.94
10.07
0.00
17.94
9.20
100.82
0.00
11.59
15.39
101.82
8.30
26.76
1.99
99.95
8.30
15.17
-13.40
-1.87
100
100
100
0%
The structure of the Company's liabilities changed in respect to long-term and short-term obligations:
the share of long-term liabilities reduced by 11.94%, the share of short-term liabilities increased by 10.07%.
It is attributable to the fact that a part of long-term debt on advance payments received in connection with
completion of the project "Krasnodarskaya TPP" was transferred to the item "accounts payable" as received
short-term advance payments.
For the reporting period the Company's current assets increased by 11,830 million RUR:
Indicators
Growth of current assets
Growth
K RUR
% to growth
11 009 161
100
1. +/- capital and reserves
679 926
6.18%
2. +/- long-term liabilities
3 867 262
35.13%
3. +/- short-term loans
4 058 251
36.86%
4. +/- accounts payable
8 925 579
81.07%
5. +/- settlements on dividends
-606 341
-5.51%
-2
0.00%
-629 521
-5.72%
-3 324 302
-30.2%
-78 668
-0.71%
307
0.00%
6. +/- deferred incomes
7. +/- provisions for future expenses
8. +/- other short-term liabilities
9. -/+ fixed assets
10. -/+ intangible assets
11. -/+ long-term financial investments
-814 270
-7.40%
12. -/+ construction in progress
13. -/+ income-bearing investments into
tangible assets
14. -/+ other non-current assets
-32 038
-0.29%
-230 794
-2.10%
806 229
-7.31%
11 009 161
100
Total
Main factors that influenced growth of current assets were the following:
- equity capital – profit growth;
49
- long-term and short-term credits and loans – increased credit portfolio;
- accounts payable – employment of customer funds;
Main factors that influenced reduction of current assets were the following:
- other short-term liabilities (reverse charge of VAT from outstanding revenues);
- reduction of long-term financial investments;
- accrual of provisions for future expenses;
6.3. Analysis of Company business results dynamics
Dynamics of main indicators of "Profit and Loss Statement"
K RUR
2009
2010
2011
%
deviation
11/10
Δ K RUR
11/10
Revenues from sales of goods
1 496 159
12 380 914
19 096 625
154
6 715 711
Cost of goods sold
1 591 661
11 184 695
16 828 635
150
5 643 940
- 95 502
1 196 219
2 267 990
190
1 071 771
380 971
359 734
79 842
699 287
74 315
1 129 058
93
161
-5 527
429 771
Profit (loss) from sales
- 836 207
417 090
1 064 617
255
647 527
Interest receivable
Interest payable
Other income
Profit from participation in
other companies
Other expenses
422 681
236 911
1 823 870
316 356
144 107
2 327 901
253 406
476 557
2 903 875
80
331
125
-62 950
332 450
575 974
1 346
9 820
13 250
135
3 430
1 909 684
2 697 510
2 889 190
107
191 680
Profit (loss) before taxation
- 734 905
229 550
869 401
379
639 851
128 365
56 050
189 375
338
133 325
- 606 540
173 500
680 026
392
506 526
Indicator
Gross Profit
Commercial expenses
Management expenses
Profit tax and temporary
differences
Net profit (loss)
In the Company there is a trend of net profit growth. Versus 2010 in 2011 the net profit increased
by 506.5 million RUR.
Growth of revenues and prime cost versus relative indicators of deviations are almost equal, 154%
and 150% accordingly. It is reflected by change over to the Russian Accounting Standards 2/2008, since
according to such accounting the calculation of revenues from construction contracts is done on a
monthly basis by the "when completed" method, with account of extent of works completion under each
contract (project) separately, and is recognized in the same period that actually incurred costs under the
contract (project).
Growth of management expenses was mainly caused by the Company move to a new office at the
following address: World Trade Centre, 12, Krasnopresnenskaya naberezhnaya.
The balance on other incomes and expenses in 2011 versus 2010 increased slightly (by 7.6 million
RUR).
50
6.4. Main financial factors
2009
2010
2011
Instant liquidity
1.20
1.54
Current liquidity
1.59
Ratio of accounts receivable
and payable (more than 1)
Factor
Change
10/09
11/10
1.41
1.29
0.92
2.00
1.91
1.25
0.96
1.85
1.99
1.50
1.08
0.75
Receivables turnover in days
days
806,21
145,05
240,57
0.18
1.66
Payables turnover in days
days
887,24
131,45
170,73
0,15
1.30
Turnover of inventory
days
475,85
68,70
47,91
0.14
0.70
-123.47
-56.01
1 844.88
0.45
-32.94
-0.01
-0.02
0.00
2.23
-0.03
Ratios of debt and equity
capital
Equity ratio (financial
independence)
Return on sales
%
-55.9%
3.4%
5.6%
-0.06
1.65
Net profit margin
%
-40.5%
1.4%
3.6%
-0.03
2.54
Return on equity
%
513,8%
-41.2%
-216,9%
-0.08
5.26
Instant liquidity ratio reflects payment capabilities of the Company for timely and quick
repayment of its debt. The normative value of this ratio is > 1. This ratio during the entire considered
period is within the permissible range. As of the end of 2011 the ratio increased versus 2010 by 0.26 and
is within the permissible range. This indicates availability of sufficient liquid assets in the JSC E4 Group.
Ratio of current liquidity gives a general estimate of current assets liquidity. It shows how
many roubles of current assets fall per one rouble of short-term liabilities. The normal level of total cover
ratio shall be equal to 1.5–3 and shall not go below 1. As of the end of 2011 the ratio increased versus
2010 by 0.1, but is within the permissible range.
Coefficient of ratio of accounts receivable and payable during the considered periods of
activity reduces. The normative level of the coefficient is less than or equal to 1.Deviation of this
coefficient from 1 poses a threat to financial stability and causes the necessity to employ additional
sources of financing. As of the end of 2011 the coefficient reduced by 0.06, which gives evidence of
indicator deterioration.
Turnover of receivables and payables in days reduces versus 2010.
Coefficient of debt and equity capital ratio indicates sharp rise of the indicator value in 2011,
since the Company during the year employed external credits and loans, to support the Company's
business and implement the projects.
Equity ratio shows the share of enterprise owners in the total amount of funds advanced into its
business. The higher the value of this ratio, the more financially stable and independent on external
creditors is the enterprise. Versus 2010 this indicator increased by 0.98 and reached the positive value.
Return on sales in 2011 increased versus 2010 by 2.21%, which is a positive trend, since the
Company profit from the main activity and business and financial performance for this period.
Net profit margin – in 2011 the indicator increased by 2.16%.
Return on equity describes the business viability. As of the 2011 results it amounted to 44%,
which is a negative trend, but versus 2009 the fall rates are much lower.
51
6.5. Dynamics of the Company's net assets for the last three completed
financial years, including the reporting year
K RUR
2009
-188 646
2010
-653 424
2011
26 501
Change
10/09
11/10
-464 778
679 925
Net assets of the Company are intended to continue the business, and as of the end of the
reporting period they make 26,501 K RUR, which is 579,925 K RUR higher versus the last year.
The main driver that caused the fact that according to the results of 2011 the cost of the
Company's net assets was less than the Company's chartered capital, in opinion of the Company's Board
of Directors, was considerable cumulative reduction of net profit from the start of the Company's
business when changing over to the Russian Accounting Standards 2/2008. However, in 2011 the
indicator improvement is evident (increase by 579.9 million RUR), which indicates further positive
prospects in the Company development.
The main actions that will make it possible for the Company to bring the cost of net assets in
compliance with its chartered capital following the results of 2012 are as follows:
1. Signature of profitable contracts in the amount that makes it possible to both operate at the
breakeven point level and have continuous profitability of at least 15%.
2. Reduction of management and commercial costs by implementation of austerity actions.
3. Contracting of expenditure contracts with mandatory observation of the price level of not more
than 85% of the profitable contract price.
52
7
53
SECTION 7. INVESTMENTS
7.1. Company investments, including the ones forwarded
reconstruction, technical upgrade and acquisition of fixed assets
for
The main activity of JSC E4 Group is performance of general contractor functions in construction
of power facilities, as well as corporate management and coordination of companies included into the
Group. Investment programmes and projects of the Company are developed on the basis of the industry
features, performed works and services under planned and executed contracts.
The volume of the Company's capital investments for 2009–2011 is given in the table:
K RUR
Investment patterns
New construction (SMB)
Upgrade and reconstruction of fixed
assets
Purchasing shares of other companies
Establishment of new entities
Purchasing machines and mechanisms,
equipment and accessories
Acquisition of a building
Infrastructure (management)
Total
2009
2010
2011
-
143 890
219 047
-
-
207 323
2 780 101
174 000
5
-
99 990
29 997
862
18 109
277 370
-
260 850
-
68 771
74 957
81 544
2 849 734
771 795
815 286
In 2011 versus 2010 the volume of investments increased by 5.6%. The uneven volume of capital
investments is observed along investment patterns. In 2011 within the framework of upgrade and
reconstruction of fixed assets the project "Move to the new office" was implemented, a crane Liebherr LR
1750 was purchased costing 264,142 K RUR (investment pattern – purchasing machines and equipment).
In part of investment into securities (shares), into establishment of new entities, on the contrary, there is
negative dynamics observed.
Dynamics of main indicators variation in 2009–2011 is given in charts:
Volume of capital investments, K RUR
Purchasing machines, mechanisms, K RUR
54
In 2011 the main volumes of investments by JSC E4 Group were forwarded to upgrade and
reconstruct fixed assets, to purchase machines and mechanisms and new construction.
Structure of all capital investments in 2011 (K RUR)
Infrastructure (management)
New construction
Purchasing machines, mechanisms,
equipment and accessories
Upgrade and
reconstruction of fixed assets
Establishment of new entities
The start of 2011 was marked by execution of one of the largest deals in the real estate market of
Moscow, in which JSC E4 Group was the tenant of more than 10,000 m2 of office premises in the World
Trade Centre. Already in July, upon completion of finishing works, the official move of the Company's
headquarters took place. We are absolutely confident that arrangement of optimal labour conditions for
the Company employees is a key factor supporting stable dynamic development of the Company for
many years.
Within the framework of the project the leased
areas were expanded, finishing and reconstruction of
premises were done, an integrated security complex was
created, fire-fighting and video surveillance systems
were established, multimedia service equipment was
installed, IT-infrastructure was built, workplaces were
equipped with state-of-the-art office equipment,
furniture.
New office after finishing and reconstruction of premises
Being a holding company, E4 Group supports implementation of large-scale projects aimed at
optimisation of tenure, usage, disposal of real estate in all regions of its presence, in particular, in St.
Petersburg there were actions taken to purchase a land plot with total area of more than 20,000 m2 from
the government, which is located under the Company's real estate facilities.
In 2011 the funds were invested into the following facilities of the fixed assets (machines and
mechanisms, equipment and accessories) required for the production process:
• A caterpillar crane with a lattice boom Liebherr LR 1750
 A hydraulic loader (within the turnkey projects for testing of bridge cranes, delivered and
mounted, when obtaining a permit to commission bridge cranes from the Federal Service of
Environmental, Technological and Nuclear Supervision (Rostekhnadzor) authorities
• A forklift truck (required in connection with growing volumes of equipment arriving on site and
the necessity to store it).
55
The main reason behind higher volume of investments for purchasing machines and mechanisms
in 2011 versus 2010 (by 276,176 K RUR) is purchase of a caterpillar crane with a lattice boom Liebherr
LR 1750, weight-lifting capacity of 750 tons, cost of 264,142 K RUR. The crane was purchased by the
resolution of the Board of Directors to fulfill the Company's obligations under turnkey contracts, to handle
bulk and large-tonnage facilities of construction when performing works on the construction site of the
Nyaganskaya GRES, and in the nearest future on sites of the Cherepovetskaya GRES and Serovskaya
GRES.
The purchase was carried out within the
framework of the developed strategy of JSC E4 Group,
which is based on availability of a continuous contract
base. In connection with limitation on availability of
such equipment in the territory of the Russian
Federation (nowadays there are hardly ten such cranes
in the territory of the country), there are risks related
to impossibility to lease the equipment, and as a result,
risks of failure in fulfillment of the Company's
obligations.
Crane Liebherr LR 1750 on site of Nyaganskaya GRES construction
In 2011 in connection with implementation of the new project "Reconstruction of the
Astrakhanskaya GRES with erection of CCPP 110", with the active stages of "Serovskaya GRES" and
"Cherepovetskaya GRES" projects, the Company headcount increased, which required purchasing
additional vehicles, office equipment, furniture and upgrade of data storage equipment.
K RUR
Name
Internal funds
Profit of previous years
Depreciation
Other internal sources
1
Financial lease (leasing)
Total
2009
2010
2011
2 849 734
771 795
551 144
-
-
173 500
15 448
19 624
77 137
2 834 285
752 171
300 507
-
-
264 142
2 849 733
771 795
815 286
Mainly the current needs of the Company are supported with internal funds of financing.
Leasing
Other internal sources
1
Depreciatio
Profit of previous years
Crane Liebherr LR 1750
56
7.2. Investment activity of E4 Group companies for the period
from 2009 to 2011.
The main purpose of the investment activity of the companies included into E4 Group is provision
of reliable, safe operation and uninterrupted production activity aimed at increase of market value of
enterprises by rational investments into upgrade, development and expansion of the business scale.
Volume of capital investments by E4 Group companies into fixed assets for the period of
2009–2011 of the following activities
VAT excluded, K RUR
2009
2010
2011
0
5 540
49 420
Upgrade and reconstruction of fixed
assets
10 334
91 691
87 637
Acquisition of buildings and structures
20 134
0
0
Purchasing machines and mechanisms
367 583
321 788
260 400
Infrastructure (software, office
equipment, etc.)
48 142
0
0
446 193
419 019
397 457
Name
New construction
Total
Most significant investment projects by E4 Group companies completed within 2010–2011
and scheduled for 2012
VAT excluded, K RUR
Company
Project name
Line for production of NKMZ
beams
Reconstruction of NKMZ railway
tracks
Cost
Year of
completion
22 435
2010
10 304
2012
JSC Bureyagesstroy
Construction of a concrete plant
42 373
2012
JSC Bureyagesstroy
Reconstruction of the head office
90 132
2012
7.3. Investment plans
Investment plans for the current year include actions aimed at implementation of turnkey projects,
support of the Company's current business and also at improvement of business quality.
To implement newly executed and to be executed turnkey projects, investments are planned to
establish new local divisions and the Representative Office in Belarus.
JSC E4 Group is active in the field of nuclear power engineering – a strategically important sector
of the country. On October 31, 2010 there was an agreement signed to develop cooperation in the
sphere of power engineering between EVN, the State Corporation ROSATOM and JSC E4 Group on
construction of the first NPP in Vietnam, "Ninh Thuan-1". Therefore additional capital investments are
required in 2012 for development of the Representative Office in Vietnam.
57
Investment activity of E4 Group companies in 2012.
Investment programmes of E4 Group companies for 2012 include several important projects aimed
at implementation of the main activities and improvement of competitiveness of companies. Besides, the
programmes are designed to update the fixed assets of the companies and to purchase large
construction equipment to complete Turnkey Projects.
The total amount of investment costs of E4 Group companies in 2012 makes 429,692 K RUR (VAT
excluded). Taking into account the indicator of 2011 (397,442 K RUR), the volume of investments versus
the previous year will increase by 32,250 K RUR in absolute terms, and by 7.5% in relative terms.
Volume of capital investments of E4 Group companies in 2012.
K RUR, VAT excluded
Short-term investment programme
2011
Financial
investments
(actual)
Company
Commissioni
ng
2012 (plan)
Item
Construction of new
facilities
Reconstruction,
upgrade
Acquisition of fixed
assets
Construction of new
facilities
Reconstruction,
upgrade
assets
assets
Reconstruction,
upgrade
assets
Reconstruction,
upgrade
assets
assets
Reconstruction,
upgrade
assets
assets
Capital
investments
50 000
42 373
78 814
55 300
46 864
46 864
97 411
33 305
82 551
3 300
2 797
2 797
29 389
24 906
24 906
224 160
179 821
179 821
59 159
50 134
50 134
23 359
19 758
18 270
61 803
51 553
58 034
32 121
27 221
23 403
7 987
6 779
6 779
16 371
13 874
14 074
2 599
2 203
2 203
43 769
37 093
37 093
27 602
19 079
16 169
16 169
397 457
725 807
554 850
1. Construction of new facilities
49 420
53 300
45 170
81 611
2. Reconstruction, upgrade
87 637
142 768
120 952
115 646
260 400
529 739
388 728
444 655
JSC Bureyagesstroy
JSC E4-CEM
LLC E4-Magistral
PJSC KIEP
JSC NPO CKTI
JSC E4-SibCOTES
JSC Siberian ENTTs
JSC Sibtekhenergo
Total, including
3. Total acquisition of fixed assets
180 350
46 218
3 427
25 432
42 930
7 979
63 517
641 912
58
8
59
SECTION 8. PROCUREMENT ACTIVITIES
Nomenclature and procedural base of procurement activities
In order to improve efficiency and transparency of procurement activities in 2011 the Procurement Activity
Organisation Policy was analyzed (approved by the resolution of the Board of Directors JSC E4 Group in 2009). The
new version of the Policy was approved by the resolution of the Board of Directors, Minutes No. 127 dated October
14, 2011.
The following amendments were made to the Policy:
 The Policy was brought in compliance with requirements of the Quality Management System
 The complex procurement programme (hereinafter referred to as CPP) format was modified
 A list of documents that are mandatory to a request for modification of procurement parameters in the
CPP or for inclusion of an off-schedule purchase in the CPP was regulated
 A list of documents submitted to a request for initiation of a procurement procedure was regulated
 A concept of Prequalification was introduced
 The timing was set for procurement procedure stages
 The procedure was introduced for procurement of the "Competitive List" method
 The procedure was regulated on how to perform actions to improve procurement terms (competitive
negotiations, reverse auction)
 The procedure to approve procurement by the "single source" method was regulated.
Besides, a new version of the Regulation on the Company's Central Procurement Committee (CPC) was also
updated and introduced (approved by the resolution of the Board of Directors, Minutes No. 124 dated September 15,
2011). The new version of the document regulates the procedure of procurement approval by the Central
Procurement Committee; the annexes to the Regulation on the CPP were the new formats of CPP, a format of a
request for making changes or to include a purchase into a CPP.
In connection with the start of implementation of JSC Gazprom Energoholding projects, the Policy on
cooperation of JSC E4 Group and General Customer in process of procurement procedures on the project
"Construction of the power unit No. 4 of the Cherepovetskaya GRES on the basis of combined cycle technology",
power unit No. 4 (CCPP-420) was approved and introduced (approved by the resolution of the Board of Directors,
Minutes No. 136 dated December 30, 2011).
In 2011 the procurement activity of JSC E4 Group was carried out on the basis of the Quarterly Complex
Procurement Programmes approved by the Company's CPC. Correction of the procurement programme or its
amendment was also approved on the basis of resolutions by the official meetings of the CPC.
The Central Procurement Committee of the Company includes most Deputy General Directors of the Company
in charge of various activities, which ensures making good and reliable decisions related to the procurement activities
of the company.
The scheme of the procedure to apply to the CPC in order to approve a purchase:
60
Transparency of procurement
Competitive procurement procedures for the needs of JSC E4 Group for the purposes to implement
the turnkey projects, to support the current activity of the Company, in 2011 were carried out by the
Authorized Specialized Procurement Company LLC ESSK-Invest.
In accordance with the terms of the turnkey projects for construction of the Serovskaya and
Cherepovetskaya GRES, the procurement commissions for selection of suppliers / contractors include
representatives of the Customer (JSC OGK-2 and LLC MRES accordingly), which provides for maximum
economic efficiency in organisation of procurement and accelerates the timing for decision-making, and
also makes it possible to take into account the Customer's interests at all stages of construction.
Information on procurement was published in the open sources: at the Electronic Trading Facility
Interbranch Trading System "Fabrikant" (website www.fabrikant.ru), the official website of the Company,
the information was forwarded to the Chambers of Industry and Commerce in the Regions, where
construction facilities of JSC E4 Group are located.
Work within the Electronic Trading Facility makes it possible to select high-quality affordable goods
and services, expands the number of potential suppliers / contractors, makes it possible to speed up
competitive procedures by application of electronic documents and to considerably reduce the
procurement prices. Free access of suppliers and contractors is provided to information on procurement,
as well as an option of electronic trading for orders of any cost without geographic barriers.
On the basis of analysis of the performed procurement procedures, monthly reports are made on
efficiency of JSC E4 Group procurement activities for the company management and the Board of
Directors.
Fulfillment of Complex Procurement Programme
Following the results of 2011 the Complex Procurement Programme of JSC E4 Group planned and
additionally approved purchases for the amount of 58,032,960 K RUR, VAT included.
Actually in 2011 the procurement procedures were completed for the total cost of 25,764,666 K
RUR, VAT included. Out of those the planned purchases amounted to 8,477,507 K RUR, VAT included.
Off-schedule purchases made 17,287,159 K RUR, VAT included.
Completed out of the offschedule purchases
17 287 159
32 268 294
Completed out of the
planned purchases
Planned, but not
completed
8 477 507
The main reasons for deviation of the actual purchase amount versus the amount of the ones
planned in the CPP are as follows:
 Transfer of purchases under turnkey projects to the next quarters as a result of non-completion
of a few procedures, since no detailed documentation approved by the Customer was available.
 Changes in the detailed documentation and accordingly collection of corrected technical and
commercial proposals and extension of timing for procurement procedures.
 Availability of purchases undone from the number of the ones planned in the CPP, as a result of
variation, unavailability or delay in the issue of the design and estimate documents, detailed documents.
 Execution of new contracts in the current quarter.
 Reduction of actual cost of purchasing due to efficiency of completed procurement procedures.
61
According to the data of the Authorized Specialized Procurement Organisation LLC ESSK-Invest,
217 competitive procedures were held in the reporting period with application of the following methods
of procurement: open and closed request for proposals.
For the reporting period the savings index achieved versus the budget cost of procurement
amounted to 3,819,574 K RUR, VAT included (42%).
Quality assessment of completed purchases broken down by procurement method
K RUR, VAT excluded
Open request for
proposals
Closed request for
proposals
Single source
Main reasons of the high index of procurement from a single source are as follows:
Required material and technical resources may be manufactured / supplied or the works may be
performed / services rendered by the only contractor, and their equivalent replacement is not accepted in
compliance with the requirements of the end Customer.
The necessity of additional purchases on the grounds of standardization, unification, and also to
ensure compatibility or succession (for works, services) with the previously purchases goods (new
purchases may only be made from the same supplier / contractor). For instance, similar equipment is
purchased for the three power units on the project of the Nyaganskaya GRES power island construction.
Provision of one proposal only, but performance of new procedures, by resolution of the
Procurement Committee / Procurement Organizer, is not reasonable (for instance, time limits for
procurement procedures have been exhausted, new competitive procedures will not result in changes of
the participant circle and appearance of another winner, considerable procurement cost, etc.);
Urgent need of the Customer in a purchase, failure to complete which within the shortest possible
period of time may result in considerable financial or other losses (such tight deadlines are, for instance,
specific to: pre-commissioning of the first power unit of the Nyaganskaya GRES, commissioning of the
Krasnodarskaya TPP and Astrakhanskaya GRES).
Higher efficiency of procurement activities:
 Purchasing from a single source undergoes the full-scale procedure of approval by the CPC with
preliminary elaboration and analysis of data provided by those who order purchasing.
 Within the framework of the procurement procedures, the cost of material and equipment
contained in the estimates of contractors is assessed.
 For the purpose of expert appraisal of technical capabilities, financial stability of the companies,
production visits are organized to monitor goods shipped, to confirm qualification of E4 partners both
within the territory of the Russian Federation and abroad.
These actions will make it possible to rationalize the basis of market cost of equipment and
materials to negotiate with participants of procurement procedures and to get maximum saving of funds.
62
9
63
SECTION 9. CORPORATE GOVERNANCE
In the reporting year JSC E4 Group celebrated its first anniversary – five years of the Company.
For the time of our existence we have managed to develop new activities at nuclear power
engineering enterprises, construction of power grids, metallurgical industry, oil and gas, forest, chemical
industries, and also to expand the map of presence. JSC E4 Group has become a large holding, which
includes companies of various orientation located within the entire territory of Russia: design institutes,
construction and installation companies, enterprises manufacturing process equipment.
In order to support implementation of projects using internal resources through combination of
various companies of the Group within a single project, the main objectives of JSC E4 Group in part of
corporate governance are as follows:
 Achievement of integration cooperation of separate companies of the Group within the business
of the Holding as a whole;
 Consolidation of positions of multiple shareholders / participants of enterprises included into E4
Group;
 Efficient organsation and coordination of interaction of all companies between each other, and
also with the environment;
 Provision of unity in planning, setting tasks and monitoring of their completion;
 Efficient management of current business of the companies.
Management of E4 Group companies is built on the system of making decisions by collective
management bodies (boards of directors) of subsidiaries and affiliates, the competence of which cover a
wide spectrum of issues taking into account the specific nature of each company's business.
The vertical system of corporate governance makes it possible for the management of the parent
company to solve strategic objectives through involvement of each separate entity of the Group in this
process.
The Company management follows best Russian and international practices of corporate
governance, strives to improve quality of holding management, provides for strict observance of
legislation requirements, rights and interests of other shareholders of the Group companies.
9.1. Principles of Company corporate governance
Management by JSC E4 Group and companies of the Group is carried out on the basis of the
following principles of corporate governance:
Efficient distribution of competence
Establishment of efficient structure and optimal operation of
Divide et impera
management bodies of E4 Group of companies is achieved by strict
distribution of powers between executive branches, boards of directors
Divide and conquer
and general meetings of shareholders / participants.
The principle of competence division is implemented through
approval of policies and internal documents regulating powers of management bodies in JSC E4 Group
and its subsidiaries and affiliates. Therefore, apart from division of competence specified by the
mandatory legislative requirements, powers of a sole executive body in charge of operating management
on most important issues are additionally limited in favour of the Board of Directors representing interests
of shareholders and making strategic decisions on organisation of the appropriate company's business
and development and also supervision over its management activities.
Transparency and disclosure of information
The management of JSC E4 Group pays close attention to issues
Ubi facta loquuntrur nоn
of timely and accurate information disclosure. All companies of the
opus est verbis
Group strictly adhere to legislation in part of transparency of their
business and provision of requested information to shareholders, state
Where facts speak, words
authorities and all stakeholders.
are not required
For consistent and open communication with shareholders,
websites of the Group companies contain data on provision of documents to shareholders, with indication
of the procedure of their making and issue and also people in charge of their preparation.
Besides, corporate websites of the Holding companies contain the entire required volume of
information on business, management and internal documents of the companies. Special attention is paid
64
to updating, visualization and availability of information placed on webpages of JSC E4 Group and its
subsidiaries and affiliates.
Methodology and information exchange
To ensure efficient management, coordination and supervision
Ipsa scientia potestas est
over the business of the Group companies, a system of regular
information exchange was established in the Holding, also via active
The knowledge itself is
participation of the boards of directors in management of the
power
companies.
Information exchange makes it possible to take into account
features of business of each separate company within the Group, to consolidate positions of multiple
shareholders, to manage risks, to ensure unity of planning and setting tasks, as well as to efficiently
respond to arising problems in process of their completion.
Within the framework of the information exchange, the Group companies review management
reports to the Board of Directors on a quarterly basis in respect to completion of the business plan,
achievement of specified key performance indicators, special tasks, as well as reports on completion of
decisions made by boards of directors and general meeting of shareholders.
Lawfulness and control
Steady adherence to legislation requirements is the basic principle of
Dura lex sed lex
Group companies’ management. All decisions made on organisation of the
Holding business and internal documents prepared to develop them strictly
Law is harsh, but it's law
follow the mandatory requirements of the Russian Federation regulations
and laws. Besides, the company management adheres to the policy of
observing optional standards and recommended norms contained, for instance, in the Corporate Conduct
Code.
To ensure compliance with legal requirements and effective control of the business, special
subdivisions of internal audit and financial control were established in JSC E4 Group and the Group
companies, which report to the Board of Directors; the activities of the management are regularly
reviewed by the audit committees and external auditors.
Principal documents of corporate governance
The following internal documents containing rules and standards of corporate governance are
approved by JSC E4 Group:













Charter of JSC E4 Group
Regulation on the Order of Convening and Holding of the Meetings of the Board of Directors
Regulation on the Management
Regulation on the Audit Committee
Regulation on Preparation and Approval of Materials for Meetings of the Board of Directors
Standards of Corporate Operation
Standard of Efficient Minutes of Meeting
Standard on Disclosure and Provision of Information in Securities Market
Standard on Organisation of Efficient Work of the Board of Directors
Standard on Corporate Governance of Subsidiaries and Affiliates
Rules to Keep Register of Owners of Registered Securities
Regulation on Requirements to Format, Structure and Contents of the Annual Report
Plan of JSC E4 Group Board of Directors Work for the Next Period
Information on the Company's observance of the Corporate Conduct Code provisions
recommended by the Regulation of the Federal Commission for the Securities Market of Russia No. 421/r
dated April 4, 2002 is given in the Annex 1 to the Report.
65
9.2. Development of Company corporate governance
To achieve the objectives in the sphere of corporate governance set by the management of JSC E4
Group for 2011, the following actions were taken:
Within the framework of the objective to improve internal documents of the Company the following
was approved:
- Standards of corporate operation of JSC E4 Group
- Standard of Efficient Minutes of Meeting
- Standard on Disclosure and Provision of Information in Securities Market
- Standard on Organisation of Efficient Work of the Board of Directors
- Standard on Corporate Governance of Subsidiaries and Affiliates
- Regulation on the Management
Besides, a new version of the Company's Charter and Rules to Keep Register of Owners of
Registered Securities of JSC E4 Group were approved.
In order to build the optimal management system, plants of board of directors work were approved
in JSC E4 Group and all companies of the Group, a system of business planning, KPI and special task
setting for each company of the Group was established. To motivate the management, bonuses are paid
depending on completion of tasks set, achievement of specified indicators.
The system of quarterly reports by the General Directors of the Group of companies to boards of
directors has been introduced on all main activities, also on fulfillment of decisions made by the general
meetings of shareholders and boards of directors.
In the reporting year the special attention was paid to improvement of corporate sites of E4 Group
of companies in the Internet. Thus the structure of the section "For Shareholders and Investors" on the
webite of JSC E4 Group was modified, the website of JSC Siberian ENTTs was completely changed.
Employees of the Corporate Procedures Organisation Department of JSC E4 Group in 2011
received further training under programmes "Special (extraordinary) transactions in JC: purchasing more
than 30% of shares, large transactions and related party transactions" and "Corporate transactions:
relevant legal and practical issues".
Apart from the above, improvement of corporate governance in the reporting year found its
reflection in establishment of a collective executive body of JSC E4 Group – the Management, which
made it possible to considerably increase quality and efficiency of taken management decisions.
9.3. Information about the management and control bodies of
the Company
Sole
Shareholder
External Control
Board of Directors
Auditor
Committees of the Board of Directors:
Human Resources, Remunerations and
Personnel Development; Audit Committee;
Technical Policies, Procurement and
Investments;
Economics, Finance and Development
Audit
Committee
Internal Control
Financial Controller
(functions
performed by
Directorate for
Internal Control)
Management
General Director
66
9.3.1. Sole shareholder
In 2011 the sole shareholder of JSC E4 Group took 8 decisions:
Date
Issue
21.01.2011
On approval of transactions to establish the Consortium and participate in the tender
on the project "Construction of the high-voltage line 220 kV "Chernyshevsk – Mirniy –
Lensk – Peleduy", the Republic of Sakha (Yakutia)"
02.06.2011
1. On approval of a new version of the Company Charter
2. On approval of the Regulation on the Management of JSC E4 Group
30.06.2011
1. On approval of the annual report, the annual financial statements, including the
profit and loss statement of the Company for 2010, and also on distribution of profit
(also on payment of dividends) and losses of the Company following the results of the
2010 financial year
2. On election of the members to the Board of Directors of the Company
3. On election of the members to the Audit Committee of the Company
4. On approval of the Company's Auditor
20.07.2011
On approval of a related party transaction, the subject of which is property with cost
of more than 2% of the Company's assets balance cost2
18.08.2011
On approval of related party transactions that may be closed in the future
01.09.2011
1. On approval of a new version of the Company Charter
2. On approval of a related party transaction, the subject of which is property with
cost of more than 2% of the Company's assets balance cost
03.10.2011
On approval of related party transactions that may be closed in the future
15.12.2011
On approval of a related party transaction, the subject of which is property with cost
of more than 2% of the Company's assets balance cost
9.3.2. Board of Directors
The Board of Directors of JSC E4 Group is a management body, the competence of which covers a
broad range of the Company's activities as specified by the Company's Charter: from the development
strategy for the Company, approval of annual business plans, list and descriptions of key performance
indicators, to preliminary approval of the most important transactions executed by the Company and
regulation of the main processes in JSC E4 Group and review of the Company management reports on
their activities.
Issues falling within the competence of the Board of Directors can be found on the corporate
website of JSC E4 Group: http://e4group.ru/?id=64.
In 2011 the meetings of the Board of Directors of JSC E4 Group were held on a regular basis
twice per month in accordance with the approved Plan of the Company's Board of Directors Work for
2011. Out of 37 meetings of the Board of Directors, 11 were off-schedule.
2
See details in the Annex
67
Key decisions by the Board of Directors of JSC E4 Group taken in 2011
Date
Issue
15.04.2011
On leasing a caterpillar crane Liebherr LR 1750
10.05.2011
On election of V.V. Kalinin the General Director of the Company
02.06.2011
1. On recommendations to the sole shareholder of the Company on the issue of
approving the new version of the Company's Charter.
2. On recommendations to the sole shareholder of the Company on the issue of
approving the Regulation on the Management of JSC E4 Group.
03.06.2011
On identification of the Company's Management numerical composition and
election of its members.
15.12.2011
On establishment of the Open Joint-Stock Company E4 Group in the Republic of
Belarus.
The Board of Directors of JSC E4 Group consists of 6 members, 4 of which are independent
directors (N.V. Stepanov, A.N. Lavrov, O.N. Serebrennikov, E.A. Balakin).
Composition of the Board of Directors of JSC E4 Group in 2011
1) The composition of the Board of Directors acting from November 15, 2010 (Resolution by the
sole shareholder No. 31) to June 29, 2011 (inclusive):
1. Abyzov Mikhail Anatolievich;
2. Stepanov Nikolay Vladimirovich;
3. Nikitin Daniil Nikolaevich;
4. Serebrennikov Oleg Nikolaevich;
5. Sobolev Evgeny Viktorovich;
6. Lavrov Aleksey Anatolievich.
2) The composition of the Board of Directors acting from June 30, 2011 (Resolution by the sole
shareholder No. 34) to January 15, 2012 (inclusive):
1. Abyzov Mikhail Anatolievich;
4. Serebrennikov Oleg Nikolaevich;
5. Balakin Evgeny Anatolievich;
6. Lavrov Aleksey Anatolievich;
7. Kalinin Vladimir Vasilievich.
3) By the resolution of the sole shareholder on January 16, 2012 (Resolution No. 40) the following
members were elected to the Board of Directors of the Company:
2. Kalinin Vladimir Vasilievich;
3. Lavrov Aleksey Anatolievich;
5. Balakin Evgeny Anatolievich;
6. Serebrennikov Oleg Nikolaevich.
68
Information on the Members of the Board of Directors
Abyzov Mikhail Anatolievich
Year of Birth: 1972
Education: higher education, Lomonosov Moscow State University, Faculty
of Economics
Positions held in the last five years:
2004–2005:
Member of the Management of JSC RAO UES of Russia,
Managing Director of Business Unit No. 1
2005–2006:
General Director of JSC UK Kuzbassrazrezugol
2006–January 16, 2012: Chairman of the Board of Directors, LLC RU-COM.
Citizenship: Russian Federation
Stepanov Nikolay Vladimirovich
General Director, LLC RU-COM
Year of Birth: 1974
Education: higher education,
1996: Irkutsk State Economic Academy, majored in "State and Regional
Management"
1998: All-Russian Academy of Foreign Trade, Ministry of Trade of the
Russian Federation, foreign trade management
2005–2007:
Deputy Chairman of the Management – Executive Director
of the Management of the JSC Russian Communal Systems
2008–2009:
Deputy General Director for Management – Head of the
Management Centre of LLC RU-COM
2009–present time: General Director LLC RU-COM
Lavrov Aleksey Anatolievich
Deputy General Director for Economics and Finance: LLC RU-COM
Year of Birth: 1973
Education: higher education:
2007: Antwerp University Management School (UAMS), Executive MBA
1996, 1997: Baltic State Technical University, St. Petersburg, Manager,
Mechanical engineer
2005–2006:
Head of Financial Planning Department of LLC
Gazpromenergo
2007–2008:
Deputy Executive Director – Head of Economic and Finance
Department of JSC Russian Communal Systems
2008–2009:
Financial Director of CJSC Eurasia-EnergoService
69
Nikitin Danil Nikolaevich
Deputy Chairman of the Board of Directors of JSC E4 Group
Year of Birth: 1972
Education: higher education, Finance Academy under the Government of
the Russian Federation, specialisation "Finance and Credit"
2004–2005:
Deputy Managing Director, Executive Director of Business
Unit No. 1 JSC RAO UES of Russia
2005–2006:
First
Deputy
General
Director
of
CJSC
UK
Kuzbassrazrezugol;
2006–2009: General Director, LLC RU-COM
from September 2009 to May 10, 2011: General Director of JSC E4 Group
Serebrennikov Oleg Nikolaevich
Deputy General Director for Technical Policy and Investments of
LLC RU-COM
Year of Birth: 1968
Education: higher, Chita Polytechnic Institute, Hydraulic Engineer
2004–2007: Chief of the Production and Technical Department of OJSC
Russian Communal Systems
2008– 2009: Deputy Head of the Management Centre of LLC RU-COM
Sobolev Evgeny Viktorovich
Deputy General Director LLC RU-COM for Public Relations
Year of Birth: 1973
Education: higher, Military University of the Ministry of Defence of the
Russian Federation, linguist, intercultural communications (Arabic, English)
2005–2006:
PR consultant of the General Director of CJSC UK
Kuzbassrazrezugol
Balakin Evgeny Anatolievich
Security Director, LLC RU-COM
Year of Birth: 1955
Education: higher education, Omsk Higher Police School
2006–2008:
Deputy Security Department Director, The Oil Transporting
Joint Stock Company Transneft
2008–2009:
Deputy Security Department Director, State Corporation
Olympstroy
70
Kalinin Vladimir Vasilievich
General Director of JSC E4 Group
Year of Birth: 1959
Education: higher education, Ukhta Industrial Institute, specialisation
"Mining Engineer on Development of Oil and Gas Deposits"
2000–2007:
First Vice-President of Transneft
2007–2008:
Member of the Management of the State Corporation
Olympstroy
2008–2009:
Deputy Chairman of the Management of JSC FGC UES
2010–2011:
Vice-President of TNK-BP
Has state awards, including Order of Friendship.
Members of the Board of Directors do not own Company shares, during the reporting period
no transactions on acquisition or carve-out of the Company shares
were made.
Committees of the Board of Directors
Committees of the Board of Directors are special permanent bodies established by the Board of
Directors and responsible for efficient implementation of management and control functions of the Board
of Directors in the spheres that are most important for the successful business of the Company, through
preliminary review of issues referred by the Company's Charter to the competence of the Board of
Directors. Resolutions by the committees are of advisory nature.
The following Committees of the Board of Directors of JSC E4 Group were established and are
currently in action by the resolution of the Board of Directors dated January 29, 2010 (Minutes No. 73):
 Audit Committee
 Human Resources, Remunerations and Personnel Development Committee
 Technical Policies, Procurement and Investment Committee
 Economic, Finance and Development Committee
Economic, Finance and Development Committee
Committee Objectives:
 Formation of policies, as well as approval, coordination and control of the Company's activity in
the field of economics and finances;
 Control over payment discipline and effective functioning of the system of execution of the Cash
Flow Budget;
 Coordination and organisation of Company's actions aimed for optimisation of its financial and
economic condition;
 Preliminary consideration and issue of recommendations on a range of issues within the
competence of the Board of Directors of the Company.
Technical Policies, Procurement and Investment Committee
 Optimisation of investment and production processes to improve technical condition of the
Company, provision of quality materials required for adoption of corporate decisions by the General
Shareholders’ (Participants') Meeting and the Board of Directors of the Company;
 Control over revenue and expenses parts of the investment budget and over production costs;
 Provision of payment discipline and effective functioning of the system of execution of the
investment budget;
 Coordination and organisation of actions of the executive bodies of the Company with the
purpose to improve technical condition of the Company through optimisation of investment and
production processes;
71
 Provision for effective operations and control over procurement;
Human Resources, Remunerations and Personnel Development Committee
 Formation of policies, as well as approval, coordination and control of the Company's activity in
the field of human resources, remuneration and organisational development;
 Coordination of the Company's activities in formation of effective business processes;
 Formation of proposals (recommendations) regarding the candidates for position of the sole
executive body and other official positions within the Company;
 Formation of proposals (recommendations) regarding the remuneration system for the sole
executive body and other officials within the Company;
 Analysis and assessment of actions of the sole executive body and other officials of the
Company;
Audit Committee
Committee Objective:
 Preliminary consideration and recommendations in relation to the candidate for position of the
Auditor of the Company, remuneration of the Audit Committee of the Company and payment for services
of the Auditor of the Company, as well as in relation to the range of issues within the competence of the
Board of Directors of the Company.
9.3.3. The Management
On June 2, 2011 a collective executive body – the Management – was established in JSC E4
Group.
The Company Management is responsible for practical implementation of objectives, development
strategy and policy of the Company and manages the current business of the Company within the
competence identified by the Company's Charter, resolutions by the sole shareholder and the Board of
Directors of the Company.
Main objectives of the Company's Management are as follows:
(а) Supporting observance of rights and legal interests of the Company shareholder;
(b) Development of proposals on the development strategy of the Company (including branches
and representative offices) and its subsidiaries and affiliates;
(c) Development and implementation of the Company's business policy, making decisions on
important issues of its current business and coordination of its divisions operation;
(d) Increased efficiency of internal control and risk monitoring systems;
(e) Provision for high level of Company assets profitability and maximum profit from the Company's
business.
Compositions of the Management:
1) From June 03, 2011 (Minutes of the Meeting of the Board of Directors No. 116) to August
15, 2011:
1. Kalinin Vladimir Vasilievich (Chairman of the Management);
2. Khaydarov Farit Rifovich;
3. Zagretdinov Ilias Shamilevich;
4. Umrikhin Alexander Anatolievich;
5. Khmaruk Nikolay Petrovich;
6. Shmakov Maxim Evgenievich;
7. Starshinova Olga Viktorovna;
8. Grigoriev Sergey Viktorovich;
9. Molchanov Dmitry Evgenievich;
10. Melyakin Yury Ivanovich;
11. Artemiev Yury Anatolievich;
12. Blokhina Svetlana Vladimirovna;
13. Anisimov Vladimir Leonidovich.
72
2) From August 15, 2011 (Minutes of the Meeting of the Board of Directors No. 122) to
September 30, 2011:
9. Blokhina Svetlana Vladimirovna;
3) From September 30, 2011 (Minutes of the Meeting of the Board of Directors No. 126) to
January 30, 2012:
3. Martianova Elena Mikhailovna;
4) By the resolution of the Board of Directors on January 30, 2012 (Minutes No. 139), the
following were elected as the members to the Management of the Company:
3. Martianova Elena Mikhailovna;
Information on the members of the current Management
(as of the moment of the Annual Report approval)
Chairman of the Management
Year of Birth: 1959
2000–2007: First Vice-President of Transneft
2007–2008: Member of the Management of the State Corporation
Olympstroy
2008–2009: Deputy Chairman of the Management of OJSC FGC UES
2010–2011: Vice-President of TNK-BP
73
Khaydarov Farit Rifovich
First Deputy General Director on Operations
Year of birth: 1966
Education: higher education, Ufa Oil Institute, specialisation "Agricultural
water supply, watering and protection of water resources", Cand. Sc.
(Engineering).
2005–2007: General Director, JSC Project Management Centre Stroyneft
2007–2008: Vice President – Executive Director on Sochi, State Corporation
Olympstroy
2008–2011: management positions in CJSC VNIIST – Diagnostika, JSC FGC
UES, JSC TNK-ВР management
Martianova Elena Mikhailovna
First Deputy General Director for Economics and Finance
Year of birth: 1963
Education: higher education, Moscow Power Engineering Institute,
specialisation "Cybernetics of electric systems"
2007–2008: Deputy Centre Supervisor-Unit Supervisor in the Engineering
and Construction Management Centre in OJSC RAO UES of
Russia
2008–2011:
Deputy General Director for Economics and Finance OJSC
Engineering and Construction Management Centre of Unified
Energy System
Zagretdinov Ilias Shamilevich
First Deputy General Director - Technical Director
Year of birth: 1956
Education: higher education, Moscow Power Engineering Institute,
specialisation "Thermal power plants",
Moscow Management Institute, specialisation "Organisation and
management in power engineering"
2004–2008:
Deputy Managing Director, Business Unit No.1 JSC RAO UES
of Russia
2008:
General Director of OJSC TGK-14
Umrikhin Alexander Anatolievich
First Deputy General Director – Executive Director, BU 1 –
Commercial Director
Year of birth: 1967
Education: higher education, Ivanovo Power Engineering Institute,
specialisation "Automation of technological processes and production (by
branches)"
2007:
Deputy General Director for Capital Construction JSC OGK-3
2007–2008:
Director for Projects Implementation LLC ERA, Holding
Complex Energy Systems
2008–2011:
Deputy General Director for Capital Construction JSC
Quadra
74
Grigoriev Sergey Viktorovich
Deputy General Director for General Issues
Year of birth: 1959
Education: higher education, Grozny Oil Institute, specialisation "Machines
and equipment of oil and gas fields"
1999–2007:
Vice-President of JSC Transneft
2007–2008:
Vice President for General Issues, Branch of State
Corporation Olympstroy
Melyakin Yury Ivanovich
Deputy General Director for Security
Year of birth: 1959
Education: higher education, Tyumen Higher Police School, Ministry of
Internal Affairs, Russian Federation, specialisation "Science of law"
2006–2007: Consultant to Chairman of the Management, OJSC CB
Stroykredit
2007–2009: Deputy Chairman of the Management, OJSC CB Stroykredit
2009–2010: Security Department Manager, OJSC Sibibank
Anisimov Vladimir Leonidovich
Deputy General Director for Legal Issues
Year of birth: 1966
Education: higher education, Belarus Polytechnic Institute, specialisation
"Power plants"
International Law and Economics Institute named after A.S. Griboedov,
specialisation "Legal studies"
2005– 2006: Deputy General Director for Corporate Governance, JSC
Lenenergo
Lysyaniy Konstantin Kirillovich
Deputy General Director for Supplies
Year of birth: 1960
Education: higher education, Ivano-Frankovsk Oil and Gas Institute,
qualification "Mining engineer"
2007–2008:
Deputy General Director for Production – Chief Engineer,
General Director, CJSC Transport Company LUKoil-Trans
2009–2010:
Deputy General Director for Production, JSC ESKO UES
2011–2012: General Director, LLC E4-Magistral
75
Cherepanov Vladimir Vladimirovich
Deputy General Director for Inspections
Year of birth: 1963
Education: higher education, Moscow Finance Institute, specialisation
"Accounting and analysis of economic activities"
2000–2011:
worked in the investment and production group "GUTA" at the
positions of the First Deputy Supervisor of Internal Control
Service, Deputy Chairman of the Management, Vice President
CJSC Guta-Insurance, First Vice President OJSC GUTA-Bank
Bondarev Vladimir Ignatievich,
Deputy General
energoholding
Director
for
Turnkey
Projects,
Gazprom
Year of birth: 1954
Education: higher education, Belarus Institute of Agricultural Mechanization,
specialisation "Use of electric power in farming"
2004–2011:
Deputy General Director for Construction, Chief Engineer,
Deputy General Director for Operation in Foreign Enterprise
Lukoil-Belarus
2012:
Manager of Representative Office of JSC E4 Group in the
Republic of Belarus
Members of the Management do not own Company shares, during the reporting period no
transactions on acquisition or carve-out of the Company shares were made.
76
Information on the members of the earlier Managements
Artemiev Yury Anatolievich
Year of Birth: 1961
Education: higher education, Almetievsk Oil Technical College, specialisation "Operation of oil and gas
wells", Moscow State Open University, specialisation "Designing, erection and operation of gas and oil
pipelines and gas and oil storage tanks"
Positions held in the last five years
2011:
Deputy General Director for Capital Construction JSC E4 Group
2010–2011:
Director for Capital Construction UKP BN PIT
2009–2010:
First Deputy General Director in Engineering and Construction Management Centre of
UES, FGC UES
2008–2009:
Head of Capital Construction Department in CJSC VNIIST-Diagnostika
2007–2008:
Head of Trade Department, State Corporation Olympstroy
Khmaruk Nikolay Petrovich
Year of birth: 1970
Education: higher education, Moscow State Institute of Foreign Affairs (Univesity), Ministry of Foreign
Affairs of Russia, specialisation "Foreign economic relations"
2010–2012:
Deputy General Director for Turnkey Projects Gazpromenergoholding, JSC E4 Group
2009–2010:
Deputy General Director for Grid Construction CJSC Intertehenergo
2007–2008:
Consultant to General Director OJSC IDGC of Volga
Starshinova Olga Viktorovna
Year of birth: 1954
Education: higher education, Moscow Power Engineering Institute, specialisation "Heating Engineer"
2007–2011:
Deputy General Director for Sales, JSC E4 Group
2004–2007:
Deputy Head of Logistics and Procurement Department OJSC RAO UES of Russia
Blokhina Svetlana Vladimirovna
Year of birth: 1966
Education: higher education, Kalinin State University, mathematician, teacher
Moscow State University, postgraduate course, PhD, management sociology
2008–2011:
Deputy General Director for HR Management, JSC E4 Group
2007–2008:
HR Director, JSC Company Rubin
Shmakov Maxim Evgenievich
Year of birth: 1974
Education: higher education, Astrakhan State Technical University, specialisation "Accounting and audit"
2006–2011:
Deputy General Director for Economics and Finance, JSC E4 Group
Molchanov Dmitry Evgenievich
Year of birth: 1976
Education: higher education
2010–2011:
Deputy General Director for Supplies, JSC E4 Group
2010: General Director of LLC ESSK-Invest
2007–2010: Commercial Director of LLC ESSK-Invest
77
9.3.4. General Director
Nikitin Danil Nikolaevich
(until May 10, 2011)
Year of Birth: 1972
Education: higher education, Finance Academy under the
Government of the Russian Federation, specialisation "Finance and
Credit"
2004–2005:
Deputy Managing Director, Executive Director of Business Unit No. 1
JSC RAO UES of Russia
2005–2006:
First Deputy General Director of CJSC UK Kuzbassrazrezugol;
2006–2009:
General Director, LLC RU-COM
from September 2009 to May 10, 2011:
Citizenship: Russian Federation.
Share in the Company's chartered capital: none.
Share of own ordinary shares of the Company: none.
Information on transactions to acquire or carve out the
Company shares made in the reporting year: none.
(from May 11, 2011)
Year of Birth: 1959
2000–2007:
First Vice-President of Transneft
2007–2008:
Member of the Board of the State Corporation Olympstroy
2008–2009:
Deputy Chairman of the Board of JSC FGC UES
2010–2011:
Vice-President of TNK-BP
Share in the Company's chartered capital: none.
Share of own ordinary shares of the Company: none.
Information on transactions to acquire or carve out the
Company shares made in the reporting year: none.
78
9.3.5. Audit Committee
To control the commercial and financial activities of the Company, the General Shareholders'
Meeting annually elects an Audit Committee, which has a broad range of powers allowing it to effectively
execute its duties. Competence of the Audit Committee is determined by the Charter of the Company, and
its procedures – by the Regulation on the Audit Committee, JSC E4 Group.
Before June 29, 2011 the Audit Committee elected by the resolution of the sole shareholder of the
Company on June 30, 2010 (Resolution No. 29) operated with the following members:
1. Lavrov Mikhail Vladislavovich
2. Snisar Galina Vladimirovna
3. Pilipenko Marina Petrovna
By the resolution of the sole shareholder on June 30, 2011 (Resolution No. 34) the Audit
Committee was elected with the following members:
1. Lavrov Mikhail Vladislavovich
2. Snisar Galina Vladimirovna
3. Skakalin Evgeny Sergeevich
Lavrov Mikhail Vladislavovich
Deputy Director for Internal Control of LLC RU-COM
Year of birth: 1966.
2006–2009: Head of the Financial Audit Department of CJSC Complex Energetic systems
Snisar Galina Vladimirovna
Chief Expert of the Directorate of Internal Control of LLC RU-COM
Year of birth: 1963.
Education: higher education.
2005 –2009: Head of the Regional Department of Internal Audit, Head of Department of Planning
and Control of JSC TNK-BP Management
Skakalin Evgeny Sergeevich
Year of birth: 1983
2007: Assistant Auditor, LLC Respekt-Audit
2007–2009: Assistant Auditor of the Representative Office in Volgograd and Volgograd Region,
CJSC Auditing and Consulting Group "Development of Business Systems"
2009: Expert of 1st category of Field Audit Department, Federal Tax Agency Inspectorate of the
Central District, Volgograd
2009–2010: Tax Consultant, LLC Legal Supermarket
Pilipenko Marina Petrovna
Year of birth: 1982
2005–2010: Chief State Tax Inspector of the Department of Field Audits of the Russian Federation
Federal Tax Agency Inspectorate No. 5 of the City of Moscow
2010–07.2010: Chief Expert of the Directorate of Internal Control of LLC RU-COM
Members of the Audit Committee do not own Company shares, during the reporting period no
transactions on acquisition or carve-out of the Company shares were made.
79
9.3.6. Financial Controller
In accordance with the Regulation on Internal Control of Finance and Business Activities of JSC E4
Group the functions of the Financial Controller are carried out by the Internal Control Directorate, which
is a structural subdivision of the Company.
Main functions of Financial Controller:






Establishment of the internal control system in the Company, identification of internal
control activities, detection, analysis and control of risks.
Organisation and implementation of financial control in the Company in accordance with
the Regulations on Financial Control in the Company approved by the Board of Directors of
the Company.
Inspection of procurement activities in the Company.
Assessment of economic feasibility and efficiency of transactions made by the Company.
Detection of prerequisites and conditions for losses, shortages and fraud with the Company
resources.
Inspections of the Company's financial and economic activities.
Internal control over financial and commercial activities of the Company is carried out in
accordance with the requirements of existing legislation of the Russian Federation, the Company's
Charter, Regulation on the Board of Directors of the Company, Regulation on Internal Control over
Financial and Commercial Activities of the Company, and also Regulation on Organisation of Financial
Control.
9.4. Remunerations and compensations to the members of the
management and control bodies of the Company
9.4.1. Remunerations and compensations to executive bodies
By Resolution of the Sole Shareholder of the Company No. 25 dated April 13, 2009 the new version
of the Regulation on Payment to the Members of the Board of Directors of JSC E4 Group of
Remunerations and Compensations was approved providing for no payment of any remuneration for the
members of the Board of Directors for their work as such members.
Therefore, no remuneration was paid to the members of the Board of Directors of JSC E4 Group for
2011.
The total remuneration to the members of the JSC E4 Management (proportionately to the
duration of their membership in 2011) made 102,565,880 RUR.
9.4.2. Remunerations and compensations to members of the Audit Committee
By Resolution of the Sole Shareholder of the Company No. 25 dated April 13, 2009 the new version
of the Regulation on Payment to the Members of the Audit Committee of JSC E4 Group of Remunerations
and Compensations, providing for payment for participation in audit (review) of the financial and
commercial activities to each member of the Audit Committee in the amount equal to six and a half
minimum wages used to manage labour remuneration and established by the federal law as of the date
of completion of the audit (review).
In the reporting year no remunerations (compensations) were paid to the members of the Audit
Committee.
80
9.5. Corporate Secretary of the Company
In accordance with the subclause 20 of the clause 14.1 of the Company's Charter, to organise
activities of the Board of Directors of the Company, the Board of Directors elects a Corporate Secretary,
and also a person is assigned to perform the functions of the Corporate Secretary for the period of its
temporary absence (acting Corporate Secretary).
In accordance with the Charter of JSC E4 Group, a broad range of issues fall within the competence
and functions of the Corporate Secretary, including:
 Preparation (approval) of all materials submitted for consideration of the Company's Board of
Directors;
 Assistance to the members of the Board of Directors in obtaining information they require to
perform their functions;
 Clarification to the members of the Board of Directors of the requirements of the current laws of
the Russian Federation, the Charter and the internal documents of the Company in relation to procedural
issues for the preparation for and holding of meetings of the Board of Directors;
 Review of all transactions executed by the Company to ensure their compliance with the
corporate (shareholding) laws;
 Disclosure (provision) of information about the Company;
 Corporate management of E4 Group companies, etc.
By the Resolution of the Board of Directors dated April 15, 2009 (Minutes No. 49), the following person
was elected as the Corporate Secretary of JSC E4 Group
Dubinsky Evgeny Sergeevich
Director for Corporate Management
Year of Birth: 1977
Education: higher education, the People's Friendship University of Russia,
Faculty of Law
2005–2006: Chief of the Corporate Management Department of Business
Unit No. 1 JSC RAO UES of Russia
2006–2009: Chief of the Corporate Management Department of LLC RUCOM
Acting Corporate Secretary of the Company
In accordance with the Company Charter, for the period of temporary absence of the Corporate
Secretary of the Company (business trip, vacation, sick leave), its functions are performed by a person
authorized to do so by the Resolution of the Board of Directors of the Company (acting Corporate
Secretary).
By the Resolution of the Board of Directors of the Company dated June 30, 2011 (Minutes No. 118) the
person elected as authorized to perform functions of the Corporate Secretary for the period of its
temporary absence is
Stodolnikova Yulia Vyacheslavovna
Chief Legal Counsellor of Corporate Procedures Organisation
Department
Year of birth: 1983
Education: higher education, Moscow State Law Academy, Russian School
of Private Law (Institute)
2006–2009:
lawyer, Bar Association "Sergunin and Partners"
81
9.6. Auditor of the Company
Legal Name
Limited Liability Company
RSM Top-Audit, LLC RSM Top-Audit
Location
119017, Moscow, Bolshaya Ordynka str., 54, bld.2
Contact Details
tel.: (495) 363-28-48;
fax: (495) 981-41-21;
mail@top-audit.ru, omakarov@top-audit.ru
Audit License Details,
Full Name and Location of the Self
Regulatory Organisation of Auditors,
where the Auditor is a member
License No. E004827 to carry out audit, valid until August 1,
2013.
LLC RSM Top-Audit is a member of the self-regulatory
organisation Non-commercial Partnership Russian Collegium of
Auditors
(membership
certificate
No. 984-yu,
ORNZ
10305006873), location: 107045, Moscow, Kolokolnikov per., 2.
Not more than 1,000,000 RUR (VAT excluded), approved on
September 15, 2011 by the Board of Directors of the Company
(Minutes No. 124)
Total Auditor's Fee
9.7. Securities of the Company
9.7.1. Shareholder's capital
The charter capital of the Company amounts to 490,000,000 RUR.
Number of issues and outstanding ordinary shares: 490,000,000 pcs., par value of 1 RUR each.
The Company did not issue preference shares.
100% shares of the Company belong to the sole shareholder – the company EFORG ASSET
MANAGEMENT LIMITED. There are no own shares in the balance of the Company.
9.7.2. Issue and handling of shares in the market
JSC E4 Group issued the following sets of ordinary shares:
1. Ordinary registered shares:
 State registration number: 1-01-11519-А.
 Date of state registration of the securities issue: July 31, 2006.
 Authority that performed the state registration of the securities issue: Regional Branch of the
FSFM of Russia in the Central Federal District.
 Par value of each security in the issue: 1 RUR.
 Number of the placed securities in the issue 30,000,000 pcs.
 Date of state registration of the securities issue report: July 31, 2006.
 Placement method: distribution of shares among the founders of the joint-stock company.
2. Ordinary registered shares (additional issue):
 State registration number: 1-01-11519-А-001D;
 Date of state registration of the additional securities issue: October 14, 2008;
 Authority that performed the state registration of the additional securities issue: FSFM of
Russia;
 Par value of each security in the additional issue: 1 RUR;
 Number of placed securities of the additional securities issue: 460,000,000 pcs.;
 Date of state registration of the additional securities issue results report: January 13, 2009;
 Method of placement of securities of the additional issue: private subscription in favour of the
sole shareholder of the Company.
By the resolution of the FSFM of Russia on August 05, 2010 the individual number (code) 001D
was cancelled.
Securities of JSC E4 Group are not traded on the stock market.
82
9.8. Dividend History
Information on the distribution of profits of the Company in accordance with the decisions of the
General Shareholders' Meetings of the Company for the past three years is shown in the table below.
K RUR
2008
Profit distribution
Leave within undistributed profit
23 665
Reserve fund
1 246
2009
2010
23 098
1 400
Investments
1 326 022
Other expense items
920 012
Dividends
638 253
0
The General Shareholders' Meeting made no decisions on the payment of interim dividends on
shares of the Company during the period in question.
As of the moment of approval of the Annual Report the dividends for 2009 were paid in full.
9.9. Participation of JSC E4 Group in other organizations
 LLC ESSK-Invest
 LLC E4-Magistral
 LLC NPP-Buran
 JSC E4-Sevzapenergoservis
 JSC e2
 CJSC Siberian ENTTs
 JSC E4-SibCOTES
 JSC Bureyagesstroy
 PJSC KIEP
 JSC Dalenergomontazh
 JSC Sibenergostroy
 JSC E4-CEM
 JSC Sibtekhenergo
 JSC NPO CKTI
 JSC Elektrocentromontazh
Detailed information on the main companies included into E4 Group, their business and
performance is given in the Sections 4 and 5 of the Report.
JSC E4 Group is a member of the Self Regulatory Organisation of Non-Commercial Partnership
"Union of Companies Performing Architectural and Construction Design of Nuclear Industry Facilities"
SOYUZATOMPROEKT (registration number in the state register of self regulatory organizations dated
June 30, 2009 No. SRO-P-010-30062009).
83
10
84
SECTION 10. HR- AND SOCIAL POLICY
10.1. Primary principles of HR- policy in the Company
The principles of HR- policy in the Company in 2011 met the goals of transformation of the Company
into a modern high-tech enterprise conducting different projects in the energy area, capable to compete
efficiently within the market of engineering services and to develop new activities by taking into account
requirements of the market. That’s why HR- policy of the Company is based on proper manpower
deployment, creating conditions for the most complete application of unique knowledge and skills of the
Company employees, as well as maintaining the personnel, formation of professional and highly productive,
team-oriented personnel.
The main principles of HR- policy
Cost effectiveness: any expenditure for any HR- measures must be paid off and produce financial
performance results of the Company.
Equal share: balance the individual interests of the employees and the Company.
Results: all HR-related measures should be aimed for increase of personnel productivity.
Prospects: all HR-related measures should be pro active.
Priorities of HR- policy in 2011
 Recruitment and maintenance of qualified, resilient and loyal
employees, aimed at long-term and efficient work
 Formation of a close-knit team of fellow-thinkers
 Development of professional competences of personnel
 Maintenance and further development of the competences in
conducting the Company projects in combination with search and
application of new progressive ideas
 High-quality and full-scale training of the Customers’ personnel
in operating and maintenance of the plant units constructed by JSC Е4
Group
 Rising of the Company image in the labour market as that of an
attractive employer.
High-rise erection at construction of the Bureyskaya HPP
10.2. Personnel development tasks for the reporting period and
measures taken
10.2.1 Personnel training and development in the Company
Orientation of JSC Е4 Group policy in the area of personnel development and training determines
strategic goals and tasks of the Company. The choice of the contents and forms of the Company personnel
training comes from a rising competition in the engineering services and a necessity of the fastest
acquirement of present knowledge and innovative technologies in solving professional tasks by the Company
key specialists and managers.
In 2011 compulsory training programmes of operational personnel and the personnel training within
business needs were developed and carried out.
As such, with the aim of compliance to the regulatory authorities requirements as to safe working
practices, JSC Е4 Group puts into practice the compulsory training programme of operational personnel, that
takes target preparation on a regular basis with subsequent mandatory induction qualification aimed at
obtaining competence certificates for the jobs mainly carried out within the main construction trade projects
accomplishment. In 2011 more than 500 employees completed their training in the following areas:
 Work safety
85
 Basics of fire safety
 General requirements of industrial safety
 Gas distribution and consumption objects
 Safe operation of pressure equipment
 Safety rules for lifting appliances and mechanisms
 Requirements for work procedure of electricity generating equipment
 Requirements for work procedure at heating plants and heat supply networks
 Requirements for work procedure at electric power stations and networks
 Visual inspection of painting works’ quality, etc.
Besides, JSC Е4 Group puts into practice personnel development programmes. In 2011 more than 150
employees of production engineering services completed their specialized qualification courses in the
following directions:
 Commissioning of automatic equipment, power supply, protective relay devices, power and
instrument transformers, hot-water boilers and boilers for central heating
 Works on management of construction, reconstruction, major repairs and building inspection
implementation on AE usage objects
 Arrangement of power networks for voltage under 330 kV
 Environmental safety insurance when working in the area of hazardous waste management
 Energy inspection of objects
 Conducting of technical supervision over design and construction of gas distribution and
consumption systems
 Implementation of quality assurance management system in the flow of construction works. etc.
As a part of personnel qualification development programmes in 2011 the course of IAEA trainings
was carried out, the aim of which was competence developing in the area of project management and
monitoring with due consideration of the IAEA international industrial requirements.
Among the measures on competence developing in the area of project management we should
mention the workshops conducted within January and July, 2011, for the employees in training on how to
use Primavera software. In total more than 200 employees completed their trainings.
Due to the fact that operational personnel training is an essential priority of “The Company personnel
training and development” direction, in 2011 the corporate remote educational system “OLYMP: OKS” was
started in all enterprises of the Company. Such system allows not only to conduct training and certification
of employees according to the programmes of personnel compulsory training without interruption of main
activities, but also to improve qualification on the job by self-tuition in business activities. By means of
corporate remote educational system more than 400 employees of E4 Group got training in various areas.
The Company carries out educational activities for employees of non-production services of various
functional orientation:
 Price formation, budgeted norm setting and contract relations in construction
 Documentation check for construction, reconstruction and repair of major construction objects
 Purchasing activity arrangements within JSC Е4 Group
 Time management and many others.
In total, about 150 people got training in business-related needs of the Company.
Careful attention is paid to personnel training in the
area of Quality management system. In 2011 the Company
developed and carried out the programme “Quality
management system on basis of ISO standards series 9000:
JSC Е4 Group basic course”. Within period August to
December 2011 more than 100 people completed their
studies according to the programme.
For the top-management the Company holds activities
combining educational elements and advisory format. During
such activities called “strategic sessions” an exchange of
knowledge and experience, actualization of the Company
strategic plans and goals, management in changes in the Company take place. In 2011 we carried out a
schedule program of quarterly strategic sessions (total 4 sessions were held).
86
10.2.2. Training of Customer’s personnel
As Е4 Group is a full-cycle engineering Holding, the task of full-scale (“turn-key”) training of
Customer’s personnel in relation to operation and maintenance of constructed power facilities is included in
“turn-key” preparation of power units.
Contractual obligations of the Company as to training of operation and maintenance crews are carried
out in Complex educational programmes that are formed and put into practice according to the requirements
of generating companies toward their operating personnel training, with direct involvement of manufactures
and suppliers of equipment, partners in sub construction and commissioning as well as specialized training
centers.
Complex, systematic and centralized approach towards training of operation and maintenance
personnel allows us to carry out principles of successive training courses, to balance excess of educational
material, to react fast and flexible to changes of situations in construction sites, to adapt training process
according to work schedule of the employees and to the level of their initial training.
Training of the personnel of 115 MW CCGT unit
of Kurskaya TPP lasted for a year and a half and it was
completed in 2011, as well as the training project for
the personnel of 410 MW CCGT unit of Krasnodarskaya
TPP, started in 2010 and embodied more than 130 000
academic hours. Within the frames of above mentioned
project for the Customer personnel we carried out
training and certification in accordance with the
requirements of regulatory authorities; internship
programmes at active power plants; theoretic
education n specialized training centers on how to work
with equipment; practical training on how to work with
the equipment in the process of commissioning and
subcontracted works; training with simulators;
instructions, consulting services, etc.
Besides, within 2010 and 2011 the Company held 25 training courses for the personnel of 410 MW
CCGT unit of Nyaganskaya GRES.
For achievements in the area of relations with business partners and clients, the project «Training of
Customer’s Personnel in Relation to Operation and Maintenance of the “Turn-Key” Power Facilities» the Е4
Group JSC was awarded with Grand-Prix of PEOPLE INVESTOR contest.
10.2.3 Work with young specialists
Since 2010 JSC Е4 Group is taking an active part in the re-launching of Student Construction Teams
(SCT) and organizing of their work on the base of main construction trade projects sites.
For example, in 2011 JSC Е4 Group formed 2 construction teams, the number of students in them has
doubled (compared to year 2010) and came up to 40 students. The students of the following leading higher
educational establishments of energy industries were
engaged into the project – Ivanovo State Power
University (ISPU), Moscow Power Engineering
Institute (Technical University) (MPEI TU), Bryansk
State Technical University (BSTU).
When working in the Student Construction Teams the
students obtain real practical skills, adopt their senior
colleagues’
experience, get familiarized with
peculiarities and characteristics of modern power
engineering equipment and unique features of power
system objects construction.
87
With the aim of gaining more profound theoretical knowledge the participants of SCT went through
additional training in methodology of power engineering, modern equipment operation, as well as
requirements for work and industrial safety.
JSC Е4 Group pays close attention in order to attract promising, professionally trained youth. Selected
students are invited for practical training and pre-degree internship, subsequently the best of them are hired
by the Company.
In 2011, 22 students of specialized higher educational establishments were in training in JSC Е4
Group, 11 of them were afterwards hired by the Company. In total for the reporting year the Company hired
23 young specialists who graduated from specialized faculties of some specialized universities, some of them
participated in pre-degree studies or took part in E4 Group projects SSA-2010/2011.
23% of the hired young specialists got promoted within their first year of work.
With the aim of attracting students and young specialists, аs well as creating a positive image of the
employing Company the following measures were taken in 2011:
 Participation in preliminary
students for pre-degree internship
allocation
of
 Organization of pre-degree internship
 Allocation of high school post-graduates
 Organization of “Days of JSC Е4 Group”
 Making
partnership
agreements
specialized higher educational establishments
with
 Student Construction Teams
 Organization of additional trainings for
students in pre-degree internship with the aim of more
profound study of specific features of energy industry.
Day of JSC Е4 Group in MSU
10.3. Employees structure by categories, salary and labour
efficiency
Average scheduled number of employees of the Company (categories of administrative and
managerial personnel (AMP))
Number (empl.) / Share in the total number (%)
2009
Category
2010
2011
Average scheduled number of
employees
258
100%
415
100%
797
100%
Managers
81
31,4%
115
27,7%
173
21,7%
Specialists
168
65,1%
271
65,3%
498
62,5%
9
3,5%
29
7,0%
126
15,8%
Service employees
Compared to 2010 the staff increase is 92%.
88
The staff increase is also expected in the future. At present the Company is in a phase of dynamic
growth: by 2012 almost twofold increase in scope of the works executed is being planned in comparison to
those of 2010 that assumes intensive growth in terms of personnel. The surplus in amount mainly results in
active enrollment of personnel on construction sites of the Company for the purposes of main construction
trade projects.
Change in structural relation of personnel categories in 2011 reflects a need of the Company in
qualified specialists, and is also connected with restructuring of the Company.
In 2011 there was a rise in labour productivity as compared to the year 2010 at the expense of
efficient management, increase of labour efficiency, headcount optimization and business-related process
reengineering within the Company.
Labour productivity dynamics for 1 person, RUB (thousand) / empl.
490,9
348,1
310,3
2009
2010
2011
Along with the rise of labour productivity in the Company there was increase in average salary of the
Company personnel.
The changes in average monthly salary of employees, in RUB (thousand)
117,9
114,4
112,2
2009
2010
2011
Maintaining of the salary competitiveness of the Company personnel is the main accent of HR- policy
in the Company. As such, in 2011 there was a raise in monthly salary of the employees compared to 2010
and it was equal to 5,1%. The increase in question was due to increase in number of highly qualified
specialists, retention of key employees, as well as by development and implementation of new kinds of
material incentive.
During 2011 salaries of the Company personnel were paid in time, without violation of time periods
specified in JSC E4 Group Personnel Compensation Policy.
89
10.4. Social policy
Social policy of the Company as a part of its overall HR- policy is aimed at solving of key tasks in the
area of personnel management (engaging and retaining of qualified employees, the rise of labour
productivity, etc.), as well as at the achievement of the Company goals (in particular, at increase of its
financial efficiency).
The main principles of social policy within the Company

Assurance of salary competitiveness of employees and promptitude in payment

Creation of conditions for professional competence development of employees

Create friendly social climate in the Company

Ensure safe working conditions, maintain legislative and work safety rules

High-level fulfillment of tax obligations toward funds of all levels
The key corporate social programmes

Provide employees with voluntary medical insurance

Casualty insurance

Maternity grant for women—the Company employees with birth of a child

Provide recovery for housing expenses for specific categories of employees

Provide recovery for relocation costs for specific categories of employees
In 2011 medical insurance of the employees in the Company was organized under terms of Voluntary
Medical Insurance Agreement with LLC IC «Soglasiye». Premium total over an effective period of the
Agreement was 4 803 960 RUB. Total number of the assured was 880 employees, that is twice as more than
the number of the assured employees in 2010. Out of the total number, 38% of the assured are the
employees of separate subdivisions and subsidiaries of the Company.
With the aim of protecting from the risk of complete or partial loss of health, in 2011 the Company
carried out the insurance programme against accidents and diseases, also under terms of the Agreement
with LLC IC “Soglasiye”. The Agreement ensured accidents and diseases coverage for 213 employees,
amount of investments was 871 150 RUB.
Recovery for relocation costs and for renting expenses were carried out for the employees of separate
subdivisions and subsidiaries of the Company, moving for work within structural subdivisions of JSC E4
Group, situated in Nyagan (Tyumen region), Astrakhan, Serov (Sverdlovsk region), Cherepovets (Vologodsk
region).
Employees health safety measures


In 2011 the following measures were taken to provide health safety of employees:
In-office flu vaccine prophylaxis
In-office tick-borne encephalitis for employees going on business trips to areas endemic to tickborne encephalitis
Awards
In 2011 the employees of E4 Group Companies
were nominated for Ministry of Power of the Russian
Federation awards: Title “Fuel & Energy Complex
Honorable Employee” (1 employee), Title “Honorable
Power Engineer” (2 employees), Certificate of
Appreciation
(6 employees),
Letters
of
Acknowledgement (8 employees).
Besides, about 300 employees of E4 Group
enterprises were awarded with corporate awards on
the occasion of Power Engineers’ Day and the fifth
anniversary of the Company.
Awarding of the Company employees
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10.5. Work safety
Activities of E4 Group JSC in relation to work safety are among the priorities for the management of
the Company. The Company constantly strives for reduction of occupational injuries and risk of work-related
diseases of employees.
Within the frames of work safety in the Company the following measures were taken:


Provide the personnel with certified equipment for the personal and collective protection, devices for
safe execution of work
Carry out engineering and administrative controls aimed at safe execution of work

Personnel training with the aim of its qualification within the frames of work safety, instructions on
labour safety
Review, study and analyze information on accidents

Scheduled and unscheduled inspections of work places of construction sites in the Company

To solve the above mentioned tasks the Company created health and safety departments,
departments of industrial and environmental safety in construction projects, ongoing “Medical stations”, on
the base of which all drivers receive pre-trip medical check-ups, and also organized first aid treatment to
those injured at work or in case of diseases.
In 2011 the Company completed verification of totally 1104 work places with respect to working
conditions.
To provide work safety The Company invested RUB 26, 333 (thousand), of which:






Trainings on occupational, fire and industrial safety: RUB 10, 204 (thousand).
Purchase of special outfit and other individual protective aids: RUB 5, 777 (thousand).
Reconstruction and renovation of premises: RUB 1, 445 (thousand).
Verification services of work places: RUB 930 (thousand).
Furniture, equipment for relaxation and kitchenette areas: RUB 378 (thousand).
Other services in connection with providing of safe work conditions and occupational safety: RUB
7, 592 (thousand).
The Company pays a lot of attention to personal training on labour, industrial and environmental
safety: in 2011 the following training was carried in training centers:
 Work safety - 206 managers and specialists
 Basics of fire safety - 69 specialists


Industrial safety - 149 managers and specialists
Electrical safety - 99 managers and specialists

Environmental safety - 17 managers and specialists.
Control over the safety of works, in construction projects of the Company is laid upon the Department
of labour, industrial and environmental safety by means of planned and random inspections of conditions
and types of work and production control. To familiarize the employees with the requirements of labour
safety, the Company issued a range of regulatory and administrative documents (e.g. Procedural Guidelines
“Work planning and organization of labour, industrial, fire and environmental safety”, that are to coordinate
work of E4 Group companies on work safety.
To implement new approaches to work safety management, in 2011 the E4 Group initiated
Occupational Health and Safety Management System (OHSAS 18001:2007), that gives a possibility to control
work related injuries and diseases, to improve industrial effectiveness. The Company has developed OHSAS
Standards.
The Policy of E4 Group JSC was put in force in the area of work safety by General Director of JSC E4
Group V. V. Kalinin’s order.
The aim of the Company is to raise each employee’s responsibility and motivation in creating safe
work conditions in accordance with the requirements of the State Legal Work Safety regulations.
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11
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SECTION 11. DEVELOPMENT OF THE QUALITY MANAGEMENT
SYSTEM
The main operational principle of JSC «Е4 Group» is to meet customer requirements while creating
socially significant facilities of industrial construction in accordance with all modern requirements. To carry
out this principle the Company has developed, implemented and maintained the Quality Management
System (the QMS) as an instrument to embody the Policy in relation to quality, to achieve goals in the area
of quality and to make sure that goods meet the requirements of customers and the Laws. The Company
and the Group Companies set a course for constant improvement of QMS efficiency in accordance with the
requirements of standard GOST R ISO 9001-2008.
With the aims of development and improvement of the QMS the following was established and
created in JSC «Е4 Group»:
 QMS Management Representative
 Quality Department (a structural subdivision accountable for the development and implementation
of the QMS, for the personnel training in QMS principles and for internal audit)
 Quality Council Committee under the General Director (the collegial consultative body accountable
for the QMS management decision making)
In April 2010 JSC «Е4 Group» successfully passed certification audit with Certification Authority
AFNOR (France). Compliance with the QMS was confirmed by the following certificates:
 Certificate of Compliance with the Requirements of the International Standard ISO 9001:2008
 Certificate of Compliance with the Requirements of Standard GOST R ISO 9001-2008
 Certificate IQNet, evidencing the acknowledgement of the Company’s QMS by the International
Certification Associations (IQNet consolidates 37 leading certification authorities representing 33
countries advanced in the area of quality management systems)
11.1. Measures in relation to improvement of the QMS in 2011
According to the results of the QMS analysis the following inconsistencies were revealed:
 lack of documented indicators in relation to certain processes carried out by the Company
 description of the processes are different from the actual operations carried out by the personnel
 insufficient analysis of the performance of certain processes
 insufficient monitoring of the data in relation to satisfaction of the consumers, including
subcontractors
In relation to all inconsistencies correcting measures were taken. The main reasons for the above
mentioned inconsistencies during implementation of the QMS in 2010 were determined:
 insufficient informing of the personnel and management on the QMS and requirements of standard
GOST R ISO 9001-2008
 insufficient educative and information events in relation to new internal and external regulatory
documents and requirements
 lack of indicators and assessment procedure for accumulation of statistic data on performance
processes
To increase performance results of the Quality Management System the following measures were
planned and carried out in 2011:
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1. Updating of the Policy and development of the Goals in relation to quality with
reference to strategic and business goals of the Company
Extension of stock of orders in the Company and approaching the market of NPP construction
determined increasing attention of the Company management to safety matters, work safety and ecology.
The management reconsidered the list of the Company liabilities (obligations) to customers to provide
quality of running projects.
Goal planning in the area of quality for 2011 was carried out for the main processes and for severally
general contracting projects. The Company developed indicators for each goal, assessment criteria,
appointed responsible executives for the performance monitoring.
2. Development of Process Model of the Company
In accordance with the established organization structure a graphic model of business processes in
the Company was formed. In relation to each process we defined criteria of efficiency, a computation
scheme for assessment results, a list of regulatory documents. Within the description of business processes
plans for development / actualization of internal regulatory documents were arranged and put into practice.
The Company developed and introduced a procedure of mandatory planning and reporting, that
specifies format, planning structure and its periodicity (frequency). The above mentioned system allows us
to control:
 workload of executives in relation to processes
 correlation of work schedules in relation to projects
 execution of the management decisions
The information from subdivisions is analyzed by Central Dispatch Office that gets a status ready for
the management consideration and decision making in relation to processes.
3. The Programme of competence development in relation to the QMS was developed and
carried out.
According to the requirements of Standard GOST R ISOВ 9001-2008 and the approved schedule of the
quality management system development in the Company for 2011 the Department for Quality prepared
and put into practice the Training programme for the employees of the Company and the Group Companies
in the following training courses:
 Introduction to the QMS
 The QMS audit
 The Maintenance Programme of the QMS at the general contracting projects
 Tools of Lean Production
 5С Practice in office.
The curriculum content was developed separately for each stage of training in accordance with the
structure of training groups that were formed in relation to position categories. The programme was aimed
at providing the employees with knowledge in the following directions:
 background information on the management system in the Company, the QMS structure,
document layout and implemented activities for new joiners
 understanding of the requirements of GOST R ISO 9001-2008 (in relation to the industry-based
requirements in work processes of the Company) by executives in charge
 knowledge of structure of internal regulatory documents of the Company, each project by itself,
implementation scheme of industrial processes
 knowledge of compulsory procedure organization scheme of the QMS (internal audit, planning and
implementation of corrective / preventive)
 comprehension of structure, operating principle of the QMS improvement instruments (Lean
production, 5С – office)
 determination of the main requirements of the Company towards the QMS of its subsidiaries
4. The development of the assessment procedure for consumer satisfaction assessment
Improvement and implementation of the procedure is planned for 2012.
At the moment a procedure of internal environment monitoring (assessment of the Company
employees’ satisfaction) is not developed or put into practice in the Company that does not allow us to
recognize the general procedure for assessment of consumer satisfaction as all-inclusive.
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5. Implementation of the Programme of the QMS development at general contracting
projects
In relation to each project the Company developed and carried out plans of measures in the QMS
development including:
 creation of normative base of the project in accordance with contract liabilities, internal documents
of the Company, the Process model and organization structure of the project
 development of the Project Quality Plan
 development of plans of inspections and testing in relation to kinds of works
 implementation of measures aimed at competence development and exchange of experience
 carrying out of mandatory procedures of the QMS (internal audit, work with inconsistencies)
 introduction of technical control in relation to kinds of works
 development of process description, assessment criteria for processes, scheme of information
collection and analysis in relation to process efficiency
 creation of data bases for project decisions to use in other projects
6. The implementation of the procedure of interaction in relation to the QMS with the
Group Companies
Within work on integration of the Company QMS with the QMS of E4 Group Companies the following
measures were taken:
 determination of the requirements towards the QMS of Subsidiaries and Associates of the Company
(SAC)
 determination of format and content of reported data in relation to the measures within realization
of SAC special tasks / special projects in relation to the QMS development
 audit procedures of the QMS SAC were launched
 projects on collective training in the QMS were launched
 development of general principles of the QMS implementation in cooperative projects
 creation of a unified knowledge base in relation to the QMS (within the Internet portal of JSC Е4
Group)
7. Development of the basic contract requirements in relation to the QMS of the
Company and counteragents
As a part of Quality Assurance Programme at the general contracting projects we specified basic
requirements for the QMS of the suppliers of production and services as well as obligations of the Company
to customers. These requirements were included into standard forms of contracts.
The structure of basic contract requirements to the QMS is shown in the picture
Our general contract
obligations
E4 contract obligations to
the QMS in GC project
Project quality plan in
accordance with
GOST R ISO 9001
GOST R ISO 10005
Our requirements in
subcontract agreements /
supplies
E4 contract requirements to
the QMS of subcontractors
in GC projects
Project quality plan for
ITP project
E4 contract requirements to
the QMS of the suppliers
Quality assurance plan for
manufacturing worksх
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11.2. Assessment of the Company QMS performance in 2011
Development of the Company QMS can be estimated by the results of reaching the goals in specified
indicators in relation to quality.
Results of reaching the Goals in relation to quality in 2011
%- of reaching a goal
Lack of
scrapping of ICT at incoming inspection
Development and handover of “6D” technology into production
Acceptance of LTI stages in accordance to the plan
Number of LTI returns for rework
Weight-average profitability of contracts
Attestation of the working places according to the plan
Deficiency of injuries
Fulfillment of the plan of the personnel training and qualification
Employee turnover reduction
Deficiency of repeated instructions
Observation of deadlines in instruction performance
Departure from SE planned budged (less than 10%)
Departure from SE project realization(less than 10%)
Implementation of the QMS development schedule
The QMS efficiency
Receiving customers’ reviews in relation to all objects
Deficiency of official claims
Profits from sales
Procurement
Basing on the results of analysis in accomplishment of the goals in 2011 the Company developed
correcting actions by taking into account revealed potentials to improve the management system.
In March 2011 the Company successfully passed the first surveillance audit with Certification Authority
«Afnor» in relation to compliance with the requirements of Standard GOST R ISO 9001-2008.
In May 2011 the Company passed SRO inspection in relation to compliance with the requirements of
competency certification and meeting the requirements of Standards of SRO NPO “Soyuzatomstroy”.
11.3. Actions in relation to development of the QMS for 2012
1. Further improvement of the QMS of the Company.
In accordance with the schedule of works in relation to the QMS development for 2012 we are
planning to go on the work begun and to carry out the following measures:
 optimize the procedure of documentation management in the Company
 improve processes and increase performance in reaching the goals in the area of quality in the
Company
 implement the procedure of assessment criteria in relation to consumers’ satisfaction
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 further implementation and development of the QMS at general contracting projects
 further development of the personnel competences in the area of quality management.
2.
Integration of quality management systems
In 2011 JSC Е4 Group began to develop and introduce the environmental management system and
safety management system in accordance with the requirements of Standard GOST R ISO 14001 and OHSAS
18001.
The management made a decision to consolidate all management systems into an integrated system
(IMS):
 quality management system (QMS)
 work safety management system (WSMS)
 environmental safety management system (ESMS)
 information security management system (ISMS)
 risk management system (RMS).
The QMS is specified as a core system in accordance with GOST R ISO 9001-2008. To consolidate all
systems the Company created a working group of the employees supervising the above mentioned
management systems.
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12
98
SECTION 12. INNOVATIONS AND MODERNIZATION
«Innovation distinguishes leader
from the follower». Steve Jobbs
12.1. Targets of E4 Group in the sphere of innovations and
modernization
E4 Group OJSC is an innovation-active company: innovation activity is a vital necessity, a key factor of
economical growth, and a basis for development and prosperity of the country in XXI century. Innovations
are the lever which is able to increase essentially the capitalization of any company.
The problem of general interpretation of innovation activity was successfully solved in Russia in 2011.
Definition of «innovation» term is given in the Federal Law No254-FZ dated 21.07.2011. «On changes in the
Federal Law «On Science and state scientific-technical policy»:
«Innovations» - is a newly introduced or significantly improved product (good, service) or a process,
a new sales method or a new organizational method in business activity, in organization of work places or
external relations.
Strategic task of the Company and E4 Group is a drastic increase of innovation activity to provide
worldwide business competitive ability and scientific-technical leadership at the market of overall electrical
engineering at expense of wide use of innovative solutions, breakthrough technologies, equipment,
methods, technological and world-class management processes.
Targets of the Company activity in the sphere of innovations and modernization
 Development and implementation of strategy and programs of the Company innovation-based
development according to resolutions of «Russian Federation innovation development Strategy for
the period up to 2020», «The Russia Energy Strategy for the period up to 2030», conclusions of
Commission at President of Russia on modernization and technological development of Russia
economy, Government High Technologies and Innovation Committee, State Program «Innovative
Power Engineering», oriented at technological breakthrough and modernization of domestic power
engineering.
 Active search, selection and commercialization of advanced innovative solutions. Qualitative
renewal and diversification of business aiming at entering the neighboring, prospective and
growing markets with world-class hi-tech products.
 Formation and development of innovative infrastructure. Creating of effective management system
and coordination of Holding innovative activity according to «open innovations» model, providing
free inflow of both internal and external ideas and developments, using of advanced experience,
best technological innovations and world practices.
 Optimization of organization structure, reinforcement of interaction with external scientifictechnological environment.
 Development of partnership relations and providing of effective interaction with profile companies
and structures: Bright Capital Foundation, OJSC «е2», Research & Development Directors Club
(iR&Dclub), RUSNANO, Skolkovo Science & Technology Institute (SkTECH), Skolkovo Foundation,
Russian Venture Company, Russia Technological Development Foundation, Committee of Russian
Union of Industrials and Entrepreneurs on technical control, standardization, development and
conformance evaluation, Innovative Technologies Committee at Self Regulating Organizations
Counsel (СРО) of Nuclear branch, National Engineering Companies Association etc.
 Significant reduction of bureaucracy level while making decisions in sphere of innovative activity.
Creation of risk tolerance atmosphere in the Company, formation of favorable «innovative
climate», innovation sensitive environment, involvement of personnel in the Company
development, including creation of conditions and incentives for innovative activity, development or
transfer on innovative technologies in preferred directions of Company development, as well as
favorable conditions to use innovations and the best positive practices in all types of activity.
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 Strengthening of Company’s competitive positions at the market by way of resources consolidation,
complete utilization of available intellectual, scientific-technical and industrial potential, scientific
reserve, know-how of leading engineering institutions of companies which are the part of E4 Group
(Scientific-Production Association Central Boiler & Turbine Plant OJSC, «Siberian Energy Scientific
and Technical Center» OJSC).
 Proactive position and efforts concentration at basic trends. Integration of Е4 Group into national
innovative projects, expansion of international co-operation with world leading technological
companies, creation of international strategic alliances.
 Expansion of constructive co-operation and partnership relations with Danish Energy Agency (DEA)
and Danish Board of District Heating (DBDH), occupying leading positions in the world in creation
and practical use of energy efficiency technologies and equipment.
 Creation of common intellectual property management system of the Company. Providing of
maximum protection and effective use of right for intellectual property objects.
Organizational structure of innovative activity management
Coordination of innovative activity in the Holding is carried out by Energy Efficiency and Innovations
Department of Е4 Group OJSC, which basic tasks are as follows:
1. Identification of progressive innovative developments of domestic and foreign manufacturers, new
energy-efficient technologies and solutions for their type assignment and replication, development
of proposals on their practical application.
2. Organization of international co-operation in the sphere of innovative activity and energy
efficiency, partnership and interaction with leading world and domestic manufacturers of
equipment and high technologies, development of proposals on alliances creation.
3. Organization of scientific-technical, methodological and informational support for subdivisions of
the Company and the Group companies while implementation of innovative projects, mastering of
new competitive types of products, using of innovative technologies and energy saving equipment.
4. Conducting of training seminars for employees of the Company and of E4 Group companies on
mastering of up-to-date methods for design, erection and commissioning of a new generation of
energy equipment together with global producers of energy equipment.
5. Development of co-operation in innovative activity issues with Innovative Technologies Committee
at Self Regulating Organizations Counsel of Nuclear branch, profile subdivisions of Commission at
the President of Russian Federation on modernization and technological development of Russia
economy, Ministry of Energy of Russian Federation, Russia Energy Agency, Energy Policy & Energy
Saving Committee, Committee of Russian Union of Industrials and Entrepreneurs on technical
control, standardization, development and conformance evaluation, State Corporation RUSNANO,
the Russian and foreign scientific organizations.
6. Organization of the Company’s Scientific & Technical Counsel performance to develop
recommendations on priority direction of activities involving leading experts, scientists and
specialists of the branch.
7. Implementation of pilot projects and creation of high energy-efficient demonstration sites.
8. Formation and support for intellectual property management system of the Company (patents,
licenses, industrial models, databases, know-how).
9. Preparation of proposals for Federal Agencies of State Authorities on implementation of state policy
in the sphere of modernization, technological and innovative development of energy and energy
saving in Russia.
12.2. Areas of activities of Е4 Group in the sphere of innovations
and modernization
State and private partnership in Technological Platforms Program
Companies of Е4 Group take an active part in implementation of Technological Platforms Program
(TP) approved in April 2011 by Hi-tech & Innovation Government Committee. TP is important element of
national innovative system, providing resources consolidation at priority trends of innovative development,
forming of scientific co-operation, determination of possible consortiums at the expense of development of
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scientific-technical partnership. Out of the 27 approved Technological Platforms in “Energy” branch the four
basic ones were emphasized:
 №14. Intellectual Energy System of Russia
 №15. Environmentally friendly thermal power
 №16. Advanced technologies of renewable energy
 №17. Small distributed energy
The specialists of OJSC Scientific-Production Association “Central Boiler & Turbine Institute” (St.
Petersburg) take part in the project. They develop home pulverized coal power unit with the power of 800
МW for super above-critical steam parameters, advanced boilers of light and medium power for burning of
low grade fuels (peat, slates, waste wood). In Platform No 14 being «Intellectual Energy System of Russia»
the following companies of the Group are involved: OJSC «е2», «Sibtechenergo» OJSC and «Siberian Energy
Scientific and Technical Center» CJSC.
«Scientific-Production Association “Central Boiler & Turbine Institute”» OJSC takes an
active part in other state programs aimed at creation of new generation energy equipment:
Within the frames of Federal Target Oriented Programs «National technological base»:
 Development and bench testing of technological solutions on increase of adjustment range of high
pressure radial-axial turbine with improved energy cavitation characteristics
 Development of technical solutions for basic energy equipment of coal energy units with a power of
660-900 МW for super above-critical steam parameters up to 30 МPa, 600/620С
 Development of basis for mass production of steam boilers with the steam output of 670 t/h and
1000 t/h with circulating fluidized furnace.
Within the frames of innovative projects for Atomic Power Station-2006 and Atomic Power Station 2009:
 For turbine plants К-1200-6,8/50 LNPP-2 and NPP-2 – development of technical projects of
deaerators, low-pressure heaters ПНД-1,3,4, delivery water heaters ПСВ-1,2,3, principal diagram and
algorithm for heating ПВД-К-5, ПВД-К-6, creation of new typical size condensate hydro electric pump КГТН
415-305А.
Besides, having a unique competences in the sphere of development, testing and finishing of up-todate high efficient energy equipment Scientific-Production Association “Central Boiler & Turbine Institute”
OJSC in 2011 together with leading home and foreign power plant construction companies developed
advanced hydraulic units with extended frequency and power control range, development of diagnostic
systems for steam and hydraulic turbines. The following trends are considered to be the most prospective:
development of technology for creation of welded composite rotors for steam turbines for super abovecritical steam parameters, testing and finishing of home-made medium-power gas turbines, bench
processing of home-made medium-power gas turbines units, development and model testing of hydraulic
turbines with variable speed, extension of service life of energy equipment, development and manufacturing
of high-efficiency heat exchange equipment for Thermal Power Stations and Atomic Power Stations,
development of technologies for steam and gas turbines servicing.
«Е4-Centrenergomontazh» OJSC: the new technology providing resources saving and reduction
of erection period was used while erection of the vertical type recovery boiler heating services at the most
powerful in Russia heating block CCPP-440 МW at Krasnodarskaya Heat Power Station. The boiler
manufacturer proposed to erect heating surface by way of sequential module blocks laying from top to
bottom, what required use of 22 rope-type jacks with a lifting capacity of not less than 45 t each, with
further repositioning of them to the next three rows. High cost for the jacks’ rent, additional work on
repositioning for the next rows as well as the modules production technology at works made us to develop
another erection technology: using 4 rope-type jacks of lifting capacity of 70 t each, allowing us to reduce
expenditures for rent of expensive equipment without increasing terms for work execution.
While execution of work at the 4th block of Kalinskaya Atomic Power Station a new technology for
erection of diagonal vertical circulating pumps of HYUNDAI production was mastered and implemented.
OJSC «Sibtechenergo» actively uses new technique as well as modernization of technological
equipment in their projects in 2011: new manufacturing technologies enabled to install new major units at
Aksukskaya Heat Power Station into the module of exhausted 300 МW block (boiler unit, steam turbine,
generator) with the power of 350 МW. The up-to-date control and measurement facilities were used – fullscale Automatic Process Control System.
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The research on implementation of complex for cleaning of boiler units heating surfaces from slag and
ash deposits developed by JSC “Sibtechenergo” in continued for Nazarovskaya State District Power Plant.
The complex is constructed on the basis of air-pulse unit and blowing-off automated monitoring system,
developed in the Institute of Theoretical and Applied Mechanics of Russian Academy of Sciences. The
solution on using of such a cleaning package was made at the time of major reconstruction of existing
boiling units at Barnaulskaya Heat Power Station-2. The using of the package allowed to increase the power
of pulverized coal boiler units by 10%.
The technology of controlled electric heating of formwork with the help of computer technologies was
implemented in Khabarovsk branch of OJSC «Dalmostostroy». The heating cables were laid on the
outside of metal formwork. The quantity and diameter of mentioned cables in different zones of formwork
was calculated in accordance with thermo-physical calculations of concrete strength gain and heat losses
through the formwork surface. Temperature control was done with a computer based on information,
obtained from temperature sensors located on formwork surface. Energy consumption for heating of one
girder during two day until formwork removal is approximately 800 кW*h (34 кW*h/m3). Such technology of
heating up enables to reduce costs for fuel & energy resources spent for production needs while
manufacturing of concrete structures.
Participation in the program of innovation centre Skolkovo creation
Construction of energy saving building «ECO-OFFICE»
The idea of construction of a unique energy
saving building was born in innovation centre
Skolkovo during the visit of the President of Russian
Federation D.A. Medvedev to Denmark in April 2010
during visiting the University building (Green Light
House) in Copenhagen. The Green Light House has
no analogues in the world and was constructed to
opening of Kyoto Protocol international summit in
2009. The most up-to-date energy saving
technologies and materials were used here, energy
consumption was reduced by 75% due to unique
energy concept combining utilization of heating and
the sun energy, central municipal heating and
natural ventilation. The excess electrical energy is
sold out.
The construction project of the first in Russia «Eco-office» with lowest possible energy
consumption in Skolkovo is implemented together with RU-COM Group and Joint Shipbuilding
Corporation. The 100% subsidiary company of OJSC “E4 Group” – OJSC “e2” is responsible for the
project implementation.
The purpose of the project is not only implementation of energy saving project in within a relatively
short time according to XXI century technologies, but also create conditions for further replication of up-todate solutions. Danish company Ramboll Group has been involved with the project, architectural and
engineering concept of the building has been already developed, measures on efficiency have been
established. The building with the total area of 1,5 thou m2 will consist of four sub-ground and one
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underground floors. It will look like pentagon with sloped, South-oriented, roof where the sun batteries will
be mounted.
Targeted parameters of the project
 Total capital investments volume - 150 000 000 rubles.
 Total area of the building - 1570 m²
 The unit cost of construction ~ 96 thou rubles /m²
 Specific need in loss-free energy for heating ≤ 40 кW∙h/(m²∙year)
 Specific need in final (purchased) energy for heating, cooling, ventilation, hot water supply and
lighting ≤ 20 кW∙h/(m²∙year)
Basic implemented energy saving solutions
 Compact geometry of the building
 Increased thermal insulation of walls and windows
 Minimization of thermal bridges
 Increased air tightness of building envelope
 Using of natural ventilation through automatically opened windows
 Using of energy saving lighting appliances
 Automation of ventilation, heat supply and lighting systems
 Using of thermal pump with efficiency coefficient =3,5 will cover ~ 71% of the building’s need in
heat energy for heating
 Using of sun collectors (60 m²) will cover ~ 58% of the building’s need in heat energy for hot water
supply
 Utilization of photo-electrical panels (180 m²) will cover ~ 76% of total building’s need in electrical
energy.
Participation of E-4 Group OJSC in international forums and conferences
Managers and specialists of the Group took part and made reports in important international forums
and specialized conferences:
 XV St. Petersburg International Economic Forum
 BP International Panel on “Development prospects of the World Energy Market for the
period up to 2030 in the Institute of World Economy and International Relations of the
Russian academy of sciences: BP has been preparing the annual forecast on world energy
sector development tendencies already 60 years and the seminar is public from 1956
 Conference of the Department of Energy on “Extension of field of use of coaling stations ashes and
slag waste”
 III User Conference of AVEVA solutions in Russia and CIS
 “ATOMEXPO-2011” International Forum. Under the forum, E-4 Group introduced its new company –
“Buran Nuclear Power Plant” – which is oriented on work package implementation in nuclear field
 VIII International Conference on “Renewable и small-scale energy sector”
 ELECTRO-2011
 X International Innovation Forum Sochi-2011
 ENERGY FRESH 2011: III International Forum on renewable energy sources and energy saving
 IV Water Chemistry Forum in Skolkovo
 Seminar and business program on the occasion of the official visit of Her Majesty Queen Margrethe
II of Denmark, His Majesty Prince Consort and His Majesty Crown Prince to the Russian Federation
 Conference in Skolkovo on “Energy efficient technologies for the industry of the Russian Federation”
 Yaroslavl Energetic Forum
 Seminar on “Energy efficient technologies in building” (“Business Russia”)
 Annual International Research and Practice Conference on “Energy equipment efficiency increase 2011”
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Interaction of society in national innovative system creation
E4 Group is an active participant of the “Club of directors of research and
innovation” («iR&Dclub»). The aim of «iR&Dclub» is to further the
development of innovation culture in the country. The main purpose is to
create favourable environment for exchange of experience and innovation
process improvement in Russian companies for professional community in the field of researches,
development and innovations.
Tasks of «iR&Dclub» also are:
1. Professional community formation, horizontal communication establishment and consolidated
position elaboration on issues being of general interest for Club members.
2. Independent public professional expertise of state initiatives in the field of innovation development,
working out of proposals and recommendations on improvement of regulation in economics,
innovation infrastructure development, coordination of working out and matching of long-term
development plans, industry and interindustry road maps
3. Interindustry cooperation development, working out of innovations omnibus order mechanisms,
stimulation of demand for innovation production, control of innovation activities results
4. Working out of communication mechanisms with research and education foundations, formation of
requirements for personnel and education programs, formation of the basis for professional activity
standards
iR&Dclub became an important element of domestic national system formation in a relatively short
time, it provides efficient interaction with state structures and international community.
http://irdclub.ru
12.3. Modern methods of design and management applied and
implemented by E4 Group
Innovative technologies of automated 3D design and general contractor management
(6D)
Engineering company’s main purpose is quality performance of contract in a timely manner. For
performing this task effectively mutual coordination and control of all processes, process and analyze of vast
amounts of information are necessary. E4 Group companies use in their activities intelligent technology
“Multi-D” design, covering main stages of energy facility life cycle: design, construction, equipment supply
and installation, mounting, etc.
OJSC "E4 Group" is a leader in Russia for use in practice the most advanced technology- automated
3D design -based design software AVEVA Global PDMS and 6D general contractor activities management on
the basis of single software for all engineering companies of the Holding Company.
6D technology has a clear formula - a system of three-dimensional design, which integrates calendar,
network planning, resource planning and catalog information about power equipment and materials.
Technology 6D combine all six coordinate in single integrated system. All coordinates are now in E4 Group
and are standards: AVEVA Global PDMS, KEDO, Primavera, 1C.
6D = SED KEDO + AVEVA 3D + PRIMAVERA + 1C + E4 data center with communication
channels
Innovative technologies of automated 3D design and general contractor management (6D), working in
real time, allow:
• Control and manage project resources and timelines operational
• Solve interaction problems a large number of companies in construction of large complex objects
effectively
• Solve complex technological and design problems
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• Provide choice of equipment, logistics, construction
• Create complex schedules
Benefits of technology are obvious:
• Compliance with large tenders’ competitive conditions with foreign co-investors and foreign technical
advisors
• Implementation of high-quality project works in a short time through use of automated design
system (3D-CAD)
• Establishing a common knowledge base
• Synchronization of all project companies and divisions
6D general contractor of construction management technology of major energy facilities includes
following components:
1.
3D object ‘s model, which contains permanent information stored in directories, variable
information entered into model by design organization in form of attribute database, and graphical
information received while creating model
2.
Design calendar-network schedule, procurement of equipment, supplies, construction, installation
and commissioning operations
3. Requirements schedule of human, operational and material resources
4.
Hardware database
characteristics
containing
information
on
technical,
cost,
performance
equipment
3D design technology was put into operation in all six E4 Group design institutes, including
extensive branch network. In addition, company has experience in rapid introduction of 3D technology
institute to work as a subcontractor.
3D piece of technology – Digital three-dimensional object‘s model
Software Developer - British company AVEVA since 2009 holds user conference AVEVA PDMS in Russia
and CIS. Over 100 organizations take part in these conferences and conduct an annual competition for
design in 3D. 4 conferences have already been held and at 2 of them Company’s design institutes received
first prizes: in 2010 - CJSC "E4-SibCOTES", in 2012 - PJSC "KIEP."
4D technology. Calendar-network planning
Using modern 3D technology to create parts’ models and assemblies of construction projects in
connection with project implementation schedule (fourth dimension) makes it possible to obtain building
information modeling (BIM).
4D-modeling provides and links together in time, such stages of project as: planning, production of
construction documents, procurement and supply management, cost and risk. It also allows to prevent and
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respond with maximum efficiency to any deviations from plan of construction and to identify exact reasons
for these deviations.
The result of 4D-modeling is an integrated information construction model, consisting of 3D-geometry
of the object and interactive part of object’s changing in a stepwise creating process (visualization of
construction project). This model is compatible with modern hardware and software that ensures its
accessibility and ease of implementation in a traditional building.
4D-modeling planned schedule takes into account all stages of project’s implementation, including
design and survey, construction and commissioning works and informational related to 3D object model,
technology uses integrated information that allows you to monitor all stages of project’s realization and
makes whole course of construction absolutely transparent.
5D technology. Database of equipment, catalogs, contract specifications
There is a need to create and update database of equipment and materials - such database should be
the same for all Company units and Group companies. Updating the database should be conducted on an
ongoing basis. The amount of information should cover not only information needs for major construction
period, but also in the initial period. Equipment database, formed with participation of design organizations
and manufacturing plants on basis of equipment HUB - SATELLITES, becomes Engineering database and a
single point of storage and updating of information necessary for 6D technology implementation.
Engineering solutions database
6D technology. Resource planning
Information composition: resource planning diagram (personnel, machinery, materials, finance).
Information composition includes terms, period, man-hours, operation hours, volume and weight
characteristics of materials, funds flow.
12.4. Company’s policy in IT-technologies field
Company’s policy in IT-technologies field aimed at creating a single information space for business
needs and optimizing IT ownership costs. For automation and informatization of Company’s business
processes was selected an approach based on implementation of best in class information systems
applications with using common principles of integration on common integration platform.
In target model corporate information systems cover all significant areas of automation, closely
integrate at data level and provide information to strategic management and decision making information
analysis system.
Information systems choice is based on the following criteria:
• Applicability
• Functionality
• Flexibility (architecture, adaptability)
• Scalability
• Cost of ownership
• Cost of implementation
Currently, following information systems and facilities were implemented and function in E4 Group
(other than described in Section p.12.3):
• 1C Industrial Enterprise Management (accounting and tax accounting)
• Electronic document management and control orders on basis of Directum
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•
•
•
Relationship Management with contractors based on MS Dynamics CRM
Project Management System based on Oracle Primavera
A single integration platform IBM Websphere ESB
In 2012, further development of information space is planned in following areas:
•
•
•
•
•
•
•
Contract activities management automation
Management accounting automation
Treasury operations automation
Control process automation MTR from acquisition to delivery to Customer
Budgeting system automation
Corporate portal creating
Transition to single corporate directory and a single e-mail system
As part of software licensing agreement policy concluded follows:
• Agreement with Microsoft in corporate licensing program (Microsoft Enterprise Subscription
Agreement)
• Corporate License Agreement with Autodesk on software products and on design platform
• Strategic agreement with Kaspersky Lab
• Corporate License Agreement with Adobe
• Implemented a software asset management system (Software Asset Management) based on MS
SCCM.
As part of Company’s IT-infrastructure development following projects were implemented:
• Project to create a single corporate network was Implemented (ECTS), bringing together the OJSC
"E4 Group" and Group’s companies with secured communication channels and ensuring provision of high
quality corporate telecommunications services (IP-telephony, video conferencing, access to corporate
information systems, etc.).
• Corporate network video conferencing was significantly expanded, central node of video
conferencing was commissioned in office of OJSC "E4 Group" in Moscow
• Corporate conference call system was implemented, based on Cisco Call Manager and IPForum
• System of video surveillance review for progress of construction at the sites was implemented.
Today, the system integrates five construction sites with central node in Moscow
• Company's computer network capacity has doubled in size and includes more than 1,000 jobs in two
Moscow and four regional offices
• Building information security management system project was implemented (ISMS) - ISO: 27000
• Protection of personal data in accordance with federal law project was implemented
• Monitoring corporate computer networks project based on MS SCOM was implemented.
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13
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SECTION 13. ENERGY SAVING AND POWER EFFICIENCY
Among priority tasks of E4 Group regarding energy saving program are development of partner
relations and establishment of alliances with the leading international and national manufacturers of energysaving technologies of the following areas:
 Generation: turn-key construction of modern steam-to-gas power generating units CCPP 125-450
MW with coefficient of efficiency (COE) 1.5 times higher than COE of conventional steam-power
units
 Complex approach to development of combined heat and power sources, mini-heat and power
plants, heating system installation, power-efficient buildings on modern technological base
 Development and turn-key implementation of standard power-efficient solutions for energy sector,
industry, municipal facilities
 Interaction with NPO JSC ELSIB on promotion of new product in the market – system of variablefrequency electric drive «Е4-VEDA ELSIB» for electric motors of 250-8200 kV, 6-10 kV
 Development of steam and hot-water boilers for industrial and municipal energy sector 4 - 58 MW,
namely furnaces with low-temperature and high-temperature fluid bed for combustion of turf, shale,
wood waste
 Development of zero-discharge technologies of water-processing, usage of deaerators of new
generation
 Development and upgrade of hydropower equipment, namely for midget power plants (up to 2 MW)
and micro power plants (up to 100 kW).
Development of cooperation with Denmark
Е4 Group gradually expands scope and trends of cooperation with Danish companies, which hold
world leading positions in power efficiency sphere. Agreement on strategic cooperation with DEA (Danish
Energy Agency) and DBDH (Danish Board of Distant Heating) with participation of leading Danish companies
Danfoss, Grundfos, Aalborg Engineering, APV AN SPX BRAND, LOGSTOR, BROEN, OKP CLEARING,
Kamstrum was signed on November 9, 2009. Purpose of the Agreement is development of partner relations
and joint work on making and implementation of standard design solutions for fuel and energy sector and
housing and communal services; conduction of educational seminars for specialists of designing institutes
and engineering companies.
Almost in every large-scale project of the JSC power-efficiency equipment Danfoss and pumping
equipment Grundfos are used. «Reconstruction of the Zhodinskaya TPP boiler house no.3 (RK-3) in Borisov
(Republic of Belarus) involving CCPP-65 MW construction» project provides for delivery of boiler-utilizers
produced by Danish company Aalborg Engineering.
On April 27, 2011 during visit of V.V. Putin to Denmark E4 Group signed
agreement on cooperation with LOGSTOR, designer of production technology and
world leader in production of pre-insulated tubes. Development of cooperation
between E4 and LOGSTOR is an important part of the process of implementation of the Russian Federation
state policy on upgade of Russian economy and increase of its power efficiency. Within the framework of the
agreement E4 Group and LOGSTOR intend to exchange their experience and knowledge in the sphere of
power efficiency, coordinate work on extensive implementation of energy-saving and power-efficient
technologies, materials and equipment when developing heat supply systems.
At the same time the parties are planning joint realization of display and pilot drafts as well as
projects on construction of new and upgrade of the existing heating systems. As a separate clause of the
agreement between the companies there is training of specialists of designing and engineering companies,
including subdivisions of E4 Group, in modern technology of complex designing, construction and fitting of
power-efficient heat-insulated piping by means of conducting educational seminars, conferences,
presentations.
In advance of an official visit of the Queen Margrethe II of Denmark, Prince
Consort, as well as His Royal Highness Crown Prince to the Russian Federation on
September 6-9, 2011, JSC E4 Group, JSC «e2» and RU-COM group signed an
agreement on formation of Open strategic alliance in the sphere of energy saving with
Danish companies Danfoss, Grundfos Holding, Logstor, ABB, Danish Energy Solutions,
Amplex, WEXPO International, Teplotex APV LTD.
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Interaction with Partners on Power-Efficient Projects
In 2011 a list of prospective partners of E4 Group on establishment of strategic alliances in the sphere
of power efficiency was created. The JSC will continue expanding cooperation with AVEVA (Great Britain)
concerning usage of innovating technologies of automated 3D designing and 6D turnkey contract control in
the projects. AVEVA technology is also used in global power industry by the following companies: Alstom
Power, AREVA, EDF, Foster Wheeler Energy, Mitsubishi Heavy Industries, Siemens Industrial Turbines and
others.
Partner relations with WILO (Germany), Flakt Woods Group (France) in the sphere of application of
new generation of pumping units and draught machines are established. In the sphere of distant heating
arrangements on cooperation with SMIT-Yartsevo (Russia), Tateploizolyatsia (Kazan) are reached. In the
sphere of development of gas-turbine and gas-piston power plants of average and low power, including
cogeneration, mini-heat and power plant - with Wartsila Corporation (Finland). Consultations with Solid Cell
Inc (USA) and GK RUSNANO are being held regarding chemical generators on the basis of solid-oxide fuel
cells. In the sphere of membrane technologies of water-processing cooperation with SPC Mediana-Filter and
Voronezh-Aqua is being developed, regarding thermal technologies of water-processing – with IKSA (Russia)
and Ivanovo State Power University.
The main service subdivision, which takes active part in the market of energy saving sphere
and implements unique power efficient pilot turnkey projects is JSC «е2» (www.e2-ru.com) –
100% subsidiary enterprise of JSC E4 Group, established on December 20, 2010.
Principal trends of activity of JSC «е2» are the following:
 preparation of application programs for increase of power efficiency, complex development of
energy sector and housing and communal services for entities of the RF and municipal formations
 implementation of advanced experience and energy-saving technology in design, construction and
operation of objects of infrastructure, industry and housing and communal services, as well as within
the framework of energy service contracts in consideration of accumulated experience, in
partnership with the leading international and Russian equipment manufacturers, as well as expert
organizations
 conductance of energy audit in cooperation with designing institutes
 implementation of energy management, which underwent stage of practical realization and proved
to be highly efficient
 energetic simulation, evaluation and improvement of PSD buildings and structures for the purpose to
increase their power efficiency on the basis of experience received when designing and construction
power-efficient office building «Eko-office» in Skolkovo
 global search for the most advanced energy saving technologies and proposal of high tech complex
solutions for different areas of agriculture, entities of the RF and municipal formations.
In the JSC’s projects a wide use of plasma lamps of new generation is
planned. JSC «е2» concluded an exclusive contract with the American company
LUXIM for supply of innovative plasma lamps in the territory of Russia and CIS
countries. Plasma lamp has a variety of advantages in comparison with lightemitting diode lamps: natural white light, electric energy saving up to 60%,
service life – 50000 hours.
Priority trends of further mutually beneficial cooperation and development of
partner relations between JSC E4 Group and NPO JSC ELSIB and VASSA engineering
Ltd, Russian representative office of the Finnish company VEO concerning
promotion of power efficient technology of frequency-controlled joint product E4ELSIB VEDA, are already determined.
1. Variable-frequency electric drive Е4- ELSIB -VEDA – power up to 5.2 MW.
a. On the basis of two transformers circuit with low-voltage frequency
converter and high-voltage electric motor;
b. On the basis of low-voltage frequency converter and low-voltage electric motor;
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2. Variable-frequency electric drive, power up to 8 MW on the basis of frequency converters 6kV,
10kV.
3. Excitation systems of synchronous machines ELSIB -VEMA:
a. Excitation systems of generators ELSIB -VEMA-G;
b. Excitation systems of electric motors ELSIB -VEMA-М.
Mini-heat and power plant on the basis of gas-piston power plants
On June 15, 2011 in Novosibirsk a routine educational seminar Wartsila took place. It was
conducted for E4 Group companies in the format of videoconference and broadcasted in
all and every company of the engineering Holding. WARTSILA is a world leader in
development of multifuel internal combustion engines with unit capacity of power plants
18.2 MW. The purpose of the conducted seminar is to familiarize managers and specialists of designing and
engineering companies of the Group with equipment, technologies, approaches to design and engineering,
as well as economic justification of projects of Wartsila power stations construction.
Information about volume of energy resources used in 2011
Volume of
consumption
accounting on the
basis of quantities
Unit of
measurement
Volume of
consumption,
thous.rub.
16 945 151
kW-h
34 464
Electric energy required for household needs
232 450
kW-h
720
Thermal energy required for household needs
125
thous. m3
2 839
Energy resource type
Electric energy required for industry
111
14
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SECTION 14. RISK MANAGEMENT
14.1 Risk Management Policy
Policy of the Risk management of the Company is based on a complex approach to the risks analysis
and to the methods of reducing risks probability as well as minimization of their negative effect. The existing
structure of managing the risks within the Company:
The first level
of management
The second level
of management
The Board of Directors of E4
Group JSC
Council on the risks of E4
Group JSC. Risk manager
Specialists of the Department of
Insurance and Risk
Management of E4 Group JSC
The third level of
management
Operational level
Structural and separate
divisions: the risks owner
Structural and separate units
responsible for the activities
Defining the objectives of risk management
- Organization of work on risk management.
- Determining the tolerance level of risks.
- The decision making on risks of disputes.
- Making decisions on current issues of risk
management.
- Evaluation of the IRMS implementation (Integrated
Risk Management System).
- Adoption of a risk management program.
- Identification of prospective project risks in the flow of
examination of tender documentation.
- Control of correctness of risk assessment methodology.
- Consolidation of information on risks.
- Monitoring compliance of activities to risks identified.
- Preparation of schedules and reports on risks.
- IRMS assessment.
- Formation of the list of risks.
- Description of risks.
- Quantitative and qualitative assessment of risks.
- Determination of risk management methods.
- Allocation of the implementation personnel with
respect to risks.
- Develop action plans for risks, monitoring of their
execution.
- Monitoring of risk assessment.
- Informing about the case of implementation risks.
- Implementation of activities on risks.
- Communicating the status of activities at risks.
As part of risk management program being implemented in 2011 the Company conducted the following
measures:
 Risk management activity (RM) was integrated into the duties of a Risk Manager of the Company
(Organizational development plan for 2011)
 Reactions to all kind of risks of the Company’s Risk Map were scheduled; long-term strategies of
reacting to the risks selected.
 Plans of measures to manage top risks scheduled in compliance with terms, set forth for each plan.
 Self-assessment of the existing RM system performed.
The objectives of risk management systems for the management of the Company for 2012 are:
1. Creation and development of databases and knowledge to track key performance and risk indicators
2. Increase of staff motivation with respect to risk management
3. Identification of risks of key business processes based on the descriptions of business processes,
identification of response measures.
4. Self-evaluation and optimization of risk management:
 Description of key actions / areas of risk management of all risks and opportunities in the risk map
 Updating maps of risks and opportunities, taking into account new information
 Creating a unified database and registry of regulation documentation on risk management with the
shared access (as part of work to create IMS (Integrated Management System)
 Definition and implementation of necessary updates/amendments to database of regulatory
documents.
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Constant tasks of risk management system include regular execution and optimization of the following
activities:
 Timely inform about the risks
 The allocation of responsibility for risk management
 The identification and systematic analysis of risks
 A mandatory account of risks when making management decisions
 Increasing the effectiveness of managerial decision-making
 Improving the effectiveness of risk management
 Development of internal control system
• Maintaining and developing the risk management system
• Accumulation of knowledge in the field of risk management
In 2012, the development of risk management is planned under collaboration with department of
quality with respect to creation of an Integrated Management System.
14.2 Risk groups
Country risks
2011 was marked by political stability in the country. The worsening of political situation in the
country in 2012 is unlikely. Therefore, the risks associated with the political situation in the country, are
negligible.
Market risks
There is a risk of underfunding of programs for regional and industrial development due to high
federal budget deficit and reducing subsidies to regional budgets.
A long and successful experience of the competitors in projects in the EPC format, as well as the tried
and tested contacts with foreign partners, threatens release of the Company to foreign markets.
Insufficient demand of the majority of potential customers for innovation component of the Company.
Leveling of such risks and minimization of consequences of their occurrence are possible through:
 Geographic diversification: access to markets of infrastructure construction of foreign countries;
 Industrial diversification: reducing dependence on funding in the sectors with different structure of
funding sources (presence in industries dominated by both the private and public funding);
 Further work to strengthen relationships with technology leaders;
 Conduct marketing activities aiming at increase in demand for innovative services component of
the Company (environmental friendliness, efficiency, safety);
 Forming alliances with leaders of local markets for EPC services when entering foreign
infrastructure construction markets;
 Increase operational efficiency in terms of personnel, technology and management systems to
maintain rated profitability under conditions of high market power and concentration of customers.
Project risks
One of the most significant types of risks for the Company are the risks associated with the
implementation of EPC / M-contracts. For leveling of such risks:
 The Company has established and successfully operates a project management system, based on
information system named Primavera and its integrated modules.
 Methodology for risk management projects of general contractor of the Company is created and
permanently improving. During on-line operation the identification and qualitative assessment of
risks and challenges, associated with the project (degree of detail depends on the stage of the
project life cycle) is being made. As part of project risks assessment measures to mitigate the
effects of risk the actions are developed with appointment of those responsible for their
implementation.
Ownership risks
As part of participation in competitive procedures for selection of contractors The Company has
repeatedly faced the problem of missing information (document certifying the ownership right) on the
ownership of land, buildings and structures that fall into a site of construction, what leads to price rise and
delay in the project schedule.
Minimization of such a risk may be achieved through:
 Considering of the issue by the customer before the announcement of tender and submission of
publicly available information to the participants;
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 Formation conditions of agreement in such a way that the contractor has the right to change the
terms of project in case of delay in submission of legal property confirming documents. Such
approach to the organization of contractual scope of work will significantly reduce risks of the
General Contractor and reduce the time of construction.
Design decision risks
Design errors, low efficiency of technical solutions, used in the project, can either lead to a rise in the
cost of the project or to reduce the Company rating on the market of services provided. For leveling of such
risks, the Company is working on the following areas:
 Involvement of customer in discussion of major technical decisions, substantiating the
effectiveness of certain technical proposals usability within the project;
 Search, self-development and introduction of innovative technologies, new equipment, devices and
machinery;
 Participation in specialized exhibitions and conferences;
 Use of modern technologies of three-dimensional design on the basis of AVEVA in the flow of
implementation of own projects, which allows yet at the stage of project development to prevent
potential risks and problems.
Construction and erection risks
Poor execution of construction works due to errors in design documentation, poor organization of
work leads to a deviation from the targeted parameters of the project. For leveling of such risks the
Company is working on the following areas:
 Execution of maximum possible amount of work on their own with the involvement of experts of
the Group;
 Organization of competitive procedures to select contractors for the work that can not be
performed in-house;
 Implementation of operational monitoring of progress of works on site, including those of the subcontractors;
 Continuous improvement of personnel skills;
 Involvement of equipment manufacturers experts into execution of sub-contractor work;
 Insurance of construction/erection risks.
Logistics risks
The reasons for the logistics risks are outdated transportation infrastructure, a limited number of
companies able to perform complex logistics projects, complex system of preparation of documentation for
transportation of bulky equipment. For leveling of this type of risk, the Company carries out procedures for
competitive selection of logistics companies.
Reducing the likelihood of risk events associated with transportation of bulky goods to construction
sites can be achieved by applying to this type of work of project management methods, development of a
detailed schedule for its implementation, identification of all possible types of permits and approvals (yet at
the stage of the E4 Group participation in the bidding procedures). Also, the leveling of this risk is possible
through a detailed consideration of the proportion of suppliers that are in the area of logistics efficiency
relative to the object of construction as well as through clear understanding by specialists of the Company of
necessary routes and delivery terms.
Risks associated with manufacturing cycle of individual equipment
Key risks as to ЕРС/М-projects are associated with the supply of equipment of individual
manufacturing cycle. This is the most resource-consuming production the result of which affects all key
parameters of the project: time, cost, quality (achievement by the object the targeted indices). For leveling
these risks, the Company conducts:
 Mandatory selection of supplier on the basis of competitive procedures;
 Working closely with suppliers of major equipment yet at the stage of the Company's participation
in competitive procedures of a client;
 Mandatory requirements to suppliers as to availability at a supplier of the quality management
system, to scheduling a quality plan
 Operational work progress monitoring (design, manufacture, supply);
 The manufacturer inspection prior to signing the contract in order to check its level of facilities, the
reference list check out;
 Mandatory submission of requirements to suppliers as to certification of equipment, its packaging
and marking, as well as insurance;
 Implementation of operational monitoring of term of fulfillment of work on the basis of developed
calendar/network schedules for execution of each type of work combined with the schedule of ODA
implementation at suppliers;
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 Mandatory participation of general designer’s specialists while selecting the suppliers of major
equipment and developing technical specifications for manufacturing.
Organizational risks
In order to improve project management effectiveness and organizational risk leveling, project teams
are created in the Company, the project manager is assigned, highly qualified specialists in all areas of the
project are being selected for all directions of the project implementation, calendar-network planning and
progress forecasting of the project progress are being done.
Staff risks
Three main reasons cause the emergence of the risks associated with personnel management:
 Lack of skilled engineering staff and project managers on the market;
 Availability of possibility of employees’ transfer to competing companies (or to other companies in
the industry);
 Low motivation of personnel.
Lack of qualified engineering personnel in the projects can be covered by rotations within the
Company. Currently the E4 Group includes companies operating virtually the entire range of activities within
the project "turnkey". The company has a training program for project managers, project management
training, as well as occupational training and retraining.
In order to reduce the risks associated with the transfer of key personnel to other companies, the E4
Group has developed a system of motivation of staff, benefits package is proposed, as well as the measures
are being implemented to promote the retention of key personnel.
In order to improve staff motivation, in addition to the above, various activities related to intangible
incentives and team building (the formation of teams) are conducted:
 Education and team building training;
 Internship;
 Corporate events’ are being organized;
 Celebration of the events, significant to employee;
 Confirmation of importance of employee and his/her contribution to the reaching of project
objectives (article in the corporate newspaper, commendation, awards and gifts, etc.).
Legal risks
Risks associated with lack of perfection of the Russian legislation.
Constant change in regulatory/legislative documents, contradiction of legislative norms and their
varying interpretations can lead to increased costs and become an obstacle in development of the Company.
Constant monitoring of regulations governing activities of the Company, study of legal practice and, if
necessary, engagement of the leading Russian legal experts contributes to proper legal support to the
Company and reduction of legal risks.
Possible changes in foreign exchange regulations and customs control and dues.
Change in legislative acts that govern monetary relations, import and export issues may hinder the
proper executions of obligations under contracts concluded earlier with foreign counterparts, providing for
the need to make payments in foreign currency and require additional agreements to such contract. To
reduce the impacts associated with the risk, the company carries out continuous monitoring of legislation in
this area, including those prepared for approval, diversifies portfolio of suppliers increasing the share of
domestic producers.
Protection from currency exchange rate changes for imported equipment can be carried out by fixing
the exchange rate in the contract, separation of the agreed amount with the customer into the Russian and
foreign currency (for payments to foreign suppliers), the conclusion of direct contracts by the customer with
foreign suppliers and involvement of the Company as a project manager only.
Risks associated with changes in judicial practice on issues of activity of the Company
The risks of this type can affect negatively the performance of the Company, as well as results of
ongoing trials, in which the Company is involved. In order to minimize this type of risk the Company
constantly monitors the current legislation and legislative initiatives.
Safety risks
Safety risks may be associated with violation of occupational safety rules, industrial safety, economic
safety, environmental standards and requirements at the site.
In order to prevent occurrence of risk events mentioned the Company focuses on quality management
system, providing safe working conditions, ensuring industrial and ecological safety in the area of
116
construction objects. For this purpose, while implementing projects the programs on labor and environment
protection are being developed, corporate policy is tightened in the field of environmental compliance; after
completion of construction work the measures to restore the natural environment are provided.
Financial risks
Risks associated with the violation by customer of financial obligations
Violation of terms of payment by the Customer may result in suspension of work on the project, in
necessity to attract credit resources of the Company to cover cash shortages and to reduce the Company's
gross margin. To level the risks in question it is necessary to:
 Include into General Contract terms the provisions of guarantees by customers of execution of
financial obligations as well as (if possible) receipt from the customer a documented confirmation
of creditability to finance the project;
 Conclude sub-contractual agreements directly connected to payment by the customer of these
works;
 To change over from the fixed-price contract for a fixed bonus which will increase the level of
customer involvement in the project and the transparency of financial relations;
 Translate financial obligations of contract with customer into agreements with subcontractors.
Interest risks
Change the refinancing rate can cause higher interest rates on loans; consequently, costs are likely to
rise, as the increase in cash flow to service loans will be required. Conversely, if the funds are placed on
deposit on which interest is paid, there is a risk of reducing the income of the Company in case of interest
rate cuts.
To reduce the impact of this type of risk it is necessary to negotiate the establishment of fixed rates
on loans, as well as to optimize credit policy, taking into account forecast in changes of refinancing rate and
interest rates on loans.
In addition, in order to reduce interest rates on loans and improve relationships with banks the
openness in providing information about the company, submission to banks quality support, control and
reduction of accounts receivable (including negotiations with clients) is required.
Price risks
The occurrence of risk events associated with changes in cost of works executed, equipment and
materials, can lead to both negative and positive consequences depending on the increase or decrease in
price. Transition to the EPCM contract and development and implementation of incentive schemes of the
Company by the customer through participation in savings from the project, is the optimum solution for the
customer and the Company. In addition, it is possible to hedge the risks by entering into long-term and
wholesale contracts for supply of equipment / materials (for example, for a number of projects under
implementation in the Company).
Tax risks
The Company does not exclude the possibility of tightening tax laws, particularly in the state budget
proposed deficit of the Russian Federation. In case of introduction of new taxes or changes in procedure for
payment of current taxes, the Company would be forced to pay higher taxes, which may have a negative
effect on its operations and financial results.
For leveling the risks, the provisions which give a possibility to review terms in case of changes in tax
legislation should be included into the EPC / M contract.
Currency risks (convertible quotes)
This risk may affect the results of the Company operation both positively and negatively. In case of a
positive change in quotations the Group can earn extra income, while in case of a negative one - there is a
possibility of not getting profit from the impact of exchange rate changes on the expected cash flows.
To reduce the negative consequences of this risk it is necessary to:
 Discuss with customers the transition from a fixed-price contract (EPC) to contracts with a fixed
reward (EPCM), which will assist in reduction of the risks of General contractor associated with an
increase in the value of contracts concluded in currency values;
 Insurance the currency risks by entering into foreign exchange transactions.
Risks of emergencies
Consequences of occurrence of risk of accidental loss or accidental damage to object under
construction may be lowered by implementing a comprehensive system of insurance coverage in accordance
with international quality standards.
117
CONTACT DETAILS
Full company name
Public Joint-Stock Company Е4 Group
Abbreviated name
JSC Е4 Group
Name in English
JSC E4 Group
Address of location
Mailing address for correspondence
Telephone / Fax
12, entrance 9, Krasnopresnenskaya emb., 123610,
Moscow
12, entrance 9, Krasnopresnenskaya emb., 123610,
Moscow
Tel: (495) 642-83-44
Fax: (495) 642-83-45
Web page
http://www.e4group.ru
E-mail address
e4@e4group.ru
Registrar
The Company maintains a register of their own
118

Annual Report JSC E4 Group, 2011

Transcription

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