The work of Kubanenergo is divided into a number of areas which are priorities in accordance with the corresponding decision by the Board of Directors taken for 2007-2011.

1. Providing quality, reliable and safe electricity supplies to consumers, meeting consumer demand.

   More information can be found in Results of the Company’s activities/Results of operating activities.

2. Carrying out the Programme for Construction of Olympic Facilities and Development of the City of Sochi as a Mountain Resort, confirmed by Decree of the Government of the Russian Federation of 29 December 2007 № 991.

   For more information see Results of the Company’s activities / Investment activity / Construction and renovation of Olympic facilities.

3. Improving the technology policy at Kubanenergo in the field of modern information technology.

   For more information see Results of the Company’s activities / Results of operating activities / Information technology.

4. Carrying out the environmental policy of Kubanenergo for 2008-2015.

   For more information see Human capital and social responsibility / Environmental protection.

5. Raising the level of antiterrorist and counter sabotage protection of Kubanenergo electricity production facilities.

   For more information see Results of the Company’s activities / Results of operating activities / Ensuring the security of Company facilities.

6. Carrying out work to draw up titles to ownership of Kubanenergo real estate, executing/re-executing title to use land parcels for 2011-2014 taking into account the execution of work on preparing information on the borders of buffer zones at electricity production facilities.

7. Developing human capital assets.

   More information can be found in the section titled Human capital and social accountability / Staff training and development.

   
   

   A priority area of activity, confirmed by the Board of Directors in 2011.

8. Realising the Programme for Innovative Development at Kubanenergo for 2011-2016.

   The Programme for Innovative Development at Kubanenergo for 2011-2016 was confirmed by a decisionof the Board of Directors on 29 July 2011 (Protocol № 115/2011) and is aimed at drawing up an effective mechanism for realising the innovation cycle, creating favourable conditions for creating and promoting high technology equipment and leading technologies for the electricity production sector.

   For more information see Results of the Company’s activities/ Results of operating activities/Innovation work at the Company’s.

9. Planning development of Kubanenergo electricity distribution network.

   Planning development of Kubanenergo electricity distribution network confirmed as a priority area by a decision by the Board of Directors of 7 July 2011 (Protocol № 116/2011).

   In carrying out this decision by the Board of Directors, the Company is carrying out the following work on long term planned development of Kubanenergo electricity networks:

   • direct involvement in development the Master Plan and the Programme for Long Term Development of Electricity Supply in Krasnodar Region for 2012-2016;
   • preparing proposals for inclusion in work on construction of new electricity network facilities and renovation of existing ones in the Plan and Programme for Development of Electricity Supply in Krasnodar Region and the Republic of Adigeya for 2013-2017;
   • realising the programme for innovative development development, which stipulates examination for development of the plan for long term development of Kubanenergo 35 kilovolt and higher electricity networks for 2012-2017 and further to 2022;
   • participation in developing a programme for integrated development of public utility I nfrastructure systems of 44 municipalities in Krasnodar Region for 2012-2020.

   More information can be found in the section titled Development Strategy / Strategic aims and prospects for development / Prospects for Development.

10. Implementing a system to manage construction of the most important investment projects.

    The most important investment projects for the Company at the current time are creating and renovating facilities included in the Programme for Construction of Olympic Facilities and Development of the City of Sochi as a Mountain Resort confirmed by Decree of the Government of the Russian Federation on 29 December 2007 № 991.

    To improve the effectiveness of realising these projects, since December 2011 there has been a Regulation for managing construction of the most important investment projects which sets out the principles and order:

    • drawing up the object of supervision;
    • cooperation between departments participating in the supervision during construction;
    • monitoring of realisation of planned indicator and drawing up reports;
    • drawing up management decisions and corrective actions;
    • executing stages of construction of facilities;
    • setting responsibility for realisation of projects to construct Olympic facilities.

    The system to manage construction of Olympic facilities is being carried out using Oracle Primavera P6.

11. Consolidation of electricity network assets in the territory served by Kubanenergo.

    To increase its share in the market for electricity network services and reduce the number of territorial network companies in the region served by Kubananergo the Board of Directors of the Company confirmed a long term Programme for Consolidation of Electricity Network Assets for 2011-2015 (Protocol of 21 November 2011 № 121/2011).

    The task of this Programme is to acquire property or its use of network assets not under the control of Kubanenergo. It is planned to consolidate 283 power facilities with more than 18 000 kilometres of power line with a capacity of more than 2122 MVA. Expenditure on consolidation of these facilities will total approximately 11 205 million rubles.

    At the current time work is ongoing on gathering together documents of title regarding the facilities included in the Programme, and they will be aquired in 2012, and negotiations are being held about the conditions for closing deals, deadlines and cost indicators.

    Realisation of the Programme should make it possible to improve the reliability of electricity supply and the manageability of electricity networks.

12. Carrying out obligatory energy inspection at production and business facilities and Kubanenergo electricity production facilities in 2011-2012.

    In the accounting year energy inspections were carried out in administrative and production buildings and installations of the Company, and energy certificates were prepared for the appropriate objects from the results.

    For 2012 it is planned to carry out energy inspections on the distribution network of all branches of the Company and prepare the energy certificate of the Company and present it in the Ministry of Energy of Russia.