2006 Social Responsibility and Corporate Sustainability Report (стр. 1 )

THE OPEN JOINT STOCK COMPANY «YENISEY TERRITORIAL GENERATING COMPANY(TGC-13)»

2006 Social Responsibility and Corporate Sustainability Report

CONTENTS

SUMMARY 2

LIST OF THE USED ABBREVIATIONS 3

GENERAL INFORMATION ON THE COMPANY 7

2006 ACTIVITY IN FIGURES 11

THE COMPANY’S ROLE IN THE REGION 13

STRATEGY OF THE COMPANY’S DEVELOPMENT 16

CAPITALIZATION INCREASE ACTIVITIES 17

MONETARY STREAM INCREASE ACTIVITIES 19

INVESTMENT PROGRAM OF THE COMPANY 20

SOCIAL IMPORTANCE OF THE INVESTMENT PROGRAM 21

STRATEGY ACTIVITIES DIRECTED TO

CORPORATE GOVERNANCE DEVELOPMENT 23

SOCIAL RESPONSIBILITY AND CORPORATE SUSTAINABILITY 27

RELATIONS WITH STAKEHOLDERS 30

ENVIRONMENTAL POLICY 41

LABOR RELATIONS AND PERSONNEL MANAGEMENT POLICY 53

MAINTENANCE OF SUSTAINABILITY OF THE BASIC PRODUCTION ACTIVITY 59

APPENDICES 62

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SUMMARY

The JSC “Yenisei TGC” (hereafter "The Company" or “Yenisei ТGC”) corporate sustainability and social responsibility report for 2006 represents the information on the Company’s activity in 2006 and plans for the future in the field of sustainable development.

The basis of this report is the social position of the JSC “Yenisei ТGC (ТGC-13)” representing the Company as a socially responsible business facility and principles by which the Company is guided at making strategic decisions. The principle contents of the Company’s Development strategy is presented to the readers; the report covers non-financial risks, impact on the environment and also the JSC “Yenisei TGC” (TGC-13) contribution to the personnel development and social and economic development of the regions of its presence. Essential attention is given to the Company’s investment program and the mechanisms considering public interests. The Report reflects corporate mechanisms ensuring the quality of the Company’s work and efficient control over its effect on the economy, environment, society and social sphere of the regions of its presence. Special accent is made on informing the interested parties and involving them in the process of the Company’s effect management.

The report includes the JSC “Yenisei TGC (TGC-13)” plans and obligations in the field of corporate social responsibility. Its contents are defined with the consideration of the interests and the wishes stated by the representatives of the interested parties: regional and local authorities, environmental associations, investment community, major shareholders of the Company and other parties, and also in accordance with the key aspects of the Company’s Development Strategy.

The report had been prepared on the basis of GRI (G3 Guidelines) Guidelines on reporting in the field of sustainable development and also the draft of the GRI power branch protocol. Interaction with the stakeholders is based on the principles of AA 1000 SES standard.

The Report was approved on October, 1st, 2007 in the form of public hearings with participation of representatives of all the Company’s stakeholders, held on the basis of AA1000 SES standard.

The next report is to be completed in the summer of 2008.

The person to be addressed regarding social reporting issues is the Leading Specialist of the Corporate Governance Department - Andrey Borisovich Oleinikov, tel. (39

Additional information on economic, ecological and social aspects of the Company’s activity is available on the corporate site www. *****.

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LIST OF THE USED ABBREVIATIONS

AO-energo – the open joint-stock company of power engineering and electrification;

BU - business unit of the OJSC RAO “UES of Russia”;

GNP - gross national product (total value of all goods and services produced in the country);

SDPP - state district power plant;

SDCs - subsidiaries and dependent companies;

ASW – ash and slag waste;

ASU - ash and slag utilization;

eff. - efficiency;

KPI - key performance indicators;

PTL – power transmission line;

NWEM - new wholesale electricity market, since 01.09.2006 ;

R and D - research and development;

RD - research development;

NPP – non-state pension provision;

WEM - wholesale electricity(power) market;

BTA - branch tariff agreement;

MPE - maximum permissible emissions;

MPC - maximum permissible concentration;

MPD - maximum permissible discharge;

RAO “UES of Russia” - Russian Open Joint-Stock Company "United Power System of Russia" ;

REC - regional energy commission;

SPZ – sanitary protective zone;

ТGC - territorial generation company;

FS - feasibility study;

TPS - thermal power station;

CHP(P) – combined heat and power plant (a thermal power station producing not only electricity, but also heat delivered to the customers as steam and hot water);

FWEM - Federal Wholesale Electricity (Power) Market;

AA 1000 SES - Accountability Stakeholder Engagement Standard;

GRI - Global Reporting Initiative;

IPO - Initial Public Offering;

ISO - International Organization for Standartization;

OHSAS - Occupational Health and Safety Assessment Series.

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STATEMENT BY THE DIRECTOR GENERAL

Dear colleagues!

The Reform of the Russian power industry in the past 2006 has reached its final stage. Global transformations occurring in the power industry have affected Eastern Siberia to the full extent.

The results of the “Yenisei ТGC (ТGC-13)”activity for 2006 can be considered successful without exaggeration: on December, 31st corporate ­procedures on formation of the incorporated generating company on the basis of OJSC “ТGC-13”, OJSC “Krasnoyarsk Generation”, OJSC “Khakass Generation Company” were completed­. Since that time the JSC “Yenisei TGC (TGC-13)” began its activity as the united operational company. As the assignee of all the rights and responsibilities of the OJSC "ТGC-13" since December, 31st, 2006 the JSC “Yenisei TGC (TGC-13)” acts as the trust manager of the OJSC "Khakassenergosbyt" shares.

The principle goal of the conducted inter-regional integration of generating assets is creation of a competitive company, attractive for investors, with dynamically growing capitalization. Consolidation of financial and generating assets ­ of the Krasnoyarsk region and the Khakass Republic ­has raised the investment appeal of the JSC "Yenisei ТGC (ТGC-13)", has made it ­more stable and reliable. Already now the unified company shares are quoted at the Russian stock exchanges, the Company’s capitalization is growing steadily; besides, the Yenisei TGC participates in all WEM sectors as ­the independent entity of the market.

The Priority targets of the Company for 2007 are reduction of expenditures and increase of sales’ profitability by realization of measures directed to cost-saving and optimization of loading modes of the equipment, economically reasonable restraint ­of the Company’s tariff growth to secure the already occupied market share and expand its influence zone. One of the basic directions of the development of our Company and the industry as a whole in 2007 is ­further liberalization of the electric power industry,­ increase in a share of the competitive electric power market and stage-by-stage transition to the competitive power capacity market.

A special role in 2007 will be assigned ­to the investment program on attraction of funds for the completion of generating sets № 1 and № 2 of ­Krasnoyarsk CHP-3 branch of the JSC «Yenisei ТGC (ТGC-13)» through issue of additional shares.

In 2006 the Company completed the first report on social responsibility and corporate sustainability reflecting our principles of environmental, personnel and social policy­ for 2005. The Company shares the principles of social responsibility and strives to implement them in practice in all spheres of business. One of the major ­principles of the Company’s activity is regular interaction with stakeholders.

The key feature of the JSC "ТGC-13" from the point of view of non-financial risks and interaction with stakeholders’ management is as follows: the Company, actually being the monopolist supplying the region with thermal power, is one of the major entities providing conditions for the sustainable development of the region of its presence – the Krasnoyarsk region and the Republic of Khakassia.

In 2007 the Company will continue to ­prepare non-financial reporting; this time we offer you the JSC “Yenisei TGC (TGC-13)” social responsibility and corporate sustainability Report for 2006. This year the mechanism of public hearings is applied for the first time for public approval of the Report and consideration of all interested parties’ opinions.

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Seals, like solar batteries, absorb energy of the diffused sunbeams.

Seals are one of rare animal species equally active both in the day-time and at night.

The Yenisei ТGC (ТGC-13) plants work uninterruptedly in a round-the-clock regime.

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GENERAL INFORMATION ON THE COMPANY

The open joint-stock company “Yenisei Territorial Generating Company (ТGC-13)” is a new generating company established as a result of reforming of the electric power industry of the Krasnoyarsk region and the Republic of Khakassia. The power systems of these regions have been divided in accordance with the activity type into generation, grid and power sales companies. The JSC “Yenisei ТGC (ТGC-13)” was established on the basis of the regional generation companies OJSC “Krasnoyarsk Generation” and the OJSC “Khakass Generation Company”.

Yenisei ТGC generates thermal and electric power, operates power stations, boiler houses and heating systems, carries out trust management of the OJSC "Khakassenergosbyt" shares. Thermal power is being delivered to Krasnoyarsk, Abakan, Nazarovo, Divnogorsk, Minusinsk, Sosnovoborsk and Kansk consumers. Electric power is delivered to the wholesale electricity market. Besides, the Company purchases some thermal and electric power to perform its obligations to consumers on power delivery.

The Company comprises 8 electric power stations, heating systems, electric boiler houses. The total established electrical output of a reactor of the stations makes 2458 МW, thermal output - 7117,4 Gcal/h. The boiler-houses’ capacity is 978 Gcal/h. The length of the heating systems owned by the Company is

743 km.

About 7 thousand employees work in the Yenisei ТGC; 6,8 thousand of them are busy in production. According to the performance indicators and the number of personnel employed the JSC “Yenisei ТGC (ТGC-13)” is one of the largest generation companies of Siberia.

The Yenisei ТGC shareholders are both legal entities and natural persons. Two principal shareholders: the OJSC RAO “UES of Russia” and the OJSC “Siberian Coal Power Company” own totally 88,61 % of the Company’s shares.

Yenisei TGC Capacities

Krasnoyarsk Krasnoyarsk CHP-1 Nel plant = 506 MW Qh plant = 1785 Gcal/hour Krasnoyarsk CHP-2 Nel plant = 465 MW Qh plant = 1405 Gcal/hour Krasnoyarsk CHP-3 Qh plant = 442 Gcal/hour Krasnoyarsk Heating system Qh plant = 660 Gcal/hour Nazarovo Nazarovo SDPP Nel plant = 1120 MW Qh plant = 870 Gcal/hour Divnogorsk Electric boiler-house + 6 quarter boiler-houses of the Heating System branch Qh plant = 121 Gcal/hour

Krasnoyarsk region: Krasnoyarsk Sosnovoborsk Kansk Nazarovo Minusinsk Divnogorsk Republic of Khakassia Abakan

Sosnovoborsk Sosnovoborsk CHP Qh plant = 460 Gcal/hour Kansk Kansk CHP Nel plant = 17 MW Qh plant = 337,4 Gcal/hour Minusinsk Minusinsk CHP Nel plant = 80 MW Qh plant = 333 Gcal/hour 3 electric boiler-houses Qh plant = 144,3 Gcal/hour Abakan Abakan CHP Nel plant = 270 MW Qh plant = 481 Gcal/hour

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Share capital structure as of 31.12.2006

OJSC “RAO “UES of Russia” 56,92% - The authorized capital amount ,98 rubles.

OJSC “SUEC” 31,69% - Par value of shares - 226,42 rubles.

Other 11,39% - Placed shares total pieces.

The Yenisei ТGC has the following subsidiaries and dependent companies:

Name of the company	Yenisei TGC share
OJSC “Krasnoyarskenergoremont”	100%
OJSC “Krasnoyarskenergospetsremont”	100%
OJSC “Nazarovo Fish Farm”	100%
OJSC “Krasnoyarsk HEPP”	25,02%

In June, 2007 Yenisei ТGC sold its block of shares in the OJSC “Khakass Service and Repair Company” (the company specializes in the stations’ equipment repair).

Since June 2007 the OJSC “Kyzyl CHP” shares have been passed over in the trust management of the Company.

Share capital formation

On December, 31st, 2006 shares of the joining OJSC “Krasnoyarsk Generation” and JSC "ТGC-13" were converted into an additional share issue of the JSC “Yenisei ТGC (ТGC-13)” on the following factors:

146,0356 ordinary shares of the OJSC “Krasnoyarsk Generation” at a par value 1,25 rubles each were converted in 1 additional ordinary share of the JSC “Yenisei ТGC (ТGC-13)” with a par value 226,42 rbl.

159,462 preference shares of the OJSC “Krasnoyarsk Generation” at a par value 1,25 rubles each were converted in 1 additional ordinary share of the JSC “Yenisei ТGC (ТGC-13)” with a par value 226,42 rbl.

,272 ordinary shares of the JSC “Territorial Generating Company №13” at a par value 0,01 roubles each were converted in 1 additional ordinary share of the JSC “Yenisei ТGC (ТGC-13)” with a par value 226,42 rbl.

On February, 13th, 2007 the report on the results of the JSC “Yenisei TGC (TGC-13)” additional securities’ issues was registered. On February, 28th, 2007 changes in the Charter, related to the increase in an authorized capital of the JSC “Yenisei ТGC (ТGC-13)” were made. In 2006 the JSC “Yenisei ТGC (ТGC-13)” shares were not circulating in the official securities markets.

On March, 27th, 2007 in the OJSC “RTS” classical and exchange markets the auctions by JSC “Yenisei TGC (TGC-13)”ordinary registered shares have begun.

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On April, 9th, 2007 the JSC “Yenisei TGC (TGC-13)” shares (additional issues) were included in the CJSC “SE MICEX” List of unlisted securities.

On April, 11th, 2007 the CJSC “MICEX SE” started an auction by the JSC “Yenisei TGC (TGC-13)”ordinary registered shares (additional issues).

The JSC “Yenisei TGC (TGC-13)” ordinary registered shares (additional issues) were assigned the following codes:

№	Securities’ emitter	Type, code	State registration number	Securities code
1	JSC “Yenisei TGC (TGC-13)”	AO	E-001D	TGKM-001D
2	JSC “Yenisei TGC (TGC-13)”	AO	E-002D	TGKM-002D
3	JSC “Yenisei TGC (TGC-13)”	AO	E-003D	TGKM-003D

The supreme management body of “Yenisei ТGC” is the General Meeting of Shareholders. The shareholder's meeting approves the Board of Directors responsible for the acceptance of strategic decisions, control over the Company’s operation, the Company’s governance through its representatives in the committees under the Board of Directors. The Management Board of the Company is a joint executive body; it carries out business planning, makes key decisions and executes operational management by the Company within its authorities. Director General is the sole executive body; he supervises the Company’s current activity.

Yenisei TGC management structure

More detailed information on the competence and authorities of the Yenisei TGC governing bodies is available on the Company’s site: www. *****

		General Meeting of Shareholders	Auditing Commission
		Board of Directors
		Management Board
		Director General
		Executive Body
Moscow Representative office		Subsidiaries		Trust Management
Krasnoyarsk CHP - 1	Krasnoyarsk CHP - 3	Abakan CHP	Kansk CHP	OJSC “Khakassenergosbyt
Krasnoyarsk CHP - 2	Nazarovo SDPP	Minusinsk CHP	Sosnovoborsk CHP	OJSC “Kyzyl CHP”
	Krasnoyarsk Heating System

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Key dates of the Yenisei ТGC establishment

-  On June, 28th, 2005 state registration of the JSC “Territorial Generating Company №13” as a 100 % affiliated company of the OJSC RAO “UES of Russia” took place.

-  On July, 1st, 2005 state registration of the OJSC “Khakass Generation Company” allocated from the OJSC "Khakassenergo” as a result of reorganization took place.

-  On October, 1st, 2005 registration of the OJSC “Krasnoyarsk Generation” allocated from the OJSC "Krasnoyarskenergo" as a result of reorganization took place.

-  On November, 29th, 2005 an extraordinary General Meeting of Shareholders of the OJSC “Krasnoyarsk Generation” on transfer of the OJSC “Krasnoyarsk Generation” authorities of a sole executive body to the JSC "ТGC-13" was held.

-  In December, 2005 agreements on transfer of powers of the sole executive body of the OJSC “Krasnoyarsk Generation” and the OJSC “Khakass Generation Company” to the managing company – the JSC "ТGC-13" were signed.

The agreements came into force on 01.01.2006.

In August, 2006 on the Shareholder's meetings of the companies the scheme of reorganization of the OJSC ”Krasnoyarsk Generation” and the OJSC "ТGC-13" in the form of joining with the OJSC “Khakass Generation Company” was accepted by the majority of votes.

In October, 2006 the OJSC “Khakass Generation Company” Board of Directors made a decision on establishment of the following branches and representative offices:

-  Nazarovo SDPP

-  Kansk CHP

-  Minusinsk CHP

-  Krasnoyarsk CHP-1

-  Krasnoyarsk CHP-2

-  Krasnoyarsk CHP-3

-  Sosnovoborsk CHP

-  Krasnoyarsk Heating System

-  Moscow representative office

-  On October, 12th, 2006 the OJSC “Khakass Generation Company” Board of Directors approved the decisions and the prospectus of an additional share issue for converting; on November, 28th the Federal Service on the Russian Federation Financial Markets registered an additional issue and the prospectus of the securities issue.

-  On December, 06th, 2006 the OJSC RAO “UES of Russia” Management Board on its meeting approved the new staff of the OJSC “Khakass Generation Company” Board of Directors and the OJSC “Khakass Generation Company” Charter in the new wording was adopted:

1.  The Company changed its name from the OJSC “Khakass Generation Company” to the Open Joint-Stock Company “Yenisei Territorial Generating Company (ТGC-13)” – full name, for short – JSC “Yenisei ТGC (ТGC-13)”.

2.  Changes were made in the location of the Company; the new address is: Krasnoyarsk, Bograda Street, 144A.

3.  The number of members of the Board of Directors changed from 5 to 11 persons

4.  The joint executive body – the Management Board of the Company - was introduced.

5.  Changes related to the observance of stock exchange requirements for admittance of shares on the stock exchanges of MICEX and RTS were made.

-  On December 31, 2006 corporate procedures related to merger of the OJSC “Krasnoyarsk Generation” and the JSC “Territorial Generating Company №13” with and into the JSC “Yenisei Territorial Generating Company (ТGC-13)” were completed.

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2006 ACTIVITY IN FIGURES

PRODUCTION	Indicator	Units	2006
Installed capacity (electric)	MW	2458
Installed capacity (thermal)	Gcal/h	7091
Efficient thermal power output:	thousand Gcal.	13 944
Industry		1 861
Housing and Utilities		8 992
Population		907
Other		2 184
Efficient output of electricity to the wholesale market	mln. kW/h	8 940
ECONOMY	Indicator	Units	2006
Sales gain	*****bles	9 605
Cost price	*****bles	9 858
Gross profit	*****bles	-253
Net profit	*****bles	-433
ENVIRONMENT	Indicators	Units	2006
	Gross harmful emissions (including those by types) in the atmosphere	Thousand tons	118,646
	Solid fuel ashes		38,035
	Gaseous and liquid		79,508
	Sulfur dioxide		44,539
	Carbon oxide		6,523
	Nitrogen oxide		28,067
	Specific emissions in the atmosphere	Kg/ t. f e.
	Ashes (on solid fuel)		7,48
	Sulfur dioxide		8,76
	Nitrogen oxide		5,52
	Water used for the industrial needs	mln m 3	612,856
	Volume of loose water	mln m 3	271,874
	Discharge of the polluted sewage	mln m 3	0,6
PERSONNEL	Indicator	Units	2006
	Number of employees as of 31.12.2006	Persons	6 983
	Personnel rotation	%	4,5
	Number of occupational injuries’ cases	-	0
	Number of fatal outcome injuries	-	0
	Number of cases of occupational diseases registered		Not registered

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