8.1. Equity Capital Structure

TGC-1’s authorized capital is 38,543,414,165.71 rubles, divided into 3,854,341,416,571 and 3/7 ordinary registered shares of the equal nominal value of 0.01 rubles. No changes in the structure of TGC-1’s key shareholders occurred in the course of the year.

As of 12 May 2011, the date of finalizing the register for participation in the 2011 Annual General Shareholder Meeting of TGC-1, total number of Company’s shareholders was 327,735 including:


8.2. Securities Trading Shares

TGC-1’s shares circulated on the main trading site of the Russian securities market MICEX-RTS Stock Exchange. The securities trading is performed in three sectors: Main market, Standard and Classical markets. TGC-1’s shares were included in Quotation List “A1”.

Over the 12 months of 2011, the capitalization of TGC-1 decreased by 40.2 %, which corresponded to the decrease of the Russian electric energy sector for the given period. For 12 months of 2011, the MICEX and RTS indices decreased by 23.1 % and 23.3 % respectively, and the sectoral indexes of MICEX Energy Industry and RTC Electric Energy Industry by 32.3 % and 40.9 % respectively.

The TGC-1 Board of Directors approved the Company’s Dividend Policy by its decision of 24 December 2010. The Company plans to annually commit from 5 to 35 % of the net profit for payment of dividends given a fully established Reserve Fund.

At the TGC-1 Annual General Shareholder Meeting of 27 June 2011 the decision was made to pay dividends on the Company’s ordinary shares for the results of the 2010 fiscal year in the amount of 0.000046791 rubles per one ordinary share within 60 days following the date of the decision. The total amount of dividends paid for 2010 amounted to RUR 180.3 million. The Company’s executive bodies did not make the decision on payment of interim dividends for 2011.

Bonds

On 8 December 2011, the Federal Financial Market Service of Russia registered the issues and prospectus of TGC-1 series 03-06 bonds for total of 8 billion RUR to be placed by public subscription in order to finance the Company’s investment program. Each of the four issues comprises two billion bonds with a nominal value of 1000 RUR. The issues were registered with the following numbers: 4-03-03388-D, 4-04-03388-D, 4-05-03388-D, 4-06-03388-D. Bonded debt circulation term is ten years.

As of the end of March 2012, three TGC-1’s bonded debts of series 01-03 are circulating on the MICEX-RTS stock exchange. On 11 March 2012, a 10-year bonded debt of series 04 was placed at MICEX-RTS stock exchange with a total volume of 2 billion RUR, the first coupon rate was approved in the amount of 7.6 %. Decisions on trading of series 05-06 issues will be made in 2012, if it will be required to raise investments for funding the investment program.

Securities Floating Abroad

The programme of global depositary receipts (GDR) for TGC-1 shares was started on 9 July 2008 with the goal to ensure the rights of the holders of depositary receipts of RAO UES of Russia, who, after its liquidation, received securities of the separated companies pro rata their share in the holding company.

As of 30 December 2011, the share of GDRs in the TGC-1 charter capital amounted to 0.16 %, the quantity of GDRs according to Reg. 144А was 314,902, and the quantity of GDRs according to Reg. S was 941,957.


8.3. Management and Control Bodies

In accordance with TGC-1's Articles of Association of, the General Shareholder Meeting is the supreme management body of the Company. In 2011, one Annual General Shareholder Meeting of TGC-1 was held.

TGC-1’s Board of Directors provides general management of the Company’s business, controls compliance with General Shareholder Meetings’ resolutions, and guarantees the rights and interests of the Company’s shareholders as required by the laws of Russia. In 2011, 23 meetings of the Board of Directors were held.

Biographical Information on the Members of the Board of Directors

Kirill Seleznev, Chairman of the Board of Directors
Born in 1974. Graduated from Baltic Ustinov State Technology University majoring in “Pulsing Devices and Automatic Rotary Lines” in 1997 and from Saint Petersburg State University with a degree in finance and credit in 2002.
1997–1998: Manager, Baltic Finance Company.
1998–1999: technical analyst on money market instruments, specialist, senior specialist on securities, Stock Exchange Transaction Department, Investment-Financial Group “Management. Investments. Development”.
1999–2000: senior specialist, Investment Activity Coordination Group, Saint Petersburg Maritime Port.
2000–2001: Head, Tax Group, Baltic Pipeline System (BPS), then BPS affiliate Upper Volga Oil-Trunk Pipelines.
2001–2002: Deputy Administrator of the Board Administration, Aide to the Chairman of the Board, Gazprom.
Since 2002: Board Member, Head, Gas and Liquid Hydrocarbons Processing and Marketing Department, Gazprom.
Since 2003: General Director, Gazprom mezhregiongaz (previously Mezhregiongaz).
Since 2008: Chairman of the Board of Directors, TGC-1.
Holds no shares of TGC-1.

Denis Fedorov, Deputy Chairman of the Board of Directors
Born in 1978. Graduated from Moscow Bauman State Technology University and postgraduate courses of Moscow Energy Institute, Candidate of economic.
2001–2003: worked in the UES of Russia, then in NPVP Turbocon.
2003–2006: Head of Investment Technologies and Production Engineering Projects Office, EuroSibEngineering and Investment Office, Gazenergoprom Corporation.
2006–2007: Advisor to General Director, Mezhregiongaz.
2006–2008: General Director, JSC Mezhregionenergosbyt.
Since 2007: Head, Electricity Sector Development and Marketing Office, Gazprom.
Since 2008: Chairman of the Board of Directors, OGK-2 and OGK-6, JSC TEC Mosenergo; Deputy Chairman of the Board of Directors, TGC-1.
Since 2009: General Director, Gazprom Energoholding.
Holds no shares of TGC-1.

Alexander Chuvaev, Deputy Chairman of the Board of Directors
Born in 1960. In 1983 graduated from Moscow Bauman State Technology University majoring in mechanical engineering.
1991-1999: various positions in Solar Turbines Europe S.A. in Europe and the USA.
1999-2005: various positions in General Electric in the USA and Canada.
2005-2006: Operations Director, JSC OMZ.
2006: General Regional Manager, GE Oil & Gas (Russia and CIS countries).
2006-2008: Managing Director, Power Machines.
2008-2009: Director for Investment Development, JSC SUEC.
2009: Executive Director, GE Oil & Gas (Russia and CIS countries).
Since 2009: General Director, Fortum, Management Board Member of Fortum Corpotation.
Holds no shares of TGC-1.

Irina Grave, Member of the Board of Directors
Born in 1968. In 1992 graduated from Saint Petersburg State University with a law degree and in 2000 with a degree in financial management.
2000–2004: Lawyer and Counsellor, Salans Hertzfeld and Heilbronn International.
2005–2007: Vice-President, Head of Saint Petersburg Office of Fortum Power and Heat Oy (Finland).
Since 2007: Vice-President, Fortum Corporation, M&A Russia.
Holds no shares of TGC-1.

Alexander Dushko, Member of the Board of Directors
Born in 1964. Graduated from the Engineering and Economics Academy in Saint Petersburg.
2001–2002: Head of Fuel and Energy Complex (TEC) and Consumer Market Development Office, Gazprom.
2002: Head of Budget Planning Office, Gazprom; Deputy Head of Corporate Finance Department, Gazprom.
Since 2002: Deputy Head, Finance and Economy Department, Gazprom.
Holds no shares of TGC-1.

Andrey Drachuk, Member of the Board of Directors
Born in 1971. In 1993 graduated from Judicial and Procuracy Faculty of Sverdlovsk Labour Red Banner Order Law Institute (since 1992, the Urals State Law Academy) with a law degree.
2002–2007: Attorney-at-law in Firm of Attorneys No. 30 of Sverdlovsk Regional Bar Association.
2004–2006: First Deputy Executive Director - Director for Corporate Matters and Property, Corporation AFK.
2006–2007: Executive Director and First Vice-President, Corporation AFK.
Since 2007: Head, Power Industry Investment Project Economic Analysis Department, System Operator the UES.
Since 2009: Director for Strategic Planning and Organizational Development, System Operator the UES.
Holds 0.0001 % of the shares of TGC-1.

Valentin Kazachenkov, Member of the Board of Directors
Born in 1949. In 1972 graduated from Briansk Technology Institute with major in turbomachinery.
He worked as shop manager and then Director of Power Engineering Industry Plant in Leningrad.
1994–1996: Deputy General Director; since 1996: General Director of Sigma-Gaz enterprise.
1999–2004: General Director, Peterburgregiongaz.
Since 2004: General Director, Gazprom mezhregiongaz Saint Petersburg (previously Peterburgregiongaz).
Holds no shares of TGC-1.

Kari Kautinen, Member of the Board of Directors
Born in 1964. In 1989 graduated from the University of Helsinki, Master of Law.
Since 2005: Vice-President, Fortum Power and Heat Oy.
Since 2007: Vice-President, Fortum Corporation, M&A.
Holds no shares of TGC-1.

Alexey Mityushov, Member of the Board of Directors
Born in 1975. Graduated from Baltic Ustinov State Technology University (Saint Petersburg) majoring in “Pulsing Devices and Automatic Rotary Lines” in 1997, from International Educational Programme of the Faculty of North-West Extra-Mural Polytechnic Institute in 1999, and Saint Petersburg International Management Institute (IMISP) majoring in business administration in 2008.
1997–2003: worked at enterprises of Saint Petersburg (CJSC Open Systems, JSC Kirovsky Zavod, ZAO Development of Service Industry, JSC Electrosila, and Nevka-SPb LLC).
2003–2007: Head, Property and Corporate Operation Office, Mezhregiongaz.
2003–2007: as a dual activity status, General Director of JSC Mezhregionteploenergo.
Since 2007: General Director, Gazpromenergo LLC.
Since June 2008: General Director, Chairman of the Board, OGK-6.
Since 2010: General Director, Chairman of the Board, OGK-2.
Holds no shares of TGC-1.

Anatoly Gavrilenko, Member of the Board of Directors
Born in 1972. In 1995, graduated from Moscow Lomonosov State University majoring in economic cybernetics, and in 2001 majoring in civil law. In 2001 graduated from Interbranch Institute for Advanced Training and Re-Training of Administrators and Staff, Plekhanov Russian University of Economics majoring in assessment of the enterprise (Business) cost.
Since 2004: General Director, CJSC Leader.
Holds no shares of TGC-1.

Alexey Sergeyev, Member of the Board of Directors
Born in 1954. In 1978 graduated from Leningrad Polytechnic Institute majoring in mechanical engineering.
1977–1981: Assistant Secretary, then Secretary of the Komsomol Committee of Leningrad Polytechnic Institute.
1981–1985: Second Secretary, then First Secretary of the Kalinin District Komsomol Committee.
1985–1989: Deputy Shop Manager, Shop Manager, Head of Assembly Production Unit of the Production-and-Engineering Complex of the Leningrad Optical and Mechanical Association.
1989–1991: Instructor, then Assistant Team Leader of the Leningrad Oblast Committee of the Communist Party of the Soviet Union.
1991–1992: Deputy Director for Commercial Matters of Leningrad Regional Fur and Leather Products Tailoring Factory.
1992–2004: General Director of ZAO Sampo.
2004–2006: Head of Administration of the Kalinin District of Saint Petersburg.
2006–2009: Head of Economic Development, Industrial Policy and Trade Committee of the Government of Saint Petersburg.
2009 – September 2011: Vice-Governor of Saint Petersburg.
Since December 2011: General Secretary of the CIS Interparliamentary Assembly of States.
Holds no shares of TGC-1.

Committees of the Board of Directors

The objective of the Committee’s activity is to ensure efficient operation of the Board of Directors in solving issues referred to its competence. At present, there are four committees of the TGC-1 Board of Directors:

Audit Committee

The major objectives of the Company’s Audit Committee are as follows:


Management Board

The Management Board is TGC-1's collegial executive body, which manages the Company’s current operations within the framework of the competence set forth in TGC-1's Articles of Association.

The General Director shall be the sole executive body of the Company. On 22 April 2011, TGC-1 Board of Directors elected Andrey Filippov to the position of the General Director and Chairman of the Management Board, who headed the Company starting from 1 May 2011.

Members of the Management Board as of 21 December 2011:

Andrey Filippov (Chairman of the Management Board)
Born in 1959. Graduated from Leningrad Lenin Higher Naval Engineering School in 1981 and Saint Petersburg Baltic Ustinov State Technology University VOYENMEKH in 2002.
2006–2007: Deputy General Director, Peterburgteploenergo LLC.
2007–2009: Deputy General Director for Investments and Capital Construction, TGC-1.
2009–2011: Deputy General Director for Investments and Capital Construction, TGC-1; Director for Capital Construction, TGC-1.
Since 2011: General Director, TGC-1.
Holds no shares of TGC-1.

Sergey Laputko
Born in 1948. Graduated from Leningrad Technology Institute of Pulp and Paper Industry.
2000–2005: First Deputy General Director – Chief Engineer; Chief Engineer, JSC Lenenergo.
2005–2007: Chief Engineer, TGC-1.
Since 2007: First Deputy General Director for Engineering Policy – Chief Engineer, TGC-1; Deputy General Director–Chief Engineer of TGC-1, Director of Nevsky Branch.
Holds 0.000005 % of the shares of TGC-1.

Kirill Lykov
Born in 1971. Graduated from Saint Petersburg State University of Economics and Finance.
2000 – 2004: Project Manager of the Directorate for Corporate Matters (2002), Deputy Director for Corporate Matters
(2003 -2004), Director for Corporate Matters (2004-2006), Director for Asset Management (2006-2007), Power Machines.
2007–2008: Deputy General Director for Operating Activities, JSC Polius Zoloto.
2008–2009: Executive Director, Holding Company INTERROS.
Since 2009: Deputy General Director for Economy and Finance, TGC-1; Director for Economy and Finance, TGC-1.
Holds no shares of TGC-1.

Sergey Redkin
Born in 1977. Graduated from Saint Petersburg State University of Technology.
2006–2008: Head, UES Development Department, RAO UES of Russia.
2008–2009: Project Director, SPb Upravcom.
Since 2009: Deputy General Director for Development, TGC-1; Director for Development, TGC-1.
Holds no shares of TGC-1.

Alexander Antipov
Born in 1953. Graduated from Leningrad Polytechnic Institute.
2005–2007: Director of Kolsky Branch, TGC-1.
Since 2007: Deputy General Director – Director of Kolsky Branch, TGC-1.
Holds no shares of TGC-1.

Raisa Stanishevskaya
Born in 1959. Graduated from Engels Leningrad Institute of Soviet Trade.
1994–2005: Senior Specialist of the Methodological Group of Accounting Department; Deputy Chief Accountant; Head of the Consolidated Reporting Department of the Directorate for Economy, Finance and Accounting – Deputy Chief Accountant; Deputy Director – Head of the Audit Office, Audit and Economic Security Department, Lenenergo.
Since 2005: Chief Accountant, TGC-1.
Holds 0.0000001 % of the shares of TGC-1.

Andrey Fedorov
Born in 1960. Graduated from Leningrad State University.
2005 – 2007: Head of the Department for Special Program, TGC-1.
Since 2010: Deputy General Director for General Affairs, TGC-1; Director for Corporate Protection, TGC-1.
Holds no shares of TGC-1.

Valery Belov
Born in 1972. Graduated from Saint Petersburg State Technology University.
2004: First Deputy Chief Engineer, Karelenergo.
2005: First Deputy General Director – Chief Engineer, JSC Karelenergogeneration.
2005–2007: Director of Kolsky Branch, TGC-1.
Since 2007: Deputy General Director – Director of Karelsky Branch, TGC-1.
Holds 0.00000002 % of the shares of TGC-1.

Andrey Sokolov
Born in 1963. Graduated from Leningrad State University.
2005: Deputy General Director for Repairs and Capital Construction, Generating Company Lenenergo.
2005–2008: Deputy Head of the Equipment Supply Department, Head of the Department for Fuel Supplies and Procurement, TGC-1.
Since 2008: Deputy General Director for Procurement and Logistics, TGC-1; Director for Logistics, TGC-1.
Holds no shares of TGC-1.

Vadim Vederchik
Born in 1979. Graduated from Saint Petersburg State Polytechnic University.
2005-2007: Head of Engineering Policy and Development Division of Production planning and Technical Development Department, Head of Engineering Policy and Development Division of Perspective Planning and Technical Development Department, TGC-1.
2007: Deputy Head of Perspective Planning and Technical Development Department, TGC-1.
2007–2009: Deputy Head of Investment and Capital Construction Department; Deputy Head of Investment Department, TGC-1.
2009–2011: Head of Capital Construction Projects Implementation Department, TGC-1.
Since 2011: Director for Capital Construction, TGC-1.
Holds no shares of TGC-1.

Changes in the Management Board in 2012
Starting from 1 January 2012, Sergey Redkin, Member of the Management Board was appointed to the position of the Director for Marketing and Sales.
Starting from 16 April 2012, Eduard Lisitsky was appointed to the position of the Director for Business Development and elected to the TGC-1 Management Board.

Eduard Lisitsky
Born in 1973. Graduated from Saint Petersburg State Technical University.
2005-2009: Head of Production Planning and Technical Development Department, Head of Perspective Planning and Technical Development Department, Head of Investment and Capital Construction Department, TGC-1.
2009–2010: Head of Investment Department, TGC-1.
2010–2012: Director of the Pravoberezhnaya CHPP, TGC-1.
Since 2012: Director for Business Development, TGC-1.

Information on Remuneration and Compensation to the Members of the Board of Directors, the Members of the Management Board and the General Director of TGC-1 (Executive Staff)
In 2011, the Company paid the short-term remuneration in money (wages, bonuses, and fringe benefits) to the executive staff for the total amount of RUR 130,666,000. The said sum includes individual income tax and insurance fees. Members of the Management Board received the remuneration in compliance with their labor contracts, no extra remuneration was paid to the Members of the Management Board on the results of the 2010 fiscal year. No long-term remuneration or loans were granted to the members of the Board of Directors and Management Board.


8.4. Subsidiaries and affiliates of TGC-1


Performance of subsidiaries and affiliates in 2011

Murmansk CHPP

TGC-1 owns 95.03 % of the ordinary shares of Murmansk CHPP, the share of TGC-1 in the charter capital of Murmansk CHPP is 90.34 %.

In order to optimize the costs of Murmansk CHPP, the Board of Directors of Murmansk CHPP decided on 3 June 2011 to establish LLC Kola Heating Company with a 100 % participation of Murmansk CHPP in its capital. On 16 September 2011, the property of Murmansk CHPP, which was used for heat generation (electric boiler houses and heating grids located in Murmashi settlement and Verkhnetulomsky settlement), was transferred as a contribution to the charter capital of Kola Heating Company.

Khibiny Heating Company

Khibiny Heating Company was established in order to act as a customer in implementation of the investment project “Renovation of the Apatitskaya CHPP and construction of the heating mains till the city of Kirovsk with an installation of the central transformer station”. On 25 November 2011, a ceremony was held to celebrate the start of work on routing the heating mains: the city of Apatity – the city of Kirovsk – first joint.

On 22 August 2011, FFMS of Russia registered an additional securities issue of KHC in the amount of 800 million shares with a nominal value of one RUR each, to be placed by closed subscription. At present time, an additional issue is being placed.

Saint Petersburg Heating Grid

Creation of Saint Petersburg Heating Grid was provided for under a tripartite agreement among the Administration of Saint Petersburg, TGC-1 and GUP TEC SPb to unify the heating grids within the territory of TGC-1 CHPPs.

The securities placement was completed in December 2011, and the report on the results of an additional issue of Saint Petersburg Heating Grid shares was approved. The Company placed additional ordinary registered shares totaling 31,304,269,380 shares. As a result of the placement, the structure of the authorized capital of Saint Petersburg Heating Grid has changed: TGC-1 owns 74.9997 %, GUP TEC SPb has 25.0003 % of the Company’s issued shares.

TGC-1-Service

In 2011, in order to optimize and improve the quality of repair works at electric power plants, TGC-1 in cooperation with Electrocentromontage established a specialized repair company, TGC-1-Service. The new company will provide repair of the main and auxiliary equipment of CHPPs and HPPs of TGC-1 and other power companies in the North-Western region, and render services for commissioning and diagnostics of the equipment, retrofit and renovation of the energy industry facilities. The share of TGC-1 in the charter capital of TGC-1-Service is 26 %.