OREANDA-NEWS. June 27, 2007. Stockholders considered the standard for annual meeting issues: results for 2006; approval of annual accounting reporting; distribution of profit of the Company for 2006 and paying out the dividends; electing the members of Board of Directors of the Company and Auditor’s Committee; approval of Auditоr of the Company and entering changes upon the Articles of Association.

The reporting year for the energy holding was not typical as said Prime-Minister of Tatarstan Rustam Minnihanov. High price of fuel, by 2.5 times exceeding the tariff forecast, transfer of obsolete intra-quarter heat lines to KTK, connection of obsolete grid business of "Tatelectrogrid" to Grid Company of the holding resulted in such financial results of JSC "Tatenergo". The net profit reduced by 9.4 times compared to 2005, it was explained by the fact that on results of tariff regulation for 2006 by Republicаn Energy Commission the tariffs for electricity and heat were set at minimal level. However, even working under conditions when process for energy carriers increased sharply, but the tariffs did not, JSC "Tatenergo" contributed to budget of Republic 1 billion 283 million rubles.

On behalf of administration of Republic Rustam Minnihanov thanked the team of managers and the Board of Directors of JSC "Tatenergo", remarking that the Company team is capable to solve the complex tasks. "Reliability of the power system is a number one issue. Lack of accidents, financial stability are the basic requirements and factors impacting the economical situation in total", - Prime-Minister emphasized.

As was said in report by General Director of JSC "Tatenergo" Ilshat Fardiev, in 2006 JSC "Tatenergo" worked as the valid subject of wholesale market of electrical energy, successfully passing the peak of winter maximum and satisfying the growing needs of Republic of Tatarstan. Production of electricity in 2006 was 24 billion 860 million. KWh and increased by 4.8% or 1 billion 130 million kWh compared to 2005. Stable growth of generation was in 3-4 quarters of 2006 because of grown energy consumption in Republic (by 5.4 %) and energy supplies to wholesale market. On results for 12 months balance - acceptance was 135 million kWh. Regarding settlements the money balance is positive and was 76 million rubles. Supply of heat grew by 2.9% and was 31 million 530 th. Gcal. Level of settlements of consumers with energy companies for electrical energy and heat in 2006 was 100% of current charges. Due to work by the Holding entities with debtors the volume of accrued indebtedness for electrical energy and heat reduced.

Use of fuel at JSC "Tatenergo" plants continued growing in 2006. Specific consumption of fuel for supply of electricity was 324.2 g/kWh and reduced against norm by 2.3 g/kWh. Specific consumption of fuel for supply of heat wаs 137.1 kg/Gcal and reduced against norm by 0.8 kg/Gcal. It was due to enhanced technical level of equipment operation and improvement of structure of production of electrical energy and heat.

The last year was a breakthrough in capital construction and was marked by upgrading the fixed assets in the power system. Investments aimed at their renovation exceeded in 2006 5 billion rubles. Total amount of money invested in fixed assets in companies of the Holding, constituted 7 billion 277 million 400 th. rubles. For comparison: in 2005 volume of investments aimed at capital construction, was 4.2 billion rubles.

Key objects of investments became construction of the new heat bridge from Naberezhnye Chelny CHPP till Zyab settlement and heat lines between Kazan CHPP-1 and DBH "Azino" with 2 pump stations on streets Tihomirnova and Vishnevskogo and reconstruction of the trunk and intra-quarter thermal grids. Regarding upgrading the generation and grid facilities, in 2006 was commissioned the return osmoses installation at Zainsk Condensation Plant , reconstruction of substation 110 kV "Оsinovo", "Ptitseprom", "Vostochnaya" was completed, were laid over 400 km of SIP.

Realization of Chelny project by JSC "Tatenergo" regarding leveling in big town of Tatarstan tariffs for heat, called by President of Tatarstan "example of housing problems solving", cost the energy holding 840 million rubles. New heat line allows to supply to consumers cheaper heat, co- generated at NCh CHPP. Due the project over 100 thousand of residents of Naberezhnye Chelny now pay for heat twice cheaper, than earlier. Transfer of the remaining part of town population to optimized tariff will take place in 2007-08. Considering the course of implementation of Program "Energo resource efficiency in Republicе of Tatarstan for 2006-2010" at the meeting of Government of Republicи, President of Tatarstan Mintimer Shaimiev put task to reach the same result in Kazan, where the cheap energyя of thermal plants shall replace the heat from small boiler houses.

After founding the JSC "KTK" the dimensions of investing activity of the Company changed dramatically. Kazan Thermal Grid Company united the heat business, that had KTS JSC "Tatenergo" in capital of Republic, and over half of property of MUP "PO "Kazenergo", major part of which is in obsolete condition whish resulted in necessity of considerable capital investments in reconstruction of the entities. Besides, in 2006 were invested 326.5 million rubles in construction of bridge between КCHPP-1 - DBH "Azino", 66.9 million rubles - for construction of heat lines till Teatralnaya square, 55.8 million rubles - for construction of one more heat line from source DBH "Sabvinovo".

Priorities of investment program of Holding "Tatenergo" for 2007 are construction of steam-gas installations at 3 power palnts - Kazan CHPP-1, Kazan CHPP-3, Zainsk Condensation Plant , reconstruction of heat line #2 for increasing its passing capacity and supply of big volumes of cheap heat from Kazan CHPP-1 to downtown.

The milestones at Kazan CHPP-2 were replacement of oil switches 110 kV with SF6, mountin the microprocessor relay automatics. At Kazan CHPP-3 - reconstruction of switches 110 kV for enhanced electricity supply to JSC "Kazanorgsintez", at Zainsk Condensation plant - reconstruction of outdoor switchgear 110, 220, 500 kV. At Zakamie palnts - Nizhnekamsk and Naberezhnye Chelny CHPP, Nizhnekamsk HPP the focus was made on reconstruction of basic equipment. In Grid Company of the holding the basic current year task will be reconstruction of electrical grids entities, they number tens of substations 10-110 kV and mass replacement of non- insulated cables with self-bearing cables (SIP).

Rustam Minnihanov aimed the power engineering specialists for large-scale upgrading and renovation of funds. "It is impossible with no expenses, we require serious investments, we need investments and strategic partners, - he said. - Energy capacities are today under valuated but attractive for prospective investоrs. Tatarstan specialists have to increase capitalization of the Company and use attracted money maximally". He quoted Urussu Condensation Plant: investоr plans to invest 600 million rubles in construction of cost efficient GT on the plant. AS a result everyone wins: investоr able to operate on the market, Republic gains additional capacities, Tatenergo, after selling the low capacity plants, may concentrate on other entities.

Speaking about potential investоrs, Prime-Minister told that both Tatarstan, Russian and foreign investоrs may become the strategic partners of power engineering. Regarding volumes of investments for upgrading the power system, as said General Director of JSC "Tatenergo" Ilshat Fardiev, it is necessary for the time period till 2010 above 24 billion rubles.

With these advantages (good geopolitical location and big consumers in person of "highlights" of Tatarstan industry, Tatarstan holding can be competitive on Russian market, stressed Prime-Minister of Republic. He also stressed the necessity of the joint unbiased task solving.

Meeting of stockholders of JSC "Tatenergo" elected the new members of Board of Directors of the Company:
Alexander Petrovich Volodkevich - Chief of department of industry of Cabinet of Ministers, Republic of Tatarstan;
Radik Raufovich Gaizatullin - Minister of finances of Republic of Tatarstan;
Gulsina Munirovna Minnehanova - First Deputy General Director of JSC "Tatenergo" - Director for Economics and Finances;
Ravil Fatyhovich Muratov - First Deputy Prime-Minister of РТ;
Boris Petrovich Pavlov - First Deputy Prime-Minister of Republic of Tatarstan - Minister of Economy and Industry of RТ;
Marat Rashitovich Safiullin - national Adviser with President of РТ for social and economical issues;
Valeri Yurievich Sorokin - General Director of JSC "Svyazinvestneftehim";
Farid Haidarovich Tuktarov - Deputy Minister of Economy and Industry of RТ;
Ilshat Shaehovich Fardiev - General Director of JSC "Tatenergo".

"FBK "Povolzhie" was approved as the Auditоr for the Company for 2007.

Stockholders of "Tatenergo" from the first time of the energy company privatization decided to pay out annual dividends on common stocks of the Company. For their payment were streamed 30% of net profit of JSC "Tatenergo", соnstituting for 2006, 128 million 10 th. rubles. Remaining part less 5% of reserve fund of the profit in amount of 78 million rubles will be streamed for Company development.

After the meeting of stockholders was held the meeting of Board of Directors of JSC "Tatenergo" in new membership for electing the Chairman. R.F.Muratov was elected the Chairman.