OREANDA-NEWS.   DTEK, Ukraine’s largest energy company, released its audited consolidated financial statements for the 12 months of 2013 that ended December 31, 2013.

“Given the decline in industrial production in Ukraine, downgrades to the country’s credit ratings and the unstable political situation, DTEK’s financial and operational indicators in 2013 were generally in line with our expectations. In 2014, we will focus on ensuring the stable operation of the company, improving operational efficiency and concentrating investments in the most promising areas. We will actively develop gas production projects that will become important for improving the country’s energy balance. We will continue the large-scale program to continue reconstructing power units and improving the reliability of electricity and heating. Today our main objective is to retain stable work for DTEK’s entire production chain from coal mining to electricity generation and transmission to consumers,” said DTEK CEO Maxim Timchenko on the company's yearend results and plans for the future.
DTEK's income is generated by wholesale electricity sales to state enterprise Energorynok; sales of coal products; electricity transmission and sale to end consumers; and sales of heating, natural gas and gas condensate.
 
In 2013, the share of electricity sales to end consumers (including exports) amounted to 46.6% (vs. 44.6% in 2012) of consolidated profits (including heat tariff compensation); electricity sales to Energorynok SE made up 37.9% (vs. 37.2% in 2012); the share of coal product sales was 6.6% (vs. 8.5% in 2012); the share of heating sales was 5.7% (vs. 9.6% in 2012); and the share of natural gas amounted to 3.2% (vs. 0% in 2012).
 
Overview of the financial results
 
In 2013, the company continued implementation of a large-scale program of investments in infrastructure and optimization of the cost structure and expanded activities in the field of natural gas and gas condensate extraction by acquiring control over PrJSC Naftogazvydobuvannya.
 
The Company’s 2013 consolidated revenues grew by 12.4% to UAH 92,817 million vs. UAH 82,581 million in 2012. The substantial growth in income was mostly accounted for by the energy companies acquired in the first half of 2012 being consolidated for the full period and the expansion of natural gas sales.
 
The cost of products sold increased by 16.8% to UAH 82,695 million. The main factors affecting the increase in the production cost of sold products effect of the consolidation of the energy companies for the full period acquired on 2012; growth of the electricity production cost caused by an increase in the rate of the environmental pollution tax and growth in the coal production cost (growth of payroll, transportation and enrichment costs).
 
Gross profit amounted to UAH 10,122 million in 2013, which was 14.2% below the level of 2012 (UAH 11,803 million).
 
Net profit in the reporting period went down from UAH 5,954 million in 2012 to UAH 3,332 million in 2013.
 
Net operating cash flow grew by 20.7% to UAH 10,082 million, compared to UAH 8,355 million in 2012.
 
Capital expenditures varied insignificantly, increasing by 1.2% to UAH 10,310 million.
 
Debt liabilities
 
As of 31 December 2013, the Company’s cumulative loan debt amounted to UAH 27,010 million, including current debt of UAH 4,752 million (17.6% of the total amount) and long-term liabilities of UAH 22,258 million (82.4% of the total amount). The Net debt to EBITDA ratio equalled 1.5 as of yearend 2013.
“Despite the deterioration in the macroeconomic indicators in 2013 and price pressure in export markets, DTEK's vertically integrated business model, focus on operating efficiency and quality investment projects enabled the company to maintain its stable financial position. In particular, we increased electricity production and exports, and achieved a 20% increase in revenues from coal exports against the background of declining electricity demand in the domestic market. The decrease of EBITDA by UAH 1,980 million came as a result of the recognition in 2012 of one-off  income from the heat tariff compensation difference for previous periods, and a decrease in margin of trading operations. The EBITDA margin decrease from 20.5% to 16.1% was also directly associated with the impact of these factors, in addition to growth in the share of electricity sales segment.
 
In the volatile financial markets, we completed the placement of Eurobonds in the amount of USD 750 million and arranged our first pre-export finance credit facility in the amount of USD 375 million to implement investment projects and acquire a stake in PrJSC Naftogazvydobuvannya. In 2013, we entered into a credit agreement with the Black Sea Trade and Development Bank in the amount of USD 30 million, which marks DTEK's first-ever cooperation with an international financial organization. The company's debt portfolio at yearend 2013 amounted to UAH 27,010 million, with a comfortable medium maturity of 3.9 years and Net debt to EBITDA ratio of 1.5.
 
The successful credit facilities raise as well as our quality financial control system enable us to say that DTEK has the required financial stability, despite the series of challenges that Ukraine's economy is facing today.”
Coal production and enrichment

In 2013, DTEK's coal production companies increased coal output by 4.3% YoY, in spite of the general decline in Ukraine's electricity consumption by 2.3% or 3.5 billion kWh in 2013, compared to 2012. The company's coal enrichment plants also increased production: ROM coal preparation went up by 5.9% and concentrate production grew by 4.8%. The consolidation of the performance indicators of coal production companies acquired in 2012 ensured a positive production trend.
 
Main factors affecting the production performance:

•         increase in DTEK Pavlogradugol's coal output by 7.1% in 2013
•         consolidation of coal mining results of the Russian enterprises (three mines and a coal enrichment plant) and Mine Bilozerska ALC acquired by the company in March and July 2012, respectively
•         increase in sales of export-quality coal due to 2013 capital investments in coal preparation plants.
 
Capital investments:

In 2013, DTEK invested UAH 4,212 million in the development of its coal production enterprises, including UAH 1,199.4 million for fitting out mines with breakage face equipment and UAH 517.1 million for renewing the road header fleet and retrofitting the transport chain. The active implementation of cutting-edge equipment helped improve miners' working conditions and enhanced the efficiency of underground operations. DTEK's coal production enterprises retained high performance indicators throughout the year. The average annual labor productivity at DTEK's mines was four times higher than the average figure for state-owned mines.

Key projects:
 
•         increase of the hoisting system’s throughput capacity at the Geroiv Kosmosu Mine (total project budget: UAH 153.5 million)
•         replacement of the main fan at DTEK Mine Komsomolets Donbassa (total project budget: UAH 63.8 million)
•         construction of the intake shaft at the V. V. Vakhrusheva Mine (total project budget: UAH 127.7 million)
•         construction of the intake shaft at the M. V. Frunze Mine (total project budget: UAH 214.7 million)
•         construction of the air supply well at the Yubileina Mine (total project budget: UAH 235 million)
•         construction of the air supply well at the Dobropilske Mine (total project budget: UAH 70 million)
•         technical retrofit of the second section of CCM Pavlogradskaya (total project budget: UAH 133.8 million). The project will increase the concentrating mill's production capacity from 4.2 million tons to 5.6 million tons of processed ROM coal annually, thus reducing the cost of outsourcing coal preparation to external preparation plants and optimizing the logistical scheme 'mine-preparation plant-TPP'.

Electricity generation

In 2013, DTEK increased its electricity supply by 11.3% (+5.4 billion kWh) from 47.6 billion kWh to 53.0 billion kWh.

Main factors affecting the production performance:

•         effect of the full period of consolidation of production indicators of DTEK Dniproenergo and DTEK Zakhidenergo acquired in 2012;
•          start of electricity sales by the Botievo wind farm
•          increase in the market share of DTEK's TPPs in 2013, which became possible, inter alia, due to the high technical availability of DTEK's power units

Capital investments:

In 2013, the company allocated in total UAH 2,486 million for the reconstruction and technical retrofitting of TPP power units. The modernization of power units can extend their service life by 10-15 years; increase their capacity and enhance their maneuverability range, while reducing specific consumption of fuel. Since 2012, as part of power unit modernization, DTEK has been carrying out the retrofitting of electrical precipitators to achieve a level of dust emissions in accordance with Directive 2001/80/EC.

In particular, reconstruction work in 2013 increased the installed capacity of power unit #6 at DTEK Kurakhovska TPP and power unit #5 at DTEK Burshtynska TPP by 15 MW and 40 MW, respectively. Their manoeuvreability range was extended by 40 MW and 30 MW.

The company also completed the modernization of power unit #5 at Myronivska TPP in 2013. The operating capacity of the power unit was upgraded to the installed capacity level of 115 MW. Completed reconstruction enabled the company to reduce balance-of-plant electricity consumption substantially: from 18.2% to 9.9%.
In late 2013, the company took power unit #3 at DTEK Zaporizka TPP out of operation for modernization; and continued the reconstruction of power unit #1 at DTEK Kryvorizka TPP, power unit #13 at DTEK Luganska TPP and power unit #8 at DTEK Dobrotvirska TPP. Approximately UAH 2 billion will be allocated for their modernization.

Electricity distribution

In 2013, DTEK increased its electricity transmission by grids by 13.9% (+6.9 billion kWh) from 50.0 billion kWh to 56.9 billion kWh, despite electricity consumption in Ukraine declining by 2.7% (-4.5 billion kWh).

Main factors affecting the production performance:

•         effect of the full period of consolidation  of production indicators of DTEK Dniprooblenergo and DTEK Krymenergo acquired in April and May 2012, respectively (+8.7 billion kWh)
•         decrease in the electricity distribution of DTEK Power Grid and DTEK Donetskoblenergo, respectively, by 5.1% and 3.3% due to declining demand from industrial enterprises.
 
Capital investments:

To ensure reliable high-quality electricity supply to consumers, DTEK’s distribution enterprises invested UAH 868 million in technical retrofits of transmission lines and substations in 2013. At yearend, the enterprises constructed, retrofitted and repaired almost 9,000 km of transmission lines and approximately 6,500 substations.
Major 2013 investment projects for the construction and modernization of substations:
•         construction of the Rodniki substation (DTEK Dniprooblenergo) to improve the quality of electricity supply to consumers in Novomoskovsk and to create backup capacity for the connection of new consumers
•         construction of the Gorod 11 substation (DTEK Donetskoblenergo) to ensure additional electricity supply capacity for the central districts of Mariupol and to facilitate development of city infrastructure
•       retrofit of the Pechersk substation (Kyivenergo) to eliminate the capacity deficit in the central part of Kyiv and to satisfy growing electricity demand
•         retrofit of the Zhavoronki substation (DTEK Krymenergo) that supplies electricity to the pump stations of the Mezhgornyi Water Supply Centre and Saki Irrigation System Centre that supply water to household consumers in Simferopol, Yevpatoria, Saki and some districts of Sevastopol
•         modernization of the YuGOK-150 kV substation and Severnaya 150/35/6 kV (DTEK Dniprooblenergo) that supply electricity to metals & mining enterprises in Dnipropetrovsk region and partially to household consumers in Kriviy Rih and Zheltye Vody
•         retrofit of the Chasov Yar substation (DTEK Power Grid) to improve the reliability of electricity supply to the pumping station of the company Voda Donbassa, Chasov Yar Refractory Plant and to the residents of the Artemivsk district of Donetsk region.
 
Commercial operations

The Company’s 2013 revenues from commercial operations grew by 17% to UAH 46.1 billion vs. UAH 39.3 billion in 2012. The substantial growth in income was mostly a result of income increase in electricity supply by TPP (UAH 5.1 billion) as well growth in gas sales (UAH 2.9 billion).
Coal exports

In 2013, the company increased coal supplies to foreign markets by 72.7% to 4,740 thousand tons. The growth in export supplies was driven by DTEK's entry to new coal sales markets in Asia and Africa and the broadening of the company's cooperation with metallurgical enterprises in China and South Korea. Supplies to 'non-conventional' markets grew to 1.26 million tons vs. 0.34 million tons in 2012 (+267% YoY). In addition, the company expanded its presence in the domestic coal market, in particular, by increasing sales to cement and limestone plants and metallurgical enterprises. DTEK's share in the construction segment market went up from 27% to 43%.

In 2013, European coal prices (API2 index) went down by 12% YoY and Australian coking coal prices (Hard Coking Coal, FOB Australia), to which global anthracite prices are linked, sank by 20% YoY.
 
2013 also saw DTEK's first-ever entry to the global freight market; the company freighted its first ships on optimal market conditions.
 
Main factors affecting the production performance:

•         consolidation of DTEK's position in traditional sales markets and access to the Asian coal market
•         extended cooperation with iron and steel companies in China and South Korea, which confirmed the effectiveness of using anthracite for coking coal replacement technologies in blast furnaces
•         conclusion of contracts with leading international energy companies for the supply of coal to meet the needs of thermal power plants in Europe
•         resumed supplies of thermal coal (G and DG grades) to Mediterranean countries
•         increase in the efficiency of export operations and increased share of direct sales to end consumers in Europe

Electricity exports

In 2013, DTEK increased export supplies of electricity by 1.25% to 9,828 million kWh, due to positive trends in the first half of the year. GEN-I and Vitol are worth mentioning among DTEK’s new electricity export contractors in 2013.
One of the major factor affecting the performance was increase in the throughput capacity of the cross section of National Energy Company Ukrenergo from 500 to 650 MW. This growth became possible due to the equipment and relay protection modernization of the Burshtyn TPP’s power grid and due to the conclusion of agreements on the emergency backup of approved exports with system operators in the Continental Europe regional group in adjacent power systems.
A separate note should be made on electricity price fluctuations: in 2013, the average spot price for electricity in Poland decreased by 11% YoY and in Hungary by 18% YoY.
 
Commercial operations in oil & gas
 
The launch of DTEK's oil & gas business was caused by the necessity to provide resources to internal electricity generation facilities and the needs of businesses that are part of SCM Group with the total need of about 6 billion cubic meters per year. In late 2013, the company finished the process of acquiring of 50% stake of Private Company Naftogazvydobuvannya – the largest private gas production company in Ukraine, which has the potential for natural gas production at the level of up to 1.5 billion cubic meters. In 2013, DTEK became an active participant in the natural gas market in Eastern Europe, importing 628.3 million cubic meters.
 
Coal sales in the domestic market
 
In 2013 YoY the company significantly increased supplies of coal to the power generation companies not incorporating DTEK from 1.4 to 2.7 million tons.  Volumes of coal supplies to industrial consumers in Ukraine also increased to 1.2 million tons. The growth was caused by opening new sales segments: cement plants, lime plants, PCI and comprehensive provision of Metinvest Holding with AS product for sintering purposes.
 
Electricity sales in the domestic market
 
The sales of electricity generated by DTEK’s thermal power plants (not including Kyivenergo) in 2013 grew by 2.6 TWh (+5.6% to 2012 level). Growth in selling prices in 2013 amounted to 5.5%.
 
“In 2013, the internal energy market of Ukraine and DTEK’s target overseas markets showed negative trends. In a rather difficult situation, DTEK managed successful commercial performance both in Ukraine and abroad. For the entire product line. The achievement of a record sales market share of 28.1% by DTEK’s TPPs (not including Kyivenergo) in the internal electricity market, breakthrough in coal export transactions (+72.7% by volume YoY), and entry into the European gas market. All these events served as a foundation for DTEK’s sustainable performance in 2013,” said Andrey Favorov, Commercial Director of DTEK.
 
Key events in the reporting period:
 
•  January 2013. Power unit #4 of DTEK Zuivska TPP was connected to the power system of Ukraine after retrofitting. Modernization of the power unit with the use of new technologies improved the reliability of the equipment and significantly reduced its environmental impact. Investments in the modernization of the unit amounted to UAH 245.6 million.
•  March 2013. Modernization of power unit #6 at DTEK Kurakhovska TPP was finished. Work was carried out within a record time of 11 months. The total investment in the project amounted to UAH 583 million. The main equipment of the power unit – turbine, boiler, generator, transformer and electrical equipment – was revamped with new technical solutions.
•  April 2013. DTEK placed Eurobonds in the amount of USD 750 million with a coupon of 7.875% and repayment date of 2018. Proceeds were directed to a partial redemption of the bonds of the previous issue (2010) and to some general corporate purposes of DTEK, including, but not limited to, financing ongoing capital programs, replenishment of working capital and repayment of certain debt instruments.
•  June 2013. Wind Power, a subsidiary of DTEK, attracted EUR 138 million for a term of 10 years for the second phase of the Botievo wind farm (WPP). Its construction is planned to be completed in 2014. The investor bank is LandesBankBerlin, one of the largest banks in Germany. The second phase of construction includes the installation of 35 modern Vestas V-112 wind turbines with a total capacity of 105 MW.
•  July 2013. DTEK commenced the import of natural gas from Europe. In 2013, the volume of natural gas imports amounted to 628.3 million cubic meters. DTEK's entry into the oil and gas business was caused by the necessity to provide resources to internal electricity generation facilities and the needs of businesses that are part of SCM Group (the total need is about 6 billion cubic meters per year).
•  September 2013. DTEK made a debut pre-export financing facility in an amount of USD 375 million, which was organized by Deutsche Bank AG (Amsterdam branch), Raiffeisen Bank International AG, Gazprombank (Open Joint Stock Company), Erste Group Bank AG and UniCredit Bank Austria AG. The credit line has two tranches with terms of 3 and 5 years. Proceeds were allocated to support DTEK’s export activities.
•  October 2013. DTEK Trading signed a contract to supply natural gas to PGNiG SA. Test supplies were made between October 28-31, with the maximum daily supply reaching 3.5 million cubic meters.
•  November 2013. DTEK Magyarorszag Kft (DTEK Hungary Power Trade LLC) received a license for sales of natural gas in Hungary. This enabled DTEK to increase the effectiveness of its import operations with natural gas in order to meet the fuel demand of its own generation facilities and the businesses of SCM Group.
•  November 2013. DTEK gained control over the Ukrainian engineering company Elektronaladka. This will enable it to centralize the management of large-scale projects to retrofit energy equipment, construct new power units at TPPs, and increase investment effectiveness.
•  December 2013. DTEK gained control over PJSC Naftogazvydobuvannya, the largest private gas production company in Ukraine. Naftogazvydobuvannya is developing the Semyrenkivske and Machukhske fields in Poltava region. Its proven reserves of natural gas are 20.0 billion cubic meters and of gas condensate are 2 million tons. In 2013, the company produced 506 million cubic meters of natural gas, and in 2014 it intends to increase its production to 802 million cubic meters. The company's 2014 investments into production development amounted to UAH 1.5 billion.
 
Key events in the post-reporting period
 
•  February 2014. Naftogazvydobuvannya launched production at new well #8 of the Semyrenkivske gas and condensate field in Poltava region. The daily production of natural gas by the new well is 170 thousand cubic meters, and of gas condensate is 5 tons. Investments in its drilling and development amounted to more than UAH 100 million.
•  March 2014. DTEK Mine Komsomolets Donbassa, Geroiv Kosmosu Mine and Pavlogradska Mine extracted 1 million tons of coal each, ahead of the production plan for 2014.
 
Sustainable development

DTEK’s total costs for sustainable development projects, including social partnerships with territories where the Company operates, health and safety, environmental protection (including eco-tax), maintenance of social assets and staff development, in 2013 totalled more than UAH 3.6 billion.

Social investments within the framework of DTEK’s social partnership strategies amounted to more than UAH 130 million. The funds were allocated to projects related to energy efficiency in the utility sector, healthcare, support for socially significant infrastructure (repairs to kindergartens and schools, construction of sports grounds, improvement of solid waste disposal, etc.), development of the business environment, and increasing local residents’ activism.

In 2013, DTEK started to implement three-year social partnership strategies with 22 populated territories where the Company operates. Civil society organizations, experts, representatives of municipal governments, city councils and active citizens were involved in the process of the strategies’ development, their execution and control of the implementation of projects. The strategies provide for a systemic approach to ensure resolutions to territories’ key issues, but not just single-point its elimination. This approach is important for improving the return on social investments, planning cities’ sustainable development, and improving living and working conditions both for local citizens and employees.

In 2013, DTEK received the grand prize from international CSR experts for setting up local development agencies in the regions of Ukraine. In addition, according to in an opinion survey of the chief editors of Ukrainian business media, the company came in first place in the “Best contribution to the development of the country” category, and, according to Readers’ Choice Awards, “Best non-financial report.” In 2013, following the results of a website assessment based on international methodology by the Beyond Business organization, DTEK took first place in the Transparency and Accountability Index rating among Ukrainian companies and first place in the rating of socially responsible companies by GVardia journal.

In 2013, DTEK spent UAH 551.6 million on the maintenance of social sector assets and non-commercial facilities. Most of the expenditures were spent on the maintenance of boiler houses (27.4%), health and recreation resorts (13.3%), housing facilities on the books of enterprises (9.6%), public food facilities (7.6%), recreation facilities (7.2%) and sports facilities (5.5%).

The costs of projects in the field of occupational health and safety at DTEK’s coal mining, electricity generation and electricity supply enterprises amounted to UAH 691.3 million. The funds were allocated to eliminate the impact from hazardous and harmful production factors on employees, bring fixed assets into compliance with the requirements of safety rules and regulations, provide employees with efficient individual protective equipment, create safe labour conditions at work places, train staff and raise the level of skills among enterprises’ personnel, and provide medical support to staff.

DTEK’s environmental expenditures amounted to UAH 2.2 billion in 2013, including environmental taxes of UAH 1.2 billion and DTEK’s 2013 environmental expenditures and investments of UAH 1 billion. The investments were targeted at atmospheric air protection, organization of proper treatment of hazardous substances and materials, and rational use of natural resources.
 
Key events in the social partnership sphere

•  February 2013. DTEK launched the Energy Efficient Schools pilot project in educational institutions in Kyiv. From February to May, an optional course Fundamentals of Heat Supplies and Saving Heat was taught in the capital's schools. As a result of the course, students created projects to improve the energy efficiency of their schools. DTEK allocated UAH 1 million for the implementation of these projects in all 11 schools that participated in this pilot initiative.
•  March 2013. DTEK, the East European Foundation, Sokal Agency for Regional Development, and the British Council in Ukraine announced the launch of a new project to support social entrepreneurship. The project, in which DTEK invested UAH 1 million, is aimed at improving the competitive position of regions where DTEK operates by strengthening their economic potential. Agencies for Local Economic Development are being established as part of the project and funds have been allocated to support and promote social enterprises.
•  April 2013. DTEK and the Ivano-Frankivsk Regional State Administration signed an agreement to cooperate on the social and economic development of Ivano-Frankivsk region within the framework of their social partnership. In 2013, DTEK plans to allocate UAH 7.2 million for the implementation of priority projects for the development of the region and the city of Burshtyn.
•  April 2013. DTEK implemented its first corporate volunteering project. Over 8,600 DTEK employees participated in the Clean City campaign. Volunteers in 24 cities collected over 600 tons of inorganic waste that was sent to sorting lines and duly disposed of.
•  May 2013. DTEK, the Luhansk Regional State Administration and Luhansk Regional Council signed an addendum to their agreement to cooperate on the social and economic development of Luhansk region from 2 March 2012. Separately, a decision was made to establish a regional development fund for Luhansk region. The new fund should be an effective mechanism to attract financial resources from international and national grant programs to address the social issues of the region. The key objective of the fund will be the organization of a new industrial park near the cities of Sverdlovsk and Rovenki.
•  May 2013. DTEK, the United States Agency for International Development, and the Kyiv City State Administration opened the first energy-efficient school in Kyiv. DTEK invested UAH 3 million to improve the energy efficiency of a school and a kindergarten in the capital. These projects were the final stage of joint work between DTEK, USAID and the Kyiv City State Administration.
•  June 2013. DTEK, the Dnipropetrovsk Regional State Administration, and Dnipropetrovsk Regional Council signed a Memorandum of Cooperation on Social and Economic Development Issues of Dnipropetrovsk Region. The Company will double social investments in Dnipropetrovsk region in 2013.
•  August 2013. DTEK launched a program to create new jobs in regions where the Company’s enterprises operate. Existing and potential contractors of DTEK were invited to participate in the program. All other conditions with respect to price and quality being equal, the Company, when awarding contracts, is ready to give preference to suppliers who create new jobs in the regions where DTEK operates.
•  October 2013. The ‘’Development of the Business Environment in Small and Medium Size Cities of Ukraine” conference took place in Kyiv. The conference was attended by the mayors of cities, representatives of government bodies, civil organizations, international donors, representatives of DTEK and SCM Group, and the employees of 14 local development agencies in cities where DTEK operates.
•  October 2013. DTEK launched the second stage of the Energy Efficient Schools project. 55 schools in 22 Ukrainian cities participated in the second phase of the project.
•  November 2013. In Lviv, the first Telemedicine and Information Technologies scientific workshop with the participation of international partners and DTEK was held, where the results of the first phase of the Telemedicine project were presented and the prospects for its further implementation and expansion were discussed. Over 2012-2013, nine medical institutions were connected to the national telemedicine network with the support of DTEK.
•  December 2013. DTEK, the Dobropolye City Council and Dobropolye District State Administration started the development of the Big Dobropolye Development Strategy for the next three years. The company proposed a number of steps that would make it possible to create 150 new work places in the city and in the district in 2014 and to improve its infrastructure.
•  December 2013. The Generation DTEK project to cooperate with higher educational institutions in Ukraine received the prestigious Human Capital 2013 award. It was recognized as the best in the area of working with graduates and young professionals in Ukraine and Russia.
•  December 2013. On the eve of the New Year, DTEK arranged world-class holiday illuminations in 23 cities in eight regions of Ukraine. Trees and street lamps in the central streets and squares were decorated with illuminations by French Blachere Illumination Sas. This manufacturer produces decorative illumination to decorate the Champs-Elysees and the Eiffel Tower in Paris. The New Year illuminations became DTEK’s present to the residents of cities where the company’s businesses operate.

Key achievements in the health, safety and environmental protection sphere

•  DTEK Dniprooblenergo’s health and safety management system passed a compliance audit to validate conformity with the requirements of OHSAS 18001:2007. The enterprise also passed a certification audit validating its conformity with the requirements of the international environmental standard ISO 14001:2004. Auditor TÜV SÜD (Germany) confirmed the compliance of the enterprise’s environmental management system with international requirements.
•  Compliance audits of safety systems were carried out at DTEK’s Pavlogradska Mine, Geroiv Kosmosu Mine, Ternivska Mine, Pershotravenska Mine, Dniprovska Mine, Mine Komsomolets Donbassa, and DTEK Zuivska, Kurakhovska, Luganska, Prydniprovska, Kryvorizka, Zaporizka TPPs. All the audits confirmed the compliance of the current safety management systems with the requirements of OHSAS 18001:2007. All of the employees of these enterprises were included in the scope of certification.
•  10 enterprises of DTEK passed recertification environmental audits. International auditors from Moody International, Tuv Nord Ukraine and Rusintertek confirmed the compliance of the enterprises’ environmental management systems with international standard ISO 14001:2004.
•  DTEK Zaporizka, Kryvorizka, and Prydniprovska TPPs and DTEK Kyivenergo passed compliance audits of their environmental management systems. Independent auditors from Moody International confirmed that the environmental management systems of these enterprises were being improved and met the requirements of ISO 14001.
•  The following procedures were developed and introduced: three-level internal control for occupational safety at DTEK’s coal mining and processing enterprises; staff motivation system for safety achievements; methodology for performance assessments of the enterprises’ senior management in the area of safety; and a uniform regulation for the provision of coal enterprises with small power tools and equipment.
•  Following the results of periodic medical examinations, DTEK Dniprooblenergo carried out in-depth clinical and diagnostic examinations. The regulation “On the provision of medical services to employees” was approved.
•  DTEK Zuivska TPP implemented a pilot project on the use of LOTO (LockOut/TagOut) safety interlocks.
•  DTEK’s electricity distribution enterprises implemented the projects of “Management of visualization means” and “Corporate style of uniforms, footwear and other PPE.”
•  The reconstruction of the dust capturing equipment at DTEK Kurakhovska TPP (power unit #6) and DTEK Luhanska TPP (power unit #13) resulted in a reduction in dust concentration in flue gases to a level that meets the requirements of European Directive 2001/80/ÅÑ (no more than 50 mg/Nm3). The requirements of European Directive 2001/80/EC for dust emissions in 2013 were met at a number of other power units of DTEK’s TPPs. All modernized power units are equipped with systems to continuously monitor flue gases.
•  Within the framework of the project “Construction of a road between Zugres town and the SHW landfill using ash and slag from DTEK Zuivska TPP,” guidelines for the use of ash and slag from Zuivska TPP in road construction were developed and the elaboration of project design documentation was initiated.
•  Projects to clean the river bed of the Ternovka River and construct facilities to treat mine water in the Kosminnaya gully were completed.
•  A program to ensure ornithological safety at DTEK’s electricity distribution enterprises was developed and is being implemented.