Economic Performance

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Record economic figures for 2016 are the result of measures implemented to improve the efficiency of management and operations of subsidiaries and ensure the financial stability and loss-free operations of all ROSSETI Group’s companies.

0
billion rubles
consolidated
revenue

All of the ROSSETI Group’s main profitability indicators grew in 2016.

Revenue Structure of the ROSSETI Group by Segment, bn RUB

Indicators20162015
Electricity transmission and distribution725.5650.4
Electricity and capacity sales74.755.9
Network connection68.134.2
Other revenue and government subsidies35.726.3
TOTAL904.0766.8

The ROSSETI Group’s consolidated revenue totaled 904 billion rubles, or 17.9% up on 2015, largely due to a growth in revenue from electricity transmission and distribution because of increased net electricity delivery, compensation for lost income resulting from the termination of last mile agreements, and the restored smoothing mechanism of minimum regulated revenue in tariff decisions in accordance with the Forecast of the Socioeconomic Development of the Russian Federation.

Procurement System

The ROSSETI Group’s principal goal of procurement is to purchase products in a timely and complete manner with the greatest possible cost effectiveness.
ROSSETI carries out the strategic management of the Company’s and SDCs’ procurement practices, including establishing general rules, exercising control and coordination, and assessing procurement efficiency.

Cost Breakdown by Activity, thousand rubles

Regulated Procurement Procedure Breakdown by Purchasing Method

26%

95,272.122

New construction and expansion of electric grid facilities

27%

95,821.102

Rehabilitation and technical upgrading of electric grid facilities

36%

127,706.857

Other purchases

8%

28,431.555

Power equipment repair, general repair, and maintenance operations

3%

11,211.554

IT purchases

3%

Sole source purchases

58%

Public competitive bidding

20%

Public requests for proposals

10%

Public auctions

9%

Public requests for quotations

Supplier Chain

ROSSETI gives much attention to the development of its relations with suppliers and contractors. The Company conducts supplier selection procedures strictly in accordance with the requirements of procurement documents. The bid evaluation criteria require approval from the Procurement Commission, depending on the purchase method, the purchase type, and the subject matter of the awarded contract. The Company’s interaction with suppliers includes a sequence of procedures from budget planning to contract performance.

Mechanisms and Channels of Communication with Suppliers

Geography of Suppliers, Contractors, and Service Providers

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