The year 2014 was a testing time for the Lenenergo concept of development and the Company’s management system. Biased tariff regulation, the rising cost of borrowing to finance our large-scale investment program, creation of provision for impairment associated with freezing of Lenenergo funds in the accounts of the Bank Tavrichesky, due to the loss of its liquidity — all that had a significant negative impact on the Company’s performance last year. By the end of 2014, the Company reflected a loss of RUB 7,968 mln.
Thus, despite all complications, Lenenergo has performed the tasks assigned to it regarding provision of reliable power supply of St. Petersburg and the Leningrad Region. The Company continues to implement its projects in the field of uninterrupted power supply of consumers and development of technological connection systems to networks, and to carry out modernization of Lenenergo assets.
The Board of Directors made important decisions aimed at strengthening its financial discipline and considered the Plan of priority measures to ensure the Company’s financial stability. In order to protect the Company’s financial interests and for effective functioning of the governing and supervisory bodies of the Company, increase of information transparency and ensuring shareholder rights, a number of amendments to the internal regulatory documents of Lenenergo were approved.
Lenenergo, as a public company, aspires to follow the principles and recommendations set forth by the Corporate Governance Code, approved in 2014 by the Bank of Russia’s Board of Directors and recommended to the joint stock companies, whose securities are admitted to trading. The Company assessed its compliance with the corporate governance principles and developed an action Plan to improve its own corporate governance considering the best Russian and international practice.
The Company is consistently working to improve and increase the transparency of its social policy, as well as enhancing communications with stakeholders.
In 2015, Lenenergo will together, actively continue with its major shareholders to search the ways to improve the efficiency of its financial and business performance and attract non-tariff funding sources. A special priority will be displayed to ensure financial stability, execution of accumulated liabilities for technological connection and risk management.
In conclusion, I would like to express my gratitude and appreciation to all shareholders for their trust to our Company. I am sure that by our joint efforts we will successfully overcome all difficulties and fulfil all the tasks that we are challenged.