Today joint-stock company „State energy generation company ”Centrenergo”(JSC ”Centrenergo”)
is the important element of the power system of Ukraine and one of the leading power generation
company providing 7,7% of country needs in electric power. Power production stability is secured
by advantageous geographical location of power stations. Total installed capacity is 7 575 MW,
or 15 % from  the installed capacity of power industry of Ukraine. Therefore JSC  ”Centrenergo”
plays sufficiently substantial role in support and adjusting of energy balance of whole country.
  Company operates under the license for enterprise activity in the field of power production issued
by National commissions of adjusting of power industry of Ukraine ref. AB ą 220541 dated
07.09.2005.
   JSC ”Centrenergo” possesses facilities of three thermal power-stations located in the most
industrially developed regions of Ukraine: Tripol'skoy Termal Power Plant (TPP) located in Kiev region,
Zmievskoy TPP ilocated in Kharkov area and Uglegorskoy TPP located in Donetsk area.
23 power units capacity from 175 MW to 800 MW are installed at the power plants of the Company.
18 from the total quantity is coal, 5 from the total is gas-and-oil-burningi.

History  of company

Aims and tasks of development

Strategic directions of development of Company on 2001-2010.    
For the improvement of the financial and technical state of company, non-admission of its bankruptcy, and also for creation of base of its perspective development  there were developed a list of
strategic directions of development JSC "Centrenergo", which foresee three stages of its implementation.
  ˛ stage (2001 year):
Providing stable economic position of company (comparing to another companies of the field) ;
  ˛˛ stage (2002-2005 years):
Providing of growth and development of company (increase of stake of production of electric power at the internal market);
 III stage (2006-2010 years):
Enter into international power markets, participating in investment projects in Ukraine and other states.

First stage (2001 year).
- An effective management is optimization of internal resources and possibilities of company for an account: providing of transparency of financially-economic mechanisms of all of subdivisions
companies;
- to organize budgetary management  of the financial flows of company;
- developments of the system of information technologies, which allows to control activity of TPP of company in full;
- introduction of regime of hard economy by the way of the strict planning and control on all of the articles of charges of JSC "Centrenergo" and TPP, creation of the detailed plans of
development of basic activity of company;
- applications of marketing strategy at the conclusion of supply contracts (fuel, equipment, repair parts, services); search of alternative markets of supplying with the fuel of more high quality;
- achievement to the end of year of project quality of burned coal used at power-stations of company (foremost is reduction of ash-content), improvement of techno-economic  
indexes of power units,  improvement of the modes of operations of equipment by diminishing of its exploitation in transitional terms (starting-stop modes, single-hull modes); as a result of above-mentioned
factors reduction of specific costs of fuel on 1,5 % in comparison with 2000; increase of stake of production of electric power at Uglegorskoy TPP - the most economical station of company;
- transition from the administrative methods of fulfilling the production plans to the methods of economic stimulation;
- perfections of structure of management (centralization of functions of financial and legal management, commercial-procurement subdivisions, increase roles of financially-analytical services,
creations of KRU of company);
- signing of depositary agreement and start of the program of issue and placing of ADR of the first level;
- strengthening of pretentiously-lawsuit work with the debtors of company, including - by a basic debtor - GP "Energorynok";
- improvements of work of social sphere of company (preparations of materials for creation of own pension a fund, development of the new system of payment of labor of personnel,
which foresees the large financial personal interest of workers of all of levels as a result of financially-economic activity of company).

Hereupon on the first stage are planned:
- to continue the reconstruction of power unit ą8 Zmievskoy TPP;
- to begin the program of introduction of the new single automated system of record of electric power on the base of modern software and multi area (by hour) commercial devices of record;
- to reduce losses from realization of heat energy twice to the volume of 2000;
- to lead to profitability of generating of electric power to 10%;
- to conduct a repair campaign in full;
- to pick up a thread the extra charge of dividends on the action of company on results 2001 and to attain the increase of price of equities there is their more par value in 4-5 times.
econd stage (2002-2005 years).

Growth and development  - to increase the share of generated electric power at the internal market of Ukraine:
- creations of modern system  staff management;
- engaging of additional investments on development of company in the process of privatization and, as a result, improvement of techno-economic indexes of power units operation;
- improvements of financial operations with the use of modern bank mechanisms (opening of credit lines, grant of one-day bank credits secured by positive account balance, work on exchange stocks
with stocks of company);
- completion in 2002 of reconstruction of power unit ą 8 Zmievskoy TPP;
- completions of introduction in 2002 of the single automated system of account of electric power;
- completions of introduction of the system of information technologies, which allows to control activity of TPP of company in full;
- reduction of prime price of generated electric power and introduction of policy of reduction of price requests in ORE in the process of competition with other companies;
- improvements of legal base;
- search for extra consumers of electric power and conclusion of forward contracts on condition of implementation of Act about the wholesale market of electric power of Ukraine; search of new
markets of sale electric power;
- operation with stocks of company within the limits of the program ADR;
- continuations of training of leading personnel of company in management and marketing, including on contracts with foreign companies;
- developments short-term and long-term business plans of company in co-operation with "British Energy" within the limits of joint business;
- transmissions of unprofitable social sphere on balance of local authorities.

Hereupon it must be attained on the second stage:
- increase of profitability of production of electric power - to 15%;
- breaking-even marketing of heat energy;
- increase of share of generating power in the total market of Ukraine to 30% and reach the level of 1995;
- introduction of the new system of wages;
- increase of stock price;
- implementation of the program of modernization of blocks on Zmievskoy and Tripol'skoy TPP;
- obtaining of stability that enables to enter international markets of electric power and participating in the investment projects of other countries.

Third stage (2006 - 2010 years ).

Transformation of the Company into the holding company with with an own financial infrastructure and international representative office, entering external power markets.
Basic activity of company is production of electric power.

On this stage it is planned to complete privatization of company.

The main tasks are:
- successful completion of privatization of company, company stock and its derivatives issue and international stock market entry;
- liquidation of negative balance of creditor-debtor debt of JSC "Centrenergo", addition to the circulating assets of company;
- additional emission of stocks with the purpose of investment capital formation for application of new technologies on power-stations
- domestic fuel and building of new power units (including in other countries);
- restructuring of company;
- training and hiring management personnel for the improvement of financial system of company and creation of financial infrastructure; optimization of financial  flows;
- optimization of control the system (lsituatioonal analysis, exploration of problem directions, development of project of control system optimization, creation of development department);
- subsequent improvement of the informative system of company;
- increase of share of generated electric power on ORE in comparison to other competitive generating companies of country;
- development of own projects and entrance of international markets of power;
- diversification of production of company, creation of auxiliary productions;
- achievement of middle profitability on holding - not below 15%.

Strategic orientir of JSC "Centrenergo"
Dynamic, international, vertically integrated power company which correspond the best world standards of effective management.

JSC "Centrenergo" today.

JSC "Centrenergo" is included in top 20th of enterprises on List of the best companies of Ukraine ("TOP-100") which annually announced by "Ukrainian
Investment newspaper".

Financial performance of the company at 2006 and on the beginning of 2007is defined by the next factors: in 2006 JSC "Centrenergo" generated  
14110,682 millions kWh., exceeded plan on 536,682 millions kWh. Share of Uglegorskoy TPP was 29,7%, Zmievskoy TPP - 42,1%, Tripol'skoy TPP
- 28,2 %.

Share of the Company in power balance of Ukraine was 7,7%.

The volume of energy sold in 2006 excluding VAT is 2 652 264 000 UAH, including electric power 2 638 323 000 UAH, heat energy 13 941 000 UAH,
auxiliaries for 1 421 000 UAH.

Profitability of marketable products including additional payments in 2006 was 8,05 %, including electric power - 8,66% and heat energy - 47,77 %.

Profit from marketable products (including administrative charges as a part of cost price) in 2006 is 197 541 000 UAH (in 2005  - 157 377 UAH),
including generating of electric power  - 210 293 000 UAH (in 2005r - 164 661 000 UAH), generating of heat energy (loss) is 12 752 000 UAH
(2005  - 7 284 000 UAH).

Profit from other operating activity (social sphere, creation of reserve of doubtful debts) is 23 935 000 UAH and income from ordinary operating
activity of Company is 221 476 000 UAH

Equivalent fuel rate in a volume of sold electric power and heat energy at JSC "Centrenergo" in 2006 did not deviate from norm.

Prime price of 1 kWh. is 18,81 kop./ kWh. Average annual tariff - 20,44 kop./ kWh. Profitability - 8,66 %.

Notes payable of decreased on 161 584 000 UAH. The main debtor of Company is GP "Energorynok", the debt of which on the end of year is
1 471 457 000 UAH

Current account payable stated on 31.12.2006 is 966 582 000 UAH, and on 209 900 000 UAH less than, than on beginning of year.

In 2006 the Company didn’t charge dividends. But based on the decision of Meeting of shareholders' in April, 26, 2007 on results activity of Company for 2006 the share of profits (15%) was transferred to
the dividends fund.

Amount of issued and paid shares of JSC "Centrenergo" in 2006 haven’t changed. Shares price on PFTS during 2006th grew constantly and wobbles within the limits of 3,0 - 6,7 of par value.

In 2006 in Company were developed and realized a list of actions aimed at subsequent reduction of unprofitability and increase of profit from maintenance of objects of social infrastructures
of TPP of JSC "Centrenergo". As a result of this work actual charges on maintenance of objects of social infrastructure reduced on 3 929 000 UAH n comparison with 2006

In 2006 capital assets was renovated. Correction of plans of renovating settled for 2006 allowed to maintain 22 power units with general power 6650 mW. instead of 18 power units planned.

A large importance attached to nature protection activity. In 2006 starting-up and adjustment works were conducted after the reconstruction of electrostatic cleaner of building “A” of power unit ą1 of
Tripol'skoy TPP. Application of new electrostatic cleaner allows to provide the European norms of extrass in the atmosphere of particulate matters and promote its output-input ratio from 92,5 to 99,86%.
Company plans to carry out stage-by-stage reconstruction of electrostatic cleaners on other coal-dust power units of the stations with drawing on modern accomplishments in industry of cleaning of
smoke gases.

JSC "Centrenergo" - among other companies

  In accordance with Decree of President
Ukraine from May, 21, 1994 ą244/94
"About measures on a market
to transformations to industry
electroenergy of Ukraine" and
orders of Cabinet Ukraine from
November, 2, 1994 ą 816-r
in relation to restructuring electroenergy,
by Order Ministries of energy and
electrifications of Ukraine ą 49 from
on March, 17, 1995 on a base Zmievskoy,
Uglegorskoy, Tripol'skoy TPP is created
State enterprise "Centrenergo".
 
In accordance with Decree of President
Ukraine ą 282/95 from April, 4 1995
"About structural alteration in an
electroenergy complex Ukraine" and
Order of Ministry power engineering
specialists and electrifications of Ukraine
from August, 31, 1995 ą174
State enterprise "Centrenergo" is regenerate
in State joint-stock energogeneriruyuschuyu
company "Centrenergo"
(GAEK "Centrenergo").
  
   on April, 25, 1996 by Ministry
finances of Ukraine registered
emission of actions of GAEK "Centrenergo"
(Testifying to registration of issue
securities from April, 25, 1996 ą221/1/96).
  
   In obedience to Order of Fund
state property of Ukraine from
September, 16, 1996 ą23-GPK
a decision is accepted relative
privatizations of korporatizovanogo
enterprises of GAEK "Centrenergo".
 
   the first took a place on July, 21, 1998
general meeting of shareholders', on which
a decision was accepted about
re-registering of GAEK "Centrenergo"
in an open corporation
"State energogeneriruyuschaya
company "Centrenergo"
(JSC "Centrenergo").