March 11, 2008. OGK-1 has completed an open bidding process for implementation of a project to improve an international financial reporting standards budgeting system. IBS, which has substantial experience of implementing projects in the power industry, offered the best solution and financial terms among four well-known Russian and multinational consulting companies.
OGK-1 is building a comprehensive, transparent and economically sound financial management model that will give it an important competitive advantage. Efficient financial management supported by the best IT solutions will enable OGK-1 to become a leader when the company spins off from RAO UES of Russia and starts operating in a competitive market.
The project to improve the budgeting system is planned to be implemented in three phases. In the first phase, the current condition of the budgeting system will be surveyed, core areas for improvement will be identified and main provisions of the target budgeting model will be specified.
Then the budgeting system concept developed in the first phase will be itemized. Templates and techniques for generating budget forms will be produced and allocation of responsibilities among executives and subsidiaries of the company will be fixed.
The final phase is planned to provide regulation of overall budget planning, adjustment and implementation control, with itemization down to specified actions involved in budgeting, responsibilities for those actions, deadlines and results.
"Given the variety and large scale of projects at OGK-1, it is crucial to have cross-functional tools of financial management", noted Nadezhda Mistyukova, Deputy General Director for Economics and Finance, OGK-1, "We have been working to align our financial management with international standards for quite a while. More specifically, OGK-1 has been presenting IFRS statements since it was established in 2005. A unified budgeting system will enable us to make the system of financial management even more comprehensive, transparent and efficient".
Dmitry Sadkov, Director of Management Consulting Department, IBS is confident that improving the system of financial management is now an important objective that is not unique to OGK-1. The RAO restructuring will make the Russian electric power market competitive. Generating, sales and repair companies are facing the need to attract a lot of investment and cut costs, and thus are pressed to provide efficient financial management in order to achieve those objectives.
Profiles of the companies
OGK-1, the first power generating company in the wholesale electric power market, is the largest thermal wholesale generating company established as the result of reforming the Russian power industry. OGK-1 has an installed capacity of 9,531 MW.
All of the company's generating assets are located in the united power grid of the Urals and the Central region, which are Russian regions experiencing power shortages and having a high level of consumption. OGK-1 includes Permskaya, Verkhne-Tagilskaya, Kashirskaya, Nizhnevartovskaya, Urengoyskaya and Iriklinskaya state regional power plants.
OGK-1 accounted for 6.5 per cent of sales in the first price zone of the wholesale electric power market in 2006.
The company currently plans to implement an investment program providing for over 2,000 MW of generation capacity to be built by 2012 in Russian regions experiencing power shortages, with a large number of projects to be carried out in the Urals region.
Common registered shares in JSC OGK-1 are traded on the RTS exchange (tickers: OGKA on the Classic market, OGKAG on the T+0 market) and on MICEX (ticker: OGK1).
OGK-1 seeks to become Russia's biggest and most efficient thermal generating company.
www.ogk1.com
Point of contact
Ekaterina Dobrogorskaya
Press Service
+7 916 372 4393
IBS is Russia’s leading player in the IT and consulting market. It was formed through the merger of IBS and Borlas Consulting Group. It is part of IBS Group Holding Limited, along with Luxoft and Depo Computers. Its core lines of business are management consulting, business applications implementation, IT outsourcing and IT infrastructure. IBS headcount exceeds 3,400 employees including over 1,500 certified consultants. 84 of Russia’s top 100 companies are customers of IBS.
For further information on IBS please contact Lada Scherbakova, PR Director. Telephone: +7 495 967-80-80, e-mail: lada@ibs.ru.
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