The Annual Report was approved by the Annual General Meeting of Shareholders
of PJSC FGC UES on 26 June 2019 (minutes No. 22 of 28.06.2019)
Previously approved by resolution of the Board of Directors on 24.05.2019
(Meeting Minutes No. 450 dated 24.05.2019)
Chairman of the Management Board of PJSC "FGC UES"
A. Murov
ABOUT THE REPORT
In May 2018, the President of the Russian Federation signed a Decree on National Goals and
Strategic Development Objectives of the Russian Federation until 2024. Implementation of
the spatial development strategy plays an important role, including lifting infrastructural
restrictions and ensuring maximum use of potential in regions and cities.
For detailed information on
the Report, its development
procedure, determination of
key topics, and responsibility
for information provided,
see section Additional
information/About the Report.
An interactive version of the
Report is available on the
Company’s website
at www.fsk-ees.ru/eng in
section Investors/Financial
Disclosure/Annual Reports.
The Integrated Annual Report of the Public Joint Stock Company "Federal Grid
Company of the Unified Energy System" for 2018 (the Report, the Annual Report)
is aimed at informing stakeholders about the strategy and mission of PJSC FGC UES,
policy in the field of social responsibility and sustainable development, key events and
results of work, impact on the economy, society, and the environment, as well as about
interaction with stakeholders.
The Report has been prepared in accordance with international and Russian
standards and regulatory requirements, including:
GRI Sustainability Reporting Standards;
international Integrated Reporting Framework;
AA1000 Stakeholder Engagement Standard (AA1000SES).
The Report is meant for a wide range of stakeholders.
GRI 102-1, 102-5
Within the text of the Report, the Public Joint Stock Company "Federal Grid Company of the
Unified Energy System" is also referred to as PJSC FGC UES, JSC FGC UES (used until 7 July
2015), FGC, FGC UES or the Company.
1 An integrated report is a concise communication about how an organisation’s strategy, governance, performance and prospects,
in the context of its external environment, lead to the creation of value over the short, medium and long term. An integrated report
should be prepared in accordance with International Integrated Reporting Framework.
for
instruction execution mechanism
The
provides
integrated modernisation
and expansion of the backbone electric
grid infrastructure, including development
of
systems and
implementation of digital smart control
systems.
centralised power
the key subjects of
As one of
the
infrastructure projects, PJSC FGC UES
solves complex tasks for providing access
in cooperation with
to electric power
representatives of all stakeholder groups.
Investment Programme
The Company's
covers electric grid complex
facilities
throughout the Russian Federation. In 2018
alone, the Company put into operation
1,880 km of power lines and 3,160 MVA of
transformer capacity.
The Company focuses on the introduction
and implementation of digital technologies
and the use of modern equipment mainly
produced in Russia, both in modernisation
projects and in new construction.
Our Annual Report provides information about the key implemented projects to improve
power supply reliability, provide connection to isolated energy districts, provide connection
to advanced development zones, carry out electrification of transport corridors and large
ports, as well as about the Company's plans for further development of infrastructure.
CONTENTS
NAVIGATION IN THE REPORT
6
8
Statement from the Chairman
of the Board of Directors
Statement from the Chairman
of the Management Board
CORPORATE
GOVERNANCE
REPORT
FINANCIAL
REPORT
149
General Information
on the Company's
Corporate Governance
154
155
169
170
General Meeting of Shareholders
Company's Board of Directors
Corporate Secretary
Committees of the Company's
Board Of Directors
176
Executive Governing
Bodies
182
190
191
200
201
203
Remuneration System
for Governing Bodies
Settlement of Conflict
of Interest
Risk Management System,
Internal Control
and Internal Audit
External Auditor
Anti-Corruption Policy
and Economic Security
Share Capital,
Securities Trading
212
Main Forms
of Annual Financial Statements
of PJSC FGC UES
for 2018 as per RAS
224
Main Forms of Financial
Statements of PJSC FGC UES
for 2018 as per IFRS
ADDITIONAL
INFORMATION
234
238
239
242
Information on the Report
Disclaimer
Auditor's Report
on Non-Financial Statements
Conclusion on Public
Endorsement
of the Integrated Report
244
Compliance with Standards
(GRI and )
257
259
262
Glossary and Abbreviations
Contact Information
Appendices
APPENDICES
Appendices are available in electronic format
and on our corporate website
Corporate Website: www.fsk-ees.ru/eng
Interactive Version:
ABOUT THE COMPANY
12
14
16
28
Geographic Reach
Company Structure
Key Results of the Year
Strategic Priorities
and Tasks
32
Corporate Governance
STRATEGIC
REPORT
36
40
44
56
59
62
Business Model
Industry Overview
Development Strategy
Key Performance
Indicators (KPI)
Key Risks
Performance Results 2018
62 Manufactured Capital
86 Financial Capital
96
Intellectual Capital
102 Natural Capital
113 Human Capital
127 Social and Relationship Capital
4
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
For ease of navigation in the Report, we have included typical designations
of the types of capital used by the Company, stakeholder groups, strategic
priorities and information links.
7 AFFORDABLE AND
CLEAN ENERGY
Informational
Link
to the website
Cross-link to other sections of the
Report or Appendices to the Report
8
7 AFFORDABLE AND
CLEAN ENERGY
DECENT WORK AND
ECONOMIC GROWTH
OUR RESOURCES
Types of capital
OUR GOALS
Strategic priorities
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
7 AFFORDABLE AND
ON LAND
CLEAN ENERGY
Manufactured
Financial
Reliability
of energy supply
Infrastructure
development
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
7 AFFORDABLE AND
ON LAND
CLEAN ENERGY
4 QUALITY
8
EDUCATION
DECENT WORK AND
ECONOMIC GROWTH
Intellectual
Natural
Customer
satisfaction
15 LIFE
7 AFFORDABLE AND
ON LAND
CLEAN ENERGY
Financial
sustainability
4 QUALITY
8
EDUCATION
DECENT WORK AND
ECONOMIC GROWTH
AND INFRASTRUCTURE
9 INDUSTRY, INNOVATION
15 LIFE
7 AFFORDABLE AND
ON LAND
CLEAN ENERGY
Human
Social
and relationship
WHO WE
WORK FOR
Stakeholder groups
ON LAND
CLEAN ENERGY
EDUCATION
DECENT WORK AND
ECONOMIC GROWTH
12 RESPONSIBLE
4 QUALITY
8
Economic
efficiency
9 INDUSTRY, INNOVATION
4 QUALITY
An indication of the Company's activities related
15 LIFE
8
AND INFRASTRUCTURE
7 AFFORDABLE AND
to fulfilling the UN Sustainable Development Goals.
For more
information on the UN Sustainable Development Goals, see
www.un.org/sustainabledevelopment/sustainable-
development-goals/
9 INDUSTRY, INNOVATION
15 LIFE
7 AFFORDABLE AND
17 PARTNERSHIP
9 INDUSTRY, INNOVATION
15 LIFE
12 RESPONSIBLE
4 QUALITY
8
CONSUMPTION
AND PRODUCTION
EDUCATION
DECENT WORK AND
ECONOMIC GROWTH
CONSUMPTION
AND PRODUCTION
EDUCATION
DECENT WORK AND
ECONOMIC GROWTH
FOR THE GOALS
AND INFRASTRUCTURE
ON LAND
CLEAN ENERGY
AND INFRASTRUCTURE
ON LAND
Shareholders
and investors
State
Consumers
Internal
stakeholders
12 RESPONSIBLE
4 QUALITY
8
CONSUMPTION
AND PRODUCTION
EDUCATION
DECENT WORK AND
ECONOMIC GROWTH
FOR THE GOALS
AND INFRASTRUCTURE
17 PARTNERSHIP
9 INDUSTRY, INNOVATION
15 LIFE
ON LAND
FOR THE GOALS
AND INFRASTRUCTURE
17 PARTNERSHIP
9 INDUSTRY, INNOVATION
15 LIFE
ON LAND
3 HEALTH
12 RESPONSIBLE
4 QUALITY
AND WELL-BEING
CONSUMPTION
AND PRODUCTION
EDUCATION
3 HEALTH
12 RESPONSIBLE
4 QUALITY
AND WELL-BEING
CONSUMPTION
AND PRODUCTION
EDUCATION
11 SUSTAINABLE
17 PARTNERSHIP
9 INDUSTRY, INNOVATION
CITIES
AND COMMUNITIES
FOR THE GOALS
AND INFRASTRUCTURE
Society
Partners, including
non-profit
5
3 HEALTH
12 RESPONSIBLE
4 QUALITY
AND WELL-BEING
CONSUMPTION
AND PRODUCTION
EDUCATION
11 SUSTAINABLE
17 PARTNERSHIP
9 INDUSTRY, INNOVATION
CITIES
AND COMMUNITIES
FOR THE GOALS
AND INFRASTRUCTURE
3 HEALTH
12 RESPONSIBLE
AND WELL-BEING
CONSUMPTION
AND PRODUCTION
CITIES
11 SUSTAINABLE
17 PARTNERSHIP
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
AND COMMUNITIES
FOR THE GOALS
3 HEALTH
12 RESPONSIBLE
CONSUMPTION
AND WELL-BEING
AND PRODUCTION
11 SUSTAINABLE
17 PARTNERSHIP
FOR THE GOALS
CITIES
AND COMMUNITIES
3 HEALTH
12 RESPONSIBLE
CONSUMPTION
AND WELL-BEING
AND PRODUCTION
11 SUSTAINABLE
17 PARTNERSHIP
FOR THE GOALS
CITIES
AND COMMUNITIES
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
17 PARTNERSHIP
FOR THE GOALS
CITIES
AND COMMUNITIES
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
11 SUSTAINABLE
CITIES
AND COMMUNITIES
STATEMENT FROM THE CHAIRMAN
OF THE BOARD OF DIRECTORS
PAVEL LIVINSKY
GRI 102-14
Dear shareholders and investors!
is
the
Federal Grid Company
largest
subsidiary of PJSC Rosseti and the key
element of the Unified National Electric Grid
(UNEG), and is systemically important for
Russia's entire power sector.
is entrusted with the tasks
FGC UES
of ensuring the reliable operation and
development of the main electric grid
complex, which plays a fundamental role
in providing electricity transmission to
national consumers.
FGC UES projects are of strategic nature
and have great importance for the social
and economic growth in Russian regions
and for energy security. The Company's role
as taxpayer, employer, consumer of both
innovative products and equipment and
services, including those supplied by small
and medium-sized enterprises, is significant
and extremely important.
Pavel Livinsky
Chairman of PJSC FGC UES
Board of Directors
EXPANSION OF THE GRID
In 2018, the geographical reach of FGC UES
was expanded and now covers 79 regions
6
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
across the country. UNEG facilities were
commissioned in the districts of the Republic
of Sakha (Yakutia), which was previously
isolated from the connection points of the
Unified Energy System of Russia. In addition,
the Company started supplying electricity to
consumers in the Irkutsk Region.
As part of the Investment Programme
implementation, construction of significant
substations and transit electric power
transmission
lines was completed, and
more than 5,600 MVA of new transformer
capacity and nearly 2,000 km of power
transmission
launched.
Meanwhile, the efforts of both the Board
of Directors and the management were
focused on achieving maximum investment
efficiency in order to minimise capital costs,
so the total amount of financing was a little
more than RUB 100 billion.
lines were
The implementation of FGC UES projects is
always associated with the involvement of
Russian suppliers and contractors.
The share of main equipment produced in Russia
accounts for 91 % of the Company's procurements.
The target is to achieve 95 % by 2030 through expansion
of comprehensive cooperation with domestic industrial
companies.
It is important that a significant portion of the contracts
are signed with small and medium-sized enterprises, with
more than 100 procurement items being purchased from
this category of suppliers alone. In the loyalty rating of the
largest SME customers for 2018, put together by the Agency
for Strategic Initiatives, FGC UES came in the top 5.
FINANCIAL AND ECONOMIC INDICATORS
FGC UES consistently demonstrates high financial and
economic indicators for a large volume of its production tasks.
The Company has been making considerable amounts
of net profit for more than five years already, including
in 2018.
This is the result of well-targeted coordinated work carried out
by the Board of Directors, management, and all employees
aimed at improving performance. PJSC FGC UES plays an
important role in the overall financial result of Rosseti Group.
DIGITAL TRANSFORMATION
Digital transformation is one of the priorities for all subjects
of the Russian economy.
All companies of Rosseti Group are fully involved in this
work. Intermediate results of pilot projects have already
shown tremendous positive effects in practice. Digital
technologies today are not only a unique tool for solving
existing problems, but also a powerful driver for growth
in competitiveness and efficiency of production and
administrative processes.
FGC UES has made significant progress in this area. In
the reporting year, the Tobol 500 kV substation — the first
ultra-high voltage facility — with integrated application of
digital technologies was put into operation in the country.
It will supply electricity to the Tobolsk production site of the
company SIBUR, which is Russia's biggest petrochemical
complex for deep hydrocarbons processing and is currently
under construction. It is planned to create another 30
substations before 2025, in which advanced digital solutions
will be widely used.
It should be noted that 100 % of the Company's facilities
are equipped with an automated information and
measuring system for commercial electricity metering.
The development of
the network of
fibre-optic
communication lines plays an important role. This not
only creates the necessary base for the Company's own
innovative solutions, but also makes it possible to provide
modern telecommunication services to residents and
enterprises located in remote areas of the country in
cooperation with
the corresponding communications
operators.
FGC UES is an industry pioneer in terms of switching
power facilities to remote control.
This work is carried out together with JSC SO UES.
This experience will be expanded throughout the power
sector.
CORPORATE GOVERNANCE
The corporate governance system of FGC UES is based on
the principles of transparency, data accuracy and a high
level of responsibility. Improving the quality of corporate
governance contributes to increasing the efficiency and
investment attractiveness of our business.
In 2018, key development aspects of the corporate
governance system in the Company were changes in the
dividend policy and the introduction of electronic voting at
the General Meetings of Shareholders.
In October 2018, the Russian Institute of Directors
confirmed the corporate governance rating of FGC UES
at the level of 7++, which allows the Board of Directors
to confirm the Company's compliance with the best
corporate governance practices and observation of the
recommendations of the Corporate Governance Code.
TASKS UNTIL 2020 AND THE NEW INVESTMENT CYCLE
The priorities of FGC UES are to ensure reliable and high-
quality power supply to consumers, provide efficient
technological connection,
implement actions for grid
development according to schedule, and preserve positive
dynamics of financial and economic indicators on the basis
of improved internal efficiency.
The current investment cycle is coming to an end, and the
Company is preparing to move into a new one. The Board
of Directors approved the draft Investment Programme
2020–2024, as well as adjustments to the current document
for 2019. The planned measures correspond to the tasks
set by Decree No. 204 of the Russian President dated
7 May 2018. In addition, due consideration was given to
changes in the composition of production assets resulting
from the implemented decision to exchange grid facilities
with JSC DVEUK.
The results achieved by the management team have
created the necessary base for fulfilling all obligations
assigned to the Company and maintain its high investment
attractiveness.
7
STATEMENT FROM THE CHAIRMAN
OF THE MANAGEMENT BOARD
ANDREY MUROV
GRI 102-14
Dear colleagues!
2018 was a milestone in the history of our
Company. FGC UES completed projects
that strengthened national energy security,
maintained a positive trend in terms of
production and financial indicators, made
progress in digitalisation, and confirmed its
status as an industry leader in the sphere of
environmental protection.
The issue of Decree No. 204 of the President
of the Russian Federation dated 7 May
2018 (hereinafter, Decree No. 204), which
determined the national goals of the country
until 2024, has not only established the
frame of reference for further development
of the Company, but has also confirmed our
previously established long-term priorities.
¾ PRODUCTION AND FINANCIAL RESULTS
Our strategic goal is to improve the quality
of services provided by FGC UES. The
Company reduced the accident rate by 17 %,
thus reaching the level of leading power grid
organisations around the world. Every year
we compete with ourselves by updating the
minimum levels from previous years.
Andrey Murov,
Chairman of the Management
Board of PJSC FGC UES
At the same time, we have continued in the
direction of improving our financial results.
In 2018, profit under IFRS increased by
5.7 % to RUB 92.8 billion, and adjusted
EBITDA by 3.2 % to RUB 133.6 billion.
In accordance with the Directive of the
Government of the Russian Federation, an
urgent task for all companies partially
owned by the stat e is to reduce OPEX by
2–3 % annually. Thanks to the actions
taken to improve internal efficiency in
2018, FGC UES reduced its unit operating
costs in comparable prices by 10.6 %
against the previous year.
FGC UES was awarded the prize of
the Government of
the Russian
field of quality
Federation
for high
the
sphere of rendered services, as well
as
introduction of highly effective
management techniques.
in
results achieved
the
in
¾MAJOR PROJECTS
In 2018, we completed a large-scale project
to strengthen interconnections between the Centre
and the North-West regions of the country. As
a result, the maximum allowable flow between
these macroregions increased by 1.5 times.
Construction of the transit line with a length of more than
750 kilometres from Neryungrinskaya GRES to the new
220 kV Maya substation was completed in Yakutia. This
made it possible to synchronise the isolated central energy
district of the republic with the UES of Russia. According
to the decision of the Board of Directors, the management
team worked on a deal to exchange assets with JSC DVEUK,
providing for transfer of transmission networks to FGC UES,
which are also located in the region. This was completed at
the beginning of 2019. Collectively, this creates opportunities
to improve our performance in terms of developing the Far
Eastern electric grid complex.
All main construction stages of Voskhod substation, which
is the final transit point with a capacity of 500 kV, were
completed in the Omsk Region, thus strengthening the
connection between the Urals and Siberia. In addition, two
power centres were commissioned in Kuban, infrastructure
was built for delivery of the new generation power from the
Far East, the Urals and the North-West. Power supply was
provided to advanced development zones in Khabarovsk
and Primorsky Krai.
Finally, we have achieved great results in the implementation
of the digitalisation programme. Tobol substation, the first
Russian power facility of 500 kV with integrated application
of the most advanced digital technologies, was put into
operation in the Tyumen Region.
¾ PLANS UNTIL 2024
Decree No. 204 pays special attention to the modernisation
and expansion of the backbone infrastructure.
We are mainly focused on creating conditions
for the development of West – East and North – South
transport corridors, and the Northern Sea Route, as well
as providing sustainable electricity supply to consumers
in all 79 regions of operation, including priority areas
of the Far East.
Work is already underway. We are implementing the Action
Plan coordinated with JSC Russian Railways for power supply
of the Baikal-Amur Mainline and Trans-Siberian Railway, we are
building a new feeding centre in Murmansk, which is one of
the basic points on the Northern Sea Route. We are creating
infrastructure that will provide electricity to the main pipelines,
mining and processing enterprises in Siberia and the Far East,
and strengthen the power systems in the South, the North
Caucasus, the Urals, the North-West, and the Centre.
Digital technologies are rapidly forming the panorama of
modern energy, making it possible to reach entirely new
levels of work. President Vladimir Putin set the direct
objective to introduce smart systems to control the Russian
electric grid facilities. Until 2025, we plan to develop more
than 30 integrated digital objects in the UNEG and switch
113 existing substations to remote control (24 have already
been switched). The coverage of digital communications
will reach 100 % and all the Company's facilities will be
supervised remotely from the unified control centres.
A new version of the Long-Term Development Programme
2020–2024 of FGC UES is being finalised with due
consideration of the tasks of Decree No. 204. In 2019,
we plan to submit this document for consideration to the
federal executive authorities and have it approved by the
Company's Board of Directors.
¾ SUSTAINABLE DEVELOPMENT
While remaining committed to the principles of sustainable
development, FGC UES continues to implement projects
aimed at minimising negative impact on the environment.
In 2018, the Company carried out activities related to
the reproduction of flora and fauna. A record amount
of equipment containing persistent organic pollutants
(POPs) has been sent for deactivation and disposal. The
national project Energy-Efficient Substation is currently
underway, which makes it possible to drastically reduce the
consumption of electricity for own needs.
The results of the compliance audit confirmed the full
conformity of the current environmental management
system with the requirements of ISO 14001:2015.
¾ HR POLICY
It is important to remember that behind each figure of
this Report there are people — the highly professional
staff at FGC UES. Twenty two thousand people work for
the Company, the majority being specialists with higher
education and graduates of leading Russian universities.
In 2018, FGC UES continued to implement all its social
programmes and adjusted salaries according to the index.
This made it possible to maintain competitive positions in the
labour market and increase motivation levels among staff.
In helping our employees to fulfil their potential, we
create new opportunities for the development of our
Company.
Our corporate training centres provide education in the form of
80 professional development programmes. There is a special
project named the Chief Engineer School for candidates
recommended to the talent pool for senior positions. In order to
attract talented young people to the industry, we are expanding
our cooperation with universities, working actively through the
youth section of the Russian National Committee of CIGRE.
Last year, FGC UES received the grand prize For Development
of Personnel Potential at the Leaders of Russian Business:
Dynamics and Responsibility contest held by the Russian
Union of Industrialists and Entrepreneurs (RSPP). The
Company was also recognised as the most socially
oriented company in the power industry in the category
for Development of Professional and Personal Potential of
Employees based on the results of the contest held by the
Ministry of Energy of Russia.
The results achieved by FGC UES in 2018 allow the Company
to look to the future with confidence. A stable financial
position, a strong production base, and a well-consolidated
team are the key to successfully achieve all tasks.
8
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
9
ABOUT THE COMPANY
ABOUT THE COMPANY
PJSC FGC UES is a Russian energy company providing electricity transmission services
through the Unified National Electric Grid. In this type of activity the Company is a subject
of natural monopoly. The Company is included in the list of core Russian organisations
of strategic importance.
MISSION OF THE COMPANY: TO ENSURE RELIABLE OPERATION AND DEVELOPMENT
OF THE UNEG IN LINE WITH ECONOMIC GROWTH, DEMONSTRATING HIGH ECONOMIC
EFFICIENCY AND COST MINIMISATION.
Core areas of business:
management of the Unified National Electrical Grid;
provision to the entities of the wholesale electricity and capacity market of services for electricity transmission
and technological connection;
investment activity for the development of the Unified National Electrical Grid.
We facilitate:
power transmission through the transmission network in 79 regions of Russia, taking part in solving the most important
problems of the country’s social and economic development;
movement of electric energy across the borders of 11 foreign countries, collection and processing of information on the
electricity flow through 133 interstate transmission lines.
GRI 102-2
FGC UES activities
The activity of PJSC FGC UES is a low-risk business, steadily developing as a result
of the consistent implementation of strategic priorities, effective management and high
professionalism of our employees.
WE
OPERATE
958 substations
146,000 km
OF HIGH-VOLTAGE
BACKBONE TRANSMISSION
LINES
HPP
NPP
THERMAL
PLANTS
OTHER
ENERGY
SOURCES
INDUSTRIAL
CONSUMERS
TECHNOLOGICAL
CONNECTION
ELECTRICITY TRANSMISSION THROUGH
BACKBONE ELECTRIC GRIDS
CONSTRUCTION
AND RECONSTRUCTION
OF GRID FACILITIES
MAINTENANCE
AND REPAIR
INDUSTRIAL
CONSUMERS
INTER-REGIONAL
DISTRIBUTION
COMPANIES
HOUSEHOLDS
SYSTEM OPERATOR,
DISPATCHING
TRADE SYSTEM
ADMINISTRATOR,
BALANCING MARKET
ELECTRICITY TRANSMISSION
TO FOREIGN COUNTRIES
10
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
11
ABOUT THE COMPANY
GEOGRAPHIC REACH
GEOGRAPHIC REACH
GRI 102-4, 102-6, 102-7
PJSC FGC UES operates in 79 regions of Russia. The territory in which the Company’s facilities are located
is divided into zones of responsibility for regional branches – main power systems (MPS), and their regional
enterprises (EMPS). Territories with low-density population and no major customers, such as Chukotka,
Kamchatka, Magadan Region, Sakhalin, Nenets Autonomous Okrug and Altai Republic, are not integrated into
the UNEG because they do not have the economic conditions necessary for laying electricity transmission
lines and establishing large substations.
As part of the 2018 agreement on the swap of assets owned by JSC DVEUK, the UNEG facilities located
in the west power region of the Republic of Sakha (Yakutia) were transferred to FGC UES.
MPS Centre
SS: 201 pcs. / 99,978 MVA
PL: 481 pcs. / 29,568 km
EMPS
Valdaiskoye
Verkhne-Donskoye
Vologda
Volga-Donsk
Moscow
Priokskoye
Chernozemnoye
Special purpose production
centre Bely Rast
MPS North-West
SS: 103 pcs. / 41,657 MVA
PL: 399 pcs. / 15,469 km
EMPS
Karelskoye
Leningrad
Novgorod
Severnoye
MPS West Siberia
SS: 91 pcs. / 39,730 MVA
PL: 226 pcs. / 14,303 km
EMPS
Eastern
Central
Southern
Yamalo-Nenets
MPS Siberia
SS: 125 pcs. / 47,637 MVA
PL: 348 pcs. / 25,567 km
EMPS
Transbaikal
West-Siberian
Krasnoyarsk
Kuzbass
Khakassky
UNIFIED NATIONAL
ELECTRIC GRID*
SUBSTATIONS
WITH VOLTAGE UP TO 1,150 KV
352 GVA
958 pcs.
POWER TRANSMISSION
LINES WITH VOLTAGE UP TO 1,150 KV
146,000 km
2,406 pcs.
NUMBER OF REGIONS OF PRESENCE
79
* Information on SS and power transmission lines with
the properly registered ownership of PJSC FGC UES and other
owners, including 0.4–110 kV voltage class facilities but
excluding power transmission lines and SS with voltage class
of 10 kV and lower, accepted by PJSC FGC UES for long-term
lease and operating in the territory of Krasnodar Krai.
MPS East
SS: 94 pcs. / 15,661 MVA
PL: 217 pcs. / 17,558 km
EMPS
Amur
Primorsky
Khabarovsk
MPS South
SS: 149 pcs. / 31,914MVA
PL: 355 pcs. / 13,824 km
EMPS
Caspian
Kuban
Rostov
Sochi
Stavropol
MPS Volga
SS: 88 pcs. / 32,357 MVA
PL: 190 pcs. / 12,902 km
EMPS
Nizhny Novgorod
Nizhne-Volzhskoye
Samara
Sredne-Volzhskoye
MPS Urals
SS: 107 pcs. / 43,008 MVA
PL: 250 pcs. / 16,748 km
EMPS
Orenburg
Perm
Sverdlovsk
South Ural
FGC UES ensures movement of electric energy
across the borders of 11 foreign countries,
information
collection and processing of
interstate
on electricity
transmission lines
through 133
flow
For further details on the Company's international
operations, as well as on electric energy exports and
imports under contracts of PJSC Inter RAO,
see Appendix 1.
12
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
13
ABOUT THE COMPANY
COMPANY STRUCTURE
COMPANY STRUCTURE
PJSC FGC UES EXECUTIVE OFFICE
BRANCHES OF PJSC FGC UES
PJSC FGC UES includes 45 regional branches, with 8 branches of the main power
systems (MPS) and 36 branches of the enterprises of the main power systems (EMPS),
as well as Bely Rast Special Production Plant.
PJSC FGC UES participates in 23 business entities that operate in different industries,
including those that ensure the functioning of electric grid facilities.
For information on participation
in the companies, see Appendix 7.
MPS
NORTH-
WEST
EMPS
Karelskoe
Leningrad
Novgorod
Severnoe
MPS
VOLGA
EMPS
Nizhne-Volzhskoye
Sredne-Volzhskoye
Samara
Nizhny Novgorod
MPS
SOUTH
EMPS
Caspian
Kuban
Rostov
Stavropol
Sochi
MPS
URALS
EMPS
Perm
Sverdlovsk
South Ural
Orenburg
MPS
WEST SIBERIA
MPS
SIBERIA
EMPS
Central
Southern
Eastern
Yamalo-Nenets
EMPS
Transbaikal
West-Siberian
Krasnoyarsk
Kuzbass
Khakassky
MPS
EAST
EMPS
Amur
Primorsky
Khabarovsk
MPS
CENTRE
EMPS
Valdaiskoye
Verkhne-Donskoye
Vologda
Volga-Donsk
Moscow
Priokskoye
Chernozemnoye
Special purpose
production centre
Bely Rast
SUBSIDIARIES, ASSOCIATED AND OTHER COMPANIES, IN WHICH PJSC FGC UES PARTICIPATES
100 %
OWNED SUBSIDIARIES
75–99 %
OWNED SUBSIDIARIES
ASSOCIATED COMPANIES
OTHER
COMPANIES
JSC APBE
JSC ELECTROSETSERVICE UNEG
LLC IT ENERGY SERVICE (79.999 %)
CJSC SEVEROVOSTOKENERGO (49 %)
PJSC INTER RAO (9.239 %)
PJSC ROSSETI (0.151 %)
JSC MOBILE GTES
JSC ESSK UES
JSC TOMSK TRUNK GRIDS (87.164 %)
JSC ENIN (38.239 %)
CJSC ENERGORYNOK (8.5 %)
JSC STEND (0.826 %)
JSC MUS ENERGETIKI
LLC INDEX OF ENERGY – FGC UES
JSC NURENERGO (76.999 %)
JSC ACRA (3.704 %)
CJSC TAIGAENERGOSTROY (0.00067 %)
JSC NTC FGC UES
LLC FGC – ASSET MANAGEMENT
JSC TSIUS UES
JSC KUBAN TRUNK GRIDS
50–74 %
OWNED SUBSIDIARIES
JSC CHITATEKHENERGO
JSC IPS SAKRUSENERGO (50 %)
Core
Non-core
14
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
15
ABOUT THE COMPANY
KEY RESULTS OF THE YEAR
MANUFACTURED CAPITAL
Increased reliability
modernization and expanded
backbone infrastructure
The Company continued to invest in the development of the power grid
infrastructure and renovation of production assets.
103.3
RUB
bln
financing
of the Investment
Programme.
A number of major projects were implemented as part of the Investment Programme in 2018.
FGC UES completed the
construction of the 220 kV
overhead line Neryungrinskaya
GRES – Nizhny Kuranakh –
Tommot – Maya in the Far
for
East, which provided
connection of the previously
isolated centre of the Republic
of Sakha (Yakutia) to the UES
of Russia.
The Voskhod 550 kV
substation forming part of the
power transit Kurgan – Vityaz –
Voskhod was built in Siberia.
Three new power supply
centres were put into operation:
the Tobol 550 kV substation
in Western Siberia with
integrated
implementation
of digital solutions, Novo-
Labinskaya and Vostochnaya
Promzona 220 kV substations
in the South of Russia.
The
infrastructure was
put into operation for power
output at Nizhne-Bureiskaya
HPP, the new power unit of
Permskaya GRES.
FGC UES supplied voltage to
the power receiving devices at
three oil pumping stations of
the Eastern Siberia — Pacific
Ocean (ESPO) pipeline system
in Khabarovsk Krai. Thus, the
conditions have been created
for the electric supply of a
new branch of the oil pipeline
with a length of 293 km, which
will connect the ESPO and the
Komsomolsk refinery.
The Company reduced the accident rate, thus reaching the level
of leading power grid organisations around the world.
By 17 %
the specific accident rate dropped due to
introduction of new equipment, improved skills and
expertise of the maintenance personnel, and other
activities.
By means of technological connection services, the Company
provides access for consumers to the electric grid infrastructure.
8 GW
of capacity of new consumers was
connected to the Unified National Electric
Grid of Russia.
16
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
17
ABOUT THE COMPANY
KEY RESULTS OF THE YEAR
FINANCIAL CAPITAL
Effective ratio own and
borrowed capital
Stable growth of cash flow from current operations provides
for active use of own resources to finance the Investment
Programme without resorting to borrowing major funds
on the capital markets.
127.4
RUB
bln
+5.6 % on 2017
cash flow from current operations in 2018.
This indicator demonstrates steady growth
for the third year in a row.
PJSC FGC UES performance indicators for 2018 reflect the work of
management aimed at ensuring financial stability and improving the
efficiency of the Company.
240.3
RUB
bln
+11.2 % on 2017
Company revenue
in the reporting year.
56.2
RUB
bln
+32.6 % on 2017
Company net profit
in the reporting year.
Reduction by 10.6 % of unit operating costs
for 2018 against 2017
(in comparable prices).
The dividend yield of PJSC FGC UES shares is one
of the highest among all enterprises in the industry.
9.14 %
dividend yield.
High credit ratings and good financial results provide for debt financing
under convenient terms. In 2018, the international rating agency Standard
& Poor's upgraded the rating of PJSC FGC UES to BBB–.
RUB 10 bln – the amount of the Company's exchange bonds, which were successfully
placed in October 2018. The issue met all the requirements necessary to be included on the
Lombard List of the Bank of Russia, as well as the requirements for investment of pension
savings and insurance reserves. Investors showed considerable interest in the issue
of PJSC FGC UES bonds. Based on the bookbuilding results, the aggregate demand
for PJSC FGC UES bonds exceeded the actual placement by more than 2.5 times.
18
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
19
ABOUT THE COMPANY
KEY RESULTS OF THE YEAR
INTELLECTUAL CAPITAL
Use in work
innovation technology
FGC UES is an industry pioneer in terms of switching power facilities
to remote control. Implementing remote control of substations
improves the efficiency and safety of industrial operations.
At 18 ss
technical actions were taken
for remote control implementation.
In 2018, the focus was on the priority areas of scientific
and technical development associated with digitalisation.
500 kV Tobol substation
commissioned in 2018 in the Tyumen Region became the first Russian ultra-high voltage facility
with integrated application of digital substation technologies, i.e. the construction of power
facility automation and control systems on the basis of the IEC 61850-9.2 standard using
state-of-the-art information processing and collection devices, such as digital optical current
and voltage transformers.
Up to 58 % the number of substations with modern digital
information collection and management systems
has increased.
Digitalisation of communication channels of automated dispatching
and technological control systems improves the monitoring and control
quality of the electric grid complex.
Up to 76,500
km
the length of the FGC UES digital
network was extended.
20
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
21
ABOUT THE COMPANY
KEY RESULTS OF THE YEAR
NATURAL CAPITAL
Environmental safety
and rational use resources
The Company considers environmental protection activities
to be an integral and important part of its operations. FGC UES aims
to minimise adverse impact on the environment during the course
of electricity transmission and distribution.
The significant costs of environmental activities reflect
the Company's responsibility to preserve the environment.
Effective environmental management.
ISO 14001:2015
in 2018, following the results of the compliance audit, the environmental
management system was recognised as fully compliant with its requirements.
252.7
+38.8 % on 2017
RUB
mln
the Company's current environmental
protection costs.
For the second time in a row, FGC UES was recognised as the most
environmentally responsible company in the sector and was awarded
for best environmental management at the Leader of Environmental
Protection in Russia contest.
Large-scale introduction of energy-saving technologies provides
not only for economic benefit, but also an environmental one.
5,914.3
tonnes of fuel
equivalent
operational benefit of
measures to reduce energy/fuel
consumption for 2018.
FGC UES supports initiatives and programmes aimed at energy,
conservation of biodiversity and prevention of environmental pollution.
About 11 MWh
were saved as a result of events held at 773 Company
facilities as part of the worldwide movement
Earth Hour.
Although PJSC FGC UES operations do not have a significant impact
on biodiversity, the Company actively implements measures to protect
wildlife at its electric grid facilities.
About 60,000
bird protection devices were installed
on high-voltage lines in 2018. Almost
five thousand of them were installed on
power transmission lines in the Northern
Caucasus in habitats of birds listed in the
Red Data Book.
22
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
23
ABOUT THE COMPANY
KEY RESULTS OF THE YEAR
HUMAN CAPITAL
High qualification staff, safe
work, social guarantees,
training and professional growth
In order to develop the professional potential of young people,
FGC UES cooperates with institutions of specialised higher
and secondary education.
More than 120 Russian educational institutions have been involved
in various forms of cooperation with the Company.
Cooperation agreements have been signed with
52 universities and 13 specialised secondary schools.
A balanced human resources management system provides for optimal use
of human resource potential.
Optimisation of the
organisational structure
made it possible to balance the personnel workload
and reduce the number of management levels for
production operations.
Fulfilment of professional and personal potential of employees is one of
the key objectives of the HR policy at FGC UES. The corporate personnel
training system of PJSC FGC UES is aimed at continuous employee
training and development to provide the Company with highly qualified
personnel under the conditions of digitisation of the electric grid complex
and a rapidly changing environment, taking into account modern
technologies and global trends.
15,800 FGC UES employees took part in training,
retraining and professional development
programmes in 2018.
Healthy and safe working conditions for employees
are a priority in all of the Company's activities.
Introduction of the Hazard Identification
Methods and Employee
Injury Risk Assessment
was aimed at continually
reducing the accident rate.
24
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
25
ABOUT THE COMPANY
KEY RESULTS OF THE YEAR
SOCIAL
AND RELATIONSHIP CAPITAL
Positive image
and reputation of a reliable partner
The achievements of FGC UES in 2018 were repeatedly noted
at various competitions.
FGC UES won the Prize
of
the
the Government of
Russian Federation in the field
of quality. The Company was
among 11 winners selected from
282 candidate organisations.
received
FGC UES
the
grand prize For Development
of Personnel Potential at the
Leaders of Russian Business:
Dynamics and Responsibility
contest held by the Russian
Union of
Entrepreneurs (RSPP).
Industrialists and
Leader
following
In 2018,
the
results of the XIV All-Russian
of
Competition
Environmental Protection
in
Russia 2018, PJSC FGC UES won
awards in two categories: “Best
Environmental Management”
and
Environmentally
Responsible Company in the
Electric Power Industry”.
“Best
received
FGC UES
the
grand prize For Development
of Professional and Personal
Potential of Employees at
the contest for Most Socially
Oriented Company in the Power
Industry, which was organised
by the Ministry of Energy of
Russia.
Support of culture and art is an important part of the Company's
charity and sponsorship activities.
The State Hermitage
Museum
was the venue for the exhibition by Ilya and Emilia
Kabakov entitled “Not Everyone will be Taken to the Future”,
which was sponsored by PJSC FGC UES. The exhibition
was a joint project between the State Hermitage Museum,
the Tretyakov Gallery and the Tate Modern (UK).
Constant interaction with customers allows the Company
to better meet their expectations and continuously develop
in this area.
9.3
points
out of 10
the level of customer satisfaction with the
Company's technological connection service
based on the survey conducted in 2018.
Interaction with regional authorities is necessary for successful
development of the regions of the Company's operations and effective
implementation of its Investment Programme.
3
cooperation
agreements
with the regions
signed in 2018:
agreement with the administration of the Sakhalin Region;
agreement with the administration of Primorsky Krai;
agreement with the administration of Krasnodar Krai.
26
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
27
ABOUT THE COMPANY
STRATEGIC PRIORITIES AND TASKS
STRATEGIC PRIORITIES AND TASKS
PRIORITIES
WHY IS IT
IMPORTANT?
1. RELIABILITY
AND QUALITY OF ENERGY
SUPPLY TO CONSUMERS
The power supply of large industrial enterprises and cities
depends on the reliability of UNEG operation.
Limitations or cuts in electricity supply to end consumers
can have serious economic and social consequences.
The transmission network shall meet the physical conditions
and limitations in terms of power, frequency, voltage, and stability,
and provide the necessary reserves to withstand unforeseen
fluctuations in demand, unexpected equipment failures, and avoid
loss of load and cascade tripping.
Maintain high levels
of reliability of electricity
transmission, reduce
electricity shortages.
STRATEGIC TASKS
FOR 2015–2019
HOW DO
WE MEASURE
THE RESULT?
~ RISKS
AFFECTING
THE ACHIEVEMENT
OF STRATEGIC TASKS*
2. DEVELOPMENT
OF UNEG INFRASTRUCTURE
3. CUSTOMER
SATISFACTION
Development of the UNEG
makes it possible to expand
the geographical boundaries
of the competitive electricity
and capacity market, providing
for entry into the market
of new generation sources
and consumers in order
to balance demand
and supply in various grid
nodes with high reliability
and cost effectiveness.
Through technological connection, FGC UES fulfils
the objective to provide consumers with the available
infrastructure and conditions for economic growth.
When carrying out activities related to transmitting
electricity, FGC UES shall ensure continuous power
supply to consumers.
Implement the Long-Term Investment Programme
amid tariff restrictions with minimal reduction in physical
indicators.
Carry out new investment projects of national
importance in the established time frames.
Ensure the timely development of UNEG infrastructure
in areas of real demand growth.
Optimise utilisation of the existing electric grid
capacities.
Reduce the cost of
technological connection
for new consumers.
Develop mechanisms
for financing investments
in the development
of the UNEG to create
the possibility of
technological connection
with non-tariff sources.
Lack of growth in number of major accidents.
Implementation of the commissioning schedule
Compliance with the deadlines for technological
Achieving the required reliability level of services provided.
of facilities.
connections.
Increase in capacity utilisation of electric grid
Achieving the required reliability level of services
equipment.
provided.
Reduction of unit investment costs.
~ КОR 013
~ КОR 010 ~ КОR 011 ~ КОR 012
~ КОR 014
* For more information on key operating risks, see section Key Risks.
28
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
29
ABOUT THE COMPANY
STRATEGIC PRIORITIES AND TASKS
STRATEGIC PRIORITIES AND TASKS
PRIORITIES
4. ECONOMIC
EFFICIENCY
5. FINANCIAL
SUSTAINABILITY
WHY IS IT
IMPORTANT?
Existing limitations of the electricity price (tariff) growth rates
impose significant restrictions on the increase in operating costs
and the allowable amount of investments in upgrading and
renovating electric power grids.
In the context of tariff restrictions and stabilisation of
the scope of grid activities, the Company needs to improve
its internal efficiency to ensure further technological development
and create profit for shareholders, which will also be used to finance
investments, including equipment renovation and modernisation.
Improvement of the investment efficiency is associated with
the optimisation of financing sources. PJSC FGC UES strives to find
a balance between financing using the Company's own funds, borrowed
funds and other sources.
The high financial stability indicators of the Company contribute
to attracting debt financing under favourable terms.
In addition, the financial stability of FGC UES guarantees the
Company's solvency and its investment and reputation attractiveness
for shareholders, investors, and contractors in the long term within
the acceptable risk level.
Reduce unit operating costs. At the same time, measures to reduce
costs shall neither have an adverse impact on the level of reliability,
nor lead to increased costs in future periods.
Use the programme-target principle when developing investment
programmes, in accordance with which the activities of investment
programmes aimed at meeting the targets shall be grouped
and united by quantitative indicators that reflect the implementation
effect of these activities.
Maintain the credit rating of PJSC FGC UES
at the sovereign level.
Growth of financial and economic indicators (consolidated net
cash flow, EBITDA).
Reduction of unit operating costs and specific investment costs.
Growth of labour productivity.
Efficiency of innovation activities.
Strict fulfilment of obligations to bond holders, maintenance
of the required liquidity level, compliance with the debt-load limits
approved by the Board of Directors. Reduction of the overdue
accounts receivable.
~ КОR 001– 006 ~ КОR 009 ~ КОR 016
~ КОR 007 ~ КОR 008
STRATEGIC TASKS
FOR 2015–2019
HOW DO
WE MEASURE
THE RESULT?
~ RISKS
AFFECTING
THE ACHIEVEMENT
OF STRATEGIC TASKS*
* For more information on key operating risks, see section Key Risks.
30
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
31
ABOUT THE COMPANY
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
The Company observes the requirements
of Russian legislation in the sphere of corporate
governance and follows a considerable number
of the recommendations of the Russian
Corporate Governance Code.
Compliance according
to the Corporate Governance
Quality Self-Assessment Method*
7++
Well-Developed Corporate
Governance Practice.
It is the corporate gover-
nance rating assigned
by the Russian Institute
of Directors.
89 %
87 %
85 %
83 %
82 %
80 %
78 %
76 %
75 %
87 %
86 %
84 %
2016
2017
2018
* Developed in accordance with the Corporate Governance Quality Self-Assessment Method in Companies Partially
Owned by the State approved by Order No. 306 of Rosimushchestvo dated 22 August 2014.
The Board of Directors shall be an efficient and professional governing body of the Company
capable of making objective and independent judgements and making resolutions in the best
interests of the Company and its shareholders.
3 independent
directors
out of 11
on the Company's Board of Directors provide
an independent perspective on operations carried
out by the Company and its governing bodies, based
on their knowledge, experience and expertise.
Only independent directors form part of the Audit
Committee and the HR and Remuneration Committee.
The excellent performance of the Board of Directors is confirmed by independent
evaluation.
5 points
out of 5
performance evaluation of the Chairman
of the Company's Board of Directors based
on the assessment results of the Board of Directors
and Committees conducted in early 2019 by
an independent consultant of JSC VTB Registrar.
The Company continues to develop its corporate governance system.
Protection
of shareholder
rights
The new version of the Regulations on the Dividend Policy
of PJSC FGC UES has been approved, where the dividend
amount was fixed to no less than 50 % of the net profit*
calculated according to financial statements as per RAS
or IFRS.
Remote participation of shareholders in the Annual
General Meeting of Shareholders was made possible
by creating technical conditions for electronic voting.
* The amount was calculated taking into account the adjustment of net profit in accordance with Regulation No. 1094-r
of the Government of the Russian Federation dated 29 May 2017.
The total number of the Company's shareholders exceeds 400,000 persons.
13.76 %
6.12 %
Share capital structure
of PJSC FGC UES
as of 31 December 2018
PJSC Rosseti
Shareholders owning from 0.5 %
to 2 % of the Company's
authorised capital
Shareholders owning less than 0.5 %
of the Company's authorised capital
80.13 %
TSR
in 2018, total shareholder return (TSR) of FGC UES shares
was above the average TSR value of the most capitalised
companies in the Russian power sector.
Analysts make an optimistic assessment of the investment attractiveness
of FGC UES shares, mainly giving the recommendation to purchase them.
Recommendations of analysts on PJSC FGC UES shares**
75 %
86 %
50 %
57 %
25 %
14 %
17 %
33 %
14 %
29 %
67 %
33 %
Buy
Hold
Sell
Q4 18
Q3 18
Q2 18
Q1 18
Q4 17
** Source: Company data.
32
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
33
In 2018, FGC UES completed projects that strenghthened the country's
energy security, kept the trend of positive production and financial indicators,
made progress in digitalisation and proved to be an industry leader
in the environmental sector.
36
Business Model
40
Industry Overview
44
Development Strategy
56
Key Performance
Indicators (KPI)
59
Key Risks
62
Performance Results 2018:
62 Manufactured Capital
86 Financial Capital
96 Intellectual Capital
102 Natural Capital
113 Human Capital
127 Social and Relationship Capital
STRATEGIC REPORT
BUSINESS MODEL
GRI 102-15
We use capitals to create value for stakeholders
BUSINESS MODEL
STRATEGIC
PRIORITIES:
RELIABILITY
AND QUALITY OF ENERGY SUPPLY
INFRASTRUCTURE
DEVELOPMENT
CUSTOMER
SATISFACTION
ECONOMIC
EFFICIENCY
7 AFFORDABLE AND
CLEAN ENERGY
FINANCIAL
SUSTAINABILITY
RESOURCES
KEY PROCESSES
PRODUCTS AND SERVICES
We ensure continuous
and reliable electricity
transmission via
backbone grids
in 79 regions of Russia,
addressing most important
issues of social and economic
development of our country.
We plan and implement
development of transmission
networks and ensure access
for new consumers.
FINANCIAL CAPITAL
We strive to raise return on financial capital
and maintain financial stability.
For information on financial capital management, please see page 86.
PRODUCTIVE CAPITAL
We invest into power grid infrastructure
development and productive assets renovation.
For information on the largest power grid infrastructure projects
in Russia, please see pages 74–79.
INTELLECTUAL CAPITAL
We promote scientific and innovative
potential development, develop and introduce
new technologies.
For digitalisation and use of advanced technologies, please see pages 96–100.
HUMAN CAPITAL
We highly appreciate experience and professional
skills of our staff, provide social support and
arrange for staff development and training.
For information on Company staff, corporate culture development,
and safe working conditions, please see pages 114–125.
NATURAL CAPITAL
We strive to reduce emission of harmful
substances into the atmosphere, water
consumption and to enhance energy efficiency.
For information on environmental safety management
and sustainable use of energy, please see pages 102, 111.
SOCIAL GOODWILL
ln our activities, we maintain
positive Company image supported
by maximum information transparency.
For the socially responsible model of Company operation, development
of regions of Compony presence and efficient interaction with stakeholders,
please see pages 127–133.
ELECTRICITY
TRANSMISSION
TECHNOLOGICAL
CONNECTION
CONSTRUCTION
AND RECONSTRUCTION
CORPORATE AND STRATEGIC MANAGEMENT
RISK
MANAGEMENT
36
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
7 AFFORDABLE AND
CLEAN ENERGY
8
8
DECENT WORK AND
ECONOMIC GROWTH
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
ON LAND
15 LIFE
RESULTS
FOR
STAKEHOLDERS
4 QUALITY
EDUCATION
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
ON LAND
CONSUMPTION
AND PRODUCTION
CONTRIBUTION
12 RESPONSIBLE
15 LIFE
TO UN
15 LIFE
SUSTAINABLE
15 LIFE
15 LIFE
DEVELOPMENT
GOALS
17 PARTNERSHIP
17 PARTNERSHIP
ON LAND
ON LAND
FOR THE GOALS
FOR THE GOALS
ON LAND
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
3 HEALTH
AND WELL-BEING
AND WELL-BEING
CLEAN ENERGY
3 HEALTH
7 AFFORDABLE AND
11 SUSTAINABLE
7 AFFORDABLE AND
11 SUSTAINABLE
8
CLEAN ENERGY
DECENT WORK AND
ECONOMIC GROWTH
CITIES
AND COMMUNITIES
CITIES
AND COMMUNITIES
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
15 LIFE
ON LAND
4 QUALITY
EDUCATION
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
CLEAN ENERGY
7 AFFORDABLE AND
7 AFFORDABLE AND
7 AFFORDABLE AND
7 AFFORDABLE AND
CLEAN ENERGY
CLEAN ENERGY
CLEAN ENERGY
8
8
8
8
DECENT WORK AND
ECONOMIC GROWTH
DECENT WORK AND
ECONOMIC GROWTH
DECENT WORK AND
ECONOMIC GROWTH
DECENT WORK AND
ECONOMIC GROWTH
EDUCATION
AND INFRASTRUCTURE
EDUCATION
EDUCATION
EDUCATION
CLEAN ENERGY
CONSUMPTION
AND PRODUCTION
CONSUMPTION
AND PRODUCTION
ON LAND
AND INFRASTRUCTURE
AND INFRASTRUCTURE
AND INFRASTRUCTURE
DECENT WORK AND
ECONOMIC GROWTH
CONSUMPTION
AND PRODUCTION
CONSUMPTION
AND PRODUCTION
4 QUALITY
4 QUALITY
4 QUALITY
4 QUALITY
7 AFFORDABLE AND
9 INDUSTRY, INNOVATION
9 INDUSTRY, INNOVATION
9 INDUSTRY, INNOVATION
9 INDUSTRY, INNOVATION
8
12 RESPONSIBLE
12 RESPONSIBLE
12 RESPONSIBLE
12 RESPONSIBLE
15 LIFE
17 PARTNERSHIP
17 PARTNERSHIP
17 PARTNERSHIP
17 PARTNERSHIP
4 QUALITY
3 HEALTH
3 HEALTH
3 HEALTH
3 HEALTH
9 INDUSTRY, INNOVATION
11 SUSTAINABLE
11 SUSTAINABLE
11 SUSTAINABLE
11 SUSTAINABLE
12 RESPONSIBLE
CITIES
AND COMMUNITIES
CITIES
AND COMMUNITIES
AND WELL-BEING
AND INFRASTRUCTURE
AND WELL-BEING
AND WELL-BEING
CITIES
AND COMMUNITIES
FOR THE GOALS
FOR THE GOALS
AND WELL-BEING
FOR THE GOALS
FOR THE GOALS
EDUCATION
FINANCIAL RESULTS
Revenue
RUB 240.3 billion.
(+11.3 %)
Net profit
RUB 56.2 billion.
(+32.5 %)
Investment programme:
RUB 103.3 billion. (+5.2 %)
Dividends paid in 2018:
RUB 18.9 billion
SUSTAINABILITY
RESULTS
Payments
to all budgets:
RUB 46.9 billion
Staff payroll:
RUB 21.1 billion
Specific
waste volume
reduced
by 12.7 %
Labour
efficiency
increased
by 10.71 %
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
SUSTAINABLE DEVELOPMENT MANAGEMENT
CITIES
AND COMMUNITIES
CONSUMPTION
AND PRODUCTION
37
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
11 SUSTAINABLE
CITIES
AND COMMUNITIES
STRATEGIC REPORT
BUSINESS MODEL
RESOURCES
AS OF END OF 2017 g AS OF END OF 2018
FINANCIAL CAPITAL
Efficient ratio of own and borrowed capital
Own capital: RUB 1,037.57 billion g RUB 1,090.3 billion
Borrowed capital (total debt): RUB 257.5 billion g RUB 246.7 billion
PRODUCTIVE CAPITAL
Modern capacities meeting customers' requirements
Substations: 944 g 958
Length of power transmission lines: 142.4 thousand km g 146 thousand km
Transformer capacity: 345 GVA g 352 GVA
INTELLECTUAL CAPITAL
Use of innovative technologies in operations
Cost Of NMA: RUB 2.67 billion g RUB 3.74 billion
Patents and certificates obtained: 9 g 24
HUMAN CAPITAL
Highly qualified personnel, safe operations,
social guarantees, training and professional
Personnel: 21,876 people g 22,052 people
NATURAL CAPITAL
Environmental safety and sustainable use of resources
Electric power consumption:* 939 million kw·h g 946 million kW·h
Water consumption:* 898.3 thousand m3 g 799.5 thousand m3
SOCIAL GOODWILL
Positive image and reliable partner reputation
Moody’s Ba1 / Stable g Ba1 / Positive
Fitch BBB – / Positive g BBB– / Stable
Standard & Poors BB+ / Positive g BBB– / Positive
Customer satisfaction rate of 9.23 points g 9.3 points (10-point scale)
7 AFFORDABLE AND
CLEAN ENERGY
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
15 LIFE
ON LAND
4 QUALITY
EDUCATION
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
7 AFFORDABLE AND
CLEAN ENERGY
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
8
DECENT WORK AND
ECONOMIC GROWTH
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
15 LIFE
ON LAND
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
4 QUALITY
EDUCATION
BUSINESS MODEL
Creation of value for stakeholders
7 AFFORDABLE AND
CLEAN ENERGY
Financial
capital
8
DECENT WORK AND
ECONOMIC GROWTH
2017 2018
Manufactured
capital
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
7 AFFORDABLE AND
CLEAN ENERGY
2017 2018
Revenue, RUB bln
15 LIFE
ON LAND
216.0
240.3
Cashflow from operating
activities, RUB bln
Transformer capacity of substations
8
commissioned, thousand PTL,
thousand km
11 SUSTAINABLE
12 RESPONSIBLE
CITIES
AND COMMUNITIES
CONSUMPTION
AND PRODUCTION
DECENT WORK AND
ECONOMIC GROWTH
4 QUALITY
EDUCATION
120.7
127.4
7 AFFORDABLE AND
CLEAN ENERGY
17 PARTNERSHIP
FOR THE GOALS
15 LIFE
ON LAND
Investment programme, RUB bln
95.6
103.3
PTL, thousand km
Dividends paid, RUB bln
Capitalisation, RUB bln
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
19.6
18.9
206.9
188.9
Service reliability rate*
8
DECENT WORK AND
ECONOMIC GROWTH
3 HEALTH
AND WELL-BEING
4 QUALITY
EDUCATION
0.009
0.009
Reduction in specific number
of accidents
15 LIFE
ON LAND
11 SUSTAINABLE
CITIES
AND COMMUNITIES
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
19 %
17 %
Objective: To maintain financial stability, balance of
shareholder interests and Company development needs.
FOR THE GOALS
CLEAN ENERGY
17 PARTNERSHIP
7 AFFORDABLE AND
KPI: Consolidated revenue from operating activities;
Consolidated net cashflow; reduction in specific operating
and investment expenses (costs); consolidated net debt/
EBITDA; implementation of the action plan to reduce
accounts receivable.
11 SUSTAINABLE
15 LIFE
3 HEALTH
8
AND WELL-BEING
DECENT WORK AND
ECONOMIC GROWTH
CITIES
AND COMMUNITIES
ON LAND
Objective: Improvement of service reliability and quality,
4 QUALITY
optimisation of capacity use, UNEG development.
CONSUMPTION
AND PRODUCTION
EDUCATION
12 RESPONSIBLE
KPI: No major accidents; delivery of commissioning
9 INDUSTRY, INNOVATION
schedule; achievement of service reliability level; increase
in the use of grid equipment capacity; electric power losses.
12 RESPONSIBLE
17 PARTNERSHIP
7 AFFORDABLE AND
3 HEALTH
DECENT WORK AND
ECONOMIC GROWTH
AND INFRASTRUCTURE
AND WELL-BEING
FOR THE GOALS
CLEAN ENERGY
8
CONSUMPTION
AND PRODUCTION
4.93
5.68
1.2
1.82
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
Intellectual
capital
Dynamics of communication channel
12 RESPONSIBLE
digitalisation at power grid facilities of
FGC UES
7 AFFORDABLE AND
CLEAN ENERGY
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
Cost of R&D, RUB bln
Partnering establishments
of higher education
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
17 PARTNERSHIP
FOR THE GOALS
15 LIFE
ON LAND
11 SUSTAINABLE
7 AFFORDABLE AND
CITIES
AND COMMUNITIES
CLEAN ENERGY
2017 2018
Human
capital
3 HEALTH
AND WELL-BEING
4 QUALITY
EDUCATION
8
DECENT WORK AND
ECONOMIC GROWTH
7 AFFORDABLE AND
CLEAN ENERGY
2017 2018
83.7 % 84.9 %
0.52
0.6
52
52
Average wage growth
11 SUSTAINABLE
CITIES
AND COMMUNITIES
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
15 LIFE
ON LAND
8
DECENT WORK AND
ECONOMIC GROWTH
6.4 % 6.3 %
Growth of labour productivity
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
4 QUALITY
EDUCATION
14.8 % 10.7 %
15 LIFE
ON LAND
Active staff turnover
17 PARTNERSHIP
FOR THE GOALS
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
5.2 % 4.6 %
4 QUALITY
EDUCATION
Objective: Creation of conditions for safe operations and
professional development, increase of labour efficiency.
12 RESPONSIBLE
3 HEALTH
CONSUMPTION
AND PRODUCTION
AND WELL-BEING
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
KPI: No increase in the number of injured during accidents,
increase of labour efficiency.
17 PARTNERSHIP
11 SUSTAINABLE
CITIES
AND COMMUNITIES
FOR THE GOALS
Objective: Efficient introduction of advanced technologies,
business process automation.
4 QUALITY
EDUCATION
7 AFFORDABLE AND
CLEAN ENERGY
8
KPI: Efficiency of innovation activities.
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
DECENT WORK AND
ECONOMIC GROWTH
Natural
capital
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
15 LIFE
ON LAND
2017 2018
Social
and relation-ship capital
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
2017
11 SUSTAINABLE
CITIES
AND COMMUNITIES
Current environmental costs,
RUB mln
Reduction
in generated waste
17 PARTNERSHIP
FOR THE GOALS
4 QUALITY
EDUCATION
3 HEALTH
AND WELL-BEING
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
11 SUSTAINABLE
CITIES
AND COMMUNITIES
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
182.12
252.7
National Pension Fund, RUB
mln
3 HEALTH
AND WELL-BEING
327.3
Cost of insurance, RUB mln
11 SUSTAINABLE
CITIES
AND COMMUNITIES
370.9
Publications
2 %
13 %
Charity and sponsorship, RUB
mln
>23
thousand
27
thousand
256.7
342.1
2018
327.3
378.4
* For in-house needs at substations.
* Reliability level of the Company's services is determined by duration of electricity outage and is calculated as the ratio of the actual total duration of electricity outage
in the control period (hour) to the maximal number technological connections for the same period.
11 SUSTAINABLE
CITIES
AND COMMUNITIES
38
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
39
Objective: To minimise negative impact over the environment;
careful use of natural capital and environmental risks
management.
3 HEALTH
AND WELL-BEING
Objective: maintaining the Company's positive
and business reputation.
image
KPI: Meeting deadlines for technological connection.
STRATEGIC REPORT
INDUSTRY OVERVIEW
INDUSTRY OVERVIEW
GLOBAL TRENDS
The most significant global trends in the electric power industry which could impact
the Company's operations are as follows:
increase in the share of electricity in the total volume of consumed power.
The universal, manageable and convenient nature of electricity make this type
of energy the best for use in modern industrial procedures and transformation
of the human environment;
diversification of electricity sources (decentralisation). With restrictions
on the extraction of traditional fossils of primary energy carriers, the share
of renewable energy sources is growing;
increase in irregular consumption of electricity with growth in the number
of consumers and generation sources. This results in the necessity
to improve flexibility in grid operations when managing power flows
on electricity transmission lines;
development of digital technologies (digitalisation). Significant growth
of information flows along with the use of technologies for flexible management
of transmission capacity, improvement of grid control and management systems,
the need to increase the speed of data processing and decision making processes
make it necessary to use digital technologies.
Global trends directly or indirectly affect the development of the electric power industry
of Russia, including the electric grid complex. FGC UES not only monitors these trends,
but also strives to respond to them in a timely manner, assessing potential risks and
opportunities in advance. When constructing new power infrastructure and providing
technological connection for users of the transmission network, due consideration is
given to electricity demand forecasts, electricity consumption profiles and technological
capabilities of the grid for flexible management of transmission capacity. The Company
will follow global trends taking into consideration the specific features when implementing
the Comprehensive Plan for Modernisation and Expansion of the Main Infrastructure
approved by Decree No. 2101–r of the Government of the Russian Federation dated
30 September 2018. This decree provides for implementation of projects related to
electric grid development aimed at accelerating social and economic development in
Eastern Siberia and the Far East and strengthening the country's raw materials and export
potential. In addition, it is planned to overcome the lack of infrastructure integration and
develop new territorial production clusters based at the power supply and processing
plants under construction.
At the same time, innovative and digital technologies will be introduced, which provide
a new quality of services both for the population and for business. This ambitious task
will require coordinated efforts to be taken by infrastructure sectors, regions, equipment
manufacturers and the financial sector.
MACROECONOMIC TRENDS 2018
The volume and physical characteristics of the services
rendered by FGC UES are highly dependent on the
overall economic situation in the country because of the
infrastructural nature of the power industry in general and
the power grid in particular.
Moderate growth in 2018 and a possible decline in the
Russian GDP in the coming years, as well as a slight
increase in specific electricity consumption, constrain the
growth of the electricity grid load and make it possible to
use the existing grid capacity reserves and postpone costly
projects aimed at strengthening the network. At the same
time, the Company continues to implement investment
projects in the grid nodes, where the increase in electricity
consumption leads to the need to increase the transmission
capacity.
Industrial production and consumer
prices growth rates, %*
7.1
1.3
8
7
6
5
4
3
2
1
0
3.7
2.1
2.9
4.6
2.4
2016
2017
2018
2019
(forecast)
Consumer
price index
Industrial
production
* Sources: Rosstat, IMF, Ministry of Economic Development.
4 Approved by Order No. 121 of the Ministry of Energy of Russia dated 28 February 2018.
GDP growth rates, %
5
4
3
2
1
0
-1
4.4
3.2
1.7
-0.2
2016
4.7
3.7
2.3
1.5
4.6
3.7
2.3
4.5
3.5
2.0
1.6
2017
2018
2019
(forecast)
Developing and developed
economies
World economy
Developed
economies
Russia
According to estimates of the Scheme and Development
Programme for the UES of Russia for 2018–20244,
the growth rate of electricity consumption is likely to remain
low in the coming years, on average about 1 % per year.
A notable growth in electricity consumption will take place
only in certain regions of intensive industrial growth and
development of social infrastructure, especially in the
South of Russia, the Far East and the Kaliningrad Region.
At the same time, the price ratio of electricity supplied from
the grid to that supplied from own sources in centralised
systems contributes to consumer transition to their own
sources, which may continue to have an adverse impact on
the demand for grid services in centralised systems.
40
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
41
STRATEGIC REPORT
INDUSTRY OVERVIEW
Electricity consumption in Russia in 2014–2018 and forecast for 2019–2024*
2014
2015
2016
2017
2018
2019
forecast
2020
forecast
2021
forecast
2022
forecast
2023
forecast
2024
forecast
1,014 1,008 1,027 1,039 1,056
1,071
1,090
1,100
1,111
1,120
1,132
Electricity consumption
in the UES of Russia,
bln kWh
* Sources: reports of the System Operator, the Scheme and Development Programme for the Unified Energy System of Russia for 2018–2024.
Thus, based on the assessment of electricity consumption,
electricity export and import volumes, and taking into account
the factors that cause a slowdown in electricity consumption
(primarily, energy saving factor), PJSC FGC UES does not
expect any increase in the paid grid services in 2018–2020.
As an active participant in the debt capital markets (as
of 31 December 2018, the total value of circulating bonds
of PJSC FGC UES was RUB 243.7 billion), the Company is
obviously affected by changes in macroeconomic conditions,
at least in terms of the proposed market rates and the time
periods for attracting new financing.
Due to the presence of bonds in the borrowed funds with a
floating coupon rate tied to the inflation rate (RUB 150 billion
or more than 50 % of the total debt, attracted at the annual
inflation rate of +1...2.5 %), the Company is also subject
to the risk of changing interest costs on existing borrowings
due to fluctuations in the national inflation level.
Despite the increase in inflation from the minimum rate
of 2.5 % in 2017 to 4.2 % in 2018, the management
of PJSC FGC UES estimates a high probability of stable
inflation in the medium term close to the target annual rate
of 4% as indicated by the Bank of Russia. Taking into account
these circumstances and the Company's right to early bond
redemption at its discretion if the coupon rate exceeds 10 %
per annum, the risk of changing interest costs is considered
to be acceptable.
GRI 103-2
OPPORTUNITIES AND RISKS FOR FGC UES
STRENGTHS
WEAKNESSES
FGC UES is a natural monopoly of strategic importance,
which guarantees constant state control over the
Company's activities.
Low exposure to market fluctuations in the development
of grid services.
Extensive experience in the field of management,
operation and engineering of electric grids.
Focus on innovative development and advanced
technologies.
Highly qualified personnel.
Strong financial performance and a balanced loan
portfolio.
A clear development strategy with a focus on improving
operational efficiency and reducing costs.
High level of corporate governance.
Solid reputation among partners and investors.
Dependence on state regulatory authorities in setting
tariffs and developing the investment programme.
Need for careful investment planning and coordination
in the development of generation and electric grids of
the power system.
Lack of economic mechanism for optimising
the volume of power declared by consumers
for technological connection, which can lead to
unreasonably high operating costs.
Capital intensive infrastructure.
FGC UES has considerable potential for further development. The Company's weaknesses and threats are estimated
on a continual basis as part of the risk management process, while the management team takes actions to reduce
possible adverse effects.
Comparison of FGC UES with certain foreign public power grid companies engaged
in monopoly activity for electricity transmission through transmission networks
GRI 103-3
No. Company name
1.
2.
3.
4.
5.
6.
PJSC FGC UES
RTE (France)
Red Eléctrica Cor-poración,
S.A. (Spain)
Terna Rete Italia SpA (Italy)
Fingrid OYJ (Fin-land)
JSC KEGOC (Ka-zakhstan)
Headcount,
persons
Length of power
transmission
lines,
thousand km
22,052
146
–
1,799
4,252
380
4,797
–
44
72
14
27
Operating costs per 100 km
of power transmission lines,
EUR mln (2016 data)
Capitalisation,
EUR mln
1.46
1.34
1.27
1.53
3.16
–
2,380
–
10,454
9,909
–
947
Comparison of FGC UES with some Russian public power companies with the most capitalised
and liquid shares among those listed in the MOEXEU sector index
(figures for all companies are calculated on the basis of consolidated statements as per IFRS)*
No. Company name
Capitalisation,
RUB bln
Average annual
trading volume
on the Moscow
Exchange, RUB mln
EBITDA,**
RUB bln
EBITDA
margin, %
Dividend
yield, %
EV/
EBITDA, %
1.
2.
3.
4.
5.
6.
PJSC FGC UES
PJSC Rosseti
PJSC Inter RAO
PJSC RusHydro
PJSC Mosenergo
PJSC Unipro
188.9
153.3
406.2
206.9
81.7
163.4
240.9
140.50
133.7
358.3
340.6
42.7
55.0
306.3
121.3
109.7
43.7
27.9
55.3
30.0
12.6
27.4
22.0
35.9
9.1
1.46
3.83
3.61
6.33
8.78
2.8
3.2
0.9
2.8
1.4
5.7
OPPORTUNITIES
THREATS
* Source: Moscow Exchange data, Bloomberg data.
** Profit for the period before taxes, financial income and costs, and depreciation. EBITDA of FGC UES without adjustments.
Application of innovative energy-saving technologies.
Improving the efficiency of grid asset management.
Reduction of operating costs.
Connection of new consumers to the UNEG.
Cancellation by customers of electricity transmission
services provided by the UNEG due to decentralised
generation and deterioration of the overall economic
situation.
Refusal of applicants to implement their own
development projects, which may lead to a reduction
in revenue of PJSC FGC UES from technological
connection services.
Errors in predictions of the grid development, and
in the composition and structure of the Investment
Programme.
42
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
43
STRATEGIC REPORT
DEVELOPMENT STRATEGY
All processes related to
economic growth and
social development in
Russia depend on the
national power industry.
The electric grid complex
is the most important
component of this industry,
and is the one closest to
the people, to consumers.
Economic development in
the constituent entities of
the Russian Federation and
improvement of quality of
life directly depends on the
development of the electric
grid complex.
Aleksandr Novak,
Minister of Energy
of the Russian Federation5
DEVELOPMENT STRATEGY
GRI 103-2
When determining its strategic development priorities, the Company is guided by
the priorities of state policy in the field of the electric grid complex.
The main strategic priorities of the state policy are determined in the Development
Strategy of the Russian Electric Grid Complex until 2030:
long-term reliable, high-quality and affordable energy supply to consumers;
ensuring reliable and safe operation of the electric grid complex;
developing the most efficient grid infrastructure in line with global standards;
maintaining the tariff level, which provides for an acceptable level of electricity
costs for the Russian economy and supports the investment attractiveness
of the Company.
In addition, the national goals and strategic development objectives of the Russian
Federation until 2024 were determined in Decree No. 204 of the President of the Russian
Federation dated 7 May 2018. The implementation of the set goals and objectives
involves a comprehensive upgrade and expansion of the main infrastructure, including
by means of:
electrification of the West - East and North - South transport corridors in conjunction
with the transport infrastructure development;
development of centralised power systems, including modernisation in line with the
needs of social and economic development;
sustainable energy supply to consumers in the constituent entities of the Russian
Federation;
development of distributed generation, including based on renewable energy sources,
especially in remote and isolated power regions;
introduction of intelligent control systems of electric grid facilities based on digital
technologies.
In the medium term, there will be some change in the geography of electricity consumption
and the scope of electricity transmission services due to the emergence of new economic
“growth areas”. In particular, the largest growth rate of transmission services is expected
in the interconnected power systems of the East and the South.
What are Company's policies and plans in terms
of consolidating the backbone grid complex
of the Russian Federation?
The Company is interested in consolidation of the backbone assets
that meet the UNEG classification criteria. This is also in line with the
Electric Grid Complex Development Strategy of the Russian Federation
until 2030.
The exchange of assets with JSC DVEUK was the largest transaction in
recent years, which provided FGC UES with control over the overhead
lines and 220 kV substations in the Republic of Sakha (Yakutia).
As a result, additional economic opportunities for direct consumers
have been created and the efficiency of the main electric grid complex
of the Far East will increase on the whole.
What are the plans for the acquisition
of transmission networks in regions
(Tatarstan, Bashkiria, Novosibirsk, Irkutsk)?
Main electric grid assets are of potential interest to FGC UES in the
Republic of Tatarstan, Republic of Bashkortostan, Novosibirsk Region
and Irkutsk Region.
The Company is ready to discuss options for their acquisition. The main
decision-making criterion is the economic feasibility of the transaction.
LONG-TERM DEVELOPMENT PROGRAMME
The main areas of FGC UES strategic development are presented in the Long-Term
Development Programme approved6 in 2014. In 2018, the new version of the Long-Term
Development Programme was developed, which clarified the goals and objectives for
the period until 2023, as well as the actions to be taken for their implementation.
Aleksandr Zaragatsky,
First Deputy Chairman
of the Management Board,
Member of PJSC FGC UES
Management Board
and
The Long-Term Development Programme
of PJSC FGC UES has been developed in
line with the targets and provisions of the
Russian Electric Grid Complex Development
Strategy7
the Methodological
for Development of
Recommendations
the Long-Term Development Programmes
prepared by the Ministry of Economic
Development of the Russian Federation,
coordinated with
federal
executive authorities and approved by the
Government of the Russian Federation.
The LDP takes into consideration risks that
may affect the achievement of FGC UES
strategic objectives and includes measures
for risk minimisation.
related
the
In the course of implementing the LDP
approved in 2014, the global and Russian
the
imposed on
economies
faced significant changes
caused by a drop in oil prices, reduction in
the exchange rate of the rouble to leading
foreign currencies, and increased tension
in
foreign political environment,
which resulted in, amongst other things,
economic sanctions
the
Russian Federation and changes in certain
strategic development guidelines of the
state and time periods required to achieve
them. There have also been changes in
expectations regarding the dynamics of
some parameters of macroeconomic
development and priorities in investment
and management of production assets,
while the requirements for reducing costs
and
improving management efficiency
became stricter. The Company has taken a
5 Talking points of the Minister of Energy of the Russian Federation in his speech at the Electric Grids International
Forum held on 4 December 2018 in Moscow.
6 Approved by resolution of the Board of Directors, Minutes No. 243 of 22 December 2014.
7 Approved by Directive No. 511-r of the Government of the Russian Federation of 03 April 2013.
44
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
45
STRATEGIC REPORT
DEVELOPMENT STRATEGY
number of actions to prevent the negative
impact of macroeconomic factors.
Taking into account these changes, we
developed a new version of the programme
in 2018. The changes were aimed at
contributing to the Company’s long-term
goals and tasks so they would do their
utmost to meet the grid consumers’ needs
and expectations of shareholders while
being realistic and achievable.
In 2019, elaboration of the LDP continued
to take into consideration the resolutions
made by the President and the Government
of the Russian Federation,8 including plans
to accelerate the growth rate of capital
investments and increase their share in the
gross domestic product to 25 %.
What are the key prerequisites for elaboration
of the updated Long-Term Development
Programme?
In developing the new LDP, we took into account the external challenges
and internal circumstances that have an objective impact on the
Company's operations, including the need to increase labour productivity,
reduce operating costs, improve the efficiency of investment activities
and the management of production assets, and implement the tasks
outlined in the May Decree of the President of the Russian Federation.
The goals and objectives of the new LDP are based on the development
needs of the Russian economy and the decisions made by the President
and Government of the Russian Federation.
Many of the benchmarks set out in the LDP are consistent with the
previous programme, but we have also tried to develop new approaches
to dealing with the usual challenges. For example, improvement of
investment efficiency in the previous LDP was mostly achieved through
cost reduction. Since this process cannot be endless, the new version
provides for improvement of investment efficiency by increasing the
quality of the investment process as a result of introducing a new
digital design, repeated use of materials from previously tested design
documentation, as well as the results of engineering and geological
surveys. Innovative technologies are also used when solving other
tasks set by the Long-Term Development Programme. In particular,
implementation of the Digital Substations Programme is expected to
increase equipment reliability and network monitoring and control,
reduce the impact of the human factor, and lower the number of failures
and time required to liquidate their consequences.
In order to monitor the implementation of measures and the achieved actual values
of FGC UES performance indicators determined in the Long-Term Development
Programme, an audit was carried out, the results of which are presented in the Audit
Report dated 29 April 2019. The availability of documents confirming the actual values
of the Company's key performance indicators, performance of activities,
and implementation of planned LDPs within the indicated terms were audited.
No violations have been found.
8 Order of the President of the Russian Federation No. 204 of 7 May 2018, Instruction of the Russian Government
No. 2101-r of 30 September 2019.
Maria Tikhonova,
Deputy Chairman
of the Management Board,
Member of PJSC FGC UES
Management Board
For more information about
the Company's strategic
priorities and objectives,
see the section Strategic
Priorities and Tasks.
Which projects implemented by the Company
will contribute to the development of the Far East
and Eastern Siberia?
The power industry of the Far East and Eastern Siberia is comprised
of several isolated large power units, many small power units and
power regions supplying power to consumers on a centralised
basis, as well as areas of decentralised electricity supply with small
amounts of electricity consumption, which do not have electrical
connections to the grid due to their remote location.
For the purpose of social and economic development of the Far
East and Eastern Siberia, PJSC FGC UES implements a number of
major projects for construction of new facilities and reconstruction
of existing electric grid facilities under its investment programme.
For example, the investment project for development of the electric
grid infrastructure in Eastern Siberia and the Far East includes an
action plan providing for development of the Baikal-Amur Mainline
and Trans-Siberian Railway within the boundaries of the Eastern
ground of JSC RZD's railway network, as well as reliable electricity
supply to the existing and prospective consumers in these regions.
At present, 627 MVA of capacity and 541 km of the power
transmission lines have been commissioned as part of the project
Eastern Siberia – Pacific Ocean – Power of Siberia. As a result,
conditions were created for delivery of up to 30 million tonnes of oil
through the pipeline system for further transportation to the markets
of the Asia-Pacific Region.
In addition, PJSC FGC UES continues to develop the grids on
the territory of the Far Eastern Federal District to increase oil
transportation to 80 million tonnes through the ESPO pipeline
system. Total growth of maximum capacity will reach 77.9 MW.
GRI 102-26
The Company's strategic objectives are achieved through adoption by the governing bodies
and implementation of a number of programmes, in particular:
Long-Term Development Programme;*
Investment Programme;*
Innovative Development Programme;*
Unified Technical Policy;*
Import Substitution Programme for Equipment, Technologies, Materials and Systems;
Energy Saving and Energy Efficiency Programme;
Programme to Improve Investment and Operating Efficiency and Reduce Costs;
Environmental Policy Implementation Programme.*
The consolidation of UNEG facilities is one of the priorities set in the Long-Term
Development Programme of PJSC FGC UES.
Aleksey Molsky,
Interim First Deputy Chairman of
the Management Board,*
Member of PJSC FGC UES
Management Board
* Order of PJSC FGC UES
No. 70 rs of 28 February 2019.
46
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
47
* Approved by the Board of Directors.
STRATEGIC REPORT
IMPLEMENTING OUR STRATEGY
IMPLEMENTING OUR STRATEGY
1. RELIABILITY AND QUALITY OF ENERGY SUPPLY
TO CONSUMERS
CONTRIBUTION OF 2018 RESULTS TO THE STRATEGY IMPLEMENTATION
PLANS AND TARGETS UNTIL 20239
In 2018, due to the
introduction of new
equipment, improvement
of skills and professionalism
of maintenance personnel
and other efforts,
the specific accident rate
at FGC UES facilities declined
by 17 %
Number of accidents at PJSC FGC UES'
facilities
Dynamics of energy undersupply
of PJSC FGC UES, MWh
2,500
2,348
2,000
1,500
1,000
500
0
1,879
1,869
1,535
1,321
2014
2015
2016
2017
2018
2,000
1,500
1,000
500
0
1,562
1,646
1,531
1,093
1,156
2014
2015
2016
2017
2018
In 2018, the electricity shortage
indicator fell by 7 %
to 1,531 MWh
compared
to 2017.
2. DEVELOPMENT OF UNEG INFRASTRUCTURE
The reliability of electricity transmission services will be
maintained at a consistently high level due to:
timely identification and analysis of factors affecting reliability
and industrial safety;
compliance with the Unified Technical Policy and
implementation of the Innovative Development Programme;
implementation of the technical upgrade and reconstruction
programme;
improvement of the UNEG monitoring and control level;
development of the production assets management system.
The Maintenance and Repairs Programme (M&R) is one
of the main tools for ensuring reliable operation of electric
grid facilities.
M&R expenses, RUB mln
14,500
14,000
13,500
13,370
13,191
14,171
13,957
13,697
13,000
12,500
2019
target
2020
forecast
2021
forecast
2022
forecast
2023
forecast
CONTRIBUTION OF 2018 RESULTS TO THE STRATEGY IMPLEMENTATION
PLANS AND TARGETS UNTIL 2023
In 2018, within the framework of the Investment
Programme, the Company implemented a number of
major projects for construction of overhead lines and
substations, including in the Far East and Western Siberia.
Financing
of the Investment
Programme
amounted to
103.3
RUB
billion.
Capacities commissioning dynamics
(setting for voltage)
10
9.52
Transformer capacity, ths. MVA
Power transmission lines, ths. km
5.69
4.07
3.12
2.32
3.16
1.88
0.66
0.42
0.8
2014
2015
2016
2017
2018
5
0
Dynamics of financing investments, RUB bln
150.0
100.0
90.9
85.9
90.7
103.3
95.6
50.0
0.0
2014
2015
2016
2017
2018
The Company's priority projects for development of the UNEG
infrastructure until 2023 include the implementation of actions
within the responsibility area of PJSC FGC UES as stipulated by
the Comprehensive Plan for Modernisation and Expansion of the
Main Infrastructure until 2024,10 including:
ensuring synchronised work of individual energy districts of the
Republic of Sakha (Yakutia) with the UES of Russia;
ensuring power output via nuclear, thermal, and hydroelectric
power plants and distributed generation;
power supply of port areas;
developing energy infrastructure in the area of the Baikal-Amur
Mainline and the Trans-Siberian Railway.
9 All target values provided herein and in the tables below are given in compliance with PJSC FGC UES
draft Business Plan 2019 and forecasts for 2020–2023.
10 Developed in line with Decree No. 204 of the President of the Russian Federation dated 7 May 2018 on National Goals
and Strategic Development Objectives of the Russian Federation until 2024, and approved by Order No. 2101-r of the Russian
Government dated 30 September 2018.
48
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49
STRATEGIC REPORT
IMPLEMENTING OUR STRATEGY
3. CUSTOMER SATISFACTION
CONTRIBUTION OF 2018 RESULTS TO THE STRATEGY IMPLEMENTATION
PLANS AND TARGETS UNTIL 2023
According to the participants of the annual customer
satisfaction survey in 2018, the quality of documents received
from PJSC FGC UES increased, as well as the performance
of PJSC FGC UES personnel in terms of providing information
on the technological connection process.
The integrated index of customer satisfaction with the
technological connection service increased against 2017
to 9.3
(out of 10).
Dynamics of electricity supply
and losses in FGC UES' grids, mln kWh
600,000
500,000
515,250
525,769
540,540
547,351
557,730
400,000
300,000
200,000
100,000
0
21,261
23,478
25,033
24,307
24,539
2014
2015
2016
2017
2018
Dynamics of volumes of consumers' capacities
and electricity generation facilities connected to FGC,
MW
15,000
10,000
5,000
0
4,949
8,944
3,916
4,053
2,766
5,419
2,653
2,982
3,768
1,769
2014
2015
2016
2017
2018
Electricity supplied to consumers of services
Electricity losses in UNEG
Consumers and grid companies
Electricity generation facilities
Improving the quality
of organisation,
planning and execution
of technological
connection activities.
Compliance with
the deadlines for
technological
connections.
Developing interactive
services in order to
improve the quality
of services provided
to consumers
during technological
connection.
Increase in capacity
utilisation of electric grid
equipment.
Forecast for volumes
of connected capacities, MW*
8,000
7,247
6,000
5,284
4,000
2,000
0
3,953
2019
target
2020
forecast
2021
forecast
* The indicator is based on the applications for technological connection currently submitted.
Since these volumes can be significantly adjusted in future, the long-term forecast is not
informative.
GRI 103-2
4. ECONOMIC EFFICIENCY
CONTRIBUTION OF 2018 RESULTS TO THE STRATEGY IMPLEMENTATION
PLANS AND TARGETS UNTIL 2023
to 129.0
RUB
billion.
demonstrating only a slight reduction
against 2017 (–0.2 %).
At the end of 2018,
the adjusted EBITDA
amounted
In 2018, the Company's net profit increased,
while earnings per share were
up 32.8 %
Earnings per share, RUB
compared
to the previous
year.
Adjusted EBITDA,* RUB bln
150
100
50
0
99.6
103.7
119.7
129.3
129.0
2014
2015
2016
2017
2018
0.10
0.05
0.00
0.0832
0.0441
0.0332
0.01402
0.00404
2014
2015
2016
2017
2018
by 5.6 %,
to RUB 127.4 billion.
In 2018, cash
flow from
current activities
increased
The annual
reduction in
controlled
operating costs
amounted to 2–3 %.
The annual
increase in labour
productivity
amounted to at
least 2 %.
Technological and
price audits of
investment projects
and investment
programmes.
Cash flow from current activities, RUB
124
EBITDA forecast, RUB bln
123.3
150
100
50
0
101
99.1
101.1
127.4
120.7
2014
2015
2016
2017
2018
122
120
118
116
114
120.4
118.8
117.8
117.9
2019
2020
2021
2022
2023
* Excluding operations for the accrual and restoration of provisions for doubtful debts, financial performance related to the sale of and change in the cost of quoted financial assets,
and revenues from technological connection.
50
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
51
STRATEGIC REPORT
IMPLEMENTING OUR STRATEGY
GRI 103-2
5. FINANCIAL STABILITY
CONTRIBUTION OF 2018 RESULTS
TO THE STRATEGY IMPLEMENTATION
PLANS AND TARGETS UNTIL 2023
In 2018, the Debt/EBITDA ratio decreased
to 1.91
indicating a reduction
in the Company's
debt burden.
The current liquidity ratio is
1.37
and remains within
standard values.
The Action Plan of FGC UES for reduction of overdue accounts
receivable for the electricity transmission services and dispute
settlement was approved.
FGC UES plans to finance its operating and
investment activities in compliance with
established debt burden restrictions and
maintain the Company's credit ratings at the
sovereign level.
The Debt/EBITDA
indicator will be
maintained below the level of 2.5 during the
projected period.
FGC UES’ financial sustainability indicators
Debt/EBITDA forecast
0.5
0.4
0.3
0.2
0.1
0.0
2.71
0.37
1.53
2.22
0.33
1.87
2.63
0.39
1.03
1.99
0.31
1.19
1.91
0.23
1.37
2014
2015
2016
2017
2018
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2.30
2.25
2.20
2.15
2.10
2.28
2.26
2.24
2.16
2.19
2019
2020
2021
2022
2023
Debt to equity ratio
Debt to EBITDA ratio
Current liquidity ratio
SUSTAINABLE DEVELOPMENT STRATEGY
PJSC FGC UES understands sustainable development of the Company's business as
an activity that not only meets economic and environmental criteria, but also social
interests of the society and the state. Proceeding from its special role as operator
of the UNEG, a system of technological infrastructure controlled by the state and of
strategic importance to Russia’s economic and social stability, FGC UES must ensure
reliable operation and development of the UNEG in line with economic growth, with a
high level of efficiency and maximum cost reduction.
The main principle of FGC UES strategic goal setting in the field of sustainable development
and social responsibility is maintaining a balance between the economic efficiency and
the solution of industrial, social and environmental problems. Particular attention is paid
to those aspects that are of paramount importance to the Company’s stakeholders.
STRATEGIC PRIORITIES OF PJSC FGC UES IN THE FIELD OF SUSTAINABLE DEVELOPMENT
INCLUDE:
improving the energy efficiency and reliability of the power grid infrastructure;
introduction of new technologies with an assessment of their long-term economic
efficiency;
the fair distribution of the economic value created and the integration of social
responsibility practice into all parts of the Company;
responsible practice of personnel management;
support of domestic producers;
implementation of environmental protection activities aimed at minimising impact on the
environment;
constructive interaction with stakeholders.
The Company’s activities in the field of
sustainable development enable
to
more accurately determine and adjust
the Company’s development strategy and
achieve its strategic goals more effectively.
it
In 2018, the Company decided to develop
a document defining the principles, goals,
objectives and approaches to sustainable
development management in PJSC FGC UES.
Work on studying the best practices has
begun, including the study of international
experience.
Responsibility for making decisions in the field of sustainable development is shared
among the Deputy Chairpersons of the Management Board in charge of the economic,
environmental and social sectors.
GRI 102-26
52
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
53
STRATEGIC REPORT
7 AFFORDABLE AND
7 AFFORDABLE AND
CLEAN ENERGY
CLEAN ENERGY
7 AFFORDABLE AND
CLEAN ENERGY
FGC UES COMMITMENT TO UN
SUSTAINABLE DEVELOPMENT GOALS*
GRI 102-12
IMPLEMENTING OUR STRATEGY
UN SUSTAINABLE DEVELOPMENT GOALS
8
8
DECENT WORK AND
ECONOMIC GROWTH
DECENT WORK AND
ECONOMIC GROWTH
SUMMARY OF THE GOALS
COMPANY'S CONTRIBUTION TO ACHIEVING THE GOALS
S
L
A
O
G
Y
T
R
O
R
P
I
I
S
L
A
O
G
T
N
A
V
E
L
E
R
DECENT WORK AND
CLEAN ENERGY
ECONOMIC GROWTH
7 AFFORDABLE AND
8
7 AFFORDABLE AND
7 AFFORDABLE AND
15 LIFE
15 LIFE
CLEAN ENERGY
CLEAN ENERGY
ON LAND
ON LAND
DECENT WORK AND
ECONOMIC GROWTH
ON LAND
DECENT WORK AND
ECONOMIC GROWTH
DECENT WORK AND
ECONOMIC GROWTH
8
15 LIFE
8
8
4 QUALITY
4 QUALITY
EDUCATION
EDUCATION
ON LAND
EDUCATION
15 LIFE
4 QUALITY
15 LIFE
15 LIFE
9 INDUSTRY, INNOVATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
AND INFRASTRUCTURE
ON LAND
ON LAND
ON LAND
CLEAN ENERGY
CLEAN ENERGY
EDUCATION
EDUCATION
EDUCATION
AND INFRASTRUCTURE
CONSUMPTION
FOR THE GOALS
AND PRODUCTION
FOR THE GOALS
FOR THE GOALS
DECENT WORK AND
ECONOMIC GROWTH
DECENT WORK AND
ECONOMIC GROWTH
AND INFRASTRUCTURE
CONSUMPTION
AND PRODUCTION
AND INFRASTRUCTURE
AND INFRASTRUCTURE
CONSUMPTION
AND PRODUCTION
CONSUMPTION
AND PRODUCTION
CONSUMPTION
AND PRODUCTION
CONSUMPTION
AND PRODUCTION
AND WELL-BEING
AND WELL-BEING
4 QUALITY
9 INDUSTRY, INNOVATION
4 QUALITY
4 QUALITY
12 RESPONSIBLE
12 RESPONSIBLE
7 AFFORDABLE AND
9 INDUSTRY, INNOVATION
12 RESPONSIBLE
9 INDUSTRY, INNOVATION
9 INDUSTRY, INNOVATION
17 PARTNERSHIP
17 PARTNERSHIP
8
7 AFFORDABLE AND
12 RESPONSIBLE
17 PARTNERSHIP
12 RESPONSIBLE
12 RESPONSIBLE
3 HEALTH
3 HEALTH
15 LIFE
8
17 PARTNERSHIP
3 HEALTH
17 PARTNERSHIP
17 PARTNERSHIP
11 SUSTAINABLE
11 SUSTAINABLE
4 QUALITY
15 LIFE
3 HEALTH
11 SUSTAINABLE
3 HEALTH
3 HEALTH
7 AFFORDABLE AND
9 INDUSTRY, INNOVATION
4 QUALITY
11 SUSTAINABLE
11 SUSTAINABLE
11 SUSTAINABLE
8
12 RESPONSIBLE
9 INDUSTRY, INNOVATION
CITIES
AND COMMUNITIES
CITIES
AND COMMUNITIES
DECENT WORK AND
ECONOMIC GROWTH
CONSUMPTION
AND PRODUCTION
AND INFRASTRUCTURE
CITIES
AND COMMUNITIES
CITIES
AND COMMUNITIES
AND WELL-BEING
CITIES
AND COMMUNITIES
CITIES
AND COMMUNITIES
AND WELL-BEING
AND WELL-BEING
FOR THE GOALS
FOR THE GOALS
AND INFRASTRUCTURE
FOR THE GOALS
AND WELL-BEING
CLEAN ENERGY
EDUCATION
EDUCATION
ON LAND
ON LAND
15 LIFE
17 PARTNERSHIP
12 RESPONSIBLE
FOR THE GOALS
CONSUMPTION
AND PRODUCTION
EDUCATION
4 QUALITY
3 HEALTH
17 PARTNERSHIP
FOR THE GOALS
AND WELL-BEING
AND INFRASTRUCTURE
9 INDUSTRY, INNOVATION
11 SUSTAINABLE
3 HEALTH
CITIES
AND COMMUNITIES
AND WELL-BEING
AFFORDABLE
AND CLEAN ENERGY
Ensuring universal access to affordable, reliable, sustainable
and modern energy for all
DECENT WORK
AND ECONOMIC GROWTH
Promoting sustained, inclusive and sustainable economic growth,
full and productive employment and decent work for all
INDUSTRY, INNOVATION
AND INFRASTRUCTURE
Creating a stable infrastructure, promoting inclusive
and sustainable industrialisation and innovation
RESPONSIBLE
CONSUMPTION
AND PRODUCTION
Ensuring transition to rational consumption
and production patterns
GOOD HEALTH
AND WELL-BEING
Ensuring healthy lifestyles and promoting well-being
for everyone at all ages
QUALITY
EDUCATION
Ensuring inclusive and fair quality education
and promoting lifelong learning opportunities for all
Uninterrupted power supply to consumers
Creating conditions for technological connection of RES generation
facilities
Improvement of labour productivity
Ensuring decent pay and working conditions, respecting employee
rights
UNEG preservation and development
Modernisation of the main electric grid infrastructure
Innovative activities and implementation of the R&D Programme
Improving energy efficiency and reducing losses
Rational use of natural resources
Minimising the negative impact on the environment
Efficient operation of the environmental management system
Health and life insurance of personnel
Ensuring safe working conditions and occupational safety
Holding corporate sports events
Training, re-training and advanced training of personnel
Improving the quality of training new specialists for the electric grid complex
Cooperation with higher and secondary specialised educational institutions
SUSTAINABLE CITIES
AND POPULATED AREAS
Making cities and populated areas inclusive, safe,
resilient and environmentally sustainable
Improving the reliability of energy supply to consumers in cities and populated areas
Applying technical architectural solutions that promote rational use of land of cities and populated areas,
as well as preserve the integrity of their architectural appearance
CONSERVATION
OF TERRESTRIAL
COSYSTEMS
PARTNERSHIP
FOR SUSTAINABLE
DEVELOPMENT
Protecting and restoring terrestrial ecosystems
and supporting their rational use, sustainable forest management,
combating desertification, halting and reversing land degradation,
halting biodiversity loss
Revitalising the global partnership for sustainable development
* The remaining UN goals are not directly related to the activities of FGC UES. The Company shares them
and makes the best possible contribution to their achievement.
Taking actions to minimise the impact of the power grid infrastructure on the life of animals
and birds
Recreation of natural resources and compensatory planting of seedlings
Effective interaction with stakeholders
Studying and applying the best global practices using mechanisms
of international scientific and technical exchange
Supporting small and medium-sized enterprises
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
11 SUSTAINABLE
CITIES
AND COMMUNITIES
17 PARTNERSHIP
FOR THE GOALS
54
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
55
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
STRATEGIC REPORT
KEY PERFORMANCE INDICATORS (KPI)
KEY PERFORMANCE
INDICATORS (KPI)
The Company has developed a system for measuring targets based on key performance
indicators (KPIs) and provided management motivation to meet the KPI targets that
characterise the achievement of the Company’s development goals.
The motivation system is based on KPIs, which are designed to evaluate the effectiveness
and bonuses of senior management,11 and also used to assess the established objectives
of the Company’s activities, as part of the LDP and the Business Plan.
PJSC FGC UES has a multi-level KPI system: The Company level (KPIs of top managers),
the level of the Executive Office of the Company,12 and the level of PJSC FGC UES
branches – MPS and EMPS.13
The KPIs at each management level are established and monitored at a higher
level of management, which allows for the implementation of an end-to-end monitoring
mechanism.
CHANGES IN THE KPI SYSTEM IN THE REPORTING YEAR
The methodology for calculating and evaluating the implementation of KPIs by top
managers of PJSC FGC UES has not changed compared to 2017. On 30 March 2018,
PJSC FGC UES Board of Directors approved the target KPI values for the Company's top
managers for 2018.14 The majority of the target KPI values remained unchanged and was
set at the level of the previous year.
Changes in the target KPI values of PJSC FGC UES in 2018 against 2017:
the target EBITDA value was established taking into account the average annual growth
rate of regulated tariffs of the network organisations according to the social and
economic development forecast of the Russian Federation;
target increase in labour productivity was set taking into account the scenario conditions
of the PJSC FGC UES Business Plan for 2018 and forecast indicators for 2019–2022,
approved by the Strategy Committee of the Board of Directors of PJSC FGC UES15
and the Management Board of PJSC Rosseti;16
target reduction of unit operating expenses (costs) corresponded to the minimum level
established by the Directives of the Government of the Russian Federation
No. 2303p-P13 dated 16 April 2015 regarding reduction of operating expenses.
For information on the
remuneration system
of the Company's
Management Board,
see section Remuneration
System for the Chairman of
the Management Board and
Members of the Management
Board.
Objective Setting
The Company’s development strategy
as defined in the PJSC FGC UES Long-Term
Development Programme
Goals and objectives
of the functional units set
in the Company’s executive documentation
The branches’ goals
and objectives set
in the executive documentation
of the Company
and Company’s Branches
Top
managers’
KPIs
KPIs
of Executive
Office managers
KPIs of structural
unit heads
in the Executive Office
KPIs
of PJSC FGC UES's
branch heads
KPIs
of branch unit heads
of PJSC FGC UES
PJSC FGC UES's management responsible
for the achievement of objectives and KPIs
Chairman of the Management Board,
Members of the Management Board
Deputy Chairmen
of the Management Board,
Executive Office Directors
Department Heads, Heads
of the Executive Office directorates
CEOs of the MPS branches,
EMPS directors,
deputies of MPS CEOs
(EMPS directors) by activities
Heads of the services
and departments
of the MPS
and EMPS branches
11 Determined by the Methodology for Calculating And Evaluating the Implementation of KPIs by Top Managers, approved
by the Board of Directors, Minutes No. 370 dated 13 June 2017, taking into account the resolution of the Board of Directors,
Minutes No. 396 dated 2 April 2018 regarding the agenda item on Approval of Target Key Performance Indicators of PJSC FGC UES
Top Managers for 2018.
12 The Regulation on Key Performance Indicators of the Executive Office and Branches of PJSC FGC UES was approved by Order
of PJSC FGC No. 519 dated 11 December 2017. The KPI system of the heads of the Executive Office and divisions of the Company’s
branches was approved by Order No. 145 of PJSC FGC UES dated 29 April 2016 - On Approval of the Methodology for Calculating
and Evaluating the Implementation of KPIs by the Heads of the Executive Office and the Divisions of the Branches
of PJSC FGC UES - MPS.
13 The KPI system of the heads of the Company’s branches was approved by Order No. 143 of PJSC FGC UES dated 26 April 2016 -
On Approval of the Methodology for Calculating and Evaluating the Implementation of KPIs by the Heads of the Branches
of PJSC FGC UES.
14 Meeting Minutes of the Board of Directors No. 396 of 2 April 2018.
15 Meeting Minutes of the Board of Directors No. 54 of 14 September 2017.
16 Extract from the Meeting Minutes of PJSC Rosseti Management Board No. 623-1pr/1 of 10 July 2017.
56
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
57
STRATEGIC REPORT
KEY RISKS
GRI 103-3
KPI IN THE CONTEXT OF STRATEGIC GOALS
2017
2018
Strategic
priorities
KPI
KPI performance
assessment
Absence of increase
in major accidents
No increase
in Q1, Q2, Q3, Q4
Reliability of power
supply to consumers
Absence of increase in the number
injured in accidents
Q1 – achieved
Q2 – achieved
Q3 – not achieved
Q4 – achieved
Target KPI
No increase
No increase
KPI performance
assessment
No increase
in Q1, Q2, Q3, Q4
Q1 – not achieved
Q2 – achieved
Q3 – achieved
Q4 – not achieved
Development
of UNEG
infrastructure
Customer
satisfaction
Implementation
the commissioning schedule
Compliance with the deadlines
for technological connections
Achieving the level of reliability
of services provided
Consolidated
net debt/EBITDA
104 %
≥ 90 %
No assessment17
1.0
≤ 1.1
1.0
0.22
≤ 1.00 0.22
Achieved Q1, Q2, Q3, Q4 ≤ 3.0
Achieved
Financial
sustainability
Implementation of the Action Plan
to reduce accounts receivable
Achieved
≥ 10.0 %
Achieved
Economic
efficiency
EBITDA
Q1, Q2, Q3 — achieved;
Year — achieved.
Consolidated
net cash flow
RUB 20.6 bln
Q1, H1 and 9 months
of the reporting
period ≥ 0;
Annual value ≥ 3.0 %
≥ the target value of
the IFRS Consolidated
Business Plan of the
FGC UES Group of
Companies (RUB bln)
Q1, Q2, Q3 —
achieved;
Year — achieved.
RUB 21.6 bln
Reduction of unit operating
expenses (costs)
Increase in capacity utilisation
of electric grid equipment
Level of electricity losses
Reduction in specific
investment costs
Improvement of labour
productivity
3.3 % ≥ 2.0 %
10.6 %
Achieved
Achieved
Achieved
Achieved
Achieved
Achieved
0.98
≤ 1.00
0.99
14.77 %
≥ 2.00 %
10.71 %
Efficiency of innovation activities
101 %
≥ 90 %
No assessment18
KEY RISKS
GRI 102-15
FGC UES has approved a Register19 of Key Operational Risks (KOR) and evaluates their
impact on the achievement of the Company's target performance indicators, and annually
updates the materiality level and takes measures related to risk management.
Risk assessment is carried out using a scenario and/or expert method. The risk materiality
level is determined based on the results of the assessment in accordance with the
materiality levels (moderate, significant, critical) determined in the Methodology for
Assessing Operational Risks.20
Critical risks are unacceptable for the Company and are subject to priority management.
Significant risks are not critical but have a considerable impact on the Company's
operations and are subject to management.
Moderate risks do not have a considerable impact on the Company's operations but are
subject to regular monitoring.
For information on the risk
management system,
see section Risk Management
System, Internal Control
and Internal Audit.
KEY OPERATIONAL RISKS OF FGC UES
Risk
index
Name
Materiality
level21
~ КОR-001
Risk of deviation of the actual volume of electricity transmission services from the value set
in the Business Plan
critical
~ КОR-002
Risk of deviation of the actual average tariff for electricity transmission services from the value
set in the Business Plan
moderate
~ КОR-003
Risk of deviation of the actual volumes of technological connection from the value set in
the Business Plan
significant
~ КОR-004 Risk of deviation of expenditures on purchasing losses from the value set in the Business Plan
significant
~ КОR-005
Risk of deviation of expenditures beyond control from the value set in the Business Plan,
except for the expenditures on purchasing electricity to compensate losses
moderate
~ КОR-006 Risk of increase in the operating expenses compared to those established for the target period
moderate
~ КОR-007 Risk of deviation of the overdue accounts receivable from the amount set in the Business Plan
critical
~ КОR-008 Risk of deviation of the debt/EBITDA indicator from the value set in the Business Plan
~ КОR-009 Risk of deviation of net profit from the value set in the Business Plan
~ КОR-010 Risk of failure to fulfil the main parameters of the Investment Programme
~ КОR-011
Risk of deviation of the percentage reduction in specific investment costs from the value
established for the target period
~ КОR-012 Risk of failure to achieve the capacity utilisation rate established for the target period
~ КОR-013
Risk of failure to achieve the reliability level of electricity transmission services established
under tariff regulation
~ КОR-014
Risk of failure to achieve the quality level of technological connection services established
under tariff regulation
~ КОR-015 Risk of accident at the fault of the Company
~ КОR-016
Risk of deviation of the labour productivity improvement indicator from the value set
in the Business Plan
moderate
moderate
moderate
moderate
moderate
significant
moderate
critical
moderate
17 The actual value and status of the KPI "Implementation of the commissioning schedule" will be determined after the report on the implementation of KPIs by top managers
of PJSC FGC UES for 2018 is approved at the meeting of the PJSC FGC UES Board of Directors.
18 The evaluation of KPIs achievement can be carried out only after consideration of the 2018 Innovation Development Programme implementation report by the Russian
authorised federal executive bodies (in accordance with the procedure approved by the Instruction No. DM-P36-7563 of the Russian Government dated 7 November 2015,
or any other document regulating the procedure for monitoring and evaluating the quality of development, updating and implementation of innovative development programmes
of joint-stock companies partially owned by the state).
19 Resolution of the Board of Directors, Minutes No. 248/1 dated 29 January 2015.
20 Approved by Order No. 86 of 21 March 2016.
21 Integrated index taking into account the probability and possible consequences of risk realisation.
58
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
59
STRATEGIC REPORT
For information on measures
for management of key
operational risks in 2018,
see Appendix 1.
IMPACT OF KEY OPERATIONAL RISKS
ON ACHIEVEMENT OF PJSC FGC UES TARGET
PERFORMANCE INDICATORS
~ КОR-001
~ КОR-002
~ КОR-003
~ КОR-007
~ КОR-004
~ КОR-005
~ КОR-006
~ КОR-008
REVENUE
EXPENDITURES
CREDITWORTHINESS
AND LIQUIDITY
~ КОR-009
NET PROFIT
~ КОR-010
~ КОR-011
MAIN PARAMETERS
OF THE INVESTMENT
PROGRAMME
INDICATOR –
REDUCTION OF SPECIFIC
INVESTMENT COSTS
FINANCIAL RESULTS
AND CREDITWORTHINESS
INVESTMENT ACTIVITIES
~ КОR-012
~ КОR-013
INDICATOR – RELIABILITY
OF ELECTRICITY
TRANSMISSION SERVICES
~ КОR-014
INDICATOR – QUALITY
OF TECHNOLOGICAL
CONNECTION SERVICES
ACHIEVEMENT OF STRATEGIC
OBJECTIVES IN TERMS
OF UNINTERRUPTED POWER
SUPPLY AND QUALITY
OF TECHNOLOGICAL
CONNECTION SERVICES
~ КОR-016
LABOUR
PRODUCTIVITY
~ КОR-015
INDUSTRIAL
SAFETY
HUMAN RESOURCES
MAP OF KEY OPERATIONAL RISKS
2017
2018
201922
y
t
i
l
i
b
a
b
o
r
P
h
g
H
i
e
g
a
r
e
v
A
w
o
L
012
003
004
014
002 005
006 008
010 011
016
001
007
009
015
013
001
007
003
004
015
010
003
004
002 005
006 008
009 010
011 012
014 016
013
002 005
006 008
011 012
014 016
KEY RISKS
001
007
015
013
Low
Average
High
Low
Average
High
Low
Average
High
Consequences
Changes in assessment of the risk materiality level in 2018
~ КОR-009
Risk of deviation of net profit
from the value set
in the Business Plan
The materiality
level has dropped
from critical to
moderate.
The change in risk materiality level was caused by an increase in net profit due
to a decrease in the level of uncontrolled and controlled expenses, positive
surplus in fines (RUB 3.4 billion), receipt of dividend payments (RUB 1.9 billion),
tax savings on property due to a change in the structure of taxable property
and reduced costs for the purchase of losses as a result of a reduction in losses
and a reduction in the weighted average tariff for the purchase of losses.
~ КОR-012
Risk of failure to achieve
the capacity utilisation rate
established for the target period
The materiality
level has dropped
from significant to
moderate.
~ КОR-014
Risk of failure to achieve the
quality level of technological
connection services established
under tariff regulation
The materiality
level has dropped
from significant to
moderate.
The change in risk materiality level was due to the transition to a new
risk assessment method.23
The change in risk materiality level was due to the absence of penalties
imposed by external authorities monitoring activities related to technological
connection in the reporting period.
22 KOR-009 is not applicable as the net profit is expected to exceed the value set in the Business Plan in 2019.
23 Developed by PJSC Rosseti.
60
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
61
7 AFFORDABLE AND
CLEAN ENERGY
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
15 LIFE
ON LAND
4 QUALITY
EDUCATION
7 AFFORDABLE AND
CLEAN ENERGY
4 QUALITY
EDUCATION
7 AFFORDABLE AND
CLEAN ENERGY
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
8
DECENT WORK AND
ECONOMIC GROWTH
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
8
DECENT WORK AND
ECONOMIC GROWTH
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
15 LIFE
ON LAND
STRATEGIC REPORT
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
15 LIFE
ON LAND
17 PARTNERSHIP
FOR THE GOALS
4 QUALITY
EDUCATION
PERFORMANCE RESULTS 2018
3 HEALTH
17 PARTNERSHIP
9 INDUSTRY, INNOVATION
4 QUALITY
AND INFRASTRUCTURE
AND WELL-BEING
FOR THE GOALS
EDUCATION
MANUFACTURED CAPITAL
3 HEALTH
AND WELL-BEING
7 AFFORDABLE AND
CLEAN ENERGY
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
11 SUSTAINABLE
CITIES
AND COMMUNITIES
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
8
CITIES
AND COMMUNITIES
DECENT WORK AND
ECONOMIC GROWTH
The Company's manufactured capital is all the production assets available to FGC UES for
the provision of services, including equipment and infrastructure.
11 SUSTAINABLE
FGC UES operates the Unified National Electrical Grid (UNEG) and provides consumers with
services related to electric power transmission via the UNEG. Such services are considered
as monopoly operation and are regulated by the State. Payment for electric power
transmission services is the major revenue source for the Company (88.9 % of the revenue).
17 PARTNERSHIP
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
FOR THE GOALS
15 LIFE
The price of electricity transmission services is determined by the tariffs calculated by the
commercial operator of the wholesale electricity market (JSC ATS) and set by the Russian
Federal Antimonopoly Service (FAS of Russia).
17 PARTNERSHIP
3 HEALTH
AND WELL-BEING
FOR THE GOALS
ON LAND
The reliability and safety of UNEG operation is ensured by management systems. In the
Company the following system operate:
4 QUALITY
quality Management System (QMS);
11 SUSTAINABLE
3 HEALTH
environmental Management System (EMS);
AND WELL-BEING
EDUCATION
CITIES
AND COMMUNITIES
energy Management System.
QMS is a part of the Company’s general management system. It is designed to ensure the
high quality of the services provided in accordance with the requirements of regulatory
documents, the needs and expectations of consumers, as well as to satisfy all stakeholders,
including employees, shareholders, investors and partners of the Company.
9 INDUSTRY, INNOVATION
11 SUSTAINABLE
CITIES
AND COMMUNITIES
AND INFRASTRUCTURE
QMS certification for compliance with ISO 9001:2015 is scheduled for 2019.
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
COMPLIANCE WITH THE TECHNICAL POLICY
FOR THE GOALS
17 PARTNERSHIP
The Unified Technical Policy has been approved and is effective in FGC UES24. The purpose
of FGC UES’ Unified Technical Policy in the electric grid complex is to determine the main
technical areas to ensure the reliability and operating efficiency of the electric grid complex
in the short and medium term, with proper industrial and environmental safety, based on
innovative development principles providing for non-discriminatory access to electric grids
for all market participants.
3 HEALTH
Control over the implementation of the Unified Technical Policy in the electric grid complex
is carried out by the dedicated structural units of the Executive Office of PJSC FGC UES and
its branches: MPS (EMPS), on a regular basis.
AND WELL-BEING
For more information
on tariff setting,
see the section
Financial Capital.
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
For more information on QMS,
15 LIFE
see Appendix 1.
ON LAND
For more information
on EMS and the energy
management system,
see section Natural Capital.
4 QUALITY
EDUCATION
7 AFFORDABLE AND
CLEAN ENERGY
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
8
DECENT WORK AND
ECONOMIC GROWTH
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
ON LAND
15 LIFE
17 PARTNERSHIP
The document is published
on the website
http://www.fsk-ees.ru/eng in
section About Us/Mission and
Strategy
FOR THE GOALS
4 QUALITY
EDUCATION
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
11 SUSTAINABLE
CITIES
AND COMMUNITIES
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
24 Resolution of PJSC FGC UES Board of Directors, Minutes No. 208 of 27 December 2013.
62
17 PARTNERSHIP
FOR THE GOALS
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
ELECTRICITY TRANSMISSION
PERFORMANCE RESULTS 2018
7 AFFORDABLE AND
CLEAN ENERGY
Reliability
of energy supply
Based on the results of PJSC FGC UES’ performance in 2018, the volume of electricity supply from the UNEG to consumers
amounted to 557,730 million kWh, which was 10,379 million kWh (1.9 %) more than in 2017.
DECENT WORK AND
ECONOMIC GROWTH
8
Electricity supply from the UNEG to service consumers, mln kWh
Electricity losses in the UNEG, mln kWh
546,366
25,415
15 LIFE
ON LAND
557,730
24,539
554,830
25,361
2018 target
2018 result
2019 target
ELECTRICITY TRANSMISSION SERVICES MARKET
GRI 102-6
4 QUALITY
EDUCATION
The scope of services provided in the backbone transmission network depends on the general state of the national economy
and is determined as power capacity supplied to the consumers of electricity transmission services and capacity of power
receivers connected to the network.
92
91
90
89
88
87
86
85
84
90.9
Power capacity paid by the consumers
of electricity transmission services through
the UNEG provided by PJSC FGC UES, GW
88.3
87.8
87.6
86.8
2014
2015
2016
2017
2018
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
In 2018, the value of paid capacity under the UNEG
amounted to an average of 86.8 GW; by the end of 2018,
the reduction in paid capacity was 0.8 GW compared to 2017,
which was primarily due to the continued implementation of
the schedule of phased transition to settlements with SDCs
of PJSC Rosseti, approved by the Board of Directors of
PJSC Rosseti at the reported actual capacity level.
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
The main consumers of the FGC UES electric power
17 PARTNERSHIP
transmission services are regional distribution companies,
retail suppliers and large industrial enterprises.
FOR THE GOALS
The most major consumers of services in PJSC FGC UES'
revenue from electricity transmission in 2018
Number of counterparties on contracts
for electricity transmission services
3 HEALTH
AND WELL-BEING
2 %
2 %
10 %
2 %
3 %
4 %
4 %
6 %
8 %
700
600
500
400
300
200
100
0
PJSC MOESK
JSK Tyumenenergo
PJSC IDGC of Centre
PJSC IDGC of Centre
and Privolzhie
PJSC Lenenergo
JSC IDGC Ural –
Sverdlovenergo
PJSC Kubanenergo
JSC IDGC Ural –
Chelyabenergo
JSC DRSK
JSC RUSAL
Krasnoyarsk
9 %
11 SUSTAINABLE
CITIES
AND COMMUNITIES
602
625
587
473
481
417
2014
2015
2016
2017
2018
2019
Forecast
Based on the results of 2018, the total number of the Company's counterparts in the electric power transmission service
agreements reached 602.
The number of the Company's counterparts in the electric power transmission service agreements grows annually.
The result of 2018 was 602 counterparts.
The number of contracts grows due to the activities carried out to ensure new technological connection to the UNEG,
as well as the conclusion of contracts with consumers of the Company's services who are technologically connected
to facilities of other entities.
63
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
STRATEGIC REPORT
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
REDUCTION OF RELATIVE ELECTRICITY LOSSES
GRI EU12, 103-2
In 2018, electricity losses amounted to 24,539 million KWh (4.4 % of electricity supply
from the grid to consumers of the electricity transmission services via the UNEG). With an
increased electricity supply from the grid, the relative value of losses decreased by 0.04 %,
while the electricity losses rose by 231.95 million KWh or 0.95 % in absolute terms. Changes
in electricity losses were caused by shifts in the UNEG’s operation in 2018 due to changes in
loading power plants and redistribution of the consumer load in FGC UES' grids.
Dynamics of electricity supply and losses in FGC UES' grids, mln kWh
515,250
525,769
540,540
547,351
557,730
Electricity
supplied
to consumers
of services
Electricity
losses in UNEG
600,000
500,000
400,000
300,000
200,000
100,000
0
TECHNOLOGICAL CONNECTION
PERFORMANCE RESULTS 2018
7 AFFORDABLE AND
CLEAN ENERGY
Customer
satisfaction
The Company provides consumers with a comprehensive service for technological
connection of power receivers of electricity consumers, power generation facilities, and
electric grid facilities owned by network organisations and other entities to FGC UES'
electric grids.
DECENT WORK AND
ECONOMIC GROWTH
8
Technological Connection service:
receiving application for technological
connection;
development of technical requirements;
signing the contract;
obtaining an operation permit from
the federal state energy supervision
authority for the consumer's facilities;
issuing the connection report.
15 LIFE
ON LAND
contracts,
reporting year,
the Company
In
the
technological connection
implemented
under
including
248
17 connections of generation facilities,
111 connections of electricity consumers,
77 connections of DEG facilities owned
by
Rosseti,
of
and 43 connections of TGC facilities.
SDCs
PJSC
4 QUALITY
EDUCATION
The Technological Connection
Service online portal provides
consumers with access to up-
to-date information
on the state of PJSC FGC UES'
feeding centres, load level
of their equipment,
as well as information
on the implementation progress
of their applications
for technological connection
to the electric grids of
the Company. Website
of the portal:
http://portaltp.fsk-ees.ru/.
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
21,261
23,478
25,033
24,307
24,539
2014
2015
2016
2017
2018
19
major technological connections
were carried out in 2018.
The Company acquires electricity and capacity on the wholesale electricity and capacity
market in order to compensate actual losses in the UNEG. Acquisitions are made
in the constituent entities of the Russian Federation united into pricing and non-pricing
zones.
The Action Plan to reduce electricity losses was approved as part of the Energy Saving
and Energy Efficiency Programme of PJSC FGC UES for 2015–2019 and implemented
in several key areas:
optimisation of the circuit and mode parameters in the process of operation
and control of the electric grids;
reduction of electric power consumption for own needs of the substations;
construction, reconstruction and development of the electric grids, and commissioning
of energy saving equipment (loss reduction has a concurrent effect).
to 46.75 million KWh.
Based on the results of 2018,
the technological effect of actions taken
to reduce electricity losses amounted
Structure of consumers
of the Company's services
by technological connection*
47 %
5 %
Dynamics of volumes of consumers' capacities
and electricity generation facilities connected
to FGC, MW
3 HEALTH
AND WELL-BEING
4,949
8,944
11 SUSTAINABLE
CITIES
AND COMMUNITIES
3,916
4,053
2,766
5,419
2,653
2,982
3,768
1,769
48 %
2014
2015
2016
2017
2018
For the assessment
of customer satisfaction
with the technological
connection service
see section Social and
Relationship Capital/
Interaction with Stakeholders/
Interaction with Service
Consumers.
Generation companies
Consumers
Grid companies
Consumers and grid companies
Electricity generation facilities
* Estimate according to the number of contracts signed in 2018.
64
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
65
INFRASTRUCTURE PROJECTS
TECHNOLOGICAL
CONNECTION
PJSC FGC UES TRANSMITS ELECTRICITY VIA
THE BACKBONE UNEG TRANSMISSION
NETWORK IN 79 CONSTITUENT ENTITIES
OF THE RUSSIAN FEDERATION AND PROVIDES
SERVICES FOR TECHNOLOGICAL CONNECTION
TO THIS NETWORK. DEVELOPING THE UNEG TO
CREATE THE POSSIBILITY FOR TECHNOLOGICAL
CONNECTION FOR NEW CONSUMERS IS ONE
OF THE STRATEGIC GOALS FOR FGC UES.
Structure of consumers of the Company's
services by technological connection
Generation companies
Consumers
Grid companies
48 %
ACTIONS TAKEN
IN PREVIOUS YEARS
In 2013–2017, PJSC FGC UES
executed 1,312 contracts for
technological connection with
a total capacity of 38,600 MW,
including
84 contracts with a declared capacity
of 20,654 MW
for generation facilities,
and 1,228 contracts with
a declared capacity of 17,946 MW
for direct consumers, IDGC and TGC facilities.
Dynamics of volumes of consumers' capacities
and electricity generation facilities connected
to FGC, MW
47 %
5 %
4,949
2,766
5,419
3,768
1,769
2,653
8,944
2,982
3,916
4,053
2014
2015
2016
2017
2018
Consumers and grid companies
Electricity generation facilities
ACTIONS TAKEN IN 2018
FUTURE PLANS
In 2018
248 contracts for technological
connection with a total capacity
of 7,969 MW
were executed, including 17 contracts with a declared
capacity of 4,053 MW for generation facilities
and 231 contracts for technological connection
of direct consumers, IDGC and TGC facilities with
a capacity of 3,916 MW.
To perform technological connection and improve the
reliability of power supply to existing consumers, FGC
UES completed a number of major projects in 2018:
Iskonnaya and Yermak 220 kV substations in
Yamalo-Nenets Autonomous Okrug (will provide power
supply to enterprises in the oil and gas sector);
Vostochnaya Promzona 220 kV substation and Novo-
Labinskaya 220 kV SS in Krasnodar Krai (will improve
the power supply reliability and create opportunities
for connecting regional electricity consumers);
Vostok 220 kV substation in Khabarovsk Krai
(will provide power supply to Khabarovsk advanced
development zone).
In 2018, PJSC FGC UES implemented the following
major projects for technological connection
of the electricity generation facilities:
For power generation at power unit No. 1
of Leningradskaya NPP-2:
construction of 330 kV overhead line Koporskaya –
Gatchinskaya;
installation of a 750 kV shunt reactor at
Leningradskaya 750 kV SS;
construction of the transit power transmission line
Koporskaya 750 kV SS – Pulkovskaya 330 kV SS –
Yuzhnaya 330 kV SS;
construction of the approach lines of 330 kV overhead
line Balti – Leningradskaya at Kingiseppskaya 330 kV SS;
replacement of switches at Gatchinskaya 330 kV SS.
For power generation at power unit No. 4
of Rostovskaya NPP:
construction of 550 kV overhead line Rostovskaya
NPP - Rostovskaya with extension to Rostovskaya
550 kV SS.
The following facilities are scheduled
to be commissioned in 2019:
Fevralskaya – Rudnaya 220 kV power transmission
line in the Amur Region (will provide power supply
to the new gold mining and processing enterprises);
Prompark 220 kV substation in Primorsky Krai
(will provide power supply to Nadezhdinskaya
advanced development zone).
The following works are planned for technological
connection of JSC RZD's power receiving devices:
construction of approach lines for 220 kV
overhead line at Shmakovka/t 220 kV SS;
at Sgibeevo/t 220 kV SS, at Kuragino;
Kashurnikovo, Sayanskaya SS;
at Gostagaevskaya 220 kV SS;
at Kievskaya 220 kV SS, at Chekon 220 kV SS.
To increase the volume of oil pumping through
the ESPO pipeline system to 80 million tonnes,
technological connection of the facilities
of Transneft Far East LLC is planned
(oil pump stations 23, 26, 32).
In order to provide energy supply to the gas
transportation system Power of Siberia of
PJSC Gazprom, technological connection of CS-3,
TC of CS-7a, and Power of Siberia TPP is planned.
The following works are planned to be completed
as part of technological connection of the electricity
generation facilities:
for power generation at power unit No. 2
of Novovoronezhskaya NPP-2:
construction of 220 kV overhead line
Novovoronezhskaya NPP-2 – Buturlinovka
with Buturlinovka 220 kV SS;
construction of 500 kV overhead line Donskaya
NPP – Stary Oskol No. 2.
for power generation at Zaramagskaya HPP-1:
reconstruction of 330 kV overhead line Nalchik –
Vladikavkaz-2 with development of the 330 kV
overhead line Zaramagskaya HPP-1 –
Vladikavkaz-2 and the 330 kV overhead line
Zaramagskaya HPP-1 – Nalchik;
reconstruction of Tobol 500 kV SS in the Tyumen
Region for technological connection of SIBUR
Tobolsk LLC.
66
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
67
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
IMPROVING THE RELIABILITY OF POWER SUPPLY
11 SUSTAINABLE
CITIES
AND COMMUNITIES
GRI 103-2
FGC UES activities are aimed at ensuring reliable and uninterrupted operation of the UNEG.
The reliability of the Company's grids increases every year.
by 17 %
in 2018, the specific accident rate
at the facilities of FGC UES decreased
In 2018, the specific accident rate at FGC UES facilities declined by 17 % due to introduction
of new equipment, improvement of the servicing personnel’s skills and expertise and other
activities. The number of staff errors decreased twice compared to 2017 and accounted
for less than 0.6 % of the total number of accidents. Decrease in the accident rate was
registered in all MPS.
Number of accidents
at PJSC FGC UES' facilities*
Distribution of accidents by main elements
of the electric grids (power transmission
lines, SS and SCS)
35
2,500
2,348
3 %
FSC UES demonstrates a steady trend towards
improved reliability. What actions are taken
by the personnel to improve the reliability of their
operation and to minimise errors?
We have been implementing a project related to assessing personnel
reliability over the last two years.
A survey was conducted to identify the reasons affecting employee
compliance with the safety regulations and occupational safety
requirements. The survey covered 4,900 employees of the Company's
technical unit.
Based on the results of the survey, we identified risk factors that lead
to violations of safety rules by employees and determined relevant
development zones.
The next step was a long-term project aimed at improving the reliability of
production personnel, which included knowledge testing, psychological
diagnostics and training under special programmes. More than
7,000 employees have already participated in the project. The main
outcome of the project is a reduction in the number of technological
violations due to erroneous actions by FGC UES' personnel. In addition,
the implementation of the project indirectly resulted in a decrease in
the number of mistakes made by employees who were not yet involved
in the project.
STRATEGIC REPORT
Reliability
of energy supply
PERFORMANCE RESULTS 2018
Natalia Ozhegina,
Deputy Chairperson
of the Management Board
of PJSC FGC UES
1,879
1,869
490
37 %
1,535
1,321
For information on the
distribution of the specific
number of accidents at MPS
of PJSC FGC UES,
see Appendix 1.
2,000
1,500
1,000
500
0
The indicator of electricity shortage to consumers tends to stabilise within the medium-
term value. In 2018, it fell by 7 % to 1,531 MWh compared to 2017. The increase in
the indicator compared to 2015 and 2016 was due to higher requirements for technological
violations taken into account when calculating the reliability indicators in accordance with
Order No. 1256 of the Ministry of Energy dated 29 November 2016 and corresponding Order
No. 443 of PJSC FGC UES dated 30 November 2018.
Reliability level of services provided25
2014
2015
2016
2017
2018
Target
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Actual
0.047
0.020
0.036
0.013
0.035
0.012
0.035
0.009
0.034
0.009
In 2019, the Company will pay special attention to personnel actions, operation
of transmission lines and automatic reclosing devices of overhead lines in order to maintain
a high reliability level.
For information about
the reliable power supply
for the facilities
of the Sochi-2018 Russian
Investment Forum, the World
Cup 2018 and the Eastern
Economic Forum 2018,
see Appendix 1.
SCS
SS
Power
transmission lines
796
60 %
Dynamics of electricity undersupply
by PJSC FGC UES, MWh
2,000
1,500
1,000
500
0
1,562
1,646
1,531
1,093
1,156
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
Specific accident rate at PJSC FGC UES'
facilities (number of accidents per 1,000
conventional units)
2.0
1.83
1.43
1.40
1.13
0.94
1.5
1.0
0.5
0.0
2014
2015
2016
2017
2018
GRI 102-48
* Starting from 1 January 2017, in accordance with the Production Meeting Minutes of the technical management of PJSC FGC
UES and JSC SO UES, the investigation and accounting of events related to decommissioning SS and OHL equipment upon “urgent”
dispatching orders and disruptions in SCS which do not fall within the scope of paragraph 4 of the Accident Investigation Rules in
Power Industry, was added to the existing accident investigation process. For adequate comparison of the number of accidents,
the information on the accident number for 2014–2016 was supplemented with the above-stated events based on the materials
submitted by JSC SO UES.
25 The reliability level of the services provided is determined as the ratio of the actual total duration of electricity outage in the control period (hour) to the maximum number
of technological connection points of service consumers for the same period.
68
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
69
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
STRATEGIC REPORT
The results of the Repair
Programme are given
in Appendix 1.
For information about
operational, technological
and situational management
in 2018, see Appendix 1.
For more information on
activities related
to preparation for operation
during special periods in 2018,
see Appendix 1.
RENOVATION OF FIXED ASSETS
The Fixed Assets Renovation Programme is aimed at ensuring reliable and efficient
operation of the electric grid complex.
Investment projects of the programme form part of the adjusted Investment Programme
2016–2020 of FGC UES26 and are presented in section 0.2 – Reconstruction, Modernisation,
and Technical Re-Equipment.
Taking into account the investment projects implemented within the Company's investment
budget for 2016–2020, the following scope of investment projects is planned under
the Renovation Programme 2016–2020 in accordance with the approved Investment
Programme:27
commissioning of facilities with a total capacity of 15,378.9 MVA;
reconstruction of power transmission lines with a total length of 439.9 km.
The investment project financing under the Renovation Programme 2016–2020 totals
RUB 148.4 billion. In 2018, actual financing amounted to RUB 30 billion.28
REPAIR PROGRAMME
In 2018, repairs were carried out to ensure the uninterrupted operation of the electric grid
complex in autumn and winter, during fire, thunderstorm and flood hazard periods (including
implementation of additional preventive measures to increase the protection of the power
grid facilities from the impact of natural phenomena), and basic and additional measures
were taken to improve the reliability of the PJSC FGC UES electric grid complex in general.
In 2018, the planned repairs were carried out in full.
Actual repair expenses for 2018 amounted to RUB 13.1 billion.
Representing Russia, the FGC UES team came in second place at the International
Competition of Forces for Repair and Maintenance of Overhead Lines of 110 kV
and higher.
OPERATION DURING SPECIAL PERIODS
Weather and climatic conditions have a significant impact on the Company's operations.
Power grid equipment, buildings and structures are prepared in advance for operation
during special periods, such as:
autumn and winter (low temperatures and maximum loads);
periods associated with natural anomalies (flood, fire and thunderstorms).
In 2018, the UNEG operated in regular mode during the special periods as well.
Forty-four duty teams operated on a permanent basis in FGC UES, which ensured reliable
operation of the facilities in emergency conditions. There were 584 standby power supply
sources with a total capacity of 173.4 MW at the Company's disposal.
On 14 November 2018, the Committee of the Ministry of Energy of Russia issued
a certificate of the Company's readiness for operation during the heating season
2018–2019.
26 Approved by Order No. 31@ of the Ministry of Energy of Russia dated 27 December 2017.
27 Actual data were taken into account for 2016–2018
28 Forecast performance indicator for 2018.
70
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
17 PARTNERSHIP
FOR THE GOALS
PERFORMANCE RESULTS 2018
INDUSTRIAL SAFETY MANAGEMENT
GRI 103-2
PJSC FGC UES industrial facilities are operated in compliance with the requirements
of Federal Law No. 116-FZ dated 21 July 1997 on Industrial Safety of Hazardous Industrial
Facilities, as well as other regulatory acts in the field of industrial safety.
PJSC FGC UES operates 252 hazardous industrial facilities of III and IV hazard classes,
which are registered in the State Register of Hazardous Industrial Facilities and identified
by the following hazard features:
use and storage of hazardous substances;
use of equipment operating under excess pressure above 0.07 MPa;
use of fixed lifting mechanisms.
The Company organises and implements production control in order to ensure safe
operation of PJSC FGC UES hazardous industrial facilities, as well as prevents accidents
at such facilities and ensure they are prepared to contain the accident and liquidate
its consequences.
In 2005–2018, no accidents were registered at PJSC FGC UES hazardous
industrial facilities.
All industrial safety requirements are fulfilled in accordance with the procedure established
by law.
Please, tell us about the results of ensuring
the occupational health at FGC UES in 2018.
In 2018, work continued to reduce the occupational injury risks based
on the results of hazard identification and risk assessment, as well
as in accordance with the set of tasks determined by the decisions of
the Occupational Health and Safety Committees and organisational
and distribution documents of the Company. Works were carried out
to identify and prepare lists of hazardous equipment. Before starting
the 2018 Repair Campaign, actions were taken to ensure the readiness
of facilities for its implementation, including personnel, protection
equipment, tools, rigging, and transport.
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
For more information
on the measures taken
by the Company in 2018
in the field of industrial safety,
see Appendix 1.
For more information
on the organisation
of favourable working
conditions, see section Human
Capital/Occupational Safety.
For information on fire safety
measures, see Appendix 1.
Dmitry Vodennikov,
Deputy Chairman
of the Management Board –
Chief Engineer, Member
of the Management Board
of PJSC FGC UES
71
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
STRATEGIC REPORT
Infrastructure
development
DEVELOPMENT OF GRID INFRASTRUCTURE AND INVESTMENT
ACTIVITIES
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
GRI 103-2
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
Investment in developing the electric grid infrastructure is the basis for ensuring reliable
power supply and an important factor of economic growth. FGC UES carries out construction
of new electrical grid facilities and reconstruction of existing ones.
17 PARTNERSHIP
FOR THE GOALS
The Company pays special attention to modernisation and increasing operational
reliability of the UNEG to ensure uninterrupted power supply to consumers.
AND WELL-BEING
The FGC UES Investment Programme 2016–2020 was approved in 201629 and adjusted
3 HEALTH
in 2017.30
The priority goals for the Company’s Investment Programme include:
maintaining the level of operational reliability of the Unified Energy System required
to ensure uninterrupted power supply to consumers;
11 SUSTAINABLE
providing electricity supply to facilities of national significance;
CITIES
AND COMMUNITIES
ensuring quality and availability of services for electric power transmission
and connection of consumers to the electric grids;
improving the operational efficiency of backbone transmission networks via cost
reduction and implementation of energy efficiency programmes;
synchronising the development programmes with generation facilities
and distribution grids;
developing an effective system for management of UNEG operation,
improving the monitoring of electric grid facilities.
MAIN PARAMETERS OF THE APPROVED ADJUSTMENTS TO PJSC FGC UES
INVESTMENT PROGRAMME 2016–2020:
Volume of financing, RUB bln
Volume of capital investments spent (excl. VAT), RUB bln
100.0
92.3
104.3
97.6
94.4
90.4
150.0
142.4
50.0
0.0
2016
2017
2018
2019
2020
100.0
50.0
0.0
98.8
108.2
66.9
53.4
2016
2017
2018
2019
2020
29 Order No. 1432 of the Ministry of Energy of Russia dated 28 December 2016.
30 Order No. 31@ of the Ministry of Energy of Russia dated 27 December 2017.
72
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
PERFORMANCE RESULTS 2018
Commissioning of main grid
capacity equipment, RUB bln
Transformer
capacity, ths. MVA
Linear capacity,
ths. km
200.0
150.0
100.0
50.0
0.0
169.1
132.0
103.2
104.5
58.7
2016
2017
2018
2019
2020
14
12
10
8
6
4
2
0
11.5
9.2
6.2
8.8
4.2
2016
2017
2018
2019
2020
4
3
2
1
0
3.4
3.1
2.4
1.2
0.8
2016
2017
2018
2019
2020
As part of the Company's Investment Programme, it is planned to commission fixed assets with 40,000 MVA
of capacity and 10,900 km of electricity transmission lines in 2016–2020.
The planned investments for 2016–2020 amount to RUB 479.07 billion. It is planned to finance the Investment Programme
2016–2020 using PJSC FGC UES’ own funds, bonds, loans and federal budget resources. The programme provides for even
distribution of investment costs over the five-year period, which enables the Company to maintain a balanced structure
of its funding sources.
FULFILMENT OF THE INVESTMENT PROGRAMME IN 2018
Dynamics of financing
investments, RUB bln
120.0
100.0
90.9
85.9
90.7
103.3
95.6
80.0
60.0
40.0
20.0
0.0
2014
2015
2016
2017
2018
Capacities commissioning dynamics
(setting for voltage)
10
9.52
Transformer capacity, ths. MVA
Power transmission lines, ths. km
2018 capital investments structure
(financing), RUB mln
473
160
5,992
0.46 %
0.15 %
5.80 %
29,160
28.22 %
21,337
20.65 %
Technological connection
Reconstruction, renovation, technical reequipment
Investment projects, implementation of which
is due to schemes and electricity and power
perspective development programmes
46,222
44.73 %
8
6
4
2
0
5.69
4.07
3.16
Other construction
of new electric grid facilities
Purchase of land plots
for implementation
of investment projects
1.88
Other investment projects
3.12
2.32
0.66
0.42
0.8
2014
2015
2016
2017
2018
For more information about
key investment projects
and their main parameters,
see Appendix 1.
73
INFRASTRUCTURE PROJECTS
POWER SUPPLY
OF PORT AREAS
THERE ARE 67 SEAPORTS OPERATING
IN RUSSIA WITH AN ANNUAL CAPACITY OF SOME
1 BILLION TONNES AND POTENTIAL GROWTH
BY 357 MILLION TONNES IN 2018–2024.
KEY DEVELOPMENT PROJECTS ARE
RELATED TO THE ARCTIC AND THE FAR
EASTERN BASINS (SOME 55 % OF GROWTH).
FGC UES SUPPLIES ELECTRICITY TO ALL
MAJOR SEAPORT AREAS IN RUSSIA.*
* Except for the Kaliningrad Region and Sakhalin Region, Chukot
and Nenets Autonomous Okrug, and Kamchatka Krai.
ACTIONS TAKEN
IN PREVIOUS YEARS
FAR EASTERN BASIN
A 500 kV energy ring
with the length of 1,042 km
commissioned in the south of Primorsky
Krai made it possible to solve the power shortage
problem in the region and create opportunities
for development of the port infrastructure.
Power supply was provided on a permanent basis
to the Kozmino offshore oil‐loading terminal.
ARCTIC
BASIN
AZOV-BLACK
SEA
BASIN
FAR
EASTERN
BASIN
74
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
ACTIONS TAKEN IN 2018
FUTURE PLANS
FAR EASTERN BASIN:
FGC UES
doubled the capacity of Vanino
substation (to 250 MVA)
to create development conditions
for the Sovgavan power unit.
AZOV–BLACK SEA BASIN:
Four linear cells with
a capacity of 220 kV were
installed at Taman 500 kV SS
to ensure power supply
to the Dry Cargo Seaport of Taman.
FAR EASTERN BASIN:
In 2019, construction
of the 220 kV power transmission line
Komsomolskaya — Selikhino — Vanino with
a length of about 390 km
will be completed. This facility is included in the macroproject
for external power supply of the Baikal-Amur Mainline and the
Trans-Siberian Railway. It will also improve the reliability of power
supply to consumers in the large port area of Khabarovsk Krai.
In 2020, construction
of the 220 kV power transmission line Shirokaya —
Lozovaya will be completed, with the length of 38 km
and removal of Nakhodka 220 kV switchgear. The project
will improve the reliability of power supply to Nakhodka
consumers, where one of the largest port areas in Russia
is located.
ARCTIC BASIN:
The first construction
stage of Murmanskaya 330 kV substation with
an installed capacity of 250 MVA
will be completed in 2019. The substation will improve
the reliability of power supply to Murmansk and create
opportunities for connection of new consumers, including
the Lavna Commercial Seaport coal transshipment complex
and the Lavna railway substation. Power will be supplied
to Kolskaya Verf, the construction yard for large capacity
offshore facilities.
AZOV-BLACK SEA BASIN:
The reconstruction
of Vyshesteblievskaya SS with a capacity of 220 kV
will be completed in 2019, resulting in an increase
in transformer capacity by 125 MVA
to supply power to railway approach lines to the Dry Cargo
Seaport of Taman.
75
INFRASTRUCTURE PROJECTS
DEVELOPMENT OF EXTERNAL POWER
SUPPLY SYSTEM OF BAIKAL-AMUR
MAINLINE AND TRANS-SIBERIAN RAILWAY
THE TOTAL LENGTH OF THE BAIKAL-AMUR
MAINLINE AND THE TRANS-SIBERIAN RAILWAY
EXCEEDS 14,000 KM. BOTH RAILWAYS FORM PART
OF THE INTERNATIONAL WEST – EAST TRANS-
PORT CORRIDOR AND PROVIDE DELIVERY
OF GOODS BETWEEN EUROPE AND ASIA ON
THE SHORTEST LAND ROUTE.
IN 2018, THE PRESIDENT OF THE RUSSIAN FEDE-
RATION VLADIMIR PUTIN SET THE OBJECTIVE
TO INCREASE THE CAPACITY OF THE BAI-
KAL-AMUR MAINLINE AND TRANS-SIBERIAN
RAILWAY TO 180 MILLION TONNES BY 2024.
FGC UES PROVIDES EXTERNAL POWER SUPPLY
TO THE RAILWAY INFRASTRUCTURE FACILITIES
OF THE EASTERN GROUND OF JSC RZD
AND APPROACH LINES THERETO.
ACTIONS TAKEN
IN PREVIOUS YEARS
FGC UES and Russian Railways signed
a cooperation agreement for development
of the railway and energy infrastructure.
The construction of facilities for external
power supply of the Baikal-Amur Mainline
and Trans-Siberian Railway is the largest project
of the FGC UES Investment Programme.
In 2016, FGC UES installed
two capacitor banks with the capacity
of 20 MVAr each at Severobaikalskaya
220 kV SS.
ACTIONS TAKEN IN 2018
FUTURE PLANS
The Ust-Kut 500 kV SS was
commissioned in the North
of the Irkutsk Region with an
installed transformer capacity
of 501 MVA and the 220 kV
power transmission line Tira
- Nadezhdinskaya with a total
length of 138.6 km
with the expansion of Tira
substation into two linear cells.
The supports of the new structure
were used when building the power
transmission lines, which made it
possible to reduce the installation
period by 20 %.
By 2024, the Company plans to complete implementation
of the remaining 15 projects for external power supply of
the Eastern ground worth RUB 128.2 billion
on the basis of the requests made by Russian Railways,
taking into account the increase in annual traffic volumes
towards the seaports and border crossings of the Far East.
In 2019–2021, the electric grid facilities forming part
of the macroproject will be commissioned in
the Irkutsk Region, Primorsky Krai
and Krasnoyarsk Krai.
Decree No. 204 of the President of the Russian Federation
dated 07 May 2018 provides
for an increase in the capacity of the Baikal-Amur
Mainline and the Trans-Siberian Railway
to 180 million tonnes per year.
An external power supply scheme is being developed
to increase the capacity in order to determine the required
scope of construction and reconstruction works of FGC UES
power grid facilities.
The scope of additional works will be determined based
on calculations of the required capacity and the power supply
scheme of Russian Railways.
76
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
77
INFRASTRUCTURE PROJECTS
DEVELOPMENT
OF CENTRALISED
POWER SYSTEMS
ACTIONS TAKEN
IN PREVIOUS YEARS
Since 2008, FGC UES has been implementing
projects aimed
at connecting the Western and Central
power districts of Yakutia to the Unified
National Electric Grid.
THE REPUBLIC OF SAKHA (YAKUTIA)
IS THE LARGEST CONSTITUENT ENTITY OF RUSSIA
IN TERMS OF AREA. THE POWER SYSTEM
OF THE REGION CONSISTS OF THREE ENERGY
DISTRICTS THAT ARE NOT CONNECTED TO EACH
OTHER (THE SOUTH YAKUTIA, CENTRAL
AND WESTERN DISTRICTS), AS WELL AS AN
EXTENSIVE AREA OF DECENTRALISED POWER
SUPPLY (THE NORTHERN POWER DISTRICT).
THE CENTRAL POWER DISTRICT HAS
THE HIGHEST POPULATION DENSITY. THE MAIN
PRIMARY INDUSTRIES ARE LOCATED IN
THE WESTERN POWER DISTRICT, INCLUDING
DIAMOND MINING AND PROCESSING,
AND HYDROCARBON PRODUCTION.
THE ISOLATED OPERATION OF THE REGIONS
CREATES HIGH RISKS FOR RELIABLE POWER
SUPPLY.
The Republic of Sakha (Yakutia)
Northern
energy district
Central
energy district
West
energy district
South Yakut
energy district
Yakutsk
Maya
Mirny
Nizhny Kuranakh
Neryungrinskaya
GRES
Tommot
Neryungri
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
ACTIONS TAKEN IN 2018
FUTURE PLANS
The power transit line
Neryungrinskaya GRES –
Nizhny Kuranakh – Tommot –
Maya
was commissioned.
Along with the power transmission
line itself, two new
220 kV substations (Tommot
and Maya) were also built,
with an aggregate capacity
of 440 MVA.
Implementation of the project
made it possible to connect
the isolated Central power district
to the UES of the East. Equipment
that meets the requirements
of reliable and safe operation
in permafrost conditions, including
gas insulated switchgear, was
installed at the power facilities.
The 220 kV power transmission line Peleduy –
Sukhoi Log – Mamakan with a length of 396 km
will be commissioned in the Irkutsk Region in 2019.
This will make it possible to connect the isolated Western
power district of the republic to the UES of Siberia.
The following facilities are scheduled to be commissioned
in 2019:
the 330 kV power transmission line Artem - Derbent
in the Republic of Dagestan (will improve the reliability
of power supply to consumers in Dagestan);
the 330 kV power transmission line Kolskaya NPP –
Knyazhegubskaya HPP – SS 330/110/35 kV Loukhi –
Putkinskaya HPP – Ondskaya HPP's 330 kV outdoor
switchgear in the Republic of Karelia (to improve the reliability
of power supply to consumers of Leningrad, Karelia
and Murmansk power systems, generation of "blocked"
capacity of Kolskaya NPP);
the 500 kV overhead line Nevinnomyssk – Mozdok with
expansion of Nevinnomyssk 500 kV SS and Mozdok
500 kV SS
(to increase the capacity of the Terek controlled cross-
section, aimed at improving the reliability of power supply
to consumers in the North Caucasian Federal District).
The following facilities are scheduled to be commissioned
in 2020:
the second 330/110 kV autotransformer with a capacity
of 125 MVA at Artem 330 kV SS (to improve the reliability
of power supply to consumers of the power system
in the Republic of Dagestan and Makhachkala).
The following facilities are scheduled to be commissioned
in 2021:
the 330 kV power transmission line of the 330 kV power
distribution station Ondsky – Petrozavodsk – Tikhvin –
Liteyniy (to improve the reliability of power supply
to consumers of the Leningrad, Karelia and Murmansk power
systems, to release the "blocked" capacity of Kolskaya NPP);
the 220 kV power transmission line Pechorskaya GRES –
Ukhta – Mikun in the Komi Republic (to prevent limitations
to be imposed on consumers in the winter peak loads in the
power system of the Komi Republic and the Kotlas power
unit in case of emergency shutdown of 220 kV single-chain
overhead lines Pechorskaya GRES – Zelenoborsk – Ukhta).
79
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
Infrastructure
development
DEVELOPMENT OF COMMUNICATION NETWORKS
AND IT SYSTEMS
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
GRI 103-2
CONSUMPTION
AND PRODUCTION
12 RESPONSIBLE
FGC UES actively implements and uses smart control systems based on modern
telecommunication and information technologies.
The Company develops its telecommunication infrastructure in accordance with the general
scheme for the creation and development of the Unified Technology Communication
Network of the Electric Power Industry (UTCNEPI) approved by the Management Board
17 PARTNERSHIP
and the Government Committee for Federal Communications.
FOR THE GOALS
The Company considers network digitalisation and intelligence to be the development
priorities for the UTCNEPI.
3 HEALTH
AND WELL-BEING
Digitalisation of the network means the level of provision of the electric grid facilities
with digital communication channels to operate and introduce dispatching, process
control and corporate governance systems.
For more information
on the APCS and CIMS,
see Appendix 1.
CITIES
AND COMMUNITIES
11 SUSTAINABLE
Digitalisation of communication channels of the automated dispatching control systems
(ADCS) and automatic process control systems (APCS) improves the monitoring and
control quality of the electric grid complex. A corporate information management system
(CIMS) has been established and is being developed in the Company to automate business
processes.
Dynamic of electric grid facilities of FGC, 2016–2018
85.0 %
84.9 %
83.7 %
80.3 %
80.0 %
75.0 %
2016
2017
2018
Structure of the Unified Technology Communication Network of the Electric Power Industry and applied technologies
UTCNEPI structural component
2018 results
A fibre-optic communication network
is the basic technology communication
network developed by means of placing
fibre-optic cable on overhead lines
(FOCL OHL).
Some three thousand km of FOCL were put into operation
on electricity transmission lines.
Total length of FOCL, ths. km, 2016–2018
70.5
73.6
76.5
Share of
use of domestic
equipment, %
38 %
2016
2017
2018
High-frequency communication system equipment was upgraded
and decommissioned due to FOCL commissioning. 143 high-
frequency communication half-sets have been installed. A total
of 11,576 half-sets are installed at FGC UES facilities.
Dynamics of high-frequency communication systems
commissioning, 2016–2018
264
212
143
80 %
A high-frequency communication
network on overhead lines is a special
type of communication means in which
the phase conductors and overhead
power transmission line cables
are used as the signal transmitting
medium. Voice, telemechanics,
automated energy metering system,
RP and EA commands needed
for management of technological
processes in the power industry
under normal and emergency modes
are transmitted via high-frequency
communication channels.
2016
2017
2018
The telecommunication network
is built on the point-to-point principle
and provides interaction with the
process network of the System
operator and other participants
of the wholesale electricity market.
Twenty seven digital private automated branch exchange sets
(PABX) were introduced, as well as systems for recording operation
personnel communication, DECT wireless communications systems,
loudspeaker and radio searching communications systems.
Dynamics of the telephone network switching
communication systems commissioning, 2016–2018
47
39
27
51 %
2016
2017
2018
80
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
81
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
STRATEGIC REPORT
7 AFFORDABLE AND
CLEAN ENERGY
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
Infrastructure
development
PROCUREMENT ACTIVITIES
8
DECENT WORK AND
ECONOMIC GROWTH
17 PARTNERSHIP
FOR THE GOALS
ON LAND
GRI 102-9, 103-2
3 HEALTH
15 LIFE
PJSC FGC UES carries out active procurements aimed at acquiring the necessary equipment
and services on the competitive market under its Investment Programme, Repairs
Programme, as well as annual target programmes in all regions of its presence.
AND WELL-BEING
EDUCATION
CITIES
AND COMMUNITIES
11 SUSTAINABLE
4 QUALITY
Principles
of the Company's
procurement activities
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
●Openness
●
Competitiveness
Reasonableness
●
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
Objectives of the Company's procurement activities
●Optimising the procurement management system on the basis
of best practices.
●Reducing the Company’s expenses by cutting the cost of procured
goods, works and services, including by minimising intermediary
services.
●Providing the Company with goods, works and services
of high quality at minimum cost and on time.
●
●
The Unified Procurement Standard of PJSC FGC UES (Procurement Regulations31)
17 PARTNERSHIP
is the main document that regulates the Company's procurements.
FOR THE GOALS
The following methodology underpins the Company’s procurement activities:
legal acts of the Russian Federation;
AND WELL-BEING
3 HEALTH
state procurement experience;
international best practices;
unified procurement standard of PJSC Rosseti (Regulations on procurement).
CITIES
AND COMMUNITIES
For the convenience of interaction with suppliers, procurements are made through
11 SUSTAINABLE
an electronic trading platform. The updated procurement plan with the possibility
of automatic transition to the trading platform for immediate information is published each
month on the website www.fsk-ees.ru in the For Suppliers section.
The Company holds annual meetings with major suppliers to discuss issues related
to improving interaction.
According to the results of the 2018 procurement campaign, 17,584 procurements
were completed at FGC UES for a total amount of RUB 227.1 billion,
with 7,503 suppliers involved in procurement of goods, works and services.
GRI 103-3
Procurements held on the basis of competitive tenders accounted for RUB 159.9 billion
or 70.4 % of total procurements. The economic effect from conducting procurements
was RUB 5,734,918.8 thousand.
For the procurement system
model of PJSC FGC UES,
see Appendix 1.
For more information
on procurement methods
and statistics,
see Appendix 1.
PROCUREMENTS FROM LOCAL SUPPLIERS AND SMALL
AND MEDIUM-SIZED ENTERPRISES
GRI 204-1
As procurements are made according to the region
in which the branches of
PJSC FGC UES are located, a large number of local suppliers and contractors are involved
in the procurement process, including small and medium-sized enterprises (SME).
Up to 75 % of local suppliers and contractors take part in procurements in each region.
To perform highly specialised works, companies completing such works throughout the
Russian Federation may be involved to carry out such works. For the construction and
commissioning of power facilities, new jobs are created, and workers are attracted from
among local residents and related economic sectors.
Annual open meetings are held with SMEs, partners and other related organisations
to identify the needs of SMEs, improve the competitive environment and increase the
Company's procurement efficiency.
By the Agency for Strategic
Initiatives, FGC UES came
the
TOP 5
in the loyalty rating of the largest
SME customers.
In 2014, the Partnership Programme was approved between PJSC FGC UES and small
and medium-sized enterprises,32 and a register is being kept of small and medium-sized
enterprises that have joined the Partnership Programme.
Information on the number and total value of contracts concluded
with SMEs based on procurement results for 2018
PERFORMANCE RESULTS 2018
For information about
the main areas and the volume
of procurements in the regions
in 2018, see Appendix 1.
The Road Map for Cooperation
with Small and Medium-Sized
Enterprises section is presented
on the Company's official
website: http://www.fsk-ees.ru/
suppliers/dorozhnaya_karta_po_
sotrudnichestvu_s_msp/
Procurement from SMEs
6,761
65.890
Number of contracts, units
Cost of contracts,
RUB bln incl. VAT
For further information
on cooperation with SMEs,
see Appendix 1.
31 In accordance with Part 2 Article 2 of Federal Law No. 223-FZ, Legal Basis for Procurement of Goods, Works, and Services.
32 In the context of implementation of Directive No. 867-r of the Russian Government dated 29 May 2013 on Approval of the Action Plan (Road Map) for "Expansion of Access
for Small and Medium-Sized Enterprises to Procurements Conducted by Infrastructure Monopolies and Companies Partially Owned by the State". At present, Directive No. 867-r
has been fulfilled (Directive No. 174-r of the Russian Government dated 6 February 2016).
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
83
STRATEGIC REPORT
SUPPLY CHAIN
GRI 102-9
Main types of purchased products, works and services in 2018, RUB bln
(% of the total procurement amount)
27.7 %
32.3 %
Work package, including design and as-built documentation,
construction and installation
RUB 73.3 bln
Equipment and materials
RUB 14.3 bln
Design work, R&D
RUB 4.1 bln
Repair and maintenance, operation
RUB 11.4 bln
22.2 %
5.0 %
4.7 %
6.3 %
1.8 %
Financial, legal, IT services, communication and insurance services
RUB 10.6 bln
Lease (purchase) of land plots/forest land plots and residential/
non-residential premises
RUB 50.4 bln
Other procurements
RUB 63.0 bln
REPAIRS
TECHNOLOGICAL
CONNECTION
CONSTRUCTION
AND RECONSTRUCTION
ELECTRICITY
TRANSMISSION
CONSUMERS
TOTAL NUMBER OF LEGAL ACTIONS AGAINST THE COMPANY
IN CONNECTION WITH PROCUREMENT ACTIVITIES
GRI 206-1
For information about
the claims made to the FAS,
see Appendix 1.
In 2018, 44 claims were made to the FAS of Russia. Following the results of examination
by the FAS Committee, 2 claims were found to be justified, 30 claims were declared
unfounded, 6 claims were recognised to be partially substantiated, 3 claims were withdrawn
by the applicant, and 3 claims were left undecided by the antimonopoly service.
Following the review of the information submitted by the Company, the FAS decided
to add 5 participants of procurement procedures who have avoided signing the contracts
to the register of bad-faith suppliers.
PERFORMANCE RESULTS 2018
Reliability
of energy supply
IMPORT SUBSTITUTION POLICY
PJSC FGC UES33 developed the Corporate Plan of Import Substitution in accordance with
the recommendations of the Ministry of Economic Development of the Russian Federation34
and taking into consideration the Analytical Report – Assessment of Import Substitution
Potential, Main Areas of Import Substitution, and Conditions for their Implementation
in SDCs of PJSC Rosseti until 2019, which was reviewed by PJSC Rosseti Management
Board.35
The main expected result of implementing the Corporate Plan of Import Substitution
is to increase the share of the main electrical equipment produced by domestic
manufacturers and characterised by a high share of production localisation in the territory
of the Russian Federation in the total volume of procurements of electrical equipment for
the Company's needs.
Share of domestic equipment procurements
in total procurements of PJSC FGC UES
100 %
80 %
60 %
40 %
20 %
0
91 %
85 %
70 %
2016
2017
2018
Main implementation principles of import substitution activities:
excluding the risks of reducing the security level of the electric grid complex facilities;
maintaining the quality of the main parameters of the investment projects being
implemented;
maintaining competitiveness in domestic and foreign markets for electrical equipment
(works, services), taking into consideration the parameters approved in the design
documentation (operating, cost, marketing);
preventing growth of costs as a result of changes in the chain of suppliers of certain
product types required for implementation of the investment projects, production
of goods (works, services).
84
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
85
33 Approved by Order No. 494 of PJSC FGC UES dated 28 November 2017 on Execution of the Corporate Plan of Import Substitution.
34 Methodological Recommendations for the development of Corporate Plans of Import Substitution by state corporations, state companies and joint-stock companies in which
the share of the Russian Federation exceeds 50 percent, organisations implementing investment projects included in the register of investment projects in accordance with
Decision No. 219R-AU of the Government Commission on Import Substitution of 11 August 2016, approved by the Ministry of Economic Development of the Russian Federation.
35 Minutes No. 386pr dated 14 October 2015.
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
7 AFFORDABLE AND
CLEAN ENERGY
FINANCIAL CAPITAL
8
DECENT WORK AND
ECONOMIC GROWTH
ON LAND
GRI 102-7
15 LIFE
An analysis has been prepared on the basis of the PJSC FGC UES annual accounting
indicators for 2018 according to RAS. Individual indicators are provided in accordance
with IFRS Consolidated Financial Statements and are accompanied with the corresponding
note.
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
How successful was 2018 for
the Company from a financial point of view?
In 2018, the Company demonstrated good financial results: revenue
grew by 11.2 % to RUB 240.3 billion, and profit grew by 32.6 % to RUB
56.2 billion. Credit ratings assigned by international agencies returned
to the investment level with a stable outlook. The financial position
of FGC UES ensures Company development in line with the needs
of customers and the objectives of state policy. The preservation
of positive financial results is the basis for the Company's development
and growth of shareholder profitability.
Does the Company plan to raise debt financing
or will the debt level remain the same?
The Company will both repay (redeem) the previously issued bonds
in accordance with the terms of the issue documents, and raise new
debts based on the needs of the Company. At the same time, the debt
burden levels will be maintained within the limits established by the
annual resolutions made by the Board of Directors, as well as the Credit
Policy adopted by the Company.
The list of organisations
included in the outline of the
consolidation of financial
statements is provided
in Appendix 1.
Sergey Terebulin,
Deputy Chairman
of the Management Board,
Member of PJSC FGC UES
Management Board
FINANCIAL PERFORMANCE MANAGEMENT
GRI 103-2
Economic
efficiency
The Company's financial stability and creditworthiness are ensured by means
of the following:
limiting the debt burden to levels that allow for guaranteed service and repayment
of raised debts under the valid tariff solutions;
implementing a conservative approach to financial risk management, i.e. minimising
currency risks, setting strict requirements for partner banks, using a developed system
to secure performance of obligations by contractors using bank guarantees and other
instruments;
detailed liquidity planning on different time horizons;
using various debt financing instruments that allow access to funds of the most
conservative investors, maximising the time periods for raising debts and minimising
the rates.
INDICATORS DESCRIBING THE EFFICIENCY
OF THE FGC UES FINANCIAL POLICY
GRI 103-3
In 2018, the actual return on invested capital (ROIC), as the ratio describing the return
on the Company's capital taking into account long-term loans, amounted to 3.17 %. ROIC
increased by 0.07 p.p. compared to the actual value for 2017 due to growth in the Company's
profit which indicates efficient use of the capital.
ROIC, 2014–2019, %
4.00
3.00
1.95
2.00
1.58
3.10
3.17
2.70
2.41
1.00
0.00
2014
2015
2016
2017
2018
2019
target
In accordance with the Company's Business Plan, the target return on invested capital
(ROIC) for 2019 is 2.41 %. The dynamics relative to the actual value for 2018 is associated
with the projected increase in uncontrolled costs for the provision of electricity transmission
services (including, due to the fulfilment of the Instruction of the Russian Government
for Consolidation of JSC DVEUK Energy Assets).
The current liquidity indicators are within the standard values proving the issuer's capability
to repay its short-term liabilities using its working assets.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
87
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
The interest coverage ratio demonstrates uneven dynamics due to the fact that
the majority of the credit portfolio is comprised of floating rate bonds with the rates calculated
on the basis of the inflation index (CPI). Inflation growth in 2014–2015 had an impact
on interest payments. Since 2016, the coverage ratio has been increasing as the interest
payments of the Company decrease.
Indicators of financial sustainability of FGC UES
2014–2019
Interest cover ratio 2014–2019
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2.12
0.37
1.53
1.92
1.87
0.33
2.22
0.39
1.03
1.74
0.31
1.19
1.64
1.37
0.23
2014
2015
2016
2017
2018
2.5
1.79
2
1.5
1
0.5
0
0.23
1.03
2019
target
10
8
6
4
2
0
9.25
7.84
7.1
4.5
4.3
3.4
2014
2015
2016
2017
2018
2019
target
Debt to equity ratio
Net debt to EBITDA ratio
Current liquidity ratio
DYNAMICS OF KEY FINANCIAL INDICATORS
The dynamics of PJSC FGC UES financial indicators describe the financial state
and efficiency of the Company.
In RUB bln
2014
2015
2016
2017
2018
actual
2018/2017
change, %
2019
target
Forecast
2020
2021
2022
2023
Revenue
Cost
Net profit
Adjusted
EBITDA*
Cash flow from
current activities
Net debt
168.9
173.3
218.4
216.0
240.3
11.2 % 234.3
239.9
232.9
250.7
246.3
132.5
134.9
140.0
152.4
170.8
12.1 % 180.1
184.5
192.0
200.8
206.4
5.1
17.9
106.1
42.4
56.2
32.6 %
35.3
33.5
19.1
25.5
18.6
99.6
103.7
119.7
129.3
129.0
–0.2 % 117.8
117.9
118.8
120.4
123.3
101.0
99.1
101.1
120.7
127.4
5.6 % 121.6
130.3
133.4
141.1
145.7
221.1
220.3
229.9
224.7
209.5
–6.78 % 210.4
219.4
226.8
227.7
225.7
* Excluding operations for the accrual and restoration of provisions for doubtful debts, financial performance related to the sale of and change in the cost of quoted business
assets, and revenues from technological connection.
REVENUE
Revenue structure, 2014–2018, RUB bln
213.6
2018
2017
2016
2015
2014
192.6
171.1
159.0
159.9
12.4 1.88
173.3
7.0 2.06
168.9
24.3
2.37
240.3
21.4
2.03
216.0
45.5
1.75
218.4
Revenue from
electricity
transmission services
Revenue from
technological
connection services
Revenue from
other activities
100.0
150.0
200.0
250.0
In 2018, the Company's revenue increased by RUB 24.3 billion (up 11.2 %) against 2017
due to growth in revenue from certain types of activities:
revenue from electricity transmission services increased due to growth in revenue from
compensation of standard technological losses of electricity (due to cancellation of
the load loss compensation mechanism as of 1 July 2017 by the Resolution No. 810
of the Russian Government dated 7 July 2017) and increased revenue from electricity
transmission caused by tariff growth;
revenue from technological connection services increased due to changes in the service
schedule determined according to consumer applications.
COSTS
Structure of full production
cost in 2018, RUB bln
Purchase of electricity
and capacity
Labour and social expenses
Dynamics of full production cost,
2014–2018, RUB bln
91.4
38
Other production expenses
Administrative expenses
Depreciation and property tax
(production assets)
179.3
160.6
140.3
142.8
148.1
179.3
22.9
18.4
8.5
2014
2015
2016
2017
2018
The main reasons for changes in the cost of sales in 2018 against 2017 are as follows:
increase in the cost of electricity and capacity acquisition caused by changes in
statutory regulation (due to cancellation of the load loss compensation mechanism as
of 1 July 2017 by Directive of the Russian Government No. 810 dated 7 July 2017);
increased costs for electricity transit services;
increase in real estate property tax costs due to phased cancellation of privileges with
respect to the electric grid facilities and cancellation of tax on movable assets privileges;
the growth in administrative costs amounted to 2.9 % due to the inflation factor.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
89
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
COST MANAGEMENT PROGRAMME
CASH FLOW
The Company has developed a programme to improve investment and operating efficiency
and reduce costs of PJSC FGC UES, which has been approved as part of its Business Plan
2018–2022.
Reduction of unit operating costs for 2018 compared to 2017 was 10.6 % (in comparable
prices) and exceeded the target value (2.0 %).
EBITDA AND PROFIT
Adjusted EBITDA for 2018 decreased by RUB 0.3 billion (–0.2 %) compared to 2017 and
amounted to RUB 129.0 billion. This result was caused by a decrease in revenues in the
form of penalties recognised on the basis of enforcement orders. Excluding this factor, the
increase in adjusted EBITDA was 2.3 % (RUB 2.9 billion).
129.0
–78.6
Formation of profit, RUB bln
Profit per share, RUB
24.3
–0.1
73.4
–17.2
0.0832
–3.9
–2.7
5.0
0.5
56.2
+32.8 %
0.0441
0.0332
0.01402
0.00404
2014
2015
2016
2017
2018
Interest
payable
Adj.
EBITDA*
Depreciation
and amortisation
Balance of changes in the
Balance of re-evaluation
Balance
cost of financial assets
of the cost of fixed assets
of the reserves
(including re-evaluation)
Write-off of overdue
Profit from TC
accounts payable
Profit before
taxation
Profit and
adjustment taxes
Net profit
In 2018, the net profit amounted to RUB 56.2 billion, up 32.6 % against 2017.
Non-cash transactions had a great impact on this financial result.
* Excluding operations for the accrual and restoration of provisions for doubtful debts, financial performance related to the sale of and change in the cost of quoted business
assets, and revenues from technological connection.
RUB bln
Net profit
Reserve balance
2017
2018
Dynamics 2018/2017
42.4
56.2
32.5 %
1.4
–2.7
–2.90
Balance of changes in the value of financial assets
–7.5
5.0
+1.7х
Write-off of overdue accounts receivable
–0.016
–0.091 –5.7х
Revaluation of fixed assets
Adjusted net profit**
Profit from technological connection
Adjusted net profit excl. technological connection
1.9
0.5
46.6
53.5
19.3
22.8
27.3
30.7
–72.9 %
14.8 %
18.1 %
12.5 %
** Profit secured by cash funds (excluding operations for the accrual and restoration of provisions for doubtful debts, financial performance related to the sale of and change
in the cost of quoted business assets, and revaluation of fixed assets).
CAPEX
For more information
on the Company's capital
expenditures, see section
Investment Activities.
Electricity transmission is a capital-intensive business and many of the Group's production
facilities are outdated and require regular maintenance and upgrading. Therefore, the
costs on maintaining, expanding and increasing the efficiency and size of the electricity
transmission grid represent a priority for the Company and have a significant effect on the
cash flows and future operating results.
Cash flow, RUB bln excl. VAT
2014
2015
2016
2017
2018
Cash flow balance
Cash flow balance
from current operations
Cash flow balance
from investments
Cash flow balance
from financial operations
22.1
–17.5
14.0
–2.6
–1.6
101.0
99.1
101.1
120.7
127.4
–53.8 –132.6
–57.1
–96.3
–99.8
–25.0
16.0
–30.0
–27.0
–29.3
For information about
the formation of cash flow,
see Appendix 1.
In 2018, the Company did not use means of state support in the form of subsidies or budget
investments.
PROFIT DISTRIBUTION AND DIVIDEND POLICY
its dividend policy,
When developing
FGC UES
is guided not only by strict
observance of the legal requirements, but
also by the necessity to ensure an optimal
interests,
balance between shareholder
the Company’s
needs,
and the need to enhance its investment
attractiveness and capitalisation.
development
The principles of the Company's dividend
policy are set in the Regulations on Dividend
Policy of PJSC FGC UES approved by
the Board of Directors.
Before May 2018, the Regulations on
Dividend Policy of PJSC FGC UES approved
by the PJSC FGC UES Board of Directors
Dividend yield of the most capitalised
and liquid shares of companies of the Russian
electric power sector (MOEXEU Index)*
10.00 %
9.14 % 8.78 %
6.33 %
3.83 % 3.61 %
were effective at PJSC FGC UES (Meeting
Minutes No. 120 dated 16 December 2010).
In May 2018, the Company's Board of
Directors36 approved a new version of the
Regulations on Dividend Policy
taking
into account the decision of the Russian
Government37 and certain recommendations
of the Corporate Governance Code in terms
of determining the size of the dividend
accounting for at least 50 % of net profit38
according to financial statements, including
consolidated financial statements, compiled
in accordance with International Financial
Reporting Standards (IFRS).
The Regulation on Dividend
Policy of PJSC FGC UES is
available on the website
at www.fsk-ees.ru/eng in
section Investors/Corporate
Governance/Corporate
Documents, http://www.
fsk-ees.ru/eng/investors/
corporate_governance/
corporate_documents/.
Amount of dividend
per share, RUB
0.0159
0.0143
0.0133
0.0180
0.0160
0.0140
0.0120
0.0100
0.0080
0.0060
1.46 %
0.0040
Unipro
Mosenergo
O
A
Inter R
RusHydro
Rosseti
0.0020
0.0000
0.0007
for 2014
for 2015
for 2016
for 2017
For more information
on the dynamics of PJSC
FGC UES shares and total
shareholder return (TSR),
see section Share Capital,
Securities Trading.
* Dividend yield was calculated as the ratio of dividends paid in 2018 per share to the value
of shares at the beginning of 2018.
8.00 %
6.00 %
4.00 %
2.00 %
0.00 %
C UES
C FG
PJS
In 2018, the dividend yield of PJSC FGC UES shares amounted to 9.14 %. This was one
of the highest indicators among all enterprises in the sector.
36 Resolution of the Board of Directors, Minutes No. 406 dated 30 May 2018.
37 Directive of the Russian Government No. 1094-r dated 29 May 2017.
38 The amount was calculated taking into account the adjustment of net profit in accordance with Decree No. 1094-r of the Russian
Government dated 29 May 2017.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
91
PERFORMANCE RESULTS 2018
Date
of last rating review
12 July 2018
29 January 2018
3 August 2018
Stable
27 November 2018
CREDIT RATINGS
international rating agency Standard & Poor's upgraded the rating
In 2018, the
of PJSC FGC UES to BBB- following the upgrade of the rating of the Russian Federation.
The Company's credit ratings assigned by international rating agencies Moody's and Fitch
Ratings based on their global scales have not changed and remain at the sovereign level.
At the same time, Fitch Ratings revised the credit rating outlook of PJSC FGC UES from
Positive to Stable due to the change in criteria for assigning ratings to companies partially
owned by the state.
Rating
agency
Standard & Poor’s
Moody’s
Fitch Ratings Ltd
ACRA
International scale rating
National scale rating
Rating
ВВВ–
Ва1
ВВВ–
–
Forecast
Rating
Forecast
Stable
Positive
Stable
–
Withdrawn
Withdrawn
Withdrawn
ААА (RU)
–
–
–
TARIFF REGULATION
GRI 103-2
PJSC FGC UES carries out regulated activities
to provide electricity transmission services
through the UNEG, power distribution grids
(DGC facilities), technological connection
to electric grids, and other non-regulated
activities.
The main activities of FGC in the provision
of electricity transmission services through
technological
UNEG and services
connection to UNEG are carried out in
accordance with the tariffs approved by
the federal executive authority in the field
for
of tariff regulation. The functions of state
regulation of tariffs for the services rendered
by PJSC FGC UES have been delegated to
the Federal Antimonopoly Service.
for
The FAS of Russia has determined two
payment methods
technological
connection to the UNEG facilities: approval
of individual payment for a specific applicant
(if construction of electric grid facilities
is required) and approval of payment per
formula using the standard tariff rate C1.
STRATEGIC REPORT
Dividend History of PJSC FGC UES
2015
(for 2014)
2016
(for 2015)
2017
(for 2016)
2017
(for Q1 2017)
Total dividends, RUB mln
847.4
16,976.6
18,184.8
1,423.1
2018
(for 2017)
18,884.7(1)
Dividend per share, RUB
0.0006647883
0.0133185
0.0142663525
0.0011164730
0.014815395834
Dividends
(% of net profit as per RAS)
25 %(2)
95 %
50 % (of
the adjusted net
profit as per RAS)
–
50 %(3) (of
the adjusted net
profit as per RAS)
Date of declaration
26 June 2015
29 June 2016
29 June 2017
29 June 2017
28 June 2018
Date of actual payment
Balance of unpaid dividends6
(as of 31 December 2018),
RUB mln
30 July 2015(4)
20 August 2015(5)
25 July 2016(4)
15 August 2016(5)
2 August 2017(4)
23 June 2017(5)
2 August 2017(4)
23 August 2017(5)
1 August 2018(4)
22 August 2018(5)
3.2
61.9
66.9
5.3
75.05
(1) Excluding dividends for Q1 2017.
(2) Including dividends paid for Q1 2014.
(3) Including dividends paid for Q1 2017.
(4) To nominee holders and trustees.
(5) To other persons registered in the PJSC FGC UES shareholder register.
(6) Dividends were paid in full to all the persons registered in the Company's shareholder register, except for those who had not promptly informed the register-keeper
on changes in their data, and whose dividend payment details were incorrect.
For more information about
the Minutes of Annual General
Meetings of Shareholders
in which decisions to pay
dividends were made,
see Appendix 1.
DEBT OBLIGATIONS
As of 31 December 2018, the debt portfolio of PJSC FGC UES amounted to RUB 243.9 billion
compared to RUB 254.3 billion as of 31 December 2017.
In 2018, bonds of 19 series (RUB 20 billion) and 15 series (RUB 0.31 billion) were redeemed,
while bonds of 001P-01R series were placed in the amount of RUB 10 billion under the
Exchange Bond Programme.
Debt obligations structure, 2014–2018 RUB bln*
86.2
96.5
103.9
117.1
140
17.5
140
17.5
140
17.5
140
17.5
140.3
100
17.5
2018
2017
2016
2015
2014
0
50
100
150
200
250
300
* Principal debt, excluding interest accrued as of the balance sheet date.
Debt obligations
Infrastructure
obligations
Euro obligations
30
25
20
15
10
5
0
For more information
about the Company's
outstanding bond issues,
see Appendix 1.
27.8
Schedule of payment of debt obligations for
the next five years, RUB bln
19.4
20
19
17
2019
2020
2021
2022
2023
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
93
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
TARIFFS FOR ELECTRICITY TRANSMISSION SERVICES
transmission
Since 2010, the tariffs for the Company's
electricity
via
the UNEG have been set on the basis
of the return on invested capital method
(RAB regulation).
services
In order to establish the tariffs for each year
of the regulated period, the required gross
revenue (RGR) is determined by summing
up the return values, the return on invested
capital, and the expenses required for
provision of electricity transmission services
via the UNEG. To prevent sharp increase
in tariffs, the RAB regulation method
provides for a smoothing mechanism that
redistributes the required gross revenue
over the years throughout the entire long-
term regulation period.
Tariffs for electricity transmission services via the UNEG for 2015–2019, RUB/MW·month39
From 1 January
2015 until
30 June 2015
From 1
July 2015 until
30 June 2016
From 1
July 2016 until
30 June 2017
From 1
July 2017 until
30 June 2018
From 1
July 2018 until
30 June 2019
From 1
July 2019 until
31 December
2019
134,589
144,687
155,542
164,096
173,164
182,698
52,923
56,869
61,138
64,402
67,955
71,691
Tariffs for electric power
transmission services via
the UNEG
Tariffs for electric power
transmission services
via the UNEG for the
constituent entities of
the Russian Federation
forming part of the North
Caucasian Federal District
The main long-term regulatory parameters established by FTS of Russia for the second long-term regulation period
2015–2019
Rate of return on capital invested, %
Base level of operating expenditures, RUB mln
Operating expenses efficiency index, %
Net working capital, RUB mln
Period of return of capital invested, years
2015
2016
2017
2018
2019
10 10
10
10
10
35,023
–
–
3.0
–
3.0
–
3.0
–
3.0
11,417 11,919
12,432
12,967
13,524
35 35
35
35
35
For information about tariff regulation, control of reliability and quality of services, tariffs for UNEG technological connection services,
as well as the list of main regulatory acts governing tariff setting and electricity transmission via the UNEG, see Appendix 1.
39 As of 1 July 2015, the tariff rate for standard technological losses of electricity in the course of electricity transmission via the UNEG is determined by the formula in accordance
with Resolution No. 458 of the Russian Government dated 11 May 2015.
CONSOLIDATED INFORMATION ON FINANCIAL
PERFORMANCE UNDER IFRS
RUB bln, except for the ratios and indicators given in %
2014
2015
2016
2017
2018
Consolidated statement indicators of profit and loss and other comprehensive income
Revenues from core activities
Other operating income
Operating expenses
Profit/(loss) for the year
Financial information not regulated by IFRS
EBITDA(1)
Adjusted EBITDA(2)
Adjusted profit for the period(3)
Coefficients and other indicators
Return on assets(4)
Return on equity(5)
Current liquidity ratio(6)
176.0
187.0
255.6
242.2
5.6
4.0
6.0
6.4
254.0
6.5
(126.1)
(131.0)
(155.5)
(135.5)
(155.8)
(20.6)
44.1
68.4
87.8
92.8
25.8
98.1
120.3
131.5
140.5
107.7
104.4
116.7
129.5
133.6
40.8
46.4
86.6
98.8
91.0
4.4 %
7.3 %
4.8 %
7.8 %
8.4 %
13.2 %
9.0 %
13.6 %
7.8 %
11.4 %
0.93
1.22
1.19
1.18
1.62
Total equity/total assets ratio
0.61
0.62
0.66
0.67
0.69
Total debt
Short-term debt
Long-term debt
Net debt(7)
Net debt/adjusted EBITDA
Cash flow from operating activities
263.0
281.5
266.7
257.9
246.8
29.7
31.5
29.7
24.0
22.2
233.3
250.0
237.0
233.9
224.6
220.1
222.9
221.8
215.4
205.4
2.0
2.1
1.9
1.7
1.5
93.0
98.0
111.5
120.8
124.1
(1) EBITDA is profit / (loss) for the period before taxes, financial income and expenses, and depreciation.
(2) Adjusted EBITDA for 2017–2018 was calculated as EBITDA (profit for the period before income tax expenses, financial income and costs, and depreciation) after deduction
of reversal / (accrual) of the net loss from depreciation of fixed assets, revenue from technological connection, costs for creation of provisions for expected credit losses
and doubtful debts, loss from derecognition of the subsidiary (only for 2017), changes in the provision for legal claims and taking into account financial income.
Adjusted EBITDA for 2015–2016 was calculated as EBITDA after the deduction of net loss from depreciation and revaluation of fixed assets, gain on derecognition of the
subsidiary (only until 2016), revenue from technological connection, cost of creating provisions for doubtful debts (excluding the depreciation amount of the accounts receivable
calculated as a difference between the book value of the accounts receivable and the present value of the estimated future cash flows), and taking into account financial income.
Adjusted EBITDA for 2014 was calculated as EBITDA after deduction of net loss from depreciation and revaluation of fixed assets, devaluation of the financial investments
available for sale, devaluation of the short-term notes, reversal of impairment loss from devaluation of investments into associated companies, and taking into account financial
income.
(3) Adjusted profit for the period was calculated as the profit for the period after deduction of the net loss from depreciation of fixed assets, loss and gain on derecognition of the
subsidiary, revenue from technological connection, including the respective amounts of the deferred income tax (except for the deferred income tax on technological connection).
Adjusted profit for 2015–2016 was calculated as the profit for the period after deduction of net loss from depreciation and revaluation of fixed assets, gain on derecognition
of the subsidiary (only until 2016), including the respective amounts of the deferred income tax.
Adjusted profit for 2013–2014 was calculated as the profit/(loss) for the period after deduction of depreciation of fixed assets, loss from revaluation of fixed assets, devaluation
of the financial investments available for sale, reversal of impairment loss from devaluation of the investments into the associated companies, impairment of the short-term
notes, including the respective amounts of the deferred income tax.
(4) The return on assets was calculated as the adjusted profit for the period divided by the average of the total assets for the period.
(5) The return on equity was calculated as the adjusted profit for the period divided by the average of the total equity for the respective period.
(6) The current liquidity ratio was calculated as the total current assets divided by total current liabilities.
(7) Net debt represents long-term and short-term debt net of cash and cash equivalents, short-term bank deposits and short-term notes.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
95
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
STRATEGIC REPORT
INTELLECTUAL CAPITAL
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
CONSUMPTION
AND PRODUCTION
Intellectual capital is made up of the Company's intangible assets, such as knowledge,
Intellectual capital
scientific development,
12 RESPONSIBLE
management involves preserving and enhancing accumulated professional knowledge,
developing new technologies and improving existing ones, conducting R&D works and
patenting development results.
intellectual property.
technology and
17 PARTNERSHIP
FOR THE GOALS
Reliability
of energy supply
MANAGEMENT OF INNOVATIVE ACTIVITIES
GRI 103-2
3 HEALTH
AND WELL-BEING
INNOVATIVE DEVELOPMENT PROGRAMME
The Innovative Development Programme of PJSC FGC UES was adopted for 2016–2020
11 SUSTAINABLE
with an outlook until 202540 (the Programme), the parameters of which correlate with the
parameters of the Long-Term Development Programme.
CITIES
AND COMMUNITIES
During the Programme development, the current technological and investment condition
of FGC UES was analysed; a market and technologies development forecast was prepared
for industries in which the Company operates or will operate; and a SWOT analysis was
performed. The results were integrated into the Programme.
The Company's innovative development strengths:
demand for innovative products and organisational innovations in the Company;
availability of production capacities to introduce innovative products;
tailored innovative development management system;
long-term experience in implementation of innovative projects;
availability of a resource base suitable for introduction of modern and energy-efficient
equipment taking into account cost minimisation requirements;
a system of higher professional training and professional development for personnel
to ensure the level required for implementation of innovative projects.
40 Approved by decision of the Board of Directors of PJSC FGC UES, Minutes No. 328 of June 28, 2016. The revised programme
was approved by decision of the Board of Directors of PJSC FGC UES, Minutes No. 370 dated 7 June 2017.
96
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
KEY OBJECTIVE OF INNOVATIVE DEVELOPMENT
The Programme stipulates the following objectives achievable using new methods,
technologies and practices:
achievement of worldwide average rates of reliability, safety, quality, efficiency, and
availability of electricity for consumers;
advancement of a customer-oriented approach within FGC UES;
development, testing and provision for commercial (batch) introduction of innovative
equipment and practices;
transition of the Company to the “adaptor” model of innovative market solutions and
technologies;
improvements in the system of interaction with innovative ecosystem subjects within
the industry;
improvement of the innovation activities management system;
formation of human resources with prospective competencies;
creation of good conditions for the development of promising scientific research,
technological operations and advanced production in the territory of the Russian
Federation.
PRIORITY AREAS FOR INNOVATIVE DEVELOPMENT
The Programme defines the priority areas for innovative development of FGC UES, respective
projects, deadlines and milestones of their implementation, technologies, and related risks.
The priority areas of Programme implementation are:
"Digital substation";
"Energy efficiency and loss reduction";
"Digital designing";
"Quality of electricity";
"Reliability and asset management";
"Composite materials and superconductivity";
"Remote control and safety".
PERFORMANCE RESULTS 2018
For more information
on the priority areas
for innovative development
of PJSC FGC UES
and Programme participants,
please see Appendix 1.
97
INFRASTRUCTURE PROJECTS
DIGITALISATION
PROGRAMME
THE WORLD ECONOMY IS UNDERGOING
A PROFOUND TRANSFORMATION. CHANGES
IN THE CONSUMER TECHNOLOGICAL PARADIGM
IMPACT REQUIREMENTS FOR THE QUALITY
OF SERVICES OFFERED BY POWER COMPANIES.
DIGITALISATION MAKES IT POSSIBLE TO CHANGE
THE PROCESS LOGICS AND TRANSITION TO RISK-
ORIENTED MANAGEMENT BASED ON DIGITAL
TECHNOLOGIES AND BIG DATA ANALYSIS.
ACTIONS TAKEN
IN PREVIOUS YEARS
FGC UES has been applying digital solutions
in accordance with IEC 61850 for over 10 years
at 196 substations. At these facilities,
the scheduled work to prevent relay
protection and automation has been
reduced from 40 hours to 8 hours.
Digital transformation is undertaken across
several areas: implementation of digital
substation technology, introduction
of telemetering and remote control, development
of technological communication network.
ACTIONS TAKEN IN 2018
FUTURE PLANS
BY 2021:
Ninety-six substations of FGC UES
will have remote control.
BY 2025:
More than 30 projects to construct digital
substations and separate 6-500 kV connections
will be implemented.
The length of the fibre optic communication
network of FGC UES will increase to 105,000 km;
all Company facilities will have digital data channels.
Software and hardware will be installed at 7 grid
control centres; design and survey work will
be completed for 28 grid control centres.
The Tobol 500 kV switching
substation in the Tyumen Region
was commissioned, which is
the first power facility in Russia
with a voltage of 500 kV
and a set of digital technologies
based on IEC 61850-9.2
Technical operations were
carried out to introduce remote
control at 18 substations.
The length of the digital
communication network
of FGC UES increased from
74,000 km to 76,500 km.
The share of substations
equipped with modern digital
information collection
and management systems grew
from 55 % to 58 %.
Automated commercial
information and metering systems
that collect digital metering
information from smart electricity
meters are installed at 100 %
of FGC UES facilities, including the
substations commissioned in 2018.
Design and survey works were
carried out to create software
and hardware for 8 grid control
centres.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
99
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
For more information
on the Innovative
Development Programme
of PJSC FGC UES, please see
www.fsk-ees.ru, Innovations/
Innovative Development/
Innovative Development
Programme.
Pavel Korsunov,
Deputy Chairman
of the Management Board
of PJSC FGC UES
The Programme will be financed mainly by the investment programme of PJSC FGC UES.
Marketing
innovations will be funded within the budget for administrative costs
of PJSC FGC UES. In the future, projects within the scope of the Programme may be
implemented jointly with venture investment participants.
INNOVATION ACTIVITY RESULTS
One of the tools to implement the Innovative Development Programme of PJSC FGC UES
is the Programme for Research, Development and Technological Works (R&D)
of PJSC FGC UES.41
Dynamics of the volume of R&D financing, 2014–2018, RUB bln
For key results of the R&D
Programme implementation
in 2018, see Appendix 1.
What are the key digitalisation projects that the
Company will implement in 2018? What is their
progress?
In 2018, the focus was made on priority scientific and development areas
related to digitalisation, namely digital substation, digital designing, and
remote control and safety.
In April 2018, the Company launched the Tobol 500 kV SS with optic
and optoelectronic 500 kV current transformers and RPA systems
supporting IEC 61850-9.2 protocol, made in Russia.
In addition, technical work was carried out to implement remote control
of switching devices at 18 SS, and design and survey work to develop
hardware and software at 8 grid control centres was completed.
Work was initiated to develop template solutions for the acceptance
and operation of digital substations using "digital doubles" information
models.
The project to create low-maintenance highly reliable facilities with
remote control at the Company involves installation of hardware and
software at 7 grid control centres, design and survey work for creation
of hardware and software at 28 grid control centres, and introduction of
remote control at 113 substations of FGC UES by 2025.
How would you characterise the level
of technological process development in FGC
as compared to foreign companies?
In accordance with applicable regulations, FGC occasionally compares
its current technological development with similar foreign companies.
According to the 2018 comparison results, the current level of the
Company's development and areas of innovative development of FGC
correspond to the key trends in leading companies in terms of applying
innovative technologies and solutions.
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
0.60
0.52
0.48
0.42
0.41
2014
2015
2016
2017
2018
approximately 600 RUB
million
were allocated by the Company
to the R&D Programme in 2018
pursuant to the investment
programme.
BUILDING AN INTELLECTUAL PORTFOLIO
AND INTANGIBLE ASSETS OF PJSC FGC UES
Within the scope of the R&D Programme implementation in 2018, 24 intellectual property
items were registered with the Federal Service for Intellectual Property (Rospatent),
including the following:
5 invention patents;
4 utility model patents;
15 software certificates.
For more information on
scientific and technical
cooperation, the corporate
standards of PJSC FGC
UES developed in 2018,
and planned innovative
development, see Appendix 1.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
101
41 Approved by Order No. 95 of 13 March 2017.
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
7 AFFORDABLE AND
CLEAN ENERGY
4 QUALITY
EDUCATION
STRATEGIC REPORT
8
DECENT WORK AND
ECONOMIC GROWTH
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
15 LIFE
ON LAND
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
NATURAL CAPITAL
ENVIRONMENTAL SAFETY MANAGEMENT
4 QUALITY
EDUCATION
17 PARTNERSHIP
FOR THE GOALS
GRI 103-2
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
3 HEALTH
AND WELL-BEING
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
11 SUSTAINABLE
CITIES
AND COMMUNITIES
FOR THE GOALS
The main directions
17 PARTNERSHIP
of the Environmental Policy
implementation as stipulated
in the Environmental Policy
Programme of PJSC FGC UES
for 2016–2019 (approved
in 2015) are presented
in Appendix 1.
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
The Company considers its environmental
activities to be an integral and important part
of its activities. FGC UES aims to minimise
adverse impact on the environment during
the course of electricity transmission and
distribution.
Environmental Policy42. This document has
been developed on the basis of principles
established by the state environmental
development policy of
the Russian
Federation and the Energy Strategy of
Russia for the period until 2030.
Environmental safety management at the
Company is governed by the Company's
The main targets for environmental protection and sustainable use of natural resources
are as follows:
compliance with the environmental protection law and the reduction of adverse impact
on the environment;
effective functioning of the environmental management system (EMS);
minimisation of adverse impact on the environment by application of innovative
solutions and the introduction of the best available technologies.
Within the programme of the Environmental Policy implementation, PJSC FGC UES
conducts technical and organisational initiatives to minimise any adverse environmental
impact caused by the Company’s production activities.
Key technical activities
Key organisational activities
●replacement of equipment containing
hazardous and toxic substances;
renovation and repair of oil receiver
and oil collector systems and devices;
construction and reconstruction of
water supply and sewage systems;
organisation of temporary waste
storage areas.
●
●
●
●development of required regulatory and technical
documentation and improvement of documentary
support for environmental protection activities;
●effective functioning of the EMS in compliance with
the requirements of ISO 14001:2015;
●improving the production and industrial environmental
control and the internal environmental audit systems
of the EMS;
●environmental training for personnel.
●
●
●
In 2018,
PJSC FGC UES has introduced, certified and
successfully operates a unified environmental
management system.
following
a compliance audit, PJSC FGC UES's
environmental management system was found
to be fully compliant with ISO 14001:2015.
In the reporting year, 31 employees completed
environmental
training;
247 employees were trained in environmental
safety.
management
What measures are being taken to ensure
innovative development in environmental safety
and the sustainable use of natural resources
by using best environmental protection practices
and technologies?
In accordance with the Environmental Policy Programme, the Company
is undertaking measures to introduce innovative solutions to facilitate
the minimisation of negative environmental impact within the scope
of the Innovative Development Programme of PJSC FGC UES for
2016–2020 with an outlook for 2025.
This area includes a number of set activities: Introduction of innovative
transformer fire-fighting systems; installation of supports with greater
hinge height, etc.
42 Approved by the Board of Directors of PJSC FGC UES on 30 September 2014.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
PERFORMANCE RESULTS 2018
Dmitry Vodennikov,
Deputy Chairman
of the Management Board –
Chief Engineer, Member
of the Management Board
of PJSC FGC UES
103
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
ENVIRONMENTAL AUDITS
GRI 103-3
For more information on the
results of IEA and inspections
by Rosprirodnadzor and
Rospotrebnadzor,
see Appendix 1.
Violations
43 %
In order to assess compliance with the requirements of environmental legislation
of the Russian Federation and the EMS, 394 production facilities were inspected
in the framework of internal environmental audits (IEA) in 2018, which is 40.7 %
of the total number of facilities operated by PJSC FGC UES. During these audits,
550 violations were issued. The majority of violations found during IEA were rectified
by the end of the reporting period.
Violations rectified
as of 31 December 2018
Fulfilled
90 %
organisational
38 %
air protection
water discharge
and water use
subsoil use
waste
management
Unfulfilled
0 %
Not yet
become due
10 %
7 %
9 %
3 %
ENVIRONMENTAL PROTECTION RESULTS
Reduction in water
consumption
Current costs of environmental
protection activities in 2018
11 %
252.7RUB mln
Due to the
to significantly reduce negative environmental
to the previous year:
implementation of environmental protection activities, FGC managed
in 2018 when compared
impact
reduction in atmospheric emission by 6 %;
reduction in water consumption by 11 %;
reduction in waste water discharges by 18 %;
reduction in waste generation by 13 %;
reduction in waste buried on disposal sites by 6 %.
In 2018, in order to monitor negative environmental impact, the Company carried out
1,341 laboratory analyses of atmospheric air quality, underground water and waste water,
and the level of physical impact.
In the reporting year, the following measures were established: 136 standards for permissible
discharges were drafted, 153 waste generation standards and waste disposal limits
were drafted, 80 standards for permissible emissions were drafted, 11 health protection
areas were designated, and 14 sanitary protection zones of drinking water sources were
designated.
To comply with the Environmental Policy and to establish documented environmental
objectives and tasks, PJSC FGC UES approved Quantitative Environmental Targets
for 2017–2019.
Environmental quantitative
target indicators
Reduction in operating equipment containing
trichlorodiphenyl by 4 % vs. previous year
A 2 % reduction in the unit volume
of waste transferred for environmental burial
and disposal was achieved in relation
to the total number of industrial facilities
of the previous year
A 2 % reduction of water consumption unit
volume by total number of industrial facilities
compared to results from the previous year
A 2 % reduction in the number of environmental
law violations were identified during
the internal environmental audit in relation
to the annual number of audited facilities from
the previous year
Number of
facilities
Absolute value
Unit value
2017
2018
2017
2018
2017
2018
Achievement of
the quantitative
environmental
target, %
–
– 33,137
21,295
–
– –35.7
960
969
6,745.40
6,338.44
7.02
6.54 –6.8
960
969
898.32
799.54
0.93
0.82
–11.83
379
394 539
550
1.42
1.39
–2.11
In 2018, PJSC FGC UES managed to achieve all set quantitative environmental targets.
On 24 March 2018, PJSC FGC UES took part in the Earth Hour worldwide movement
once again. The objective of the annual initiative is to raise public awareness about
environmental problems, climate change, the sustainable use of natural resources,
deforestation, and the declining numbers of local animal species. During the initiative,
lights that did not affect operation and safety in administrative buildings were turned
off, as well as emergency lighting at substations and other facilities.
773 of PJSC FGC UES's facilities took part in the Earth Hour initiative; the total
savings amounted to almost 11 MWh of electric power.
GRI 102-12
In 2018, following the results of the XIV All-Russian Competition Leader
of Environmental Protection in Russia 2018, PJSC FGC UES won awards in two
categories: “Best Environmental Management” and “Best Environmentally Responsible
Company in the Electric Power Industry”.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
105
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
ENVIRONMENTAL PROTECTION COSTS
The total cost of environmental protection in 2018 amounted to RUB 256.7 million,
consisting of:
capital expenditure of RUB 1.3 million;
operating expenses of RUB 252.7 million;
payments made for negative environmental impact of RUB 2.7 million.
Dynamics of changes in current
environmental protection costs in
2014–2018, RUB mln
250
200
150
100
50
0
other costs
introduction of EMS
protection of air
For more information on
payments made for negative
environmental impact,
see Appendix 1.
protection of water facilities
protection of land resources
(including management of production
and consumption waste)
EFFECTS ON THE ATMOSPHERE
AIR POLLUTANT EMISSIONS
2014
2015
2016
2017
2018
2.98
3.19
4.76
20.55
1.55
4.23
11.33
37.20
13.68
32.12
91.59
6.02
12.75
54.67
0.38
11.06
68.91
0.40
8.50
46.10
41.58
44.51
65.29
69.65
106.10
In the course of production activities at PJSC FGC UES’s branches, air pollution occurs
as a result of pollutants from stationary sources of emissions (wood/metalworking
machines, parking lots, diesel generator sets, oil-filled equipment, welding stations, etc.).
The total volume of emissions is set by calculating the maximum permissible emissions
(MPE) produced during the course of project development and are not analytically measured
since the operation of this equipment is not constant and the amount of emissions is very
small.
GRI 305-7
Dynamics of changes in volumes
of gross air emissions in 2014–2018,
tonnes
221.1
226.7
184.0
182.1
171.1
For more information
on indirect greenhouse gas
emissions, see Appendix 1.
A minor reduction in the volume of atmospheric air pollutant emissions in 2018 was
the result of taking inventory of the sources of pollutant emissions at the MPS Ural facilities
and the receipt of new permits for emissions that exclude previously rated pollutants.
2014
2015
2016
2017
2018
USAGE OF WATER RESOURCES
GRI 303-1
In the branches of PJSC FGC UES, water withdrawal for industrial and other needs
is extracted from surface and underground sources, as well as from urban water supply
and other sources. This water is subsequently used to meet technical, drinking, fire, and
technological needs.
Waste water (industrial, storm water, and technical) from PJSC FGC UES's facilities
is discharged through centralised sewerage systems and bodies of surface water.
GRI 303-1
GRI 306-1
Dynamics of changes in the volumes
of water use in 2014–2018, ths. m3
Dynamics of changes in the volumes
of water disposal in 2014–2018, ths. m3
1,160.1
1,039.9
901.1
898.3
799.5
1,094.2
992.0
490.9
432.8
373.8
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
The annual decrease in water consumption
is associated with a reduction in losses
due to the timely maintenance and repair
of water supply systems, as well as actions
taken to save water resources.
A significant reduction
in the disposal
of waste water in 2016–2018 was also
a result of the cessation of accounting for
the volume of unorganised discharges
into the surrounding
landscape, which
is excluded from the types of negative
environmental impact in accordance with
changes to the environmental legislation
of the Russian Federation.
For more information
on the Company's use
of water resources, please
see Appendix 1.
GRI 306-1
Waste water discharge
by receiving facility in 2018, ths. m3
From surface sources
14 %
86 %
From underground
sources
From centralised
water supply systems
From other sources
373.84
GRI 303-1
Water use by source
of water resources in 2018, ths. m3
1 %
9 %
30 %
799.5
60 %
Water discharge
into sewage grids
Water discharge
into surface
water facilities
In order to minimise impact on the natural environment in 2018, the following activities were carried out:
reconstruction of water supply and sewage systems at 1 production facility;
repairs and maintenance of water supply and sewage systems were performed at 243 facilities;
26 licenses for subsoil use with the purpose of underground water abstraction were received.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
107
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
WASTE GENERATION AND DISPOSAL
GRI 306-2
During the process of production activities in the branches of PJSC FGC UES (EMPS, MPS),
more than 80 kinds of hazard class I-V production and consumption wastes are formed.
This waste is transferred to special licensed organisations for processing, secondary
processing, use and disposal at special sites.
FGC strives to operate in such a way as to ensure a stable reduction in waste generation and
to dispose waste in the safest and most sustainable ways.
Waste classification Most common waste types
Total waste generated, including:
Hazard class I
Spent mercury and fluorescent lamps.
Hazard class II
Spent lead batteries and accumulated sulfuric acid.
Hazard class III
Spent car filters, transformer, transmission and motor oils, waste paint and varnish products.
Hazard class IV
Repair and construction waste, sweeping debris from industrial facility territories, absorbent
materials contaminated by oils, office equipment waste, worn clothing, used tires.
Hazard class V
Spent porcelain insulators and tires, scraps of ferrous metals, concrete product waste, waste of
insulated wires and cables, wood waste, logging waste such as branches, polyethylene waste,
paper waster and cardboard.
Total waste disposed of, including:
Transferred to specialised organisations for decontamination, secondary treatment and recycling.
Transferred to specialised organisations for burial at disposal sites.
2018,
ths. t
9.6
0.4
0.0
0.3
4.3
4.6
9.6
3.3
6.3
Dynamics of changes in the volumes of waste by means of its management
in 2014–2018, ths. tonnes
Transferred to specialised
organisations for burial disposal
sites
Transferred to specialised
organisations for secondary
treatment, recycling and
decontamination
15
12
9
6
3
0
8.2
7.2
6.8
5.9
6.5
6.3
6.7
4.3
6.3
3.3
2014
2015
2016
2017
2018
The annual decrease in the volume of generated waste is primarily a result of a reduction
in the scope of reconstruction and technical refurbishment work carried out at electric grid
facilities. To achieve more sustainable waste handling, the following activities were carried
out in 2018:
repairs and maintenance of oil receiver and oil collector systems and devices were
performed at 245 facilities;
reconstruction of oil receiver and oil collector systems and devices at 3 facilities;
sites for temporary waste storage were arranged at 79 facilities;
14,333 capacitors containing trichlorobiphenyl, with a total weight of 628.8 tonnes,
were handed over to specialised organisations for treatment/disposal.
Total waste by hazard class in 2018
Dynamics of changes in the volumes of waste generated
in 2014–2018, ths. tonnes
CONSERVATION OF BIODIVERSITY
GRI 304-2
0 %
4 %
3 %
48 %
14.3
13.6
13.1
11.0
9.6
2014
2015
2016
2017
2018
45 %
Hazard class I
Hazard class II
Hazard class III
Hazard class IV
Hazard class V
The activities of PJSC FGC UES do not have a significant impact on the biodiversity
of protected natural zones or other areas that are significant from the point of view
of biodiversity outside of protected natural zones. In the course of PJSC FGC UES's
operation, no cases of animal habitat relocation and/or damage were observed.
The impact of the backbone transmission lines of power companies on biodiversity has not
been thoroughly studied yet.
In accordance with the Regulation on Uniform Technical Policy in the Electric Grid Complex,
PJSC FGC UES has taken necessary measures to reduce the impact that electric grid
facilities have on biodiversity:
restriction of industrial and construction activities in areas of special conservation
interest;
taking management and investment decisions with account of the assessment
of environmental impact, and developing measures aimed at mitigating and eliminating
negative environmental impact;
use of innovative materials and technologies that ensure compliance with environmental
requirements and minimise negative environmental impact.
108
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
109
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
For more information on the
location of PJSC FGC UES's
production sites on protected
territories, please
see Appendix 11.
For more information
on species in the Red List
of the International Union
for the Conservation of Natural
Resources and the Red Book
of the Russian Federation
whose habitats are located
on the territory affected by
the activities of PJSC FGC UES,
please see Appendix 10.
In its activities, PJSC FGC UES uses:
high towers with conductors located above the crowning branches of valuable trees;
implementation of activities to provide animal protection on electric grids (installing
special devices in OTL bars to prevent birds from nesting on the bar elements, usage
of bird scarers and bird protection devices to prevent animals from entering the territory
of substations and getting into units and devices, etc.).
GRI 304-4
The total number of species in the Red List of the International Union for the Conservation
of Natural Resources and the Red Book of the Russian Federation whose habitats are
located on the territory affected by the activities of PJSC FGC UES, amount to 258 species,
including 121 animal species, 125 plants, and 12 mushrooms.
In 2018, a number of measures were implemented to conserve biodiversity and to recover
the population of certain plant/animal species:
installation of 59,247 bird protection devices on OHL;
compensatory planting of linden seedlings over an area of 0.5 ha;
regeneration of natural resources over an area of 6,482.67 ha;
the number of juvenile fish released: 21,575.
The oriental white stork (Ciconia boyciana Swinhoe) lives in the Far Eastern region
of Russia that belongs to the operations area of PJSC FGC UES's branch Eastern MES.
It is one of the rarest species of animals in the world and is classified as an endangered
species according to International Union for Conservation of Nature and Natural
Resources. Since 2007, activities for preserving the habitat of the oriental white stork
in the Amur Region and Khabarovsk Region have been conducted by the Company
for over 10 years. On the breeding ground areas of birds, bird scare devices were
installed on OTL bars, artificial nesting areas for breeding were established, and other
approaches were carried out to adjust the stork's habitat. In the reporting year, efforts
were continued to preserve the habitat of oriental white storks; protection structures
were erected to protect birds from death on HV lines at Amur EMPS in the catchment
basin of the Amur and Zea rivers in the Amur Region.
ENERGY SAVING AND ENERGY
EFFICIENCY IMPROVEMENT
GRI 302-4
5,914 t of fuel oil
equivalent
operational benefit of measures
to reduce energy/fuel consumption
for 2018.
2018,
In
continued
the Company
to implement the PJSC FGC UES Energy
Saving and Energy Efficiency Programme
for 2015–201943 (the Energy Saving and
Energy Efficiency Programme).
Energy Saving and Energy Efficiency
Programme Goals:
to ensure savings and rational use of
fuel and energy resources and reduce
consumption of electricity for corporate
needs during electricity transmission
via UNEG grids by improving the energy
efficiency of the Company’s facilities
and equipment;
to put in place a system of electric power
management and the certification of
operations based on the requirements
of ISO 50001:2011 Energy Management
Systems. Requirements and Guidelines;
to improve the energy efficiency
of the Company’s electric grid facilities
and equipment.
62.20 RUB mln
excl. VAT
economic benefit of measures
to reduce energy/fuel consumption
for 2018.
PJSC FGC UES operates its energy management
system in compliance with ISO 50001:2011
Energy Management Systems. Requirements
2017,
In
and Guidelines.
an independent external audit was conducted,
and
system
of PJSC FGC UES and all of its branches was
certified for compliance with ISO 50001:2011.
energy management
December
the
In October–November 2018, a successful
annual (external) compliance audit of the
energy management system was conducted
for the first time at the Executive Office
of PJSC FGC UES, as well as at the branches
of MPS Siberia, MPS Volga and MPS East
(ISO 50001:2011). Following
the audit,
compliance with
ISO 50001:2011 was
confirmed.
43 Excerpt from Meeting Minutes No. 1326/2 of the Management Board of 4 August 2015. The energy saving and energy efficiency
programme was updated in accordance with Order No. 525-e of the FTS of Russia dated 26 March 2015 on Amendments of Order
No. 508-e of the FTS of Russia dated 26 March 2014 on Requirements for the Energy Saving and Energy Efficiency Programme
of JSC FGC UES for 2015–2017, and Order No. 398 of the Ministry of Energy of Russia dated 30 June 2014 on Approval of the
Requirements to the Form of Energy Saving and Energy Efficiency Programmes of Entities with a Public Share and Municipal Units,
Organisations Engaged in Regulated Activities, and Progress Reporting.
7 AFFORDABLE AND
CLEAN ENERGY
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
8
DECENT WORK AND
ECONOMIC GROWTH
17 PARTNERSHIP
FOR THE GOALS
15 LIFE
ON LAND
3 HEALTH
AND WELL-BEING
EDUCATION
For more details on the Energy
Saving and Energy Efficiency
Programme of PJSC FGC UES
for 2015–2019, please see
11 SUSTAINABLE
4 QUALITY
the website
www.fsk-ees.ru, section About
Company/Innovations/Energy
Efficiency.
9 INDUSTRY, INNOVATION
CITIES
AND COMMUNITIES
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
CITIES
AND COMMUNITIES
For details on measures taken
11 SUSTAINABLE
to reduce the consumption
of electricity, thermal energy,
resources, and POL, please
see Appendix 1.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
111
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
7 AFFORDABLE AND
CLEAN ENERGY
HUMAN CAPITAL
8
DECENT WORK AND
ECONOMIC GROWTH
Human capital consists of the competence of employees, their abilities and experience,
15 LIFE
as well as their motivation to contribute to the implementation of the Company’s strategy
and to introduce innovation. Managing human capital consists of:
ON LAND
professional development of employees;
continuous work with the personnel reserve and the labour market;
availability and development of a system for motivating and supporting staff.
4 QUALITY
EDUCATION
PERSONNEL MANAGEMENT
GRI 103-2
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
The strategic aim of FGC in personnel management is to achieve a balanced staff
management system, to optimise the use of human resources, to satisfy the social
and material needs of employees, and to provide continuous development, training
and engagement to ensure the efficient achievement of the Company's goals.
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
The key areas of HR management within the scope of digital transformation:
FOR THE GOALS
efficient management of power grid facilities with high levels of process automation,
advanced information and process control systems, modern equipment and next
generation communication technologies;
17 PARTNERSHIP
ensuring the availability of qualified personnel for remote substation control, process
automation, and the use of digital technologies and equipment in the electric grid
complex.
AND WELL-BEING
In addition, the HR policy of PJSC FGC UES includes management of the following three
3 HEALTH
aspects: the efficiency, number and development of personnel.
The Company uses modern methods and tools for the management and development
of its staff, including integrated IT solutions.
CITIES
AND COMMUNITIES
GRI 102-16
11 SUSTAINABLE
PJSC FGC UES has a Code of Corporate Ethics and Employee Conduct in place. The Code
promotes the formation of shared positive behaviour as a team, corporate values, reliability
consolidation of the shareholders, investors, creditors and other stakeholders in the
Company, development of open and trusted relationships between the state, its entities and
its citizens with the Company, enhanced efficiency of staff performance, and preservation
and development of the process, production and scientific potential of FGC UES.
The Code of Corporate Ethics
and Employee Conduct
of PJSC FGC UES is a set
of general principles, norms
and rules of professional ethics
and corporate conduct
to be adhered to by all Company
staff, irrespective of their
position in the Company.
For details on the Code,
please browse
http://www.fsk-ees.ru, section
Staff/Code of Corporate Ethics.
The energy performance certificate of
PJSC FGC UES was registered with the
Ministry of Energy of Russia under No.
21435/E-010/2017 following the mandatory
inspection results for 2017.
Substation project. This project will result
not only in technological and economic
benefits, but will also allow a reduction
in the consumption of electricity for the
company's needs.
PJSC FGC UES implements pilot projects
for energy saving and energy efficiency
improvement. For instance, the Company
has been implementing the Energy Saving
The Energy Saving and Energy Efficiency
Programme of PJSC FGC UES
for
2020–2024 has been prepared and
approved.44
For details on measures taken
to reduce the consumption
of electricity, thermal energy,
resources, and POL, please
see Appendix 1.
Technological effect
In physical terms
Tonnes of fuel
oil equivalent
Economic effect,
RUB mln
(excl. VAT)
For more information on the
amount of energy resources
consumed by the Company
in 2018, please
see Appendix 1.
Measures to reduce
electricity losses
46,750.3 ths. kWh
5,750.3
Measures to reduce resource
consumption for internal
needs
914.3 ths. kWh
1.68 ths. Gcal
45.95 ths. litres of POL
164.0
Total
–
5,914.3
55.9
8.3
64.2
44 Meeting Minutes No. 1598/2 of the Management Board of PJSC FGC UES of 10 December 2018.
112
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
113
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
RESULTS OF THE IMPLEMENTATION OF THE PERSONNEL
POLICY
NUMBER AND QUALIFICATION OF EMPLOYEES
GRI 102-7, 103-2
For more information on staff
strength of the Company
as of 31 December 2018,
please see Appendix 1.
The average number of personnel at PJSC FGC UES in 2018 was 22,052, which is 1 % more
than in the previous year.
GRI 103-3, 401-1
Active employee turnover in 2018 was 4.64 %. The staffing indicator has traditionally
remained at a high level and, as of 31 December 2018, was 96.7 %.
Average number of employees,
2014–2018, people
9 %
4 %
Distribution of PJSC FGC UES
employees by branch in 2018
9 %
25,000
20,000
15,000
10,000
5,000
0
24,362
23,358
22,150
21,876
22,052
15 %
11 %
2014
2015
2016
2017
2018
Active labour turnover
2014–2018
10 %
8 %
6 %
4 %
2 %
0 %
11 %
9 %
8.66 %
6.50 %
4.92 %
5.20 %
4.64 %
2014
2015
2016
2017
2018
21 %
11 %
Executive Office
MPS Centre
MPS North-West
MPS Volga
MPS South
MPS Ural
MPS Siberia
MPS West Siberia
МPS East
PJSC FGC UES' staffing level 2014–2018
Personnel structure by category, %
98.0 %
97.5 %
97.0 %
97.2 %
96.7 %
96.7 %
96.5 %
96.7 %
96.0 %
96.4 %
2014
2015
2016
2017
2018
120
100
80
60
40
20
0
16.0
15.8
14.1
14.1
13.7
40.7
41.3
42.1
41.7
42.2
43.3
42.9
43.8
44.2
44.1
Managers
Specialists
2014
2015
2016
2017
2018
Non-professionals
One of our top priorities is updating and maintaining the quantitative and qualitative
composition of personnel in order to ensure the reliable operation and development
of the Company.
At FGC UES, we have high standards for the education level and qualifications of employees.
The structure of employees by education classification has remained unchanged over
the past few years. Employees with higher education prevail.
0.4 %
Personnel structure
by education
35.6 %
64.0 %
Secondary vocational
Higher
Doctor's degree
The average employee age is 40.7 years. At the same time, the majority of staff (50 %) are
employees who are at the most economically and socially active age — up to 41 years. Thus,
FGC UES has an optimal combination of young, enterprising employees and experienced,
highly professional workers, ensuring that the transfer of their professional skills and
experience is achieved and mutually shared.
Personnel structure by gender in 2018
Personnel structure by age in 2018
17 %
83 %
2 %
3 %
20 %
For details on staff
education structure,
please see Appendix 1.
Women
Men
75 %
Under
25 years
From 25
to 50 years
From 50 years
to retirement age
Working pensioners
GRI 102-8
PJSC FGC UES has a minor share of outsourced activities. There are no seasonal variations
in the staff.
114
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
115
7 AFFORDABLE AND
CLEAN ENERGY
STRATEGIC REPORT
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
4 QUALITY
EDUCATION
STAFF TRAINING AND DEVELOPMENT
Following a competition organised by the Ministry of Energy in 2018, PJSC FGC UES
was named the best socially orientated power company in the nomination
of "Development of career and personal potential of employees."
TRAINING, RE-TRAINING AND ADVANCED TRAINING OF PERSONNEL
GRI 103-2, 404-2
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
The electric grid complex digitalisation project was an
for the formation and implementation of the staff training and development strategy.
important prerequisite
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
Natalia Ozhegina,
Deputy Chairman
of the Management Board
of PJSC FGC UES
For details on HR management
during digital transformation,
please see Appendix 1.
Current trends of higher research intensity and production complexity require that staff have
new knowledge and skills, which results in the need to train highly professional specialists
to combine interdisciplinary knowledge and practical experience, in addition to specialised
education.
What does the Company do to develop digital
competences of the staff?
Thanks to the support of FGC UES, the National Research University's
Moscow Power Engineering Institute now has a new master's
programme in the specialisation of "Smart power system protection,
automation and control systems." The programme has been designed
to train specialists with the ability to introduce new technologies into
grid control process based on digitalisation, robotics, the industrial
Internet, and data load management. The Company also helped
Moscow Power Engineering Institute to modernise its laboratory unit,
which now provides students and young scientists with the opportunity
to use the devices and software actually used at UNEG and in the digital
power sector. Re-training employees already working at the Company
is held. Special attention in training programmes is paid to cyber
security during the introduction of digital technologies and the remote
control of power facilities.
PJSC FGC UES has a unified methodology
and high quality standards for personnel
training. The training system is adaptive
in character. The corporate
training
Personnel
programmes
into account the
Training Centres take
requirements of
industry
standards, amendments
in normative
and organisational documents, and the
federal acts,
used
by
composition and
serviced.
types of equipment
implement
Personnel Training Centres
programmes
80
advanced
in compliance with
industry standards
and 17 training programmes for non-
professionals.
training
In 2018 15.8 thousand
8.4 thousand
Among
them
of the Company's employees took part
in various training, re-training and advanced
training programmes.
employees were trained at PJSC FGC UES's
Personnel Training Centres.
The share of personnel trained off-site in 2018 amounted to 72 % of the Company's
total staff.
Distribution of employees who took
part in training, re-training and advanced
training programmes in 2018 by position
37 %
53 %
Non-professionals
Management
Specialist
10 %
GRI 404-1
Average training duration in 2018
Management
Specialists
Non-professionals
Men
Women
34 hours/person
26 hours/person
40 hours/person
22 hours/person
20 hours/person
32 hours/person
training
programmes
The
used
the Company's Personnel Training
by
Centres contain theoretical and practical
training at training power grid sites, at
relay protection and automation (RPA)
laboratories and at simulators, as well
as a discussion of process failures and
accidents at the company facilities that may
result from errors made by staff.
drill
simulated
PJSC FGC UES pays special attention
training
safety
to
and controlled emergency response drills
for dispatchers and operators using
simulator units developed and adjusted
to mimic real working conditions. In 2018,
408
response
drills were organised for EMPS and MPS
dispatchers.
emergency
controlled
PERFORMANCE RESULTS 2018
For more information
on the programmes
implemented by the Company's
Personnel Training Centres,
the share of employees
who participated in these
trainings, and the ratio of
training costs and payroll,
please see Appendix 1.
116
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
117
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
PERSONNEL ASSESSMENT
GRI 103-3
The personnel assessment system of PJSC FGC UES has three key aspects:
1. assessment of personnel reliability;
2. assessment of personnel qualification;
3. assessment of staff reserve and employees with the potential to develop.
Annually, categories of employees who participate in the assessment are identified
in accordance with the objectives and aims of the Company. The priority category
for personnel is that of Chief Engineer.
the qualification compliance
The assessment
of personnel and a forecast is made to recognise employees with the potential to develop
and to recognise the development zones of employees.
results are used
to determine
For more information
on the assessment
of compliance with industry
standards and on the
Qualification Assessment
Centre, please see Appendix 1.
For details on the functional
objectives of each personnel
reserve programme,
please see Appendix 1.
In 2018, 1,394 employees took part in assessments.
Assessment participants in 2018
Men
Women
STAFF RESERVE
Management
Specialists
45
–
1,335
14
PJSC FGC UES has personnel reserve programmes, the implementation of which reduces
the likelihood of a shortage of qualified job candidates, increases the level of professional
competence of employees, and allows us to discover exceptionally talented young employees.
Production staff reserve
of PJSC FGC UES
267
employees
The Chief Engineering School,
a long-term multi-level project
for prospective specialists
Youth personnel reserve
50
employees
42
employees
Appointments to higher positions from the number of reserve staff as
of 31 December 2018, persons
Type of succession pool
Production staff reserve
Youth personnel reserve
YOUTH POLICY
Targeted posts
51 (19.1 %)
18 (42.9 %)
Other posts
18 (6.8 %)
–
The Youth Policy of FGC UES aims to create an integral system to attract youth to work
at the Company, as well as to create conditions and opportunities for the successful
adaptation and efficient self-actualisation of young specialists, and their potential
development for the benefit of the Company.
Support for youth and the facilitation of professional development for young employees
are one of the priorities of the Company's HR policy, which aims to meet the internal
need for highly qualified specialists.
118
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
FGC has a comprehensive approach to attracting and retaining young employees.
The key areas of youth relations are set forth in the Youth Policy of PJSC FGC UES.45 Pursuant
to the Policy, the Company identifies three strategic areas of youth relations:
increasing the attractiveness of FGC UES for students of higher and secondary
establishments of professional education when selecting their future professions;
the development of mutually beneficial cooperation with specialised higher
and secondary establishments of professional education;
labour socialisation and the adaptation of young specialists to the Company's corporate
environment; the facilitation of advanced training, professional advancement of young
specialists, and the formation and development of professional leadership qualities,
a proactive attitude, and a professional initiative;
popularising the profession of a power engineer, attracting scholars’ interest
in the activities of FGC UES.
Since 2015, PJSC FGC UES has been actively
developing the Youth Section at RNC CIGRE.
How do you assess the contribution of this work
to the potential of personnel in the industry?
Every year the Youth Section organises over 20 events (conferences,
forums, competitions, etc.) which allow the engagement of more than
5,000 students, young specialists and young scientists in innovative
and R&D activities. They may use the CIGRE infrastructure in order
to develop their professional expertise and to present their scientific
achievements and results. The best participants of the Youth Section's
events are offered employment at FGC and as well as at other power
companies that participate in the Youth Section's operation. In 2018,
the RNC CIGRE Youth Section programme, which was supervised
by PJSC FGC UES, was distinguished for its contribution for engaging
students in international scientific activities at the 47th Session of CIGRE
in Paris, and was appointed as General Coordinator for arranging
all youth events at the 48th Session of CIGRE.
The Company has a Young Specialist regulation describing a set of social programmes
and professional development programmes aimed at PJSC FGC UES's young specialists.
They are:
the adaptation of young employees;
inclusion into the Company's youth staff reserve;
training and development for young specialists;
social welfare of young specialists;
engagement of young specialists in physical training and sports.
45 Approved on 28 September 2017 by the Chairman of the Management Board, Order No. 391.
Natalia Ozhegina,
Deputy Chairman
of the Management Board
of PJSC FGC UES
For more information
on cooperation with
specialised educational
establishments, please
see Appendix 1.
119
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
STRATEGIC REPORT
15 LIFE
ON LAND
4 QUALITY
EDUCATION
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
17 PARTNERSHIP
FOR THE GOALS
3 HEALTH
AND WELL-BEING
11 SUSTAINABLE
CITIES
AND COMMUNITIES
LABOUR PRODUCTIVITY
The Company organises a series of measures for optimal use of human resources
and enhancement of labour productivity.46
increasing productivity
The key procedure for
implementation
of the Project for Construction of Standard Functional Structures of Production Subdivisions
at the EMPS Branches of PJSC FGC UES (in terms of RMPS, FMS, and SS). Implementation
of the project made it possible to reduce the number of management levels, increase the
rate of manageability, level out the staff workload and increase operations manageability.
in 2018
the
is
In 2018, labour
productivity was
5,419 RUB/person-hour,
which is 10.71 %
higher than
in 2017.
REMUNERATION
regional
At PJSC FGC UES, a wage system has
been created that takes into account job
categories, the performance of branches
and structural units, and specific features
labour markets, as well
of
as the
individual contribution of each
employee. Performance of the Company's
senior management is assessed against key
performance indicators which are approved
by the Board of Directors.
The differentiation in wages and salaries
is determined by the level of complexity
and importance of the work performed,
the employee's qualification and his/
her impact on the overall performance
of PJSC FGC UES.
(the
tariff
The compensation system for employees
is based on invested time and includes
bonuses. The salary
rate)
of the employee corresponds to the staff
the scheme of official
schedule and
salaries. Tariff rates (salaries) to workers are
determined taking into account the minimum
monthly tariff rate of the 1st category worker
Industry Tariff
as established by
Agreement.
the
In 2018, the average salary was RUB 79,610, which is 6.3 % higher than in 2017.
Average salary of PJSC FGC UES
employees, 2014–2018, RUB
80,000
64,000
48,000
32,000
16,000
0
79,610
74,580
69,835
64,091
66,573
2014
2015
2016
2017
2018
46 In pursuance of the Directives of the Government of the Russian Federation No. 2454p-P13 dated 23 April 2014, No. 7389p-P13
dated 31 October 2014, No. 2303p-P13 dated 16 April 2015, and No. 4750p-P13 dated 4 July 2016.
PERFORMANCE RESULTS 2018
SOCIAL SECURITY
GRI 401-2
The Company’s social package is an additional tool for motivating and social protection
of employees. It includes voluntary medical insurance, accident insurance, a non-state
pension, payment of material assistance on various aspects of social orientation,
and advance payment of wages.
VOLUNTARY HEALTH INSURANCE AND PERSONNEL HEALTH MAINTENANCE
In 2018,
the Company spent RUB 362.4 million
on the VHI
Programme.
GRI 403-6
In PJSC FGC UES, there is a corporate voluntary health insurance (VHI) system
for employees, which guarantees timely and quality provision of additional medical
and other services, in addition to the mandatory health insurance.
The voluntary health insurance programme contains an expanded list of medical services,
including expensive high-tech medical procedures, a wide range of specialist doctors,
and care in the best medical and preventive institutions in Russia.
GRI 403-6
The Company actively supports initiatives related to sports and healthy living.
For more information on
healthy lifestyle initiatives,
see Appendix 1.
ACCIDENT INSURANCE
In 2018, the Company spent RUB 16 million on accident insurance.
Accident and health insurance guarantees the payment of extra compensation to employees
(or their relatives) in case of death, urgent hospitalisation and partial or complete disability
of the insured person resulting from an accident or illness.
AWARD POLICY
PJSC FGC UES has a programme for encouraging employees with state awards, awards from
the Government of the Russian Federation, the Ministry of Energy of Russia, the All-Russian
Electric Power Industry Association, PJSC Russian Grids, and corporate awards.
Employees of PJSC FGC UES subsidiaries receive awards from Russian entities
and subsidiaries for their contribution to the development of the regional electric grid complex.
In 2018, upon the recommendation of PJSC FGC UES, 1,456 Company employees,
subsidiaries and contractors were awarded, including two employees who received
state awards and awards from the President of the Russian Federation.
For more information
on the corporate awards
of PJSC FGC UES,
see Appendix 1.
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IMPROVEMENT OF HOUSING CONDITIONS FOR EMPLOYEES
Continuous cycle of the Occupational Health and Safety Management System
In order to attract qualified personnel to key facilities, facilities under construction,
and remote power facilities, FGC UES implements a programme to provide workers
with accommodation in the service housing fund, as well as a programme to compensate
for the cost of renting housing.
NON-STATE PENSION PROVISION
The non-state pension programme for employees of PJSC FGC UES has been in effect since
2004. Key principles of the programme:
a unified approach to the organisation of non-state pensions;
a differentiated approach to setting the size of non-state pensions;
stimulating employees to provide long-term, conscientious services to FGC UES
and the electric power industry.
In 2018, RUB 327.3 million were allocated to the non-state pension scheme.
VETERAN SUPPORT
PJSC FGC UES is one of the founders
of the Council of Energy Veterans (non-profit
partnership) and pays annual membership
fees that are used to provide material
the energy
to veterans of
assistance
sector. The Company provides support
to
the Council of Energy Veterans
in organising celebratory and cultural
events.
the Great Patriotic War
the Council of Energy Veterans and veterans
of PJSC FGC UES
to commemorate
the 73rd anniversary of Victory Day
of
(WWII).
In December 2018, the Executive Office
and branches of the Company organised
ceremonial events for power sector veterans
to celebrate Day of the Power Engineer.
In May 2018, FGC UES
organised
ceremonial
traditionally
for
events
OCCUPATIONAL HEALTH AND SAFETY
OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT
GRI 103-2
In all aspects of its businesses, the Company is committed to prioritising the life and health
of its employees over operating performance.
The Company has approved the Regulations on the Occupational Health and Safety
Management System,47 which define the OHS Policy and operation procedure for the
Occupational Health and Safety Management System.
GRI 403-1
The Occupational Health and Safety Management System at FGC UES is aimed
at eliminating workplace injuries and occupational diseases, promoting safe conduct
and development of accident-prevention skills among employees, and constantly improving
working conditions. The Occupational Health and Safety Management System has been
developed to ensure continuous improvement in workplace safety for Company employees,
as well as for employees of contractors and third party entities.
POLICY
ORGANISATION
PLANNING AND
IMPLEMENTATION
IMPROVEMENTS
MEASURES
ASSESSMENT
GRI 403-8
The Occupational Safety Management System covers all employees of FGC UES
and FGC's contractors, provided that their operation processes or workplaces
are controlled by the Company.
A list has been approved at the Company of normative acts of the Russian Federation
containing OHS provisions and executive documents of PJSC FGC UES that are mandatory
for efficient operation of the Occupational Health and Safety Management System.48
The Company’s main objectives in the field of Occupational Health and Safety are:
creation of healthy and safe working conditions;
consistent and continuous reduction of occupational injuries and diseases;
creation and maintenance of a positive employer image on the labour market;
strengthening trust of shareholders, investors, creditors and other stakeholders;
developing safe behaviour and accident-prevention skills among Company employees;
ensuring a high level of corporate safety culture;
continuous improvement of working conditions.
The list of norms
and standards followed
by the Company in its
Occupational Safety
Management System
is given in Appendix 1.
For more information
on the commitments
of the Company in the field
of Occupational Health
and Safety, please
see Appendix 1.
PROCESS OF HAZARD IDENTIFICATION, ASSESSMENT OF RELEVANT RISKS,
COMPETENCE OF PERSONS-IN-CHARGE
GRI 403-2
The Company has developed the Method
for Hazard Identification and Injury Risk
Assessment for PJSC FGC UES' facilities,
the main objective being
to create
a systematic method to gradually eliminate
the sources of
injuries and to create
prerequisites for consistent reduction in the
number of traumas until they are completely
eliminated.
Occupational
risks are assessed
for
separate employee groups with similar
working conditions. Hazard identification
and assessment are conducted at EMPS
and MPS facilities at least once a year.
The results are recorded in the Hazard
and Risk Assessment Map. On the basis
of hazard identification and risk assessment,
suggestions are made with regard to hazard
response.
For more information
on the main response
measure categories,
see Appendix 1.
47 Order of PJSC FGC UES No. 470 dated 14 December 2018
48 Instruction of PJSC FGC UES No. 551r dated 12 November 2018.
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PERFORMANCE RESULTS 2018
For information
on the operation of units
in charge of accident
prevention, on the industrial
safety projects implemented
by the Company in 2018,
and on the normative
framework for occupational
accident investigation,
see Appendix 1.
GRI 403-4
in a memo
Employees of FGC UES can communicate (in person, by phone,
or by any other means) to their immediate supervisor and to the occupational health
and safety unit about any hazardous production factors and safety violations affecting
their right to safe working conditions.
GRI 403-2
Occupational accidents at the Company are investigated in strict compliance with the law.
WORKPLACE SAFETY INSTRUCTIONS SYSTEM FOR EMPLOYEES
GRI 403-5
The Company has developed and continuously operates the OHS briefing process.
Briefing takes into account the employee category. All types of briefing are conducted
on a timely basis:
induction briefings;
initial workplace induction;
repeated briefings;
unscheduled briefings;
targeted briefings.
EMPLOYEE CERTIFICATION
In order to set forth the uniform requirements for staff relations, the Company has developed
the Regulations on Staff Relations at PJSC FGC UES, which stipulate the procedure
for safety certification of employees, knowledge check of normative documents, electric
unit installation and operations manuals, occupational health and safety, fire safety
and other rules and instructions issued by state supervisory authorities.
TRAININGS AND OTHER EDUCATIONAL EVENTS
GRI 403-5
All Company employees are
trained
in occupational safety and health and are
checked for knowledge of occupational
safety provisions
in accordance with
the Regulations on OHS Training and
Checks,49 including at specialised training
centres and FGC personnel training centres.
Professional competitions (contests), safety
briefings, workshops, simulation exercises
on occupational health and safety, first aid
drills and other activities are organised.
49 Approved by Regulation of the Ministry of Labour of Russia and the Ministry of Education of Russia No. 1/29 dated 13 January
2003.
ARRANGEMENT OF FAVOURABLE WORKING CONDITIONS FOR EMPLOYEES
GRI 403-2
its employees.
FGC UES pays great attention to working
conditions for
In order
to provide employees with the necessary
sanitary utilities and to create favourable
and healthy working conditions to reduce
the risk of health deterioration, work is
underway to implement the Comprehensive
Programme to Improve Working Conditions
at MPS Branches. Measures to further
improve sanitary utilities were
included
in action plans to
improve conditions
and occupational safety and minimise
occupational risks.
In order to reduce (prevent) exposure
to hazardous production factors, hazards
are identified, and injury risks are assessed;
annual in-process monitoring of sanitary
regulations
is performed; and working
conditions are analysed. The results are
used to develop and approve corrective
action plans.
Based on the results of special OHS
assessment, 113 out of 17,647
jobs
in the Company are considered hazardous
ones (labour category 3.1. or higher), which
is equal to 0.64 %.
For details on personnel
protection from exposure
to harmful production factors,
see Appendix 1.
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STRATEGIC REPORT
PERFORMANCE RESULTS 2018
For information on approaches
to managing exposures
and impacts in the field
of occupational and industrial
safety through cooperation
with business partners
and consumers,
see Appendix 1.
WORKPLACE INJURIES AND OCCUPATIONAL DISEASES
GRI 403-9
In 2018, 3 production accidents involving Company employees took place. 3 people were
injured, including 2 deaths and 1 severe injury with disability for more than 6 months.
All those injured were men.
GRI 103-3
According to the Federal State Statistics Service for 2017, the overall injury rate by type
of economic activity under the category “Transmission of electricity” was Кr=0.74.
The overall injury rate in PJSC FGC UES is 5.4 times lower the industry average value and
is equal to 0.136.50
GRI 403-9
No accidents involving the Company's contractors whose business processes
are controlled by the Company took place in 2018.
Overall injury rate in 2018
Branch name
MPS Centre
MPS Urals
MPS West Siberia
Total for PJSC FGC UES
Overall injury rate (N1/Np)x1,000
0.21 (1 severe accident)
0.4 (1 lethal accident)
0.48 (1 lethal accident)
0.136 (3 accidents)
Main causes and factors of accidents in 2018:
process violations by personnel;
inadequate monitoring by persons in charge of safe operations;
inadequate work organisation;
violations by workers of labour routine and discipline.
For the list of production
safety projects implemented
by the Company in 2018,
see Appendix 1.
The main activities associated with a high
risk of injury to employees in the Company
are work
involving existing electrical
installations and operation of vehicles.
The accidents which took place in 2018 are
directly related to activities associated with
a high risk of staff injury.
and eliminate major and recurrent violations
of OHS requirements in 2018 were taken
in accordance with the Federal Grid’s Action
Plan to reduce risk of employee injury
and the Programme to monitor compliance
with OHS standards at the Company's
facilities.
Measures
occupational
to prevent
health
injuries,
and
improve
safety,
GRI 403-10
In 2018, no occupational diseases were recorded in the Company.
SOCIAL AND RELATIONSHIP CAPITAL
Management of social and relationship capital is the use of effective mechanisms
for interaction with stakeholders, which facilitates mutually beneficial cooperation.
The process of managing social and relationship capital means creating a company
image with a spotless reputation through socially responsible conduct, participating
in development of the regions where the Company operates, implementing efficient
mutually beneficial cooperation with stakeholders, and carrying out active work
with the Company brand.
socially
In addition to efficient use of production
assets, financial, personnel, and intellectual
resources, PJSC FGC UES’ reputation as
a
successful
responsible,
company also contributes significantly
to the achievement of the Company’s
strategic goals. This affects not only growth
in capitalisation, but also increased public
significance of the Company's activities.
In order to create a positive business repu-
tation and positive image, the Company op-
erates the Regulations on Implementation of
the Communication Policy of PJSC FGC UES,
its Branches and Subsidiaries.
the
On an annual basis, the Company undertakes
a qualitative and quantitative study
information realm (mentioning
of
to assess
in mass media)
in order
interpretation of
the dynamics and
the Company's activities. Studies are
conducted
experts
based on SCAN-Interfax data. In 2018,
the Company was mentioned in mass media
27,500 times, which is 18 % more than in the
previous year. The number of publications
with positive content grew by 45 %.
The number of moderately negative
publications reduced by one third.
independent
by
Number of publications (SCAN-Interfax)
2017–2018
Dynamics of the tone of
publications (SCAN-Interfax)
27,329
27,000
+18 %
23,500
23,100
20,000
2017
2018
THE FGC UES BRAND
is
for
system
Company
comprehensive
implementing
The
visual
a
identification of the Company, promoting
the reputation and image formation, and
establishing efficiency of interaction with
customers,
investors and shareholders.
For more than 15 years, the Company
management has been working consistently
the brand capitalisation.
to
The current brand
recognised
is associated with an efficient
and
organisation which is one of the industry
increase
is well
+45 %
+
Customer
satisfaction
–
–39 %
leaders in terms of production and financial/
economic indicators.
FGC UES has developed guidelines
for management of corporate
style
as approved by the resolution of the
Management Board of PJSC FGC UES.51
This document is used for the purpose
of centralised coordination of the use
of branding elements in order to ensure
compliance with uniform visual standards.
50 The overall injury frequency rate is the number of injured employees relative to the average employee headcount in the reporting
period per 1,000 employees: Кr=(N1/Np)x1000, where
N1 is the number of injured employees with disability for more than three business days and deaths;
Np is the headcount in a certain period of time (average employee headcount).
51 Complies with the Regulations on Corporate Style Management of Rosseti Group approved by the Board of Directors of PJSC
Rosseti.
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127
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
INFORMATION DISCLOSURE
PARTICIPATION IN CONGRESS AND EXHIBITION ACTIVITIES
Transparency is one of the corporate governance principles in FGC UES ensuring timely,
regular, complete and accurate disclosure of information on the Company's activities.
FGC UES publishes information to be disclosed pursuant to the Federal Law on Securities
Market and the Regulation on Disclosure of Information by Issuers52 in the Internet.
The Company uses the following web addresses for the purposes of information disclosure:
web site address provided by Interfax-TSRKI: http://www.edisclosure.ru/portal/company.
aspx?id=379;
official web site of FGC UES: http://www.fsk-ees.ru/eng
In order to promote brand recognition of FGC UES, the Company actively participates
implementation of the Company's
in congresses and exhibitions. This facilitates
communication policy, strengthening the Company's reputation, and promotes corporate
values and development of the industry, as well as politically and economically important
cooperation.
In 2018, representatives of FGC UES took part in the Russian Investment Forum,
St. Petersburg International Economic Forum, 47th CIGRE Session, the Eastern Economic
Forum, Russian Energy Week, and other significant events.
For details on congress
and exhibition activities,
please see Appendix 1.
RISK OF LOSS OF BUSINESS REPUTATION
for
Also,
disclosure
information
the Company adheres to the principles
of
the Corporate Governance Code
of the Bank of Russia; it meets all mandatory
requirements of stock exchanges in Russia
and the UK and applicable regulations
of the Financial Services Authority (FSA).
Pursuant to clause 6.1.1 of the Corporate
Governance Code of the Bank of Russia,
FGC UES has developed and introduced
its Information Policy, ensuring efficient
the Company,
information relations of
other
investors
shareholders,
stakeholders.
and
Information Policy
The
forth
the aims and principles of disclosure by
sets
the Company of information; establishes
the list of information in addition to the
information stated in the laws of the Russian
Federation, which the Company is obliged
to disclose; and
information disclosure
procedure (including information channels
for disclosure and forms of disclosure),
deadlines for making disclosed information
available, the procedure of communication
between Company executives, officers
and employees with shareholders and
investors, as well as mass media and
other stakeholders; and the measures to
ensure monitoring of Information Policy
observance.
The Company
two possible
identifies
sources of risks for losing its business
reputation:
of
the Company, and external communications
by the Company.
production
activities
The most significant reputation risk factors
are reduced reliability of the functioning
of the Unified National Electric Grid (UNEG),
systemic disturbances
in power supply
to consumers, and accidents. The Company
takes exhaustive measures to balance
operations and process risks.
As part of external communications,
a significant
level
of awareness of consumers, public and
the Company's
other stakeholders of
factor
risk
the
is
risk,
In order
to minimise
the Company
this
activities.
reputation
has
formalised the mechanisms for interaction
with stakeholders and the procedure for
external communications.53
In addition,
the
regulation sets
Information Policy
the rules and approaches for disclosure,
the purposes and principles of
and
disclosure of mandatory and supplementary
information, which contributes to increasing
the information openness and transparency
of relations between the Company and
shareholders, creditors, potential investors
of the Company, professional members of
the securities market, public authorities,
and other stakeholders.
For more information
on the risk of reduced
reliability of UNEG
functioning, please
see section Key Risks.
The Company's Information Policy has the objectives to ensure:
timely and complete disclosure of reliable and unbiased information about
the Company, sufficient for shareholders, prospective investors and other stakeholders,
to make investment and managerial decisions associated with their participation
in the Company;
compliance with the laws of the Russian Federation and the rules set forth
by bid initiators for Company securities trading;
protection of right and legal interests of the Company.
The risk of losses resulting from loss of business reputation in the Company
is minimal.
The full text of the Regulations
on the Information Policy
of PJSC FGC UES is available at
www.fsk-ees.ru/eng, in section
Investors/Corporate Governance/
Corporate Documents.
For details on the Company’s
compliance with
the Information Policy, please
see paragraphs 6.2 and 6.3
of the Report
on the Company’s compliance
with principles
and recommendations
of the Corporate
Governance Code
in Appendix 3.
52 Approved by the Bank of Russia under No. 454-P on 30 December 2014.
53 Regulation on communications policy implementation in PJSC FGC UES approved by the Resolution of the Board of Directors
of 6 February 2017, Minutes No. 354 of 9 February 2017.
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129
7 AFFORDABLE AND
CLEAN ENERGY
8
DECENT WORK AND
ECONOMIC GROWTH
15 LIFE
ON LAND
7 AFFORDABLE AND
CLEAN ENERGY
4 QUALITY
EDUCATION
8
DECENT WORK AND
ECONOMIC GROWTH
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
15 LIFE
ON LAND
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
4 QUALITY
EDUCATION
17 PARTNERSHIP
FOR THE GOALS
9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE
3 HEALTH
AND WELL-BEING
12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
STRATEGIC REPORT
Infrastructure
development
11 SUSTAINABLE
CITIES
AND COMMUNITIES
17 PARTNERSHIP
FOR THE GOALS
SOCIAL AND ECONOMIC IMPACTS
TAX DEDUCTIONS
Being a large taxpayer, the Company has a significant influence on forming the revenue side
of the budgets of the territories where it operates.
Tax deductions to federal, regional and local budgets, RUB ths.
PERFORMANCE RESULTS 2018
CONTRIBUTION TO THE DEVELOPMENT OF THE REGIONS OF THE COMPANY'S PRESENCE
3 HEALTH
AND WELL-BEING
Taxes (contributions to extrabudgetary funds)
PJSC FGC UES is implementing projects
to build and modernise an electric grid
infrastructure aimed at the social and
regions
economic development of 79
where the Company operates, and reliable
electricity supply to consumers.
11 SUSTAINABLE
CITIES
AND COMMUNITIES
associated with
The largest projects of PJSC FGC UES
are
implementation
of Order of the President of the Russian
Federation No. 204 of 7 May 2018
on the National Targets and Strategic
Objectives of Development of the Russian
Federation up to 2024. The top priority areas
are electrification of the West-East and
North-South transport corridors including
the Baikal and Amur and Trans-Siberian
Railways, development of centralised power
systems, and ensuring stable power supply
to consumers.
to
the Comprehensive Plan
Pursuant
of
Infrastructure Modernisation and
Extension up to 2024 approved by Decree of
the Government of the Russian Federation
No. 2101-r of 30 September 2018,
PJSC FGC UES implements 35 measures to
ensure external power supply of railways
and pipeline systems, process connection
of large industrial consumers, and coverage
of the current and perspective demand
for electric power and capacity
in
the Company's regions of presence.
For more information
on reconstruction and building
of trunk lines, please
see section
Production Capital.
Investments in grid infrastructure development are the foundation
of reliable power supply and one of the important factors
of economic growth.
RUB 103.3 billion
investments in 2018
(5.2 % more than in 2017).
COOPERATION AGREEMENTS WITH THE REGIONS
In September 2018, PJSC FGC UES, the administration of the Sakhalin Region and Primorsky
Krai signed bilateral agreements on joint efforts on power grid infrastructure development
in order to facilitate economic growth in the regions.
In November 2018, PJSC FGC UES and the administration of the Krasnodar Kari signed
an agreement to build the 220kV substation Novaya which will cover increasing demand
for electric capacity in Krasnodar.
Amount
of taxes transferred
Tax
Penalties,
fines
GRI 419-1
Federal taxes and levies
14,080,804
14,078,540
2,264
VAT
PIT
Profit tax
Profit tax on foreign income
Water tax
State duty
Payments for emissions of harmful substances into the environment
Regional taxes
Profit tax
Property tax
Transport tax
Land tax
Pension Fund of Russia
Social Insurance Fund
Federal Compulsory Medical Insurance Fund
Social Accident Insurance Fund
Total
Local taxes and levies
Extrabudgetary funds
2,784,421
1,640,517
2,784,369
1,640,517
1,344
351
71,656
3,503
1,344
337
71,656
3,503
9,296,279
9,296,262
13,411,048
13,411,033
28,941
28,927
56,611
56,561
4,105,019
4,104,630
278,091
278,048
1,064,594
1,064,589
63,479
63,477
52
0
0
14
0
0
17
15
14
50
389
43
5
2
46,886,658
46,883,793
2,865
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131
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
For more information
on sponsorship
by the Company,
please see Appendix 1.
SPONSORSHIP
The Company pays a lot of attention to providing sponsorship support in its activities.
In 2018, sponsorship support amounted to RUB 160 million. The largest project implemented
during the reporting year:
continued cooperation with CSKA Professional Football Club. The Company is
a title partner of CSKA Professional Football Club since 2014;
cooperation with the Roscongress Foundation. The Company sponsored some major
business events with the participation of the top state officials: The "Russian Energy
Week" International Forum on Energy Efficiency and Energy Development, as well
as the Eastern Economic Forum;
cooperation with the Russian Chess Federation. PJSC FGC UES is a title sponsor
of the Russian international chess teams. A number of joint measures have been
implemented to develop and popularise chess in Russia. Cooperation with the State
Hermitage Museum. The Company is a sponsor of some exhibitions;
cooperation with the Russian Rugby Federation. FGC UES sponsored many events;
FGC UES acted as the Official Partner of the Moscow Academic Musical Theatre named
after K. Stanislavsky and V. Nemirovich-Danchenko.
CHARITY
The main focuses of PJSC FGC UES’s charitable activities (both for individuals and legal
entities) include:
assistance with activities in the field of education, science, culture, art, and enrichment;
assistance with activities in the field of fitness and sports (with the exception of
professional sports);
social support and protection of citizens;
protection and adequate maintenance of buildings, facilities and territories
of historic, religious, cultural or environmental importance;
social rehabilitation of orphaned children and children without parental care,
neglected children and children in difficult life circumstances;
support of activities in the field of health care, healthy lifestyle promotion,
and improvement of people's moral and psychological condition;
assistance for those who have suffered from natural disasters, catastrophes,
as well as social, ethnic or religious conflicts, victims of repression, refugees
and forced migrants;
assistance in protection of the environment and animals;
assistance for individuals requiring treatment for a severe disease or a surgery
to preserve their lives and health.
In 2018, the Company allocated over RUB 180 million as charity for individuals
and legal entities.
APPROACH TO STAKEHOLDER ENGAGEMENT
The concept of sustainable development entails the desire to meet the needs of the present
generation without creating threats to meeting the needs of future generations.54 FGC UES
understands that provision for reliable, continuous and quality power supply to consumers
in the Russian Federation is possible only when taking into account stakeholders' interests
with structural interaction and integration of this practice into all business processes
of the Company.
GRI 102-42
When identifying and selecting the stakeholder groups to engage with, the Company relies
upon assessment of their influence on its current operations and strategic development,
as well as on the established stakeholder engagement practice and stakeholder
dependence on the Company's performance. The most recent assessment of the rate of
mutual interaction between stakeholders and the Company was performed within the scope
of the preparation of the 2017 Integrated Annual Report.
PJSC FGC UES strives to provide a high level of openness and transparency of its activities
by implementing the principle of active dialogue with stakeholders. Interaction with
stakeholders takes place in all regions of FGC UES's presence. Interaction with certain
stakeholder groups is the responsibility of individual structural units of the Company.
GRI 102-43
Principles underlying stakeholders' engagement:
respect and consideration of the interests of all stakeholders, timely response to their
requests;
open and productive cooperation;
regular and full information about all material topics of FGC UES activities,
including through annual reports;
the desire to achieve concrete benefits for all participants;
fulfilment of our obligations.
For more information
on the documents governing
interaction between
the Company and
stakeholders, please
see Appendix 1.
GRI 102-43
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54 United Nations International Commission on Environment and Development, 1987.
STRATEGIC REPORT
PERFORMANCE RESULTS 2018
The map of mutual influence of stakeholders and PJSC FGC UES
13
15
14
2
1
5
4
3
6
7
8
9
11
10
12
l
s
r
e
d
o
h
e
k
a
t
s
n
o
y
n
a
p
m
o
C
e
h
t
f
o
e
c
n
e
u
l
f
n
I
4.0
3.5
3.0
2.5
2.0
1.5
1.0
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Influence of stakeholders on the Company
Company stakeholders* GRI 102-40
No.
Stakeholders
Stakeholder group
1.
Shareholders, investors
3.
6.
Business partners, suppliers and contractors
Professional associations and industry organisations
2.
Customers and consumers
4.
5.
7.
8.
9.
10.
11.
12.
13.
14.
Government authorities
Regional and local authorities
Population of the regions of presence, local communities
Scientific community
Educational institutions
Ecological organisations
Social and charitable non-government organisations
Mass media
Subsidiaries
Top management of the Company
15.
Company personnel
* The number in the table is the same as the number on the Stakeholder Map.
shareholders,
investors
partners, including
non-for-profit
organisations
and associations
consumers
state
society
internal
stakeholders
INTERACTION WITH EXTERNAL STAKEHOLDERS
Shareholders and investors
KEY INTERESTS
OF STAKEHOLDERS
MAIN CHANNELS
OF INTERACTION
Economic efficiency
Business sustainability
Business process transparency
Growth in shareholder value
Meetings of shareholders and other corporate events
IR-presentations and IR-events
Obtaining credit ratings from leading international
and national rating agencies
Information disclosure
Reporting
The Company's priorities in interaction with shareholders and investors are the creation
of an investment community and provision for efficient interaction with it in order to improve
investor trust and raise demand for the Company's shares. We consider an active dialogue
with the investment community to be important for getting feedback from this audience
in order to understand how certain decisions may impact the investors’ assessment
of the Company.
Key events held in 2018:
an annual meeting of the management with investment community representatives
(Investor's Day);
a conference call for investment community representatives to present 2017 IFRS
financial results of the Company and a session of questions and answers;
Company executives group meetings with representatives of Russian and foreign
investment companies within the framework of VTB Capital Investment Forum "Russia
Calling!";
regular communication of the Corporate and Strategic Management Department with
analysts of investment banks to give them information for updating investment models
on PJSC FGC UES;
provision of information when requested by shareholders, investors and analysts;
regular monitoring of the Company's share capital, which makes it possible to structure
the main groups and types of investors for developing an optimal mechanism of
interaction with them;
actions to engage minority shareholders in voting on items in preparing for the Annual
General Meeting of Shareholders.
In 2018, analysts and investors were mostly interested in the following areas:
financial and economic indicators and business forecast;
PJSC FGC UES' development strategy;
investment programme;
dividend policy.
Financial
sustainability
Economic
efficiency
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A traditional meeting of FGC management with investment community representatives
was held on 18 December in the Moscow Exchange. Andrey Murov, Chairman
of the Management Board, spoke about positive dynamics in the key financial
and economic and production indicators, the investment programme progress,
and announced the management's idea for 2018 dividends.
This form of meetings allows investors to receive first-hand knowledge,
and the management gets feedback directly from market experts.
Interaction of the Company with the state as a shareholder has its procedural peculiarities
set forth in the normative acts approved by the President and Government of the Russian
Federation. In particular, public representatives in management bodies of the Company
are obliged to vote for/against a number of aspects in accordance with directives
of the Government of the Russian Federation.
Partners, including non-for-profit organisations and associations
Business partners, suppliers
and contractors
Professional associations
and industry organisations
For more details
on the Company's IR events,
please see the website
www.fsk-ees.ru/eng, Investors/
IR Releases.
The list of investment analysts
monitoring the Company’s
performance is available
on the website
www.fsk-ees.ru/eng, Investors/
Analyst Coverage.
The Investor Calendar
is constantly updated
and available at the website
www.fsk-ees.ru/eng, Investors/
Investor Calendar.
KEY INTERESTS
OF STAKEHOLDERS
MAIN CHANNELS
OF INTERACTION
Fair competition and
responsible market conduct
in order to create equal
conditions for all business
partners
Transparency of activities,
including transparency
of procurements
The spotless reputation of
FGC UES as a business partner
Contractual relations
and cooperation agreements
Participation in forums,
exhibitions, conferences,
dialogues
Open and competitive
procurement procedures
Joint projects
Support of domestic suppliers
Promotion of export of hi-tech
products
Corruption management
Electric power
development
and modernisation
Transparency
of activities
Cooperation with specific
Russian and international
organisations
Participation in
professional and business
associations
Scientific and technical
exchange
Interaction with industry
and scientific and technical
mass media
For more information, please
see Production Capital.
FGC strives to develop long-term mutually beneficial relations with its business partners,
including suppliers and contractors, using open, fair and ethical methods of cooperation,
mutual respect, and compliance with obligations and commitments.
In 2018, FGC UES organised tenders for RUB 159.9 billion (70.4 % of overall
procurements).
FGC UES supports Russian suppliers and contractors: the share of Russian main
electric equipment in Company tenders was 91%. Purchases from small
and medium-sized businesses in the reporting year amounted to RUB 65.9 billion.
Interaction with representatives of professional associations and industry organisations
is targeted at joint activities for development and modernisation of the electric power sector
(scientific and engineering exchange, operation of industry and interdisciplinary working
groups, organisation of Russian and international conferences and forums, etc.).
The FGC UES team won a prize in the International Engineer Championship Case-in
for its innovative project to solve the issue of power supply to hazardous areas
of Russia's Arctic Regions.
Consumers
KEY INTERESTS
OF STAKEHOLDERS
Reliable power supply
Improved quality of services
High standards of service
MAIN CHANNELS
OF INTERACTION
Meetings of the Consumer Council
Customer surveys
Establishment of a practice to build electric power facilities
with co-funding from consumers through creation of special
project companies for speedy access to UNEG
Cooperation under contracts, treaties and cooperation
agreements
satisfying
Having a customer-oriented approach
is one of the Company's key principles.
While
half
of all electricity consumption in Russia,
FGC builds long-term mutually beneficial
relations with consumers, offering them
high-quality services.
approximately
PJSC FGC UES provides consumers with
a comprehensive service for technological
connection of power receivers of electricity
consumers, power generation facilities,
and
owned
by network organisations and other entities
to FGC UES' electric grids. There are on-site
facilities
electric
grid
service formats for locations of branches
of PJSC FGC UES — MPS, and off-site
servicing via
the portal Technological
Connection Service.
Internet
The
Technological
portal
Connection Service provides consumers
with online access to up-to-date information
on the state of PJSC FGC UES' feeding
centres,
level of their equipment,
as well as information on the implementation
progress
for
technological connection to the electric
grids of FGC UES.
applications
their
load
of
Consumer
satisfaction
Infrastructure
development
For more information
on the Technological
Connection Service using
the online portal, please see
http://portaltp.fsk-ees.ru/.
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Level of customer satisfaction with the technological connection service
1. Availability of information on
technological connection
10
9
8
7
6
5
10. Meeting deadlines set forth
by legislation by FGC
9. Design and survey works
performance quality and results
8. Transparency of preliminary
calculations for elements comprising
technological connection
2. Form of standard application
for technological connection
3. Form and content of standard contract
for technological connection and appendices
hereto
4. Quality of documentation
provided by FGC
7. Kindness/politeness
of FGC employees
5. Personnel performance in part
of providing information
on work progress
6. Readiness of FGC employees to maintain
a constructive dialogue on resolving serious
issues related to technological connection
2016
2017
2018
For information
of the Consumer Council
of PJSC FGC UES
and 2018 results, please
see Appendix 1.
According to the participants of the customer satisfaction survey in 2018, there
was improvement in the quality of documents received (terms of reference, appendices
to the contract, contract) from PJSC FGC UES, as well as improvement in the performance
of PJSC FGC UES personnel in terms of providing information on the technological
connection process. Of most importance was the benevolence and politeness of Company
personnel, and the efficiency of interactions during construction and assembly. It should
be noted: the overall integral value vs. 2017 increased significantly and reached 9.3.
State and local government bodies
Government authorities
Regional
and local authorities
KEY INTERESTS
OF STAKEHOLDERS
Ensuring reliable and stable power supply
UNEG development and modernisation
Compliance with the requirements of Russian
and international laws
Payments to budget and extrabudgetary funds
MAIN CHANNELS
OF INTERACTION
Work in joint committees, panels, expert boards.
Reporting
Development of proposals to improve
legislation
Fulfilment of obligations stated
in the investment programme
Corruption management
Ensuring reliable and stable power
supply
Promotion of development
in the regions of the Company's
presence
Payments to budget and extrabudgetary
funds
Agreements on social and economic
cooperation with constituent units
of the Russian Federation
Contribution to the development
of the regions of the Company's
presence
Social and charity programmes
PJSC FGC UES has regular meetings with representatives of the following federal executive
authorities:
Ministry of Energy of the Russian Federation;
Ministry of Economic Development of the Russian Federation;
Ministry of Industry and Trade of the Russian Federation;
Federal Anti-Monopoly Service of the Russian Federation;
Federal Agency for State Property Management (Rosimushchestvo);
Federal Service for Environmental, Technological and Nuclear Supervision;
Federal Service for Supervision of Natural Resources;
Central Energy Customs of the Federal Customs Service, etc.
FGC UES engages in a constructive way with regional administrations and local authorities
in addressing pressing social, economic and environmental issues, and cooperates
with non-profit organisations and the expert community at the regional level.
SOCIETY
Population of the regions of presence, local communities
KEY INTERESTS
OF STAKEHOLDERS
Ensuring reliable and stable power supply
Improving the quality of life in the Company's regions
of presence
Reducing the adverse impact on the environment
MAIN CHANNELS
OF INTERACTION
Contribution to the development of the regions
of the Company's presence
Social and charity programmes
Public hearings
Environmental protection programmes
Interaction with the population in the Company's areas of presence is carried out in the form
of cooperation with local authorities and public organisations. The key objective of interaction
is reliable and uninterrupted power supply to citizens. The reliability of the Company's grids
increases every year: in 2018, the specific accident rate at FGC UES facilities declined by
17 % thanks to the introduction of new equipment, improvement of the service personnel’s
skills, expertise and other activities.
FGC UES has been awarded the honorary badge of the RaEl Association
for high social efficiency.
Providing the general population with jobs with a fair salary and social security is also
a mutually beneficial objective of cooperation.
FGC UES
has about
22,000 employees.
Taking into account their family members, the Company
has a direct impact on the quality of life of tens of thousands
of people.
Infrastructure
development
Economic
sustainability
Economic
efficiency
Reliable electricity
supply
Infrastrucutre
development
For information
on the contribution
of the Company towards
the development of local
communities, please
see Contribution
to the Development
of the Regions of Presence.
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Scientific community
KEY INTERESTS
OF STAKEHOLDERS
UNEG development and modernisation
Sectoral science development
Development and implementation of innovative technologies
International scientific and technical exchange
MAIN CHANNELS
OF INTERACTION
Joint projects
R&D funding
Scientific and technical partnership with RNC CIGRE
For details on innovations
in the Company, please
see Intellectual Capital.
Interaction with institutions of innovative development, technology platforms, higher
education institutions and research and development organisations is one of the objectives
stipulated by the Innovative Development Programme. Interaction mainly takes the form
of R&D and D&T activities.
In 2018, R&D funding amounted to almost RUB 600 million.
Educational institutions
KEY INTERESTS
OF STAKEHOLDERS
Targeted staff training
Sectoral science development
Development of innovative technologies
MAIN CHANNELS
OF INTERACTION
Cooperation in scientific and research activities
Training, re-training and advanced training
R&D funding
For more information on
cooperation with higher
professional education
establishments and vocational
training schools, please
see Human Capital
and Appendix 1.
FGC UES has an active cooperation agreement with 52 establishments of higher education
and 13 specialised secondary schools. Cooperation exists in educational events for students
of the top power industry educational establishments in Russia, production and pre-degree
internships for students, engagement of students and post-graduate students into R&D
and innovation activities, construction teams for students, educational basis development,
and modernisation, etc.
The Company was awarded a number of prizes for development of student teams:
FGC UES was a nominee for "The best social projects in Russia" in the category
"Corporate projects" for organisation of construction teams for students;
FGC UES has an honourable diploma from the RaEL Association for important
achievements in development of student teams in Russia.
In 2018, some 80 establishments of higher professional education and 40 vocational
training schools were involved in cooperation.
Environmental non-government organisations
KEY INTERESTS
OF STAKEHOLDERS
MAIN CHANNELS
OF INTERACTION
Reduction of the adverse impact on the environment
Cooperation with environmental organisations
Commitments to comply with social and environmental
requirements of EBRD under agreements on funding
the Company's projects
Within the scope of implementation of the Environmental Policy, FGC UES cooperates
with Russian and international environmental organisations.
During the reporting year, PJSC FGC UES continued cooperation with the World Wildlife
Fund (WWF) "Saving Oriental White Storks". Furthermore, in 2018 PJSC FGC UES provided
charitable assistance to the Autonomous Non-Profit Organisation "Centre for Study
and Preservation of the Amur Tiger Population".
For detailed information
on environmental protection,
please see Natural Capital.
Social and charitable non-government organisations
KEY INTERESTS
OF STAKEHOLDERS
Social responsibility
MAIN CHANNELS
OF INTERACTION
Participation in forums, conferences, dialogues,
and round tables
Membership in public and expert associations
Cooperation agreements
FGC UES is committed to providing charitable support and sponsorship to public organisations:
in 2018, the Company spent more than RUB 340 million on charity.
For more information
on the Company's charity
programmes, please
see Charity and Sponsorship.
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Mass media
KEY INTERESTS
OF STAKEHOLDERS
Providing prompt access to information about the Company's
activities
Obtaining the official opinion and comments from
the Company on current and future events, trends,
and directions of development
MAIN CHANNELS
OF INTERACTION
Organisation of events for mass media
Initiation of publications in national, regional and local media
Updates of information on the corporate website, official blog
and social media resources of the Company
that
thinks
regular, open
FGC UES
communications are
very significant,
as they allow informing stakeholders about
any and all key aspects of the Company's
interaction
activities. Mechanisms of
with stakeholders and the mass media,
external
and
the
communications,
forth
in the Regulation on Communication Policy
Implementation of PJSC FGC UES.55 This
document stipulates the key implementation
principles of the communication policy
of PJSC Rosseti56 and the Information
Policy Regulation of PJSC FGC UES.57
procedure
are
set
of
the
FGC UES
leading
interacts with
business and public political Russian mass
media at the federal and regional level.
The Company undertakes constant media
space monitoring, organises media events,
and provides mass media with materials
popularising the activities of the electric
grid complex. The Company's activities
have information support in social networks
and the blogosphere.
its
In
relations with mass media,
FGC UES follows the principles of prompt
and complete provision of information.
PARTICIPATION OF STAKEHOLDERS IN SHAPING
THE COMPANY'S STRATEGY
GRI 102-21, 102-43
the
Russian
The process of reviewing and approval
of the Long-Term Development Programme
with key stakeholders is governed by the
Methodological Recommendations
on
Preparation of Long-term Development
Programmes of the Ministry of Economic
Development of the Russian Federation,
individual resolutions of the Government
of
and
the Company's internal documents. Pursuant
to the current procedure, the Company's
LDP should be approved by PJSC Rosseti
(being the key shareholder), with federal
executive authorities (including the Ministry
of Energy of Russia, Ministry for Development
of Russian Far East, Rosimushchestvo,
Ministry
Economic Development
of the Russian Federation); and, finally, with
the Government of the Russian Federation.
The primary site for document discussion
Federation,
of
is the Strategy Committee of the Company's
Board of Directors, which discusses
the LDP prepared by the management,
and once approved, it is distributed among
stakeholders.
The Company prepares annual reports
on LDP progress which are evaluated by
an independent auditor and the Company's
Board of Directors. Annual
reports
are sent via the Interdepartmental Portal
to Rosimushchestvo and
sometimes
to the Ministry of Energy of Russia.
Representatives of the industry community,
and
bodies
are members of the Strategy Committee,
and discuss LDP when reviewing quarterly
progress
its meeting
on 3 August 2017, the Strategy Committee58
recommended preparing a new LDP.
reports. During
executive
federal
the
In 2018, the overall number of publications about the Company in various mass media
sources reached approximately 27,500.
INTERACTION WITH INTERNAL STAKEHOLDERS
Key interests of stakeholders
Main forms of interaction
Subsidiaries
Strategy implementation (LDP)
High quality of corporate governance
Business plan delivery
KPI achievement
Organisational and administrative
documents
Interaction between companies
on routine aspects
For more information, please see Subsidiaries Management.
Top
managers
Strategy implementation (LDP)
Gain in all types of capital – financial, HR, intellectual, social,
and reputational
KPI achievement
Uniform corporate values in sustainable development
Management of one of the largest infrastructure companies in Russia
Organisational and administrative
documents
Preparation of financial and executive
statements
Ongoing interaction within the scope
of business processes
For more information, please see Executive Governing Bodies.
Personnel
Professional and career development in a large, stable company
Safe working conditions
Decent remuneration and full social package
For details, please see Human Capital.
Personnel development
Social support of employees
Information and communication using
internal channels
INTERACTION WITH STAKEHOLDERS DURING THE REPORT PREPARATION
to
order
ensure
In
transparency
and accountability of PJSC FGC UES,
representatives of key stakeholders are
engaged in preparing the report: they define
the topics for disclosure in the Report,
take part in Public Hearings of the Report
draft, as well as public certification of the
Report. Interaction with stakeholders during
the public reporting processes is a provision
international standards АА1000SES
of
of the
Institute of Social and Ethical
Accountability, Global Reporting Initiative
(GRI SRS), and the Integrated Reporting
International Framework.
During preparation of the previous report,
the Company undertook commitments,
into
the majority of which were taken
account in the 2017 report, while some
commitments were met in 2018.
For more information
on participation
of representatives
of stakeholders in defining
the relevant Report topics,
please see Information
on the Report.
55 Approved by the resolution of the Board of Directors, Minutes No. 354 of 9 February 2017.
56 Approved by Order No. 152 of PJSC Rosseti dated 21 August 2015.
57 Approved by the resolution of the Company's Board of Directors, Minutes No. 280 of 24 August 2015.
58 Minutes No. 51 of 8 August 2017.
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STRATEGIC REPORT
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GRI 102-44
Account of suggestions of stakeholders sounded out during Public Hearings
of the 2017 Report, held on 17 April 2018
Account of suggestions from stakeholders sounded out during
the Public Hearings of the 2018 Report
GRI 102-44
No. Stakeholder
Suggestion
Taken into account
No. Stakeholder
Suggestion
Taken into account
1.
2.
3.
4.
5.
Business partners,
suppliers and contractors
To compare the Company with similar international
companies.
Taken into account in the Industry Review
section of the 2018 Annual Report.
To set forth plans to prepare normative and technical
documents in Appendix 1 to the Annual Report.
Taken into account in Appendix 1
to the 2017 and 2018 annual reports.
To keep the Digitalisation section in future annual
reports.
Taken into account in the 2018
Annual Report.
Scientific community
To provide qualitative comparisons, particularly
to clarify the scaling system used in assessment
of customer satisfaction of 9.23 points.
Taken into account in the Business
Model section of the 2017 and 2018
annual reports.
Professional
associations and
industry organisations
To disclose information on professional standards
implemented in the Company, on the Qualification
Assessment Centre and on the Company's need
of human resources with qualification in digitalisation.
Taken into account in the Human
Capital section of the 2018 Annual Report
and Appendix 1 to the 2018 Annual
Report.
6.
Educational institutions
To keep disclosing information on the number
of students who had practical training in the Company.
Taken into account in Appendix 1
to the 2018 Annual Report.
MOEX
7.
8.
For the minutes of the Public
Hearings, please
see Appendix 2.
To review the Company's compliance with the corporate
governance principles regarding item 6.2.1. of Appendix
3 hereto "Report of PJSC FGC UES on compliance with
the principles and recommendations of the Corporate
Governance Code approved by the Board of Directors
of the Bank of Russia."
Taken into account in Appendix 3
to 2017 and 2018 annual reports.
The status in 6.2.1. is changed from
"partial compliance" to "full compliance".
To provide a diagram on participation of the independent
directors in the Board of Directors and its Committees.
Taken into account in "Report
on corporate governance" of the
Independent Directors subsection
of the 2017 and 2018 annual reports.
FGC UES takes part in Russian and international report contests annually. In 2018,
the Company was a laureate and award winner of the respectful international
and Russian contests MarCom Awards, MOEX and RCB Media Group, and RAEX
Analytics rating agency. The Company's 2017 integrated annual report was rewarded.
Our social responsibility and corporate sustainability reports are included
in the National Register of corporate non-financial reports of the Russian Union
of Industrialists and Entrepreneurs.
Professional associations and industry organisations
1.
2.
3.
4.
Representative from
the expert centre of Non-
Profit Partnership "Russian
Institute of Directors"
To supplement the Annual Report
with information on implementation
of recommendations, and information
on independent annual assessment
of activities of the Board of Directors.
To amend the Annual Report stating
that the activities of PJSC FGC UES affect
biodiversity.
Representative of the Russian
Bird Conservation Union
To supplement Appendix 10 to the Annual
Report with a detailed list of RED Book
species.
To supplement the Annual Report
with information on independent
assessment results for staff qualification
correspondence to professional standards
organised by the Centre for Development
and Assessment of Qualifications
in the Electric Grid Complex (CDA).
Representative of the
association ERA of Russia
Will be taken into account when drafting
the 2019 Report.
The impact from the activities of PJSC FGC UES
on biodiversity is insignificant.
Pursuant to standard GRI 304-2, impact
is significant if habitats, valuable populations
or separate species cannot be preserved.
In the course of PJSC FGC UES's operation,
no cases of animal habitat relocation and/
or damage were observed.
Taken into account in Appendix 10.
Will be taken into account when drafting
the 2019 Report.
MOEX
5.
Representative
of PJSC MOEX
To state in the Annual Report that dividends
are calculated with net revenue adjustment.
Taken into account in section Dividend Policy
and Profit Distribution.
Public hearings on the draft Report were held on 18 April 2019 on the premises
of PJSC FGC UES at: 9/11 Bolshoy Nikolovorobinsky Lane, Moscow.
GRI 102-43
heads
specialists.
During the Public Hearings, PJSC FGC
UES was represented by deputy Chairmen
the Management Board, discipline
of
departments,
directors,
of
and
Stakeholders were
represented by representatives of power
sector companies, industry associations,
large companies from other industries, non-
for-profit organisations, and educational
establishments. During the Public Hearings,
recommendations
in
participants sounded out 5 suggestions
regarding
and
additional disclosures
the Report.
Two suggestions (40 %) were taken into
account; one suggestion (20 %) was denied
and the decision was
justified; during
preparation of future reports, 2 suggestions
(40 %) will be
into account
or discussed.
taken
An opinion on the public
certification of the Report
is presented in Additional
Information.
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The FGC UES Corporate Governance System is grounded on transparency,
accountability, fairness and responsibility. Improving the quality
of corporate governance, we boost the efficiency and investment attractiveness
of our business.
149
General Information on the Company's Corporate Governance
154
General Meeting of Shareholders
155
Company's Board of Directors
169
Corporate Secretary
170
Committees of the Company's Board of Directors
176
Executive Governing Bodies
182
Remuneration System for Governing Bodies
190
Settlement of Conflict of Interest
191
Risk Management System, Internal Control and Internal Audit
200
External Auditor
201
Anti-Corruption Policy and Economic Security
203
Share Capital, Securities Trading
GENERAL INFORMATION ON THE COMPANY'S CORPORATE GOVERNANCE
GENERAL INFORMATION
ON THE COMPANY'S CORPORATE
GOVERNANCE
GRI 102-16
Corporate governance in the Company is based on corporate governance principles
set forth in the Corporate Governance Code recommended by the Bank of Russia,
as well as on provisions of PJSC FGC UES' Corporate Governance Code.59
TRANSPARENCY
The Company ensures timely disclosure of reliable information
about any and all material facts regarding its activities,
including its financial status, social and economic indicators,
business results, ownership and governance structure,
as well as free access to such information for stakeholders.
ACCOUNTABILITY
The Company's Board of Directors is accountable
to all shareholders as set forth by the current laws.
FAIRNESS
The Company is committed to protecting shareholders' rights
and to ensure equal treatment of all shareholders. The Board
of Directors provides all shareholders with an opportunity
for efficient protection in case their rights are violated.
RESPONSIBILITY
The Company recognises the rights of all stakeholders
stipulated by the current laws and strives to cooperate
with such persons in order to ensure its development
and financial stability.
The Board of Directors annually analyses the information on self-assessment
of the corporate governance in PJSC FGC UES. The Company meets the requirements
of laws and a number of advanced corporate governance standards.
59 Approved by the resolution of the Board of Directors of PJSC FGC UES, Minutes No. 280 of 24 August 2015.
For more information
on the elements of the
corporate governance system
of FGC, please see the Articles
of Association and internal
documents of PJSC FGC UES at
www.fsk-ees.ru/eng, Investors/
Corporate Governance/
Corporate Documents.
149
CORPORATE GOVERNANCE REPORT
GENERAL INFORMATION ON THE COMPANY'S CORPORATE GOVERNANCE
Shareholders'
agreement*
Rosimushchestvo
0.59 % voting shares
PJSC Rosseti
80.13 % voting shares
CORPORATE GOVERNANCE
SYSTEM STRUCTURE
GRI 102-18
Minority shareholders
19.28 % voting shares
election
opinion
General
Meeting
of Shareholders
Audit
Commission
election
opinion
External independent
auditor
election
reports and
recommendations
election
of the Chairman
of the Company's
Management Board
* As of 31 December 2018, the Russian Federation
represented by the Federal Agency of State Property
Management (Rosimushchestvo) owned 0.59 % of shares
in PJSC FGC UES. In this context, an agreement has been
signed between the Company’s controller shareholder
PJSC Rosseti and Rosimushchestvo regarding
management and voting at PJSC FGC UES. The agreement
regulates the shareholder’s relationship with regard to
the implementation of their rights with respect to FGC for
the purposes set forth in Decree of the President of
the Russian Federation No.1567 dated 22 November 2012.
Interaction of the Company with the state as a shareholder
has its procedural peculiarities set forth in the normative
acts approved by the President and Government of
the Russian Federation. In particular, public representatives
in governing bodies of the Company are obliged to vote
a number of aspects in accordance with directives.
opinion
supporting efficient performance
election
Board of Directors
Company's
Corporate
Secretary
opinion
election of the Management
Board and control
reports
coordinating
the candidate and signing
the agreement
The main participants
of the Internal Control
and Risk Management System
Chairman
of the Management Board
Management Board
approval
opinion and recommendations
approval of the head
election
reports and
recommen-
dations
opinion
Committees of the
Board of Directors
(cid:31) Audit Committee
(cid:31) HR and Remuneration
Committee
(cid:31) Strategy Committee
(cid:31) Investment Committee
reports
reports
reports
Head
Internal Audit
Department
reports and recommendations
opinion
Internal Control
and Risk Management
Department
150
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
151
CORPORATE GOVERNANCE REPORT
GENERAL INFORMATION ON THE COMPANY'S CORPORATE GOVERNANCE
DEVELOPMENT
OF THE CORPORATE GOVERNANCE SYSTEM
For further improvements in corporate governance quality, the Company continues
implementing best Russian and international corporate governance practices.
Area of
improvement
Measures and actions
8 Protection of
1
shareholder
0
2
rights
The revised Regulations on the Dividend Policy of PJSC FGC UES were approved.60 They
stipulate the amount of dividends of at least 50 % of the net revenue determined on the basis
of RAS or IFRS financial statements (the amount is calculated with a net revenue adjustment in
accordance with the Decree of the Government of the Russian Federation No. 1094-r
of 29 May 2017).
For details, please see Financial Capital — Dividend Policy.
Remote participation of shareholders in the Annual General Meeting of Shareholders was made
possible by creating technical conditions for electronic voting.
For more information, please see General Meeting of Shareholders.
s
d
r
a
w
n
o
d
n
a
9
1
0
2
Management
efficiency
improvement
To amend PJSC FGC UES' Corporate Governance Code as regards defining the agenda
for meetings of the Board of Directors.
To increase the number of meetings of the Board of Directors in praesentia.
Information
disclosure
To amend the Information Policy as regards clarification of the procedure and methods
of information provision to stakeholders.
To implement the Sustainable Development Policy of the Company setting forth the aims,
objectives and principles of Company activities in sustainable development, approaches
to interaction with stakeholders, and reporting principles.
To improve the quality of information disclosure in annual reports and on the Company
website.
ASSESSMENT OF CORPORATE GOVERNANCE QUALITY
INDEPENDENT ASSESSMENT MADE BY THE RUSSIAN
INSTITUTE OF DIRECTORS
The Russian Institute of Directors confirmed the corporate governance rating
at a level of 7++ "Well-Developed Corporate Governance Practice."
In October 2018, following assessment
of the corporate governance quality of
PJSC FGC UES, the Russian Institute of
Directors confirmed the rating assigned in
2017 at the level of 7++. This rating confirms
that the Company meets the requirements
of the Russian legislation on corporate
governance
follows
the Russian
the
Corporate Governance Code. Owners' risk
recommendations of
mainly
and
of loss related to corporate governance
quality is assessed as being quite low.
During the assessment by the Russian
Institute of Directors, positive changes
were noted
in corporate governance,
and corporate governance areas of
improvement were identified which allow a
further increase in the corporate governance
rating.
The Report on Compliance
with the Principles
and Recommendations
of the Corporate Governance
Code is presented
in Appendix 3.
60 Minutes of the Board of Directors No. 406 of 30 May 2018.
152
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
Positive changes in 2018
Areas for improvement
The new version of the Regulation on
the Dividend Policy of PJSC FGC UES has been
approved.
Remote participation of shareholders in the
Annual General Meeting of Shareholders was
made possible.
Ernst and Young LLC is the external auditor
of PJSC FGC UES accounting statements using
RAS and IFRS.
The Company prepared an integrated annual
report for 2017 for the first time which complies
with GRI Standards and AA1000SES standards.
The report was assessed by an independent
auditor regarding non-financial statements,
and an opinion on public certification was made.
Increase in the number of meetings in praesentia for the Board
of Directors, the Audit Committee and the HR and Remuneration
Committee, as well as amendments to the Corporate
Governance Code of PJSC FGC UES regarding defining agendas
of the meetings of Board of Directors in the form of voting
in person.
Implementation of mechanisms to monitor voting with
quasi-treasury shares by the Board of Directors.
Amendments to the Articles of Association of the Company
regarding inclusion of selection of the sole executive body
to the competence of the Board of Directors.
Amendments to the Regulations on Remuneration and
Compensation to Members of the Board of Directors of
PJSC FGC UES regarding dependence of the remuneration
amount on long-term results of the Company.
SELF-ASSESSMENT OF CORPORATE GOVERNANCE QUALITY
In April 2016 the Company's61 Board of Directors approved the Guidelines for Self-Assessment
of Corporate Governance. This document was developed on the basis of methods approved
by Order of Rosimushchestvo No. 306 of 22 August 2014 for self-assessment of corporate
governance in companies with state participation in order to ensure comparability of the annual
evaluation performed by the Company.
The method comprises assessment of corporate governance quality, and in particular,
compliance with principles and recommendations of the Corporate Governance Code approved
by the Bank of Russia. This document sets certain assumptions related to the Company's
activities.
The Company achieved 87 % compliance with the Guidelines for Self-Assessment of
Corporate Governance, which proves the high level of corporate governance quality.
The Company achieved high results for its 2016 and 2017 results as well (84 %
and 86 %, respectively).
Results of the self-assessment of the corporate governance level by component*
100 %
97 %
89 %
94 %
100 %
100 %
90 %
80 %
70 %
60 %
50 %
40 %
30 %
20 %
10 %
0 %
72 %
Shareholders'
rights
Board of
Directors
Executive
Management
Level of compliance
Transparency
and information
disclosure
Risk management,
internal control
and internal audit
Corporate
social
responsibility
and business
ethics
* The Company's self-assessment of the corporate governance level was made in Q1 2019.
Also, FGC assessed compliance with the corporate governance principles set forth
in the national Corporate Governance Code, using the methodology recommended
by the Bank of Russia in its letter No. IN-06-52/8 dated 17 February 2016 on Disclosure
in the Annual Report Prepared by a Public Joint Stock Company of the Report on Compliance
with the Principles and Recommendations of the Corporate Governance Code.
61 Minutes of the Board of Directors No. 318 of 28 April 2016.
The Report on Compliance
with the Principles
and Recommendations
of the Corporate Governance
Code is presented
in Appendix 3.
153
CORPORATE GOVERNANCE REPORT
COMPANY'S BOARD OF DIRECTORS
GENERAL MEETING OF SHAREHOLDERS
COMPANY'S BOARD OF DIRECTORS
The General Meeting of Shareholders
is
the supreme management body of
PJSC FGC UES, ensuring that shareholders
exercise their rights to manage the Company.
disclosed on
the Company’s website,
in English and Russian languages, not later
than 30 days prior to the date of the general
meeting of shareholders.
PJSC FGC UES defined a list of additional
materials to be provided to shareholders
when preparing for the general meeting
to enable them to make well-founded
decisions. Such materials include, among
other things, positions of the Board of
Directors regarding all items on the meeting
agenda,
about
the candidates to the governing and control
bodies,
tables comparing amendments
to be made to the Company’s Articles
of Association and internal documents with
the existing versions. All materials are
information
extended
PJSC FGC UES' Regulations on the General
Meeting of Shareholders provide clear
procedures for holding the GMS, including
an opportunity for shareholders to ask
questions on agenda items. Shareholders
may put questions directly to members
of the governing and control bodies, the Chief
Accountant and the Company’s Auditors, who
are in all cases invited to attend the meeting.
Since 2016, the live video broadcasting system
of the General Meeting of Shareholders was
introduced on the Company's website.
General meetings of shareholders in 2018 were held using electronic voting technology.
Shareholders were given the opportunity to vote electronically from the moment
of sending the message about the meeting to the end of the discussion on the agenda
at the meeting.
General Meetings of Shareholders in 2018
Minutes of the General Meetings
of Shareholders are available on
the website www.fsk-ees.ru
in section Investors/Corporate
\/Shareholders
Meetings.
Governance|
Resolutions taken:
Annual General Meeting of Shareholders
Date:
28 June 2018
approval of the 2017 Annual Report of PJSC FGC UES;
approval of the annual accounting (financial) statements of PJSC FGC UES for 2017;
approval of the distribution of profit and loss of the Company based on the results of the 2017
reporting year;
the amount of dividends, terms and form of their payment based on the results of work for 2017
and establishment of the date on which the persons entitled to receive dividends are determined;
payment of remuneration for work in the Board of Directors to members of the Board of Directors
who are not civil servants in the amount established by the internal documents of PJSC FGC UES;
payment of remuneration for work in the audit committee to members of the audit committee
who are not civil servants in the amount established by the internal documents of PJSC FGC UES;
election of members of the Board of Directors of PJSC FGC UES;
election of members of the Audit Commission of PJSC FGC UES;
approval of the Regulations on Payment of Remuneration and Compensation to Members
of the Audit Commission of PJSC FGC UES in the new edition;
approval of the auditor of PJSC FGC UES;
participation of PJSC FGC UES in the All-Russian Association of Employers “Russian Union
of Industrialists and Entrepreneurs”.
Extraordinary General Meeting of Shareholders
Date:
19 November 2018
It was decided to elect a Chairman of the Board of PJSC FGC UES.
GRI 102-26
FGC UES' Board of Directors performs general strategic management of the Company
and plays a key role in the Company's corporate governance system. The activities
of PJSC FGC UES' Board of Directors are governed by the Company's Articles of Association,
Regulations on the Board of Directors of PJSC FGC UES,62 and PJSC FGC UES' Corporate
Governance Code.
Board of Directors
Collegiate governing body
Functions
Implementation of joint stock control, and general strategic management of the Company.
Accountability
Accountable to the General Meeting of Shareholders.
Appointment/
election procedure
The Board of Directors is elected by the General Meeting of Shareholders of the Company from candidates
proposed by shareholders holding at least 2 % of voting shares in the Company.
The Chairman of the Board of Directors is elected by a majority vote of the formed Board of Directors.
Term of office
One year (until the next Annual General Meeting of Shareholders). The Director may be re-elected an unlimited
number of times. At the same time, a separate decision of the Board of Directors is required to maintain
the status of an independent director who has been elected for seven years in a row to the Board of Directors.
In total, 46 meetings were held in 2018, 3 of them in the form of joint presence. 178 issues
were considered, of which a quarter were issues of corporate governance.
Statistics of work of the Board of Directors
Structure of issues considered
13 %
16 %
s
g
n
i
t
e
e
m
f
o
r
e
b
m
u
N
60
50
40
30
20
10
0
482
39
9
192
22
178
4
43
3
2016
2017
2018
600
500
400
300
200
100
0
d
e
r
e
d
i
s
n
o
c
s
e
u
s
s
I
2 %
3 %
3 %
3 %
3 %
6 %
7 %
19 %
Meetings held in absentia
Meetings held in the form of joint presence
Issues considered
Strategy and priority
directions (29)
Control and reporting (33)
Corporate governance (44)
Subsidiaries management (13)
HR and remuneration (11)
25 %
Approval of transactions (5)
Other issues (6)
Internal audit (6)
Risks (5)
Social issues (3)
Finances (23)
62 In the revision approved by the resolution of the General Meeting of Shareholders of PJSC FGC UES on 29 June 2016
(Minutes No. 17 of 4 July 2016).
154
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
155
CORPORATE GOVERNANCE REPORT
COMPANY'S BOARD OF DIRECTORS
THE REPORT OF THE BOARD OF DIRECTORS
ON RESULTS OF COMPANY DEVELOPMENT
IN PRIORITY BUSINESS DIRECTIONS
GRI 102-34
In 2018, the Company's Board of Directors continued its work on developing the Company
in the priority areas defined in the Company's Long-term Development Programme.
Strategic objective
Resolutions taken
Reliability and quality
of energy supply
Customer
satisfaction
Maintaining
financial sustainability
Efficient
governance
Development
of the UNEG
infrastructure
and consolidation
of UNEG facilities
The report on execution of production programmes in 2017 was taken into account: maintenance
and repair, technical upgrading and reconstruction. The results of the implementation of the work plan
for M&R and TU&R of PJSC FGC UES for 2017 were considered satisfactory.
The programme of modernisation (renovation) of power grid facilities of PJSC FGC UES for 2018–2026
was approved.
The reports on reviewing applications for technological connection and performance of contracts on
implementation of technological connection to the power grid facilities of FGC UES for 2017 and H1
of 2018 were taken into account.
The information on indicators of reliability and quality of services provided by PJSC FGC UES subject
to tariff regulation was taken into consideration.
FGC UES business plan for 2018 and forecast indicators for 2019–2022 were approved.
The Action Plan of FGC UES for reduction of overdue accounts receivable for the electricity transmission
services and dispute settlement was approved.
The consolidated business plan (RAS) and the consolidated business plan (IFRS) for FGC UES Group
for 2018 and the forecasts for 2019–2022 were taken into account.
The reports on the implementation of the consolidated business plan (RAS) and the consolidated business
plan (IFRS) for FGC UES Group for H1 of 2017, 9 months of 2017, 2017, Q1 of 2018, and H1 of 2018 have
been taken into account.
The reports on the execution of the business plan of PJSC FGC UES for 9 months of 2017, 2017, Q1
of 2018, and H1 of 2018 were taken into account.
A general limit of the Company's debt to third parties on borrowed funds was established.
PJSC FGC UES' Antimonopoly Policy was approved.
The report of PJSC FGC UES on results of work on the capital markets and interaction with rating agencies
for 2017 was taken into account.
The report of PJSC FGC UES on the actual use of currency and interest risk hedging instruments for 2017
and the economic effect achieved was taken into account.
The report on the implementation of the Development Plan of the Industrial Assets Management System
of PJSC FGC UES and the achievement of expected effects for 2017 was approved.
The Non-Core Assets Disposal Programme of PJSC FGC UES and its Subsidiaries and the Procedure
for Organising Sales of Non-Core Asset of PJSC FGC UES were taken into account.
The reports on the progress and results of the implementation of measures under the Programme
for Disposal of Non-Core Assets of PJSC FGC UES and its Subsidiaries for Q3 of 2017, Q4 of 2017, Q1
of 2018, and Q2 of 2018 were approved.
An adjustment to the investment programme of PJSC FGC UES for 2016–2020 was approved.
The list of investment projects of PJSC FGC UES being subject to public technological and price audits
in 2018 was approved.
The annual report on the technological and price audits of investment projects of PJSC FGC UES in 2017
was approved.
The report was taken into account on execution of the investment programme of PJSC FGC UES for Q4
of 2017 and throughout 2017, including the projects of federal significance and projects implemented with
application of federal budget resources and other budgetary funds, as well as non-budget funds.
The Executive Body has been instructed to strengthen control over the implementation of priority
investment projects.
The minutes of meetings of the Board of Directors are available on the website
www.fsk-ees.ru in section Shareholders and Investors/Corporate Governance/Decisions of the Board of Directors.
ASSESSMENT OF PERFORMANCE
OF THE BOARD OF DIRECTORS
GRI 102-28
In accordance with the Regulations on
Assessment of Performance of the Board
of Directors of PJSC FGC UES, the Company
annually
comprehensive
assessment of the performance of the
Board of Directors, its committees, and an
individual assessment of the activities of
the directors.
conducts
a
At
the beginning of 2019, JSC VTB
Registrator, an independent company, made
an assessment of activities of the Board
of Directors for 2018. The assessment
methodology was based on best practices
the national
and recommendations of
Corporate Governance Code.
As a result of the assessment, the high
role of the Committees
in enhancing
the effectiveness of the Board of Directors,
the valuable contribution
as well as
of
the work
to
of the Board and committees were noted.
The work of the Chairman of the Board
of Directors and the Corporate Secretary
of the Company was highly appreciated.
independent directors
out of 5
5 points
4.9 points
out of 5
assessment of the activities of the Chairman
of the Company's Board of Directors.
average score of the Board of Directors
as a governing body.
Also, based on the results of the assessment, directions for improving the practices
of the Board of Directors and Committees were identified, in particular, an independent
consultant recommended:
increasing the number of in-person meetings of the Board of Directors, the Audit
Committee and the HR and Remuneration Committee;
considering the possibility of bringing the issues of risk management and internal audit
for internal consideration by the Board of Directors;
developing a programme for the induction of newly elected members of the Board
of Directors;
considering the possibility of introducing into the practice of working with members
of the Board of Directors informing the Board of Directors on issues of interaction with
shareholders and investors, environmental and social responsibility, as well as about
changes in legislation, local regulatory framework and best corporate governance
practices.
156
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
157
CORPORATE GOVERNANCE REPORT
COMPANY'S BOARD OF DIRECTORS
MEMBERS OF THE BOARD OF DIRECTORS
GRI 102-27
GRI 102-22
In accordance with the Company's Articles of Association, the Board of Directors is
elected in the amount of 11 people. Such a number of members makes it possible to form
a balanced composition in terms of professional qualifications, experience and business skills
of the members of the Board of Directors, to ensure high performance, and fully meets
the needs of the Company and the interests of shareholders.
In accordance with the structure of share capital (80.13 % of the total number of ordinary
shares owned by PJSC Rosseti), the vast majority of members of the Board of Directors
of PJSC FGC UES are elected on the proposal of the controlling shareholder, PJSC Rosseti.
The composition of the Board of Directors is balanced in terms of its members having
the core competencies necessary for the effectiveness and duration of their work
on the Board. Members of the Board of Directors have skills in the field of strategic
management, corporate governance, corporate finance, risk management, accounting,
as well as knowledge and experience in the field of the electric power industry.
The Board of Directors of PJSC FGC UES includes three independent directors,
and the Audit Committee and the HR and Remuneration Committee are formed
exclusively of independent directors, which is consistent with the recommendations
of the Bank of Russia Corporate Governance Code and the requirements of the Listing
Rules of PJSC Moscow Exchange. In addition, the independent director I. Kamenskoy
in 2018 was elected as a Chairman of the Investment Committee.
GRI 102-24
Candidates to the Board of Directors are elected based on their personal and professional
skills and in accordance with the independence criteria specified by the rules of listing
of PJSC Moscow Exchange.
When forming the Company's Board of Directors, the following criteria are taken into
account:
members of the Company's Board of Directors shall meet the requirements with respect
to their skills, experience, knowledge and business qualities;
election to the Company's Board of Directors of at least three independent directors
and one representative from the Association NP Market Council;
executive directors may not constitute more than 25 % of the composition
of the Company's Board of Directors.
Competences and industry-specific experience of members of PJSC FGC UES' Board of Directors
Board members
Tenure
(number of years)63
Years within
the energy
industry
P. Livinsky
P. Grachev
A. Demin
I. Kamenskoy
E. Murov
6 months
4 years 6 months
4 years 6 months
2 years 6 months
5 years 6 months
N. Roshchenko
2 years 6 months
S. Sergeev
P. Snikkars
E. Prokhorov
O. Shatokhina
E. Ferlenghi
2 years 6 months
2 years 6 months
2 years 6 months
1 year 3 months
8 years
7 years
5 years
20 years
2.6 years
7 years
10 years
10 years
14 years
11 years
16 years
10 years
Key competences
Strategy
Finances
and audit
Energy
industry
Legal
matters
Corporate
governance
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Competences of the Board
of Directors' members
Corporate
governance
Strategy
12
10
8
6
4
2
0
Board of Directors structure by term of service
3
Finances
and audit
1
1
Less than 1 year
From 1 to 4 years
From 4 to 7 years
More than 7 years
Legal matters
Energy
Energy
1
Composition
of the Board of Directors
Independent
directors
Non-executive
directors
Executive
directors
63 As of 31 December 2018.
6
3
7
158
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
159
CORPORATE GOVERNANCE REPORT
COMPANY'S BOARD OF DIRECTORS
Attendance of meetings of the Board of Directors and its Committees during 2018
ROLE OF INDEPENDENT DIRECTORS
Board of Directors
Investment
Committee
Strategy
Committee
HR and Remuneration
Committee
Audit
Committee
Members of the Board of Directors acting during the whole year 2018:
P. Grachev
Andrey Demin64
I. Kamenskoy
A. Murov
E. Prokhorov65
N. Roshchenko
S. Sergeev
P. Snikkars
E. Ferlenghi
O. Shatokhina66
46/46
46/46
46/46
46/46
42/46
37/46
45/46
36/46
44/46
46/46
100 %
100 %
100 %
100 %
91 %
80 %
98 %
78 %
96 %
100 %
100 %
89 %
78 %
8/12
67 %
9/12
75 %
100 %
90 %
12/12
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Members who left the Board of Directors in 2018:
M. Poluboyarinov67
22/25
88 %
Members elected to the Board of Directors in 2018:
P. Livinsky68
21/21
100 %
Independent directors
64 Since the election of A. Demin to the Strategy Committee of PJSC FGC UES Board of Directors (hereinafter, the Committee)
by the resolution of the Board of Directors of PJSC FGC UES of 12 December 2017 (Minutes No. 383 dated 14 December 2018)
and until the termination of powers due to the election of a new Committee on 26 September 2018 (Minutes No. 421 dated 28
September 2018), 12 meetings of the Committee were held. A. Demin attended 8 Committee meetings.
65 Since the election of E. Prokhorov to the Strategy Committee of PJSC FGC UES Board of Directors (hereinafter. the Committee)
by the resolution of the Board of Directors of PJSC FGC UES of 11 December 2017 (Minutes No. 383 dated 14 December 2018)
and until the termination of powers due to election of a new Committee on 26 September 2018 (Minutes No. 421 dated 28
September 2018), 12 meetings of the Committee were held. E. Prokhorov attended 8 Committee meetings.
66 Since the election of O. Shatokhina to the Strategy Committee of PJSC FGC UES' Board of Directors (hereinafter, the Committee)
by the resolution of the Board of Directors of PJSC FGC UES on 11 December 2017 (Minutes No. 383 dated 14 December 2018)
and until the termination of powers due to election of a new Committee on 26 September 2018 (Minutes No. 421 dated 28
September 2018), 12 meetings of the Committee were held. O. Shatokhina attended all Committee meetings.
67 During the participation of M. Poluboyarinov on the Board of Directors of PJSC FGC UES in 2018, 25 meetings were held.
At the Annual General Meeting of Shareholders of PJSC FGC UES on 25 June 2018 (Minutes of the AGMS No. 20 dated 2 July 2018),
the Board of Directors was re-elected, and M. Poluboyarinov was not included in the new composition.
68 In 2018, during the participation of P. Livinsky on the Board of Directors of PJSC FGC UES, 21 meetings were held. P. Livinsky
was elected a member of the Board of Directors at the Annual General Meeting of Shareholders of PJSC FGC UES on 28 June 2018
(Minutes of the AGMS No. 20 of 2 July 2018).
the
effective
implementation
For
by the Board of Directors of the Company
of its functions and making weighted and
informed decisions, ensuring control over
the management, the Board of Directors
of PJSC FGC UES includes independent
directors.
The goal of attracting
independent
directors to the activities of the Board
of Directors is to ensure an independent
perception of the Company's activities
and its governing bodies based on their
knowledge, experience and qualifications.
The fairness of independent directors and
their constructive criticism are very valuable
for the Board of Directors and the whole
Company.
Experience
the
of
cooperation
independent directors proves
with
that
they demonstrate high professionalism,
independent statements and independent
voting on the agenda items. Independent
directors contribute to making decisions
in
interests of various groups
of stakeholders and improving the quality
of managerial decisions.
the
Independent directors play a major
role in defining the Company's strategy
development and monitoring its execution,
evaluation of activities of executive bodies,
efficiency assessment of risk management,
internal control,
internal audit systems,
and evaluation of activities of the Board
and its Committees.
Company
The
appreciates
the contribution of independent directors
in improving the Board efficiency.
highly
Engagement of independent directors in the work of the Board
of Directors and its Committees
100 %
99 %
100 %
100 %
100 %
95 %
90 %
85 %
80 %
75 %
70 %
65 %
60 %
90 %
Average percentage
of participation
of independent
directors in meetings
of the Board
of Directors
and committees of
the Board
of Directors*
Meetings of the
Board of
Directors
Meetings of
the Audit
mittee
Com
Meetings of the
Investment
mittee
Com
Meetings of the
Strategy
mittee
Com
R
mittee
Com
and Remuneration
Meetings of the H
* Two independent directors out of three are
members of the Strategy Committee.
During 2018, the Board of Directors of PJSC FGC UES took decisions on recognising
as independent the members of the Board of Directors of PJSC FGC UES E. Ferlenghi
by the criterion of relatedness with the issuer69 and P. Grachev by the criterion of coherence
with a significant counterparty.70 In accordance with the decisions taken, the Board
of Directors of PJSC FGC UES determined that the connection of E. Ferlenghi with
PJSC FGC UES and P. Grachev with significant counterparties of the Company is of
a formal nature and does not affect the independence in the formation of E. Ferlenghi's and
P. Grachev's position on the agenda of the Board of Directors, on the ability to make objective
and fair judgements, independent of the influence of the executive bodies of PJSC FGC UES,
certain groups of shareholders, contractors, competitors of PJSC FGC UES and the state.
69 Clause 5 of Meeting Minutes of PJSC FGC UES' Board of Directors No. 414 of 29 June 2018.
70 Clause 2 of Meeting Minutes of the Board of Directors of PJSC FGC UES No. 396 dated 4 April 2018, clause 5 of Meeting Minutes
of PJSC FGC UES' Board of Directors No. 414 of 29 June 2018.
160
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
161
CORPORATE GOVERNANCE REPORT
COMPANY'S BOARD OF DIRECTORS
BIOGRAPHY OF MEMBERS OF PJSC FGC UES BOARD OF DIRECTORS71
As of 31 December 2018, the composition of the Board
of Directors of PJSC FGC UES was elected by the Annual
General Meeting of Shareholders on 28 June 2018 (information
on participation in management bodies of other organisations
is listed as of 31 December 2018, the experience
of the members of the Board of Directors is indicated for
the last five years and at present).
None of the Board members holds shares
of PJSC FGC UES.
GRI 102-23
PAVEL LIVINSKY
Chairman of PJSC FGC UES Board of Directors
Board member since 28 June 2018.
Born in 1980.
Graduated from Lomonosov Moscow State University,
majoring in Economics. In 2003, he was awarded a master's
degree in Management.
Experience:
2011–2013 — General Director of United Power Company
JSC;
2013–2017 — Head of the Department of Fuel
and Energy Economy of Moscow;
2017–2017 — Head of the Department of Housing
and Communal Services of Moscow;
since 2017 — General Director, Chairman
of the Management Board, Member
of the Management Board of PJSC Rosseti.
External appointments:
Member of the Board of Directors, Chairman of the Board
of Directors of PJSC MOESK, Chairman of the Board
of Directors of PJSC Lenenergo; Member of the Board
of Directors of PJSC RusHydro, JSC SO UES, PJSC Rosseti;
Member of the Management Board of OOR RSPP, Member
of the Board of Trustees of FSBEI HE NRU MEI,
the Foundation of the Cathedral of Christ the Saviour,
the all-Russian public sports organisation FSPR; Member
of
the Association RNC WEC,
Association RNC CIGRE; Member of the Supervisory Board
of NP NTS UES; President, Member of the Presidium
of the RPO Sports Federation of Firefighters and Rescuers.
the Presidium of
ANDREY DEMIN
Non-Executive Director
Board member since 2014.
Born in 1974.
Graduated
from Zaporozhye State University, major
Institute
in Applied Mathematics, and Zaporozhye
of Economics and Information Technologies, majoring
in Finance, Economist qualification.
Experience:
2012–2013 — Advisor of the Chairman
of the Management Board of JSC FGC UES;
2013–2015 — First Deputy General Director for Economic
Affairs and Finance of PJSC Rosseti;
since 2013 — Member of the Management Board
of PJSC Rosseti.
PAVEL GRACHEV
Independent Director
Member of the Audit Committee72
Member of the HR and Remuneration Committee73
Board member from 27 June 2013 to 27 June 2014,
re-elected in 2015.
Born in 1973.
Graduated from the Saint Petersburg State University
and the University of Trieste (Italy), majoring in Law. J.D.
Experience:
2013 — General Director of JSC Far East and Baikal
Region Development Fund;
2013–2014 — Acting Senior Executive Director of Polyus
Gold International Limited;
2014–2016 — President of JSC Polyus Krasnoyarsk
(JSC Polyus before renaming);
2014–2016 — Senior Executive Director of Polyus Gold
International Limited;
since 2014 — General Director of PJSC Polyus;
since 2016 — General Director of MC Polyus LLC.
External appointments:
Member of the Board of Directors of PJSC Polyus,
PJSC RusHydro; Member of the Board of Directors,
Chairman of the Board of Directors of SL Zoloto LLC.
71 Here and elsewhere, personal information about members of the Federal Grid’s governing and control bodies is disclosed
with their consent.
72 Resolution of the Board of Directors, Minutes No. 414 of 29 June 2018.
73 Resolution of the Board of Directors, Minutes No. 414 of 29 June 2018.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
163
CORPORATE GOVERNANCE REPORT
COMPANY'S BOARD OF DIRECTORS
EGOR PROKHOROV
Non-Executive Director
Board member since 2016.
Born in 1982.
NIKOLAY ROSHCHENKO
Non-Executive Director
Board member since 2016.
Born in 1981.
Graduated from Saint Petersburg State University, majoring
in Mathematical Methods in Economics. Ph.D. in Economics.
Graduated from Tax Academy of the Russian Federation,
majoring in Jurisprudence.
Experience:
2009–2013 — Head of the Department of Corporate
Finance, Director of Finance of JSC FGC UES;
2011–2013 — General Director of Index of Energy –
FGC UES LLC (concurrently);
2012–2013 — Finance Director of JSC IDGC Holding
(concurrently);
2013 — Financial Director of JSC Rosseti;
since 2013 — Deputy General Director for Finance
of PJSC Rosseti.
External appointments:
Board member of JSC DVEUK.
Experience:
From 2008 to the present — Head of the Legal Department
of the Association NP Market Council;
Since 2014 — Member of the Management Board
of the Association NP Market Council;
since 2017 — Deputy Chairman of the Management Board,
Member of the Management Board of JSC ATS.
External appointments:
Member of the Board of Directors of JSC ATS, Chairman
of the Board of Directors of JSC FSC.
IGOR KAMENSKOY
Independent Director
Chairman of the Audit Committee74
Chairman of the Investment Committee75
Member of the HR and Remuneration Committee76
Board member since 2016.
Born in 1968.
Graduated from Lenin Moscow State Pedagogical Institute,
majoring in Russian Language and Literature.
Experience:
2009–2014 — Managing Director of Renaissance
Capital LLC, Financial Consultant;
Since 2014 — Managing Director
of Renaissance Broker LLC.
External appointments:
Member of the Board of Directors of SC Soglasie LLC,
PJSC Aeroflot, PJSC Corporation VSMPO-AVISMA.
ANDREY MUROV
Executive Director
Chairman of the Management Board
Board member since 2013.
Born in 1970.
Graduated from Saint Petersburg State University, majoring
in Jurisprudence; underwent the Financial Management
retraining programme at the Interdisciplinary Institute
of Executive Staff Refresher Training and Retraining;
graduated from the State University of Civil Aviation, majoring
in Organisation of Transportations and Management
on Transport (Air Transport). Doctor of Economic Science.
Experience:
2012–2013 — Acting General Director, Executive Director,
Member of the Management Board of JSC IDGC Holding
(since 4 April 2013 — JSC Rosseti);
2012–2013 — First Deputy Chairman of the Management
Board of PJSC FGC UES;
since 2013 — Chairman of the Management Board
of PJSC FGC UES;
since 2015 — Chairman of the RNC CIGRE.
External appointments:
Member of the Board of Directors of PJSC Rosseti,
PJSC Inter RAO, JSC SO UES; Member of the Board
of Trustees of FSBEI HE NIU MEI, FSBEI HE SPbSU, FSBEI HE
SPbGEU; Member of the Supervisory Board of the Association
for the Development of International Energy Research
and Projects Global Energy; Non-Profit Partnership Scientific
and Technical Council of the Unified Energy System; Member
of the Supreme Council of the All-Russian NGO Rugby Union
of Russia.
74 Resolution of the Board of Directors, Minutes No. 414 of 29 June 2018.
75 Resolution of the Board of Directors, Minutes No. 421 of 28 September 2018.
76 Resolution of the Board of Directors, Minutes No. 414 of 29 June 2018.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
165
CORPORATE GOVERNANCE REPORT
COMPANY'S BOARD OF DIRECTORS
SERGEY SERGEEV
Non-Executive Director
Member of the Investment Committee77
Board member since 2016.
Born in 1976.
Graduated with distinction from the Novocherkassk State
Polytechnic University, majoring in Industrial and Civil
Construction.
Experience:
2009–2013 — Deputy Chairman of the Management
Board of JSC FGC UES;
2012–2013 — General Director of JSC CECM UES;
since 2013 — Deputy General Director for Capital
Construction of PJSC Rosseti.
External appointments:
Member of the Board of Directors of PJSC Lenenergo,
PJSC MOESK; Chairman of the Board of Directors
of JSC TCC.
PAVEL SNIKKARS
Non-Executive Director
Chairman of the Strategy Committee78
Member of the Investment Committee79
Board member since 2016.
Born in 1978.
Graduated from the Siberian Academy of Public Service,
majoring
in Public and Municipal Administration;
the Siberian University of Consumer Cooperation, majoring
in Jurisprudence. Ph.D. in Economics.
Experience:
2012–2013 — Vice Chairman of the Management Board
of NP Market Council;
since 2013 — Director of the Electric Power Industry
Development Department of the Ministry of Energy
of Russia.
External appointments:
Member of the Board of Directors, Chairman of the Board
of Directors of JSC Institute ENERGOSETPROEKT.
ERNESTO FERLENGHI
Independent Director
Chairman of the HR and Remuneration Committee80
Member of the Audit Committee81
Member of the Strategy Committee82
OKSANA SHATOKHINA
Non-Executive Director
Board member since 2017.
Born in 1975.
from
Graduated
the
Government of the Russian Federation, majoring in Finance
and Credit.
the Financial Academy under
Experience:
2012–2013 — Director for Economics of JSC FGC UES;
2012–2013 — Director for Economics of JSC IDGC
Holding (since 4 April 2013 — JSC Rosseti);
2013 — Deputy General Director for Economic Affairs
and Finance of PJSC Rosseti;
2013–2018 — Deputy General Director for Economic
Affairs of PJSC Rosseti;
2018 — Chief Advisor of PJSC Rosseti.
Board member from 2008 to 2014. Elected to the Board
again in 2016.
Born in 1968.
Graduated from the University of Tor Vergata (Rome),
Faculty of Mathematics, Physics and Natural Sciences.
Experience:
2005–2013 — Head of the Representative Office
of the Eni Concern in the Russian Federation and the CIS;
2013–2014 — Deputy General Director for External
Relations of JSC ARKTIKGAZ;
2014 — Advisor of the Chairman of the Management
Board of Renova Group;
2014–2017 — Senior Advisor for Russia of Eni S.p.A;
2014–2015 — Advisor for Business Development
of Maire Tecnimont S.p.A;
2015–2017 — Senior Advisor for Business Development
of Saipem S.p.A;
2015 — Consultant of SIIRTEC NIGI S.p.A;
2016–2017 — Consultant of SIAD RUS LLC;
2016–2017 — Senior Advisor of Snam S.p.A;
since 2013 — Individual Entrepreneur;
since 2015 — President of the Association of Italian
Industrialists “Confederation of Italian Industry”;
since 2017 — Executive Vice President of Eni on Market
Development in Russia and Central Asia of Eni S.p.A;
since 2018 — Chairman of the Energy Committee
of the Association of European Businesses (AEB);
since 2018 — General Director of Eni Energhia LLC.
77 Resolution of the Board of Directors, Minutes No. 421 of 28 September 2018.
78 Resolution of the Board of Directors, Minutes No. 421 of 28 September 2018.
79 Resolution of the Board of Directors, Minutes No. 421 of 28 September 2018.
80 Resolution of the Board of Directors, Minutes No. 414 of 29 June 2018.
81 Resolution of the Board of Directors, Minutes No. 414 of 29 June 2018.
82 Resolution of the Board of Directors, Minutes No. 421 of 28 September 2018.
166
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
167
CORPORATE GOVERNANCE REPORT
COMPANY'S BOARD OF DIRECTORS
Composition of the Board of Directors valid from 15 September 2017 to 28 June 201883
MIKHAIL POLUBOYARINOV
Non-Executive Director
PAVEL GRACHEV
Independent Director
ANDREY DEMIN
Non-Executive Director
IGOR KAMENSKOY
Independent Director
EGOR PROKHOROV
Non-Executive Director
NIKOLAY ROSHCHENKO
Non-Executive Director
ANDREY MUROV
Executive Director
SERGEY SERGEEV
Non-Executive Director
PAVEL SNIKKARS
Non-Executive Director
OKSANA SHATOKHINA
Non-Executive Director
ERNESTO FERLENGHI
Independent Director
First Deputy Chairman, Member of the Management Board of the state corporation Bank
for Development and Foreign Economic Affairs (Vnesheconombank).
Year of birth: 1966
Education: Higher. Ph.D. in Economics.
President of PJSC Polyus.
Year of birth: 1973
Education: Higher. J.D.
Member of the Management Board of PJSC Rosseti.
Year of birth: 1974
Education: Higher.
Managing Director of Renaissance Broker LLC.
Year of birth: 1968
Education: Higher.
Deputy General Director for Finance of PJSC Rosseti.
Year of birth: 1982
Education: Higher. Ph.D. in Economics.
Member of the Management Board, Head of the Legal Department of the Association
NP Market Council.
Year of birth: 1981
Education: Higher.
Chairman of the Management Board of PJSC FGC UES.
Year of birth: 1970
Education: Higher. Doctor of Economic Science.
Deputy General Director for Capital Construction of PJSC Rosseti.
Year of birth: 1976
Education: Higher.
Director of the Department of Electric Power Industry Development of the Ministry
of Energy of Russia.
Year of birth: 1978
Education: Higher. Ph.D. in Economics.
Deputy General Director of PJSC Rosseti.
Year of birth: 1975
Education: Higher.
President of Confindustria Russia "Association of Italian Entrepreneurs in Russia".
Year of birth: 1968
Education: Higher.
INTRODUCTION TO THE POST OF NEW MEMBERS
OF THE BOARD OF DIRECTORS
In order to ensure the effective work of the Board
of Directors, familiarise its members with the production and
financial-economic activities and incorporate new directors
into their work as quickly as possible, the Company provides
for a number of events.
The Company strives for the fullest possible provision
of members of the Company's Board of Directors with
all the information necessary for their duties, including
ensuring that the members, especially those elected
for the first time, are able in a short time to get a sufficient
idea of the Company's strategy, corporate governance
system, risk management and internal control system,
its executive
distribution of responsibilities between
bodies and other relevant information on the Company's
activities in the manner determined by the Company's
internal documents, including by holding an information
and introductory meeting with members of the Company's
Management Board.
LIABILITY INSURANCE OF DIRECTORS AND OFFICIALS
The cost of liability insurance
in 2018 amounted to
RUB 5.76 million.
To protect the property interests of the Company's shareholders, ensure the source of compensation for potential
losses to the Company and/or the Insured Persons in the event of certain events, as well as protect the directors
and officials from third-party claims, the Company provides liability insurance.
The perimeter of insurance coverage includes members of the Board of Directors of the Company, the Chairman
of the Management Board and his deputies, members of the Management Board of the Company, the Chief Accountant
of the Company, as well as other officials of the Company with the right to sign contracts and other documents, and/or
the right to make any representations and/or statements on behalf of the Company.
CORPORATE SECRETARY
The Corporate Secretary is an important participant in the Company's corporate governance system. The Corporate
Secretary is functionally subordinate to the Board of Directors and administratively subordinate to the Chairman of
the Management Board, that ensures his/her sufficient independence from the Company’s management. In addition, in
order to ensure the independence of the Corporate Secretary from the Company's management, the person holding this
position is prohibited to combine his work as the Corporate Secretary with the performance of other functions in the
Company.
The Corporate Secretary’s activities are subject to provisions of the Regulations on the Corporate Secretary
of PJSC FGC UES84.
Aleksey Ozherelyev performs functions of the Company's Corporate Secretary.
ALEKSEY OZHERELYEV
Corporate Secretary of PJSC FGC UES
Born in 1986. Graduated from the Moscow State University of Economics, Statistics, and Informatics in 2006, majoring
in Finance and Credit.
Experience:
2011–2013 — worked in PJSC FGC UES in the position of Deputy Head of the Corporate Governance Department;
2013–2016 — worked in PJSC Rosseti in the position of Head of the Department for Organisation of Operation
of the Management Bodies;
Since 9 January 2017 till present, he has worked in PJSC ROSSETI as Head of the Department for Organisation
of Operation of the Management Board, Board of Directors and Interaction with Shareholders and Investors
of the Department of Corporate Governance and Interaction with Shareholders and Investors.
83 The positions are as at the date of election.
84 Approved by the Board of Directors, Minutes No. 279 of 27 July 2015, Minutes No. 330 of 8 July 2016.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
169
CORPORATE GOVERNANCE REPORT
COMMITTEES OF THE COMPANY'S BOARD OF DIRECTORS
COMMITTEES OF THE COMPANY'S
BOARD OF DIRECTORS
Board Committees
Advisory bodies of the Board of Directors
Functions
Preliminary consideration of the most important issues related to the competence of the Company's Board
of Directors, and the development of recommendations that guide the Board of Directors when making
decisions on relevant issues
Accountability
Report to the Board of Directors of the Company
Formation
of Committees
The Committees are formed from Board members and persons they suggest, whose competence
and experience are essential in the work of the Committees
In accordance with best practice and the requirements of the Listing Rules of the Moscow Exchange, only
independent directors can be nominated to the Audit Committee and the HR and Remuneration Committee
This contributes to objective and balanced recommendations
In 2018, four Board Committees worked to increase the effectiveness of the resolutions
taken by the Board of Directors by providing preliminary consideration of the most important
issues and preparing respective recommendations for the Board, including:
Audit Committee;
Strategy Committee;
HR and Remuneration Committee;
Investment Committee.
The Company follows the practice of attracting independent experts, introduced in 2016.
In 2018, one independent expert was involved in the work of the Audit Committee and the
Investment Committee.
Total number of issues reviewed by the Committees
90
80
70
60
50
40
30
20
10
0
82
55
48
47
43
42
46
43
45
20
18
23
2016
2017
2018
2016
2017
2018
2016
2017
2018
2016
2017
2018
Audit Committee
HR and Remuneration
Committee
Strategy Committee
Investment Committee
Total number of meetings held
2016
2017
2018
Committee
In-person
meetings
Meetings
in
absentia
In-person
meetings
Meetings
in
absentia
In-person
meetings
Meetings
in
absentia
Audit Committee
HR and Remuneration
Committee
Strategy Committee
Investment Committee
4
1
8
12
5
10
4
4
1
0
9
7
14
10
8
6
1
0
10
10
18
12
10
8
The Board of Directors of PJSC FGC UES reviewed and approved the reports
of the Audit Committee, Strategy Committee, HR and Remuneration Committee,
and Investment Committee for the 2017–2018 corporate year85.
Detailed information
on the issues reviewed
by the Board of Directors'
Committees in key areas
of activity is given
in Appendix 1.
AUDIT COMMITTEE
The role of the Audit Committee is to assist the Board of Directors in providing efficient control
of the Company’s financial and business operations.
The committee performs important functions in the Company's corporate governance
system in terms of monitoring the completeness, accuracy and reliability of financial
statements, the efficiency and reliability of the risk management, internal control
and corporate governance system, as well as ensuring the objectivity and
independence of the internal and external audit functions.
The activities and functions of the Audit Committee are governed by the Regulations
on the Audit Committee of the Board of Directors of PJSC FGC UES, approved by the resolution
of the Board of Directors of 16 November 201586.
Given the nature of their responsibilities, the members of the Audit Committee have sufficient
relevant financial experience and skills necessary to work with financial statements,
business analysis and financial management. The Audit Committee does not include
any of the top management representatives of the Company, and it consists entirely
of independent directors.
Information on evaluation
of the external audit by
the Audit Committee
of the Board of Directors
is given in the section
Corporate Governance Report/
External Auditor.
At the beginning of 2019, an independent consultant of JSC VTB Registrator,
in assessing the performance of the Board of Directors and its Committees in 2018,
evaluated the Audit Committee and the activities of its members. The average rating
of the Audit Committee was 5 points out of 5 possible.
85 Minutes No. 415 dated 27 July 2018.
86 Minutes No. 291 dated 19 November 2018.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
171
CORPORATE GOVERNANCE REPORT
GRI 102-22
Composition of the Audit Committee
I. Kamenskoy,
Chairman, Independent Director
P. Grachev, Independent Director
Ernesto Ferlenghi, Independent Director
ACTIVITIES IN 2018
Elected by the resolution of the Board
of Directors dated 27 September 2017
Elected by the resolution of the Board
of Directors dated 28 June 2018
+
+
+
+
+
+
In 2018, the Audit Committee held 19 meetings (of which one meeting was held in the form of joint attendance), 47 issues
were considered.
Structure of issues reviewed by the Audit Committee in 2018
4 %
47 %
19 %
Organisation
Reporting, audit and revisions
30 %
RMS, IC and CG
Fraud management
STRATEGY COMMITTEE
COMMITTEES OF THE COMPANY'S BOARD OF DIRECTORS
Elected
by the resolution
of the Board
of Directors dated
11 December 2017
Elected
by the resolution
of the Board
of Directors dated
26 September 2018
A. Kaplun, Director of the Department for Natural Monopolies Relations of MC Polyus LLC
E. Belchenko, Senior Manager for Tariff Solutions of MC Polyus LLC
A. Gabov, Acting Deputy Director of the Department of State Regulation of Tariffs,
Infrastructure Reforms and Energy Efficiency of the Ministry of Economic Development
of the Russian Federation
A. Germanovich, General Director of AG Ventures LLC
K. Mikhailenko, Chief Advisor of PJSC Rosseti
A. Demin, Member of the Board of Directors of PJSC FGC UES, Member of the Management
Board of PJSC Rosseti
B. Livshits, Deputy Head of the Competitive Pricing Development Department
of the Association NP Market Council
E. Olkhovich, Deputy General Director for Strategic Development of PJSC Rosseti
E. Prokhorov, Member of the Board of Directors of PJSC FGC UES, Deputy General
Director for Finance of PJSC Rosseti
S. Lebedev, Director of the Strategic Development Department of PJSC Rosseti88
V. Furgalsky, Deputy General Director for Corporate and Legal Affairs of PJSC Rosseti89
M. Tikhonova, Deputy Chairman of the Management Board of PJSC FGC UES
P. Grebtsov, Director of the Tariff Policy Department of PJSC Rosseti
O. Shatokhina, Deputy General Director for Economic Affairs of PJSC Rosseti
A. Erdyniev, Deputy Director of the Electric Power Industry Development Department
of the Ministry of Energy of Russia
E. Ferlenghi, Member of the Board of Directors of
PJSC FGC UES, President of the Italian Industrialists “Confederation of Italian Industry”
V. Yavorsky, General Director of Tori - Audit LLC
+
+
+
+
+
+
+
+
+
+
+
+
The role of the Strategy Committee is to assist the PJSC FGC UES Board of Directors in improving PJSC FGC UES performance
efficiency in the long term.
ACTIVITIES IN 2018
GRI 102-26
The Strategy Committee preliminarily considers issues related to defining and adjusting the Company's strategic goals,
amending and approving the Company's long-term development programme, evaluating the Company's performance
in the long term, and conducting business planning.
The activities and functions of the Strategy Committee are governed by the Regulations on the Strategy Committee
of the Board of Directors of PJSC FGC UES, a revised version of which was approved by the Board of Directors
of PJSC FGC UES on 12 July 201687.
GRI 102-22
Composition of the Strategy Committee
Elected
by the resolution
of the Board
of Directors dated
11 December 2017
Elected
by the resolution
of the Board
of Directors dated
26 September 2018
+
+
P. Snikkars, Chairman of the Strategy Committee, Member of the Board of Directors
of PJSC FGC UES, Director of the Department for Development of Electric Power Industry
of the Ministry of Energy of Russia
87 Minutes No. 331 dated 15 July 2016 given the wording of Minutes No. 395 dated 26 March 2018.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
In 2018, the Strategy Committee held 20 meetings (10 in the form of joint attendance and 10
in absentia), and 46 issues were considered.
Structure of issues reviewed
by the Strategy Committee in 2018
26 %
13 %
Organisation
Determination and control
of the strategy implementation
Dividend and credit policies
Business planning
4 %
Subsidiaries and affiliates management
26 %
Approval of transactions
4 %
26 %
88 The powers were terminated by the resolution of the Board of Directors of PJSC FGC UES, Minutes No. 426 of 2 November 2018.
89 Elected by the resolution of the Board of Directors of PJSC FGC UES, Minutes No. 426 of 2 November 2018.
+
+
+
+
+
+
+
+
+
+
+
+
+
173
CORPORATE GOVERNANCE REPORT
COMMITTEES OF THE COMPANY'S BOARD OF DIRECTORS
HR AND REMUNERATION COMMITTEE
The role of the HR and Remuneration Committee is to assist the Board of Directors of PJSC FGC UES in the execution
of personnel planning (succession planning), the formation and implementation of the remuneration policy.
The committee preliminarily considers issues related to the formation of an effective and transparent practice
of remuneration, as well as the development of HR policy, the implementation of personnel planning, and the evaluation
of the effectiveness of the work of the Board of Directors.
The HR and Remuneration Committee’s activities and functions are governed by the Regulations on the HR and Remuneration
Committee of the Board of Directors of PJSC FGC UES, a revised version of which was approved by the Board of Directors
of PJSC FGC UES on 3 October 201690.
GRI 102-22
Composition of the HR and Remuneration Committee
Elected by the resolution of the Board
of Directors dated 27 September 2017
Elected by the resolution of the Board
of Directors dated 28 June 2018
Ernesto Ferlenghi, Chairman, Independent Director
P. Grachev, Independent Director
I. Kamenskoy, Independent Director
+
+
+
+
+
+
The HR and Remuneration Committee does not include any representatives of the Company's top management and consists
entirely of independent directors.
ACTIVITIES IN 2018
In 2018, the HR and Remuneration Committee held 12 meetings in absentia, and 23 issues were considered.
Structure of issues reviewed by the HR
and Remuneration Committee in 2018
48 %
Organisation
Personnel
Remuneration and setting/achievement of KPIs
22 %
30 %
INVESTMENT COMMITTEE
The role of the Investment Committee is to assist the Board of Directors in improving and developing the Company's
investment policy.
The committee preliminarily considers issues related to the approval and adjustment of the investment programme,
reporting on its execution, and the progress of the implementation of certain investment projects of the Company.
The committee’s activities and functions are governed by the Regulations on the Investment Committee of the Board
of Directors of PJSC FGC UES, a revised version of which was approved by the Board of Directors on 23 March 201891.
90 Minutes No. 341 dated 5 October 2018.
91 Minutes No. 331 dated 15 July 2016 given the wording of Minutes No. 395 dated 26 March 2018.
174
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
GRI 102-22
Composition of the Investment Committee
I. Kamenskoy, Chairman, Member of the Board of Directors of PJSC FGC UES, Managing
Director of Renaissance Broker LLC
D. Akopyan, Director of the Investment Activity Department of PJSC Rosseti
M. Bychko, Director of the Capital Construction Department of PJSC Rosseti
D. Gvozdev, Chief Engineer
V. Gritsenko, Member of the Presidium of NP OPORA ROSSII
Yu. Egoshin, Deputy Director of the Department for Relations with Natural Monopolies
of MC Polyus LLC
A. Ilienko, Member of the Management Board, Director for UES Development of JSC SO UES
A. Kaplun, Director of the Department for Natural Monopolies Relations of MC Polyus LLC
V. Kiselev, Chairman of the Consumer Council of the Government Commission for the
Electric Power Industry
V. Pelymsky, Deputy Chief Engineer of PJSC Rosseti
I. Selivakhin, Financial Director of JSC TSA, Advisor of the Chairman of the Management
Board of the Association NP Market Council
S. Sergeev, Member of the Board of Directors of PJSC FGC UES, Deputy General Director
for Capital Construction of PJSC Rosseti
P. Snikkars, Member of the Board of Directors of PJSC FGC UES, Director of the Department
for Development of the Electric Power Industry of the Ministry of Energy of Russia
O. Tokarev, Deputy Director of the Machine Tool Building and Investment Machine-
Building Department of the Ministry of Industry and Trade of Russia
R. Filimonov, Member of the Management Board, First Deputy Chairman
of the Management Board of PJSC FGC UES (is not a member of the Management Board
of PJSC FGC UES and not a member of the Investment Committee since 11 March 2019).
ACTIVITIES IN 2018
Elected
by the resolution
of the Board
of Directors dated
11 December 2017
Elected
by the resolution
of the Board
of Directors dated
26 September 2018
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
In 2018, the Investment Committee held 18 meetings (10 in the form of joint attendance and 8 in absentia), and 45 issues
were considered.
Structure of issues reviewed
by the Investment Committee in 2018
4 %
18 %
9 %
20 %
Organisation
Investment programme adjustment
Implementation of selected investment
projects
Investment programme implementation
Internal documentation approval
Technological connection
9 %
40 %
175
CORPORATE GOVERNANCE REPORT
EXECUTIVE GOVERNANCE BODIES
EXECUTIVE GOVERNING BODIES
In the reporting year, PJSC FGC UES Management Board considered the following most important issues:
Subject
Issue
The governance of the Company's current activities is carried out by the collegial and sole
executive bodies, which are the Management Board and the Chairman of the Management
Board of PJSC FGC UES.
Management Board
Collegial executive body
Chairman of the Management Board
Sole executive body
Production
activity
Functions
Ensure the effective implementation of the tasks facing the Company and the implementation
of development strategies
Accountability
Report to the General Meeting of Shareholders and the Board of Directors
Appointment/
election procedure
Members of the Management Board of the Company
are elected (appointed) by the Board of Directors
of the Company at the suggestion of the Chairman
of the Management Board of the Company
Elected by the General Meeting of Shareholders
Term of office
3 years
5 years
For subordination and efficient monitoring of work of the Company's executive bodies,
in accordance with the Company's Articles of Association, the following matters related
to members and the Chairman of the Management Board are reserved for the Board
of Directors:
election of members of the Company's Management Board (except the Chairman
of the Company's Management Board) and early termination of their powers;
applying disciplinary measures against the Chairman of the Company's Management
Board and incentives in accordance with the applicable law;
setting the amounts of remunerations and compensations payable to the Chairman
and members of the Company's Management Board;
coordinating holding of positions in management bodies of other companies,
as well as other paid positions in other companies.
REPORT ON ACTIVITIES OF THE COMPANY'S
MANAGEMENT BOARD
In 2018, the Management Board of PJSC FGC UES held 82 meetings, including one in-person
meeting and 81 in absentia, 386 issues were considered.
Statistics on the number
of issues reviewed by PJSC FGC UES
Management Board
747
433
386
2016
2017
2018
1,000
800
600
400
200
0
100
80
60
40
20
0
Statistics on the number
of meetings held by
PJSC FGC UES Management Board
82
78
82
2016
2017
2018
The annual report on technological and price audits of investment projects of PJSC FGC UES
in 2017 was considered.
Reports on the status and progress of a number of investment projects were considered.
The consolidated five-year work plan and the budget for the maintenance and repair
of PJSC FGC UES for the period 2019–2023 were considered.
The concept of development of the operational technological management and situational
management system of PJSC FGC UES was considered.
The programme of energy saving and energy efficiency improvement of PJSC FGC UES
for the period 2020–2024 was considered.
The programme of modernisation (renovation) of electric grid facilities of PJSC FGC UES
for 2018–2026 was considered.
Social and HR
Policy
Amendments were made to the Long-Term Corporate Assistance Programme for Improving
the Living Conditions of JSC FGC UES employees.
Amendments were made to the Regulations on Providing Sponsorship to PJSC FGC UES.
The Programme of Insurance Protection of PJSC FGC UES for 2019 was considered.
Financial
and economic
activities
Changes were made to the set of measures allowing for long-term financial stability and liquidity
of PJSC FGC UES.
The report of PJSC FGC UES on results of work on the capital markets and interaction with rating
agencies for 2017 was considered.
The Programme and Prospectus of Exchange Bonds of PJSC FGC UES were considered.
Reports on the implementation of the business plan of PJSC FGC UES were considered.
Internal
control
and risk
management
The report of the internal auditor of PJSC FGC UES on the assessment of efficiency of the internal
control and risk management system in PJSC FGC UES based on 2017 results was considered.
The report on the implementation of a set of actions intended to improve the risk management
and internal control system with regard to the internal auditor's recommendations was considered.
The report of the Chairman of the Management Board and members of the Management Board
of PJSC FGC UES on the organisation and functioning of the internal control system for 2017 was
considered.
The report of the Chairman of the Management Board and members of the Management Board
of PJSC FGC UES on the organisation, functioning and efficiency of the risk management system
for 2017 was considered.
The report on PJSC FGC UES key operational risks for 2017 was considered.
The report on PJSC FGC UES key operational risks for H1 of 2018 was considered.
Quarterly reports on operational risks with a rating of "Critical" were considered.
COMPOSITION OF THE MANAGEMENT BOARD
In accordance with the Regulations on the Management Board of PJSC FGC UES, the quantitative composition
of the Management Board of PJSC FGC UES is determined by resolution of the Board of Directors of PJSC FGC UES.
As of 31 December 2018, the Management Board of PJSC FGC UES included 7 people.
All persons forming part of PJSC FGC UES Management Board have the required experience and competences
for performance of their functions on the senior level.
25 %
12 %
Term of service on
the Management Board of PJSC FGC UES
Less than 1 year
From 1 to 4 years
63 %
Over 4 years
176
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
177
CORPORATE GOVERNANCE REPORT
EXECUTIVE GOVERNANCE BODIES
BIOGRAPHY OF MEMBERS OF PJSC FGC UES MANAGEMENT BOARD92
ANDREY MUROV
Chairman, Member of the Board of Directors
DMITRY VODENNIKOV
Deputy Chairman of the Management Board, Chief Engineer
Areas of responsibility:
Maintenance and Repairs.
Management Board member since 2017
Born in 1974.
Graduated from the Kurgan State University, majoring
in Automation of Technological Processes and Production.
Experience:
2011–2015 — First Deputy General Director, Chief Engineer
of JSC FGC UES' branch MPS of West Siberia;
2015–2017 — General Director of PJSC FGC UES' branch
MPS Siberia;
2017–2017 — Advisor of the Chairman of the
Management Board of PJSC FGC UES;
since 2017 — Deputy Chairman of the Management Board,
Chief Engineer.
External appointments:
Since 2017, he has been the Chairman of the Board
of Directors of JSC Tomsk Trunk Grids.
Areas of responsibility:
Management of the Company's day-to-day operations,
organisation of work of the Management Board.
Management Board member since 2012.
Born in 1970.
Graduated from Saint Petersburg State University, majoring
in Jurisprudence. Underwent the retraining programme
Financial Management at the Interdisciplinary Institute
of Executive Staff Refresher Training and Retraining.
Graduated from the State University of Civil Aviation,
majoring in Organisation of Transportation and Management
on Transport (Air Transport). Doctor of Economic Science.
Experience:
2012–2013 — Acting General Director, Executive Director,
Member of the Management Board of JSC IDGC Holding
(since 4 April 2013 — JSC Rosseti);
2012–2013 — First Deputy Chairman of the Management
Board of PJSC FGC UES;
since 2013 — Chairman of the Management Board
of PJSC FGC UES;
since 2015 — Chairman of the RNC CIGRE.
External appointments:
Member of the Board of Directors of PJSC Rosseti,
PJSC Inter RAO, JSC SO UES; Member of the Board
of Trustees of FSBEI HE NIU MEI, FSBEI HE SPbSU, FSBEI HE
SPbGEU; Member of the Supervisory Board of the Association
for the Development of International Energy Research
and Projects Global Energy; Non-Profit Partnership Scientific
and Technical Council of the Unified Energy System;
Member of the Supreme Council of the All-Russian NGO
Rugby Union of Russia.
ALEKSANDR ZAGARATSKY
First Deputy Chairman of the Management Board
Areas of responsibility:
HR Management and Development.
Corporate and Strategic Management.
Functional vertical management.
Legal Support.
Document Management.
Administrative and Economic Support.
Property Management.
Management of Communications, Public Relations
and Public Authorities.
Management Board member since 2014.
Born in 1976.
Graduated from the St. Petersburg Law Institute of the General
Prosecutor Office, majoring in Jurisprudence. Graduated from
the St. Petersburg Institute for Management and Economics,
majoring
in State and Municipal Management. Ph.D.
in Economics.
Experience:
20011–2013 — Chief of Staff of the Chairman
of St. Petersburg Legislative Assembly;
2013–2016 — Deputy Chairman of the Management
Board of PJSC FGC UES;
since 2016 — First Deputy Chairman of the Management
Board of PJSC FGC UES.
ALEKSEY MOLSKY
Deputy Chairman
(since 28 February 2018, Interim First Deputy Chairman
of the Management Board of PJSC FGC UES).
Areas of responsibility:
Development and Customer Relations.
Management Board member since 2016.
Born in 1980.
Graduated from the Moscow Power Engineering Institute,
majoring in Electric Energy Systems and Grids and Economics
and Company Management.
Experience:
since 2012 — Deputy Chairman of the Management
Board of JSC FGC UES (since 28 February 2018, Interim
First Deputy Chairman of the Management Board
of PJSC FGC UES);
since 2016 — Member of the Management Board
of PJSC FGC UES.
External appointments:
Chairman of the Supervisory Board of JSC IPS SakRusenergo;
Member of the Supervisory Board of the Association
NP Market Council; Member of the Board of Directors
of JSC TaigaEnergoStroy.
92 Information on participation in the governing bodies of other organisations is listed as of 31 December 2018.
178
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
179
CORPORATE GOVERNANCE REPORT
EXECUTIVE GOVERNANCE BODIES
SERGEY TEREBULIN
Deputy Chairman
Areas of responsibility:
Economy, finance and subsidiaries.
Management Board member since 2016.
Born in 1978.
MARIA TIKHONOVA
Deputy Chairman
Areas of responsibility:
Corporate and Strategic Management.
Management Board member since 2013.
Born in 1980.
from
Graduated
the
Government of the Russian Federation, majoring in Finance
and Credit. Ph.D. in Economics.
the Financial Academy under
Experience:
2007–2014 — Head of the Corporate Finance
Department of JSC RusHydro;
2014–2016 — Director of the Corporate Finance
Department of PJSC RusHydro;
2016–2016 — Advisor of the Chairman
of the Management Board of PJSC FGC UES;
since 2016 — Deputy Chairman of the Management
Board, Member of the Management Board
of PJSC FGC UES.
Graduated from the Volga-Vyatka Academy of Public
Service, majoring in Public and Municipal Administration,
then the Higher School of Economics with an MBA
in Finance. Ph.D. in Economics.
Experience:
since 2013 — Deputy Chairman of the Management
Board, Member of the Management Board
of PJSC FGC UES.
External appointments:
since 2018, Member of
of JSC DVEUK.
the Board of Directors
Management Board member since 2016.
Born in 1968.
Graduated from the Military Engineering Institute named after
A.F. Mozhaysky holding the Order of the Red Banner, majoring
in Engineering. From 2006 to 2009 received additional
vocational education at
the North-Western Academy
of State Service, majoring in State and Municipal Management
and Jurisprudence.
Experience:
2013–2015 — Director of the Department of Construction
of the Ministry of Defense of Russia;
2015–2016 — Head of the Central Department for Track
Maintenance of JSC Russian Railways;
2016 — Advisor of the Chairman of the Management
Board of PJSC FGC UES;
Since 2016 — First Deputy Chairman of the Management
Board, Member of the Management Board
of PJSC FGC UES (Mr. Filimonov is not a member
of the Management Board of PJSC FGC UES since
11 March 2019).
External appointments:
Since 2018, Chairman of
of JSC TsIUS UES94.
the Board of Directors
ROMAN FILIMONOV
First Deputy Chairman of the Management Board (Mr. Filimonov
is not a member of the Management Board since 11 March 2019)93
Areas of responsibility:
Development and Customer Relations.
Investments and Innovative Development.
Functional vertical management:
"IT Operation and Development",
"Procurement Management",
"Operational Analysis".
None of the Management Board members holds shares of PJSC FGC UES.
CHANGES TO THE MEMBERSHIP
OF THE MANAGEMENT BOARD IN 2018
By the resolution of the Board of Directors of 25 June 2018, the powers of Nikolay
Pozdnyakov, a member of the Management Board of PJSC FGC UES, were prematurely
terminated.95
93 Resolution of PJSC FGC UES Board of Directors, Minutes No. 439 of 13 March 2019.
94 Mr. Filimonov is not a member and the Chairman of JSC TsIUS UES Board of Directors since 9 April 2019. Resolution
of the Extraordinary General Meeting of Shareholders of JSC TsIUS UES, Meeting Minutes of the Management Board of PJSC FGC
UES No. 1626 of 10 April 2019.
95 Resolution of the Board of Directors of PJSC FGC UES, Minutes No. 410 of 27 June 2018.
180
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
181
CORPORATE GOVERNANCE REPORT
REMUNERATION SYSTEM FOR GOVERNING BODIES
REMUNERATION SYSTEM
FOR GOVERNING BODIES
GENERAL INFORMATION ON THE COMPANY'S
REMUNERATION POLICY
GRI 102-35
The procedure for determining remuneration and compensation to members of the Board
of Directors, as well as the payment procedure, is set forth in the Regulations on Payment of
Remuneration and Compensation to Members of the Board of Directors of PJSC FGC UES96.
The remuneration policy was developed on the basis of the principles and recommendations
of the Bank of Russia Corporate Governance Code, taking into account the Company's
remuneration and compensation practice.
The practices applied in the Company for determining remuneration and compensation
payable to members of the Board of Directors comply with the transparency and
reporting principles and consider the role of the above-stated persons in performance
of the Company.
for
included
procedure
remuneration
The
of persons
in committees
of the Board of Directors, but not members
of the Board of Directors, is determined by
the
Payment
and Compensation
of Remuneration
to Members of the Committees of the Board
of Directors of PJSC FGC UES97.
Regulations
on
The Regulations on the Conditions of Labour
Contracts and Determination of the Amount
and Compensation
of Remuneration
Payable
Management
Senior
of JSC FGC UES98 regulate the system
the Chairman
of
remuneration
of
to
system
remuneration
of the Management Board and members
of the Company's Management Board.
Operation of the HR and Remuneration
Committee in monitoring and improving
the
provides
for increased efficiency and transparency
of the existing policy.
The Company does not engage consultants
to determine the amount of remuneration
and compensation payable to members
of the Board of Directors and members
of the Management Board.
In 2018, no amendments were made
to the Company's remuneration policies.
REMUNERATION OF MEMBERS
OF THE BOARD OF DIRECTORS
Key aspects of the remuneration system for members of the Board of Directors:
remuneration is paid as a lump-sum payment following the results of work
of the Company's Board members for the corporate year from their election until
termination of their powers;
the decision to pay remuneration is made at the Company's Annual General Meeting
of Shareholders.
The Regulations on Payment of Remuneration and Compensation to Members
of the Board of Directors of PJSC FGC UES also provide for a number of conditions under
which remuneration is not paid in the following cases:
a member of the Company's Board of Directors misses more than half of the meetings
of the Board of Directors held during their membership in the Board of Directors;
lack of net profit for the financial year preceding the year of payment of remuneration
to a member of the Board of Directors;
a member of the Board of Directors of the Company is simultaneously a member
of the Management Board of the Company and/or the Chairman of the Management
Board of the Company;
a member of the Company's Board of Directors is a person in respect of whom the laws
of the Russian Federation provide for restrictions and prohibitions on receiving any
payments from commercial organisations.
Internal documents and the policy of PJSC FGC UES on remuneration of members
of the Board of Directors do not provide for the provision of shares of the Company
to members of the Board of Directors.
In the event of early termination of powers of a member of the Board of Directors, as
well as in the event of election of a member of the Board of Directors at the Company's
Extraordinary General Meeting of Shareholders, the remuneration of such person is
calculated taking into account the actual time they fulfil their duties as a member of the
Board of Directors.
The Company does not have any additional remuneration or compensation in case of early
termination of powers of Board members in connection with a takeover of the Company or
in other circumstances.
96 Approved by the resolution of the Annual General Meeting of Shareholders of PJSC FGC UES of 26 June 2015,
Minutes No. 16 of 30 June 2015.
97 Approved by the Board of Directors, Minutes No. 280 of 24 August 2015.
98 Approved by the Board of Directors, Minutes No. 105 of 17 June 2010.
182
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
183
CORPORATE GOVERNANCE REPORT
REMUNERATION SYSTEM FOR GOVERNING BODIES
CALCULATION OF REMUNERATION
GRI 102-36
increase
remuneration payable
involvement of the Board members
To
into the Company's operation
and motivation to achieve high financial indicators by the Company, the amount
of
the Board of Directors depends
on the Company's financial results. Remuneration is calculated taking into account the fixed
part of remuneration determined depending on the Company's revenue99 for the financial
year previous to the year of remuneration payment.
to members of
Revenue for the financial year
Amount of the fixed part of remuneration
Over RUB 200 bln
Over RUB 30 bln
Over RUB 10 bln
Over RUB 1 bln
Over RUB 600 mln
Below RUB 600 mln
RUB 1,000,000
RUB 900,000
RUB 800,000
RUB 700,000
RUB 600,000
Remuneration is not paid
COMPENSATIONS
The Regulations on Payment of Remuneration and Compensation to Members
of the Board of Directors of PJSC FGC UES provides also for payment of actual expenses
to Board members, including travel costs to location of meetings of the Board of Directors
and the Committees and back, accommodation costs, as well as other expenses related
to the Company's operation.
REMUNERATION PAID IN THE REPORTING YEAR
In connection with the receipt of net profit in 2017 in the amount of RUB 42,361,640 thousand
following the results of the Company's activities, at the General Meeting of Shareholders
of PJSC FGC UES, held following the 2017–2018 corporate year, it was decided to pay
remuneration to members of the Board of Directors.
Fixed annual remuneration was the only monetary form of remuneration of Board members
for serving on the Board of Directors during the reporting period.
Total (aggregated) remuneration paid to members of the Board of Directors, RUB thousand
The fixed amount of remuneration of members of the Board of Directors in the 2017–2018
corporate year was RUB 900,000.
Fixed
Type (element) of remuneration
2016
2017
2018
The remuneration of a member of the Board of Directors is based on the following
components:
RBD = Ractual + I
RBD
The total amount of remuneration of a member of the Company's Board
of Directors may not exceed RUB 900 thousand for the corporate year.
Ractual
Remuneration for participation in meetings of the Board of Directors.
Formed taking into account the size of the fixed part of remuneration
and the actual attendance of meetings of the Board of Directors.
I
Increases:
More information
on the formula for calculating
remuneration for participation
in meetings of the Board
of Directors can be found
in the Regulations on Payment
of Remuneration
and Compensation
to Members of the Board
of Directors of PJSC FGC UES.
+30 %
of Vactual
+20 %
of Vactual
for the Chairman
of the Board of Directors.
for the Chairman
of the Board of Directors
Committee.
+10 %
of Vactual
for a member of the Board
of Directors' Committee.
99 Calculated as per RAS.
Remuneration for participation in work of the governing body
Additional remuneration to the Chairman of the Board of Directors
Additional remuneration for participation in the Committees of the Board of
Directors
Other fixed remuneration
Total amount of fixed part of remuneration
Variable
Bonuses accrued
Accrual of remuneration paid on the basis of shares
Other variable remuneration (non-monetary remuneration and compensation),
including:
Cost of travel to location of meetings of the Board of Directors and the
Committees and back
Living cost
Other expenses related to the Company's activities
Total accrued size of the variable part of remuneration
Severance allowances, compensations and other payments
in connection with early termination of powers
5,498.5
0
818.8
0
5,764,2
189.6
832.3
0
5,942.3
207.7
801.9
0
6,317.3
6,786.1
6,951.9
0
0
0
The Company's policy on remuneration
of members of the Board of Directors does not
provide for the provision of shares of the Company
to members of the Board of Directors.
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total remuneration
6,317.3
6,786.1
6,951.9
184
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
185
CORPORATE GOVERNANCE REPORT
REMUNERATION SYSTEM FOR GOVERNING BODIES
Remuneration of members of the Board of Directors in 2018, RUB thousand*
Participation in
meetings of the Board
of Directors
(actually participated/
could participate)
For
participation
in meetings
of the Board
of Directors
For participation
in the Committees
of the Board
of Directors
Allowances for acting
as Chairman of the Board
of Directors/Committee
of the Board of Directors
Total
remuneration
P. Grachev
A. Demin
I. Kamenskoy
A. Murov**
M. Poluboyarinov
E. Prokhorov
N. Roshchenko
S. Sergeev
P. Snikkars***
Ernesto Ferlenghi
O. Shatokhina
TOTAL
36/36
36/36
36/36
35/36
33/36
33/36
30/36
36/36
29/36
33/36
36/36
692.3
692.3
692.3
673.1
634.6
634.6
576.9
692.3
557.7
634.6
692.3
138.5
69.2
69.2
–
–
63.5
–
69.2
55.8
126.9
69.2
-
207.7
276.9
–
–
-
–
–
111.5
126.9
–
830.8
900.0
900.0
–
634.6
698.1
576.9
761.5
–
888.5
761.5
6,951.9
* Other types of remuneration and reimbursement of expenses were not paid.
** Remuneration is not paid due to the fact that the Board member is the Chairman of the Company's Management Board at the same time.
*** Remuneration is not paid due to the fact that the Board member is a public servant.
Members of the Board of Directors were not provided with any loans (credits) in 2018.
SYSTEM OF REMUNERATION OF THE CHAIRMAN
AND MEMBERS OF THE MANAGEMENT BOARD
CALCULATION OF REMUNERATION
GRI 102-36
In accordance with the best practice, the system of remuneration of the members
of the Company's executive bodies is comprised of fixed and variable parts related
to achievement of top managers' key performance indicators (KPIs). Such an approach
allows motivating members of the Management Board to achieve strategic goals and thus
contribute to growth of the Company's value.
The remuneration is comprised of fixed (salary) and variable (bonuses) parts. The variable
part is comprised of quarterly and yearly bonuses (according to the results of achieved
quarterly and yearly KPIs, correspondingly). Amount of bonus predominantly depends
on achieving top managers' KPIs. If any KPI is not achieved, bonuses of all members
of the Management Board, including the Chairman of the Management Board, get reduced
by a certain percent depending on the KPI’s weight.
RBoard = Rfp + Rvp
RBoard
Remuneration system
It helps the Management Board members to attract and retain
professionals and motivates them to achieve strategic goals.
Rfp
Rvp
Fixed part
Thanks to a salary at a competitive level, the stability
of the Management Board is achieved.
Variable part
Quarterly and annual bonuses, the size of which is tied to the
achievement of KPIs, stimulate the fulfilment of planned targets;
other types of remuneration.
The Board of Directors approves the Company's KPI targets (adjusted values) and reports
on their fulfilment, on the basis of which bonuses are paid to the Chairman and members
of the Management Board.
Detailed information
on the KPI system, KPI
achievement in the reporting
year and goals for 2018
can be found in section
Strategic Report/Market
Review, Strategy and KPI/Key
Performance Indicators.
For details on the approval
by the Board of Directors
of KPI performance reports,
see Appendix 1.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
187
CORPORATE GOVERNANCE REPORT
REMUNERATION SYSTEM FOR GOVERNING BODIES
MAIN COMPONENTS OF THE SYSTEM OF
REMUNERATION OF MEMBERS OF PJSC FGC
MANAGEMENT BOARD
Fixed part
Variable part and other remuneration
Form of
implementation
Salary
The system of short-term motivation includes quarterly and annual
bonuses based on achieving KPIs, as well as other forms of additional
incentives.
The average weight
of the component
in the annual
remuneration
structure*
Component
purpose
33 %
67 %
Establishment of a fair competitive
level of remuneration corresponding
to market conditions and as a result
the attraction and retention of highly
professional managers.
General
provisions
Due to the competitive level
of the fixed part of remuneration,
the Company achieves the stability
of composition of its management.
* Calculation based on remuneration paid for 2014–2018.
Stimulation of the implementation of planned operating and financial
performance to achieve the planned results on strategic priorities.
The size of quarterly and annual bonuses payable to members
of the Management Board is calculated primarily on the basis
of actually achieved KPI values. The Company's KPI system is
interconnected with the business plan, including the Company's
investment programme, with the Company's strategy and executive
discipline.
Collective responsibility is established for the variable part
of remuneration: In the event of non-fulfilment of any KPI, the size
of the bonus of all members of the Management Board, including
the Chairman, decreases.
Conditions of the employment contract with the Chairman of the Management Board are
established by the person authorised by the Board of Directors. Conditions of employment
contracts with members of the Management Board are determined by the Chairman
of the Management Board instructed by the Board of Directors.
Information on remuneration of members and the Chairman of the Management Board
are disclosed on the PJSC FGC UES website in the annual report and quarterly report
of the issuer.
REMUNERATION PAID IN THE REPORTING YEAR
Total (aggregated) remuneration paid to the Chairman and members of the Management Board, RUB thousand
2016
2017
2018
105,636
112,220
112,484
105,636
112,220
112,484
180,385
195,979
184,683
53,345
21,352
41,590
64
259
233,730
217,395
226,532
339,366
329,615
339,016
Type (element) of remuneration
Fixed part
Salary (wage)
Total fixed part of remuneration
Variable part
Bonuses accrued in accordance with employment contract
Other types of remuneration
Severance allowances, compensations and other payments accrued in connection with early
termination of powers
Total variable part of remuneration
Total remuneration
Remuneration paid to the members of PJSC FGC UES Management Board, RUB thousand
400,000
339,366
329,615
339,016
300,000
200,000
100,000
0
233,730
217,395
226,532
105,636
112,220
112,484
2016
2017
2018
Fixed
Variable
Amount of remuneration of the Chairman of the Management Board, RUB thousand
Type (element) of remuneration
Fixed part
Salary (wage)
Total fixed part of remuneration
Variable part
Bonuses accrued in accordance with employment contract
Other types of remuneration
Total variable part of remuneration
Total remuneration
2016
2017
2018
27,200
27,200
46,014
4,039
50,053
25,324
25,324
39,272
12,023
51,295
25,277
25,277
53,010
43
53,053
77,253
76,619
78,330
Members and the Chairman of the Management Board were not paid other fixed
remuneration, share remuneration (or accrual of remuneration paid on the basis
of shares) or stock purchase options, other variable remuneration in 2016–2018.
Members of the Management Board made no transactions with shares
of PJSC FGC UES in 2018.
Members of the Management Board were not provided with any loans (credits) in 2018.
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CORPORATE GOVERNANCE REPORT
SETTLEMENT OF CONFLICT OF INTEREST
SETTLEMENT OF CONFLICT
OF INTEREST
GRI 102-25
The Company strives to prevent and minimise any consequences of possible conflicts
of interest among members of the Company's governing bodies. The Company has
a comprehensive system of dealing with any conflict of interest between members
of the governing bodies of the Company providing for reasonable assurance that any
conflict will be settled at an early stage and the Company's interests will not be infringed.
The settlement is carried out on the basis of the Company's Corporate Ethics Code,
Corporate Governance Code, the Regulations on the Board of Directors, and the Regulations
on the Management Board.
For details on preventing
conflicts of interest
of members of the Board
of Directors and the governing
bodies of the Company's
management,
see Appendix 1.
FGC UES approved the Code of Corporate Ethics for regulation of situations in which
conflicts of interest may arise. In accordance with the Code, when making decisions
on business matters and performing work duties, FGC employees should:
be guided by the interests of the Company;
avoid situations and circumstances that may lead to a conflict of interest;
disclose a real or potential conflict of interest;
facilitate the resolution of a conflict of interest.
In the event of a conflict of interest, employees have to inform their immediate
supervisor and the Central Commission for the Compliance with Corporate Ethics
and Settlement of Conflicts of Interest.
Members of
the Company's governing
bodies shall take reasonable and effective
actions, and in particular make decisions
in
considering all available
the absence of any conflict of interest,
treating shareholders of
the Company
equally, and assuming standard risk levels.
information
the
verifies
Company
participation
The
information
of members
on
of the Management Board and the Board of
Directors of the Company in other companies
on a quarterly basis. The Company performs
information received
regular analysis of
from members of the Company's governing
bodies for the presence of a potential conflict
of interest.
All members of the Board of Directors
and members of
the Management
Board met the requirements of Art. 82 of
the Federal Law on Joint Stock Companies
about sending notifications to the Company
about the presence of a possible interest
in the Company's transactions. In order
to identify conflicts of interest in a timely
manner, the Company has developed a
questionnaire for members of the Board of
Directors and the Management Board, which
they fill in quarterly and indicate all necessary
information.
Information on the positions
of members of the Board
of Directors held
in the governing bodies
of other organisations
and on the ownership
of the Company's securities
is disclosed on the website
www.fsk-ees.ru in section About
the Company/Governing Bodies/
Board of Directors,
and in the issuer's quarterly
reports and annual reports
posted at www.fsk-ees.ru/eng
in section Investors/Financial
Disclosure.
RISK MANAGEMENT SYSTEM,
INTERNAL CONTROL AND INTERNAL
AUDIT
INTERNAL CONTROL SYSTEM
The Company's internal control system (hereinafter, the ICS) is an element of the Company's
overall management system aimed at providing reasonable guarantees of achieving
the goals in the following areas:
efficiency of the Company's activities;
compliance with applicable legal requirements and local regulations of the Company;
ensuring the accuracy and timeliness of reporting.
The ICS is risk oriented. Control procedures
are risk-based and set up in such a way
as to provide a reasonable assurance
that the response to an emerging risk
occurs effectively and in a timely manner.
The ICS covers all areas of the Company's
are
activities;
performed continuously in all processes of
the Company at all management levels.
procedures
control
accepted
implementation
In order to ensure the
effective
an
of
and maintenance
that complies
internal control system
with
practices
generally
and standards of internal control, as well
as regulatory requirements, and contribute
to the achievement of the Company's
objectives,
Company
applies
Internal Control System
of PJSC FGC UES.100 It defines the objectives,
Federal
Grid
the
principles of operation and elements
of the Company's internal control system,
the main functions and responsibilities
of participants
internal control
in the
system, and the procedure for evaluating its
effectiveness.
The Company has an Order for the fulfilment
of requirements of the Regulations on
the Internal Control System,101 which reveals
the applied aspects of the application
of the standards set out in the Regulations
on the Internal Control System.
subprocesses
supporting
The control procedures for the processes
and
core
as well
and
as the Company's management processes
are documented
risk matrices
in
and control procedures.
of
activities,
the
the
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191
100 Approved by resolution of the Board of Directors, Minutes No. 369 of 2 June 2017.
101 Order of PJSC FGC UES No. 310 of 1 August 2017.
CORPORATE GOVERNANCE REPORT
RISK MANAGEMENT SYSTEM, INTERNAL CONTROL AND INTERNAL AUDIT
Interaction between the internal control system participants
GRI 102-30
Opinion on reliability
of data contained in the annual
report and annual accounting
statements
SHAREHOLDERS
Submitting
reports
Providing information
AUDIT
COMMISSION
BOARD OF DIRECTORS
(COMMITTEES)
Approving the Regulations
on the ICS Supervising the ICS
Making proposals
for the ICS improvement
Submitting
reports
Recommendations
for the ICS improvement
EXECUTIVE BODIES
Approving bylaws
Ensuring operation
of the ICS
Accountability
Preparing recommendations
for the ICS improvement
Providing information
Preparing recommendations
for the ICS improvement
Accountability
Preparing proposals
for the ICS improvement
in relation to prevention
and fighting corruption
STRUCTURAL
UNITS
INTERNAL CONTROL
ANTI-CORRUPTION
AND RISK MANAGEMENT
AND ECONOMIC SECURITY
DEPARTMENT
DEPARTMENT
INTERNAL AUDIT
DEPARTMENT
Methodological
support
COMPANY'S
SUBSIDIARIES
Interaction between the Company
and its subsidiaries and affiliates
in the framework of corporate legislation
For detailed information about
the main functions of the ICS
participants, see Appendix 1.
The Internal Control System is operated in accordance within the model of three defence
lines: This model means the implementation of internal control in the Company at three
levels:
1st defence line. The level of governing bodies and the Company's units and divisions
implementing control procedures by virtue of their responsibilities and job duties;
2nd defence line. The level of control units of the Company;
3rd defence line. The level of the Internal Audit Department.
The functions of the ICS participants are enshrined in the Regulations on the Company's
Internal Control System, the provisions on structural divisions and job descriptions.
The Company's internal auditor conducted a comprehensive assessment of the internal
control and risk management system and its compliance with the target state and level
of maturity. The Company determined 6 maturity levels of the internal control system
(from 1 "zero" to 6 "high"). According to the results of the assessment, the level of maturity
of the internal control system is determined at the level of 4.9 points (optimal). Compared
with the assessment at the end of 2017, the level of maturity increased by 0.2 points.
As of 31 March 2019, an external independent evaluation of the internal control system
was conducted by a consortium of Ernst & Young - appraisal and consulting services LLC,
and RSM Rus LLC, as a result of which the internal control system was recognised
as efficient.
Results of the ICS development in 2018 and directions for further improvement
2018 results
ICS development plans
Corrective action plans have been approved and being implemented based on
the results of the 2017102 audit of effectiveness of the internal control and risk
management system and the results of the audit of functioning of the internal
control and risk management system of the functional activity Preventing and
Combating Corruption.103 Events with a deadline of 2018 were executed in full.
Methods of self-assessment of the effectiveness of control procedures and
the system of internal control processes (activities) were approved.104
A self-assessment of the effectiveness of control procedures in the functional
areas (processes) of PJSC FGC UES was organised.
Adaptation and actualisation of control matrices in functional areas (processes)
of PJSC FGC UES, including their integration with the model of quality management
system processes, were carried out.
Regulations of the Internal Control process of PJSC FGC UES were approved.105
Based on the results of
a comprehensive analysis
by the external auditor of
the financial and economic
activities of PJSC FGC UES,
determine the vector
and ways to further improve
the internal control system.
Increasing the operational
efficiency of key control
procedures.
102 Order of PJSC FGC UES No. 131 of 13 April 2018.
103 Instruction of PJSC FGC UES No. 404r of 13 September 2017.
104 Order of PJSC FGC UES No. 58 of 20 February 2018.
105 Order of PJSC FGC UES No. 30 of 30 January 2019.
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CORPORATE GOVERNANCE REPORT
RISK MANAGEMENT SYSTEM, INTERNAL CONTROL AND INTERNAL AUDIT
RISK MANAGEMENT SYSTEM
GRI 102-15
Roles of the Risk Management System participants
Activities and events
What are the main results of the risk
management work for 2018?
In the reporting year, both the current work within the Company's risk
management was carried out: The List of Corruption Risks was updated,
the owners of key operational risks were approved, and the work on
further improving the methodological support of the risk management
function was approved. In particular, a Risk Identification Procedure
in PJSC FGC UES was developed and approved, and the Methodological
Recommendations for Assessing Corruption Risks in PJSC FGC UES
were approved. An important step in the regulation of efficiency
analysis procedures was the preparation of recommendations
for the assessment of the effectiveness of risk management measures.
Igor Feoktistov,
Director for Internal
Control of PJSC FGC UES
The FGC Regulations on the Risk
Management System in force
is available on the corporate
site at www.fsk-ees.ru/eng in
section Corporate Documents.
For information about
the principles and subjects
of the RMS and their functions
in the field of the RMS,
see Appendix 1.
PJSC FGC UES has a risk management system (RMS). The Board of Directors approved
the Regulations on the Risk Management System.106
The purpose of the RMS applied in the Company is to ensure stable continuous functioning
and development of the Company by means of timely identification, assessment
and efficient management of risks threatening efficient business operation and reputation
of the Company, employee health, environment, as well as property interests of shareholders
and investors.
The Company uses three methods to respond to risks:
risk avoidance;
risk acceptance or increase in order to implement favourable opportunities;
risk mitigation or assignment.
The choice of response depends on the risk significance, the influence on the likelihood
and impact of risks, costs of implementation, and benefits obtained.
106 Approved by the resolution of the Board of Directors, Minutes No. 291 of 19 November 2015; changes introduced
by the resolution of the Board of Directors, Minutes No. 347 of 13 December 2016.
Board of Directors
Determines principles and approaches to organisation of the RMS.
Approves approaches to identifying the risk’s priority, its values and review frequency.
Considers the matters of the risk management system operation, including on the basis
of the reports: operation of the risk management system by the Chairman and members
of the Management Board; results of assessment of the actual status, reliability
and efficiency of the risk management system by the Internal Audit Department.
Audit Committee
of the Board of Directors
Considers operational matters of the risk management system prior
to their consideration by the Board of Directors.
Chairman of the Management
Board and the Management
Board
Internal Control and Risk
Management Department
Ensure establishment of and maintaining operation of a sound risk management
system.
Responsible for implementation of resolutions of the Board of Directors on the risk
management system.
Submit the risk management system operation reports to the Board of Directors after
their preliminary consideration by the Audit Committee.
Share powers, responsibilities and liability for particular risk management procedures
among the heads of the Company's structural units.
Performs coordination of the risk management processes.
Develops methodological documents in the area of risk management.
Arranges and carries out training of the Company's employees in terms of risk
management.
Performs analysis of the Company's risk portfolio and makes proposals regarding its
risk response strategies and re-allocation of resources to manage the risks.
Makes reports on risks.
Performs operational control of the risk management processes performed by
the Company’s structural units and controlled legal entities in accordance with
the established procedure.
Monitors issues of the risk management system arrangement and functioning.
Prepares and submits information on the effectiveness of the risk management process
to the executive bodies of the Company.
Coordinates the processes of corruption risk management.
Carries out control measures aimed at preventing, identifying and minimising corruption
risks.
Internal Audit Department
Performs regular and independent review of reliability and effectiveness of the risk
management system.
Risk owners
(heads, structural units)
Develop, record, implement, monitor and improve the risk management system,
including identification and assessment of risks, development and application of risk
response measures.
Report on the risk management system operation to the Management Board and its
Chairman through the Internal Control and Risk Management Department.
Executors of risk management
measures (managers,
structural units)
Perform risk management measures as agreed with risk owners
in the functional areas of their responsibility.
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RISK MANAGEMENT SYSTEM, INTERNAL CONTROL AND INTERNAL AUDIT
Results of the RMS development in 2018 and directions for further improvement
Composition of PJSC FGC UES114 Audit Commission in 2018
2018 results
RMS development plans
The procedure for identifying risks in PJSC FGC UES was
developed and approved.107
Recommendations were issued on how to assess
the effectiveness of risk management measures.108
The owners of key operational risks were approved.109
The Methodological Recommendations
for the Assessment of Corruption Risks in PJSC FGC UES
were approved.110
The List of Corruption Risks of PJSC FGC UES was
updated.111
Improve the quality of key and operational risk
assessment, risk identification and quality of risk
management work, developing effective control
procedures and proactive measures, as well as
measures to minimise them.
Assess the corruption risks of PJSC FGC UES
in accordance with the Schedule of Assessment
for 2019.112
Provide a phased automation of the risk management
process in PJSC FGC UES.
AUDIT COMMISSION
The Audit Commission is a permanent body which is responsible for exercising control
over PJSC FGC UES' financial and business operations, its governing bodies and structural
units. The composition of the Audit Commission is elected annually at the General Meeting
of Shareholders.
The activities of the Audit Commission are governed by the Articles of Association and
the Regulations on the Audit Commission of PJSC FGC UES.113
The main functions of the Audit Commission are as follows:
confirming reliability of the data in the Company’s annual report, accounting balance
sheet, and profit and loss statement;
analysing the Company’s financial position, discovering ways for improving thereof,
and developing recommendations to the governing bodies;
organising and performing audits (revisions) of the Company’s financial and business
operations.
Full name
Year of birth, education, position
Composition formed
by the EGM on 15
September 2017115
Composition
formed by the AGM
on 28 June 2018116
MARINA LELEKOVA
Chairman
of the Audit Commission
Director of the Department for Control and Audit
Activities of PJSC Rosseti
Born in 1961. Education: higher
TATYANA ZOBKOVA
Deputy Director of the Department for Corporate
Governance, Pricing Environment and Auditing
in Fuel and Energy Industries of the Russian Ministry
of Energy
Born in 1976. Education: higher
ALEKSANDR BATALOV
Secretary
of the Audit Commission
Director of the Department for Economic Security
and Anti-Corruption of PJSC Rosseti
Born in 1973. Education: higher
EKATERINA SNIGIREVA
VLADIMIR KHVOROV
DMITRY SIMOCHKIN
Head Deputy of the Department of Property Relations
and Privatisation of the Federal Agency for State
Property Management (Rosimushchestvo)
Born in 1991. Education: higher
Leading Expert of the Department of State Regulation
of Tariffs, Infrastructure Reforms and Energy
Efficiency of the Ministry of Economic Development
of the Russian Federation
Born in 1947. Education: higher
Head of the Department of the Federal Agency
for State Property Management (Rosimushchestvo)
Born in 1992. Education: higher
+
+
+
+
+
+
+
+
+
+
In 2018, the revised Regulations on Payment of Remuneration and Compensation to Members of the Audit Commission was
approved.117 The main change is in the procedure for determining the amount and payment of remuneration. Remuneration
to members of the Audit Commission is formed of the fixed part of remuneration, which is determined on the basis of the
Company's revenue as per RAS for the financial year.
Amount of remuneration paid to the Audit Commission members in 2018, RUB thousand
Full name
M. Lelekova
A. Batalov
V. Khvorov
Total
Amount
233.2
155.4
155.4
544.0
107 Order of PJSC FGC UES No. 42 of 8 February 2018.
108 Order of PJSC FGC UES No. 43 of 8 February 2018.
109 Order of PJSC FGC UES No. 213 of 15 June 2018.
110 Order of PJSC FGC UES No. 316 of 24 August 2018.
111 Minutes No. 87 of the Audit Committee of the Board of Directors of PJSC FGC UES dated 28 December 2018.
112 Order of PJSC FGC UES No. 448 of 4 December 2018.
113 Approved by the resolution of the Annual General Meeting of Shareholders of PJSC FGC UES on 26 June 2015
(Minutes No. 16 of 30 June 2015).
114 Positions of the Audit Commission members are stated at the time of election. None of the Audit Commission members holds shares of PJSC FGC UES or positions
in its governing bodies.
115 Minutes No. 19 of 20 September 2017.
116 Minutes No. 20 of 2 July 2018.
117 Approved by the resolution of the Annual General Meeting of Shareholders of PJSC FGC UES of 28 June 2018 (Minutes No. 20 of 2 July 2018).
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CORPORATE GOVERNANCE REPORT
RISK MANAGEMENT SYSTEM, INTERNAL CONTROL AND INTERNAL AUDIT
77 audit activities were executed by the internal auditor in 2018. 881 correctives
were prescribed for execution aimed at eliminating and preventing further violations
and shortcomings revealed by the internal audit. 473 corrective actions out of 516 actions
with deadlines in the reported year were executed.
Control activities carried out by the internal audit in 2018
10
18
15
Operational audit
Revisions
Other
Unplanned activities
516
473
For information on key
decisions, measures aimed
at improving the internal audit
system, implemented
in accordance with resolutions
of the Company's Board
of Directors, see Appendix 1.
34
Correctives
1,000
881
800
600
400
200
0
Total correctives
signed
Activities that has
come due
Activities
carried out
INTERNAL AUDIT
to
Internal audit is an activity for provision
of independent and objective guarantees
and consultations
the Board of
Directors and the executive bodies of
PJSC FGC UES aimed at improving the
efficiency.
management
Company's
Internal Audit was created with the aim of
systematically
independent assessment
of the reliability and efficiency of the risk
management and internal control system,
and corporate governance practices.
the Company. The
The Internal Audit Department is a unit
internal audit functions
responsible for
Internal Audit
in
Department is administratively subordinate
to the Chairman of the Management Board,
and functionally to the Board of Directors
of the Company.118
According to the Articles of Association of PJSC FGC UES, the Company's Board of Directors
has the following competencies119 in terms of internal audit:
approval of the internal audit policy (internal audit regulations);
approval of the activity plan and budget of the internal audit unit;
approval of a candidate for the position of the head of the Company's Internal Audit
Department and termination of their powers;
determination of the remuneration conditions for the head of the Internal Audit
Department, as well as consideration of significant limitations of powers of the Internal
Audit Department or other restrictions that could adversely affect the implementation
of internal audit;
review results of quality assessment of the internal audit function.
The internal audit function of FGC UES underwent
an external assessment in the reporting year.
Tell us about this project.
Yes, indeed, PJSC FGC UES was the first of the electric power
industry companies to undergo an external independent assessment
of the internal audit function in 2018. The Internal Audit Department
of PJSC FGC UES was assessed for compliance with the International
Professional Internal Audit Standards of the Institute of Internal
Auditors and the Code of Ethics for Internal Auditors in accordance with
the methodology for external independent assessment of the internal
audit function of the IIA, as well as comparison with the best generally
accepted practices.
Who conducted the assessment?
We used the services of a company from the “Big Four”: Ernst & Young –
appraisal and consulting services LLC.
What results were obtained?
Based on the results of the assessment, the activities of the Internal
Audit Department received the highest level “generally conforms”
to the standards of the IIA and the code of ethics. Internal audit has
a provision on internal audit, policies and procedures, and their
performance and results are evaluated as conforming to the IIA standards.
118 Regulations on the Internal Audit of the Company (approved by the resolution of the Board of Directors of the Company,
Minutes No. 291 of 19 November 2015); Order No. 505 of 29 December 2016 on the Distribution of Responsibilities Between Heads
of the Executive Office of PJSC FGC UES.
119 Resolution of the Annual General Meeting of Shareholders (AGM resolution of 29 June 2017, Minutes No. 18 of 3 July 2017).
Information on the Company's
main internal documents
governing the internal audit
activity is given in Appendix 1.
Svetlana Kovaleva,
Internal Audit Director,
Head of the Internal Audit
Department
of PJSC FGC UES
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CORPORATE GOVERNANCE REPORT
ANTI-CORRUPTION POLICY AND ECONOMIC SECURITY
EXTERNAL AUDITOR
the financial statements
The Company annually engages an
external auditor to perform an independent
and unbiased assessment of quality
of its RAS and IFRS accounting (financial)
statements. The candidacy of the external
auditor of
is
approved by the Annual General Meeting
of Shareholders of the Company. Candidacy
is determined on the basis of competitive
procedures
that provide an objective
choice. Selection of an audit organisation
for the implementation of the mandatory
audit of PJSC FGC UES' financial statements
for 2018–2020 in the form of an open one-
stage competition without preliminary
qualification selection was conducted by
PJSC Rosseti.
28
June
2018120
The Annual General Meeting of Shareholders
dated
approved
ERNST AND YOUNG limited liability company
the auditor of PJSC FGC UES.
as
The Company's Board of Directors resolved
to determine
the amount of payment
the services of PJSC FGC UES'
for
auditor for the audit of reporting for 2018
in
the amount of RUB 21,805,719
and 68 kopecks, including VAT.
On 27 April 2018, the Audit Committee of
the Board of Directors121 considered the
issue of evaluating the effectiveness of the
external audit process of the accounting
(financial) statements of PJSC FGC UES for
2017. Taking into account the assessment
of the effectiveness of the external audit
process of
the Company's accounting
(financial) statements by the internal auditor,
the Audit Committee of PJSC FGC UES
Board of Directors noted the compliance of
the conducted external audit of the reports
of PJSC FGC UES for 2017 with the main
conditions of the concluded contracts.
Taking into account the opinion of the
Audit Committee of PJSC FGC UES Board
of Directors, in general, the process of
conducting external audits in the Company
can be characterised as complying with the
basic requirements.
ERNST & YOUNG LLC did not provide any non-audit services in 2018.
Reporting auditor of PJSC FGC UES
Full Corporate Name:
ERNST AND YOUNG Limited Liability Company
Abbreviated Corporate Name:
ERNST AND YOUNG LLC
Address:
77 Sadovnicheskaya Emb., Build. 1, Moscow, Russia, 115035
INN (Taxpayer No.): 7709383532 OGRN: 1027739707203
Phone: +7 (495) 648 96 42; +7 (495) 641 29 07
E-mail: Tatyana.Okolotina@ru.ey.com; Elena.Kovalchuk@ru.ey.com
Data on the membership of the auditor in self-regulatory organisations of auditors:
Self-regulating organisation of auditors "Russian Union of Auditors" (Association)
SRO Address: 8 Petrovsky Lane, Build. 2, Moscow, 107031
ANTI-CORRUPTION POLICY
AND ECONOMIC SECURITY
CORRUPTION PREVENTION
GRI 103-2
FGC UES declares zero tolerance towards corruption in any of its forms and aspects,
meaning a total ban for all managers, employees and other persons acting on behalf
of and/or for the benefit of the organisation, directly or indirectly, personally or through
any intermediary, to take part in any corrupt practices.
Anti-corruption activities in PJSC FGC UES are aimed at reducing the risks of material
and reputational damage to the Company as a result of corruption.
Anti-corruption activities in the Company are an element of the internal control and risk
management system.
Since 2012, the Company has been operating and constantly improving its Anti-Corruption
Policy. In 2015, the policy was updated122 due to changes in anti-corruption legislation.123
In 2017, a new edition of the Anti-Corruption Policy of PJSC FGC UES was approved, which
corresponds to the Methodological Recommendations of the Federal Agency for State
Property Management on risk management and internal control in the field of preventing
and combating corruption.124
The Company applies a risk-based approach to the management of its corruption prevention
system.
GRI 102-12
The Company joined the Anti-Corruption Charter of Russian Business in 2015
(certificate of accession No. 2041) and confirmed its compliance with its requirements
in 2017. In 2019, it is also planned to confirm the Company's compliance with
the requirements of the Anti-Corruption Charter.
For information on the main
objectives and principles
of the Anti-Corruption Policy,
see Appendix 1.
120 Minutes No. 20 of 2 July 2018
121 Meeting Minutes of the Audit Committee of the Board of Directors No. 75 of 28 April 2018.
122 Meeting Minutes of the Board of Directors of PJSC FGC UES No. 357 of 13 March 2017.
123 Meeting Minutes of the Board of Directors of PJSC FGC UES No. 280 of 24 August 2015.
124 Order No. 80 of the Federal Property Management Agency dated 2 March 2016.
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CORPORATE GOVERNANCE REPORT
SHARE CAPITAL, SECURITIES TRADING
To reduce corruption risks in 2018, the following measures were implemented:
12 inspections were carried out in branches and subsidiaries and affiliates;
GRI 205-1 corruption risks were assessed regarding 21 subdivisions of the executive
office (57 % of the total number of subdivisions). An up-to-date list of posts potentially
associated with increased corruption risk has been developed, internal documents
have been developed for conducting an assessment of corruption risks and identifying
corruption indicators;
the economic justification of expenses was monitored, including through a mechanism
to check the reasonableness of the calculation of the initial purchase price.
The materials were checked for more than 1,700 issues submitted to the central tender
commission of FGC UES;
work has begun on modifying the automated accounting system for beneficiaries
of counterparties of FGC UES with the ability to verify the affiliation of the counterparties
of the Company;
experts of the Company's specialised departments underwent advanced training.
Training events were held on countering corruption, getting acquainted with changes
in current legislation, and explaining the methodology for assessing corruption risks.
For detailed information
on the anti-corruption
measures taken,
see Appendix 1.
GRI 103-3, 205-3
There were no confirmed cases of corruption in 2018. Criminal cases concerning
corruption in relation to the organisation or employees were not initiated during
the reporting period and were not tried in courts.
ECONOMIC SECURITY
Economic security focused on early identification and prevention (localisation) of threats
and risks that could cause the most serious financial and image damage to the Company.
In the reporting year:
More than 1,000 audits of financial and economic activities were carried out,
750 of them together with the relevant departments and internal audit.
According to the results of the inspections, the amount of damage caused
to the Company was set at RUB 918.5 million, economic damage to the interests
of RUB 1.25 billion was prevented, and the compensated damage amounted to
RUB 424.2 million.
436 facts of unlawful actions by personnel, outside legal entities and individuals were
identified, and 327 resolutions were made.
174 applicant materials were prepared and sent to law enforcement agencies, of which
71 were prosecuted, courts of various instances convicted and prosecuted 22 persons.
The Company participated in the consideration and approval of almost 4,000 materials
submitted to the meeting of the central procurement bodies, for which 236 negative
opinions were issued, more than 10,000 purchasing procedures were reviewed, over
13,700 counterparty inspections were conducted before entering into contracts,
and 335 negative reports were issued conclusions. Cost of purchases reduced
by RUB 108.2 million.
Debt collection activities were carried out as part of enforcement proceeding: in 2018,
308 writs of debt collection for the total amount of RUB 1.76 billion were received,
and RUB 1.5 billion were reimbursed from the work done by the Company.
In the reporting year, economic damage to the Company's interests in the amount
of 1.25 billion was prevented.
Information on the Company’s
share capital history can be
found on our corporate website
www.fsk-ees.ru/eng/, in section
Investors/Share Information/
Share Capital History.
Information on allocated
issues of shares is available
on the website
www.fsk-ees.ru/eng/ in section
Investors/Share Information/
Documents for current share
issue.
SHARE CAPITAL,
SECURITIES TRADING
As of 31 December 2018, the share capital of PJSC FGC UES was RUB 637,332,661,531.50
divided into 1,274,665,323,063 ordinary registered uncertified shares with a nominal value
of RUB 0.50 each. No preferred shares were placed as of the above date.
In accordance with the Company’s Articles of Association, the number of authorised
shares is 72,140,500,768 ordinary registered shares with a nominal value of RUB 0.50 each
and a total nominal value of RUB 36,070,250,384. Authorised ordinary shares have the same
rights as outstanding ordinary shares.
In 2018, there were no issues or placements of additional shares by PJSC FGC UES.
EQUITY HOLDING STRUCTURE
The total number of the Company's shareholders exceeds 400,000 persons. As of
31 December 2018, the list of shareholders included:
450,448 private persons;
2,347 legal entities, of which 36 nominee holders and 221 trust managers (TMs).
There were no significant changes in the Company's equity holding structure in 2018.
Over 400,000 persons
the total number
of Company shareholders.
Equity holding structure of PJSC FGC UES
as of 31 December 2018
13.76 %
6.12 %
PJSC Rosseti
Shareholders owning from
0.5 % to 2 % of the Company's
authorised capital
Shareholders owning less
than 0.5 % of the Company's
authorised capital
80.13 %
The PJSC FGC UES management team is not aware of any shareholders (nominee holders)
holding more than 5 % of the Company’s outstanding shares, other than those indicated
above.
202
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
203
CORPORATE GOVERNANCE REPORT
SHARE CAPITAL, SECURITIES TRADING
PJSC FGC UES equity holding structure as of 31 December 2018
Ownership range
Less than 0.01 %
0.01 % – 0.05 %
0.05 % – 0.1 %
0.1 % – 0.5 %
0.5 % – 1 %
1.0 % – 2.0 %
Over 2.0 %
Total
Accounts of holders and TMs
Amount of uncertified registered
ordinary shares (UROS) on accounts
Quantity
Proportion
Total of UROS
Proportion
452,655
99.9653 %
50,662,154,721
89
34
26
5
2
1
0.0197 %
0.0075 %
0.0057 %
0.0011 %
0.0004 %
24,983,254,508
17,018,044,451
82,668,476,606
50,546,607,824,
27,427,739,561
0.0002 %
1,021,359,045,392
452,812
100 %
1,274,665,323,063
3.97 %
1.96 %
1.34 %
6.49 %
3.97 %
2.15 %
80.13 %
100 %
PJSC Rosseti is the largest shareholder of PJSC FGC UES (80.13 % of the authorised capital).
The Russian Federation, represented by the Federal Agency for State Property Management
(Rosimushchestvo), owns 0.59 % of the authorised capital of the Company. The government
has no special right ("golden share") to participate in the Company's management.
Shareholders' Agreement
In June 2013, PJSC Rosseti and Rosimushchestvo signed the Stockholders Agreement
on the procedure for managing and voting shares of PJSC FGC UES. The agreement
covers all voting shares of PJSC FGC UES, held by the parties or to be acquired
in the future.
As of 31 December 2018, 1.077 % of PJSC FGC UES' shares was in cross-ownership
of FGC – Asset Management LLC.
Free-float
The free float of PJSC FGC UES shares as of 31 December 2018 is 18.2 %.125
The Company conducts an annual analysis of the shareholder register to identify the key
groups of holders of ordinary shares and depository receipts.
MINORITY SHAREHOLDERS
The key minority shareholders of the Company are institutional investors, with the share of
retail investors being approximately 3.5 %.
The largest foreign shareholder of FGC at the end of 2018 are the funds and investment
mandates managed by Prosperity Capital Management (3.4 %)126.
The share of foreign institutional investors is over 50 % of free-float. These include
the largest global funds with assets under management of over USD 1 billion, including
Kopernik Global All-Cap Fund, Vanguard International Equity Index Fund, and state
investment funds, including those of Norway and the UAE.
In general, foreign investors own 64.2 % of free float shares of FGC. This percentage
increased by 4.9 p.p. over the past year.
125 Free-float is calculated as a percentage of the shares of FGC which are in free circulation as of 31 December 2018, excluding
shares owned by PJSC Rosseti, the State, municipalities and quasi-treasury shares.
126 Consent to information disclosure is received, data by Prosperity Capital Management Ltd.
List of foreign shareholders (in alphabetical order) holding in total ~ 5 %
of outstanding shares of PJSC FGC UES*
Name
Country
Type of investor
ABU DHABI INVESTMENT AUTHORITY
UAE
Sovereign wealth funds
Heptagon Fund Public Limited Company
IRELAND
Funds and managing companies
Kopernik Global All-Cap Fund
Norges Bank
USD
NORWAY
Funds and managing companies
Sovereign wealth funds
State Street Bank and Trust Company
USD
Funds and managing companies
THE PROSPERITY QUEST FUND
CAYMAN ISLANDS
Funds and managing companies
THE RUSSIAN PROSPERITY FUND
CAYMAN ISLANDS
Funds and managing companies
* Source: Company data.
Distribution of foreign investors of FGC by region
8 %
2 %
35 %
2 %
3 %
4 %
5 %
5 %
6 %
USA
Cyprus
Cayman Islands
Norway
Ireland
UAE
Luxembourg
Belize
United Kingdom
The Netherlands
15 %
15 %
Other
Distribution of foreign investors of FGC
by investment type
76 %
5 %
3 %
1 %
2 %
13 %
Funds
and managing
companies
Banks
and trusts
Brokers
Sovereign
funds
Other
Pension and
insurance
funds
The largest percentage of FGC shares held
by foreign investors – 35 % – belongs
to US companies.
Over 75 % of FGC shares held by non-residents
are concentrated in funds and management
companies.
Distribution of foreign investors of FGC by investment style
7 %
14 %
9 %
35 %
Most investors view FGC shares as an undervalued asset
(Value) or an asset with good growth prospects (Growth).
The intermediate position between these
two approaches represents the GARP investment style
(Growth at reasonable price). The "By market" group
includes short-term investors focused on the current
market situation, including brokers and hedge funds.
Index Group investors are guided by various index
solutions.
21 %
Growth
Index
Value
Other
By market
GARP
14 %
204
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
205
CORPORATE GOVERNANCE REPORT
SHARE CAPITAL, SECURITIES TRADING
Registered ordinary
uncertified share
MOEX Index
RUB 0.50
Moscow Wide Market Index (MOEXBMI)
RTS Index (RTSI)
0.35
0.3
0.35
29.12.2017
28.02.2018
30.04.2018
29.06.2018
31.08.2018
31.10.2018
29.12.2018
Dynamics of trading volumes and value of depository receipts of PJSC FGC UES at the London Stock Exchange 127
MARKET INTELLIGENCE
ON THE COMPANY'S SECURITIES
FGC shares are included in the MOEX First Level quotation list.
FGC shares are included in the MOEX First Level quotation list, as well as in the run listed
at PJSC St. Petersburg Stock Exchange.
Outside of the Russian Federation, the Company's shares are traded as global depositary
receipts (GDR) at the London Stock Exchange. THE BANK OF NEW YORK MELLON
(BNY Mellon) is the depositary bank of the GDR programme. As of 31 December 2018,
the GDR programme size was 0.048 % of the authorised capital of FGC.
The Company's shares are included in the basis for calculation of key domestic
and a number of foreign indices.
General information on shares of PJSC FGC UES
Weight of shares of PJSC FGC UES
in stock indices as of 31 December 2018, %
Category of shares
Nominal value
MOEX ticker
St. Petersburg Stock Exchange
ticker
LSE ticker
ISIN
Bloomberg Code
For more information on FGC
shares trading, please visit
our website www.fsk-ees.ru/
eng/, section Shareholders and
Investors/Information on Shares/
Shares Schedule.
For more information
on depositary receipts trading,
please visit our website
www.fsk-ees.ru/eng/, section
Investors/Share Informantion/
GDR Programme.
For updated information
on the GDR programme,
please visit the official London
Stock Exchange website
www.londonstockexchange.com,
indicating the Company's ticker
symbol – FEES.
FEES
FEES
FEES
RU000A0JPNN9
FEES RX
Moscow Electricity Exchange (MOEXEU) Index
14.71
The RTX Energy (Vienna Stock Exchange)
15.67
Results of exchange trading in shares and depositary receipts
Shares of PJSC FGC UES at MOEX
Trading volume, RUB bln
Lowest price, RUB
Highest price, RUB
Year-end price, RUB
2016
2017
2018
90.4
145.8
61.2
0.0539
0.2097
0.2032
0.15
0.261
0.14588
0.1915
0.16205
0.14812
Depositary receipts of PJSC FGC UES at the London Stock Exchange
Trading volume, USD mln
Lowest price, USD
Highest price, USD
Year-end price, USD
7.0
0.3
1.65
1.64
6.1
1.275
2.3
1.35
0.7
1.02
1.7
1.03
In 2018, FGC shares showed lagging dynamics in comparison with the MOEX index,
but closed the year with a better result than the MOEXEU sector index. Over the year,
the value of the Company's shares decreased by 8.6 % (from 16.2 kopecks at the end of 2017
to 14.8 kopecks at the end of 2018), while the MOEX index increased by 12.3 %, whereas
the MOEXEU index was down by 11.4 %. The Company’s market capitalisation as
of 31 December 2018 amounted to RUB 188.9 billion.
Change in the value of ordinary shares of PJSC FGC UES in comparison with the MOEX index and MOEXEU sector index
20 %
15 %
10 %
5 %
0 %
–5 %
–10 %
–15 %
IMOEX 12.3 %
FGC shares-8.6 %
MICEXPWR -11.4 %
150,000
100,000
50,000
0
1.7
1.4
1.1
0.8
23.01.2018
19.03.2018
13.05.2018
07.07.2018
31.08.2018
25.10.2018
19.12.2018
DR price at LSE, USD
Volume of trades, DR
The given DR price on trading results at the Moscow Exchange
In 2018, FGC shares, as well as the MOEXEU sector index as a whole, came under the
pressure of dramatic depreciation of RUB (-20 % against USD), which reduced the investment
attractiveness of companies focused on domestic demand. However, FGC's share losses
were largely restricted by the Company's good dividend prospects. According to analysts,
FGC has one of the best dividend reputations on the Russian market.
For detailed information
on the dividend policy, please
see section Profit Distribution
and Dividend Policy.
127 The DR price quoted is the valuation of 1 GDR through the stock price based on the MOEX trading results (arbitration of the value
of receipts). Calculation: Price of 1 share at MOEX/the Central Bank of the Russian Federation exchange rate USD to RUB x 500
(number of shares in 1 GDR).
206
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
207
CORPORATE GOVERNANCE REPORT
SHARE CAPITAL, SECURITIES TRADING
Dynamics of trading volumes and value of shares of PJSC FGC UES at the MOEX
.
s
c
p
n
b
l
,
e
m
u
o
V
l
15
10
5
0
0.20
0.18
0.16
0.14
0.12
B
U
R
,
e
c
i
r
P
02.02.2018
24.03.2018
13.05.2018
02.07.2018
21.08.2018
10.10.2018
29.11.2018
Volume, bln pcs.
Price of FGC shares, RUB
Dynamics of capitalisation of PJSC FGC UES
l
n
b
B
U
R
,
n
o
i
t
a
s
i
l
a
t
i
p
a
C
300
250
200
150
100
50
0
257.6
206.9
188.9
114.6
56.1
74.9
2013
2014
2015
2016
2017
2018
The Board of Directors of FGC
approved a new dividend policy
The Board of Directors of Rosseti approved
the sale of 10 % of Inter RAO
.
s
c
p
n
b
l
,
e
m
u
o
V
l
60
50
40
30
20
10
0
54.6
35.2
40.5
29.6
30.2
Rosseti proposed to exclude
FGC from the list of state-
owned companies operating
with government directives
34.6
22.5
30.9
28.3
17.3
18.9
17.6
B
U
R
,
e
c
i
r
P
0.1900
0.1700
0.1500
0.1300
In 2018, total shareholder return (TSR) of FGC UES shares was above the average TSR value of the most capitalised companies
in the Russian power sector.
GRI 103-3
TSR of the Russian power sector companies based on 2018 results
17.9 %
11.6 %
Price dynamics
Dividend yield
TSR
–4.0 %
0.5 %
1.6 %
–11.4 %
–14.6 %
FGC
MOEXEU
RCI
Mosenergo
Unipro
Inter RAO
RusHydro
Rosseti
–29.7 %
The most capitalised and liquid shares
listed in MOEXEU
20 %
10 %
0 %
-10 %
-20 %
-30 %
GRI 103-3
Analysts are still optimistic about the attractiveness of FGC shares. The percentage of "buy"
recommendations for these securities at the end of 2018 rose up to 75 % vs. 67 % one year
earlier, whereas the percentage of "sell" recommendations dropped to zero from 33 % at the
end of 2017.
For detailed information
on the dynamics of dividends
and dividend yield of shares
of PJSC FGC UES,
see section Profit Distribution
and Dividend Policy.
4Q18
3Q18
2Q18
1Q18
4Q17
75 %
86 %
50 %
57 %
25 %
14 %
17 %
33 %
14 %
29 %
67 %
33 %
Buy
Hold
Sell
* Source: Company data.
Trading volume, lowest and highest price of one share of PJSC FGC UES per month, main events driving dynamics of the stock
value in 2018.
Analyst recommendations on shares of PJSC FGC UES*
January
February
March
April
May
June
July
August
September October
November December
volume
min_min
max_max
Results for the year show that the eight leading investment companies provided
analytical coverage on PJSC FGC UES.
208
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
209
The Company has been receiving a high return for over five years. This is the result
of a coordinated purposeful work of the Board of Directors, management and all
employees on improving the efficiency.
212
224
Main Forms of Annual Financial Statements
of PJSC FGC UES for 2018 as per RAS
Main Forms of Financial Statements
of PJSC FGC UES for 2018 as per IFRS
MAIN FORMS OF ANNUAL FINANCIAL STATEMENTS OF PJSC FGC UES
FOR 2018 AS PER RAS
Ernst & Young LLC
Sadovnicheskaya Nab., 77, bld. 1
Moscow, 115035, Russia
Tel: +7 (495) 705 9700
+7 (495) 755 9700
Fax: +7 (495) 755 9701
www.ey.com/ru
ООО «Эрнст энд Янг»
Россия, 115035, Москва
Садовническая наб., 77, стр. 1
Тел.: +7 (495) 705 9700
+7 (495) 755 9700
Факс: +7 (495) 755 9701
ОКПО: 59002327
ОГРН: 1027739707203
ИНН: 7709383532
INDEPENDENT AUDITOR’S REPORT
To the Shareholders
and Board of Directors of PJSC «FGC UES»
OPINION
We have audited the financial statements of PJSC «FGC UES» (the Company), which comprise the balance sheet as at
31 December 2018 , statement of income for 2018 and appendices thereto.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position
of the Company as at 31 December 2018 and its financial performance and its cash flows for 2018 in accordance with the
rules on preparation of financial statements established in the Russian Federation
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit
of the financial statements in the Russian Federation, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter
below, our description of how our audit addressed the matter is provided in that context.
MAIN FORMS OF ANNUAL FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER RAS
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements
section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our
audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion
on the accompanying financial statements.
KEY AUDIT MATTER
KEY AUDIT MATTER HOW OUR AUDIT ADDRESSED
THE KEY AUDIT MATTER
Impairment of account receivables
Impairment of account receivables is one of the most
significant matter for our audit due to significant balance
of account receivables as at 31 December 2018, as
well as due to the fact that management’s assessment
of recoverability of account receivables is based on
assumptions, in particular, on the forecasted ability
of the Company’s customers to pay.
Information on impairment of accounts receivable
is disclosed in paragraph 3.9 of the Appendices to balance
sheet and statement of income.
We analyzed the adequacy of the Company’s accounting
policy with respect to impairment of account receivables,
as well as the procedures for confirming the appropriateness
of estimates made by the Company’s management, including
analysis of history of settlements, ageing and overdue
receivables and customers’ ability to pay.
We performed audit procedures with respect
to the information used by the Company to determine
the impairment of accounts receivable, the aging structure
of accounts receivable, tested the applicable levels of
account receivables impairment allowances.
OTHER MATTERS
The financial statements of PJSC «FGC UES» for 2017 were audited by another auditor who expressed an unmodified
opinion on those statements on 20 February 2018.
The financial statements of PJSC «FGC UES» for 2016 were audited by another auditor who expressed an unmodified
opinion on those statements on 20 February 2017.
OTHER INFORMATION INCLUDED IN ANNUAL REPORT OF PJSC «FGC UES»
Other information consists of the information included in the Annual Report of PJSC «FGC UES» other than the financial
statements and our auditor’s report thereon. Management is responsible for the other information. The Annual Report
of PJSC «FGC UES» is expected to be made available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information and we will not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
212
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
213
FINANCIAL REPORT
MAIN FORMS OF ANNUAL FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER RAS
RESPONSIBILITIES OF MANAGEMENT AND AUDIT COMMITTEE OF BOARD OF DIRECTORS
FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with the rules on preparation of financial statements established in the Russian Federation, and for such
internal control as management determines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Audit Committee of Board of Directors are responsible for overseeing the Company’s financial reporting
process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal control;
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management;
conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern;
evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the Audit Committee of Board of Directors regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Audit Committee of Board of Directors with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Audit Committee of Board of Directors, we determine those
matters that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The partner in charge of the audit resulting in this independent auditor’s report is —
T.L. Okolotina.
T.L. Okolotina
Partner Ernst & Young LLC
20 February 2019
DETAILS OF THE AUDITED ENTITY
Name: PJSC «FGC UES»
Record made in the State Register of Legal Entities on 20 August 2002, State Registration Number 1024701893336.
Address: 117630, Russia, Moscow, Academika Chelomeya street, 5A.
DETAILS OF THE AUDITOR
Name: Ernst & Young LLC
Record made in the State Register of Legal Entities on 5 December 2002, State Registration Number 1027739707203.
Address: Russia 115035, Moscow, Sadovnicheskaya naberezhnaya, 77, building 1.
Ernst & Young LLC is a member of Self-regulated organization of auditors “Russian Union of auditors” (Association)
(“SRO RUA”). Ernst & Young LLC is included in the control copy of the register of auditors and audit organizations, main
registration number 11603050648.
214
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
215
FINANCIAL REPORT
MAIN FORMS OF ANNUAL FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER RAS
BALANCE SHEET
as of December 31.20.18
Organization: Public Joint-Stock Company
“Federal Grid Company of Unified Energy System”
Taxpayer Identification Number (INN):
Type of activity: power transmission
Form of incorporation / form of ownership:
public joint-stock company /
mixed Russian assets with a federal share
Unit of measurement: RUB, in thousands
Location (address): 5A Akademika Chelomeya Street, Moscow, Russia, 117630
Annex to Decree of the Russian Ministry of Finance No. 66n
dated July 2, 2010 (as revised by Decree of the Russian
Ministry of Finance No. 124n dated October 5, 2011)
OKUD Form No. 1
Date (year, month, day)
as per OKPO
INN
as per OKVED
as per OKOPF/OKFS
CODES
0710001
2018.12.31
56947007
4716016979
35.12
47 / 41
as per OKEI
384
Approval date
Mailing (acceptance) date
Notes
ASSET
1
I. NON-CURRENT ASSETS
Intangible assets
Research and development results
Fixed assets, including:
S.1 of Notes*
S.3.2 of Annexes**
S.1 of Notes*
S.3.6 of Annexes**
S.2 of Notes*
S.3.3 of Annexes**
land plots and natural resources
buildings, machinery and equipment, structures
other fixed assets
Income-bearing investments in tangible assets
S.3 of Notes*
S.3.7 of Annexes**
Financial investments
S.2 of Notes*
S.3.4 of Annexes**
S.5.1 of Notes*
S.3.4 of Annexes**
S.3.11 of Annexes**
S.4 of Notes*
S.3.10 of Annexes**
Deferred tax assets
Other non-current assets, including:
equipment for installation
investments in non-current assets
advances against non-current assets
other non-current assets
Section I TOTAL
II. CURRENT ASSETS
Inventory, including:
raw materials, materials and other similar assets
Value added tax on purchased assets
S.5 of Notes*
S.3.9 of Annexes**
Accounts receivable, including:
Accounts receivable (payments due within 12 months
from the reporting date) including:
customers and consumers
advance payments made
other debtors
Accounts receivable (payments due within 12 months
from the reporting date), including:
customers and consumers
amounts owed by members (founders) as payments into
the authorized capital
advance payments made
other debtors
Financial investments (except cash equivalents)
Cash and cash equivalents
Other current assets
Section II TOTAL
BALANCE
S.3 of Notes*
S.3.8 of Annexes**
S.3.19 of Annexes**
S.3.11 of Annexes**
Indicator
code
As of December
31, 2018
As of December
31, 2017
As of December
31, 2016
2
1110
1120
1130
1131
1132
1133
1140
1150
1160
1170
1171
1172
1173
1174
3
4
5
3,741,290
2,673,277
3,326,907
6,778
82,442
163,047
954,319,673
878,328,073
857,440,111
1,744,010
949,044,246
3,531,417
—
1,753,458
873,401,377
3,173,238
—
1,721,968
852,356,759
3,361,384
—
57,702,933
84,064,907
71,824,222
—
251,183,633
37,726,421
191,292,474
—
285,625,335
33,460,088
230,629,349
—
250,509,851
33,328,127
191,073,182
21,832,613
21,265,668
25,790,087
332,125
270,230
318,455
1100
1,266,954,307
1,250,774,034
1,183,264,138
1210
1211
1220
1230
1231
1232
1233
1234
1235
1236
1237
1238
1239
1240
1250
1260
1200
10,937,851
10,937,851
915,376
9,749,040
9,749,040
650,020
9,108,558
9,108,558
493,970
169,855,975
128,379,075
135,201,277
92,515,178
77,882,865
11,327,562
90,683,714
—
1,831,464
76,393,401
—
1,489,464
10,485,059
—
842,503
77,340,797
50,496,210
123,873,715
31,232,620
36,388,248
89,976,088
—
—
—
1,644,465
44,463,712
6,578,091
31,772,829
48,165
270,554
13,837,408
2,051,190
33,409,107
27,568
515,934
33,381,693
2,067,318
36,007,838
30,698
220,108,287
174,266,000
182,909,659
1600
1,487,062,594
1,425,040,034
1,366,173,797
Notes
LIABILITY
1
III. EQUITY AND RESERVES
S.3.1 of Annexes**
Authorized capital (contributed capital, authorized fund,
contributions of partners)
Shares repurchased
Revaluation of non-current assets
S.3.1 of Annexes**
Additional capital (without revaluation)
Reserve capital
Undistributed profit (uncovered loss), including:
Uncovered loss of past years
Undistributed profit of past years
Undistributed profit of the reporting year
Section III TOTAL
IV. LONG-TERM LIABILITIES
S.3.12 of Annexes**
Borrowings and loans
Deferred tax liabilities
Estimated liabilities
Other liabilities
Section IV TOTAL
V. SHORT-TERM LIABILITIES
Borrowings and loans
S.5.3 of Notes*
S.3.13 of Annexes**
Accounts payable, including:
suppliers and contractors
payables to employers
payables to state non-budgetary funds
taxes and fees payable
advances received
other creditors
payables to members (founders)
Deferred income
S.7 of Notes*
Estimated liabilities
Other liabilities
Section V TOTAL
BALANCE
* Notes to the Balance Sheet and the Profit and Loss Statement for 2018.
** Annexes to the annual 2018 Financial Statements.
Indicator
code
As of December
31, 2018
As of December
31, 2017
As of December
31, 2016
2
3
4
5
1310
637,332,662
637,332,662
637,332,662
1320
1340
1350
1360
1370
1371
1372
1373
—
—
—
301,169,595
285,993,481
258,523,592
31,867,163
31,867,163
31,867,163
21,610,434
19,492,352
14,188,807
98,413,848
62,885,484
45,088,345
—
—
—
42,226,913
62,885,484
45,088,345
56,186,935
—
—
1300
1,090,393,702
1,037,571,142
987,000,569
1410
1420
1430
1450
1400
1510
1520
1521
1522
1523
1524
1525
1526
1527
1530
1540
1550
1500
224,463,734
233,862,457
236,653,463
60,827,426
55,006,638
49,658,250
—
—
—
17,708,107
17,242,803
512,667
302,999,267
306,111,898
286,824,380
22,245,391
23,687,193
29,195,354
68,223,409
54,484,828
60,031,744
39,300,899
30,383,436
31,047,890
18,516
660,238
19,407
533,822
21,370
555
11,041,882
7,278,959
16,731,083
13,208,422
12,501,008
3,778,992
3,621,211
214,460
643,517
146,985
668,204
8,171,878
3,984,504
74,464
694,921
2,557,308
2,516,769
2,426,829
—
—
—
93,669,625
81,356,994
92,348,848
1700
1,487,062,594
1,425,040,034
1,366,173,797
Chief Executive
(signature)
A.E. Murov
(print full name)
Chief Accountant
(signature)
A.P. Noskov
(print full name)
20 February 2019
For full version of annual accounting statements of Federal Grid Company for 2018 see Appendix 13.
For full version of annual accounting statements of Federal Grid Company for 2018 see Appendix 13.
216
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
217
FINANCIAL REPORT
MAIN FORMS OF ANNUAL FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER RAS
STATEMENT OF FINANCIAL RESULTS
for 2018
Organization: Public Joint-Stock Company
“Federal Grid Company of Unified Energy System”
Taxpayer Identification Number (INN):
Type of activity: power transmission
Form of incorporation / form of ownership:
public joint-stock company /
mixed Russian assets with a federal share
Unit of measurement: RUB, in thousands
Notes
Indicator Description
1
Income and expenses for common activities
Revenue from sale of goods, products and services
(net of VAT, excise duties and other similar mandatory payments),
including:
electric power transmission services
connection services
other activity
S.6 of Notes*
Production cost of goods, products and services sold, including:
electric power transmission services
connection services
other activity
Gross profit (2110 + 2120)
Commercial expenses
S.6 of Notes*
Administrative expenses
Profit (loss) from sales (2100 + 2210 + 2220)
Income from participation on other companies
Interests income
Interests expenses
S.3.15 of Annexes**
Other income, including:
quoted financial asset revaluation surplus
S.3.15 of Annexes**
Other expenses, including:
quoted financial asset revaluation losses
Profit (loss) before tax (2200 +2310 + 2320 +
2330 + 2340 + 2350)
S.3.5 of Annexes**
Current profit tax, including:
permanent tax liabilities
S.3.5 of Annexes**
Change in deferred tax liabilities
S.3.5 of Annexes**
Change in deferred tax assets
Other, including:
Other similar mandatory payments
Profit tax adjustment for the previous periods
NET PROFIT (LOSS) FOR THE REPORTING PERIOD
Annex to Decree of the Russian Ministry of Finance No. 66n
dated July 2, 2010 (as revised by Decree of the Russian
Ministry of Finance No. 124n dated October 5, 2011)
OKUD Form No. 1
Date (year, month, day)
as per OKPO
INN
as per OKVED
as per OKOPF/OKFS
CODES
0710001
2018.12.31
56947007
4716016979
35.12
47 / 41
as per OKEI
384
Code
For
the reporting
period
For the same
period of the
previous year
2
3
4
Form 0710002 p. 2
Notes
Indicator Description
As of December
2018
As of December
2017
FOR REFERENCE
S.3.3 of Annexes**
Result of the fixed assets revaluation, not included in the net profit (loss)
for the period
Gain or loss from other operations not included in the net profit for the period
Total financial result for the period
S.3.16 of Annexes**
Basic earnings (loss) per share
Diluted earnings (loss) per share
* Notes to the Balance Sheet and the Profit and Loss Statement for 2018
** Annexes to the annual 2018 Financial Statements
15,518,685
27,816,547
71,705,620
0.0441
70,178,187
0.0332
2110
240,294,489
215,999,310
Chief Executive
(signature)
A.E. Murov
(print full name)
Chief Accountant
(signature)
A.P. Noskov
(print full name)
20 February 2019
2111
2112
2119
2120
2121
2122
2129
2100
2210
2220
2200
2310
2320
2330
2340
2341
2350
2351
2300
2410
2421
2430
2450
2460
2461
2462
2400
213,619,982
192,560,137
24,300,051
2,374,456
21,411,649
2,027,524
(170,825,202)
(152,383,316)
(169,263,087)
(151,051,798)
(104,667)
(1,457,448)
69,469,287
—
(8,490,827)
60,978,460
2,452,691
8,108,953
(3,978,163)
25,661,516
11,839,069
(97,474)
(1,234,044)
(63,615,994)
—
(8,253,906)
55,362,088
1,912,559
8,613,322
(3,941,486)
23,532,350
20,622
(19,815,686)
(24,885,537)
(221,333)
(7,496,003)
73,407,771
60,593,296
(11,394,520)
(12,880,041)
2,533,754
6,109,770
(5,932,669)
(5,278,564)
111,881
(5,528)
(5,528)
—
69,824
(3,227)
(3,227)
—
56,186,935
42,361,640
For full version of annual accounting statements of Federal Grid Company for 2018 see Appendix 13.
For full version of annual accounting statements of Federal Grid Company for 2018 see Appendix 13.
218
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
219
FINANCIAL REPORT
MAIN FORMS OF ANNUAL FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER RAS
STATEMENT OF CHANGES IN EQUITY
for 2018
Organization: Public Joint-Stock Company
“Federal Grid Company of Unified Energy System”
Taxpayer Identification Number (INN):
Type of activity: power transmission
Form of incorporation / form of ownership:
public joint-stock company /
mixed Russian assets with a federal share
Unit of measurement: RUB, in thousands
Annex to Decree of the Russian Ministry of Finance No. 66n
dated July 2, 2010 (as revised by Decree of the Russian
Ministry of Finance No. 124n dated October 5, 2011)
OKUD Form No. 1
Date (year, month, day)
as per OKPO
INN
as per OKVED
as per OKOPF/OKFS
CODES
0710001
2018.12.31
56947007
4716016979
35.12
47 / 41
as per OKEI
384
1. CHANGES IN EQUITY
Indicator Description
Code
Authorized
capital
Treasury shares
repurchased
from
shareholders
Additional
capital
Reserve
capital
Undistributed
profits
(uncovered
loss)
Total
Capital value as of December 31, 2016 1
3100
637,332,662
— 290,390,755
14,188,807
45,088,345
987,000,569
For 2017 2
Increase in capital value - total:
including:
net profit
property revaluation
income relating directly to the increase
in capital value
additional issue of shares
increase of share denomination
reorganization of legal entity
other
Indicator Description
Reduction of capital value - total:
including:
loss
property revaluation
expenses relating directly to the reduction
of capital value
decrease of share denomination
reduction of shares quantity
reorganization of legal entity
dividends
Changes in the additional capital
Changes in the reserve capital
Capital value as of December 31, 2017 2
3210
3211
3212
3213
3214
3215
3216
3217
Code
3220
3221
3222
3223
3224
3225
3226
3227
3230
3240
3200
—
—
х
—
—
Total
42,361,640
70,178,187
42,361,640
—
42,361,640
27,816,547
—
х
х
х
—
—
—
—
—
х
х
х
—
—
—
—
27,816,547
х
27,816,547
—
—
—
—
—
—
х
х
х
х
х
—
—
—
х
—
—
—
Authorized
capital
Treasury shares
repurchased
from
shareholders
Additional
capital
Reserve
capital
Undistributed
profits
(uncovered
loss)
Form 0710023 p. 2
—
х
х
х
—
—
—
х
х
х
637,332,662
—
х
х
х
—
х
—
—
—
(19,607,614)
(19,607,614)
х
х
х
—
—
—
—
—
—
—
—
—
—
—
—
х
х
(346,658)
х
х
х
— 317,860,644
х
х
—
х
—
5,303,545
19,492,352
—
—
—
(19,607,614)
346,658
(5,303,545)
62,885,484
—
—
—
(19,607,614)
х
х
1,037,571,142
For full version of annual accounting statements of Federal Grid Company for 2018 see Appendix 13.
220
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
Indicator Description
For 2018 3
Increase in capital value - total
including:
net profit
property revaluation
income relating directly to the increase
in capital value
additional issue of shares
increase of share denomination
reorganization of legal entity
Reduction of capital value - total:
including:
loss
property revaluation
expenses relating directly to the reduction
of capital value
decrease of share denomination
reduction of shares quantity
reorganization of legal entity
dividends
other
Changes in the additional capital
Changes in the reserve capital
Capital value as of December 31, 2018 3
Code
Authorized
capital
Treasury shares
repurchased
from
shareholders
Additional
capital
Reserve
capital
Undistributed
profits
(uncovered
loss)
Total
3310
3311
3312
3313
3314
3315
3316
3320
3321
3322
3323
3324
3325
3326
3327
3328
3330
3340
3300
—
х
х
х
—
—
—
—
х
х
х
—
х
х
х
—
—
—
—
х
х
х
15,518,685
х
15,518,685
—
—
—
—
—
х
—
—
—
х
х
х
х
х
—
—
х
х
х
56,186,935
71,705,620
56,186,935
—
56,186,935
15,518,685
—
—
х
—
—
(18,883,060)
—
х
—
(18,883,060)
—
—
—
—
—
—
—
—
—
х
—
х
х
637,332,662
—
—
—
—
—
—
х
х
—
—
(342,571)
х
х
х
— 333,036,758
х
х
—
х
—
—
2,118,082
21,610,434
—
—
—
(18,883,060)
—
342,571
(2,118,082)
98,413,848
—
—
—
(18,883,060)
—
х
х
1,090,393,702
2. CORRECTIONS DUE TO CHANGES IN THE ACCOUNTING POLICY AND ERRORS ELIMINATION
Form 0710023 p. 3
other capital items subject to corrections:
Code
EQUITY - TOTAL
before corrections
correction due to:
changes in the accounting policy
errors elimination
after corrections
including:
undistributed profits (uncovered loss)
before corrections
correction due to:
changes in the accounting policy
errors elimination
after corrections
3400
3410
3420
3500
3401
3411
3421
3501
other capital items subject to corrections:
before corrections
correction due to:
changes in the accounting policy
errors elimination
after corrections
3. NET ASSETS
Indicator Description
Net assets
3402
3412
3422
3502
Code
3600
As of December 31,
2016 1
Changes in equity for 2017 2
due to net profit
(loss)
due to other factors
As of December 31,
2017 2
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
As of December 31, 2018 3
As of December 31, 2017 2
As of December 31, 2016 1
1,091,037,219
1,038,239,346
987,695,490
Chief Executive
(signature)
A.E. Murov
(print full name)
Chief Accountant
(signature)
A.P. Noskov
(print full name)
20 February 2019
Notes: 1. The year preceding the previous year is indicated. 2.The previous year is indicated. 3. The reporting year is indicated.
For full version of annual accounting statements of Federal Grid Company for 2018 see Appendix 13.
221
FINANCIAL REPORT
MAIN FORMS OF ANNUAL FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER RAS
Indicator
1
CASH FLOWS FROM FINANCIAL TRANSACTIONS
Receipts - total, including:
obtaining of credits and loans
monetary contributions of owners (members)
from issue of shares, participatory interest increase
from issue of bonds, promissory notes and other debt securities
other receipts
Payments - total, including:
to owners (members) due to repurchase of shares (participatory interest)
of their organization or their cessation of membership
for payment of dividends and other distribution payments
profit to owners (members)
due to the payment of promissory notes and other debt securities,
repayment of credits and loans
other payments
Cash flow balance from financial operations
Cash flow balance for the reporting period
Cash and cash equivalents balance as of the beginning of the reporting year
Cash and cash equivalents balance as of the end of the reporting year
Influence of foreign currency change versus RUB
Code
For 2018
For 2017
2
3
4
4310
4311
4312
4313
4314
4319
4320
4321
10,039,700
16,020,390
40,950
22,050
—
—
—
—
9,998,750
15,998,000
—
340
(39,307,190)
(43,000,078)
—
—
4322
(18,884,671)
(19,607,954)
4323
(20,422,519)
(23,392,124)
—
—
(29,267,490)
(26,979,688)
(1,636,278)
(2,598,731)
33,409,107
36,007,838
31,772,829
33,409,107
4329
4300
4400
4450
4500
4490
Chief Executive
(signature)
A.E. Murov
(print full name)
Chief Accountant
(signature)
A.P. Noskov
(print full name)
20 February 2019
CASH FLOW
STATEMENT
for 2018
Organization: Public Joint-Stock Company
“Federal Grid Company of Unified Energy System”
Taxpayer Identification Number (INN):
Type of activity: power transmission
Form of incorporation / form of ownership:
public joint-stock company /
mixed Russian assets with a federal share
Unit of measurement: RUB, in thousands
Indicator
1
CASH FLOWS FROM CURRENT TRANSACTIONS
Receipts - total
including:
from sale of products, goods, work and services
lease payments, license fees, royalties,
commission charges and other similar payments
from resale of financial investments
other receipts
Payments - total, including:
to suppliers (contractors) for raw materials, materials, work and services
remuneration of labor
debenture interest
corporate tax
other payments
Balance of cash flows from current transactions
CASH FLOWS FROM INVESTMENT TRANSACTIONS
Receipts - total, including:
from sale of fixed assets (except financial investments)
from sale of other companies’ shares (participatory interest)
from repayment of granted loans, from sale of debt securities
(claims for cash against third parties)
dividends, interest on debt financial investments and other similar income
from participatory interest in other companies
other receipts
Payments - total, including:
Annex to Decree of the Russian Ministry of Finance No. 66n
dated July 2, 2010 (as revised by Decree of the Russian
Ministry of Finance No. 124n dated October 5, 2011)
OKUD Form No. 1
Date (year, month, day)
as per OKPO
INN
as per OKVED
as per OKOPF/OKFS
CODES
0710001
2018.12.31
56947007
4716016979
35.12
47 / 41
as per OKEI
384
Code
For 2018
For 2017
2
3
4
4110
246,796,788
229,247,960
4111
4112
4113
4119
4120
4121
4122
4123
4124
4129
4100
4210
4211
4212
4213
4214
4219
4220
229,506,983
210,773,286
1,314,924
935,257
—
—
15,974,881
17,539,417
(119,406,103)
(108,558,349)
(57,645,661)
(41,146,101)
(17,662,948)
(16,514,357)
(4,441,515)
(4,846,346)
(10,938,031)
(16,877,846)
(28,717,948)
(29,173,699)
127,390,685
120,689,611
19,459,972
20,035,317
190,442
3,708,155
164,670
—
12,479,129
17,107,160
3,082,246
2,763,487
—
—
(119,219,445)
(116,343,971)
payments associated with the acquisition, establishment, upgrading,
reconstruction and preparation for the use of fixed assets
4221
(91,302,730)
(86,148,749)
from purchase of other companies’ shares (participatory interest)
4222
(504,276)
(816,831)
from purchase of debt securities (claims for cash against third parties),
granting loans to third parties
debenture interest included in the investment asset value
other payments
Balance of cash flows from investment transactions
4223
(17,141,868)
(16,091,032)
4224
4229
4200
(10,270,464)
(13,287,354)
(107)
(5)
(99,759,473)
(96,308,654)
For full version of annual accounting statements of Federal Grid Company for 2018 see Appendix 13.
For full version of annual accounting statements of Federal Grid Company for 2018 see Appendix 13.
222
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
223
FINANCIAL REPORT
MAIN FORMS OF FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER IFRS
MAIN FORMS OF FINANCIAL STATEMENTS OF PJSC FGC UES
FOR 2018 AS PER IFRS
GRI 102-7
Ernst & Young LLC
Sadovnicheskaya Nab., 77, bld. 1
Moscow, 115035, Russia
Tel: +7 (495) 705 9700
+7 (495) 755 9700
Fax: +7 (495) 755 9701
www.ey.com/ru
ООО «Эрнст энд Янг»
Россия, 115035, Москва
Садовническая наб., 77, стр. 1
Тел.: +7 (495) 705 9700
+7 (495) 755 9700
Факс: +7 (495) 755 9701
ОКПО: 59002327
ОГРН: 1027739707203
ИНН: 7709383532
INDEPENDENT AUDITOR'S REPORT
To Shareholders and Board of Directors
of Public Joint-Stock Company
"Federal Grid Company of Unified Energy System"
OPINION
We have audited the consolidated financial statements of Public Joint-Stock Company "Federal Grid Company of Unified
Energy System" (PJSC "FGC UES") and its subsidiaries
(the Group), which comprise the consolidated statement of financial position as at 31 December 2018, and the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for 2018, and notes to the consolidated financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Group as at 31 December 2018 and its consolidated financial performance and its consolidated
cash flows for 2018 in accordance with International Financial Reporting Standards (IFRSs).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the
consolidated financial statements section of our report. We are independent of the Group in accordance with the
International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together
with the ethical requirements that are relevant to our audit of the consolidated financial statements in the Russian
Federation, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA
Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context of our audit
of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that
context.
We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the performance
of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial
statements. The results of our audit procedures, including the procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying consolidated financial statements.
KEY AUDIT MATTER
HOW OUR AUDIT ADDRESSED THE MATTER
Allowance for expected credit losses on trade receivables
The matter of creating allowance for expected credit
losses on trade receivables is one of the most significant
matters for our audit due to the material balances of trade
receivables as of 31 December 2018, as well as due to
the fact that management's assessment of the possible
recoverability of these receivables is based on assumptions,
in particular, on the projected solvency of the Group's
customers.
Information on allowance for expected credit losses on
trade receivables is disclosed in Notes 10, 13 and 27 to the
consolidated financial sta tements.
We analyzed the adequacy of the Group's accounting
policy on the trade receivables with respect to the creation
of allowance for expected credit losses on trade receivables,
as well as procedures to confirm the appropriateness
of measurements made by the Group's management,
including the analysis of repayment of trade receivables,
the analysis of maturity and delayed performance
of obligations, and the analysis of customers' solvency.
We performed audit procedures
the
respect of
information used by the Group to determine the allowance
for expected credit losses on trade receivables, the structure
of receivables by age and maturity, and tested the
correctness of the charged allowance amounts based on
management's estimates.
in
Impairment of non-current assets
Due to the existence of the impairment indicators
of non-current assets as of 31 December 2018,
the Group performed impairment testing. The value-in use
of property, plant and equipment, forming a significant share
of the Group's non -current assets, as of 31 December 2018,
was determined by the projected cash flow method.
impairment testing of property, plant
The matter of
and equipment was one of the most significant matters
for our audit because the property, plant and equipment
balance forms a significant part of the Group's assets at
the reporting date, and because management's assessment
of the value-in use is complex and largely subjective
and is based on assumptions, in particular, on the projected
electricity
fees,
as well as operating and capital expenditures that depend
on the expected future market or economic conditions
in the Russian Federation.
Information on the results of the impairment analysis
of non-current assets is disclosed by the Group in Note 6
to the consolidated financial statements.
transmission volumes,
transmission
Assessment of retirement and other liabilities to employees
liabilities
retirement and other
The Group has defined benefit pension plans.
to
Assessment of
employees is a significant audit matter as management
determines carrying values of defined benefit pension plans
and the discounted value of respective liabilities on the basis
of actuarial valuation that includes certain assumptions,
and the amount of liabilities under defined benefit pension
plans at the reporting date is highly sensitive to changes
in those assumptions. Such assumptions include, but are
not limited to, mortality, both during and after employment.
rates of employee turnover, discount rate, future salary
and benefit levels as well as the expected return on plan
asset.
Information on pension liabilities is disclosed in Note 18
to the consolidated financial statements.
tariff
transmission,
the electricity
As part of our audit procedures, we also assessed
the assumptions and methodologies applied by the Group,
in particular, those relating to projected total revenue
from
regulations,
operating and capital expenditures, long-term growth rate
and discount rate. We tested the input data incorporated in
the model and the mathematical accuracy of the model used
to determine the recoverable amount in the impairment test
of fixed assets. We engaged valuation specialists to analyze
the model used to determine the recoverable amount
in the impairment test of property, plant and equipment.
We also analyzed the sensitivity of the model to changes
in the main indicators of assessment and the Group's
disclosures of assumptions on which the results of
impairment testing largely depend.
applied
sample
assumptions, made
In the course of our audit procedures we also analyzed
the
testing
of the Group's employee data used for actuarial calculations,
as well as performed analytical procedures in respect
of the carrying value of liabilities under the defined
benefit pension plans and their changes during the period.
We engaged
to provide
assistance with these audit procedures. We also reviewed
the respective disclosures in the consolidated financial
statements.
the professional actuaries
224
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
225
FINANCIAL REPORT
MAIN FORMS OF FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER IFRS
OTHER MATTERS
The financial statements of the PJSC "FGC UES" and its subsidiaries for 2017 were audited by another auditor who expressed
an unmodified opinion on those statements on 23 March 2018.
The financial statements of the PJSC "FGC UES" and its subsidiaries for 2016 were audited by another auditor who expressed
an unmodified opinion on those statements on 21 March 2017.
OTHER INFORMATION INCLUDED IN THE COMPANY'S ANNUAL REPORT
Other information consists of the information included in the Annual Report other than the consolidated financial statements
and our auditor's report thereon. Management is responsible for the other information. The Annual Report is expected
to be made available to us after the date of this auditor's report.
Our opinion on the consolidated financial statements does not cover the other information and we will not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated.
RESPONSIBILITIES OF MANAGEMENT AND AUDIT COMMITTEE OF THE BOARD
OF DIRECTORS FOR THE CONSOLIDATED FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Audit Committee of the Board of Directors are responsible for overseeing the Group's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal
control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management .
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group
to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with Audit Committee of the Board of Directors regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide Audit Committee of the Board of Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with Audit Committee of the Board of Directors, we determine those matters that were
of most significance in the audit of the consolidated financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
The partner in charge of the audit resulting in this independent auditor’s report is –
T.L Okolotina
T.L. Okolotina
Partner Ernst & Young LLC
15 March 2019
DETAILS OF THE AUDITED ENTITY
Name: PJSC «FGC UES»
Record made in the State Register of Legal Entities on 20 August 2002, State Registration Number 1024701893336.
Address: 117630, Russia, Moscow, Academika Chelomeya street, 5A.
DETAILS OF THE AUDITOR
Record made in the State Register of Legal Entities on 5 December 2002, State Registration Number 1027739707203.
Address: Russia 115035, Moscow, Sadovnicheskaya naberezhnaya, 77, building 1.
Ernst & Young LLC is a member of Self-regulated organization of auditors “Russian Union of auditors” (Association)
(“SRO RUA”). Ernst & Young LLC is included in the control copy of the register of auditors and audit organizations, main
registration number 11603050648.
226
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
227
FINANCIAL REPORT
MAIN FORMS OF FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER IFRS
PJSC "FGC UES"
CONSOLIDATED STATEMENT OF FINANC IAL POSITION
(in millions of Russian Rouble unless otherwise stated)
Notes
31 December
2018
31 December
2017
(restated*)
1 January
2017
(restated*)
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investments in associates and joint ventures
Financial investments
Deferred income tax assets
Long–term accounts receivable
Other non–current assets
Total non–current assets
Current assets
Cash and cash equivalents
Bank deposits
Accounts receivable and prepayments
Income tax prepayments
Inventories
Other current assets
Assets held for sale
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity
Share capital: Ordinary shares
Treasury shares
Share premium
Reserves
Retained earnings
Equity attributable to shareholders of FCC
Non–controlling interest
Total equity
Non–current liabilities
Deferred income tax liabilities
Non–current debt
Long–term accounts payable
Government grants
Retirement benefit
obligations
Total non–current liabilities
Current liabilities
Accounts payable to shareholders of FGC UES
Current debt and current portion
of non–current debt
Accounts payable and accrued charges
Income tax payable
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
6
7
8
9
16
10
11
12
13
14
30
15
15
15
16
17
20
18
937,277
6,638
1,442
37,956
207
72,699
1,306
1,057,525
37,618
3,811
71,417
56
17,037
111
130,050
21,467
151,517
1,209,042
637,333
(4,719)
10,501
25,167
170,699
838,981
181
839,162
29,586
224,585
15,001
867
5,950
275,989
879,293
6,303
1,136
67,403
55
69,350
960
1,024,500
42,535
–
45,437
211
15,907
111
104,201
-
104,201
1,128,701
637,333
(4,719)
10,501
40,482
74,152
757,749
(603)
757,146
25,528
233,862
14,864
966
7,617
282,837
809,645
7,320
1,160
76,537
14
45,145
1,853
941,674
44,404
450
58,187
305
14,900
140
118,386
-
118,386
1,060,060
637,333
(4,719)
10,501
49,093
6,829
699,037
(837)
698,200
18,600
236,954
–
919
5,959
262,432
17, 19
20
213
146
73
22,224
67,608
3,846
93,891
369,880
1,209,042
23,988
60,925
3,659
88,718
371,555
1,128,701
29,660
62,059
7,636
99,428
361,860
1,060,060
PJSC "FGC UES"
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
(in millions of Russian Rouble unless otherwise stated)
Notes
Year ended
31 December 2018
Revenues
Other operating income
Operating expenses
Loss on derecognition of subsidiary
Reversal of impairment/(impairment)
of property, plant and equipment, net
Operating profit
Finance income
Finance costs
Share of profit of associates and joint ventures
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income/(loss)
Items that will not be reclassified subsequently to profit or loss
Change in fair value of financial investments
Remeasurements of retirement benefit obligations
Income tax relating to items that will not be reclassified
Total items that will not be reclassified to profit or loss
Items that are or may be reclassified subsequently to profit or loss
Change in fair value of financial investments
Foreign currency translation difference
Income tax relating to items that may be reclassified
Total items that are or may be reclassified to profit or loss
Other comprehensive income/(loss)
for the period, net of income tax
Total comprehensive income for the year
Profit attributable to:
Shareholders of FGC UES
Non-controlling interests
Total comprehensive income attributable to:
Shareholders of FGC UES
Non-controlling interests
Earnings per ordinary share for profit attributable to shareholders
of FGC UES – basic and diluted (in Russian Rouble)
21
21
22
6
23
24
8
16
9
18
16
9
8
16
25
25
253,979
6,474
(155,844)
–
2,248
106,857
12,981
(4,862)
125
115,101
(22,256)
92,845
1,613
(134)
6,717
8,196
–
181
–
181
8,377
101,222
92,809
36
101,186
36
0.074
* The amounts shown here do not correspond to the 2017 consolidated financial statements and reflect change
in accounting policy for measuring property, plant and equipment (for details see Note 3).
* The amounts shown here do not correspond to the 2017 consolidated financial statements
and reflect change in accounting policy for measuring property, plant and equipment (for details see Note 3).
Authorised for issue and signed on behalf of the Management Board:
15 March 2019
Chairman of the Management Board
Head of Accounting and Financial Reporting – Chief Accountant
The accompanying notes are an integral part of these Consolidated Financial Statements
For full version of consolidated financial statements of FGC UES Group for 2018 see Appendix 14.
228
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
A.E. Murov
A.P. Noskov
The accompanying notes are an integral part of these Consolidated Financial Statements
For full version of consolidated financial statements of FGC UES Group for 2018 see Appendix 14.
Year ended
31 December 2017
(restated*)
242,186
6,405
(135,505)
(52)
(11,121)
101,913
12,587
(4,501)
28
110,027
(22,210)
87,817
-
(1,395)
145
(1,250)
(9,134)
(53)
1,826
(7,361)
(8,611)
79,206
87,744
73
79,133
73
0.070
229
FINANCIAL REPORT
MAIN FORMS OF FINANCIAL STATEMENTS OF PJSC FGC UES FOR 2018 AS PER IFRS
PJSC "FGC UES"
CONSOLIDATED STATEMENT
OF CASH FLOWS
(in millions of Russian Rouble unless otherwise stated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before income tax
Adjustments to reconcile profit before
income tax to net cash provided by operations
Depreciation of property, plant and equipment
(Gain)/loss on disposal of property, plant and equipment
Amortisation of intangible assets
(Reversal of impairment)/Impairment of property, plant and equipment, net
Loss on derecognition of subsidiary
Share of result of associates
Accrual/(reversal) of allowance for expected credit losses
Reversal of other provision for liabilities and charges
Finance income
Finance costs
Other non-cash operating income
Operating cash flows before working capital changes
and income tax paid
Working capital changes:
Increase in accounts receivable and prepayments
Increase in inventories
Decrease in other current assets
Increase in accounts payable and accrued charges
Income tax paid
Net cash generated by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Purchase of intangible assets
Redemption of promissory notes
Placement of bank deposits
Redemption of bank deposits
Dividends received
Loans given
Repayment of loans given
Proceeds from sale of financial investments
Interest received
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from current and non-current borrowings
Repayment of current and non-current borrowings
Repayment of lease
Dividends paid
Interest paid
Acquisition of non-controlling interests
Government grants
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
Notes
Year ended
31 December 2018
Year ended
31 December 2017
(restated*)
115,101
110,027
22
22
22
6
8
22
20
23
24
17
17
17
15
11
11
32,346
(310)
1,154
(2,248)
–
(125)
4,634
(778)
(12,981)
4,862
(2)
141,653
(7,458)
(1,130)
265
2,093
(11,286)
124,137
(88,941)
1,029
(2,049)
10
(24,134)
20,323
2,251
(53)
23
3,708
3,194
(84,639)
10,054
(20,436)
(115)
(18,702)
(14,712)
(504)
–
(44,415)
(4,917)
42,535
37,618
28,428
1,093
1,220
11,121
52
(28)
(3,813)
(1,320)
(12,587)
4,501
(241)
138,453
(3,959)
(1,007)
719
3,796
(17,235)
120,767
(86,970)
1,446
(1,011)
10
(9,566)
10,016
2,579
(1)
1,002
–
5,959
(76,536)
16,074
(23,795)
(149)
(19,354)
(18,164)
(817)
105
(46,100)
(1,869)
44,404
42,535
* * The amounts shown here do not correspond to the 2017 consolidated financial statements
and reflect change in accounting policy for measuring property, plant and equipment (for details see Note 3).
The accompanying notes are an integral part of these Consolidated Financial Statements
For full version of consolidated financial statements of FGC UES Group for 2018 see Appendix 14.
230
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
PJSC "FGC UES"
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in millions of Russian Rouble unless otherwise stated)
Attributable to shareholders of FGC UES
Notes
Share
capital
Share
premium
Treasury
shares
Reserves
(Accumulate
d deficit)/
Retained
earnings
Total
Non-
controlling
interest
Total
equity
637,333
10,501
(4,719)
302,099
(144,118)
801,096
672
801,768
3
–
–
–
(261,617)
218,270
(43,347)
(1,275)
(44,622)
637,333
10,501
(4,719)
40,482
74,152
757,749
(603)
757,146
As at 1 January 2018,
as previously reported
Effect of changes in
accounting policies
As at 1 January 2018
(restated*)
Total comprehensive income for the year
Profit for the year
–
–
Other comprehensive income/(loss), net of related income tax
9, 15
15, 18
8, 15
9
Change in fair value
of financial investments,
net of tax
Remeasurements
of retirement benefit
obligations, net of tax
Foreign currency
translation difference
Total other
comprehensive income
Total comprehensive
income for the year
Transfer of accumulated
revaluation reserve
at disposal of financial
investments
Dividends declared
Acquisition of non-
controlling interests
As at
31 December 2018
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-
–
–
–
–-
–
–,
–
92,809
92,809
36
92,845
8,458
(262)
181
8,377
8,377
–
–
–
–
8,458
(262)
181
8,377
–
–
–
–
8,458
(262)
181
8,377
92,809
101,186
36
101,222
(23,692)
23,692
–
(18,702)
(18,702)
–
–
– (18,702)
(1,252)
(1,252)
748
(504)
–
–
637,333
10,501
(4,719)
25,167
170,699
838,981
181
839,162
* The amounts shown here do not correspond to the 2017 consolidated financial statements and reflect change
in accounting policy for measuring property, plant and equipment (for details see Note 3).
The accompanying notes are an integral part of these Consolidated Financial Statements
For full version of consolidated financial statements of FGC UES Group for 2018 see Appendix 14.
231
FINANCIAL REPORT
PJSC "FGC UES"
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in millions of Russian Rouble unless otherwise stated)
Attributable to shareholders of FGC UES
Notes
Share
capital
Share
premium
Treasury
shares
Reserves
(Accumu-
lated deficit)/
Retained
earnings
Total
Non-
controlling
interest
Total
equity
As at 1 January 2017,
as previously reported
Effect of changes in
accounting policies
As at 1 January 2017
(restated*)
637,333
10,501
(4,719)
281,759
(198,273)
726,601
1,816
728,417
3
–
–
–
(232,666)
205,102
(27,564)
(2,653)
(30,217)
637,333
10,501
(4,719)
49,093
6,829
699,037
(837)
698,200
Total comprehensive income for the year
Profit for the year
9, 15
Other comprehensive income/(loss),
net of related income tax
Change in fair value
of financial investments,
net of tax
Remeasurements of
retirement benefit
obligations, net of tax
Foreign currency
translation difference
Total other
comprehensive income
Total comprehensive
income for the year
15, 18
8, 15
Dividends declared
acquisition of non-
controlling interests
Loss on derecognition
of subsidiary
As at 31 December
2017 (restated*)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
87,744
87,744
73
87,817
(7,308)
–
(7,308)
–
(7,308)
(1,252)
(51)
(8,611)
–
–
–
(1,252)
(51)
(8,611)
–
–
–
(1,252)
(51)
(8,611)
(8,611)
87,744
79,133
73
79,206
–
–
–
(19,424)
(19,424)
(3)
(19,427)
(997)
(997)
–
–
180
(16)
(817)
(16)
637,333
10,501
(4,719)
40,482
74,152
757,749
(603)
757,146
* The amounts shown here do not correspond to the 2017 consolidated financial statements and reflect change
in accounting policy for measuring property, plant and equipment (for details see Note 3)
The accompanying notes are an integral part of these Consolidated Financial Statements
For full version of consolidated financial statements of FGC UES Group for 2018 see Appendix 14.
232
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
ADDITIONAL INFORMATION
INFORMATION ON THE REPORT
INFORMATION ON THE REPORT
REPORT PREPARATION PROCESS
GRI 101
Reporting cycle
Report Format
Annual, for the period from 1 January 2018 through 31 December 2018 GRI 102-50, 102-52
Integrated Annual Report of PJSC FGC UES
GRI Sustainability Reporting Standards GRI 102-54
Core option, Compliance Table, see section Compliance with GRI Standards
International Reporting
Standards
Industry Application GRI G4 for the electric power industry, The Electric Utilities Sector Disclosures
International Integrated Reporting Standard, The International Framework
See the Compliance Table in section Compliance with GRI Standards
Stakeholder Engagement Standard, AA1000 Stakeholder Engagement Standard (2015)
Regulation No. 454-P on disclosure of information by issuers of securities approved by the Central Bank
of the Russian Federation, dated 30 December 2014
Corporate Governance Code recommended by the Bank of Russia (Letter No. 06-52/2463 dated
10 April 2014)
Resolution No. 1214 of the Government of the Russian Federation, dated 31 December 2012
on improvement of the Procedure of Management of Open Joint Stock Companies whose Shares are
in Federal Ownership, and Federal State Unitary Enterprises
Russian Reporting
Standards
Date of previous
report publication
July 2018 GRI 102-51
Scope of Report
PJSC FGC UES, including all branches (MPS and EMPS)
Production indicators and indicators in the field of financial and economic activity of PJSC FGC UES, stated
in the Report, are presented on the basis of indicators of accounting statements of PJSC FGC UES, prepared
in accordance with Russian Accounting Standards. Individual financial and economic indicators
are presented in accordance with the consolidated financial statements as per IFRS and are followed by
relevant notes.
As compared to the previous year, no indicators were restated. GRI 102-48
The reporting information is confirmed by the conclusions of:
●independent audit organisation ERNST & YOUNG LLC, confirming the reliability of the accounting
(financial) statements as per RAS and the reliability of the consolidated financial statements as per IFRS
Auditors' report on the financial statements for 2018 is stated in section Financial Statements
Independent auditor's report is given in section Financial Statements
Verification of reporting
information
●independent auditing firm Nexia Pacioli LLC, confirming the reliability of non-financial information and
compliance of the Report with the main application variant of GRI SRS Standards and the International
Integrated Reporting Standard GRI 102-56
The Independent auditor's report is given in section Additional Information
●representatives of the main stakeholders in the course of the public Report endorsement procedure
The Conclusion on the public Report endorsement is given in section Additional information
The purpose of the Report preparation is to inform interested parties about the Company's activities: strategy and mission,
social responsibility policy and sustainability of business development, key events and results of activities, impact
on the economy, society, environment, and on interaction with stakeholders.
The Report is prepared in accordance with the principles of determining the content of the report and with the reporting
information quality principles GRI SRS.
GRI 102-46
MATERIALITY DETERMINATION PROCESS
While preparing this Report, the Company, together with representatives of the groups of main stakeholders, identified
material topics for disclosure in the Report. Representatives of the groups of main stakeholders (23 respondents
representing external stakeholders and 51 respondents representing internal stakeholders) were questioned. Based
on the results of the survey, a materiality matrix was formed.
Respondent reach when preparing the Report
80
60
40
20
0
74
61
2017
2018
Respondents assessed the material topics by two parameters:
impact of the topic on assessments and decision making by the stakeholders,
impact of the Company on the economy, environment and social sphere (within the scope of the topic).
Based on the results of the survey, a materiality matrix was formed. According to the GRI SRS Standards, any topic is material
if it is highly assessed for at least one parameter. On this principle, the topics are divided into three groups according
to the degree of materiality:
Group I — material topics with more than 2 points for at least one parameter;
Group II — less material topics with 1.5 to 2 points for at least one parameter;
Group III — immaterial topics with less than 1.5 points for both parameters.
Scope of topics: PJSC FGC UES, including all branches (MPS and EMPS). GRI 103-1
No significant changes in the scope and coverage of disclosed topics compared to previous reports. GRI 102-49
234
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
235
ADDITIONAL INFORMATION
INFORMATION ON THE REPORT
GRI 102-47
Materiality Matrix
Group I (material topics) — 16 pcs
Group II (less material topics,
partial disclosure) — 6 pcs
Group III (immaterial topics) — 2 pcs
22
23
3.00
2.00
1.00
g
n
i
k
a
m
n
o
i
s
i
c
e
d
d
n
a
t
n
e
m
s
s
e
s
s
a
n
o
e
c
n
e
u
l
f
n
i
l
r
e
d
o
h
e
k
a
t
S
12
16
17
15
2
1
5
3
4
14
19
13
7
18
9
10
20
11
6
24
8
21
0.00
0.00
1.00
2.00
3.00
Influence on economy, environment and society
Group II
6
8
10
11
20
21
24
Innovative activities, scientific and technical development
Import substitution
Information transparency
International cooperation
Energy efficiency and internal power consumption
Biological diversity preservation, including preservation of natural habitat along power transmission lines
Compliance with the requirements of legislation and regulatory bodies in the area of environmental protection
Group III
22
23
Emissions of air pollutants
Discharges and waste generated as a result of the Company's activities
As part of preparation of the Report 18 April 2019, public hearings were held on the draft
report, which were attended by representatives of the groups of main stakeholders. Requests
and recommendations made at the hearings have been regarded, to the extent possible, in
the process of preparation of this Report (see section Interaction with Stakeholders during
the Preparation of the Report). Requests of stakeholders received during the previous
reporting campaign, and reviews of the previous report received within the framework of
Russian and international competitions of annual reports, have been also regarded in the
process of preparing this Report.
Refer to section Compliance
with GRI Standards
for information on correlation
between material topics
and GRI SRS topics.
GRI 102-32
RESPONSIBILITY FOR REPORT PREPARATION
The Report is approved by resolutions of the Board of Directors (tentatively) and the Annual
General Meeting of Shareholders of PJSC FGC UES.
Material topics of the Report
Group I
1
2
3
4
5
7
9
Implementation of infrastructure projects, development of the Unified National Electric Grid
Reliability and quality of electric power supplied to consumers
Tariff setting
Efficiency of infrastructure operation
Efficiency of investment activities (capital construction)
Implementation of digital technologies and solutions
Investment attractiveness
12
Improving economic efficiency and financial sustainability
13 Managing procurement activities and combating unfair competition
14
15
16
17
18
19
Corruption management
Ensuring decent working conditions and respect for employees' rights
Occupational health and safety at work
Personnel development
Impact on socio-economic development of the regions in which the Company is present
Compliance with the requirements of legislation and regulatory bodies in the social and economic sphere
236
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
237
ADDITIONAL INFORMATION
AUDITOR'S REPORT ON NON-FINANCIAL STATEMENTS
DISCLAIMER
This Integrated Annual Report (hereinafter,
the Report) is drawn up with the use
of information available to PJSC FGC UES
at the time of its preparation. The Company
trusts that the information provided in the
Report is complete and accurate at the time
of publication of the Report, however does
not claim that it cannot be further specified
or revised.
This Report contains forecasting statements
reflecting expectations of the Company's
management team. Due to various objective
factors, actual performance results may
differ
forecasts and
assessments.
the above
from
business
operations,
The Annual Report contains certain
regarding
statements
forecasting
the
economic
indicators and financial standing of the
Company, its business plans, projects, and
expected results. Also, the Report may
contain estimates of trends in terms of
changes in prices of services/products,
volumes of production and consumption,
costs, estimated expenses, development
factors,
prospects and other similar
as well as forecasts regarding development
of the industry and markets, and timelines
of
termination
of individual projects within the Company's
operations.
commencement
and
Such terms as "assume", "expect", "forecast",
"intend", "seek", "estimate", "plan", "deem",
"consider", "could be", "will", along with
other resembling or similar expressions,
as well as those used with negation,
usually reflect the forecasting nature of
any statement. Forecasting statements,
in virtue of their specific character, involve
inherent risk and uncertainty of both general
and individual nature, and there is a risk
that such assumptions, forecasts, projects
and other
forecasting statements will
not be implemented. In view of the above
risks, uncertainties and assumptions, the
Company forewarns that the actual results
may substantially differ from the indicators
expressed or implied in such forecasting
statements, being valid only at the date of
the Report preparation.
represents nor
The Company neither
warrants that the performance results, as
reflected in the forecasting statements,
will be achieved. The Company shall not
be liable for any losses or damage which
may be incurred by any individuals or
legal entities acting on the basis of such
forecasting statements. Such forecasting
statements represent,
in each specific
case, only one of multiple possible case
scenarios and shall not be deemed to be
the most likely scenario.
Except as expressly provided by
law,
the Company assumes no obligation
to publish updates and changes to its
forecasting statements based on any new
information and subsequent events.
AUDITOR'S REPORT
ON NON-FINANCIAL STATEMENTS
Nexia Pacioli Limiting Liability Company
(Nexia Pacioli LLC)
TIN 7729142599
KPP 770601001
OGRN 1027739428716
Phone: +7 (495) 640-6452
E-mail: pacioli@pacioli.ru, http://www.pacioli.ru
2 Malaya Polyanka st., Moscow 119180, Russia
STATEMENT ON RESULTS OF INDEPENDENT ASSURANCE
OF THE PJSC FGC UES INTEGRATED ANNUAL REPORT 2018
ADDRESSEES OF THE STATEMENT
The Statement is addressed to the PJSC FGC UES management.
SUBJECT MATTER OF THE ASSURANCE
(1) Information included in the PJSC FGC UES Integrated Annual Report 2018.
(2) The process of stakeholder engagement during preparation of the Integrated Annual Report 2018.
CRITERIA
(1) Information included in the PJSC FGC UES Integrated
Annual Report 2018:
requirements of the Russian Law to the content of annual
reports of joint stock companies regarding information
disclosure;
requirements of the GRI Standards (Core Option);
requirements of the International Integrated Reporting
Standards.
(2) The stakeholder engagement process during preparation
of the Integrated Annual Report for 2018:
requirements of the local integrated reporting
regulations;
recommendations of the AA1000 AccountAbility
Principles Standard (AA1000APS) 2008 regarding
the PJSC FGC UES compliance with the principles
of inclusiveness, materiality and responsiveness;
RESPONSIBILITY OF THE PARTIES
recommendations of the AA1000 Stakeholder
Engagement Standard (AA1000SES) 2015.
The PJSC FGC UES management
is responsible for
preparation and presentation of the Integrated Annual
Report 2018, stakeholder engagement and implementation
of all related procedures and requirements, including
the requirements to the internal control system.
Nexia Pacioli LLC is accountable only to the PJSC FGC UES
for the results of assurance of the Integrated Annual Report
2018 within the agreed terms of reference and assumes
no responsibility to any third parties.
238
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
239
ADDITIONAL INFORMATION
AUDITOR'S REPORT ON NON-FINANCIAL STATEMENTS
STANDARDS AND ASSURANCE LEVEL
IMPORTANT CIRCUMSTANCES
The assurance was conducted
in accordance with
the International Standard on Assurance Engagements
3000 “Assurance. Engagements Other than Audits or
Reviews of Historical Financial Information” (ISAE 3000)
and AA1000AS
(2008). The assurance corresponds
to the level “limited” as per ISAE 3000 (2013) and “moderate”
as per AA1000AS (2008). The assurance corresponds
to Type 2 as per AA1000AS (2008).
BOUNDARIES
The assurance was conducted exclusively
in respect
of the 2018 data. The assurance was not conducted in
respect of forward-looking statements and statements
expressing opinions, convictions and intentions.
in-field audit procedures were
The
to the PJSC FGC UES Headquarters.
limited to visits
The assurance was performed exclusively based on
the Russian language version of the Integrated Annual
Report 2018 provided in MS Word format and pre-approved
by the Management Board of the PJSC FGC UES on
25 May 2019.
We were unable to verify the fact of the publication
of the final version of the Integrated Annual Report 2018
(including all Appendices and Public Assurance Statement)
on the corporate website, because the signing of this
statement preceded the publication.
evaluation of compliance with GRI 101 standard regarding
requirements for the principles of determining the content
of the report and ensuring its quality;
the assessment of compliance with GRI 103 standard
regarding requirements for disclosure of approaches
to management;
compliance assessment of GRI 102, 201, 204, 205, 206,
302, 304, 305, 306, 307, 401, 403, 404, 413, 419, EU12 419
regarding the requirements for the reporting elements
stated in the GRI Content Index, as well as requirements
for topics’ disclosure related to managerial approaches;
the assessment of compliance with of the International
Integrated Reporting Standards requirements;
evaluation of information in the Integrated Annual Report
against the requirements of the Russian law related
to the content of annual reports of joint stock companies.
materiality and responsiveness; requirements of the GRI
Standards (Core Option); requirements of the International
Integrated Reporting Standards.
that
Concerning the subject matter of the audit (2), we
conclude
implemented using
AA1000SES recommendations (2015) to the principles of
cooperation, mutual linkage of goals, format and audience
of engagement.
the process
is
METHODOLOGY
During the work we implemented the following actions:
random interviewing of the PJSC FGC UES top-management
representatives, as well as random
interviewing of
the employees engaged in the preparation of the Integrated
Annual Report;
analysis of the local regulations related to integrated
reporting;
random verification of data used for preparation
of the Integrated Annual Report;
review of the information published on www.fsk-ees.ru
about
including
sustainability activities;
the PJSC FGC UES operations,
random
information
of
the PJSC FGC UES published in the mass media;
review
the
about
the conformity assessment of the Integrated Annual
Report preparation process against local regulations
related to reporting;
the assessment of the PJSC FGC UES’s observance
of the AA1000APS (2008) principles;
CONCLUSIONS
Based on the work done and the evidence received,
we detected no facts that would make us believe that
the subject of assurance (1) does not correspond in all
material aspects to the requirements of the Russian
law to the content of annual reports of joint stock
companies; requirements of the local reporting regulations;
(2008) standard
recommendations of AA1000APS
inclusiveness,
regarding observance the principles of
240
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
Without changing our opinion, we draw attention to the existence of inherent limitations of the Statement related
to the nature of spot checks. As a result, unscrupulous actions, errors or violations may remain undetected.
RECOMMENDATIONS
It is reasonable to exercise the disclosure of indicators
in relation to the target values as well as to plans.
Increase the degree of disclosure of indicators, which have
not fully complied with GRI requirements.
Given the global scale of the PJSC FGC UES’s operations, we
recommend considering inclusion of provisions related to
support of additional international guidelines on responsible
business practices, such as the UN Global Compact, when
preparing the next intergraded annual report.
STATEMENT OF INDEPENDENCE AND COMPETENCE
is an
fundamental principles of
Nexia Pacioli LLC
independent audit and
consultancy company that observes requirements of
the International Code of Ethics for Professional Auditors
and Auditing Companies, as well as the Code of Ethics for
Professional Auditors in the Russian Federation, based on
the
integrity, objectivity,
professional competence and due care, confidentiality and
professional behavior, and fulfilling the requirements of the
International Quality Control Standard 1 “Quality control
in auditing organizations conducting audit and review of
financial reporting, as well as performing other tasks that
provide confidence and tasks to provide related services”.
This way, Nexia Pacioli LLC supports the succinct system
of quality control, confirmed by the documented policy
and procedures regarding meeting the ethical requirements,
legislation
and
professional
applicable
standards
and norms. Nexia Pacioli LLC is a member of the self-
regulating organization of auditors, the “Sodruzhestvo”
association, included in the Register of auditors and auditing
organizations noted by the self-regulatory organization
of auditors on October 28, 2016 under the primary
registration number 11606052374. The team of specialists
that audited the PJSC FGC UES Integrated Annual Report
included competent employees of Nexia Pacioli LLC,
who had done a special training in the GRI Standards,
standards of the series AA1000, standard ISO 26000:2010,
having many years of experience in consultancy on public
nonfinancial reporting and assurance as per ISAE 3000.
The Head of the Audit has a Uniform Qualification Certificate
of the Auditor; there is a specialist in the team who has
the existing certificate CSAP of Accountability.
S. I. Romanova
General Director
23 May 2019
241
ADDITIONAL INFORMATION
PUBLIC CERTIFICATION STATEMENT
CONCLUSION ON PUBLIC
ENDORSEMENT OF THE INTEGRATED
REPORT
COMPLETENESS AND BALANCE
In our opinion, all material information is presented in
full in the Report. The information is given in a balanced
manner: the positive results of the Company's performance
are described, as well as the problems the Company
faces and addresses. In order to more accurately adhere
to the principle of completeness, the Report contains
references to regulatory documents and additional sources
of information, including the ones posted on the corporate
website. We are not aware of any facts of concealing
the material information.
INTRODUCTION
INTERACTION WITH STAKEHOLDERS IN THE REPORT PREPARATION
PJSC FGC UES' management offered us to assess
the 2018
(hereinafter,
Integrated Annual Report
the Report) in terms of its completeness and materiality
of information disclosed therein, as well as to assess
the management's response to the recommendations
and proposals of stakeholders. To this end, the Company
provided us with an opportunity to participate and
give comments during the Public Hearings regarding
the Draft Report held on 18 April 2019. At the event we
were free to express our opinion on the issues discussed.
We hereby confirm our independence and objectivity of
our assessments. We received no compensation from
the Company for participating in the public verification
procedure.
REPORT ASSESSMENT PROCEDURE
Our statement
is based on a comparative analysis
of the two versions of the Report (the Draft Report for
the Public Hearings and the final version of the Report)
and the materials provided to us upon results of the Public
Hearings (Minutes of the event, including the table of
response to the stakeholders' comments), as well as on
the comments given by the Company's management and
employees in the course of public assurance of the Report.
In the process of public certification of the Report, we did
not set the task of verifying the reliability of information.
Confirmation of the degree of compliance of the Report with
any reporting standards, both Russian and international,
was not the goal of this certification as well.
The results of our work are included into this Public
Certification Statement, containing our generally agreed
opinions.
ASSESSMENT, COMMENTS AND RECOMMENDATIONS
We all agreed on the positive assessment of the Report, i.e.
its format and the amount of information contained herein.
We appreciate that the Report is issued by the Company
for the seventeenth consecutive year. It is a good example
of raising the level of transparency and openness by
the Company. The format of integrated annual report used
by PJSC FGC UES in preparation of this Report is in line
with the best practices of corporate reporting and makes
it possible to fully disclose information on the strategy
implementation,
the Company's production activities,
financial and economic results of the year, results in the
area of sustainable development and plans for the future.
MATERIALITY
the Report
international standards
is
in the course
Application of
of
its another unconditional
issuing
advantage (a series of Global Reporting Initiative (GRI SRS)
standards in the area of sustainable development, a series
of АА1000 Institute of Social and Ethical Accountability, and
the International Framework).
Our recommendations on improving the quality of public
reporting of PJSC FGC UES are reflected in the minutes
of Public Hearings (Appendix 1 to the minutes).
includes
The Report
the Map of Material Topics
determined together with the Company's representatives
and stakeholders. In our opinion, the Report discloses all
material topics presented on the Map.
the material topics we mean those topics contributing
to actual or potential impacts on stakeholders or making
influence on assessments and decisions of the stakeholders
in respect of the Company.
It should be noted that the Company has been using the
methodology for determining material topics of activity
for their disclosure in the Report developed on the basis of
international standards for the fifth year, which allows to
take into account the views of stakeholders. Furthermore, by
theme Space
The Report's main
for Development
is disclosed both on special spreads and throughout
the Report, including interviews with representatives of
the Company's management.
When preparing the Report, the Company demonstrated a high
level of readiness to carry on an open dialogue with stakeholders
covering different areas of its activities. We note that
the Company's management is aware of the constructiveness
and prospects for interaction with stakeholders.
recorded all
The Company
recommendations
of the stakeholders in the minutes of the Public Hearings,
carried out a thorough analysis, took them into account when
preparing the final version of the Report, and also took over the
commitments for future reporting periods.
the
reports, spoken out during the discussion of the 2017
integrated annual report, were considered in the development
of the 2018 Report.
We believe that the Company will continue to consistently
implement the principles of responsible corporate behaviour
in its activities by improving the quality of annual reports
and interaction with stakeholders.
We also would like to note that our proposals on the future
Signatures of certifying parties
Full name
Position
Signature
Irina ESIPOVA
General Director of the FEC Communication Development Centre
Elena ZUBAKINA
Development Director of the Russian Bird Protection Association
Aleksandr MAKHROV
Deputy Chairman of the sub-committee for energy sector
of the Russian Union of Industrialists and Enterpreneurs
Aleksey MOSKALEV
Discipline Head of the Vice President establishement
for the energy sector of the NLMK Group
Nikita REMNEV
Head of the Student Construction Teams Unit of the National
Research Institute MPEI
Aleksandr CHUDNOV
Researcher of the Departement for Civil Service and Mobilisation
Training of the Ministry of Energy of Russia
Arkady ZAMOSKOVNY
General Director of the Russian Association of Energy Employers
Ilya ANDREEV
Head of the department for social partnership and legal coverage
development of the Russian Engineering Association (SoyuzMash)
242
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
243
ADDITIONAL INFORMATION
COMPLIANCE WITH STANDARDS (GRI AND )
COMPLIANCE WITH STANDARDS
(GRI AND )
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Page
number
GRI 102-55
GRI Content Index
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Page
number
102-11
Application of the
precautionary principle
234
2
10
259
12
2
12
63
12
86
114
224
114
84
No significant changes
in the size, structure or ownership
of the organisation or its supply
chain in the reporting year
102-12
External initiatives
supported
by the organisation
102-13
Membership
in associations
GRI 102:
General
Indicators
2016
102-14
Statements of key decision
makers in the company
102-15
Key impacts, risks
and opportunities
102-16
Principles, values,
standards and norms
of conduct
102-18
Management structure
102-22
102-23
102-24
Members of the supreme
management body
and its committees
Chairman of the supreme
management body
Procedure for nomination
and selection of
candidates to be members
of the supreme corporate
management body
and its committees
Sustainable development strategy
Environmental protection outcomes
Prevention of corruption
Appendix 1. International Activities
Appendix 7. Information on
Participation in Profit and Non-Profit
Organisations in 2018
Statement from the Chairman
of the Board of Directors
Statement from the Chairman
of the Management Board
Business model
Key risks
Risk management system
Appendix 1. Key Risks
Human resources management
General information on the Company's
corporate governance
General information on the Company's
corporate governance
Members of the Board of Directors
Committees of the Board of Directors
Members of the Board of Directors
Members of the Board of Directors
101
102-1
102-2
102-3
102-4
102-5
102-6
GRI 101:
Principles
of Report
Preparation
GRI 102:
General
Indicators
2016
Principles
of report preparation
Information on the Report
Name of organisation
Report fly page
Activities, brands,
products, services
About the Company
Head office location
Contact information
Geographic reach
Geographic reach
Type of ownership
and form of business
organisation
Markets targeted
by the organisation
102-7
Size of the organisation
Fly page of the Report
Geographic reach
Services market for electricity
transmission
Geographic reach
Financial capital
Number and qualification of employees
Main forms of financial statements of
PJSC FGC UES for 2018 as per IFRS
102-8
Information on employees
and other work force
Number and qualification of employees
Appendix 1. Human Capital
102-9
Supply chain
Procurement activities
102-10
Significant changes
in the organisation
and supply chain
244
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
In accordance with the precautionary
principle, PJSC FGC UES seeks
to avoid any assumed damage
to the environment, even if there
is no proven scientific evidence
that any particular type of activities
may cause such damage. At the
stage of development of project
documentation for the power grid
facilities construction/renovation,
the impact of their operations
on the environment is assessed,
and design choices are made to
prevent or minimise any possible
negative impact
54
105
201
6
8
36
59
194
113
151
151
158
172, 174,
175
162
158
245
ADDITIONAL INFORMATION
COMPLIANCE WITH STANDARDS (GRI AND )
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Page
number
102-25
Conflict of interest
Settlement of conflicts of interest
102-26
102-28
Role of the supreme
management body
in setting goals, principles
and strategies
Sustainable development strategy
Report of the Board of Directors
of the Company
Strategy Committee
Assessment
of performance
of the supreme corporate
management body
Assessment of performance
of the Board of Directors
102-30
Risk management
process efficiency
Internal control system
Appendix 1
102-32
102-35
Position of the person
officially verifying
and approving the
organisation's reports
and covering all material
aspects
Policy of remuneration of
the supreme management
body members and senior
executives
Responsibility
for the Report preparation
General information on the Company's
remuneration policy
102-36
Remuneration assessment
process
Calculation of remuneration
102-40
List of stakeholders
Approach to stakeholder engagement
102-41
102-42
102-43
Percentage of employees
covered by collective
labour agreements
Principles for identification
and selection
of stakeholders
The organisation's
approach to engagement
with stakeholders
Approach to stakeholder engagement
Approach to stakeholder engagement
Participation of stakeholders in
shaping the Company's strategy
Interaction with stakeholders during
the Report preparation
102-44
Key topics and concerns
raised by the stakeholders
Interaction with stakeholders during
the Report preparation
GRI 102:
General
indicators
2016
Page
number
190
53
155, 47
172
157
193
237
182
184
134
PJSC FGC UES has no collective
labour agreements. PJSC FGC UES
is a signatory to the Sectoral Tariff
Agreement in the electric power
industry of the Russian Federation
133
133
143
145
144, 145
102-45
102-46
Legal entities whose
reports have been included
in the consolidated
financial statements
Methods of determining
the Report content and
the scope of material topics
Appendix 1. Financial Capital
Appendix 14. Consolidated Financial
Statements of PJSC FGC UES for 2018
as per IFRS. http://www.fsk-ees.ru/
upload/docs/2018_IFRS_FGC_UES_
wo.pdf
Report preparation process
235
246
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
102-47
List of material topics
Report preparation process
102-48
102-49
Results of all restatements
in previous reports
and reasons thereof
Improvement of power supply reliability
to the regions, Information
on the Report
Significant changes
in scope and coverage
of material topics
compared to
previous reporting periods
Report preparation process
GRI 102:
General
Indicators
2016
102-50
Reporting period
Information on the Report
102-51
The latest previous
report issue date
Information on the Report
102-52
Reporting cycle
Information on the Report
102-53
102-54
Contact person for
questions on the report
Indication to the GRI
application level:
basic or advanced
102-55
GRI Content Index
Organisation's policy
and practices regarding
the external report
endorsement assurance
Discussed topics
and scope thereof
Contact persons
Information on the Report
Compliance with standards
(GRI and )
Information on the Report
Report preparation process
The external auditor
shall be selected through
tender procedures
102-56
103-1
103-2
103-3
GRI 103:
Management
Approaches
2016
Management approaches
and components thereof
Specified individually
for each material topic
Assessment of efficiency
of management
approaches
Specified individually
for each material topic
Group I on the materiality matrix (material topics)
Improving
economic
efficiency
and financial
sustainability
GRI 201:
Economic
performance
results
2016
103-2
103-3
201-1
Management approaches
and components thereof
Development strategy
Financial capital
Assessment of efficiency
of management
approaches
Straight economic value,
generated and distributed
Key performance indicators (KPI)
Financial capital
Appendix 1. Financial Capital
236
68
234
235
234
234
234
260
234
244
234
235
44, 50,
52
87
58
87
247
ADDITIONAL INFORMATION
Standard
Indicator GRI indicator
Managing
procurement
activities
and
combating
unfair
competition
GRI 204:
Procurement
practices
2016
GRI 206:
Anticom-
petitive
behaviour
2016
Corruption
management
GRI 205:
Corruption
management
2016
Ensuring
decent
working
conditions
and
respect for
employees'
rights
GRI 401:
Employment
2016
103-2
103-3
204-1
206-1
103-2
103-3
205-1
205-3
103-2
103-3
401-1
401-2
Section of report/
report annex number/notes
Procurement activities
Procurement activities
Procurement activities
Procurement activities
Management approaches
and components thereof
Assessment of efficiency
of management
approaches
Share of expenses
on local suppliers
Total number of instances
of legal proceedings
brought against the
organisation in relation to
anti-competition and anti-
trust infringements, and
results thereof
Management approaches
and components thereof
Corruption prevention
Appendix 1. Anti-Corruption Activities
Assessment of efficiency
of management
approaches
Total number and
percentage of subdivisions
subject to corruption risk
assessments and material
risks identified
Confirmed cases
of corruption and response
actions taken
Anti-corruption activities
Anti-corruption activities
Anti-corruption activities
Management approaches
and components thereof
Personnel management
Number and qualification of employees
Assessment of efficiency
of management
approaches
Total number of hired
employees and personnel
turnover
Benefits and preferences
granted to full-time
employees, which are not
granted to temporary or
part-time employees
Personnel policy results
Number and qualification of employees
Appendix 1
Social security
COMPLIANCE WITH STANDARDS (GRI AND )
Comments
Page
number
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
82
82
83
84
201
202
202
202
113
114
114
114
121
103-2
103-3
403-1
403-2
403-3
403-4
403-5
Occupational
health
and safety
at work
GRI 403:
Health and
workplace
safety
2018
Management approaches
and components thereof
Assessment of efficiency
of management
approaches
Occupational Health
and Safety Management
System
Occupational health and safety
management
Appendix 1. Human Capital
Workplace injuries
and occupational diseases
Occupational health and safety
management
Appendix 1. Functioning
of Subdivisions Responsible
for the Workplace Accidents
Avoidance and Prevention
Hazard identification,
risk assessment
and investigation
into incidents
Subdivisions in charge
of occupational health
and safety
Interaction,
consultation services
and communication
with employees on
occupational safety
and health issues
Occupational health
and safety training
of employees
403-6
Personnel health
maintenance
403-7
Prevention and mitigation
of health and safety
impacts directly related
to business relationships
Process of hazard identification,
assessment of relevant risks,
competence of persons-in-charge
Arrangement of favourable working
conditions for employees
Appendix 1. Personnel Protection
against Harmful Production Factors
Appendix 1. Functioning
of Subdivisions in Charge
of the Workplace Accidents Avoidance
and Prevention
Process of hazard identification,
assessment of relevant risks,
competence of persons-in-charge
Appendix 1. Functioning of
Subdivisions in Charge of the
Workplace Accidents Avoidance and
Prevention
Workplace safety instructions
system for employees
Voluntary health insurance
and personnel health maintenance
Appendix 1. Personnel Health
Maintenance
Appendix 1. Approaches
to the Occupational Health
and Safety Impacts Management
through Interaction with Business
Partners and Consumers
Page
number
122
126
122
123
125
124
124
121
248
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
249
ADDITIONAL INFORMATION
COMPLIANCE WITH STANDARDS (GRI AND )
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
The fatal injuries rate
in 2018 was 0.0512 per
1 million hours worked
The fatal injuries rate
in 2018 was 0.0256 per
1 million hours worked
The Company has
no information about
occupational diseases of
contractors' employees
403-8
Safety management
system coverage
Occupational health
and safety management
403-9
Workplace injuries
Workplace injuries
and occupational diseases
403-10
Occupational diseases
Workplace injuries
and occupational diseases
103-2
103-3
404-1
Management approaches
and components thereof
Training, re-training and advanced
training of personnel
Assessment of efficiency
of management
approaches
Personnel assessment
Average training hours
per man year
Training, re-training and advanced
training of personnel
404-2
Personnel development
programmes
Training, re-training and advanced
training of personnel
Appendix 1. Programmes Implemented
by the Company's Personnel Training
Centres
103-2
Management approaches
and components thereof
Industrial Safety Management
103-3
Assessment of efficiency
of management
approaches
Appendix 1. Fire Safety
Appendix 1. Results of Ensuring
Industrial Safety
Occupational
health
and safety
at work
GRI 403:
Health and
workplace
safety
2018
Personnel
development
GRI 404:
Training
and
education
2016
Impact on
socio-
economic
development
of the
regions in
which the
Company is
present
GRI 413:
Local
Communities
2016
Page
number
123
126
126
116
118
117
116
71
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Page
number
FGC UES actively cooperates with
local communities on a continuous
basis by working together with local
authorities and public organisations.
The reliable and continuous power
supply of consumers is the key
element of this cooperation. It is
due to construction of new UNEG
facilities, open discussions of the
investment programme project and
consultations, as well as responding
to applications received from the
local communities' representatives.
Provision of jobs with a decent
remuneration level and social
benefits is also a means of mutual
cooperation.
Such approach to interaction with
local stakeholders historically proved
its effectiveness, targeting and
sufficiency, so the Company runs no
formalised special programmes on
cooperation with local communities.
The Company has no significant
actual or potential negative impact
on the local communities
The Company structures its
activities in strict compliance with
the applicable legal and regulatory
framework. FGC UES strictly
complies with the legislation and
regulatory requirements in the social
and economic areas
Percentage of subdivisions
with implemented
programmes of interaction
with local communities,
community impact
assessment programmes
and programmes
of development of local
communities
413-1
Impact
on socio-
economic
development
of the
regions in
which the
Company is
present
GRI 413:
Local
Communities
2016
413-2
Actual material or potential
negative impacts on local
communities
Compliance
with the
requirements
of legislation
and
regulatory
bodies in the
social and
economic
sphere
GRI 419:
Compliance
with
social and
economic
requirements
2016
103-2
Management approaches
and components thereof
250
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
251
ADDITIONAL INFORMATION
COMPLIANCE WITH STANDARDS (GRI AND )
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Page
number
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Page
number
Compliance
with the
requirements
of legislation
and
regulatory
bodies in the
social and
economic
sphere
GRI 419:
Compliance
with
social and
economic
requirements
2016
Implemen-
tation of
infrastructure
projects,
development
of the
Unified
National
Electric Grid
Reliability
and quality
of electric
power
supplied to
consumers
Tariff setting
Efficiency of
infrastructure
operation
103-3
Assessment of efficiency
of management
approaches
419-1
Non-compliance with
the legislation
and regulatory
requirements in the social
and economic areas
Tax deductions
103-2
Management approaches
and components thereof
Development strategy
Grid development and investment
activities
103-3
103-2
103-3
EU12
103-2
103-3
103-2
103-3
Assessment of efficiency
of management
approaches
KPI in the context of strategic
objectives
Management approaches
and components thereof
Assessment of efficiency
of management
approaches
Transmission electric
power losses and
respective share in the
total volume of electricity
Development Strategy
Improving the reliability
of power supply
KPI in the context
of strategic objectives
Reduction of Relative Electricity Losses
Management approaches
and components thereof
Tariff Regulation
Appendix 1. Tariff Regulation
Assessment of efficiency
of management
approaches
Management approaches
and components thereof
Assessment of efficiency
of management
approaches
Appendix 1. Control of Reliability
and Quality of Services
Reduction of relative electricity losses
Improving the reliability of power
supply
KPI in the context
of strategic objectives
The criterion of the Company's
efficient activity in this area is
a timely response to changes
in requirements of legislation
and regulators, minimisation
of penalties and non-financial
sanctions imposed on FGC UES
No non-financial
sanctions are imposed
against the Company
as a result of
non-compliance with
legislation or regulatory
requirements in the area
of social and economic
activities
No lawsuits are filed
against the Company
with the help of dispute
regulation mechanisms
131
44
72
58
44
68
58
64
93
64
68
58
Efficiency of
investment
activities
(capital
construction)
Imple-
mentation
of digital
technologies
and
solutions
Investment
attractiveness
103-2
103-3
103-2
103-3
103-2
103-3
Management approaches
and components thereof
Grid development
and investment activities
Assessment of efficiency
of management
approaches
Management approaches
and components thereof
Assessment of efficiency
of management
approaches
Management approaches
and components thereof
Assessment of efficiency
of management
approaches
KPI in the context
of strategic objectives
Development of communication
networks and it systems
Management of innovative activities
KPI in the context
of strategic objectives
Opportunities and risks for FGC UES
Comparison of FGC UES with some
Russian public power companies with
the most capitalised and liquid shares
among those listed in the MOEXEU
sector index
Market intelligence on the Company's
securities
Group II on the materiality matrix (less material topics, partial disclosure)
Environmental safety management
Environmental protection results
Appendix 1. Natural Capital
103-2
103-3
307-1
Management approaches
and components thereof
Assessment of efficiency
of management
approaches
The monetary value
of substantial penalties
and the total number
of non-financial
sanctions imposed
for non-compliance
with the environmental
legislation, the number
of environmental
impact complaints filed,
processed and settled
through the formal filing
mechanisms
302-4
Reduction of energy
consumption
Energy saving and improvement of
energy efficiency of the PJSC FGC UES
economy in 2018.
Compliance
with the
requirements
of legislation
and
regulatory
bodies
in the area of
environmental
protection
GRI 307:
Compliance
with the
environmental
protection
requirements
2016
Energy
efficiency
and internal
power
consumption
GRI 302:
Energy
2016
72
58
80
96
58
42
43
209
102
105
111
252
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
253
ADDITIONAL INFORMATION
COMPLIANCE WITH STANDARDS (GRI AND )
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Page
number
Standard
Indicator GRI indicator
Section of report/
report annex number/notes
Comments
Page
number
Biological
diversity
preservation,
including
preservation
of natural
habitat
along power
transmission
lines
GRI 304:
Biodiversity
2016
304-1
304-2
304-4
Production sites owned,
leased or managed by
the organisation and
located within protected
natural areas and terrains
with high biodiversity value
situated outside
of protected natural areas
or adjacent to such areas.
Significant impact of the
organisation's activities,
products, and services
on biological diversity
Total number of species
on the Red List of the
International Union for
Conservation of Nature
and the National List of
Protected Species, with
their habit areas located
on terrains affected by
the organisation's activities
Innovative
activities,
scientific
and
technical
development
Import
substitution
Information
transparency
International
cooperation
–
–
–
–
–
–
–
–
Appendix 11. Register of Specially
Protected Natural Areas
Conservation of biodiversity
Conservation of biodiversity
Appendix 10. Species Listed in the
IUCN Red List and the Red Book of the
Russian Federation, which Inhabit the
Territories of PJSC FGC UES' Operation
Intellectual Capital
Import Substitution Policy
Information disclosure
Appendix 1. International Activities
109
110
Group III on the materiality matrix (immaterial topics)
305-1
Direct greenhouse gas
emissions
305-7
Pollutant emissions into
the atmosphere
Appendix 1. Natural capital
303-1
Water consumption
306-1
Total waste discharge
with indication of waste
water quality and receiving
facility
Air pollutant emissions
Usage of water resources
Appendix 1. Natural Capital
Waste generation and disposal
Appendix 1. Natural Capital
306-2
Total weight of waste
with breakdown by type
and methods of handling
Waste generation and disposal
Emissions
of air
pollutants
GRI 305:
Emissions
2016
Discharges
and waste
generated
as a result
of the
Company's
activities
GRI 303:
Water 2016
GRI 306:
Solid
and liquid
waste
2016
No direct greenhouse emissions take
place as a result of the Company's
core business activities (electricity
transmission and distribution)
106
107
107
108
254
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
255
ADDITIONAL INFORMATION
GLOSSARY AND ABBREVIATIONS
COMPLIANCE WITH THE INTERNATIONAL
INTEGRATED REPORTING STANDARD
GLOSSARY AND ABBREVIATIONS
Reflection of the Standard Fundamental Concepts in the Report
ABBREVIATIONS AND ACRONYMS
Fundamental concepts
Creation of value for the organisation and stakeholders
Capitals
Value creation process
Used/not used
Used
Used
Used
Report compliance with the Standard guiding principles
Guiding principles
Strategic focus and future orientation
Information cohesiveness
Engagement with stakeholders
Materiality
Conciseness
Reliability and completeness
Consistency and comparability
Compliant/not compliant
Compliant
Compliant
Compliant
Compliant
Partially compliant*
Compliant
Compliant
* Scope of the Report is reduced as compared to the scope of the integrated annual report for the previous year.
Availability of the Standard content elements in the Report
Content elements
Report section
Page number
Organisation overview and external
environment
Company introduction,
Industry profile
Management
Business Model
Risks and opportunities
Strategy and allocation of resources
Performance results
Future prospects
Corporate management report
Business Model
Business Model
Opportunities and Risks for FGC UES
Key Risks
Risk Management System
Strategic priorities and objectives
Development strategy
Key results of the year
Business model
Performance results for 2018
Industry profile
Development strategy
Performance results for 2018
10
40
146
36
36
42
59
194
28
44
16
36
62
40
44
62
DECT
EBIT
EBITDA
GRI
GRI SRS
ISIN
ISO
LSE
OPEX
RAB
TSR
ADCS
AECS
APCS
ATX
NPP
BAM
GDP
OHPL
FOCL
EGMS
ESTO
Wireless communications systems compliant with DECT
(Digital European Cordless Telecommunications) standard
Earnings Before Interest and Taxation
Earnings Before Interest, Taxation, Depreciation and Amortisation
Global Reporting Initiative
GRI Standards
International Securities Identification Number
International Organisation for Standardisation
London Stock Exchange
Operating expense
Regulatory Asset Base (tariff regulation based on the method of economically justified return on investment)
Total shareholder return
Automated dispatch control system
Automated engineering control system
Automated process control system
Automatic telephone exchange
Nuclear power plant
Baikal-Amur Mainline
Gross domestic product
Overhead power line
Fibre optic communication line
Extraordinary general meeting of shareholders
Eastern Siberia – Pacific Ocean oil pipeline
HF communication
High Frequency Communication
IEA
GDR
AGMS
SDPP
POL
HPP
S&A
LTDP
EBRD
UNEG
Internal environmental audit
Global depositary receipts
Annual general meeting of shareholders
State district power plant
Petroleum, oil and lubricants
Hydroelectric power plant
Subsidiaries and affiliates
Long-Term Development Programme
European Bank for Reconstruction and Development
Unified National (All-Russian) Electric Grid
UTCNEPI
Unified technological communications network of electric power industry
UES of Russia
Unified Energy System of Russia
IIA
Institute of Internal Auditors
256
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
257
ADDITIONAL INFORMATION
CONTACT INFORMATION
CMIS
CGC
KOR
KPI
PTL
Corporate Management Information System
Corporate Governance Code
Key operational risk
Key Performance Indicators
Power transmission line
MEDT of Russia
Ministry of Economic Development of the Russian Federation
Minenergo of Russia
Ministry of Energy of the Russian Federation
IUCN
SME
IFRS
MPTL
RGP
VAT
R&D
International Union for Conservation of Nature
Small and medium entrepreneurship
International Financial Reporting Standards
Main power transmission lines
Required gross proceeds
Value added tax
Research and development
EEPl Association
All-Russian Industrial Association of Employers of Electric Power Industry
UNO
OSG
WMEP
UES
EMPTL
EPS
RPA
RAS
GDC
ICS
CIGRE
MM
QMS
CIS
United Nations Organisation
Open switchgear
Wholesale electricity and capacity market
Unified energy system
Enterprises of main power transmission lines
Electric power substation
Relay protection and automation
Russian Accounting Standards
Grid distribution company
Internal control system
Conseil International des Grands Reseaux Electriques Haute Tension
(International Council on Large Electric Systems)
Mass media
Quality Management System
Commonwealth of Independent States
HSE MS
Health, Safety and Environment Management System
RMS
EMS
TC
TSR
FEC
CHPP
OWATX
FZ
Risk management system
Environmental management system
Technological connection
Trans-Siberian Railway
Fuel and energy complex
Combined heat and power plant
Office and Worksite ATX
Federal Law
FTS of Russia
Federal Tariff Service of the Russian Federation
ECM
Electronic computing machine
UNITS OF MEASURE
GW
kV
kW
gigawatt
kilovolt
kilowatt
sq. km
square kilometre
kWh
km
cu m
MVA
MVAr
MWh
kilowatt-hour
kilometre
cubic meter
megavolt-ampere
megavolt-ampere reactive
megawatt-hour
mln
bln
pct
RUB
t
million
billion
percentage point
Russian rouble
tonne
TFOE
tonnes of fuel oil equivalent
ths.
h
pc.
thousand
hour
piece
CONTACT INFORMATION
Full corporate name
Public Joint Stock Company Federal Grid Company of the
Unified Energy System
Abbreviated name
PJSC FGC UES
Form of ownership and business
legal structure GRI 102-3
Mixed Russian property with a share of federal ownership
Public Joint Stock Company
Location GRI 102-3
Moscow, Russia
Postal address GRI 102-3
5a Akademika Chelomeya Str., Moscow, 117630
Phone/fax
E-mail
OGRN
INN
Core business
Unified data centre: 8 (800) 200-18-81
Foreign calls:
+7 (495) 710-93-33. Fax: +7 (495) 710-96-55
info@fsk-ees.ru
1024701893336
4716016979
Electricity transmission over the transmission networks
and power supply of consumers throughout the Unified
National Electric Grid (UNEG)
Corporate website
http://www.fsk-ees.ru/eng/
Registrar Information
JSC Registration Company STATUS
23 Novokhokhlovskaya Str., Build. 1, Moscow, 109052
http://www.rostatus.ru
258
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
259
ADDITIONAL INFORMATION
CONTACT INFORMATION
CONTACT PERSONS
GRI 102-53
Contact information for institutional
investors and analysts
Phone: 8 (800) 200-18-81
Fax: +7 (495) 710-96-41
Egor TOROPOV
Phone: 8 (800) 200-18-81, ext. 22-75
E-mail: toropov-ev@fsk-ees.ru
Aleksey NOVIKOV
Phone: 8 (800) 200-18-81, ext. 21-43
E-mail: novikov-as@fsk-ees.ru
External Communications
and Government Relations Department
Yuliya RATNIKOVA
Phone: 8 (800) 200-18-81, ext. 20-97
E-mail: ratnikova-yd@fsk-ees.ru
Corporate and Strategic
Management Department
Oksana VERSTAKOVA
Phone: +7 (495) 710-90-28
E-mail: verstakova-op@fsk-ees.ru
INFORMATION ON STATE REGISTRATION
Data on initial state registration:
State registration number: 00/03124
Date of state registration: 25 June 2002
Name of the public registrar:
Registration Chamber of the Leningrad Region
Information on legal entity registration: Primary state registration number of legal entity
1024701893336
Date of legal entity entry on the Unified State Register of Legal Entities (registered
prior to 1 July 2002): 20 August 2002
Name of registration authority: Inspectorate of the Ministry of Taxes in Tosnensky district
of the Leningrad Region.
REGISTRAR
Entity maintaining the register of holders of registered securities, the registrar:
JSC Registration Company STATUS (JSC STATUS)
Address: 23 Novokhokhlovskaya Str., Build. 1, Moscow, 109052
Phone: +7 (495) 974-83-50
Fax: +7 (495) 678-71-10
Hotline for shareholders of PJSC FGC UES: 8 (800) 500-05-52
E-mail: info@rostatus.ru
Licence number: 10-000-1-00304
Licence issue date: 12 March 2004
Licence term: indefinite
Issuing authority: Federal Financial Markets Service of Russia
DEPOSITORY
Information on the depository carrying out centralised storage of securities:
Non-bank Credit Organisation National Settlement Depository Closed Joint-Stock Company
(CJSC NSD)
Address: 12 Spartakovskaya Str., Moscow, 105066
Phone: +7 (495) 234-48-27
E-mail: info@nsd.ru
Licence number: 177-12042-000100
Licence issue date: 19 February 2009
Licence term: indefinite
Issuing authority: Federal Financial Markets Service of Russia
260
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
261
ADDITIONAL INFORMATION
APPENDICES
APPENDIX 1.
Additional information on the sections of the integrated report
APPENDIX 2.
Minutes of public hearings on the draft annual report
APPENDIX 3.
Report on compliance with the Corporate Governance Code
APPENDIX 4.
Information on major transactions and transactions made
by PJSC FGC UES in 2018, recognised in accordance with
the legislation of the Russian Federation as related party
transactions, requiring approval by the authorised management
body of the Company
APPENDIX 5.
Information on material transactions made by PJSC FGC UES
and affiliated entities
APPENDIX 6.
APPENDIX 7.
APPENDIX 8.
Information on the actual execution by PJSC FGC UES
of the instructions of the President and the Government
of the Russian Federation in 2018
Information on the participation of PJSC FGC UES in the activities
of subsidiaries, affiliates and other business entities in 2018
[profit and non-profit organisations]
Information on concluded contracts of sale of interest, shares,
equities of business partnerships and companies, including
information on the parties, scope, price and other conditions
of such contracts
APPENDIX 9.
Information on sale of non-core assets in 2018
APPENDIX 10.
Species listed in the IUCN Red List and the Red Book
of the Russian Federation, whose habitats are located within
the areas of operations of PJSC FGC UES
APPENDIX 11. Register of specially protected natural areas
APPENDIX 12.
Report of the Audit Commission of PJSC FGC UES for 2018
APPENDIX 13.
Annual financial statements of PJSC FGC UES for 2018
as per RAS with the auditor's report, explanatory note
and accounting policy
APPENDIX 14.
Consolidated financial statements of PJSC FGC UES for 2018
as per IFRS
262
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
APPENDICIES
TO THE ANNUAL REPORT 2018
CONTENTS
265
339
344
371
388
393
APPENDIX 1
Additional information on the sections
of the annual report
APPENDIX 2
Minutes of the Public Hearings on the PJSC FGC
UES draft integrated annual report for 2018
APPENDIX 3
Report of PJSC FGC UES on compliance with principles
and recommendations of the Corporate Governance
Code approved by the Bank of Russia Board
of Directors on 21 March 2014 and recommended
for application by the Bank of Russia (Bank
of Russia Letter No. 06-52/2463 of 10 April 2014)
APPENDIX 4
Information on major transactions and transactions
made by PJSC FGC UES in 2018, recognised as related
party transactions under Russian legislation
and subjects to approval by the Company’s
authorised governing bodies
APPENDIX 5
Information on the Material Transactions
by PJSC FGC UES and Its Controlled Entities in 2018
APPENDIX 6
Information on the actual performance of instructions
of the President and the Russian Government in 2018
401
409
411
413
419
425
430
508
APPENDIX 7
Information on participation of PJSC FGC UES
in profit and non-profit organisations in 2018
APPENDIX 8
Information on concluded purchase contracts of shares,
stocks, equity interest of business partnerships and
business entities including information on the parties,
subject, price, and other terms of the contracts
APPENDIX 9
Non-core assets disposal in 2018
APPENDIX 10
The species listed in the IUCN Red List and the Red
Data Book of the Russian Federation, whose habitats
are located within the territories of PJSC FGC UES
APPENDIX 11
The List of Environmentally Sensitive
Areas where PJSC FGC UES Operates
APPENDIX 12
Opinion of the audit commission
APPENDIX 13
Annual financial statements
of PJSC FGC UES for 2018 as per RAS
APPENDIX 14
Consolidated financial statements
of PJSC FGC UES for 2018 as per IFRS
APPENDIX 1
ADDITIONAL INFORMATION
ON THE SECTIONS OF THE ANNUAL REPORT
STRATEGIC REPORT
CONSOLIDATION OF ELECTRIC GRID FACILITIES
FORMING PART OF UNEG
In compliance with p. 2, Art. 7 of Federal Law No. 35-FZ of
26 March 2003 ”On the Electric Power Industry” (hereinafter,
the ”FZ-35”), owners or other legal owners of electric grid
facilities included in the UNEG are limited in exercising their
rights in part:
zz the right to conclude service agreements for electricity
transmission via electric grid facilities included into UNEG
and define the provisions of such agreements;
zz using (decommissioning) of the specified facilities without
approval of the organisation for the management of UNEG.
PJSC FGC UES is an organisation for the management of
UNEG.
In order to ensure the unity of the economic space in the
sphere of electricity circulation in accordance with the
provisions of FZ-35, based on the contracts determining
the use of electric grid facilities, PJSC FGC UES concludes
agreements with third parties on its behalf for the provision
of services for electricity transmission using the electric grid
facilities included in UNEG, which are owned by other owners
or other legal owners, agrees their use (decommissioning),
as well as returns to the owners or other legal owners the
income received as a result of their rights.
In case there is an economic expediency for PJSC FGC UES,
the lease and purchase and sale contracts may be concluded
with the owners and/or other legal owners of UNEG facilities,
according to which PJSC FGC UES acquires the rights, on a
reimbursable basis, of property ownership and use, as well
as the rights of ownership for UNEG facilities.
As of 31 December 2018, 13 contracts were concluded
between PJSC FGC UES and the owners/other legal owners of
UNEG facilities, which determined the use of the facilities, as
well as 11 lease contracts and 7 contracts for the gratuitous
use of property.
For the purpose of implementing the Long-Term
Development Programme, the Company together with a
specialised consulting organisation performed assessment
of opportunities and risks of consolidation of electric grid
facilities owned by third parties, forming part of UNEG and
being managed by the Company, including the facilities
located in non-isolated centralised power supply zones.
265
APPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORT Monitoring the volumes of consolidation of electric grid assets
2016
2017
2018
The volume of consolidation of
electric grid assets for the period
The volume of consolidation of
electric grid assets for the period
The volume of consolidation of
electric grid assets for the period
MVA
Km
C.u.
MVA
Km
C.u.
MVA
Km
C.u.
6,738.08
3,785.22
31,890.79
6,897.45
4,429.86
35,620.80
10,479.10
5,197.91
47,264.79
–
–
–
500.00
725.16
3,730.00
–
–
–
6,512.98
3,555.34
27,571.96
6,172.35
3,474.82
27,571.96
6,921.31
3,471.01
27,357.87
–
–
–
–
–
–
–
–
–
TOTAL.
PJSC FGC UES
Acquisition of
electric grid
facilities
Rent of electric
grid facilities*
Other (permanent
tenure rights)
Other (temporary
tenure rights)**
INTERNATIONAL ACTIVITY
GRI 102-13
PJSC FGC UES’ MAIN DIRECTIONS
OF INTERNATIONAL COOPERATION
Since 1 January 2004, PJSC FGC UES has acted as a carrier of electricity across the Russian border and is a technical executor
under commercial contracts of export/import participants of the wholesale electricity and capacity market.
PJSC FGC UES renders services for electricity transmission in the territory of the Russian Federation to its state border in
accordance with the terms of the contract with PJSC Inter RAO through the grid facilities belonging to UNEG and owned or
otherwise legally owned by PJSC FGC UES.
225.10
229.88
4,318.83
225.10
229.88
4,318.83
3,557.79
1,726.90
19,906.92
FINLAND
* The consolidation of the Company’s electric grid assets includes the lease of the objects of the subsidiaries JSC Kuban Trunk Grids and JSC Tomsk Trunk Grids.
** Pursuant to:
– Order of the Russian Government No. 2243-r of 2 December 2013, contracts were concluded between the local office of the Federal Agency for State Property Management
(Rosimushchestvo) in Krasnodar Krai and the Company for the gratuitous use of property constituting the property of Russia’s state treasury, the object of which is the electric
grid real estate of the distribution grid complex located in the Adler District of Sochi, Krasnodar Krai, built for the purpose of organising and conducting the XXII Olympic Winter
Games and the XI Paralympic Winter Games in Sochi in 2014;
– Order of the Russian Government No. 1709-r of 9 August 2017, the Ministry of Property and Land Relations of the Republic of Crimea and the Company concluded three
contracts for the gratuitous use of property constituting the property of Russia’s state treasury, the object of which is the electric grid facilities built as part of implementation
of the federal target programme Social and Economic Development of the Republic of Crimea and Sevastopol until 2020;
– Resolution of the Company’s Board of Directors (extract from Meeting Minutes No. 384/1 of 25 December 2017), the regional state institution the Directorate for Integrated
Development of the Lower Angara Region and the Company concluded a contract for the gratuitous use of property of Krasnodar Krai, the object of which are the electric grid
facilities of the capacity output scheme of Boguchanskaya HPP.
ESTONIA
LITHUANIA
LATVIA
BELARUS
CHINA
MONGOLIA
KAZAKHSTAN
AZERBAIJAN
RUSSIA
PJSC FGC UES
UKRAINE
GEORGIA
266
267
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I ELECTRICITY EXPORT AND IMPORT UNDER PJSC INTER RAO’S CONTRACTS
IN 2012–2018
INFORMATION ON INTERSTATE POWER TRANSMISSION LINES (IPTL)
AND ELECTRICITY TRANSIT
Actual electricity exports, mln kWh
No.
Country
2014
53.054
2015
54.848
2016
59.560
2017
63.373
1,425.023
2,815.240
3,180.811
2,732.968
Georgia, South Ossetia
767.189
656.564
557.448
653.297
Azerbaijan
Belarus
Kazakhstan
China
Latvia
Lithuania
Estonia
Mongolia
Ukraine
Finland
1
2
3
4
5
6
7
8
9
10
11
TOTAL:
Actual electricity imports, mln kWh
No.
Country
Azerbaijan
Belarus
Georgia, South Ossetia
2018
76.150
49.500
351.585
1,346.670
3,108.921
0.000
1,643.673
3,375.632
0.000
1,541.999
1,164.275
1,293.934
3,299.350
3,319.908
3,319.190
0.000
0.000
0.000
3,215.539
2,994.516
3,018.544
3,130.899
4,414.918
0.000
390.332
177.993
0.000
284.450
2,461.972
0.000
299.869
119.644
0.000
371.187
93.923
2,995.008
3,383.435
5,281.610
5,040.337
14,043.443
17,492.374
17,001.669
16,699.108
2014
134.169
0.260
160.078
2015
108.365
0.058
169.575
2016
120.143
0.058
147.590
2017
117.251
0.000
261.923
0.000
415.993
44.939
6,903.038
16,711.714
2018
121.367
0.000
96.889
Kazakhstan
3,084.440
989.666
2,725.996
5,736.324
4,824.636
China
Latvia
Lithuania
Estonia
Mongolia
Ukraine
Finland
0.000
0.000
43.161
0.000
30.368
0.000
0.234
0.000
0.000
0.000
0.000
114.561
115.575
0.000
54.178
3.756
23.400
0.000
33.867
0.000
0.000
0.000
0.000
85.267
6.269
23.019
0.000
0.000
0.000
0.000
52.102
0.000
26.988
0.000
0.000
3,452.710
1,463.559
3,143.229
6,230.053
5,121.982
1
2
3
4
5
6
7
8
9
10
11
TOTAL:
268
Pursuant to Decree of the Russian Government No. 41 of 26
January 2016, power transmission lines crossing the state
border of the Russian Federation comply with the criteria for
assigning electric grid facilities to UNEG.
PJSC FGC UES collects and processes information on
the movement of electricity through 133 interstate power
transmission lines (IPTL) based on data of commercial
electricity metering devices.
In order to provide reliable electricity supply to Russian
customers in the Bryansk, Pskov, Leningrad and Kaliningrad
Regions, strengthen cooperation and development of the
international electricity market and manage parallel operation
of the power systems, on 7 February 2001 PJSC FGC UES
entered into an agreement with JSC SO UES, SIA Belenergo,
Elering AS, Augstsprieguma tikls AS and Litgrid AB on parallel
operation of the power systems in Russia, Belarus, Estonia,
Latvia and Lithuania (hereinafter, the ”ER BRELL Agreement
on Parallel Operation”).
In accordance with the Agreement of 20 November 2009
between the Russian Government and the Government of
the Republic of Kazakhstan on measures ensuring parallel
operation of the unified power systems of the Russian
Federation and the Republic of Kazakhstan, there is an
electricity transit contract signed, under which PJSC FGC UES
has been paying for the electricity transit throughout the
territory of Kazakhstan since May 2010 in order to provide
reliable supply of the Russian customers with electricity.
In accordance with the Protocol on Provision of Access to the
Services of Natural Monopolies in the Field of Electric Power,
including the pricing and tariff policy, which is Appendix No. 21
to the Agreement on Eurasian Economic Union, the inter-state
transmission of electricity between the participating countries
is possible, including through the grids of UES of Russia.
PARALLEL WORK OF UES OF THE RUSSIAN FEDERATION WITH ELECTRIC
POWER SYSTEMS OF FOREIGN COUNTRIES
Russia’s power system works simultaneously with the power
systems of Georgia, Azerbaijan, Kazakhstan, Belarus, Ukraine,
Estonia, Lithuania, Latvia and Mongolia, in particular it is
connected with the power systems of Finland and China
through HVDC lines of UES of Russia. There are currently
several contracts in force stipulating parallel operation of
the Russian UES with the electric power systems of foreign
states. The parties to these contracts are PJSC FGC UES and
the economic entities of the following countries: Georgia,
Azerbaijan, Kazakhstan, the Baltic States and the Republic
of Belarus. Moreover, agreements on technical support of
parallel operation are signed with Ukraine, the Republic of
Belarus, and Mongolia. The Company also concluded an Inter-
System Contract with Finland and an Inter-System Agreement
with the People’s Republic of China.
As an organisation managing UNEG and interstate power
transmission lines (hereinafter, the “IPTL”), PJSC FGC UES:
zz coordinates commercial contracts for import/export of
electricity and provides engineering support thereof;
zz arranges and implements commercial metering of
electricity transmitted via IPTL;
zz measures and ensures customs processing of actual
volumes of electricity transmitted across the state border.
To determine the amount of electricity transmitted via each
IPTL, PJSC FGC UES has agreements with foreign electric
power companies on metering of the transmitted volume
of electricity, according to which PJSC FGC UES exchanges
commercial metering data with the electricity systems of
11 foreign countries.
In the framework of international exchange, PJSC FGC UES
takes actions to enhance the relationship with the energy
systems of the adjacent states in the field of electric power,
including the CIS Electric Power Council and its commissions,
the Committee for Energy Systems of BRELL, working groups
in the Executive Committee of the Electric Power Council of
the CIS and the Committee for Energy Systems of BRELL.
On the basis of the Agreement on Parallel Operation of the
Energy Systems of ER BRELL, a permanent working body of
the Parties to the Agreement was established on 7 February
2002, i.e. the Committee for Energy Systems of Belarus,
Russia, Estonia, Latvia, and Lithuania (ER BRELL Committee).
The ER BRELL Committee has the following priority tasks:
coordinating the principles of managing joint operation,
as well as developing and coordinating the legal, technical
and technological documents regulating parallel operation
of BRELL power systems; coordinating cooperation with
power companies operating the national power grids and/
or performing operational dispatch management of the
power systems, which are interconnected with BRELL power
systems; developing recommendations for improvement of
the information exchange and ensuring control of compliance
with the requirements for the joint parallel operation; informing
about perspective plans for power systems development
providing an impact on parallel operation.
In 2018, PJSC FGC UES’s representatives participated in:
meetings of the ER BRELL Committee, meetings of the
working groups of the ER BRELL Committee on planning and
operational management, and the meeting of the heads of
the parties to the ER BRELL Agreement on Parallel Operation:
zz the meeting of the working group on planning and
operational management held on 14–15 February in Minsk;
zz the 34th meeting of the ER BRELL Committee held on
15–16 March in Moscow;
269
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I Electric Power Council of the CIS and the Vice-President of
the Electric Power Council of the CIS expired, Aleksander
Novak was elected President of the Electric Power Council
of the CIS and Usmonali Yusunali Usmonzoda, Minister of
Energy and Water Resources of the Republic of Tajikistan,
was elected Vice-President of the Electric Power Council
of the CIS in the meeting. In addition, the Memorandum on
Cooperation between the Electric Power Council of the CIS
and the Eurasian European Commission was approved there.
FORMATION OF THE COMMON ELECTRICITY MARKET
OF THE EURASIAN ECONOMIC UNION
The common electricity market of the Eurasian Economic
Union (hereinafter, the “CEM EEU”) is formed in accordance
with Article 81 of the Treaty on the Eurasian Economic Union
of 29 May 2014 on the basis of electric power systems of
the member states operating in parallel taking into account
the specifics of existing models of electric power markets
of the Union member states.
The CEM EEU Formation Concept was approved by Resolution
No. 12 of the Supreme Eurasian Economic Council of
8 May 2015.
The CEM EEU Formation Programme was approved by
Resolution No. 20 of the Supreme Eurasian Economic Council
of 26 December 2016.
The implementation period for the CEM EEU Formation
Programme starts from the date of its approval and ends on
1 July 2019. It will lead to development of methodological,
organisational, infrastructural, technological and legal bases
of the future CEM EEU.
26 January 2018 A. Molsky, Deputy Chairman of the
Management Board, participated in the meeting of the
Advisory Committee on Electric Power at the Board of the
Eurasian Economic Commission, where disputes between the
member states were discussed with regards to the provisions
of the International Treaty on CEM EEU.
In 2018, representatives of PJSC FGC UES also took part in
15 meetings of the Subcommittee for CEM EEU Formation,
where the above-stated Draft International Treaty and other
draft international laws and regulations were discussed, which
were developed for the CEM EEU formation and functioning.
Following Resolution No. 142 of the Board of the Eurasian
Economic Commission of 7 September 2018, the Draft
International Treaty on CEM EEU was approved in general (in
the form of the Protocol to amend the Union Treaty). The Draft
International Treaty was then sent by letter No. KE-2264/21 of
the Eurasian Economic Commission of 14 September 2018 to
governments of the member states, including the Government
of the Russian Federation for intra-state coordination.
In 2019, within the framework of the Advisory Bodies of the
Eurasian Economic Commission it is planned to finalise the
International Treaty based on the results of the intra-state
coordination and take necessary actions for its approval by
the Supreme Eurasian Economic Council (the President of the
Russian Federation is a member) within the period stipulated
by the CEM EEU Formation Programme (before 1 July 2019).
Furthermore, in 2019 development and discussion of the
draft international laws and regulations aimed at forming and
functioning of CEM EEU will continue on the platform of the
Eurasian Economic Commission involving representatives
of PJSC FGC UES.
zz the meeting of the working group on planning and
operational management held on 4–5 September in
Jurmala;
Final desynchronisation of the Baltic power systems from the
Russian power system and the power system of the Republic
of Belarus is scheduled to take place before 2025.
zz the 35th meeting of the ER BRELL Committee held on
14 November in Minsk;
zz the 16th meeting of the heads of the parties to the ER BRELL
Agreement on Parallel Operation held on 15 November in
Minsk.
A number of issues related to the reliable operation of
BRELL power systems were discussed at the meetings of
the committees and the working group on planning and
operational management, including those concerning the
regulation of coordination of settings for relay protection and
automatic reclosing of interstate power transmission lines.
The parties discussed their positions: on the revision of
the updated Regulation on the Organisation of Operational
and Dispatch Management of Parallel Operation of BRELL
Power Systems; the analysis results of the possible automatic
exchange of daily planning data at an interval of 1 hour without
flow distribution calculation; the status of preparations for
testing in the BRELL power ring with separation of the Baltic
power systems for isolated work scheduled for 8 June 2019
(on 6 February 2019, the information was published on Elering
AS official website that a resolution was made at a meeting
of operators of the transmission network of the Baltic States
held on 4 February 2019 to postpone the planned testing
with isolation of the Baltic States from UES of Russia and
CES of Belarus); amendments to be introduced to the data
lists aimed to update the estimated model in the part of the
newly commissioned equipment; and testing of the power
system of the Kaliningrad Region in the isolated regime
from 18 May until 26 May 2019, as well as Methodological
Guidelines for Stability of the BRELL Power Ring Systems.
The following documents were coordinated and approved:
The list of transmitted TV measurements and TV signals
between the North-Western Operational and Dispatch
Management Department and Elering, the Baltic Regional
Dispatch Management Department and Litgrid; changes and
supplements to the distribution list of dispatching objects of
CES of Belarus, UES of Russia, ES of Estonia, ES of Latvia and
ES of Lithuania in accordance with the dispatch management
method, submitted for approval by the heads of the parties
to the Agreement, etc.
The following documents were approved at the meeting of
the heads of the parties: Guidelines for Separation of Power
Systems of the Baltic States for Isolated Work from UES
of Russia and CES of Belarus and Restoration of Parallel
Operation; amendments to the Guidelines for Prevention of
Development and Liquidation of Disturbances in the Regular
Mode in BRELL Power Ring and amendments to the Regulation
on Operational and Dispatch Management of Parallel
Operation of UES of Russia, ES of Estonia, CES of Belarus,
ES of Lithuania and ES of Latvia. Representatives of the
transmission network organisations initiated an extraordinary
meeting of the Committee for Energy Systems of ER BRELL
for desynchronisation of the Baltic power systems from UES
of Russia and CES of Belarus to be held on 25 January 2019.
The Electric Power Council of CIS was established on
14 February 1992 by the Agreement on Coordination of the
Interstate Relations in the Field of Power Industry of the
CIS. The Council is an interstate sectoral authority of the
Commonwealth of Independent States.
Heads of the respective state authorities and national power
companies of the participating states form part of the CIS
Electric Power Council and are assigned by their states with
the respective authorities.
Working groups, coordinating councils and target working
groups represent the working bodies of the CIS Electric Power
Council.
In 2018, representatives of PJSC FGC UES took active part
in meetings of the working groups of the CIS Electric Power
Council and the Coordinating Council for Implementation of
the Interaction and Cooperation Strategy between the CIS
Countries in the Power Industry, as well as development of the
position on the agenda items and materials for participation
and elaboration of legal documents regulating development of
the common electric power market of the CIS. PJSC FGC UES’
representative leads the working group on metrological
support of the electric power industry of the CIS.
As part of operation of the working groups and coordinating
councils, the following documents were developed and
agreed: Amendments and supplements to the Strategy
(main directions) of Interaction and Cooperation of the CIS
Countries in the Field of Power Industry; the Action Plan of
the Committee for Coordination of Cooperation between the
State Energy Supervision Authorities of the CIS Countries for
2019–2021; Regulation on the Board of the Electric Power
Council of the CIS for Inquiry of the Technological Disturbance,
Development and Implementation of Joint Measures for
Prevention of Technological Disturbances at Electric Power
Facilities Providing Interstate Transmission of Electricity and
Capacity of the CIS Countries; Guidelines for Arrangement
of Fire Trainings at Electric Power Enterprises of the CIS
Countries; Methodological Guidelines for Stability of Energy
Systems of the CIS Countries, Baltic States and Georgia,
which Operate in Parallel, etc.
On 2 November 2018, PJSC FGC UES participated in the 53d
in-person meeting of the Electric Power Council of the CIS held
in Astana and chaired by A. Novak, President of the Electric
Power Council of the CIS and the Russian Minister of Energy.
The meeting was attended by delegations of the electric
power management authorities and electric power companies
of the Republic of Armenia, the Republic of Belarus, the
Republic of Kazakhstan, the Republic of Moldova, the Kyrgyz
Republic, the Russian Federation, the Republic of Tajikistan,
Turkmenistan and the Republic of Uzbekistan.
In the course of the meeting the documents developed in the
working groups and coordinating councils were endorsed,
and the 2019 Action Plan of the Electric Power Council of
the CIS was approved. As the powers of the President of the
270
271
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I KEY RISKS
GRI 102-15
Management of Key Operational Risks in 2018
Risk
Risk management activities
z Taking measures aimed at settling disputes with consumers of electricity transmission services in part of the scope of
services and preventing occurrence of new disputed scope of services;
z Working with consumers of electricity transmission service for coordination of the planned scope of services, including the
declared capacity, to introduce them into the respective electricity transmission service contracts and submit them to the
state tariff regulation authorities.
z Qualitative planning and control of the level of expenditures, which can be controlled or are beyond the control;
z Qualitative formation of justification materials for the tariff setting/review application;
z Control of the level of reliability and quality of services provided by PJSC FGC UES;
z Timely and qualitative preparation of reports on PJSC FGC UES’ invested capital movement base.
z Controlling timely fulfilment of obligations under the signed technological connection contracts;
z Handling claims against consumers, who have exceeded the term for fulfilment of their technological connection obligations
before the Company;
z Increasing the responsibility of the contractors. Setting schedules for completion of procedures by the Company’s structural
units and implementation of actions to improve control over scheduled deadlines at all stages of business process, from
registration of an application for technological connection to full performance of contractual obligations;
z Controlling the quality of materials prepared to submit a tariff application;
z Timely submission of the tariff application;
z Monitoring and attracting new consumers;
z Timely activation of works within the framework of the IP implementation;
z Timely introduction of technological connection and investment plan actions;
z Developing offers to be considered by the executive authorities for introduction of amendments into orders of the Russian
Government No. 861 of 27 December 2004 and No. 1178 of 29 December 2011 related to clarification of the procedure
for concluding agreements for design and estimate documentation development, extension of the application submission
term to set the price for technological connection, and settlement of relations with third parties in the framework of the
technological connection;
z Implementation of the Programme for Improving the Efficiency of Technological Connection to PJSC FGC UES’ Electric
Grids and Increasing Transformer Capacity Utilisation (approved by resolution of the Management Board No. 1281/2 of 31
December 2014);
z Ensuring the fulfilment of PJSC FGC UES’ accumulated obligations under the previously concluded technological connection
agreements, which term has been violated by the Company.
z Ensuring compliance of the technical condition of measuring instruments with the requirements of Government Decree of
No. 1172 of 27 December 2010 and Federal Law No. 102 of 26 June 2008;
z Timely and complete implementation of measures aimed at reducing electricity losses.
z Budget control; in case of additional expenditures that are beyond the control, developing proposals to the Budget
Committee for redistribution of funds through savings of controlled expenditures;
z Controlling compliance of expenditures with the approved tariff and balance decisions;
z Timely submission of applications to the regulatory authorities taking into account increase in expenditures that are beyond
the control.
~ КОR-001
Risk of deviation
of the actual
scope of electricity
transmission services
from the value set in
the business plan
~ КОR-002
Risk of deviation of
the actual average
tariff for electricity
transmission from
the value set in the
business plan
~ КОR-003
Risk of deviation
of the actual scope
of technological
connection from
the value set in the
business plan
~ КОR-004
Risk of deviation of
the expenditures for
purchase of losses
from the value set in
the business plan
~ КОR-005
Risk of deviation of
expenditures that are
beyond the control
from the value set
in the business
plan, except for the
expenditures for
purchase of electricity
to compensate losses
272
Risk
Risk management activities
~ КОR-006
Risk of increase in the
operating expenses
compared to those
established for the
planned period
~ КОR-007
Risk of deviation of
the overdue accounts
receivable from the
amount set in the
business plan
~ КОR-008
Risk of fluctuation
in the Debt/EBITDA
indicator from the
value set in the
business plan
z Control of compliance of planned operating expenses with the level of approved tariff and balance decisions;
z Control of compliance with the approved amount of operating expenses and achievement of target indicators for reduction
of unit operating expenses;
z Budget control: approval of executed contracts if there are funds available in the approved Income and Expenditure Budget
and the Cash Flow Budget, signing the certificates of works performed if they correspond to the price conditions of the
contracts.
z Handling claims in order to reduce the accounts receivable, controlling timely performance;
z Complete and/or partial reduction of power supply to consumers in arrears;
z Controlling implementation of debt restructuring agreements;
z Interacting with the Federal Bailiff Service of the Russian Federation at the enforcement proceedings stage, signing
cooperation agreements with the Federal Bailiff Service of the Russian Federation, controlling debt repayment in the
framework of the enforcement proceedings based on the court judgements on recovery of overdue debts.
z Obtaining economically justified tariff and balance decisions ensuring compliance of the tariff level with the approved
business plan;
z Control of compliance with the approved amount of operating expenses and achievement of target indicators for reduction
of unit operating expenses. Target indicator in compliance with the approved Business Plan, % of reduction in 2018 > 2 %;
z Cost management depending on the expected income level (with consideration of mandatory reliability and security
requirements) to achieve the EBITDA level approved by the Company’s Business Plan;
z Developing and implementing an Action Plan aimed at improving efficiency and financial and economic performance;
z Financing in compliance with target indicators of the Company’s investment budget;
z Timely approval by the Company’s management bodies of target indicators of the investment budget and their changes
(adjustments) for the Investment Programme forming part of PJSC FGC UES’ budget;
z Reducing equipment procurement costs (reducing starting price margins, procurement bundling and centralisation, direct
purchases from suppliers/manufacturers, improvement of competition);
z Taking actions to reduce the overdue accounts receivable for electric power transmission services and settle disputes;
monitoring achievement of the target level of collected electricity payments:
– Handling claims in order to reduce the accounts receivable; controlling timely performance,
– Complete and/or partial reduction of power supply to consumers in arrears.
z Controlling implementation of debt restructuring agreements.
~ КОR-009
Risk of fluctuation
in the net profit from
the value set in the
business plan
z Operational control; monitoring compliance of the net profit with the approved business plan;
z Obtaining economically justified tariff and balance decisions ensuring compliance of the tariff level with the approved
business plan;
z Controlling compliance with the approved amount of operating expenses and achieving target indicators for reduction of unit
operating expenses;
z Implementing the Action Plan to reduce the overdue accounts receivable for electric power transmission services and
settling disputes, monitoring achievement of the target level of collected electricity payments;
z Implementing a Project for the Long-Term Efficiency Improvement of PJSC FGC UES and its Subsidiaries
(Order No. 273 of 3 August 2016).
~ КОR -010
Risk of failure to fulfil
the main parameters
of the Investment
Programme
z Developing and submitting draft changes (adjustments) to the target indicators of PJSC FGC UES’ Investment Programme
2016–2020 to the Ministry of Energy of Russia;
z Approval by the regulator of the required gross revenue in the amount sufficient for implementation of the Investment Programme;
z Timely approval by the Company’s management bodies of target indicators of the investment budget and their changes
(adjustments) for the Investment Programme forming part of PJSC FGC UES’ budget;
z Timely submission by project managers (MPS General Directors, structural units of the Executive Office) of GCU as part of the
project certificates to develop the IPR project for construction and reconstruction of electric grid facilities;
z Timely implementation of planned actions for GCU as part of the project certificates to develop the IPR project for construction and
reconstruction of electric grid facilities approved by the Investment Programme;
z Acceptance quality control of materials and equipment;
z Quality management of capital construction;
z Handling claims with contractors violating their contractual obligations prior to commissioning of the facility;
z Financing in compliance with target indicators of the Company’s investment budget;
z Timely development of initial permits, design and working documentation.
273
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I Risk
Risk management activities
Risk
Risk management activities
~ КОR-011
Risk of fluctuation in
the percent indicator
of reduction in the
investment costs
from the value
established for the
planned period
~ КОR-012
Risk of failure to
achieve the capacity
utilisation rate
established for the
planned period
~ КОR-013
Risk of failure to
achieve the reliability
level of electricity
transmission services
established in tariff
regulation
~ КОR-014
Risk of failure to
provide the quality
of technological
connection services
established in tariff
regulation
z Reducing equipment procurement costs (reducing starting price margins, procurement bundling and centralisation, direct
purchases from suppliers/manufacturers, improvement of competition);
z Reaching the share of standard technological solutions of 30 % in 2018;
z Internal technical expertise (optimisation of technical solutions), cost examination of the projects;
z Cancelling excessive works based on the results of examination of the design documentation;
z Controlling timely registration of land and legal relations and issue of the initial permits;
z Annual monitoring of the unit cost of investment projects as part of benchmarking and comparative analysis of unit
construction cost indicators per unit of physical parameters (km, MVA);
z Technological and price audit of investment projects;
z Timely development of initial permits, design and working documentation;
z Applying basic technical solutions with optimal cost.
z Developing and implementing a Technical Action Plan to optimise the load of underutilised electric grid facilities
of PJSC FGC UES;
z Monitoring the existing and expected consumption rate of electricity and capacity at PJSC FGC UES’ electric grid facilities
(analysis of potential load on energy hubs, power centres with a capacity of 35 kV and higher);
z Submitting proposals to the executive authorities of the constituent entities of the Russian Federation to include the
technical actions for load optimisation at underutilised electric grid facilities and the expected increase in electricity
consumption rates into the Electric Power Charts and Development Programmes of the constituent entities of the Russian
Federation;
z Considering the technical actions for load optimisation at underutilised electric grid facilities in development
of PJSC FGC UES’ investment programmes
z Widening of overhead line right-of-ways to reach the established standard;
z Developing M&R programmes with consideration of the assessment results of current technical state of the equipment,
including the electric grid equipment diagnostics performed based on these results;
z Quality control of M&R works (including those performed by contractors);
z Monitoring implementation of actions based on the results of investigation of technological violations (accidents);
z Timely implementation of the projects for renovation of the electric grid facilities and target reliability improvement
programmes (IPR implementation).
z Minimising the human factor (negligence, lack of attention, etc.);
z Controlling compliance with the deadlines for submission of technical requirements for approval to the Operational and
Dispatch Management Department/Regional Dispatch Management Department;
z Controlling compliance with the deadlines for submission of the Company’s requests to the authorised executive authority
for state tariff regulation to determine the amount of payment for technological connection to electric grids;
z Improving control of compliance with the deadlines for adding the technological connection facilities to the Company’s
Investment Programme;
z Improving control of compliance with the deadlines for procurement procedures;
z Improving control of compliance with the deadlines for performance of contract works;
z Operational control of fulfilment of technological connection requests, analysing the risks of failure to fulfil them;
z Implementation of the Programme for Improving the Efficiency of Technological Connection to PJSC FGC UES’ Electric
Grids and Increasing Transformer Capacity Utilisation (approved by resolution of the Management Board No. 1281/2 of 31
December 2014);
z Developing proposals to be considered by the executive authorities to introduce amendments into orders of the Government
of the Russian Federation No. 861 of 27 December 2004 and No. 1178 of 29 December 2011 related to: clarification of the
procedure for concluding the design and estimate documentation development agreement, extension of the application
submission term to set the price for technological connection, settlement of relations with third parties in the framework of
the technological connection;
z Regular meetings to resolve technological connection problems in a timely manner;
z Ensuring compliance with deadlines for execution of warnings of the Russian Federal Antimonopoly Service and its territorial
bodies in terms of technological connection;
z Pre-trial settlement of disputes with consumers related to technological connection. Meetings with:
– working groups forming part of subsidiaries and affiliates of PJSC Rosseti;
– consumers for pre-trial settlement.
~ КОR-015
Risk of an accident
due to the fault of
the Company
Internal investigations of accidents resulted in issue of orders for remedial actions to be taken.
In addition, the following actions have been taken to minimise this risk:
z Improving personnel qualification by means of practical training of skills and methods of safe work performance (in order to
develop the safe occupational behaviour skills of employees and prevent dangerous situations);
z Medical examinations of employees (preliminary, regular, pre-trip);
z Conducting safety days and other occupational safety inspections, working with personnel at each EMPS;
z Operating the system of response to violations of occupational safety requirements (taking enforcement actions against
employees, who have violated the occupational safety requirements);
z Analysing violations of the occupational safety requirements and developing the remedial actions;
z Ensuring acquisition and provision of certified high-quality personal protective equipment, special clothing and footwear,
rinse-off and detoxicating products, working tools, devices and monitoring their proper application;
z Introducing and applying technologies providing for safe performance of works and safe working conditions;
z Controlling compliance with the occupational safety requirements at PJSC FGC UES’ facilities;
z Ensuring safe operation of vehicles, including premises and parking spaces for vehicles;
z Controlling compliance with the rules of passenger and cargo transportation;
z Analysing road accidents and developing remedial actions;
z Controlling performance (implementation) of programmes containing occupational safety requirements and aimed at
preventing injuries (programmes for liquidation of potential injury places, etc.);
z Taking actions under the project Safe Energy for Children (conducting electrical safety lessons at schools, excursions for
school children to substations, preparing and distributing electrical safety cards and bookmarks for children at schools,
publishing articles in regional and interregional mass media about works performed to prevent electrical injuries of children
and teenagers);
z Taking actions under the project Safe Energy for Population (interacting with the communities of fishermen, gardeners,
non-ferrous metal reception points and informing the population through printed media, radio and television about the
danger of approaching and staying close to electrical installations, as well as violating of the electric grid safety rules and
requirements, mortal danger of unauthorised connection to electric grids among residents of private households, etc.);
z Taking actions under the programmes for installation of information signs prohibiting and informing about the danger of
fishing in the exclusion area of overhead lines, where the overhead lines cross the water bodies;
z When signing contractor agreements, introduction of obligations and liability of personnel for safe performance of works in
the existing electrical installations, electrical installations under construction, technical refurbishment, reconstruction and
control of their compliance with the safety requirements when performing works;
z Performing inspections at EMPS, where accidents took place, including road accidents;
z Developing and implementing actions to prevent occupational injuries and ensure compliance of the personnel of MPS
and EMPS branches with the occupational safety requirements based on the accident investigation results, performance
of control measures and resolutions of the Occupational Safety Committee, as well as ensuring efficient operation and
constant improvement of the occupational safety management system;
z Timely performance of actions prescribed under the instruction acts and operational instructions issued based on the results
of inspections performed by the supervision and control bodies and in the framework of technical supervision, as well as
actions to liquidate the reasons of accidents stated in the investigation reports.
~ КОR-016
Risk of fluctuation in
the labour productivity
improvement indicator
from the value set in
the business plan
z Improving the Company’s organisational and staff structure with consideration of centralisation/decentralisation of
functions;
z Controlling compliance of actual number of administrative and managerial personnel with the planned values set in the
Company’s business plan;
z Taking actions to improve motivation and loyalty of employees and reduce personnel turnover;
z Improving work organisation for rational use of working time.
274
275
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I PERFORMANCE RESULTS
2018
MANUFACTURED CAPITAL
QUALITY MANAGEMENT SYSTEM (QMS)
QMS is a part of the Company’s general management system.
It is designed to ensure the high quality of the services
provided in accordance with the requirements of regulatory
documents, the needs and expectations of consumers and
satisfy all stakeholders, including employees, shareholders,
investors and partners of the Company.
The Company developed and approved by the resolution of
the Board of Directors1 a Regulation on PJSC FGC UES´ Quality
Management System.
In 2017, the senior management of PJSC FGC UES made a
resolution to bring the existing system in compliance with
the requirements of the new version of ISO 9001:2015 in
order that the Company can further apply for the international
certificate.
In 2018, PJSC FGC UES performed the following actions to
bring the existing QMS in compliance with the requirements
of ISO 9001:2015:
zz PJSC FGC UES Quality Policy has been developed,
approved by the Management Board of PJSC FGC UES2
and is planned for approval by PJSC FGC UES Board of
Directors in 2019.
zz PJSC FGC UES’ Quality Management System Guidelines3
and Internal Audit Procedure of the Quality Management
System4 have been developed and approved;
zz 1,415 specialists of the Executive Office/MPS/EMPS
received training under the course Quality Management
System Meeting the Requirements of ISO 9001:2015.
Introduction of the Quality Management System at
PJSC FGC UES and the Internal Audit of the Quality
Management System at PJSC FGC UES;
zz following the results of QMS audit performed at
PJSC FGC UES by the consulting company, a conclusion
has been drawn that the Company is ready for international
certification.
In 2019, PJSC FGC UES plans to certify its QMS in compliance
with the requirements of the international standard ISO
9001:2015.
1 Minutes No. 291/3 of 19 November 2015.
2 Minutes No. 1572/5 of 24 August 2018.
3 Order No. 398 of 22 October 2018.
4 Regulation No. 429r of 17 September 2018.
276
OCCUPATIONAL SAFETY
AND HEALTH MANAGEMENT SYSTEM
GRID DEVELOPMENT AND INVESTMENTS
Key investment projects for 2016–2020
Investment projects
Social and economic significance
Development of the power
infrastructure for the oil
transportation system
(ESPO)
Power supply of port areas
Improvement of the access
to electric grid infrastructure
of Krasnodar Krai
Power delivery of the
generation facilities
Development of the power
infrastructure in the area of
BAM and TransSib
In 2017, design and exploration works on the facilities of the external power supply of SS-23, 26,
32 were performed in order to increase oil pumping through the ESPO-I pipeline system up to 80
million tonnes per year in the framework of the interstate agreements with the PRC. Construction
and installation works on the facilities of external power supply of SS-6, 29 were carried out, and
PJSC FGC UES facilities were reconstructed to increase the capacity of SS-15, 16.
In 2019, the first construction stage of the 330 kV Murmanskaya substation is to be completed.
The substation will improve the reliability of power supply to Murmansk and create opportunities
for connection of new consumers, including the coal transhipment complex Commercial Seaport
“Lavna” and the railway substation of the same name. Power will be supplied to Kolskaya Verf,
the offshore superfacility construction yard.
In 2019, reconstruction of Vyshesteblievskaya SS with a capacity of 220 kV will be completed
resulting in an increase in transformer capacity by 125 MVA to supply power to railway approach lines
to the Dry Cargo Seaport of Taman.
In order to improve the reliability of electricity supply to consumers of the Pavlovsky and Krylovsky
Districts of Krasnodar Krai, Tikhonkaya SS is planned to be built with a capacity of 110 kV and
transformer capacity of 64 MVA (2x32 MVA) along with two overhead lines Tikhonkaya-Krylovskaya
with a capacity of 100 kV and approximate length of 24 km each, as well as reconstruction of
Krylovskaya SS with a capacity of 220 kV.
Technological connection of JSC Oboronenergo was completed. PJSC FGC UES implements a project
for construction of Novo-Labinskaya SS with a capacity of 220 kV with overhead lines of 220 kV and
commissioning of 330 MVA. In addition, construction of Vostochnaya Promzona SS in Krasnodar is at
the completion stage.
Works were completed for implementation of the power delivery schemes at Rostovskaya NPP,
Nizhne-Bureiskaya HPP, and Leningradskaya NPP. Works are continued to implement the power
delivery schemes at Novovoronezhskaya NPP-2 and Zaramagskaya HPP.
In 2019–2020, in order to ensure power delivery from plants almost 300.00 km of lines
and 1,002 MVA of transformer capacity are planned to be commissioned.
In order to ensure the potential loads of the Eastern ground of JSC RZD, PJSC FGC UES implements
an Integrated Investment Project of Power Infrastructure Development in the Area of Baikal-Amur and
Trans-Siberian Railways. The project will provide infrastructure to the facilities of the Eastern ground
of JSC RZD. There will be positive effect achieved for the large potential consumers (PJSC Transneft
– MPL ESPO-1, PJSC Polyus, Baikal Mining Company LLC – Udokan Deposit Ore Processing Plant)
and for the existing consumers in the territories of the project implementation (improvement of power
supply due to commissioning of new and reconstruction of existing transformer capacities and power
transmission lines).
Building of the electricity
infrastructure for the gas
transportation system Power
of Siberia
Works continue at the external power supply facilities of a number of compressor plants, Power of
Siberia HPP, as well as Chayandinsky OGCF crude oil delivery and acceptance point to provide energy
supply to the gas extracting centres of the Republic of Sakha (Yakutia) and the Irkutsk Region, and
ensure gas transportation from these plants through Khabarovsk to Vladivostok.
277
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I Key parameters of the major investment projects
INCREASING THE RELIABILITY OF POWER SUPPLY
Project
Development of the power infrastructure
for the oil transportation system
Implementation period
start
end
2011
2021
Power supply of port areas
2011
2019
Improvement of the access to electric grid
infrastructure of Krasnodar Krai
2010
2019
Power delivery of the generation facilities
2009
2021
Development of the power infrastructure
in the area of BAM and TransSib
2010
2024
Ensuring reliable operation of UES
of Russia separately from the energy
systems of the Baltic States (BRELL
macroproject)
2008
2020
Building of the electricity infrastructure
for the gas transportation system Power
of Siberia
2016
2020
Commissioned
in 2018
Design
capacity
354 MVA
554.5 km
625 MVA
11.4 km
954 MVA
52.59 km
8,409 MVA
3,326.40 km
2,250 MVAr
3,998 MVA
4,217.9 km
1,394 MVAr
900 MVA
896.56 km
1,078.8 MVAr
0
0
0
0
0
0
0
The amount
of funding in
2016–2020,
RUB bln
11. 90
3.17
5.60
39.28
74.96
37.48
114 km
5.11
QUALITY MANAGEMENT OF CAPITAL CONSTRUCTION
As part of the implementation of Decree of the Russian
Government No. 468 of 21 June 2010 “On the procedure for
conducting construction supervision in the implementation
of construction, reconstruction and overhaul of capital
construction facilities” in order to verify compliance with
the requirements of project documentation, technical
regulations, urban development plan of the land, and the
results of engineering surveys, construction supervision is
carried out.
The construction supervision at the capital construction
facilities of the Company’s Investment Programme is carried
out by organisations engaged in construction, as well as
JSC TsIUS UES, within the framework of fulfilling the contract
for performance of the functions of a technical customer
No. Ts/02 of 1 March 2018.
ENSURING RELIABLE POWER SUPPLY FOR THE FACILITIES OF THE RUSSIAN INVESTMENT FORUM SOCHI-2018,
THE WORLD CUP 2018 AND THE EASTERN ECONOMIC FORUM 2018
From 14 to 16 February 2018, the Russian Investment Forum
Sochi-2018 was held at the site of the Main Media Centre of
the Olympic Park in Sochi. The Russian investment forum
is a key event of the year for the presentation of investment
opportunities of regions and a substantive discussion on
regional development issues. Practically all Russian regions
and the largest Russian companies take part in the forum,
which allows for a direct dialogue between the business
sphere and the government. PJSC FGC UES’ branches
Sochi EMPS and Kuban EMPS were involved to ensure power
supply of the forum.
The geographical spread of the 2018 World Cup in
the Russian Federation covered 11 cities and 12 stadiums.
PJSC FGC UES provided power supply for the Spartak stadium
in Moscow and Fisht stadium in Sochi. PJSC FGC UES also
participated in providing power supply for sports facilities and
significant infrastructure facilities of such constituent entities
of the Russian Federation as Volgograd, Rostov-on-Don,
St. Petersburg, Nizhny Novgorod, Samara, Saransk, Kazan,
and Yekaterinburg. PJSC FGC UES’ branches MPS Volga,
MPS North-West, MPS Ural, MPS Centre, MPS South
and 14 EMPS were involved to ensure reliable power supply
for the 2018 World Cup facilities.
The tasks of operational and technological management,
operational maintenance of SS, diagnostics and testing of
equipment, operation of communication systems, operation
and repair of power transmission lines were carried out in
accordance with the schemes of enhanced operation of
electric grid facilities. In total, more than 1,700 people were
engaged and more than 270 units of special equipment were
used. During the 2018 World Cup, the electric grid facilities
operated according to the normal power supply scheme, and
compliance with the technological silence mode was ensured;
repair and other works on electric grid facilities involved in the
power supply of the 2018 World Cup sport and infrastructure
facilities were excluded.
During the 2018 World Cup from 14 June 2018 to 15 July
2018, there were no interruptions in the power supply of
sports and infrastructure facilities in the area of responsibility
of PJSC FGC UES.
In general, the holding of the sports event is another
successful experience after the 2014 Winter Olympics in
Sochi. The operation scheme during the 2018 World Cup has
fully justified itself and will be further applied in reliable power
supply of facilities of special important events in Russia.
In accordance with the Decree of the President of the Russian
Federation, the Eastern Economic Forum is held annually
in the city of Vladivostok. The IV Eastern Economic Forum
was held on Russky Island from 11 to 13 September 2018.
The International Forum is held annually in Vladivostok
in order to stimulate foreign investment in the Russian
Far East and the development of economic cooperation in
the Asia-Pacific region. Also, domestic issues related to
the Far East are discussed at the event. PJSC FGC UES’ branch
Primorskoye EMPS (6 SS of 220–500 kV, 10 OHL of 220 kV)
ensured reliable power supply for the EEF-2018.
RESULTS OF THE REPAIR PROGRAMME IMPLEMENTATION
In 2018, as part of PJSC FGC UES’ repair programme, the
work on repair and maintenance of power lines, substations,
relay protection devices and emergency control automation,
automated control systems, telemechanics, communication
systems, automated control systems and metering of
electricity, measuring instruments, technological and
administrative buildings and structures, as well as vehicles,
was conducted in accordance with the maintenance and
repair consolidated plan of PJSC FGC UES, approved by the
Chief Engineer, Deputy Chairman of the Management Board.
The following factors had an impact on the repair campaign
in 2018:
zz the need to complete the main work affecting the receipt
of a certificate of preparedness for a fall/winter period
before 1 October 2018;
zz elimination of consequences of emergency outages in the
electric grid complex;
zz organisation of work on the operational and maintenance
of the facilities of the Talent and Success Foundation;
zz organisation of inspections and thermal imaging of
overhead lines and substation equipment in the area
of responsibility of PJSC FGC UES’ branch MPS South,
affecting the reliable power supply of the Crimean
peninsula;
zz preparation of the PJSC FGC UES facilities for holding
the 2018 Soccer World Cup;
zz preparation of objects of PJSC FGC UES - MPS Siberia for
holding the XXIX World Winter Universiade in the city of
Krasnoyarsk in 2019.
The plan of maintenance and repair of the PJSC FGC UES
facilities for the main spectrum was completed in full.
In addition to the general plan, a number of unscheduled
work was carried out in order to take priority measures to
prepare electric power industry subjects for the completion
of the compliance assessment in 2018/2019, as well as
urgent work in order to ensure reliable operation of electric
grid facilities and prevent emergency outages.
Actual repair expenses for 2018 amounted to RUB 13,149
million.
Carrying out timely repairs, as well as reliable assessment of
the technical condition of the main equipment by technical
278
279
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I zz The Regulation on the Procedure for Issuing Permits for
the Preparation of Workplaces and Admission to Work on
Power Lines and Equipment of PJSC FGC UES’ Substations
was approved by Order of PJSC FGC UES No. 485r of 10
October 2018 and issued.
zz The Standard Instruction on the Organisation and Conduct
of Inspections of Equipment, Devices and Structures by
Operating Personnel of PJSC FGC UES’ Substations was
approved by Order of PJSC FGC UES No. 49r of 6 February
2018 and issued.
zz The Standard Regulations for Work with Operational and
Duty Personnel of PJSC FGC UES were approved by Order
of PJSC FGC UES No. 219r of 5 May 2018 and issued.
zz From 23 to 28 April 2018, the VI Interregional Competition
of Operational Personnel of 220-750 kV Substations
and Dispatchers of the Grid Control Centre EMPS of
PJSC FGC UES was held by PJSC FGC UES’ branch MPS
West Siberia.
zz Transmission of operational information and participation
of FGC in providing reliable power supply to facilities during
the period of special events (Russian Investment Forum
Sochi-2018, St. Petersburg International Economic Forum,
Soccer World Cup 2018, International Energy Efficiency
and Energy Development Forum “Russian Energy Week”,
Eastern Economic Forum, etc.).
zz During the training organised to work out interaction of the
PJSC FGC UES - EMPS branches in the event of liquidation
of emergencies at PJSC FGC UES’ electric grid facilities
(from 22 September 2018 to 21 December 2018), the work
of the FGC/MPS/EMPS headquarters was conducted, as
well as collection of information and effective management
of the training progress.
zz The Standard Technical Requirements were approved
for the SHS of the APCS of the substations and for
the exchange of process data for the implementation
of functions of equipment telecommanding and relay
protection devices of the substations from the dispatching
centres of JSC SO UES and the network management
centres of network organisations.
zz The Procedure for Planning Disconnection Schedules
for Electric Grid Facilities of PJSC FGC UES to Perform
Maintenance, Repair, Reconstruction, Targeted Programmes
and New Construction was developed and approved by
Order of PJSC FGC UES No. 290 of 1 August 2018.
zz In connection with the update of the Rules for Repair
Outage and Decommission of Electric Grid Facilities
(Decree of the Russian Government No. 937 of 13 August
2018 “On approval of the Rules for Process Operation of
Electric Power Systems and on Amendments to Certain
Acts of the Government of the Russian Federation”),
amendments were made to Order of PJSC FGC UES No.
290 of 1 August 2018 “On approval of the Procedure
for Planning Disconnection Schedules for Electric Grid
Facilities of PJSC FGC UES”.
zz The Regulation on the Procedure for Executing and
Coordinating Normal Electric Circuits of PJSC FGC UES’
Substations was developed and approved (it was agreed
by JSC SO UES on 25 September 2018 and approved by
PJSC FGC UES on 3 October 2018).
zz Order of PJSC FGC UES No. 136r of 28 March 2018 “On the
Procedure for Installing Portable Grounding and Tolerance
on Overhead Power Lines” was issued.
specialists of enterprises operating UNEG facilities, ensures
reliable quality and uninterrupted power supply to consumers.
In accordance with the PJSC FGC UES Long-Term
Development Programme, maintenance staff was provided
with full load in 2018, taking into account the balance and
uniformity of its employment during the year, including by
performing additional work outside the repair campaign on
investment and unregulated activities (in particular: Technical
audit of power supply facilities of the Republic of Dagestan,
interregional exercises for organising the elimination of
massive power outages of the constituent entities of the
Russian Federation), which together resulted in an increase
in the efficiency of the load of repair personnel by 1 p.p. in
the reporting period compared to 2017 (from 114 % in 2017
to 115 % in 2018), with unconditional compliance with the
requirements of the Labour Code of the Russian Federation.
In addition, the Company ensured outpacing growth in 2018
in labour productivity of repair personnel in comparison
with 2014 in the amount of 16 % with a target value
of 9.8 % established by Programme No. 4 of the 40/40 project,
approved by the Protocol of the PJSC FGC UES Budget
Committee of 13 September 2018 (letter of PJSC FGC UES
No. TS/285/495 of 13 September 2018 “On sending the
Protocol of the Budget Committee”), which was mainly
achieved through the use of the current costing standards
database (hereinafter, the “CSD’) of PJSC FGC UES in the 2016
edition (with the expansion and addition of the composition
of prices in 2017) and decrease in the ad hoc breaks and
loss of working time.
As a result of a 26 % increase in the volume of service over
the past 6 years while simultaneously optimising the number
of M&R personnel by 11 %, growth in the volume of service
(c.u.) by 1 (One) M&R worker was achieved in the amount
of 42 %. In particular, the growth of this indicator in 2018
compared with 2017 amounted to 2.6 %.
OPERATIONAL PROCESS CONTROL AND SITUATIONAL MANAGEMENT
Operational process control is a system of measures carried
out to ensure reliable operation of the UNEG facilities and
to comply with the operational process modes set by the
dispatch centres of the system operator.
in correspondence with a contingency or emergency situation
on the electric grid complex (analysis and assessment of risks
of the situation occurrence and its consequences, making and
implementing appropriate management decisions).
In the framework of operational process control of the
Company situational management tasks are executed. The
situational management is a system of measures carried out
The tasks of operational process control and situational
management were successfully solved in 2018.
Results of operational process control and situational management in 2018
zz The Concept of Development of the Operational Process
Control Situational Management System in PJSC FGC UES
was released and approved in accordance with the Meeting
Minutes of the Company’s Management Board of 9 October
2018.
zz As part of improving the system of accounting for the
indicators of reliability of the services provided, Order
of PJSC FGC UES No. 443 of 30 November 2018, “On
the calculation of reliability indicators of the services
provided” was approved. The main amendments affected
the following processes:
– the process of entering information on reliability
indicators in the “Emergency” software and “Reliability”
complex system of the Ministry of Energy of Russia
was regulated;
– the process of determining the parameters of electricity
transmission termination due to process violations
was clarified;
– forms for consumer delivery points were added to
the statements for their submission to PJSC Rosseti;
– the process of entering information on the cessation
of electricity transmission in the Appendix to the TV
(technological violation) investigation certificates was
regulated.
zz As part of improving the monitoring process and
maintaining the required voltage levels in UNEG, as
well as in connection with the issuance of the Rules
for Technological Operation of Electric Power Systems,
approved by Decree of the Russian Government No. 937
of 13 August 2018, Order of PJSC FGC UES No. 255 of 30
June 2017 was updated.
zz The Distribution of Functions Between the Management
Levels in the Operational Process Control and Situational
Management System in PJSC FGC UES was approved by
Order of PJSC FGC UES No. 519r of 24 October 2018 and
released.
zz The Instruction for the Production of Switching at
PJSC FGC UES’ Substations of 35-750 kV was revised
and approved by Order of PJSC FGC UES No. 393r of 1
September 2017.
zz The Instruction on the Procedure for Conducting
Operational Negotiations and Transmitting Operational
Information of PJSC FGC UES was approved by Order
of PJSC FGC UES No. 7r of 15 January 2018 and issued.
zz The Instruction on the Procedure for Working with the
Documentation of Operational Personnel of 35-750 kV
PJSC FGC UES’ Substations was approved by Order of
PJSC FGC UES No. 305r of 10 July 2018 and issued.
280
281
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I REPAIR PROGRAMME
M&R production results for 2018 and targets for 2019
(own property)
Description of work
Measurement unit
Actual 2018
Target 2019
WORK ON POWER TRANSMISSION LINES
Clearing routes
Cutting down trees threatening to fall
Insulators replacement
Replacement/repair/strengthening of the foundations
Replacement of the ground wire
Replacement of the vent fingers
Replacement of U-bolts of anchor plates
Replacement/reinforcement of supports
WORKS ON SS
Repair of autotransformers/transformers
Repair of reactors
Repair of switches
Repair of disconnectors
Repair of compressors
ha
units
units
units
km
units
units
units
units
units
units
units
units
56,525
24,032
88,099
12,094
1,331
3,909
110
2,793
47
15
1,774
3,424
150
54,808
18,176
103,464
11,288
653
2,440
204
2,102
51
12
1,716
4,871
131
PREPARATION FOR THE WORK DURING SPECIAL PERIODS
In 2018, the flood in most of Russia was moderate; there were
no emergency shutdowns of electricity grid equipment as the
result of the flood, including with consumers de-energising
in the area of operational responsibility of PJSC FGC UES’
branches.
The Company also prevented occurrence of major disruptions
in the operation of the energy facilities during forest fires
commenced in spring in the Far Eastern Federal District.
During the emergency, Company employees worked closely
with the regional administrations, the Russian Ministry of
Emergency Situations, hydro-meteorological services, and
power companies of the regional grid distribution system. The
work was done in advance to reduce the possibility of the cut
off of overhead lines due to the ground fires, dry vegetation
was removed in a timely manner and the fire break plowing
was performed around the substations.
44 headquarters function on a permanent basis in the
Company’s branches in order to ensure reliable operation of
the electric grid complex in the event of a power failure of
consumers and other abnormal situations. Representatives of
the branches participate in the work of the headquarters for
the security of electricity supply established in the constituent
entities of the Russian Federation. The Company entered into
154 agreements on cooperation with contractors involved in
extraordinary and emergency situations and recovery works
at the facilities of the electric grid complex, as well as 62
agreements with Roshydromet, and 81 agreements with the
Russian Ministry of Emergency Situations.
The Company has formed an emergency reserve in sufficient
volume, including an enlarged assembly. In order to improve
the efficiency of the electric grid facilities management during
emergency recovery operations, the Company has 584 backup
power sources with a total capacity of 173.38 MW.
Passage of the compliance assessment 2018–2019 in
comparison with the similar periods of previous years, due to a
noticeable decrease in the total number (specific accident rate
reduced by 16 %) of the voltage transformer by the Company,
both at the substation equipment and at power transmission
lines; there is also a decrease in the number of accidents
caused by personnel erroneous or incorrect actions.
282
FIRE SAFETY
GRI 103-3, 413-2
The Company complies with the requirements of federal legislation related
to fire safety.
In 2018, one fire was registered at PJSC FGC UES’ facilities. There were
no signs of violation of the fire safety rules according to the investigation.
Fire safety days are held once every three months in all units of
PJSC FGC UES’ branches MPS, as a result of which a set of actions has
been developed to eliminate identified observations and violations.
FGC UES was noted for the widest geography of participants attracted
in the 2017 GTO season. According to the results of the GTO Corporate
Cup, the Company took a second place.
As part of the training of fire safety personnel, periodic fire training
and exercises are held, including together with the fire-fighting units of
the Ministry of Emergency Situations of Russia. .
Reported cases of fires at the Company
facilities, incidents
6
5
4
3
2
1
0
5
3
3
1
1
2014
2015
2016
2017
2018
Requirements of federal legislation related to fire safety
zz Federal Law No.69-FZ of 21 December 1994 “On fire
safety”;
zz Federal Law No. 123-FZ of 22 July 2008 “Technical
regulations on fire safety requirements”;
zz The Fire Safety Rules in the Russian Federation, approved
by Decree of the Russian Government No. 390 of 25
April 2012 and other regulatory legal acts of the Russian
Federation;
zz Company standards, put in force by Order of PJSC Rosseti
No. 6r of 15 January 2015:
– Company Standard 34.01-27.1-001-2014 (IFSR 27-14)
“The Fire Safety Rules in the electric grid complex of
JSC Rosseti”;
– Company Standard 4.01-27.3-001-2014 (AFSR 28-14)
“Fire protection installations. General technical
requirements”;
– Company Standard 4.01-27.3-002-2014 (AFSR 29-14)
“Fire protection designing of objects of the electric
grid complex of JSC Rosseti. General technical
requirements”.
RESULTS OF ENSURING INDUSTRIAL SAFETY
Distribution of the specific number of accidents at MPS of PJSC FGC UES
S
E
U
C
G
F
C
S
J
P
t
a
e
t
a
r
i
t
n
e
d
c
c
a
c
i
f
i
c
e
p
s
e
g
a
r
e
v
A
2.000
1.500
1.000
0.500
0
7
7
3
.
1
3
0
2
.
1
1
2
1
.
1
5
6
6
.
1
1
8
5
.
1
8
6
0
.
1
0
1
1
.
1
1
6
0
.
1
2
0
9
.
0
6
9
3
.
1
5
5
1
.
1
7
5
8
.
0
7
7
1
.
1
2
3
1
.
1
0
7
8
.
0
4
1
4
.
1
4
3
9
.
0
9
5
8
.
0
3
9
2
.
1
9
3
9
.
0
1
6
8
.
0
8
0
9
.
1
7
3
3
.
1
0
7
1
.
1
Volga
East
Western Siberia
North-west
Siberia
Ural
Centre
South
2016
2017
2018
Av. at FGC 2016
Av. at FGC 2017
Av. at FGC 2018
GRI 103-3 The average specific accident rate for SS and PTL has a steady downward trend
1.401
1.134
0.946
283
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
List of the Company’s industrial safety projects completed in 2018
DEVELOPMENT OF COMMUNICATION AND IT SYSTEMS
zz meetings of the Committees on labour protection were
held at the level of the Executive Office and the Company’s
branches;
zz Special commissions checked the norms and rules are
known by Company staff; all directors and chief engineers
of EMPS and employees of business subdivisions of
occupational safety and reliability (BSOSR) of MPS and
EMPS passed the knowledge test in the central examination
commission of PJSC FGC UES;
zz before starting the 2018 repair campaign, actions were
implemented to ensure the readiness of objects for its
implementation, including staff, protection equipment,
tools, rigging, and transport;
zz work was carried out to identify hazards and estimate
risks (hazard identification at workplaces and injury
risk estimation, identification and creation of lists of
injury equipment and applied mechanisms requiring the
replacement or repair under the conditions of safe works
performance, development of actions to eliminate (reduce)
hazards, including them in action plans for improving labour
conditions and protection, estimation of the adequacy of
actions taken to reduce the level of injury and effectiveness
of the taken actions);
zz an action program was developed and implemented to
reduce the injury risks, taking into account the effectiveness
analysis of the safety management system and the results
of control and analytical actions;
zz the training focused on the development of practical
skills and methods for safe working practices, and the
professional development programmes were adjusted to
increase the number of hours for labour protection issues;
zz training films on work safety were shown and discussed
with the staff during the training;
zz the staff was informed on time about the circumstances
and reasons of accidents occurred in the electric grid
complex;
zz the manufacturers of working wear were involved to bring
to the staff the importance of the full use of working
wear, its component parts and compliance technical
requirements;
zz drivers who transfer passengers were taught the skills
of safe (emergency) driving, including driving in difficult
road and climatic conditions on the basis of specialised
educational organisations;
zz labour protection days and sudden inspections of working
teams were held every month;
zz target inspections of the organisation of labour protection
in EMPS and mutual inspections between EMPS for the
experience exchange were carried out;
zz months of road traffic safety were held;
zz the implementation of the Behavioural Safety Audit project
was continued to change the staff’s approach to the
conscious observance of safety standards;
zz work was carried out to prevent violations of labour
protection requirements, including for poor-quality
performance of functional responsibilities in labour
protection on the basis of the Regulation on the System of
Response to Violations of Labour Protection Requirements
by Company staff;
zz the implementation of the project for the use of mobile
video recorders to record and analyse with the staff the
most dangerous behaviour of employees performing woks
in existing electrical installations;
zz target inspections of the enterprises in which accidents
took place (on results of the investigation of these
accidents, the analysis of detected violations and the
inspection of the organisation of safe working practices
were conducted, corrective and preventive actions were
developed, which were extended to all Company’s branches,
corrective measures were taken for those employees who
committed violations or poorly performed their labour
duties);
zz the work of stationary and movable labour protection
cabinets was continued to promote safe labour conditions
and to train staff in safe working methods, taking into
account the modern requirements;
zz the work on the effective functioning of the psychological
discharge rooms for the operating staff of substations
was continued;
zz a contest for the best work organisation on labour
protection in EMPS and the best work organisation on
labour protection in MPS was held. In 2018, the Sverdlovsk
enterprise of MPS of Ural and MPS of Siberia were
recognised as the best Company’s branches for the work
organisation on labour protection, respectively.
AUTOMATED PROCESS CONTROL SYSTEM
Automated process control system (APCS) is a unified
distributed hierarchical system that allows to perform
operational and non-operational functions by the Grid Control
Centres, to improve the efficiency of UES mode control due to
high level of observability, to prevent the emergency outages
of consumers and to reduce the time for decision making
and the possibility of wrong actions by operating staff in
emergency situations.
APCS, as a control system for the operation UNEG, combines
means and subsystems of the existing independently
developing automatic and automated control systems
(such as APCS, IATS, ADCS, RPA, EFMS), thus providing the
necessary interface for interaction with the control systems
of the system operator and grid distribution companies.
As a control system for the operation and development of
UNEG, APCS unites the means and automation systems of
the dispatch operational and technical activities of the FGC
apparatus and MPS/EMPS services.
In 2018, the works on creation of automated operational and
technological control systems of the Grid Control Centres
(AOTCS GCC) were continued.
In 2018, the actions were continued to improve the reliability
and observability of the objects of UNEG in accordance with
concluded contracts on the creation of ITC IATS in MPS North-
West by 36 SS, MPS Volga - 27 SS, MPS South - 25 SS, MPS
Siberia - 16 SS, MPS East - 8 SS.
When carrying out project, the Import Substitution Programme
is implemented, the preference is given to using equipment
and software of domestic manufacturers at all hierarchy
levels of technological control.
DEVELOPMENT OF THE ENTERPRISE INFORMATION CONTROL SYSTEM
The enterprise information control system (EICS) of
PJSC FGC UES is a set of information systems that are
methodologically and technically interconnected and meant
to the Company’s business processes automation in order
to increase their efficiency. The development of EICS is
carried out within the frame of the consolidated IT strategy
implementation plan of PJSC FGC UES for 2014–2020
(IT strategy), approved by the Management Board of
PJSC FGC UES in 2014.
In 2018, a number of projects was implemented within the
framework of which the Company’s business processes
through the development of their automation. In particular,
the following business processes were improved:
zz investment management (project for the creation of
an automated system for verification and correction of
the investment programme);
zz financial management (projects for the creation of an
automated control system of relationship with contractors
in terms of counter requirements and the creation of an
automated accounting system of address and target
financing);
zz property management (project for the creation of an
automated accounting system of movable property and
the maintenance of legal information on properties);
zz business assets management (project for the creation of
an automated process control system of planning repairs,
diagnostics and evaluation of technical conditions).
In 2019, the development of EICS will be continued within the
frame of the consolidated IT strategy implementation plan of
JSC FGC UES for 2014–2020, taking into account the results
of the draft Consolidated Plan of the Department Programme
“Unified technological policy. Reliability of electricity supply”
and the tasks of moving to the prior use of domestic software.
284
285
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I PROCUREMENT CHAIN AND PROCUREMENT ACTIVITY
PROCUREMENT METHODS
PROCUREMENT SYSTEM MODEL OF PJSC FGC UES
Provision of procurement process
methodology, coordination
of procurement from a single
source, approval of conclusion
of supplementary agreement to
contracts, approval of annual
comprehensive procurement
programme of the executive body,
approval of the branches’ annual
comprehensive procurement
programmes in terms
of non-competitive
procurement worth more than
RUB 100 million, consideration
of reports on the annual
comprehensive procurement
programme implementation.
Approval of procurement plans
for investment activities and M&R
within existing competences
Performing procurements,
documentation, archiving,
maintaining price register
upon the results of the market
research, drafting consolidated
reports on the FGC procurement
activities, owner of KISU-Zakupki,
development of the electronic
trading facility
Current procurement management
in the field, establishing
procurement commission on its
basis
Selection of the successful
tenderer in procurement under
RUB 100 million.
FGC BOARD OF DIRECTORS
Approval of the Procurement Regulation,
the Chairman of the Central Tender
Commission
CHAIRMAN OF THE
MANAGEMENT BOARD
FGC CENTRAL TENDER
COMMISSION
CONSOLIDATED PLANNING AND
PROCUREMENT DEPARTMENT
PERMANENT TENDER
COMMISSION
FOR INVESTMENT
ACTIVITIES
PERMANENT
TENDER
COMMISSION FOR
MAIN ACTIVITIES
PROCUREMENT COMMISSIONS AT
THE EXECUTIVE OFFICE COMMISSION
LEVEL
JSC ESSK UES AS THE PROCUREMENT
ORGANISER
CENTRE FOR ENGINEERING AND
CONSTRUCTION MANAGEMENT, EES,
FGC BRANCHES
PERMANENT TENDER
COMMISSION OF THE BRANCHES
PROCUREMENT DEPARTMENTS
PROCUREMENT COMMISSIONS
SUPPLIERS OF PRODUCTS (GOODS, WORKS, SERVICES)
Signing executive documentation on
the procurement activities, following on
the Procurement Regulation. Drafting
and considering consolidated reports
on the procurement activities, reports
on procurement from a single source.
Approval of final minutes or delegation
of authority to approve them to Deputy
Chairmen of the Management Board and
General Directors of the branches
Methodological and operational
management, drafting organisational and
management documents on procurement
activities, supporting Central Tender
Commission and Permanent Tender
Commission.
Arranging procurement planning,
procurement process control, reports,
analysis. Automation and improvement of
the procurement process. JSC ESSK UES
management.
Decision-making for choosing
counterparties under the FGC Executive
Office and major procurement of the
FGC branches
Procurement customer, drafting
technical part of the documentation,
participation in application
assessments, contracting
Needs planning, drafting the annual
comprehensive procurement
programme, preparation for procurement
activities at the branches, reports
Competition
The competition is the main procurement method, with or without pre-qualification, without special
procedures, in the absence of expressly provided grounds of carrying out other procedures (the assumed
procurement volume exceeds RUB 10 million (incl. VAT).
Auction
The auction can be only one-stage, with or without pre-qualification. The auction does not provide for post-
qualification or the right to submit alternative proposals. It is held when purchasing products, for which
there is a competitive market of producers and for which the procurement initiator has formulated detailed
requirements in form of the technical task. CPB PJSC FGC UES has the right to determine the list of products
purchased only following the results of the auction.
Request for proposals
Request for proposals can be with or without pre-qualification. It is held when one of the following conditions
is fulfilled:
a) the initial (maximum) contract price doesn’t exceed RUB 10 million (incl. VAT);
b) short deadlines - from the date of announcement of the procurement procedure to the beginning
of deliveries, works and services less than 20 calendar days (there is no possibility to hold an open
competition), but there are no circumstances requiring the immediate procurement from a single source,
and the complexity of products or conditions of their delivery don’t allow for the auction or request for rates.
Request for rates
When purchasing simple products for which there is a functioning market, the only criterion is the rate and
provided that the contract price doesn’t exceed RUB 5 million for the open rate request (incl. VAT) based on
the results of open competitive procedures, among the participants, with whom framework agreements have
been concluded. It is prohibited to conduct procurement of complex, unique equipment by means of the
request for rates.
Simple procurement
They are carried out when the customer’s profit for the reporting financial year is more than RUB 5 billion.
In other cases, this procurement method is not used.
It is carried out when technical requirements are clearly formulated for products to be purchased, including
when the functional characteristics (consumer properties) of goods, sizes, package, goods dispatch are
determined, the specific requirements to the work (services) results in the form of the technical task are
established.
It is carried out when the initial (maximum) contract price amounts from RUB 100,000 to 500,000, inclusively
(incl. VAT). It can be carried out by the customer’s decision when the initial (maximum) contract price is less
than RUB 100,000 (incl. VAT).
Small procurement
It is carried out when the initial (maximum) procurement price is up to RUB 100,000 (incl. VAT). It is carried
out when technical requirements are clearly formulated for products to be purchased, including when the
functional characteristics (consumer properties) of goods, sizes, package, goods dispatch are determined,
the specific requirements to the work (services) results in the form of the technical task are established.
Procurements from
a single source
(provider, contractor)
The decision on the choice of a supplier is accepted by the customer’s CPB or by other authorising body
within its competence in accordance with the Unified Procurement Standard based on the customer’s
information on the conducted market analysis.
They are divided into:
a) procurement of unique goods (works, services) from a single supplier (provider, contractor);
b) procurement from a single source (contractor, provider) in order to prevent emergency situations or
liquidate their consequences.
286
287
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I ПРИЛОЖЕНИЕ 1
ДОПОЛНИТЕЛЬНАЯ ИНФОРМАЦИЯ ПО РАЗДЕЛАМ ГОДОВОГО ОТЧЕТА
Structure of regulated procurements by their implementation methods in 2018
INFORMATION ON THE COOPERATION WITH SMALL AND MEDIUM-SIZED BUSINESS ENTITIES IN 2018
29.56 %
0.85 %
15.21 %
46.31 %
7.32 %
0.71 %
OC — open competition
ORR — open request for rates
ORP — open request for
proposals
A — auction
SS — procurement from a single
source (provider, contractor)
Simple P — simple procurement
TOTAL
By all
methods
OC
ORP
ORR
А
SS 1
Simple P
Cost of conducted procedures,
RUB bln
Number of conducted procedures,
pcs.
In % from the cost of conducted
procedures
227.1
105.2
1.6
16.6
34.6
67.2
1.9
17,584
694
1,311
2,333
5
816
12,425
100
46.31
0.71
7.32
15.21
29.56
0,85
According to the results of the procurement campaign in 2018, PJSC FGC UES completed 17,584 procurement procedures
for a total amount of RUB 227,142,549.53 thousand. The share of procurement procedures conducted on a competitive basis
was RUB 159,927,163.6 thousand or 70.4 %1 of the total procurement volume. The economic effect from the procurement
performance was RUB 5,734,918.8 thousand.
In accordance with Federal Law No. 223-FZ of 18 July 2011,
the procurement activity is carried out with the inclusion in the
procurement plan of goods, works, services and innovating
and high-technology products, the compulsory procurement
portion from small and medium-sized business entities (SME).
From the force (1 July 2015) of the RF Government Decree
No. 1352 of 11 December 2014, which approved procurement
quotas by specific customers of SME in the amount of 10 %
and further increasing the portion of such procurements
(special trades) up to 15 %, the procurement plan from such
SME, within the frame of the main and investment activities
of the Company, is exceeded in the range from 10 % to 30 %
and above during the reporting year regularly.
Within the frame of execution of the RF Government Order No.
867-r of 29 May 2013 “On approval of the action plan (“road
map”) “Access extension of small and medium-sized business
entities to the procurements of infrastructure monopolies and
government-sponsored companies”, in 2014 the Programme
of Partnership between PJSC FGC UES and small and medium-
sized business entities was approved by PJSC FGC UES, and
the register of small and medium-sized business entities that
has joined the Partnership Programme is maintained2. The
“Road map for the cooperation with SME” section was also
developed on the Company’s official website www.fsk-ees.
ru/suppliers/dorozhnaya_karta_po_sotrudnichestvu_s_msp.
The list of goods, works and services that are planned to
be purchased only from small and medium-sized business
entities was approved on 27 April 2015 according to the RF
Government Decree No. 1352 of 11 December 2014. This
list expands every year to increase the procurement portions
from SME. There were 118 positions at the end of 2018. Also,
in order to ensure the efficiency of procurement conducted
by PJSC FGC UES for small and medium-sized enterprises,
on 25 February 2014 the composition of the advisory body
was approved, which included the following representatives:
PJSC Rosseti, Chamber of Commerce and Industry of the
Russian Federation, Skolkovo Foundation, Association of
Enterprises of the Power Constructing Complex, Compliance
Evaluation and Monitoring Directorate of JSC Corporation
SME, Committee on Innovation of NAPI, Procurement and
Sales Management Institute named after A.B. Solovyov
of NRU HSE, Energy Committee of the All-Russian Public
Organisation of SME OPORA ROSSII, and RUSENERGOSBYT
LLC (hereinafter, the “Council of SME”).
Taking into account the draft amendments, the procurement
plan was approved by the Federal Corporation for the
Development of Small and Medium-Sized Enterprises in 2018.
There are regular interactions with development institutions,
including JSC Corporation SME, as well as other organisations
and industry associations to support SME and increase
procurements of such SME in the total annual procurement
volume of the Company. An efficient instrument in such work
was the Council of SME. On 8 June 2018, a joint meeting of
the Advisory Bodies on ensuring the procurement efficiency
was held by PJSC Rosseti, PJSC FGC UES, PJSC MOESK, and
PJSC IDGC of Centre as part of the Open Day for suppliers
and potential participants of procurement procedures. SMEs,
JSC Corporation SME, Opora Rossii, Chamber of Commerce
and Industry, etc. were invited to the event (Minutes of
8 June 2018).
The work is carried out with the suppliers (contractors,
providers) who have joined the Programme of Partnership
between PJSC FGC UES and SMEs according to the Company’s
Order No. 92 of 25 February 2014. The register of such SMEs
is maintained, information on which is posted on the official
website of PJSC FGC UES. In addition, the work is carried out
to monitor and update the list of goods, works and services
that are purchased only with the participation of SMEs in
order to increase the procurement portion from such SMEs.
According to the Company’s innovation development plan
and the needs for innovation and high-technology products,
the list of goods, works and services that meet criteria for
being qualified as innovative products, advanced technology
products has been developed and approved by Order No. 500r
of 30 November 2016. The innovative products procurement
plan for 2016–2020 was placed in the UIS on 27 December
2016. The innovation plan for 2018 was amended. In 2018,
the work on the draft regulations of appeals of SME for the
introduction of innovation proposals was continued. This
regulation is integrated into the Company’s draft order “On
approval of the Regulation for the Performance of Pilot
Production at PJSC FGC UES’ Facilities” and to date it is under
approval by the interested business units of PJSC FGC UES.
1 Taking into account the procurement procedures in the amount of RUB 41,476,691.6 thousand for the assets exchange in accordance with the instruction of the Russian Government
No. DK-P9-5664 of 29 August 2019 and the building lease for the Executive Office of PJSC FGC for 5 years in the amount of RUB 3,588,878.8 thousand.
2 To date, Order No. 867-r has been fulfilled (the RF Government Order No. 174-r of 6 February 2016).
288
289
APPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I Information on complaints sent to the Federal Antimonopoly Authority on actions of PJSC FGC UES
when carrying out the procurement activity
FINANCIAL CAPITAL
The main objects of complaints were:
1) The unanswered request of a participant in the procurement
procedure for explanation of provisions of procurement
documentation.
2) Wrongful rejection/admission of a participant in the procurement
procedure.
3) An indication in notice that doesn’t correspond to the procurement
object of ОКPD.
4) Procurement without taking into account the peculiarities of
participation of SMEs.
5) Violation of the re-sale procedure.
6) The time extension of application consideration and the summation
of procurement results.
7) Incorrect evaluation of the participants’ applications.
During the reporting period, the Moscow Arbitration Court considered 26
cases on appeal of decisions of the FAC (including appeal of decisions
made by the FAC in 2017).
Upon the results of the consideration, 2 requirements of PJSC FGC UES
were rejected by the Moscow Arbitration Court, and 24 requirements of
PJSC FGC UES were met in full.
Within the framework of administrative proceedings of the FAC, 4
decisions on instituting administrative action against PJSC FGC UES
were taken under p. 7, Art. 7.32.3 of AC (violation of retirements for the
content of notices, documentation) for a total amount of RUB 20,000.
By the decisions of the Moscow Arbitration Court, the above mentioned
resolutions of the FAC are recognised as illegal and cancelled.
During 2018, the 9th Arbitration Court of Appeal considered 12 cases in
appeal of decisions of the Moscow Arbitration Court (including appeal
of decisions of the Arbitration Court given in 2017), where: 2 appeals
of PJSC FGC UES were accepted, 1 appeal of PJSC FGC UES was
rejected, including 1 accepted appeal of the FAC; upon the results of
the consideration of 8 appeals of the FAC, the decisions of first instance
were left unchanged, the stated claims of the FAC were not accepted.
The Arbitration Court of the Moscow District considered 2 cassation
appeals, where: 1 appeal of the FAC was rejected, the decision of first
instance was left unchanged, 1 appeal of the FAC was accepted.
30
Partly admissible
Withdrawn by requester
Remained unconsidered
Admissible
Inadmissible
6
1
3
2
3
1
2
8
Accepted FAS appeals
Rejected appeals of PJSC FGC UES
Accepted appeals of PJSC FGC UES
FAS appeal claims left unaccepted
IMPORT SUBSTITUTION POLICY
The corporate plan of import substitution corresponds to the following tasks:
zz ensuring technological safety of the electric grid complex of the Russian Federation;
zz reducing dependence on foreign products, equipment, technical devices as well as services/works of foreign companies
and use of foreign software.
MAIN FINANCIAL AND ECONOMIC INDICATORS, RUB BLN
No.
Indicator
2015
2016
2017
2018
1.
Revenue from sales of products (services), including:
1.1.
1.2.
1.3.
1.4.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Electricity transmission
Technological connection
Sale of electricity
Other activities
Cost of products (services)
Gross profit
Administrative expenses
Selling expenses
Profit (loss) on sales
Interest receivable
Interest payable
Income from participation in other organisations
Other income
Other expenses
Profit (loss) before taxation
Tax on profit and other payments
Net profit (loss)
Adjusted EBITDA*
173.3
159.0
12.4
218.4
171.1
45.5
216.0
192.6
21.4
240.3
213.6
24.3
1.9
1.8
2.0
2.4
−134.9
−140.0
−152.4
−170.8
38.3
−7.9
30.5
8.2
−8.5
0.1
23.5
−26.0
27.9
−10.0
17.9
103.7
78.3
−8.0
70.3
7.8
−6.2
0.3
73.0
−20.8
124.3
−18.2
106.1
119.7
63.6
−8.3
55.4
8.6
−3.9
1.9
23.5
−24.9
60.6
−18.2
42.4
129.3
69.5
−8.5
61.0
8.1
−4.0
2.5
25.7
−19.8
73.4
−17.2
56.2
129.0
* Excluding operations for the accrual and restoration of provisions for doubtful debts, financial performance related to the sale of and change in the cost of quoted business assets, and
revenues from technological connection.
290
291
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I PROFIT DISTRIBUTION
Profit distribution in 2018, RUB thousand
Undistributed profit (loss) of the
reporting period,
incl.:
Reserve fund
Development
Payment of dividends
Cover for losses of previous periods
2014
(for 2013)
2015
(for 2014)
2016
(for 2015)
2017
(for 2016)
2018
(for 2017)
−25,897,521
4,699,940
17,870,137
106,070,911
42,361,640
–
–
–
–
256,837
893,507
5,303,546
–
–
21,599,974
2,118,082
19,935,757
847,383
16,976,630
18,184,825
20,307,801
(including the interim
dividends for Q1 2017
1,423,130
(AGM Resolution
No. 18 of 3 July 2017))
3,595,720
–
60,982,566
–
Information on the profit distribution and dividends paid
is presented in accordance with the resolutions of the
Company’s Annual General Meetings of Shareholders (AGM):
AGM 2014 (for 2013) – Minutes No. 15 of 30 June 2014;
AGM 2015 (for 2014) – Minutes No. 16 of 30 June 2015;
AGM 2016 (for 2015) – Minutes No. 17 of 4 July 2016;
AGM 2017 (for 2016) – Minutes No. 18 of 3 July 2017;
AGM 2018 (for 2017) – Minutes No. 20 of 2 July 2018.
ISSUES OF THE COMPANY’S BONDS IN CIRCULATION
As of 31 December 2018, the following issues of the Company’s bonds circulated:
Series
Total nominal value
(RUB)
4-06-65018-D
10,000,000,000
4-07-65018-D
4-08-65018-D
4-09-65018-D
4-10-65018-D
4-11-65018-D
4-12-65018-D
5,000,000,000
10,000,000,000
5,000,000,000
10,000,000,000
10,000,000,000
10,000,000,000
Placement coupon rate
Volume in circulation at
nominal
value (RUB)
Current
coupon rate
7.15 %
7.50 %
7.15 %
7.99 %
7.75 %
7.99 %
8.10 %
7,534,586,000
1,760,821,000
7,314,887,000
667,049,000
29,151,000
520,989,000
46,462,000
8.25 %
7.50 %
8.25 %
0.10 %
7.75 %
0.01 %
8.10 %
Series
4-13-65018-D
4-18-65018-D
4-21-65018-D
Total nominal value
(RUB)
10,000,000,000
15,000,000,000
10,000,000,000
4-22-65018-D
10,000,000,000
4-23-65018-D
10,000,000,000
4-24-65018-D
4-25-65018-D
10,000,000,000
15,000,000,000
4-26-65018-D
15,000,000,000
4-27-65018-D
15,000,000,000
4-28-65018-D
20,000,000,000
4-29-65018-D
20,000,000,000
4-30-65018-D
10,000,000,000
4-34-65018-D
15,000,000,000
4-37-65018-D
20,000,000,000
4-38-65018-D
20,000,000,000
4В02-02-65018-D
10,000,000,000
4В02-03-65018-D
10,000,000,000
4В02-04-65018-D
10,000,000,000
Exchange bonds
series 001P-01R
10,000,000,000
Placement coupon rate
Volume in circulation at
nominal
value (RUB)
Current
coupon rate
8.5 %
8.50 %
8.75 %
10,000,000,000
109,762,000
419,838,000
8.50 %
8.50 %
7.40 %
1–2 coupons — 9 % per annum, 3–20
coupons are calculated using the
formula*: Кi = (CPI – 100 %) + 2 %
1 coupon – 8.4 % per annum, 2–140
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
10,000,000,000
4.80 %
10,000,000,000
4.50 %
8.00 %
8.60 %
10,000,000,000
1,781,862,000
8.00 %
9.00 %
1 coupon – 7.5 % per annum, 2–136
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
1 coupon – 7.5 % per annum, 2–136
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
1 coupon – 8.4 % per annum, 2–140
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
1 coupon – 7.1 % per annum, 2–132
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
1 coupon – 7.5 % per annum, 2–132
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
1 coupon – 7.5 % per annum, 2–132
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
1 coupon – 17.9 % per annum, 2–120
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
1 coupon – 17.9 % per annum, 2–120
coupons are calculated using the
formula: Кi = (CPI – 100 %) + 1 %
9.35 %
7.75 %
7.6 %
8.70 %
15,000,000,000
4.40 %
11,000,000,000
4.40 %
20,000,000,000
4.50 %
20,000,000,000
4.40 %
10,000,000,000
4.50 %
14,000,000,000
4.50 %
20,000,000,000
4.40 %
20,000,000,000
4.40 %
10,000,000,000
9,000,000,000
7,000,000,000
9.35 %
7.75 %
7.60 %
10,000,000,000
8.70 %
XS0863439161
17,500,000,000
8.446 %
17,500,000,000
8.446 %
292
293
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I ANALYSIS OF CHANGES IN THE ACCOUNTS RECEIVABLE, RUB BLN
Indicator
Accounts receivable. including:
Buyers and customers. including:
electricity transmission
technological connection services
Notes receivable
Advances made
Other receivables
for
31 Dec 2016
for
31 Dec 2017
for
31 Dec 2018
135.2
100.5
39.5
57.4
20.6
0.5
13.6
128.4
112.8
36.3
74.8
0.6
0.3
14.7
169.9
121.9
29.6
91.1
0.6
1.6
45.7
The increase in other accounts receivables as of 31 December
2018 was due to the sale of shares of PJSC Inter RAO in
2018, the payment of which under the terms of the concluded
contracts is foreseen in 2019.
In 2018, in order to recover accounts receivables of the
counterparties, the PJSC FGC UES Executive Office sent 183
claims and statements to arbitral tribunals concerning the
inclusion in the register of claims of debtors for the recovery
of debt for electricity transmission services. Total claims
amounted to RUB 18,170.88 million.
Based on the outcomes of court proceedings in 2018, judicial
acts were issued on collecting receivables for electricity
transmission in favour of the Company in 139 cases for a
total amount of claims of RUB 4,846.49 million.
In 2018, with a view to recovering accounts receivable
from counterparties of PJSC FGC UES’ branches MES,
249 statements of claim and applications for inclusion in
the register of creditors’ claims were submitted to arbitral
tribunals. Total claims amounted to RUB 2,441.40 million.
Based on the outcomes of court proceedings in 2018, judicial
acts were issued to collect accounts receivable in favour of
FGC UES’ branches MES and the inclusion in the register of
creditors’ claims in 159 cases for a total of RUB 519.39 million.
The total amount of claims for unfinished legal proceedings
in which FGC acts as a plaintiff amounts to RUB 55.384 billion
as of 31 December 2018, including RUB 22.234 billion for the
FGC Executive Office.
The total amount of the claims for unfinished legal
proceedings in which FGC acts as a defendant amounts
to RUB 15.858 billion as of 31 December 2018, including
RUB 2.614 billion for the FGC Executive Office.
ANALYSIS OF CHANGES IN ACCOUNTS PAYABLE, RUB BLN
Indicator
Accounts payable. including:
Suppliers and contractors
Notes payable
Advances received
including power purchase agreements
Taxes and duties
Other payables
for
31 Dec 2016
for
31 Dec 2017
for
31 Dec 2018
60.0
31.0
8.2
6.4
16.7
4.1
54.5
30.4
12.5
11.8
7.3
4.3
68.2
39.3
13.2
11.2
11.0
4.7
TARIFF REGULATION
GRI 103-2
THE LIST OF MAIN REGULATORY ACTS REGULATING THE ISSUES OF TARIFF SETTING AND ELECTRICITY
TRANSMISSION ACTIVITIES THROUGH UNEG
zz Federal Law No. 35-FZ of 26 March 2003 on Electric Power
Industry;
zz resolution of the Russian Government No. 1178 of
29 December 2011 on Pricing in Regulated Areas (Tariffs)
in the Electric Power Industry;
zz resolution of the Russian Government No. 1220 of
31 December 2009 on Defining the Applicable Indicators
of Reliability and Quality of Goods and Services Provided
in Establishing Long-Term Tariffs;
zz resolution of the Russian Government No. 1172 of
27 December 2010 on Approval of the Rules for
the Wholesale Electricity and Capacity Market and
Amendment of Certain Acts of the RF Government Related
to Organising the Functioning of the Wholesale Electricity
and Capacity Market;
zz resolution of the Russian Government No. 861 of
27 December 2004 on Approval of the Rules for Non-
Discriminatory Access to Electricity Transmission Services
and Provision Thereof, the Rules for Non-Discriminatory
Access to Services on Operational Dispatch Management
in the Electric Power Industry and Provision Thereof,
the Rules for Non-Discriminatory Access to Services of
the Wholesale Market Administrator and Provision Thereof,
the Rules for Technological Connection of Power Receivers
of Electricity Consumers, Power Generating Facilities,
and Electric Grid Facilities Owned by Grid Organisations
and Other Entities, to Electric Grids;
zz resolution of the Russian Government No. 977 of
1 December 2009 on Investment Programmes of Electric
Power Industry Entities;
zz Russian FTS Order No. 56-e/1 of 21 March 2006 on
Approval of the Guidelines for Calculation of Tariffs for
Electricity Transmission via Unified National (All-Russia)
electric Grid;
zz Russian FTS Order No. 228-e of 30 March 2012 on Approval
of the Guidelines for Regulation of Tariffs Using the Return
on Equity;
zz Russian FTS Order No. 53-e/1 of 12 April 2012 on Approval
of the Procedure for Preparing of a Consolidated Balance
Forecast for Electricity Generation (Capacity) and Supply
Within the Unified Energy System of Russia by Constituent
Entities of the Russian Federation and the Procedure of
Determining the Ratio of the Total Forecasted Annual
Electricity Consumed by the Population and Similar
Consumer Categories to the Volume of Electricity,
Corresponding to the Annual Average Forecasted Capacity
Determined for These Consumer Categories.
REGULATION OF TARIFFS FOR ELECTRICITY TRANSMISSION SERVICES THROUGH UNEG
Russian FTS Order No. 297-e/3 of 9 December 2014 approved
the tariffs for electricity transmission via UNEG for the second
long-term regulatory period of 2015–2019. At the end of 2018,
the following changes were made to the established tariffs
and regulatory parameters:
zz according to clause 37 of the Basics of Pricing in the Field
of Regulated Prices (Tariffs) in the Electric Power Industry,
approved by the Resolution of the Russian Government
No. 1178 of 29 December 2011; Order of the FAS of Russia
No. 1710/18 of 6 December 2018 amended Russian FTS
Order No. 297-e/3 of 9 December 2014 and approved
adjusted tariffs for electricity transmission services via
UNEG, provided by PJSC FGC UES for 2019;
zz by Order of the Federal Antimonopoly Service of
Russia No. 873/18-DSP of 26 June 2018 (as amended
No. 1649a/18-DSP of 27 November 2018) the forecast
balance of electricity and capacity for 2019 was approved,
providing for a decrease in the volume of services provided
by the Company to network organisations from 1 July 2019,
due to a phased transition to the calculations based on
the arithmetic mean power.
294
295
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I TARIFFS FOR TECHNOLOGICAL CONNECTION SERVICES
The FAS of Russia defines two payment methods for technological connection to the UNEG facilities: the approval of individual
payment for a specific applicant (in case if construction of electrical grid facilities is required) and approval of the payment
per formula using the C1 standard tariff rate.
During the period from 2013 to 2017, the Federal Tariff Service of Russia and the Federal Antimonopoly Service of Russia
approved the standardised tariff rate C1 for PJSC FGC UES in the amount of RUB 23.64 to 28.61 for 1 kW (excl. VAT).
Dynamics of the C1
standardised rate, RUB/
kW (excl. VAT) in the
period from 2013 to 2017
W
k
/
B
U
R
,
e
t
a
r
d
e
s
i
d
r
a
d
n
a
t
s
1
C
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0
27.56
27.56
28.61
25.16
23.64
2013
2014
2015
2016
2017
Order of the FAS of Russia No. 1135/17 of 29 August 2017
on Approval of Guidelines for Determining the Amount of
Payment for Technological Connection to Electric Networks
established a new procedure for calculating the charge
of the C1 standardised tariff rate for technological con-
nection to UNEG on the basis of 1 connection (1 contract
for technological connection), differentiated by three catego-
ries of applicants.
Order of the FAS of Russia No. 1827/18 of 21 December 2018
on Approval of the Payment for Technological Connection
of Power Receivers of Electric Power Consumers, Electric
Power Generation Facilities, and Electric Grid Facilities owned
by Grid Organisations and Other Persons to Unified National
Facilities in the Form of a Formula for 2019 approved the C1
standardised tariff rate for three categories of applicants in
the amount of:
zz RUB 1,362,509.76 excl. VAT for technological connection
of facilities for the production of electricity, the connected
capacity of which exceeds 5 MW;
zz RUB 700,931.55 excl. VAT for technological connection of
power receiving devices, as well as electric grid facilities,
the connected capacity of which exceeds 5 MW;
zz RUB 632,800.69 excl. VAT for technological connection
of power receiving devices and power industry facilities,
the connected capacity of which does not exceed 5 MW.
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1,344,484
1,362,510
692,018
700,932
623,695
632,801
Facilities generating
over 5MW
Consumption over
5MW
Consumption under
5MW
2018
2019
In 2018, the payment for technological connection on an individual project was established for 15 consumers for a total
of RUB 16.6 billion (excl. VAT).
Applicants with
the highest fee for
technological connection
)
.
l
c
x
e
T
A
V
(
n
m
B
U
R
l
,
C
T
f
o
t
s
o
C
5,000
4,000
3,000
2,000
1,000
0
1,087
1,256
1,107
4,639
3,704
2,426
2,074
JSC DRSK, KS-5 220 kV SS
JSC DRSK, A m ga 220 kV SSS
JSC DRSK, Zeya 220 kV SSS
JSC Zara m agskie H PP
Sozvezdie SS
PJSC ID G C of Centre and Privolzhie,
GEK H Engineering LLC
JSC Prim orsky G OK
Dynamics of the approval
of individual payment for
technological connection
l
n
b
B
U
R
.
t
s
o
C
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0
42.71
37.38
34.48
22.38
16.64
6.15
1.25
1.39
1.43
2010
2011
2012
2013
2014
2015
2016
2017
2018
REGULATION OF RELIABILITY AND QUALITY OF SERVICES
GRI 103-3
Tariff regulation carried out by the method of return on
invested capital on the basis of long-term parameters,
implies the obligation of FGC to fulfil the reliability and quality
indicators of the services provided by the FTS of Russia.
Order of the Ministry of Energy of Russia No. 1256 of 29
November 2016 approved the Methodological Guidelines
for calculating the level of reliability and quality of the goods
supplied and services provided for the organisation managing
the UNEG and territorial grid organisations.
The list includes the indicators of power transmission reliability
that characterise occurrence of process disturbances and
their consequences for the consumers, as well as the quality
indicators of consumer service that primarily characterise
timely execution of technological connection liability.
Order of the FTS of Russia No. 254-e/1 of 26 October 2010
approves the Guidelines for calculation and application of
decreasing (increasing) factors allowing to ensure consistency
of the tariff levels established for organisations that perform
regulated operations with the level of reliability and quality of
goods delivered and services provided. In accordance with
these guidelines, the increasing or decreasing factors within
the limits of 3 % of the required gross revenue will be applied
to the FGC revenues.
296
297
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
Planned values of reliability and quality indicators for the FGC services established by the FTS of Russia
PJSC FGC UES ECONOMIC PERFORMANCE IN 2018, RUB BLN
Service reliability indicator
0.03602
0.03548
0.03495
0.03443
0.03391
Services quality level indicator
1.23908
1.22049
1.20219
1.18415
1.16639
2015
2016
2017
2018
2019
TARIFFS FOR SERVICES FOR ELECTRICITY TRANSMISSION ON OBJECTS OF DISTRIBUTIVE NETWORKS
The FGC provides electricity transmission services using
distribution grid facilities (DGF), created as part of the
PJSC FGC UES investment programme, including electric
grid facilities built for the XXII Olympic Winter Games and
the XI Paralympic Winter Games of 2014 in Sochi, built by
the Olimpstroy Group of Companies, transferred for free use
by the FGC in pursuance of the orders of the Government of
the Russian Federation, as well as facilities built to supply
the Valaam Island in the Republic of Karelia.
For the first time for FGC, Order of REC-DTST of Krasnodar
Krai No. 82/2014-e of 26 December 2014 approved tariffs for
2015 for the services of electric power transmission in DGC
facilities located in the Krasnodar Territory.
By Resolution of the State Committee of the Republic of
Karelia No. 243 of 27 December 27 2016 on prices and tariffs,
tariffs for electricity transmission services for DGF facilities
located in the Republic of Karelia owned by the Company
were approved for the first time for 2017.
According to the barter agreement No. 544364 of
26 December 2014 concluded between PJSC FGC UES and
JSC DVEUK, DGF facilities located in the Krasnodar Territory
and the Republic of Karelia (Valaam Island) were transferred
into the ownership of JSC DVEUK.
Given the fact that FGC UES PJSC has established tariffs for
electricity transmission services at DGC facilities for 2019,
JSC DVEUK and PJSC FGC UES concluded lease agreements
for DGC facilities located in the Krasnodar Territory and the
Republic of Karelia (Valaam Island), in accordance with which
the said facilities of DGC were transferred for temporary
possession and use of PJSC FGC UES on 1 January 2019.
For 2019, tariffs for transmission services for distribution
grids for PJSC FGC UES are set on the basis of long-term
regulatory parameters.
Order of REC-DTsT of Krasnodar Krai No. 90/2018-e of
28 December 2018, on Establishment of Uniform (Boiler)
Tariffs for Services for Electricity Transmission through
the Krasnodar Krai networks and the Republic of Adygea,
approved for PJSC FGC UES the required gross proceeds for
the maintenance of DGF facilities located in Krasnodar Krai
in the amount of RUB 1,761.4 million for 2019.
Based on the decision of the State Committee of the Republic
of Karelia regarding prices and tariffs No. 213 of 29 December
2017 On Establishing Unified Boiler Tariffs for Electricity
Transmission Services through the Networks of the Republic
of Karelia for 2019, the required gross revenues for the main-
tenance of DGC facilities were approved for PJSC FGC UES,
located in the Republic of Karelia, in the amount of RUB 334.4
million.
GRI 201-1
Name
Economic value added
Revenue
Economic value distributed
Operating costs
Wages and salaries, other payments and benefits for personnel
Payments to equity contributors
Payments to the state budget
Community investments
Economic value retained
Increase in operating costs in 2018 compared to 2017 was
mainly due to:
zz the growth of expenses on power purchase to compensate
for losses due to the entry into force of the Resolution
of the Government of the Russian Federation of 7 July
2017 No. 810 on 1 July 2017, under which changes were
made to the rules of non-discriminatory access to power
transmission services and the provision of these services
in terms of acquisition of the actual amount of electricity
losses (income provided);
zz an increase in material costs due to an increase in the
volume of purchased materials, tools, equipment, and fuel.
2017
226,727.2
226,727.2
122,600.5
49,564.5
20,524.1
23,549.4
28,871.7
90.8
104,126.8
2018
251,132.7
251,132.7
155,073.4
72,759.5
21,835.2
22,862.8
37,385.4
230.5
96,059.3
The increase in payments of taxes and fees in 2018 compared
to 2017 was due to an increase in property tax liabilities
(change in the norms of the Russian Tax Code) and income
tax (due to an increase in taxable income).
The Company has no investments, the estimated level
of income for which is more than 10 % per year.
THE LIST OF ORGANISATIONS INCLUDED IN THE OUTLINE OF THE CONSOLIDATION
OF FINANCIAL STATEMENTS
(in accordance with the indicators GRI 102-45, 201-1)
No.
Name of the organisation
INN (Taxpayer No.)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
PJSC FGC UES
JSC APBE
Index Energetiki — FGC UES LLC
JSC Kuban Trunk Grids
JSC Mobile GTES
JSC MUS Energetiki
JSC NTC FGC UES
JSC Tomsk Trunk Grids
JSC TsIUS UES
JSC ChitaTechEnergo
JSC Electrosetservice UNEG
JSC Energostroysnabkomplekt UES
IT Energy Service LLC
FGC – Asset Management LLC
4716016979
7729530055
7729601362
2312130841
7706627050
7705039240
7728589190
7017114665
7728645409
7536053550
7705825187
7723185941
7729403949
7728320231
299
298
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I INTELLECTUAL CAPITAL
Direction
Implementation
timeframe
Technologies
PRIORITY DIRECTIONS OF INNOVATIVE DEVELOPMENT OF PJSC FGC UES
Direction
Implementation
timeframe
Technologies
DIGITAL SUBSTATION
A digital substation is a substation with a high level of automation of technological process
control, equipped with developed information technology and control systems and facilities,
where all information exchange processes between SS elements, information exchange
with external systems, and SS control are implemented in digital form. At the same time,
the primary power equipment of the digital substation (DSS) and the components of IT
and control systems shall be functionally and structurally designed to support digital data
exchange, which allows to provide a high level of diagnostics and operational reliability
while reducing maintenance costs.
2016–2025
DIGITAL DESIGN
Ecosystem engineering based on modern information technology design, support of
teamwork and parallel engineering, the introduction of digital assessment methods and
virtual checks of engineering solutions. The initiative is aimed at implementing the Strategy
for the development of the electric grid complex of the Russian Federation3 in terms
of improving performance and reducing the unit cost of investments and meeting the
requirements of the Unified Technical Policy in the electric grid complex at all stages of
the life cycle of power facilities, optimisation and informatisation of engineering activities,
creating electronic services that ensure uniformity of design processes, constructions and
interaction of subjects in the construction of power grid facilities.
2015–2020
(modification
and
development
of the
informational
services:
2020–2025)
SS equipment supporting information
exchange based on IEC 61850
standard: bay controllers, switches,
fibre optic communication lines,
optical and electronic current and
voltage transformers (conversion
devices), intelligent electronic devices,
registration and diagnostics systems.
CAD (PLM, BIM), modelling tools,
e-catalogues, electronic payment
services, logistic tools of data
processing, mobile terminals,
geolocation, laser technologies.
ENERGY EFFICIENCY AND LOSS REDUCTION
The most promising innovative areas of implementation and further research in the field of
loss reduction include:
z efforts to reduce power consumption for the substation own needs, including improving
the efficiency of transformer cooling systems and automating the heating of drive
cabinets, switches, separators, autotransformer on-load tap-changers;
2015–2018
(implementa-
tion of
targeted
programmes:
2018–2025)
z research and testing of functional wire coatings to reduce energy losses, including
Functional wire coating, distributed
(intelligent) automatic voltage and
reactive power control systems, heat
recycling of transformers, energy
efficient cooling control systems of
the power transformers, automatic
equipment heating control systems.
corona losses;
z new developments and approbation in the area of creating distributed (intelligent)
systems for controlling voltage and reactive power.
A number of research works and pilot projects are to be implemented, aimed at creating
standard technical solutions to reduce technological power losses during its transmission.
REMOTE CONTROL AND SECURITY
PJSC FGC UES is introducing an automated process control system (APCS), a set of tools
to automate the tasks of production, engineering, operation and process control of the
UNEG grid facilities, enabling remote control and monitoring of the facility operation to
ensure high operational readiness of the UNEG and system reliability of the UES as a whole.
The development of remote control technology from the Network Management Centres
of PJSC FGC UES, coordinated interaction with JSC SO UES Dispatcher departments
with the optimisation of the facility operation scheme are ensured. This has an effect of
increased facility control while reducing management costs. To ensure the implementation
of the project and the development of the market of management and protection tools,
it is necessary to carry out a set of measures for pilot implementation and development
of regulatory and technical documentation, as well as solving a number of integration
problems and developing appropriate tools.
2016–2025
Systems of technological control of the
level of control centres (SCADA, EMS) and
the level of objects (SSPI, SSPTI), modern
digital measurement systems (monitoring
and diagnostic tools, systems and means
of information and physical protection,
systems for detecting and localising
cybernetic attacks).
POWER QUALITY
The work in this area involves the placement of voltage control devices, a system of
balancing and compensation of voltage harmonics in complex circuit mode nodes of a
grid. So far, a broad class of devices, based on a power electronic hardware, which enable
to impart active characteristics to the elements of the electric grids and ensure control on
a new quality level, have been developed with the participation of the PJSC FGC UES. In
order to scale technology to the distribution system and energy receiving devices of the
industrial consumers, pilot projects, the development of a new type of control systems,
regulatory and legislative adjustments, as well as the establishment of a ramified system of
independent control of the electric power quality are required.
2016–2025
RELIABILITY AND ASSET MANAGEMENT
Development of a methodology for the integrated management of production funds and
assets, based on the planning of technical impacts on equipment, taking into account the
analysis of its current technical condition, costs and potential risks. According to foreign
data, such an integrated approach to the management of business assets reduces the
repair costs by 5–15 % (depending on the region of the Company’s presence), equipment
downtime by 5–20 %, and increases the equipment service life by 5–30 %. This includes
the development of infrastructure for data aggregation, a series of data-processing studies,
the adaptation and implementation of technological innovations that are actively used in
logistics, revision of the regulatory documentation and the introduction of new service
approaches, including maintenance.
2016–2019
(modifica-
tion and
development
of information
services:
2020–2025)
COMPOSITE MATERIALS AND SUPERCONDUCTIVITY
The initiative seeks to implement the Strategy for the Development of the Electric Grid
Complex of the Russian Federation4 , as well as the order of the Russian Government
No. 1307-r of 24 July 2013 on Developing the Composite Materials Industry in terms
of improving performance and reducing the unit cost of investment and meeting the
requirements of a uniform technical policy cycle at all stages of energy facilities through
the development of new technical solutions with the wider use of new structural materials,
the creation of a production base and favouring standard solutions, industry standards and
company standards.
2015–2025
The package of FACTS technologies
(DCD, static thyristor compensator
(STC), controlled shunt reactor
(CSR), phase shifting devices (PSD),
STATCOM), systems of balancing and
compensation of voltage harmonics,
distributed monitoring and control
systems, standard automatic control
systems that make it possible to
regulate several electric power quality
criteria of voltage.
Transaction technologies and asset
management system elements, mobile
terminals of production personnel,
unmanned aircraft, systems for
modelling the consequences of
technological violations, remote
information reading systems from
sensors and RFID tags, systems for
structuring and analysing production
risks, geolocation technologies,
intelligent monitoring and diagnostics
systems, systems of integration
and collective use of production
data, systems of accumulation
and visualisation of production
information (stationary, mobile),
knowledge management systems,
remote training systems and personnel
certification, distribution systems of
positive experience in the operation of
production equipment.
Composite materials for structures
of overhead lines and substations,
composite materials for insulating
products, composite cores and
conductor products, high-temperature
superconductivity technology,
functional coatings of overhead lines,
new insulation materials to ensure
a reduction in consumption for own
needs.
3 Approved by the order of the Government of the Russian Federation on 3 April 2013 No. 511-r
4 Approved by the order of the Government of the Russian Federation on 3 April 2013 No. 511-r.
300
301
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I INFORMATION ON PLANNED AND ACTUAL VALUES OF COSTS FOR THE MAIN
DIRECTIONS OF INNOVATIVE DEVELOPMENT
No.
Innovative Development Directions
1
2
3
4
Shift to digital substations of various voltage classes
Shift to digital active adaptive networks with distributed intelligent automation
and control systems
Shift to the integrated efficiency of business processes and automation of
management systems
The use of new technologies and materials in power industry
Cost plan. RUB
million.
(VAT excl.)
Actual expenses.
RUB million.
(VAT excl.))
43.47
105.04
114.82
282.93
43.47
99.54
112.01
282.93
PARTICIPANTS IN THE DEVELOPMENT OF THE PROGRAMME AND IMPLEMENTATION
OF FGC UES INNOVATION ACTIVITIES
The main participants in the implementation of the Programme in the Company are:
zz The Board of Directors;
zz Investments Committee of the Board of Directors5;
zz Management Board;
zz Chairman of the Management Board;
zz First Deputy Chairman of the Management Board;
zz Deputy Chairman of the Management Board, tasked with
organising the activities of the Innovation and Scientific
and Technological Development Management Unit;
zz Profile Units;
zz Innovative Development Department;
zz Technical Committee;
zz The Committee for the development and improvement
of organisational and technological conditions for the
introduction of innovative and high-tech products at the
electric grid facilities of PJSC FGC UES, including those
produced by SMEs;
zz Subsidiaries and associated companies.
The Programme lists the functions of each of the participants.
MAIN RESULTS OF THE R&D PROGRAMME IMPLEMENTATION FOR 2018
Development Results
Use of Developments
The sets of working design documentation (WDD), unified
single-chain intermediate and anchor-angle supports of
overhead lines, unified double-chain intermediate and
anchor-angle supports of overhead lines 330 and 500 kV,
and foundations for them have been developed.
A prototype of a selective automatic reclosing system for
aerial cable lines with voltage of 110 kV and above has
been developed. (ARS ACL). The prototype is installed
on the ACL 500 kV Zapadnaya – Ochakovo I and II circuit
(Centre MPS).
A software and hardware complex has been designed and
manufactured for recording the processing and analysis
of information using the best available technologies
to optimise the costs of overhead line maintenance
(hereinafter referred to as OHL Monitoring SHS). OHL
Monitoring SHS is installed for pilot production in the
branch of FGC UES — MES Centre.
The prototypes of the software and hardware system for
monitoring climate impacts on the OHL structures have
been developed, taking into account all factors affecting
its accidents and the software and hardware system for
monitoring the state of the OHL, allowing to determine
the pre-emergency condition of the air line and prevent
accidents.
The prototypes were installed on the 110 kV OHL
Olenya–Yamburg 1 of the MES of Western Siberia for pilot
operation.
The economic impact of the use of standardised support structures in
construction and operation can be achieved by reducing the number
of supports and foundations per 1 km of overhead lines, reducing the
number of insulators and line fittings. The analysis of the material
intensity of the overhead line showed that with the use of modified
support structures, the metal consumption can be reduced by 30–50 %
relative to the existing unified supports.
Creating a system of selective automatic reclosing will allow:
z to reduce operating costs by cutting the number of breaker repairs
caused by short-circuit trips;
z to exclude unjustified decrease in the switching resource of switches
when disconnecting unsuccessful recloser;
z to reduce the risk of damage done to cable shields from short-circuit
currents effects;
z to exclude the possibility of a single-phase short circuit within the
cable part of the line in the two- and three-phase;
z to exclude the need to replace a cable that is damaged with the line
turned on again.
SHS will allow to organise a more efficient detection of defects, to
combine a set of diagnostic methods and tools, including the ability to
visualize data into geographic information systems (hereinafter — GIS)
and to optimise the costs of maintenance and repair.
Development of a monitoring system for climatic influences on
structures of overhead lines taking into account all factors affecting
its accident rate (wind speed, icy deposits, minimum and maximum
temperatures, temperature and wind speed during icing, depth of soil
freezing-thawing, etc.) and monitoring systems of the condition of the
overhead line, will allow to determine the pre-emergency condition of
the overhead line and prevent accidents (determination of the effective
mechanical stresses in wires and cables, rolls of the supports, the
presence and size of glacial sediments, etc.).
5 Given the possibility of attracting independent innovation experts from other organisations (including representatives of technology platforms relevant for the Company and
innovative regional clusters, as well as development institutions) on innovation development issues.
302
303
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I PJSC FGC UES CORPORATE STANDARDS (REGULATORY AND TECHNICAL
DOCUMENTS) DEVELOPED IN 2018
No.
Subject area
Service Station Name
Registration number
No.
Subject area
Service Station Name
DOCUMENTS APPROVED IN 2018
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Measurement
PJSC FGC UES standard guidelines for the quality of organisation and performance
of metering process
STO 56947007-
29.240.01.252-2018
Digital
Technologies
Typical test procedures for DSP components for compliance with IEC 61850 first
and second editions
STO 56947007-
29.240.10.253-2018
RPA, Process
automation
system
Recommendations concerning the calculation and selection of parameters for
setting up and triggering devices for Relay Protection and Automation (RPA)
installed in the network of the controlled CPC adjacent to the switch-on point
STO 56947007-
29.120.70.254-2018
OHL, CL, SS
Digital
Technologies
Digital
Technologies
Digital
Technologies
Digital
Technologies
Digital
Technologies
Digital
Technologies
Steel lattice supports of the new unification of 220 kV overhead lines. Guidelines
on the use of pillars of new unification in the design of 220 kV overhead lines
STO 56947007-
29.240.55.255-2018
Technical requirements for hardware and DSP software and electrical equipment
STO 56947007-
29.240.10.256-2018
Digital Substation Networks and communications systems at substations (based
on the IEC 61850 standards group). Part 1. IEC 61850-6
STO 56947007-
29.240.10.257-2018
Digital Substation Networks and communications systems at substations (based
on the IEC 61850 standards group). Part 2 IEC 61850-5
STO 56947007-
29.240.10.258-2018
Digital Substation Networks and communications systems at substations (based
on the IEC 61850 standards group). Part 3 IEC 61850-7-1
STO 56947007-
29.240.10.259-2018
Digital Substation Industrial communication networks. Networks with high
availability for automatic processing. Part 3 IEC 62439-3
STO 56947007-
29.240.10.260-2018
Digital Substation Precise time synchronisation protocol for measuring and control
systems
STO 56947007-
29.240.10.261-2018
11.
RPA, PAS, PCAAS
Guidelines for the design of operational direct current systems (ODSP) of the UNEG
substation. Generic design solutions
STO 56947007-
29.120.40.262-2018
12.
OHL, CL, SS
Substation own needs systems. Generic design solutions
DOCUMENTS UPDATED IN 2018
OHL, CL, SS
Generic technical requirements for tire support for voltage 35–750 kV
STO 56947007-
29.240.40.263-2018
STO 56947007-
29.080.30.073-2011
OHL, CL, SS
OHL, CL, SS
Typical technical requirements for power transformers 6–35 kV for distribution
electrical networks
STO 56947007-
29.180.074-2011
Typical technical requirements for high-voltage inputs of 10–750 kV voltage
classes
STO 56947007-
29.080.20.088-2011
OHL, CL, SS
Generic technical requirements for current transformers 110 and 220 kV
OHL, CL, SS
Generic technical requirements for switchgears for voltage classes 6–35 kV
OHL, CL, SS
Spacers are remote damping.
General technical conditions
STO 56947007-
29.180.085-2011
STO 56947007-
29.130.20.104-2011
STO 56947007-
29.120.10.158-2013
1.
2.
3.
4.
5.
6.
304
Registration number
STO 56947007-
29.180.078-2011
7.
8.
9.
OHL, CL, SS
Generic technical requirements for 500 kV shunt reactors
OHL, CL, SS
OHL, CL, SS
Generic technical requirements for combined current and voltage transformers
110 and 220 kV
STO 56947007-
29.180.080-2011
Methodical directions on the use of power cables with insulation of cross-linked
polyethylene for a voltage of 10–35 kV
STO 56947007-
29.060.20.020-2009
10.
OHL, CL, SS
Guidelines for the use of ice detectors and forecasting of icing hazard
11.
OHL, CL, SS
Uninsulated wires having normal construction. General technical requirements
12.
OHL, CL, SS
Tension fittings for overhead lines. Technical requirements
13.
OHL, CL, SS
Supporting fittings for overhead lines.Technical requirements
14.
OHL, CL, SS
Connection fittings for overhead lines.Technical requirements
15.
OHL, CL, SS
Contact fittings for overhead lines Technical requirements
16.
OHL, CL, SS
Protective fittings for overhead lines. Technical requirements
STO 56947007-
29.240.55.113-2012
STO 56947007-
29.060.10.079-2011
STO 56947007-
29.120.10.061-2010
STO 56947007-
29.120.10.062-2010
STO 56947007-
29.120.10.063-2010
STO 56947007-
29.120.10.065-2010
STO 56947007-
29.120.20.066-2010
Methodological Guidelines for conducting periodic technical examination of UNEG
SS electrical equipment
STO 56947007-
29.240.10.030-2009
A model programme of acceptance tests of automated process control systems
completed by the construction of JSC FGC UES substations
STO 56947007-
25.040.40.012-2008
Accuracy standards for mode and process parameters measured at the
PJSC FGC UES facilities. Methodological Guidelines for determining the
metrological characteristics of measuring channels and complexes
20.
RPA, PAS, ECM
AMIS
Devices for collecting and transmitting data from automated information and
measuring systems for commercial metering of electricity (ECM AMIS). Typical
technical requirements
21.
OHL, CL, SS
Rules for preparation of wiring schematic diagrams of substations
STO 56947007-
29.240.01.244-2017
STO 56947007-
35.240.01.188-2014
STO 56947007-
29.240.10.249-2017
PLANS TO PREPARE REGULATORY AND TECHNICAL DOCUMENTS
It is planned to prepare 33 new company standards (such as STO) for typical cabinets as well as to update 19 existing company
standards following their implementation.
305
17.
OHL, CL, SS
18.
RPA, Process
automation
system
19.
Measurement
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I SCIENTIFIC AND TECHNICAL PARTNERSHIP
Interaction with the entities of the innovative industry
ecosystem — institutions of innovative development,
technology platforms, higher education institutions and
research and development organisations, equipment
manufacturers — is one of the objectives stipulated by the
Innovative Development Programme.
In 2018, the focus was on the priority areas of scientific and
technical development associated with digitalisation, namely:
Digital Substation, Digital Designing, and Remote Control
and Safety. Financing of these operations amounted to
RUB 256 million (43 % of the total R&D funds), that is 54 %
more than in 2017.
Key partners of the Company in scientific and research and
development operations are:
zz JSC NTC FGC UES;
zz Tomsk Polytechnic University;
zz Unitel Engineering LLC;
zz JSC RT Soft;
zz JSC IAES.
Besides, FGC UES cooperates with organisations of the
Ministry of Energy of Russia. In 2018, FSBO Russian Energy
Agency was commissioned by the Company to prepare the
final report on the analysis of the technical development and
efficiency indicators of FGC as compared with leading similar
foreign companies
PLANS FOR 2019 AND MEDIUM TERM
The Company plans to achieve the following effects in the framework of the Innovative Development Programme:
1) Growth of the R&D Programme planning and
implementation quality and efficiency aimed at:
zz compensating resourcing reduction of the Company’s
Investment Programme;
zz maximum focus on the most advanced and crucial
directions of innovative activities.
2) Updating “open innovation” tools to cooperate with
partners in FGC innovative development, including:
zz development and promotion of public documents and
Internet resources related to Company’s innovative
development for its partners and contractors;
zz assure development of innovative competence centres
established jointly with the Company or with its support on
the basis of university labs, chairs, departments and small
innovative subsidiaries, as well as innovation contests;
zz development of public and private partnership mechanisms;
zz development of instruments for knowledge, competencies
and Company’s operations management to use at
maximum the internal potential of FGC UES.
NATURAL CAPITAL
ENVIRONMENTAL POLICY
The main directions of the implementation of the Environmental Policy:
zz compliance with the requirements and norms established
by the environmental legislation of the Russian Federation
and international legal acts in the field of environmental
protection;
zz compliance with the standards of permissible
environmental impact, established by the environmental
legislation of the Russian Federation;
zz priority of taking precautionary measures on measures to
eliminate environmental damage;
zz use of the best available technologies in the production
process, ensuring compliance with environmental
requirements and minimising the negative impact on the
environment;
zz limiting the management of production and construction
activities in areas of special conservation importance;
zz ensuring the conservation of biological diversity;
zz phased decommissioning of equipment containing
polychlorinated biphenyls and its replacement by
environmentally safe equipment;
zz management of generated waste products and their
environmentally safe handling;
zz improvement of environmental management system.
RESULTS OF IEA AND EXTERNAL ENVIRONMENTAL SUPERVISION
GRI 307-1
The number of non-compliances identified during the 2018
internal environmental audit per one inspected facility reduced
by 2.11 % over the previous year which proves the efficiency
of the FGC UES’s activities for minimisation of the adverse
environmental impact.
In 2018, the territorial authorities of Rosprirodnadzor and
Rospotrebnadzor conducted seven inspections in FGC UES’s
branches (MPS/EMPS) to check the compliance with the
environmental legislation; following inspection results, 3
corrections were recommended and 1 fine of RUB 5,000 was
imposed on an official. One correction was implemented
in 2018; the deadline for the two other corrections was set
for 2019.
306
307
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I PAYMENTS FOR NEGATIVE IMPACT ON THE ENVIRONMENT
Dynamics of evolution of
payments for negative
impact on the environment
2014–2018, RUB mln
Surplus
Normative
2.6
4.3
2.6
3.9
1.4
3.1
1.7
2.7
1.2
1.5
2014
2015
2016
2017
2018
Reduction of payments for negative impact on the environment
is associated with the abolition of charges for emissions of
pollutants from mobile sources of emissions, as well as for
discharging pollutants into the relief.
The main reason for the presence of excess fees is the
absence of permits for emissions, discharge of pollutants
and waste disposal, removal of generated waste to landfills
that are not included in the state register of waste disposal
facilities due to their absence in the area of the substation
location.
AIR POLLUTANT EMISSIONS
GRI 305-7
Indicators
Gross emission of harmful substances to air, total
including:
solid
including:
solid fuel ash
gaseous and liquid
including:
sulphur dioxide
carbonic oxide
nitrogen oxide (re-calculated to NO2)
carbon hydride (without volatile organic compounds)
volatile organic compounds
benzopyrene
EMISSIONS OF GREENHOUSE GASES
GRI 305-1, 305-5
UOM
t
t
t
t
t
t
t
t
t
t
Report
2014
2015
2016
2017
2018
184.00
221.06
226.69
182.12
171.13
5.91
8.62
9.34
8.33
7.69
0.00
0.83
1.10
1.10
1.09
178.09
212.45
217.34
173.79
163.44
1.14
1.58
1.74
1.94
2.14
42.82
51.15
50.47
49.67
48.77
6.02
7.69
7.91
9.39
10.78
49.61
46.26
41.15
23.49
16.81
68.38
94.41
103.41
78.06
73.14
0.02
0.00
0.00
0.00
0.00
USE OF WATER RESOURCES
Use of water resources by PJSC FGC
GRI 303-1 Water consumption, thousand m3
Total, including:
from surface water sources
from underground sources
from centralised water supply systems
from other sources
GRI 306-1 Water discharge, thousand m3
Total, including:
Water discharge into centralised systems
Water discharge into surface water bodies, including:
without treatment
insufficiently treated
normally treated
2018
799.5
73.3
481.6
237.9
6.7
373.84
319.66
54.18
0.0
28.12
26.06
No repeated use of water discharges by other organisations takes place.
ENERGY EFFICIENCY AND INTERNAL ENERGY CONSUMPTION
2018 energy saving results6 :
zz Equipping buildings, constructions, structures with
metering devices for water, natural gas, thermal and
electric power. Progress: 100 %.
zz Reduction in specific electric power consumption by
substations per 1 conventional equipment item was 1.31 %,
whereas the target value was 0.5 %.
zz Reduction in specific electric power consumption by
buildings, constructions, structures per 1 square meter
was 1.03 %, whereas the target value was 3.4 %.
zz Reduction in specific thermal power consumption by
buildings, constructions, structures per 1 square meter
was 1.2 %, whereas the target value was 5.8 %.
zz Reduction in specific consumption of petrol used by FGC
to provide electric power transmission services via UNEG,
per 1 km of vehicle mileage was 2.9 %, whereas the target
value was 0.4 %.
zz Reduction in specific consumption of diesel fuel used by
FGC to provide electric power transmission via UNEG, per
1 km of vehicle mileage was 1.8 %, whereas the target
value was 0.5 %.
zz LED lighting devices installation (% of the total number
of lighting devices) was 30 %, whereas the target value
was 30 %.
In the process of transmission and distribution of electricity
due to losses in electrical grids and the consumption of
electricity for the needs of substations, indirect emissions
of greenhouse gases are formed.
In order to reduce indirect greenhouse gas emissions, FGC
implements measures set forth in the Energy Saving and
Energy Efficiency Programme of the Unified National Electric
Grid (UNEG) for 2015–2019.
The Company does not estimate greenhouse gas emissions.
6 Planned target values are defined by the FAS of Russia.
308
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APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
MEASURES TO REDUCE CONSUMPTION OF ELECTRIC AND THERMAL POWER,
RESOURCES AND POL
The key measures aimed at reducing the consumption of
electric and thermal energy in buildings, structures and
installations:
zz improving heat insulation of building and structures;
zz replacement of window structures with energy efficient
ones (dome and ribbon windows);
zz replacement of old lamps with new energy-saving ones
(mainly LED);
Main activities aimed at reducing consumption of petrol, oil
and lubricants:
zz technical control of operation of vehicles (alignment of
wheels, tyre pressure control, replacement of oil, filters,
spark plugs, injection of fuel nozzles, etc.);
zz adjustment of fuel consumption rates;
zz purchasing of the injection engine test benches;
zz equipping of vehicles with satellite positioning equipment
zz installation of a lighting control system (installation of
for continuous monitoring;
zz optimising traffic routes, educating personnel, and, when
possible, priority loading with minimum specific fuel
consumption.
motion and presence sensors);
zz replacing the old doors, entrance units and gates with new
energy efficient ones;
zz modernisation of heating, ventilation and air-conditioning
systems;
zz installation of reflective shields behind the heating
appliances;
zz control of operation modes of heating units;
zz optimising operation of heating, air-conditioning, lighting
of the buildings, and disconnecting of office equipment,
electric appliances with the appointment of responsible
persons.
GRI 302-1 The volume of energy resources used in FGC
No.
Types of resources
Measurement unit
Target 2018
Actual 2018
Deviation, %
1.
Nuclear energy *
2.
Thermal energy in
administrative buildings
Electric energy
in administrative buildings
powered from third-party
sources
Electromagnetic energy *
Oil*
3.
4.
5.
6.
Gasoline for cars
7.
Diesel fuel
8.
9.
Heating oil*
Natural gas *
10.
Coal*
11.
Oil shale*
12.
Peat*
13.
Other*
In physical terms
In monetary terms
In physical terms
In monetary terms**
In physical terms
In monetary terms**
In physical terms
In monetary terms
In physical terms
In monetary terms
In physical terms
In monetary terms**
In physical terms
In monetary terms**
In physical terms
In monetary terms
In physical terms
In monetary terms
In physical terms
In monetary terms
In physical terms
In monetary terms
In physical terms
In monetary terms
In physical terms
In monetary terms
–
–
37.11
thousand Gcal
RUB 63,775.82
thousand
VAT excl.
29,654.85
thousand
kWh
–
–
39.87
thousand Gcal
RUB 68,510.67
thousand
VAT excl.
31,071.13
thousand kWh
RUB 131,198.28
thousand
VAT excl.
RUB 137,464.14
thousand
VAT excl
–
–
–
–
–
–
–
–
6,412.24
thousand l
RUB 225,895.56
thousand
VAT excl.
5,988.04
thousand l
5,587.53
thousand l
RUB 196,841.95
thousand
VAT excl
9,263.71
thousand l
RUB 218,482.11
thousand
VAT excl.
RUB 337,999.67
thousand
VAT excl
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7.4
7.4
4.8
4.8
–
–
–
–
-12.9
-12.9
54.7
54.7
–
–
–
–
–
–
–
–
–
–
–
–
* The resource is not used in FGC and in accordance with order of the FAS of Russia No. 508-e of 26 March 2014 is not a resource in respect of which the target indicators are set.
** The value in monetary terms is indicated from the calculation of the average cost of an energy resource per year.
The base year is the previous year from the reporting year in accordance with order of the Federal Tariff Service of Russia
No. 508-e of 26 March 2014 On Establishing Requirements for the Programme for Energy Saving and Improving the Energy
Efficiency of PJSC FGC UES for 2015–2017 (the base year for 2018 is 2017).
310
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APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I HUMAN CAPITAL
GRI 102-8, 103-2
PERSONNEL POLICY RESULTS
HEADCOUNT AND PERSONNEL COMPETENCY
Information on the Company’s staff strength as of 31 December 2018
Men, persons
Women, persons
Headcount, persons
GRI 401-1
18,577
3,725
22,302
Employees hired in 2018 with a breakdown by age, gender and branch
Gender
Age
Executive Office
MPS Centre
MPS North-West
MPS Volga
MPS South
MPS Urals
MPS Siberia
MPS West Siberia
MPS East
Total
%
87
458
308
130
280
220
340
249
195
3.84
20.20
13.59
5.73
12.35
9.70
15.00
10.98
8.60
M
45
358
235
107
242
179
287
216
173
F
42
100
73
23
38
41
53
33
22
Total for PJSC FGC UES
2,267
1,842
425
Employees fired in 2018 with a breakdown by age, gender and branch
under
25 years
from
25 to 50
years
above 50
years,
pensioners
Working
pensioners
7
154
87
44
80
69
100
52
81
674
75
259
186
83
179
136
230
182
108
5
45
34
3
19
14
10
15
6
1,438
151
0
0
1
0
2
1
0
0
0
4
Gender
Age
Total
%
Executive Office
MPS Centre
MPS North-West
MPS Volga
MPS South
MPS Urals
MPS Siberia
MPS West Siberia
MPS East
91
505
375
194
287
251
273
166
207
Total for PJSC FGC UES
2,349
312
7.10
4.95
4.89
2.42
6.67
3.05
3.93
5.21
5.00
4.64
M
43
345
282
129
237
187
207
132
171
F
48
160
93
65
50
64
66
34
36
under
25 years
from
25 to 50
years
above 50
years,
pensioners
Working
pensioners
6
161
87
57
86
61
87
47
77
61
254
186
98
187
145
169
107
111
9
47
61
9
5
19
9
6
9
15
43
41
30
9
26
8
6
10
188
1,733
616
669
1,318
174
Staff structure: education
80 %
60 %
40 %
20 %
0 %
60.9 %
38.6 %
63.0 %
63.0 %
63.0 %
64.0 %
36.4 %
36.5 %
36.6 %
35.6 %
0.1 % 0.4 %
0.1 % 0.4 %
0.1 % 0.4 %
0.0 % 0.3 %
0.0 % 0.3 %
2014
2015
2016
2017
2018
PhD
Candidate
of Science
Higher education
Vocational training
STAFF TRAINING AND DEVELOPMENT
TRAINING, RETRAINING AND ADVANCED TRAINING
Human resources and digital transformation
The main challenge of the digital economics is the changes
in staff training which are possible only in cooperation of
the state, higher education establishments and companies.
In 2017 under the auspices of the Russian Ministry of Energy,
the Russian Ministry of Education and Science and RNC
CIGRE, PJSC FGC UES organised a round table discussion:
“New professions in electrical power industry in the era of
digital economics”, where the key areas were identified:
Due to the introduction by the company of substations with
remote control of switching devices, PJSC FGC UES needs
specialists familiar with digital control systems of power
facilities. Therefore, a new programme has been developed
in cooperation with the National Research University Moscow
Power Engineering Institute to retrain company specialists
servicing relay protection and automatics devices. 70 staff
members completed the training.
zz Development and retraining of company’s personnel;
zz Training of specialists in new professions/ disciplines at
establishments of higher education;
zz Development of cooperation with the international
scientific community.
Taking into account the importance of specialist training in
new professions/ disciplines, a joint master’s programme
has been developed in cooperation with the National
Research University Moscow Power Engineering Institute
“Smart protection, automatics and control systems for power
systems control”; first students were enrolled in 2018.
A share of FGC UES employees who took part in trainings and a share of the training costs in 2018 payroll budget
100 %
90 %
80 %
70 %
60 %
50 %
40 %
30 %
20 %
10 %
0 %
81 %
79 %
0.75 %
0.65 %
67 %
54 %
55 %
45 %
43 %
51 %
0.53 %
73 %
0.64 %
0.51 %
41 %
40 %
0.74 %
56 %
44 %
40 %
0.25 %
0.02 %
1.0%
0.8%
78 %
0.77 %
72 %
59 %
0.62 %
58 %
0.61 %
0.6%
47 %
Executive
UES Volga
UES East
UES Western
Siberia
UES
Northwest
UES Siberia
UES Ural
UES Centre
UES South
Society
average
Share of employees who
received training, %
Share of those who received training
in our own training centres, %
Share of training costs
in the payroll budget, %
0.4%
0.2%
0.0%
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APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I
Programmes implemented by the Company’s Personnel Training Centres
GRI 404-2
In order to ensure transparency and to verify the quality
of training organised by the Personnel Training Centres,
PJSC FGC UES arranges for professional public certification
of corporate advanced training programmes. In 2018 the
most popular programmes were certified:
zz advanced training programme for operation personnel
of substations and administrative and engineering staff
allowed to operate substations;
zz specialist training in: “Safe methods and procedures of
working at height without scaffolding for group 2 staff.”
The Personnel Training Centres are the main platform for
professional competitions. During the period in question,
3 Interregional Professional Competitions were held:
zz competitions of operation personnel and EMPS GCC staff;
zz personnel competitions in OHL M&R;
zz APCS staff competitions.
In 2018 the Department of RZM and PAS organised a remote
competition for RPA personnel (using digital technologies)
in cooperation with the Personnel Training Centre. The event
was attended not only by PJSC FGC UES’s staff, but also by
representatives of PJSC Lenenergo and Belenergo (Belarus).
Based on the results of the All-Russian Professional Skill
Competition “The best duty electrician of 2018”, held under
the auspices of the Ministry of Energy of Russia, the 1st place
was awarded to a specialist of PJSC FGC UES.
PERSONNEL ASSESSMENT
In 2018, employees of PJSC FGC UES participated
in the Young Professionals Open Corporate Championship of
Professional Excellence, held by PJSC Rosseti according to
the WorldSkills procedure, in the following areas of expertise:
zz operation of cable power lines;
zz maintenance and repair of the relay protection and
automation equipment.
Pursuant to the training licence, the Personnel Training
Centres of PJSC FGC UES organise trainings not only for its
own staff, but they also implement complex training projects
for third-party customers.
In 2018, the training centres of the Federal Grid Company
trained 1,178 people for third-party customers.
Within the scope of development of partnership with
the Vietnamese State Power Grid Company, in 2018
the Personnel Training Centre organised training for 35 specialists
of EVN NPT in Hanoi using special advanced training
programmes:
zz an advanced training programme for specialists in NDE of
substation equipment;
zz an advanced training programme for specialists in
organisation and implementation of power transformer
repairs.
The main assessment principles are as follows:
zz comprehensiveness (identification of the highest
number of factors characterising staff performance and
professionalism and management performance);
zz objectivity (assessment relates to unbiased staff
performance and actual competencies demonstrated,
due to involvement of a large number of respondents
including external experts, as well as use of special tools);
zz openness, flexibility and transparency of assessment
criteria and methods;
zz staff criteria differentiation depending on different staff
categories.
Enhanced staff reliability project
In order to reduce the number of technical violations due
to erroneous actions of staff, PJSC FGC UES has been
implementing a long-term project to enhance staff reliability.
The project covers:
zz staff knowledge checks using remote technologies;
zz psychological diagnostics of personnel;
zz special trainings.
For assessment of risky behaviour of the staff, a set of
modern remote psychophysiological tests is used which
was developed taking into account the Company’s specifics
and needs.
The differentiation algorithm allows identifying staff reliability
categories: high reliability, stable performance, operation
disruption risk, as well as low reliability and “dual” risk area
following knowledge assessment and psychological testing.
In 2018, the project enrolled 1,236 employees directly involved
into RPA and emergency operation.
A scenario for project participants was developed and
implemented taking into account reliability category. Special
attention was paid to employees in the “dual risk area”
(following psychological assessment results and those who
made at least 3 mistakes in knowledge check). They were
subjected to psychophysiological examination, additional
training and knowledge re-assessment.
The key project outcome is the reduction in the number of
process violations caused by erroneous actions by FGC UES’s
staff.
Introduction of professional standards and the Centre for Qualification Assessment
In 2018, PJSC FGC UES exerted major efforts to assess staff
qualification correspondence to professional standards.
11,317 employees were assessed. The results were used to
shape an activity programme up to 2022, within the scope
of which in 2018 165 employees had advanced training and
re-training, 578 employees will complete their training in 2019.
277 company employees will receive higher education.
JSC NTC FGC UES was used as the basis for the Centre
for Development and Assessment of Qualifications in the
Electric Grid Complex (CDA). During the period in question,
draft regulation on the Centre, job descriptions, procedure for
organisation and execution of qualification assessment were
prepared. Assessment tool developers in PJSC FGC UES were
trained in the National Qualification Development Agency.
In 2018, 4 assessment tools were developed and approved,
their testing is scheduled for February–March 2019 at
examination sites of the Personnel Training Centres of MPS
East (APCS staff) and MPS Centre (OHL M&R staff).
Company staff reserve
Production staff reserve
of PJSC FGC UES
267 employees
“Chief Engineer School is a long-term
multi-level project for prospective
specialists
50 employees
Youth staff reserve
42 employees
The reserve is formed for:
z improving the reliability of electric grid facilities;
z formation of the optimal professional and qualification structure of personnel;
z training of reservists able to quickly take targeted, vacant or newly vacated positions.
The reserve was formed on the positions of the head of the structural unit and the
deputy head of the structural subdivision of the branches of FGC in the following areas:
z relay protection and automation;
z operation of substation equipment;
z information technology systems;
z operational and technological management;
z power line.
The project aims at training employees for the managerial positions of the Chief
Engineer’s units in the Company’s branches and ensures management succession in
technological processes.
The reserve was created with the aim of forming a system for transferring knowledge
and experience, as well as motivating young Company employees and furthering their
advancement along the career ladder.
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APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I YOUTH POLICY
Cooperation with specialised educational establishments
Annually PJSC FGC UES cooperated with approx. 80 establishments of higher education and 40 specialised secondary
educational establishments, including contractual cooperation with 52 and 13 establishments, respectively.
Key areas of cooperation:
zz training, professional retraining and advanced training
of employees (69 students are getting their employer-
sponsored education in 12 higher educational
establishments under employer-sponsored education
agreements);
zz arrangements for practical staff training, including
organisation of on-the-job training for students at the
facilities of PJSC FGC UES (2018: 960 students), summer
work for students at construction sites (2018: 194
students), Young Engineer School for undergraduates in
Personnel Training Centre Bely Rast (2018: 27 students);
zz professional orientation including organisation of
introductory tours at Company’s production sites
(2018: 1,440 people), All-Russia Day of PJSC FGC UES
in educational institutions (2018: 3,000 students and
teachers);
zz staff support of the educational process. Approx.
50 employees of the Company are tutors of student
qualification papers or take part in thesis defence or state
examination committees;
zz improvement of educational standards and professional
competences in cooperation with educational
establishments. Training programmes and graduation and
course papers are integrated and adapted to the production
specifics of PJSC FGC UES;
zz modernisation of educational and scientific infrastructure
of educational establishments. Annually the Company
supports educational establishments in purchase of
lab equipment and classroom modernisation. In 2018,
PJSC FGC UES assisted in modernisation of the lab
unit at the Relay Protection and Automation of Power
Systems of the National Research University Moscow
Power Engineering Institute;
zz participation of students and post-graduates in events
organised by PJSC FGC UES.
SOCIAL SECURITY
STAFF HEALTH SUPPORT
GRI 403-6
Support of healthy lifestyle
In 2018, FGC UES’s indoor soccer, volleyball, basketball,
swimming, table tennis, racing and other teams participated
in corporate tournaments of PJSC Rosseti and in tournaments
organised in cooperation with the Ministry of Energy.
In September 2018, FGC’s team participated in the Far East
Corporate Games held in Vladivostok within the scope of
the sporting programme of the Eastern Economic Forum.
In May 2018, the corporate indoor soccer tournament
of PJSC FGC UES was held. In August 2018, the 4th corporate
GTO Spartakiad took place.
In November 2018, the VIII Traditional Open Chess
Tournament of Power Engineers in memory of M. Botvinnikov
was organised by PJSC FGC UES and JSC NTC FGC UES.
The tournament welcomed 37 teams of power companies,
equipment manufacturers, scientific and research institutes,
establishments of higher education.
AWARD POLICY
Corporate awards of PJSC FGC UES
PJSC FGC UES has established the following awards:
zz the title Honoured Employee of Federal Grid Company,
zz the title Veteran of Federal Grid Company,
zz a badge of honour For contribution to the development
of Federal Grid Company, First Class and Second Class,
zz a badge of honour For Professional Skills,
zz a badge of honour For Construction and Reconstruction
of Electric Grid Facilities,
zz putting a photo to the Recognition Board of PJSC FGC UES,
zz honorary Diploma,
zz letter of Commendation.
Nominees for awards can be employees having the credit
of the state, power industry, PJSC FGC UES, showing
high performance and competences in management,
demonstrating high results in operation, construction and
reconstruction of power grid facilities, in development,
exploration and introduction of new machinery and
technologies, those who have implemented progressive
labour organisation methods, showed professionalism in
accident prevention and liquidation, power facilities recovery,
respected and with good account among colleagues,
advocating corporate values and abiding by them.
Following the year results, the staff of PJSC FGC UES
branches ensuring reliable equipment operation, showing
high performance results and good results in exploration and
introduction of new machinery and technologies, are awarded
“Best branch of the Federal network company – MPS”
and “Best Enterprise of Federal Grid Company – EMPS.”
In 2018, awards were given to 1,456 employees
of PJSC FGC UES, its subsidiaries and contractors, of which:
zz 2 employees were given state awards and awards
of the President of the Russian Federation;
zz 10 employees were awarded by the Electric Power Council
of the Commonwealth of Independent States;
zz 101 employees received awards from the Ministry
of Energy of the Russian Federation;
zz 138 employees were awarded by the Association ERA
of Russia;
zz 205 employees who made major contributions to
the development of the electric grid complex received
corporate awards from PJSC Rosseti;
zz 1,000 employees were given corporate awards
of PJSC FGC UES.
Employees of PJSC FGC UES subsidiaries received awards
from the entities of the Russian Federation and subsidiaries
for their contribution to the development of the regional
electric grid system.
For ensuring reliable operation of equipment, development and
introduction of new equipment and technologies, introduction
of progressive forms and methods of labour organisation and
management the title “The best branch of the Federal Federal
network company – MPS” was awarded to the branch MPS
of Siberia, the title “Best Enterprise of the Federal Network
Company – EMPS” to the branch West-Siberian Enterprise of
Main Electric Networks.
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APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I OCCUPATIONAL SAFETY
MAIN OBLIGATIONS OF THE COMPANY
IN THE AREA OF OCCUPATIONAL SAFETY
GRI 103-2
The Company’s main obligations in the area of occupational safety include:
zz ensuring priority of preservation of life and health
of workers in the process of their work over results
of production activity;
zz demonstrating the commitment of top management and
managers at all levels of management to occupational
safety issues;
zz ensuring compliance of production activities with the state
regulatory requirements of labour protection, requirements
of international agreements, industry-wide and local
statutory regulations on labour protection;
zz ensuring safe working conditions of employees at power
grid facilities, prevention of injuries and deterioration
of health of employees;
zz prevention of injuries of any third parties on the territory
of the power grid complex of PJSC FGC UES;
zz ensuring the prevention of any emergencies, accidents
and incidents;
zz identification of hazards at workplaces, assessment
and effective management of professional risks with
due regard for the distinctive features and specificity
of production activities;
zz ensuring the timely modernisation of power grid facilities,
replacement of equipment, improvement of production
and technological processes, providing workers with high-
quality tools and devices, efficient means of individual and
collective protection;
zz stimulating the introduction of innovative approaches and
technologies ensuring the safety of workers in the course
of production activities;
zz continued improvement and enhancement of efficiency
of the occupational safety management system with
due regard for the modern methods, standards and best
practices in the area of occupational safety;
zz developing a culture of safe behaviour among workers
and ensuring compliance with the labour protection
requirements in the process of labour activity;
zz establishing and maintaining the required level of
competence of managers, specialists and other employees
in order for them to carry out their duties related to ensuring
and complying with the occupational safety and labour
protection requirements;
zz creating conditions for maximising support of competent
and qualified employees for a long-term professional job;
zz increasing the motivation of employees to comply with
the requirements of occupational safety in the process of
labour activities and to improve their level of qualification;
zz taking actions to encourage the contractors’ employees
to comply with the labour protection requirements while
carrying out works at the facilities of PJSC FGC UES;
zz carrying out consultations and encouraging employees
and their representatives to actively participate
in the management of occupational safety and ensuring
safe working conditions;
zz mainstreaming the occupational safety in order to prevent
injuries and occupational diseases of workers.
NORMS AND STANDARDS IN LINE WITH THE COMPANY’S
OCCUPATIONAL SAFETY MANAGEMENT SYSTEM
The Company’s Occupational Safety Management System meets the following requirements:
zz Federal Law No. 197-FZ of 30 December 2001 (Labour
Code of the Russian Federation);
zz Model Regulations on the Occupational Safety Management
System, approved by the Order of the Ministry of Labour
of the Russian Federation No. 438n of 19 August 2016;
zz OHSAS 18001-2007. Occupational disease prevention and
safety management system. Specification;
zz GOST 12.0.230-2007. Occupational health and safety
management systems. General requirements (enacted by
Order of Rostekhregulirovanie No. 169-st of 10 July 2007);
zz GOST 12.0.230.1-2015. Occupational health and safety
management systems. Guidelines for the use of GOST
12.0.230-2007 (enacted by Order of Rosstandart
No. 603-st of 9 June 2016);
zz GOST 12.0.230.2-2015. Occupational health and
safety management systems. Conformity assessment.
Requirements (enacted by Order of Rosstandart
No. 603-st of 9 June 2016);
zz GOST R 12.0.010-2009. Occupational health and safety
management systems. Definition of hazards and risk
assessment (enacted by Order of Rostekhregulirovanie
No. 680-st of 10 December 2009).
PROPOSALS ON RESPONDING TO THREATS IDENTIFIED IN THE COURSE OF THE OCCUPATIONAL RISK
ASSESSMENT:
zz forming a list of equipment requiring replacement or repair
under the operations safety conditions;
zz elimination (prevention) of hazards and reduction of risks;
zz improvement of staff professional training,
psychophysiological training of personnel for work at
potentially dangerous workplaces;
zz measures to mitigate the risk of injuries are included in the
action plans intended to improve work environment and
occupational health and safety conditions, and to reduce
occupational risk levels in the Company;
zz monitoring the efficiency of taken decisions and their
adjustment, monitoring the implementation of the risk
management plan and future planning of improvement of
the labour protection activities in the Company.
PROFESSIONAL SKILL COMPETITIONS
Based on the results of the All-Russian Professional Skill
Competition “The best duty electrician of 2018”, held under
the auspices of the Ministry of Energy of Russia, the 1st place
was awarded to a specialist of PJSC FGC UES.
In 2018, employees of PJSC FGC UES participated in the
Young Professionals Open Corporate Championship of
Professional Excellence, held by PJSC Rosseti according to
the WorldSkills procedure, in the following areas of expertise:
zz operation of cable power lines;
zz maintenance and repair of the relay protection and
automation equipment.
REGULATORY FRAMEWORK FOR INVESTIGATIONS OF WORKPLACE ACCIDENTS
zz Federal Law No. 197-FZ of 30 December 2001 (Labour
Code of the Russian Federation);
zz Ordinance of the Ministry of Labour of the Russian
Federation No. 73 of 24 October 2002 “On approval
of forms of documents required for investigation and
recording of workplace accidents, and Regulations on
features of investigation of workplace accidents in certain
industries and organisations”.
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AVOIDANCE AND PREVENTION
GRI 403-1, 403-3, 403-4
FGC UES includes business subdivisions of occupational
safety and reliability (BSOSR), comprising qualified and trained
experts compliant with professional standard “Specialist
in the area of occupational safety” 7 .
Each BSOSR comprises both stationary and mobile
occupational safety offices. All production facilities are
furnished with the occupational safety and health desks.
AUTHORISED OCCUPATIONAL SAFETY PERSONNEL
An important element of labour protection management
is the engagement of workforce in creation of healthy
and safe working conditions through authorised (trusted)
occupational safety personnel. The authorised occupational
safety personnel monitors the level of work environment
and occupational health and safety conditions in their
respective business subdivisions, as well as compliance
with the requirements of labour protection standards by
the business subdivision employees. All authorised personnel
OCCUPATIONAL HEALTH AND SAFETY COMMITTEES
Occupational health and safety committees have been
established at all levels of the Company management structure
(executive office, MPS, EMPS). In 2018, the Committees’
decisions were implemented on all the addressed issues.
Meetings of the workforce of business operating units
of the branches of PJSC FGC UES – EMPS have appointed
the operating personnel authorised in the area of
occupational safety. Each branch of MPS (EMPS) comprises
the Occupational Safety Committees.
has undertaken occupational safety training courses
at the specialised organisations in a timely manner.
Due to the efforts of the authorised occupational safety
personnel, the number of inspections of workplaces and
working teams has been increased in order to prevent any
violations of the occupational health and safety legislation
requirements.
The number of the Occupational Health and Safety Committee
employees is 979, including 406 staff representatives (41.5 %).
The FGC has 45 operating Occupational Health and Safety Committees. In 2018, 278 meetings of the Committees were held.
PERSONNEL PROTECTION
AGAINST HARMFUL PRODUCTION FACTORS
GRI 403-2
The main harmful production factors which may have a
negative impact on workers' health status at workplaces
include:
zz physical factors (microclimate, temperature and relative
humidity, noise, electromagnetic fields, etc.);
zz chemical factors (chemicals and mixtures measured in
the workplace air);
zz labour process severity (physical dynamic load, working
posture, weight of lifted loads, etc.);
zz labour process intensity (duration of concentrated
observation, impact on vocal apparatus, etc.).
The Company performs systematic actions to identify injury-
causing equipment, places and mechanisms used, which
is a part of the systematic hazard identification and risk
assessment activities carried out by the Company, including:
zz workplace hazards identification and employee injury risks
estimation;
zz identification and creation of lists of injury-causing
equipment and mechanisms used requiring replacement
or repair under the safe operation conditions;
zz organisational arrangements (fencing of electromagnetic
field exposure areas, location of workplaces and service
personnel flow routes at sufficient distances from
electromagnetic sources, ensuring compliance with the
maximum allowable levels);
zz engineering and technical measures (installation of
biological EMI protection along the traffic routes,
introduction of new technologies and application of
personal EMI protection equipment).
Activities planned and carried out in 2018 include measures
intended to eliminate substandard operation of the supply and
exhaust ventilation at chemical laboratories and permanent
stations of arc welders, procurement of sophisticated
respiratory protection equipment for electric and gas welders,
provision of appropriate special clothing for personnel in
compliance with the typical industry standards for the
personal protection means allocation.
Measures planned to be implemented in 2019 are intended to
reduce harmful production factors exceeding the allowable
levels at such workplaces, and to carry out an unscheduled
special assessment of labour conditions (SALC).
zz development of (short-term and forward-looking)
measures to eliminate (reduce) hazards, with their
subsequent inclusion in the action plans intended to
improve work environment and occupational health and
safety conditions, and to reduce occupational risk levels;
Based on the results of the SALC, action plans are to be
developed and approved which are intended to improve work
environment and occupational health and safety conditions,
and to reduce occupational risks in the Company, including
the arrangements for:
zz assessment of sufficiency and efficiency of the measures
taken to reduce the injury rate.
zz accident prevention;
zz carrying out sanitary and hygienic measures to prevent
In order to reduce the impact of electromagnetic field at
workplaces (substations and overhead power transmission
lines of 330 kV and above), the following actions are carried
out:
industrial diseases;
zz overall improvement of labour conditions;
zz providing personnel with personal protective
equipment, etc.
APPROACHES TO THE OCCUPATIONAL HEALTH AND SAFETY IMPACTS MANAGEMENT
THROUGH INTERACTION WITH BUSINESS PARTNERS AND CONSUMERS
GRI 403-7 In case any violations of the labour protection requirements are detected in the course of unannounced inspections
of the contractors’ teams working at the Company’s electric grid complex facilities, a notice shall be sent to the contractor’s
senior managers with a demand to comply with the OHS requirements, including any hazardous facilities, indicating any
identified violations and the need to take appropriate corrective actions towards the employees having committed such
violations. The occupational safety liabilities of the contractors’ employees are stated in their job contracts.
GRI 413-2 No violations of occupational safety requirements were registered in 2018 with a high probability of causing any
serious harm to the health of employees not being on the Company’s staff, however subjected to the SALC at the Company.
7 Approved by the Order of the Ministry of Labour and Social Protection of the Russian Federation No. 524n of 4 August 2014.
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PARTICIPATION IN THE ACTIVITIES OF THE RUSSIAN NATIONAL
COMMITTEE OF CIGRE (INTERNATIONAL COUNCIL ON LARGE ELECTRIC
SYSTEMS)
PJSC FGC UES is actively involved in the development of the
Russian National Committee of CIGRE (International Council on
Large Electric Systems), the largest international organisation
in the area of electric power industry, which has brought
together various leading experts, scientists, representatives of
branch companies, ministries and departments, with the Youth
Section being of major importance in the structure thereof.
Involvement of employees of PJSC “FGC UES” in the activities
of research committees of the RNC CIGRE, participation in
the activities of the Youth Section as experts, reviewers and
lecturers, contributes to the development of managerial and
innovative skills, improvement of professional expertise, and
enhancement of the level of foreign language skills of the
Federal Grid Company personnel.
zz contest of translators of scientific and technical literature
on the electric power and electrical engineering subjects,
intended to improve the level of foreign language skills and
technical terminology in the area of electric power industry
and electrical engineering. Specialists of PJSC FGC UES
take part in the contestants’ works evaluation;
zz young specialists of PJSC FGC UES act as experts
at the Case-in International Engineering Championships;
zz participation in the International Youth Power Industry
Forum (SPIEF-2018) and the Youth Day of the Russian
Energy Week;
zz a team of the PJSC FGC UES youth talent pool became the
participants to the Youthful Energy Interregional Summer
Educational Forum.
The most significant events of 2018 include:
zz contest of graduate qualification works on the electric
power and electrical engineering subjects (graduation
theses), within which the PJSC FGC UES experts evaluate
theses of bachelors and masters of Russia’s leading
technical universities;
In 2018, the RNC CIGRE Youth Section programme, supervised
by PJSC FGC UES, was distinguished for its contribution to
engaging students in the international scientific activities at
the 47th Session of CIGRE in Paris, and it was appointed as
the General Coordinator on arranging all youth events within
the 48th Session of CIGRE.
PARTICIPATION IN THE CONGRESS AND EXHIBITION ACTIVITIES
FEBRUARY
A delegation of PJSC FGC UES, headed by the Chairman of the Management Board, Mr. A. Murov, took part in the work of
the Russian Investment Forum. The head of the company took part in the meeting of Mr. Dmitry Medvedev, Prime Minister
of the Russian Federation, with representatives of business circles.
MAY
A delegation of PJSC FGC UES, headed by Mr. A. Murov took part in the activities of the St. Petersburg International Economic
Forum. The Chairman of the company attended the plenary meeting and spoke at the session “Digital Infrastructure: Challenge
or Opportunity?”. At the forum:
zz a cooperation agreement was signed with the Russian Engineering Union, aimed at the development of domestic
enterprises of the power engineering industry, developing and manufacturing high-technology products, and at the
technical re-equipment of the electric grid complex and electricity consumers;
zz a strategic cooperation agreement was signed with Rostelecom, making provisions for cooperation in the area of
development and operation of communication networks.
SEPTEMBER
A delegation of PJSC FGC UES, headed by Mr. A. Murov, took part in the events of the Eastern Economic Forum business
programme, including the plenary session “Far East: extending boundaries of opportunities.” On the sidelines of the Forum the
cooperation agreements were signed with Primorsky Territory and Sakhalin Region, aimed at the development of the power
grid infrastructure in the regions, and at the consumer electricity supply availability growth through the use of distributed
energy generation facilities of Mobile GTPP subsidiary company.
SEPTEMBER - OCTOBER
PJSC FGC UES took part in the All-Russian energy saving festival # ВместеЯрче (Brighter Together). The company branch
offices took part in the work of regional steering committees of # ВместеЯрче (Brighter Together) festival, held events in
the constituent entities of the Federation and provided information support of the festival.
OCTOBER
A delegation of PJSC FGC UES, headed by Mr. A. Murov, took part in the Russian Energy Week, an international forum on
energy efficiency and energy development. The head of PJSC FGC UES attended a plenary meeting with the participation
of the President of the Russian Federation, the All-Russian conference on winterisation arrangements for the period of
2018/2019, spoke at the session dedicated to the digitalisation of networks and held business meetings with the senior
managers of EVNNPT and Siemens companies.
NOVEMBER
A delegation of PJSC FGC UES, headed by Mr. A. Murov, took part in the first Russian-Chinese energy business forum, held
under the auspices of the Presidential Commission of the Russian Federation for the Fuel and Energy Complex development
strategy and environmental safety issues. Within the business trip to Beijing, a meeting was also held with the senior managers
of Huawei company to exchange the digital projects implementation experience.
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KEY PRIORITIES OF THE FGC UES SPONSORSHIP ACTIVITIES
sessions for the students of power engineering institutions,
together with the team a series of visual materials was
developed on electrical safety and electric injuries prevention
using images of the football club players.
Cooperation with the Russian Rugby Federation
In 2018 PJSC FGC UES acted as the official sponsor of the
Russia Rugby Federation. The finals of the Federal Rugby
League tournament were arranged with the company support,
and the Russian international rugby team took part in the
European Championships qualification stage (Grand Prix
Series) and in the European Beach Rugby Championships.
Cooperation with the Roscongress Foundation
In 2018 the Company sponsored some major business events
with the participation of the top state officials: International
Forum on Energy Efficiency and Energy Development “Russian
Energy Week” and Eastern Economic Forum.
Interaction with the Moscow Academic Theatre named after K.
Stanislavsky and V. Nemirovich-Danchenko
FGC UES acted as the Official Partner of the Moscow
Academic Musical Theatre named after K. Stanislavsky and
V. Nemirovich-Danchenko. The company supports
management of events within the 100th anniversary theatrical
season of 2018/2019.
Cooperation with the State Hermitage Museum
PJSC FGC UES acted as the general sponsor of Ilya and
Emilia Kabakovs’ exhibition “Not Everyone Will Be Taken To
The Future” held at the State Hermitage Museum from 20
April till 29 July 2018. The exhibition is a joint project of the
State Hermitage Museum, the Tretyakov Gallery and the Tate
Modern Gallery (UK).
Cooperation with the Russian Chess Federation
Since 2016, PJSC FGC UES has been acting as a title sponsor
of the Russian international chess teams. In 2018, with the
support of PJSC FGC UES a number of joint activities aimed
at the development and popularisation of chess throughout
the country were implemented, as follows: Aeroflot Open,
a Russian Junior Championship, White Castle All-Russian
Chess Competition, Higher League All-Russian Championship,
Superfinals of the 71st Russian Men’s Championship and of
the 68th Russian Women’s Championship, the 43rd World
Chess Olympiad in Batumi (Georgia), the 8th Open Chess
Tournament in memory of Mikhail Botvinnik, the first Russian
world chess champion.
On 22 November 2018, PJSC FGC UES and the Russian
Chess Federation (RCHF) counter-signed a new cooperation
agreement for a three-year period. The Company will continue
to support the Russian international chess teams, participate
in the training of juniors and the nation-wide development
of chess. The document was signed by the Chairman
of the Board of PJSC FGC UES, Mr. A. Murov and the President
of the Russia Chess Federation, Mr. A. Filatov, witnessed
by the President of FIDE, Mr. A. Dvorkovich..
Cooperation with PFC CSKA
Since 2014, PJSC FGC UES has been the title partner of
Professional Football Club CSKA.
With the company support, certain competitions and events
for the club fans have been arranged. Football players and
coaches of PFC CSKA held master classes and autograph
STAKEHOLDER ENGAGEMENT APPROACH
INTERNAL DOCUMENTS OF THE COMPANY REGULATING
INTERACTION WITH STAKEHOLDERS
GRI 102-43
The Company has a number of effective corporate documents regulating various aspects of interaction with stakeholders:
zz Code of corporate ethics and official conduct of employees of PJSC FGC UES,
zz Information policy,
zz Investment programme,
zz Innovative development programme,
zz Environmental policy implementation programme,
zz Partnership programme between PJSC FGC UES and the small and medium-sized business entities,
zz Communication Policy and others.
INTERACTION WITH EXTERNAL STAKEHOLDERS
Consumer Council
The Council of consumers of services of PJSC FGC UES is a collegial body representing interests of all consumer groups,
public and entrepreneurial associations. At its site certain issues are discussed which are related to the Russian Federation
power grid complex development strategy delivered by FGC UES.
In 2018 a meeting of the Council of consumers of services of PJSC FGC UES was held which considered the following issues:
zz results of activities of FGC UES for 2017;
zz results of the repair and maintenance activities and of the FGC UES power grid equipment operation reliability improvement
for 2017;
zz investment activity of FGC UES. Review of the annual report on public technological and price audit of investment projects
of FGC UES in 2017.
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APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I CORPORATE MANAGEMENT REPORT
COMMITTEES OF BOARD OF DIRECTORS
AUDIT COMMITTEE
Decisions taken on key areas of activity
Area
of activity
Results of activities
z Previewing the annual accounting (financial) statements of PJSC FGC UES for 2017 and recommendation
for approval.
z Considering the impact of changes in the accounting policy of PJSC FGC UES as per the International
Accounting Standards for 2018 on the consolidated financial results of PJSC FGC UES.
z Reviewing the Conclusion and Acts of the audit committee of PJSC FGC UES on the results of the audit
of its financial and economic activities for 2017.
z Reviewing the results of audits of financial and economic activities of subsidiaries and affiliates
of PJSC FGC UES for 2017.
z Reviewing the results of independent audit of financial, economic and investment activities
of PJSC FGC UES for 2016.
z Reviewing the issue of Recommendations to the Annual General Meeting of Shareholders on
the candidature of the auditor of PJSC FGC UES.
z Evaluating the efficiency of external audit of the accounting (financial) statements of PJSC FGC UES for
2017.
z Reviewing the results of audit of the business process in the area of investment activity.
z Considering Report on the implementation of corrective action plans aimed at eliminating the causes
of shortcomings identified in accordance with the findings of audits of functional areas of activity
(processes) of PJSC FGC UES:
– capital construction,
– management of projects financed through the technological connection fees,
– procurement activities.
z Considering forecast for the implementation of key operational risks by the end of 2017.
z Giving recommendations on approval of the List of Corruption Risks of PJSC FGC UES.
z Previewing the Annual report of PJSC FGC UES for 2017 and recommendation for approval.
z Considering report on the implementation of a set of actions intended to improve the system of risk
management and internal control with regard to the internal auditor’s recommendations.
z Considering reports of the internal auditor of PJSC FGC UES on the assessment of efficiency of the
corporate management and the internal control and risk management systems in PJSC FGC UES, based on
the results of 2017.
z Considering report of the Chairman of the Management Board and members of the Management Board
of PJSC FGC UES on the organisation and functioning of the internal control system for 2017.
z Considering report of the Chairman of the Management Board and members of the Management Board
of PJSC FGC UES on the organisation, functioning and efficiency of the risk management system for 2017.
z Considering report on PJSC FGC UES key operational risks for the H1 of 2018.
Reports, audits and
examinations
Risk management
system, internal
control and corporate
management
Fraud management
z Reviewing the results of PJSC FGC UES anti-corruption monitoring for 2017.
STRATEGY COMMITTEE
Decisions taken on key areas of activity
Area
of activity
Results of activities
z Approving the standard forms of documents used in PJSC FGC UES in the course of the technological
connection implementation.
z Reviewing the results of rendering services within the framework of Stage 1 of the Terms of Reference
for “Assessment of opportunities and risks of consolidation of power grid facilities, classified as a single
national (all-Russian) electricity grid, or meeting the criteria of reference to the Federal Grid Company,
under the management of PJSC FGC UES, including the power grid facilities being in the ownership of any
third parties and located in the non-insulated areas of centralised power supply, with preparation of
the draft Program of phased consolidation of the Federal Grid Company facilities under the management
of PJSC FGC UES”.
z Considering reports on the implementation of measures and achievement of key performance indicators
defined by the PJSC FGC UES long-term development programme for the period of 2015–2019, and the
forecast up to 2030.
z Considering report on the results of operations in the capital markets and interaction with rating agencies
for 2017.
z Considering reports on the progress and results of implementation of measures under the Programme for
Disposal of Non-Core Assets of PJSC FGC UES and its Subsidiaries.
z Introducing changes in the Regulation on the organisation (procedure) of disposal of non-core assets
of PJSC FGC UES.
z Approving a new version of the register (plan of disposal) of non-core assets of PJSC FGC UES.
z Approving a new edition of the business planning standard of PJSC FGC UES.
z Considering the consolidated business plan based on the Russian Accounting Standards (RAS) and the
consolidated business plan based on the International Accounting Standards (IAS) for the FGC UES Group
of Companies for 2018, and forecast indicators for 2019–2022.
z Considering reports on execution of the business plan of PJSC FGC UES, on execution of the consolidated
business plan based on the RAS and consolidated business plan based on the IAS for the FGC UES Group
of Companies.
Determining
and monitoring
the strategy
implementation
Business planning
Dividend and credit
policies
z Considering report of PJSC FGC UES on the actual use of currency and interest risk hedging instruments
for 2017 and the economic effect achieved.
z Approving a new version of the Regulation on the dividend policy of PJSC FGC UES.
HR AND REMUNERATION COMMITTEE
Decisions taken on key areas of activity
Area
of activity
Results of activities
Remuneration
and setting/
implementation of
KPIs
z Considering reports on the KPIs implementation by the senior managers of PJSC FGC UES for various
periods of financial and economic activities.
z Introducing changes in the methods of calculation and assessment of the key performance indicators
implementation by the senior managers of PJSC FGC UES.
z Reviewing the results of assessment of efficiency of the Board of Directors of PJSC FGC UES.
HR issues
z Introducing professional standards into the activities of PJSC FGC UES
z Considering issues related to the working environment of the Chairman of the Board of PJSC FGC UES and
individual members of the Board of PJSC FGC UES.
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Decisions taken on key areas of activity
Area
of activity
Results of activities
Adjusting the investment
programme
z Recommending for approval an adjustment to the investment programme of PJSC FGC UES for
2016–2020.
z Considering proposals of PJSC FGC UES on improvement of the process of formation, coordination,
approval and adjustment to the investment programme.
Implementing individual
investment projects
Implementation of the
Investment Programme
Approval of internal
documents
z Considering information and reports on the status of implementation of a number of investment
projects of PJSC FGC UES.
z Reviewing the results of field inspections carried out by the Ministry of Energy of the Russian Federation
on the progress of implementation of a number of investment projects of PJSC FGC UES and the
planned measures to eliminate the identified deviations.
z Considering reports of the managers of PJSC FGC UES on execution of action plans intended to
eliminate the deviations identified in the course of inspections of the Ministry of Energy of the Russian
Federation.
z Approving the Action Sheet for the implementation of the Comprehensive Plan for Modernisation and
Expansion of the Main Infrastructure for the Period until 2024.
z Considering report on execution of production programmes in 2017: maintenance and repair (MaR),
technical upgrading and reconstruction (TUaR).
z Considering report on execution of the investment programme of PJSC FGC UES for the Q4 of 2017
and throughout 2017, including the projects of federal significance and projects implemented with
application of federal budget resources and other budgetary funds, as well as non-budget funds.
z Considering report on execution of the investment programme of PJSC FGC UES for the Q1, Q2 and Q3
of 2018, including the federal projects.
z Recommending for approval a list of investment projects of PJSC FGC UES being subject to public
technological and price audits in 2018.
z Approving the Regulations for the investment programme formation and changing, as well as
preparing reports on its implementation, increasing investment efficiency and reducing expenses of
PJSC FGC UES.
z Considering the annual report on the technological and price audits of investment projects of
PJSC FGC UES in 2017.
z Approving the annual report for 2017 on the implementation of the Programme of Innovative
Development of PJSC FGC UES for 2016–2020 with an outlook until 2025.
z Approving a new edition of the internal document of PJSC FGC UES, the scenario conditions of
formation of the investment programmes of PJSC FGC UES.
z Approving the Quality Policy of PJSC FGC UES.
z Approving a new edition of the Unified Procurement Standard of PJSC FGC UES (Procurement
Regulations).
Implementation
of technological
connections
z Considering reports on reviewing applications for technological connection and performance of
contracts on implementation of technological connection to the power grid facilities of PJSC FGC UES
for H1 of 2017, throughout 2017, and for the H1 of 2018.
SYSTEM OF REMUNERATION OF MANAGEMENT BODIES
APPROVAL OF THE QUARTERLY KPI IMPLEMENTATION REPORTS IN 2018
In 2018, the Board of Directors made decisions to approve
reports on the quarterly KPIs implementation: Report on the
KPIs implementation by PJSC FGC UES for Q1 and Q2 of 2018
was approved by the decision of the Board of Directors of
20 November 20188 , report on the KPIs implementation by
PJSC FGC UES for Q3 of 2018 was approved by the decision
of the Board of Directors of 05.04. 20199.
CONFLICT OF INTEREST MANAGEMENT
PREVENTION OF A CONFLICT OF INTEREST BETWEEN MEMBERS
OF THE BOARD OF DIRECTORS
GRI 102-25
In accordance with the internal documents of the Company,
a number of obligations are imposed on the members of the
Board of Directors, who shall:
zz avoid any actions that will lead or may lead to a conflict
between their interests and interests of the Company;
zz inform the Board of Directors and the Corporate Secretary in
a timely manner about any existing conflict of interest and
the grounds of its emergence;
zz timely disclose any information on his/her possession of
securities of the Company, its subsidiaries and controlling
persons, any sale or acquisition thereof; on any overlapping
positions held by him/her in other legal entities; on his
acceptance of any invitation to become a candidate to the
members of the Board of Directors of another legal entity, or
any change of his principal place of employment.
PREVENTION OF CONFLICT OF INTERESTS BETWEEN
MEMBERS OF EXECUTIVE BODIES
The Regulation on the Management Board of PJSC FGC UES
stipulates an obligation of members of the Management
Board to notify the Board of Directors, the Audit Committee,
the Auditor and the Executive Secretary of the Management
Board of the following facts:
zz any affiliation;
zz potential conflict of interest, including any interest in
closing any transaction by the Company;
zz possession of the Company’s securities, as well as any
sale or acquisition thereof.
In order to minimise the emergence of any conflicts of interest,
any overlapping positions of the members of the Management
Board in other organisations shall be permitted only upon
consent of the Board of Directors of the Company.
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8 Minutes of Meeting of the Board of Directors No. 428 of 21 November 2018.
9 Meeting Minutes of the Board of Directors No. 442 of 05 April 2019.
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I INTERNAL CONTROL
FUNCTIONS OF ICS PARTICIPANTS
GRI 102-30
Participant
Name
Core functions in ICS
FIRST LINE OF PROTECTION
The Board of
Directors
z determines the principles of and approaches to the Company’s internal control system arrangement, including
approval of internal documents of the Company, stating the internal control system structure, and criteria for the
internal control system efficiency assessment;
z supervises the activities of the Company’s executive bodies in the main (priority) areas of operations;
z annually review reports of the Chairman and members of the Management Board on the Company’s internal
control system functioning;
z annually reviews the Internal Auditor’s reports on the internal control system efficiency;
z reviews the results of external independent assessment of the internal control system efficiency.
z previews, prior to approval by the Company’s Board of Directors, the internal documents stating the internal
control system structure and the criteria of its efficiency;
z previews the following documents, prior to their reviewing by the Company’s Board of Directors: report of
the Chairman and members of the Management Board on the internal control system functioning; Internal
Auditor’s report on the internal control system efficiency, and information on the results of the external
independent assessment of the internal control system efficiency;
z reviews issues related to monitoring the Company’s accounting (financial) statements accuracy, selecting
an external auditor and performing the external audits, ensuring compliance with the regulatory legal
requirements, and considering issues related to the analysis and assessment of implementation of the
Regulations on internal control system.
z monitor implementation of the determined financial and operating indicators, monitor compliance with the
applicable laws, rules and procedures determined by the local normative acts, and monitor accuracy and
timeliness of reports drawn by the Company.
z confirms validity of data stated in the annual report, and the annual accounting (financial) statements of the
Company;
z reviews the Company’s financial standing, identifies reserves for the financial standing improvement, makes
recommendations to the management bodies;
z conducts inspections (audits) of the Company’s financial and economic activities.
z ensure development and efficient functioning of the internal control system;
z ensure implementation of the resolutions of the Board of Directors in terms of the internal control
arrangements.
z ensures that reports of the Chairman and members of the Management Board on the internal control system
functioning are submitted for consideration to the meeting of the Company’s Board of Directors upon
preliminary review by the Audit Committee of the Company’s Board of Directors;
z reviews the results of external independent and internal assessments of the internal control system
efficiency, works out measures to develop and improve the internal control system.
The Audit
Committee of the
Board of Directors
Other committees
of the Board of
Directors (HR and
Remuneration
Committee,
Strategy Committee,
Investments
Committee)
The Audit
Commission
Executive bodies
of the Company
(Management
Board, Chairman of
the Management
Board)
The Company’s
Management Board
330
Participant
Name
The Chairman of
the Company’s
Management Board
Core functions in ICS
z approves regulatory and methodological documents of the Company in terms of the internal control system
development and functioning, except for the documents to be approved by the Company’s Board of Directors;
z ensures implementation of the Company’s performance plans required to achieve its targets;
z arranges accounting records maintenance and management accounting, issue accounting (financial) and other
statements;
z submits to the Company’s Board of Directors consideration any reports on the financial and economic activities of
the Company and on the arrangement and functioning of the Company’s internal control system.
Heads of units
and structural
subdivisions of the
Company
z are responsible for the internal control system development, documentation, implementation, monitoring
and improvement in the functional areas of the Company’s operations, whereof the responsibility for
arrangement and coordination/implementation is assigned to them by the Company’s regulatory documents/
provisions on structural subdivisions, including:
z ensuring implementation of the internal control principles;
z arranging efficient processes (activity areas), including development and implementation of any new or
changing the existing control procedures, with regard to identified risks;
z assessment of the monitored processes (activity areas) regarding the necessity to optimise their efficiency
and meet the changing conditions of external and internal environment, ensuring their regulation, and
developing proposals to improve the control procedures;
z arranging implementation of the control procedures;
z arranging assessment (monitoring) of the control procedures implementation;
z eliminating any drawbacks identified in the control procedures and processes (activity areas).
z execute the control procedures;
z ensure timely notifying the line managers of the cases when execution of the control procedures has
become impossible for whatever reasons, and/or on any amendments in the control procedures design
required due to any changes of internal and/or external business environment conditions of the Company;
z submit to the line managers consideration any proposals on the control procedures implementation in
respective activity areas.
Employees of
the Company’s
structural
subdivisions,
implementing
control procedures
in virtue of their
official duties
331
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I Participant
Name
Core functions in ICS
SECOND LINE OF PROTECTION
Legal Department
Monitors the Company’s compliance with the applicable legal requirements by conducting legal expertise and
coordination in accordance with the procedure established by the Company’s regulatory and administrative
documents, drafts agreements and contracts, drafts regulatory and administrative documents, drafts decisions
of the Company’s management bodies, drafts powers of attorney to represent the Company’s interests to any
third parties, drafts applications, letters, appeals, complaints sent on behalf of the Company to legislative and
executive authorities, judicial authorities, law enforcement agencies, and monitors and informs the Company’s
senior managers on the adopted regulatory legal acts of the Russian Federation having any significant impact
on the Company’s activities, minimising the risks of non-compliance with the applicable legal requirements and
the Company’s interests.
Corporate
and Strategic
Management
Department
Monitors compliance of decisions taken by the Company's executive bodies with the legislation of the Russian
Federation, Company standards, regulatory and administrative documents of the Company, and the Company's
interests, minimising the risks of non-compliance with the requirements of corporate legislation and internal
regulatory documents.
The Anti-Corruption
and Economic
Security Department
Arranges and carries out inspection activities to establish the causes of any economic and reputation damage
to interests of the Company and its subsidiaries and affiliates, agency checks on receipt of any information
about possible abusive activities of any officials of the Company and its subsidiaries and affiliates, including
the hotline reports.
Department
of Business
Administration
Supervises execution of instructions stated in the Company’s Management Board records, Company orders,
minutes of meetings and directions of the Chairman of the Management Board of the Company, minimising the
risks associated with the late fulfilment of any important tasks.
Centre of Technical
Supervision of PJSC
Rosseti
Carries out under the contract with PJSC FGC UES:
z selective technical supervision of the condition and level of performance of the existing facilities of the
electric grid complex;
z monitoring of the operational and process management arrangements;
z monitoring of the production process safety level (labour protection; fire, industrial and environmental
safety);
z monitoring of implementation of the operational and system-wide measures intended for the prevention of
fires, breakdowns and accidents;
z monitoring of completeness and timeliness of execution of the Company’s accident-prevention
documentation and regulatory and administrative documents, minimising the risks of non-compliance with
the applicable legal requirements and the Regulations on a Uniform technological policy in the electric grid
complex, as well as any risks associated with violation of production process safety, emergence of fires,
breakdowns and accidents.
Participant
Name
Internal Control and
Risk Management
Department
Core functions in ICS
z coordinates the internal control processes;
z develops methodological documents in the area of internal control;
z arranges and carries out training of the Company’s employees in terms of internal control;
z monitors issues of the internal control system arrangement and functioning;
z prepares and presents to the Company’s executive bodies any information on the internal control system
arrangement and functioning;
z ensures the implementation of the Company’s Anti-Corruption Policy, introduction and monitoring of the
implementation of Anti-Corruption Policies in the Company’s subsidiaries and affiliates;
z arranges and carries out anti-corruption procedures in the Company;
z develops and ensures updating of the regulatory and administrative documents aimed at prevention
(avoidance) of corruption;
z arranges and carries out activities laying the groundwork of anti-corruption behaviour and animus toward
corruption among employees;
z ensures work of the Company’s Central Commission on compliance with the corporate ethics code and
conflict of interest management;
z submits reports to the Federal agencies of executive authority in accordance with the requirements of the
Normative Legal Acts of the Russian Federation in terms of disclosure of information on the counterparties
chain of ownership, ensuring efficiency and transparency of the Company’s activities;
z carries out daily monitoring of the Company’s counterparties until complete performance of their contractual
obligations in respect of any information on their insolvency (bankruptcy), liquidation, striking off the State
Register (Uniform State Register of Legal Entities);
z carries out monitoring and control of bankruptcy and liquidation procedures of counterparties, analysis of
implementation of relevant procedures, analysis of information on the progress of cases and bankruptcy
procedures, decisions taken by meetings of creditors and creditor committees and actions of insolvency
officers, preparation of proposals to protect the Company’s interests in connection with liquidation
(bankruptcy) of any counterparties, striking off the Uniform State Register of Legal Entities, including
development of alternatives to minimise the Company’s risks;
z maintains a unified register of the Company’s contractors, including the Company’s branches, subsidiaries
and affiliates undergoing any bankruptcy and liquidation procedures;
z coordinates the activities of the Company’s structural subdivisions in order to represent and protect interests
of the Company as a creditor in any cases of bankruptcy and liquidation of counterparties;
z selects any self-regulatory professional bodies of insolvency officers to nominate an insolvency officer for
any bankruptcy proceedings;
z ensures preparation of conclusions on evidence of any signs of fictitious or deliberate bankruptcy of
organisations, carries out express analyses of legal entities;
z interacts with insolvency officers, winding-up committees (liquidators), creditors, law enforcement agencies
and other persons in connection with any insolvency (bankruptcy), liquidation, striking off the Uniform State
Register of Legal Entities.
THIRD LINE OF PROTECTION
The Internal Audit
Department
z upon internal audits, develops recommendations on any improvement of control procedures, any individual
components (elements) of internal control and the whole internal control system;
z carries out independent internal assessment of the internal control system efficiency and issue
recommendations on improving the internal control system efficiency and performance.
332
333
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I RISK MANAGEMENT SYSTEM
INTERNAL AUDIT
z continuity and integrity;
z assignment of risk management
z goal orientation
z integration into management
z balance between risks and
KEY PRINCIPLES OF RMS:
profitability
z indeterminacy
z consistency
z quality of information
z interest and leadership
responsibility
z efficiency
z cross-functional networking
z reasonable confidence
z adaptability
z continuous improvement
z The Board of Directors;
z The Audit Committee of the Board of Directors;
THE MAIN PARTICIPANTS
OF RMS ARE
z executive bodies (Chairman of the Management Board, Management
Board);
z Internal Control and Risk Management Department;
z Internal Audit Department;
z risk owners;
z risk management executives.
The Company approved the following documents regulating
the internal audit activities:
zz Regulation on the Internal Audit Department
of PJSC FGC UES, approved by the Chairman of the
Management Board of PJSC FGC UES on 4 October 2017;
zz Guidelines for conducting internal audits of PJSC FGC UES,
approved by the order of PJSC FGC UES of 6 July 2017
No. 261 (approved by the Audit Committee of the Board
of Directors of PJSC FGC UES (Minutes No. 62 of 30 May
2017));
zz Internal audits quality guarantee and improvement
programme of PJSC FGC UES, approved by the Board
of Directors of PJSC FGC UES on 11 December 2017
(Appendix 3 to Meeting Minutes No. 383 of the Board
of Directors of PJSC FGC UES of 14 December 2017);
zz Rules of interaction of the Internal Audit Department with
structural subdivisions and branches of PJSC FGC UES
in the course of inspections and monitoring of the
corrective action plans implementation, approved by Order
of PJSC FGC UES No. 120 of 22 March 2017;
zz Guidelines for monitoring the corrective action plans
implementation to eliminate violations and shortcomings
identified subsequent to the results of internal audits,
approved by Order of PJSC FGC UES No. 97 of 13 March
2017;
zz Instruction on the generation and use of the Unified
Classifier of Violations and Shortcomings, approved by
Order of PJSC FGC UES No. 97 of 13 March 2017;
zz Guidelines for planning the Internal Audit Department
activities, approved by Order of PJSC FGC UES No. 98 of
13 March 2017;
zz Guidelines for preparation of reports on implementation
of the plan of activities and performance results of the
Department of Internal Audit of PJSC FGC UES, approved
by Order of PJSC FGC UES No. 488 of 22 November 2017;
zz Code of Ethics of Internal Auditors of PJSC FGC UES
approved by Order of PJSC FGC UES No. 261 of 6 July
2017 (approved by the Audit Committee of the Board of
Directors of PJSC FGC UES (Minutes No. 62 of 30 May
2017));
zz Internal control and risk management system efficiency
assessment standard of PJSC FGC UES, approved by the
Board of Directors of PJSC FGC UES (Minutes No. 309 of
29 February 2016);
zz Procedure for interaction of the Internal Audit Department
of PJSC FGC UES with the internal control system subjects
and other interested parties carrying out the internal system
control monitoring and assessment in individual areas
of activity, and formation of a guarantee administration
scheme (the “guarantee card”), approved by Order
of PJSC FGC UES No. 510 of 7 December 2017;
zz Regulations for recording of inspections of PJSC FGC UES
carried out by external control (supervision) bodies,
approved by Order of PJSC FGC UES No. 104 of 15 March
2017.
zz Regulation on the professional competency profile of the
Internal Audit Department officers, approved by Order of
PJSC FGC UES No. 303 of 9 August 2018.
Key decisions and measures aimed at improving the internal
audit system implemented in accordance with the decisions
of the Board of Directors of the Company:
zz On 19 February 2018, the Board of Directors
of PJSC FGC UES approved the plan of activities and
budget of the Internal Audit Department of PJSC FGC UES
for 2018 (Minutes No. 392 of 22 February 2018).
zz Feedback from the Audit Committee of the Board
of Directors is provided by the head of internal audit in
various forms during interaction with the Audit Committee,
including analysis of decisions/recommendations of
the Audit Committee on issues within the internal audit
competence, as well as through questioning the Audit
Committee members.
zz Quotient of satisfaction of the Audit Committee
of the Company’s Board of Directors with the internal
audit unit performance results (weighted average total of
points in the questionnaires of the voting members of the
Audit Committee versus the number of voting members
of the Audit Committee) at the end of 2018 corresponds
to a “conforming” rate in accordance with the Company’s
Internal Audits Quality Guarantee and Improvement
Programme, approved by decision of the Board of
Directors of the Company of 11 December 2017 (Minutes
No. 383 of 14 December 2017).
334
335
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I ANTI-CORRUPTION ACTIVITIES
The objectives of the Anti-Corruption Policy of the Company include:
PRINCIPLES AND OBJECTIVES OF THE ANTI-CORRUPTION POLICY
GRI 103-2
The basic principles of the Company’s Anti-Corruption Policy implementation correspond to the best practices of
corruption management:
zz Compliance with the applicable legislation and generally
accepted standards.
zz Zero tolerance towards corruption in any of its forms and
aspects, meaning a total ban for all managers, employees
and other persons acting on behalf of and/or for the benefit
of the organisation, directly or indirectly, personally or
through any intermediary, to take part in any corrupt
practices.
zz Example of top management. Members of the Board of
Directors, Chairman and Members of the Management
Board, as well as other senior officials of the Company
declare uncompromising attitude towards corruption;
generate and observe high ethical standards of doing
business, with their behaviours setting an example for
other employees of the Company.
zz Observance of legitimate rights and interests. The
Company ensures protection of business reputation of its
employees, partners, counterparties and other persons, as
well as observance of non-disclosure whilst implementing
the anti-corruption measures.
zz Involvement of employees. The Company regularly informs
its employees on the provisions of anti-corruption laws and
actively involves them in the generation and implementation
of anti-corruption standards and procedures.
zz Transparency of doing business and training. The
Company makes every possible effort to explain to
its employees, intermediaries and counterparties the
principles and requirements of its anti-corruption activities,
the liability for violation of the provisions of anti-corruption
laws and this Anti-Corruption Policy.
zz Responsibility for corrupt practices. The Company makes
every possible effort to ensure prompt, inevitable and
illustrative suppression of any acts of corruption on the
grounds provided by the Company’s normative, regulatory
and administrative documents. The perpetrators shall be
held liable regardless of their position and duration of work
in the organisation.
zz Efficiency of anti-corruption procedures. The Company
carries out anti-corruption measures ensuring easy
implementation and producing meaningful results.
zz Identification and assessment of corruption risks. The
Company is constantly working to identify and assess the
significance of corruption risks specific to the Company’s
activities, with regard to its strategic development plans.
The anti-corruption procedures being carried out are
commensurate with the risk of corruption, with due regard
for the corruption risks existing in the Company’s activities.
zz Availability of a system of anti-corruption control
procedures. The Company develops and implements
control procedures aimed at minimising corruption
risks. The procedures are transparent, understandable,
enforceable and commensurate with the identified
corruption risks. The Company regularly evaluates the
efficiency of anti-corruption control procedures and carries
out respective improvement measures.
zz Checks of counterparties. The Company carries out
thorough checks of counterparties to minimise reputation,
financial and operational risks related to interaction
therewith. The checks include, but are not limited to, the
analysis of information from open sources on the degree
of compliance of a counterparty with ethical principles
of business conduct, its readiness to comply with the
requirements of the Anti-Corruption Charter of Russian
Business, to include anti-corruption provisions in the
agreements, and to participate in collective anti-corruption
measures.
zz Monitoring and control. The Company regularly assesses
observance of anti-corruption procedures by its managers
and employees. The results of such assessments shall be
communicated to the Chairman of the Management Board,
the Board of Directors and shareholders of the Company.
zz implementation of the requirements of Federal Law
No. 273-FZ of 25 December 2008 On Countering
Corruption and the Decree of the Russian President
of 29 June 2018 No. 378 On the National Anti-Corruption
Plan for 2018–2020;
zz creation of an efficient legal arrangement to prevent and
combat corruption;
zz creation of an efficient practical mechanism for
implementing measures to prevent and fight corruption
(including approval of the anti-corruption measures
programme);
zz improvement of the regulatory and legal framework in
the area of corruption management and interaction with
the government authorities in charge of anti-corruption
issues;
zz prevention of corruptive delinquencies, ensuring
responsibility for any corruption and other offences;
zz assistance to shareholders, partners, counterparties,
members of management and control bodies, employees
to gain consistent understanding of the Company’s stance
on zero tolerance towards corruption in any of its forms
and aspects;
zz minimisation of the risk of the Company’s involvement in
any corrupt practices;
zz shaping the corporate anti-corruption mentality.
REPORT ON ANTI-CORRUPTION MEASURES 2018
Direction
Key achievements
Corruption Risk
Management
(hereinafter — CR)
Identification and
settlement of conflicts
of interest
In order to reduce the likelihood of realisation of corruption risks, the CR owners arranged quarterly
assessments of the likelihood of corruption risks realisation, developed action plans to mitigate them.
There were no identified realised corruption risks in the Company and its branches in 2018.
GRI 205-1 In 2018, corruption risks were assessed regarding 21 subdivisions of the executive office (57 %
of the total number of subdivisions).
In order to implement the risk-oriented approach in the Company and its branches, the List of Positions
Related to High Corruption Risks was approved10.
In order to unify functional verticals of the Company’s management, as well as upon analysing the CR
List by the degree of its corruption danger, amendments to update the CR List were drafted11.
Methodological Recommendations for CR assessment in PJSC FGC UES based on the Standard CR
Assessment Methods of PJSC Rosseti and SDCs of PJSC Rosseti were approved12. Methodological
Recommendations define the principles and approaches to assessing CR and identifying corruption
indicators.
Risk owners described CR of the Company. All risks were assessed by expert method on the basis of
the professional judgement with principles stipulated in the methodological documents of the Company
taken into account.
In 2018, certification of the conflict of interest of the Company’s employees for 2017 was arranged.
According to the certification of the conflict, all manageable situations were settled.
In addition, certification of the conflict of interest of applicants to the vacant positions was held on a
regular basis. There were no conflicts of interest during the reporting period.
In 2018, in compliance with the Regulation for Arranging Surveys for Preventing, Detecting and Fighting
Corruption and other Offences 13 , preventive surveys with the usage of a lie detector were held regarding
job applicants, transfer of the employees starting with the head of the department and above, as well as
during agency checks.
10 In compliance with the Methodological Recommendations of Rosimushchestvo. PJSC FGC UES Order No. 88 of 22 March 2018.
11 Approved by the Audit Committee of the Board of Directors on 28 December 2018 (Minutes No. 87 of 28 December 2018)
12 PJSC FGC UES Order No. 316 of 24 August 2018
13 PJSC FGC UES Order No. 259 of 6 July 2018
336
337
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTAPPENDIX 1ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES I Direction
Key achievements
Anti-corruption control
in relations with the
partners and contracting
parties
Monitoring procurement process in relation to corruption risks, timely receipt of information on changes
in the shareholders of the contracting parties, as well as the inclusion of an anti-corruption clause
and other mandatory clauses into contracts.
Verification of counterparties’ reputation and identification of possible affiliations was carried out by:
z Anti-Corruption and Economic Security Department when considering applications of participants
Identification of
potential corruption due
to the abuse of power
in trade procedures;
z Internal Control and Risk Management Department when auditing the current counterparties.
The Procedure for Organising Anti-Corruption Control of the Procurement Stages and Anti-Corruption
Expertise of the Projects on The Company’s Executive Documentation was updated14. In 2018, 256
projects on the executive documentations were revised, regarding the approval of regulations,
methodical recommendations, provisions, procedures, etc. No violations were identified.
Pursuant to Federal Law No. 224 of 27 June 2010, the Company constantly maintained and updated
the list of insiders, notifying the persons included/excluded to/from the list of insiders, organised
interaction of structural divisions on issues related to control over the use and disclosure of insider
information in accordance with the requirements of the Russian legislation. If necessary, the list of
insiders was provided to the trade organisers of PJSC Moscow Exchange.
Interaction with public
authorities
The Company carried out the following work:
z collection and monthly submission of information on concluded contracts with indication of the entire
Informing and training
employees on anti-
corruption issues,
shaping anti-corruption
behaviour of employees
chain of owners of counterparties to the federal executive authority;
z monthly sending of information on the Company’s measures to improve efficiency and transparency
of the Company’s operations to the federal executive authority.
Upon the federal executive authority’s request the information on the measures aimed at improving the
efficiency of the anti-corruption activities was prepared and sent to the Ministry of Energy of Russia, the Ministry
of Labour and Social Affairs of the Russia, the Civil Service and HR Department of the Russian Government.
The information in the Anti-corruption Activities section of the corporate website and the internal portal
of the Company was updated in a timely manner.
Three trainings were held for the Company’s employees. Internal Control and Risk Management
Department employees passed an additional advanced training on a number of subjects. Internal Control
and Risk Management Department employees also took part in:
z the All-Russian interactive initiative organised by the Chamber of Commerce and Industry
of the Russian Federation and timed to the International Anti-Corruption Day;
z the SPARK Conference on Business Security and Risk Management 2018
An anonymous survey of employees on the implementation of the Anti-Corruption Policy of the Company
was conducted15.
14 PJSC FGC UES Order No. 259 of 6 July 2018
15 PJSC FGC UES Instruction No. 124 of 19 March 2018
338
APPENDIX 2
MINUTES OF
the Public Hearings on the PJSC FGC UES draft integrated
annual report for 2018
Venue:
9/11 Bolshoy Nikolovorobinsky Lane,
PJSC FGC UES, Moscow
Date and time:
18 April 2019, from 3 p.m. till 6 p.m.
AGENDA
1. PJSC FGC UES draft annual report for 2018: goals, standards and key topics.
2. Implementation of key infrastructure projects.
3. HR management and social projects of PJSC FGC UES in 2018.
4. Occupational and environmental safety management of PJSC FGC UES.
5. Recommendations and proposals of stakeholders for the draft annual report; Company representatives’ reaction
to the recommendations and proposals of stakeholders.
6. Summary.
LIST OF PARTICIPANTS
1.
2.
3.
4.
5.
6.
7.
8.
ALEKSEY
MOLSKY
DMITRY
VODENNIKOV
NATALIA
OZHEGINA
MARIA
TIKHONOVA
MADINA
KALOEVA
GEORGY
RESHETNIKOV
ALEKSANDER
MUKHIN
TARAS
YUDIN
Representatives of PJSC FGC UES
Acting First Deputy Chairman of the Management Board
Deputy Chairman of the Management Board, Chief Engineer
Deputy Chairman of the Management Board
Deputy Chairman of the Management Board
Director of Corporate Strategy, Head of the Corporate Strategy Department
Head of External Communications and the Government Relations Department
Representatives of Horizon Corporate Finance LLC
Executive Director (meeting moderator)
Senior Analyst
339
APPENDIX 1 ADDITIONAL INFORMATION ON THE SECTIONS OF THE ANNUAL REPORTINTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 2 MINUTES OF THE PUBLIC HEARINGS ON THE PJSC FGC UES DRAFT INTEGRATED ANNUAL REPORT Representatives of stakeholders
President of Rusenergosbyt LLC
Head of the Natural Monopolies Department JSC RUSAL Global Management B.V.
Head of the Relay Protection and Automation of Power Systems Department
at MPEI National Research University
Deputy Director of Public Relations of RusCable Media Holding
SPEAKERS:
The moderator explained the tasks and procedure of the Public Hearings.
ITEM NO.1
The speech was made by M. Tikhonova, Deputy Chairman of the Management Board.
Topic: PJSC FGC UES Draft Annual Report for 2018: Goals, Standards and Key Topics.
M. Tikhonova presented general facts about the Company,
including its area of activity, length of its power lines, number
and total transformer capacity of substations.
She gave an overview of requirements, recommendations
and standards used by the Company as guidelines in the
report preparation. It was noted that the Company intends to
gradually develop this approach to preparing the integrated
annual report, strives to improve the public reporting quality
and the efficiency of stakeholder engagement.
A summary of the procedure for selecting material report topics
was introduced and the main theme Space for Development
with explanation for its relevance was announced.
Ms Tikhonova also presented information on the report
certification procedure for which stakeholder representatives
were invited.
General Director of Fuel and Energy Complex Communications Development Centre
ITEM NO.2
Director of Development of the Russian Bird Conservation Union
Deputy Head of Expert Centre of the Non-Profit Partnership Russian Institute
of Directors
Deputy Chairman of the Energy Sub-Committee of the Russian Union of Industrialists
and Entrepreneurs
Leading Specialist of ANO Russian System of Quality (Roskachestvo)
Head of Staff in Energy under Vice President of NLMK Group
Head of the Issuer Control Management Department of the Listing Department
of PJSC Moscow Exchange
Head of the Student Labour Detachment Headquarters of MPEI
Assistant of the Civil Service and Mobilisation Training Department of the Ministry
of Energy of Russia
VLADIMIR
SHCHELKONOGOV
First Vice President of the Association ERA of Energy
MIKHAIL
ANDRONOV
OLEG
VASILIEV
ALEKSANDER
VOLOSHIN
ALEKSANDER
DEMENTYEV
IRINA
ESIPOVA
ELENA
PASTUKHOVA
NATALIA
LIKHACHEVA
ALEKSANDER
MAKHROV
ANNA
MIKHEEVA
ALEKSEY
MOSKALEV
ELENA
PASTUKHOVA
NIKITA
REMNEV
ALEKSANDER
CHUDNOV
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
340
The speech was made by A. Molsky, Acting First Deputy Chairman of the Management Board.
Topic: Implementation of Key Infrastructure Projects.
A. Molsky began with a review of the electricity and capacity
consumption dynamics for the Unified Energy System of
Russia and forecasts up to 2025 in accordance with the
approved Roadmap and the UES of Russia development
programme. He noted a trend for an increase in electricity
consumption and the corresponding increase in FGC electric
power output.
The speaker informed that the general development areas
for the main network infrastructure up to 2024 are indicated
in Decree of the President of the Russian Federation No. 204
dated 7 May 2018 on National Goals and Strategic Tasks for
Development of the Russian Federation Over the Period up
to 2024. Mr Molsky gave an overview on implementation of
key infrastructural projects in such areas as the development
ITEM NO.3
of centralised power systems, power supply to port zones,
development of the external power supply system for the
Baikal-Amur Mainline and the Trans-Siberian Railway, power
plants’ output, the ESPO and Power of Siberia projects, power
supply to advanced development zones.
He drew particular attention to the projects in the area of
technological connection for which the Company focuses
on large consumers.
In conclusion, he emphasised the innovation factor of the FGC
investment projects, noting that the Company’s approach lies
in application of new technologies without additional increase
in the costs of the projects.
The speech was made by N. Ozhegina, Deputy Chairman of the Management Board.
Topic: HR Management and Social Projects of PJSC FGC UES in 2018.
N. Ozhegina spoke about main staff indicators of FGS for
the reporting period such as average staffing number, age,
productivity, and turnover. She mentioned that the expert com-
munity highly evaluated the activities of the Company in the HR
management and social areas, which is further confirmed by
awards won at the specialised competitions in 2018 and 2019.
The Company pays special attention to personnel training
and education. The presentation provided information on the
activities of nine Personnel Training Centres, as well as the
training system using training simulators of operation of actual
power grid facilities.
It contained information on ongoing work for the development
of human capacity, particularly for introduction of professional
standards to the FGC personnel interaction system, as well as
the accreditation of education programmes of FGC to be used
in the electric grid complex. Ms Ozhegina reported on plans to
open a qualification assessment centre in 2019. The Company’s
involvement in the work of the youth section at the Russian
National Committee of CIGRE was highlighted. N. Ozhegina
also talked about young personnel training programmes
implemented jointly with MPEI National Research University.
At the end of the report, she touched upon such social respon-
sibility issues as corporate events, corporate sport, housing
and youth policies.
341
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 2 MINUTES OF THE PUBLIC HEARINGS ON THE PJSC FGC UES DRAFT INTEGRATED ANNUAL REPORT APPENDIX 2 MINUTES OF THE PUBLIC HEARINGS ON THE PJSC FGC UES DRAFT INTEGRATED ANNUAL REPORT ITEM NO.4
Chart of Proposals and Recommendations of Stakeholders
Appendix 1
No.
Stakeholder
Proposal
Taken into account
1.
2.
3.
4.
Representative
of the Expert Centre
of Non-Profit
Partnership Russian
Institute of Directors
To supplement the annual report with
information on implementation
of recommendations and information
on independent annual assessment
of the Board of Directors activities.
Representative
of the Russian Bird
Conservation Union
To amend the annual report stating that
the activities of PJSC FGC UES affect
biodiversity.
Representative
of the Association
ERA of Energy
To supplement Appendix 10 to the annual
report with a detailed list of RED Book
species.
To supplement the annual report
with information on independent
assessment results for staff qualification
correspondence to professional standards
organised by the Centre for Development
and Assessment of Qualifications
in the Electric Grid Complex (CDA).
Will be taken into account when drafting the 2019
annual report.
The impact of PJSC FGC UES on biodiversity
is insignificant.
Pursuant to standard GRI 304-2, impact is significant
if habitats, valuable populations or separate species
cannot be preserved.
In the course of PJSC FGC UES operation, no cases
of animals’ habitats relocation and/or damage were
observed.
Taken into account in Appendix 10.
Will be taken into account when drafting the 2019
annual report.
5.
Representative
of PJSC MOEX
To state in the annual report that dividends
are calculated with net revenue adjustment.
Taken into account in section Dividend Policy
and Profit Distribution.
The speech was given by D. Vodennikov, Deputy Chairman of the Management Board, Chief Engineer.
Topic: Occupational and Environmental Safety Management of PJSC FGC UES.
D. Vodennikov spoke about positive dynamics in improving
the Company’s grid security, decrease in accident rate and
number of erroneous actions of the personnel.
Leader of Environmental Protection in Russia 2018,
PJSC FGC UES won awards in two categories in the reporting
year.
The speaker informed the audience about the supervisory
audit conducted in 2018, the results of which showcased
the Company’s Environmental Management System as fully
compliant with the requirements of the ISO 14001:2015
international standard. Mr Vodennikov presented information
on the environmental policy and a summary of environmental
activities carried out in 2018, including, in particular, work
to preserve the habitat of the oriental stork and participation
in the Amur tiger conservation programme. It was noted
that following the results of the XIV All-Russian Competition
ITEM NO.5
D. Vodennikov informed the audience on the industrial injuries
dynamics and reported that the FGC total injury frequency
rate is 5 times lower than the average in the industry.
He also presented information on special assessment
of labour conditions (SALT) and activities of occupational
safety committees.
In conclusion, Mr Vodennikov focused on the Company’s goals
to increase the occupational safety level in 2019.
Stakeholders made their proposals and gave recommendations
for the draft annual report.
evaluation of the Board of Directors activities when preparing
future annual reports.
E. Zubakina expressed the desire to change the wording
“PJSC FGC UES’ activities do not have a significant impact on
the biodiversity of protected natural zones or other areas that
are significant from the point of view of biodiversity outside
of protected natural zones”. According to Ms Zubakina,
construction of power lines cannot but impact biodiversity.
D. Vodennikov replied that the Company shall consider it.
E. Pastukhova suggested stating in the annual report that
dividends are calculated with net revenue adjustment.
M. Tikhonova responded that the procedure for calculating
dividends in FGC is regulated by Order of the Russian
Government No. 1094-r dated 29 May 2017 on Forming
Principles for Long-Term Shareholder Interest – Russian
Federation in PJSC Rosseti on the Issue of Dividend Payments,
according to which the FGC dividend policy specifies
adjustments to the net profit in order to calculate the amount
of dividend payments.
N. Likhacheva suggested specifying the results of
recommendations given as a result of the annual independent
ITEM NO.6
The meeting moderator suggested that those with any
remaining questions should send them to the Company
in a working order, thanked the participants of the Public
M. Tikhonova confirmed the possibility to take this comment
into account.
V. Shelkonogov proposed supplementing the 2019 annual
report with information on independent assessment results
for staff qualification correspondence to professional
standards organised by the Centre for Development and
Assessment of Qualifications in the Electric Grid Complex
(CDA).
N. Ozhegina noted that preliminary results of the CDA
operation shall be obtained in 2019 and agreed to include
relevant information in the 2019 annual report.
Furthermore, the participants made other comments in
regard to the activities of the Company, but not related to
the contents of the annual report.
Hearings for their activity and informed that recommendations
received shall be included in the 2018 annual report if possible.
FGC representatives thanked the participants for their
presence in the Public Hearings as well.
Appendix: Chart of Proposals and Recommendations of Stakeholders.
A. Mukhin
Moderator
Executive Director
Horizon Corporate Finance LLC
M. Tikhonova
Deputy Chairman
of the Management Board
of PJSC FGC UES
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 2 MINUTES OF THE PUBLIC HEARINGS ON THE PJSC FGC UES DRAFT INTEGRATED ANNUAL REPORT APPENDIX 2 MINUTES OF THE PUBLIC HEARINGS ON THE PJSC FGC UES DRAFT INTEGRATED ANNUAL REPORT APPENDIX 3
REPORT OF PJSC FGC UES
on compliance with principles and recommendations
of the Corporate Governance Code approved by the Bank
of Russia Board of Directors on 21 March 2014 and
recommended for application by the Bank of Russia
(Bank of Russia Letter No. 06-52/2463 of 10 April 2014)
Report date: 30 March 2019.
This Report was considered as part of the preliminary consideration of the Company’s Annual Report
by the Board of Directors of PJSC FGC UES 24.05.2019 (Minutes No. 450 of 24 May 2019).
The Board of Directors confirms that the material presented in this Report contains complete and accurate
information on the Company’s compliance with the principles and recommendations of the Corporate Governance
Code during the reporting period from 1 January 2018 to 30 March 2019.
This Report is an Appendix to the annual report of PJSC FGC UES for 2018, which describes the most significant
aspects of the model and practice of corporate governance, as well as a description of the methodology by which
the Company conducted an assessment of compliance with the principles of corporate governance.
Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
1.1.
The Company shall ensure equal and fair treatment of all shareholders exercising their right to participate in the governance of the Company.
1.1.1.
1.1.2.
1.1.3.
The Company
shall create
the most favourable
conditions for its
shareholders
to enable them
to participate
in the General
Meeting
and develop
reasoned positions
on items on its
agenda, as well as
to provide them
with the opportunity
to coordinate their
actions and express
opinions on items
discussed.
Procedures for
sending notice of
the General Meeting
and provision of the
relevant materials
shall enable
shareholders to get
properly prepared for
participating therein.
During
the preparation
for and holding of
the General Meeting,
shareholders shall
be able to receive in
a freely and timely
manner information
on the meeting and
materials thereto,
ask questions to
members of the
Company’s executive
bodies and the Board
of Directors, and to
communicate with
each other.
observed
partially
observed
not observed
observed
partially
observed
not observed
observed
partially
observed
not observed
1. The Company’s internal
document approved by the
General Meeting of Shareholders
and regulating the procedures for
holding the General Meeting is
publicly available.
2. The Company provides an
accessible way to communicate
with the community, such
as a hotline, a special email
address or an Internet forum
that enables shareholders to
express their opinions and ask
questions regarding the agenda
when preparing for the General
Meeting. The above actions were
taken by the Company prior to
each General Meeting held in the
reporting period.
1. The Notice of the upcoming
General Meeting was posted
(published) on the corporate
website at least 30 days prior
to the meeting.
2. The Notice of the General
Meeting specified the exact
location of the meeting and
documents required for
admission to the premises.
3. Shareholders had access
to the information about
the persons who had proposed
items on the agenda and
nominated candidates
to the Board of Directors
and the Audit Commission
of the Company.
1. In the reporting period,
shareholders were enabled to
ask questions to members of
the Company’s executive bodies
and the Board of Directors prior
to and during the Annual General
Meeting.
2. Position of the Board of
Directors (including any
dissenting opinions recorded in
the minutes) on each agenda
item of the General Meetings
held within the reporting period
was included in the materials
for the General Meeting of
Shareholders.
3. The Company provided
shareholders, entitled thereto,
with access to the list of persons
entitled to participate in the
General Meeting, starting from
the date of its receipt by the
Company, in all cases of holding
general meetings in the reporting
period.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Explanation of deviation from corporate governance
principles compliance criteria
Comments
Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
1.2.
Shareholders shall have equal and fair opportunity to participate in the Company’s profits by means of receiving dividends.
1. The Company’s dividend policy
has been developed, approved
by the Board of Directors and
disclosed.
2. If the Company’s dividend
policy uses criteria from
the Company’s financial
accounts to determine
the amount of dividends,
the dividend policy shall employ
the consolidated financial
indicators.
1. The Company’s dividend policy
clearly indicates the financial/
economic circumstances under
which the Company shall not pay
dividends.
1.2.1.
1.2.2.
The Company shall
develop and put
in place a
transparent
and clear
mechanism
for determining
the amount of
dividends and
payment thereof.
The Company shall
not make a decision
on the dividend
payment if such
decision, without
formally violating
limits set by law,
is economically
unjustified and
might lead to false
assumptions about
the Company’s
activity.
1.2.3.
The Company
shall not allow
deterioration of
dividend rights
of its existing
shareholders.
1. In the reporting period,
the Company did not take
any actions leading to the
deterioration of dividend rights
of the existing shareholders.
observed
partially
observed
not observed
observed
partially
observed
not observed
observed
partially
observed
not observed
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
observed
partially
observed
not observed
observed
partially
observed
not observed
Corporate
governance
principles
Corporate governance principle
compliance criteria
1.1.4.
1.1.5.
1.1.6.
There shall be
no unjustified
difficulties
preventing
shareholders from
exercising their
right to request for
a General Meeting
to be convened,
nominate candidates
to the Company’s
governing bodies,
and to place
proposals on its
agenda.
Each shareholder
shall be able to
freely exercise his/
her right to vote in a
straightforward and
the most convenient
manner.
Procedures for
holding a General
Meeting set by
the Company shall
provide equal
opportunity to all
persons present at
the general meeting
to express their
opinions and ask
questions that might
be of interest to
them.
1. In the reporting period,
shareholders were entitled
to propose new items to be
included on the agenda
of the Annual General Meeting
at least 60 days after the end
of the respective calendar year.
2. In the reporting period,
the Company did not refuse to
accept proposals for the agenda
or candidates to the Company’s
bodies due to misprints or
other insignificant defects in a
shareholder’s proposal.
1. The Company’s internal
document (internal policy)
includes provisions whereby
any participant of the General
Meeting may, until the end of
the General Meeting, request a
copy of the ballot filled by that
participant and certified by
the Company’s counting board.
1. In the reporting period,
when General Meetings of
Shareholders were held in
the form of a meeting (joint
presence of shareholders),
sufficient time was provided for
reports on agenda items and for
further discussion thereof.
2. Candidates to the Company’s
governing and control bodies
were available to answer
shareholders’ questions
at the meeting where they were
put to the vote.
3. When making decisions
related to the preparation and
holding of the General Meeting
of Shareholders, the Board of
Directors considered a matter on
the use of telecommunications
to provide shareholders with
remote access to attend
the General Meetings held
in the reporting period.
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
Corporate
governance
principles
Corporate governance principle
compliance criteria
1.2.4.
The Company shall
strive to rule out any
ways through which
its shareholders
can obtain any
profit or gain at the
Company’s expense
other than dividends
and liquidation value.
1. To eliminate other methods
for shareholders to obtain profit
(income) at the Company’s
expense, other than dividends
and liquidation value, the
Company’s internal documents
establish controls that ensure
the timely identification and
procedure for the approval
of transactions with persons
affiliated (related) with
substantial shareholders
(persons entitled to dispose
of the votes attached to voting
shares), where the law does
not formally recognise such
transactions as related-party
transactions.
Explanation of deviation from corporate governance
principles compliance criteria
Comments
1. Partially not observed.
The Company’s internal documents do not provide for controls
that ensure the timely identification and procedure for the
approval of transactions with persons affiliated (related)
with substantial shareholders (persons entitled to dispose
of the votes attached to voting shares), where the law does
not formally recognise such transactions as related-party
transactions.
The Company’s substantial shareholders are PJSC Rosseti that
holds 80.13% of voting shares, and the Russian Federation
represented by the Federal Property Management Agency
under the agreement concluded with PJSC Rosseti.
The Russian Federation has no affiliated persons.
Currently, the legislation is moving along the path of
simplifying the related-party transactions procedure, and
reducing their total number. Thus, Federal Law No. 343-FZ
of 3 July 2016, from 1 January 2017, introduced a new
related-party transactions procedure through notification
to management bodies members, and also expanded the
list of transactions that are not recognised as related-party
transactions, including transactions with a price threshold,
before the achievement of which the transactions can be made
without corporate procedures provided by Chapter XI of the
Federal Law No. 208-FZ of 26 December 1995 On Joint-Stock
Companies.
In accordance with these changes and taking into account
the Bank of Russia Directive No. 4335-U of 31 March 2017
(regarding the amount of transactions) deals amounting
to more than RUB 1 billion between PJSC FGC UES and
the controlled entities of PJSC Rosseti in 2018 were related-
party transactions and were made in the manner prescribed by
the requirements of the legislation of the Russian Federation.
In accordance with the procedure established in the Company,
all contracts concluded in the Company are preliminary
approved, including checking counterparties for transactions.
The counterparties are also inspected at
the stage of procurement procedures.
At the moment, the Company does not plan to make any
additional amendments to its internal documents in respect
of the introducing additional control measures and procedures
for the approval of transactions mentioned in this paragraph.
1.3.
The corporate governance system and practices shall guarantee equal conditions for all shareholders owning shares of the same category (type), including minority
shareholders and foreign shareholders, as well as their equal treatment by the Company.
1.3.1.
The Company shall
create conditions
that would enable
its governing bodies
and controlling
persons to treat each
shareholder fairly,
in particular, which
would eliminate the
possibility of any
abuse of minority
shareholders by
major shareholders.
1. During the reporting period,
the procedures for managing
potential conflicts of interest
among existing shareholders
were efficient, and the Board of
Directors paid due attention to
conflicts among shareholders,
if there were any.
observed
partially
observed
not observed
No conflicts of
interests were
recorded in the
reporting period.
Corporate
governance
principles
Corporate governance principle
compliance criteria
1.3.2.
The Company shall
not take any actions
that will or might
result in artificial
redistribution of
corporate control.
1. The Company does not have
quasi-treasury shares or they did
not take part in the voting during
the reporting period.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
Explanation of deviation from corporate governance
principles compliance criteria
Comments
The Company has
quasi-treasury
shares but they did
not take part in the
voting at the Annual
General Meeting and
the Extraordinary
General Meeting of
Shareholders in 2018.
1.4.
1.4.
The shareholders shall be provided with reliable and efficient means of recording their rights in shares as well as with the opportunity to freely dispose of such
shares in a non-onerous manner.
1. The registrar’s quality and
reliability in maintaining the
shareholder register meet the
Company’s and its shareholders’
needs.
The shareholders
shall be provided
with reliable and
efficient means of
recording their rights
in shares as well as
with the opportunity
to freely dispose of
such shares in a non-
onerous manner.
observed
partially
observed
not observed
2.1.
The Board of Directors provides strategic governance of the Company, determines the main principles of and approaches to the arrangement of the Company’s risk
management and internal control systems, supervises the Company’s executive bodies, and performs other key functions.
1. Partially not observed.
According to the Company’s Articles of Association, the Board
of Directors shall appoint members of the Management Board
of PJSC FGC UES, and the General Meeting of Shareholders
shall appoint the Chairman of the Management Board.
The Company did not amend its Articles of Association with
respect to delegating the authority to appoint the Chairman of
the Management Board to the Board of Directors at the Annual
General Meeting of Shareholders in 2018 due to the high
risk of financial and economic implications for the Company
resulting from the possible demand for redemption of minority
stakes.
Due to the amendments to the legislation (Federal Law
No. 209-FZ of 19 July 2018) regarding the exclusion of
the redemption of shares when delegating authority from
the General Meeting of Shareholders to the Board of Directors,
the Company plans to consider delegating authority to appoint
the Chairman of the Management Board to the Board of
Directors.
2. Observed.
2.1.1.
2.1.2.
The Board of
Directors shall be
responsible for
making decisions
to appoint and
remove members
of executive
bodies, including in
connection with their
failure to perform
their duties properly.
The Board of
Directors shall
also ensure that
the Company’s
executive bodies
act in accordance
with an approved
development
strategy and the
Company’s activities.
The Board of
Directors shall
establish basic long-
term targets of the
Company’s activity,
evaluate and approve
its key performance
indicators and
principal business
goals, as well as
evaluate and approve
its strategy and
business plans in
respect of its core
businesses
observed
partially
observed
not observed
1. The Board of Directors has
the powers set out in the Articles
of Association to appoint and
remove members of the executive
bodies, as well as determine
terms and conditions of
contracts to be concluded
with them.
2. The Board of Directors has
considered a report (reports)
of the sole executive body
and members of the collective
executive board
on the implementation
of the Company’s strategy.
1. During the reporting
period, the Board of Directors
considered matters related
to the progress review and
updating of the Company’s
strategy, the approval of its
financial and business plan
(budget), and the review of
criteria and performance
indicators (including
intermediate) of the Company’s
strategy and business plan.
observed
partially
observed
not observed
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
2.1.3.
2.1.4.
2.1.5.
2.1.6.
2.1.7.
The Board of
Directors shall
determine principles
of and approaches
to the establishment
of the Company’s
risk management
and internal control
systems.
The Board of
Directors shall
determine the
Company’s policy on
remuneration and/or
reimbursement
of expenses
incurred by its Board
members, members
of its executive
bodies and other key
managers.
1. The Board of Directors
determined principles of
and approaches to the
establishment of the Company’s
risk management and internal
control systems.
2. In the reporting period,
the Board of Directors reviewed
the Company’s internal control
and risk management systems.
1. The Company has developed
and implemented the policy (-ies)
approved by the Board
of Directors
on the remuneration and
reimbursement (compensation)
of expenses incurred by
the Board members, members
of its executive bodies and other
key managers.
2. During the reporting
period, the Board of Directors
considered issues related
to the above policy(-ies).
The Board of
Directors shall
play a key role in
prevention, detection
and resolution of
internal conflicts
between the
Company’s bodies,
shareholders and
employees.
1. The Board of Directors plays
a key role in prevention,
detection and resolution
of internal conflicts.
2. The Company has established
a system for identifying
transactions involving conflicts
of interest and a system
of measures aimed at resolving
such conflicts.
1. The Board of Directors has
approved the Regulations
on the Information Policy.
2. The Company has determined
persons responsible for
implementing the information
policy.
1. During the reporting
period, the Board of Directors
considered items
on the Company’s corporate
governance practices.
The Board of
Directors shall play
a key role in ensuring
that the Company
is transparent,
discloses
information in full
and in a timely
manner, and provides
its shareholders with
easy access to its
documents.
The Board of
Directors shall
monitor the
Company’s corporate
governance
practices and play
a key role in its
material corporate
events.
observed
partially
observed
not observed
observed
partially
observed
not observed
observed
partially
observed
not observed
observed
partially
observed
not observed
observed
partially
observed
not observed
2.2.
The Board of Directors shall be accountable to the Company’s shareholders.
2.2.1.
Information
on the Board of
Directors’ activities
shall be disclosed
and provided
to the shareholders.
1. The Company’s annual report
for the reporting period includes
information on the attendance
at meetings of the Board of
Directors and its committees.
2. The annual report contains
information on the main findings
of the Board of Directors’
performance evaluation for
the reporting period.
observed
partially
observed
not observed
Explanation of deviation from corporate governance
principles compliance criteria
Comments
Corporate
governance
principles
Corporate governance principle
compliance criteria
2.2.2.
The Chairman
of the Board of
Directors must
be available for
communication
with the Company’s
shareholders.
1. The Company has
a transparent procedure that
enables shareholders to submit
their questions and positions
thereon to the Chairman
of the Board of Directors.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
2.3.
The Board of Directors shall be an efficient and professional governing body of the Company capable of making objective and independent judgments and taking
decisions in the best interests of the Company and its shareholders
1. Observed.
2. Not observed.
In the reporting period, the Board of Directors and/or the HR
and Remuneration Committee did not evaluate candidates to
the Board of Directors considering the following criteria.
The procedure for nominating candidates to the Board of Directors
of the Company is regulated by the Regulation of the Government
of the Russian Federation No. 738 of 3 December 2004.
Taking into account the legal status of the Company
(PJSC FGC UES is included in the special list approved by the
Order of the Government of the Russian Federation No. 91-r
of 23 January 2003), candidates to the Board of Directors are
nominated in accordance with the Order of the Government
of the Russian Federation.
The candidates to the Board of Directors are selected and
evaluated by the Federal Property Management Agency
Committee on selection of independent directors and
representatives of the interests of the Russian Federation
for governing and control bodies of joint-stock companies
considering suggestions of the Russian Ministry of Energy
and PJSC FGC UES.
The candidates are preliminary surveyed and evaluated in
terms of their experience, knowledge, business reputation,
absence of conflicts of interest, etc.
In 2018, candidates for the Board of Directors of PJSC FGC UES
were nominated by the Order of the Government
of the Russian Federation No. 363-r of 3 March 2018.
The Company does not plan to implement this
recommendation in the next reporting periods.
1. Partially not observed.
When holding the Annual General Meeting of Shareholders
on 28 June 2018, in the agenda of which the issue of electing
members of the Board of Directors was included, no information
was provided on the results of the evaluation of such candidates
by the Board of Directors or the Remuneration Committee.
The procedure for nominating candidates to the Board of Directors
of the Company is regulated by the Regulation of the Government
of the Russian Federation No. 738 of 3 December 2004.
In 2018, candidates for election to the Board of Directors
of PJSC FGC UES as representatives of the Russian Federation
and independent directors were nominated by the Order
of the Government of the Russian Federation No. 363-r of 3
March 2018.
The Company does not plan to implement this recommendation
in the next reporting periods.
Other information on the candidate (biographical data,
the consent, the status of an independent director) was presented
to the shareholders as part of the materials to the EGM.
2.3.1.
Only persons with
impeccable business
and personal
reputation shall
be elected to the
Board of Directors;
such persons
shall also have
knowledge, skills,
and experience
required to make
decisions that fall
within the role and
responsibilities
of the Board of
Directors and to
perform its functions
efficiently.
observed
partially
observed
not observed
1. The procedure for the Board
of Directors’ performance
evaluation adopted in the
Company includes, among other
things, evaluation of professional
skills and expertise of the Board
members.
2. In the reporting period,
the Board of Directors
(or its Nomination Committee)
evaluated candidates
to the Board of Directors in terms
of their experience, knowledge,
business reputation, absence
of conflicts of interest, etc.
2.3.2.
Board members shall
be elected pursuant
to a transparent
procedure enabling
shareholders to
obtain information
about the respective
candidates that is
sufficient to get
an idea
of the candidates’
personal and
professional
qualities.
2.3.3.
The composition
of the Board of
Directors shall
be balanced, in
particular, in terms
of qualifications,
expertise, knowledge
and business
qualities of its
members. The Board
of Directors shall
enjoy the confidence
of shareholders.
1. In all cases when a general
meeting of shareholders was
held during the reporting period,
the agenda of which included
the election of the Board of
Directors, the Company provided
shareholders with biographical
data of all candidates
to the Board of Directors,
results of the evaluation of such
candidates performed by
the Board of Directors
(or its Nomination Committee),
as well as information on
the candidates’ compliance
with the independence
criteria according to the
recommendations in paragraphs
102–107 of the Code, and the
candidates’ written consent to be
elected to the Board of Directors.
1. As part of the Board
performance evaluation carried
out in the reporting period,
the Board of Directors reviewed
its own needs in professional
expertise, experience and
business skills.
observed
partially
observed
not observed
observed
partially
observed
not observed
350
351
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Explanation of deviation from corporate governance
principles compliance criteria
Comments
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
Corporate
governance
principles
Corporate governance principle
compliance criteria
1. As part of the Board
performance evaluation carried
out in the reporting period,
the Board of Directors
considered whether the size
of the Board was appropriate in
terms of the Company’s needs
and shareholder interests.
2.3.4.
The number of
members of the
Company’s Board
of Directors shall
enable the Board
to organise its
activities in the most
efficient way, in
particular, to create
Board committees,
as well as to enable
the Company’s
substantial minority
shareholders to elect
a candidate
to the Board of
Directors for whom
they would vote.
2.4.
The Board of Directors shall include a sufficient number of independent directors
1. During the reporting period,
all independent members
of the Board of Directors met
the independence criteria
specified in recommendations
102–107 of the Code or were
recognised as such
by the decision of the Board
of Directors.
observed
partially
observed
not observed
2.4.1.
An independent
director shall mean
any individual
who has required
professional skills
and expertise and
is sufficiently able
to have his/her own
position and make
objective and fair
judgments, free
from the influence
of the Company’s
executive bodies,
certain groups of
shareholders or
other stakeholders. It
should be noted that,
in normal conditions,
a candidate (or an
elected director)
shall not be deemed
independent, if he/
she is associated
with the company,
any of its substantial
shareholders,
material trading
partners or
competitors,
or the government.
Corporate
governance
principles
Corporate governance principle
compliance criteria
2.4.2.
It is recommended
to evaluate whether
candidates
nominated
to the Board of
Directors meet
independence
criteria as well as to
review, on a regular
basis, whether
independent Board
members meet
the independence
criteria. When
carrying out
such evaluation,
substance shall take
precedence over
form.
2.4.3.
At least one third
of the elected
members
of the Board
of Directors is made
up of independent
directors.
1. In the reporting period,
the Board of Directors
(or the Nomination Committee)
evaluated the independence
of each candidate to the Board
and submitted the relevant
opinion to shareholders.
2. In reporting period, the Board
of Directors (or the Nomination
Committee) at least once
reviewed the independence of
the acting Board of Directors
members who the Company
specifies in the annual report
as independent directors.
3. Procedures have been
developed in the Company that
determine necessary actions
to be taken by the member of
the Board of Directors if he or
she stops being independent,
including the obligation to notify
the Board of Directors in a timely
manner.
1. At least one third
of the elected members
of the Board of Directors is made
up of independent directors.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
observed
partially
observed
not observed
Explanation of deviation from corporate governance
principles compliance criteria
Comments
1. Not observed.
In 2018, the conclusion regarding the independence of
candidates to the Board of Directors of the Company was not
presented to the shareholders as the status of the candidates
to the Board of Directors of the Company is determined by
the Order of the Government of the Russian Federation
No. 363-r of 3 March 2018 on Nomination of Candidates to
the Governing and Control Bodies of PJSC FGC UES taking
into account the preliminary selection by the Federal Property
Management Agency of candidates for management and
control bodies of joint-stock companies with participation
of a state, representatives of the Moscow Exchange, where
the independence of these candidates is also assessed in
accordance with recommendations of the Code and the
requirements of the Listing Rules of PJSC Moscow Exchange.
The Company does not plan to implement this
recommendation in the next reporting periods.
2. Observed.
3. Observed.
1. Partially not observed.
Independent members of the Board of Directors during
the reporting period made up less than 1/3 of the Board of
Directors composition of 11 members.
To comply with this recommendation of the Code, the number
of independent directors in the company shall be more than
three (at least four).
Board of Directors of the Company has three independent
directors, that corresponds with the listing rules of
the Moscow Exchange, which state that the Board has
to have at least 1/5, but no less than 3, independent directors.
The process of formation of proposals and nomination of
candidates for the management bodies of the Company is
regulated by the Resolution of the Government of the Russian
Federation No. 738 On Management of the Federal Ownership
of Shares of Joint-stock Companies and the Use of a Special
Right to Participate in the Management of Joint-stock
Companies (‘Gold Share’) dated 3 December 2004. Candidates
for the Board of Directors of the Company are elected
on the basis of the corresponding order of the Government of
the Russian Federation.
In 2017, election candidates for the Board of Directors of
PJSC FGC UES were nominated by the order of the Government
of the Russian Federation No. 602-r of 31 March 2017 as
representatives of the Russian Federation and independent
directors.
In 2018, election candidates for the Board of Directors of
PJSC FGC UES were nominated by the order of the Government
of the Russian Federation No. 303-r of 3 March 2018 as
representatives of the Russian Federation and independent
directors.
Thus, the Company cannot influence the process of electing
members to the Board of Directors.
The risks associated with the incomplete implementation
of the recommendations of the Code are offset
by the effective organisation of the activities of independent
directors in the Company.
There is no information on the planned increase in the number
of nominated independent directors; therefore, there is no plan
to increase their number at present.
352
353
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Explanation of deviation from corporate governance
principles compliance criteria
Comments
Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
Corporate
governance
principles
Corporate governance principle
compliance criteria
2.4.4.
Independent
directors shall play a
key role in preventing
internal conflicts
in the Company
and performing
the Company’s
material corporate
actions.
1. Independent directors
(who do not have any conflicts
of interest) perform a preliminary
evaluation of material corporate
actions related to a potential
conflict of interest, and
the findings of such evaluation
are submitted to the Board
of Directors.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
1. Partially not observed.
Independent directors (who do not have any conflicts
of interest) do not always perform a preliminary evaluation
of material corporate actions related to a potential conflict
of interest.
The Company’s Articles of Association do not give a definition
of material corporate actions.
However, the issues mentioned in the Corporate Governance
Code relating to material actions are:
z reorganisation of the Company;
z acquisition of 30 or more percent of the voting shares
of the Company (takeover);
z material transactions made by the Company;
z increase or decrease in the authorised capital
of the Company;
z listing and delisting of the Company’s shares,
in accordance with the current legislation and the Articles
of Association of the Company, are assigned to the
competence of the Board of Directors or the General Meeting
of Shareholders.
Most of these issues (except for listing and delisting of
shares and decrease in the authorised capital) fall within
the competence of the Strategy Committee of the Board of
Directors.
Thus, the assessment of material corporate actions related
to a possible conflict of interest is carried out within the
framework of the analysis of the Board Strategy Committee
materials, as well as within the consideration of materials sent
to the members of the Board of Directors.
During the reporting period, several material corporate actions
were made by persons under the control of the Company from
the list of material corporate actions specified in the Code.
In all these cases, the Strategy Committee made a preliminary
assessment of corporate actions and gave appropriate
recommendations to the Board of Directors.
Therefore, the risks associated with the incomplete
implementation of this recommendation of the Code have
not been identified.
Under the current process of reforming the corporate
legislation and the lack of a unified approach to understanding
the essence of "material corporate actions", the Company
does not currently plan to make any amendments to its
internal documents.
2.5.
The Chairperson of the Board of Directors contributes to the most effective implementation of the functions imposed on the Board of Directors
2.5.1.
The Chairperson
of the Board
of Directors shall
be an independent
director; or a
senior independent
director shall be
appointed among
the Company’s
independent
directors to
coordinate work
of the independent
directors and to
liaise with the
Chairperson
of the Board.
1. The Chairperson of the Board
of Directors is an independent
director; or a senior independent
director has been appointed
among the Company’s
independent directors.
2. The function, rights and duties
of the Chairperson of the Board
of Directors (and, if applicable,
the Senior Independent Director)
are properly specified
in the Company’s internal
documents.
observed
partially
observed
not observed
1. Not observed.
The Chairman of the Board of Directors is not an independent
director.
In accordance with sub-paragraph D of paragraph 1 of the list of
instructions of the President of the Russian Federation No. Pr-846
of 2 April 2011, as well as the Order of the Government of the
Russian Federation No. ISH-P13-26pr of 8 April 2011, professional
trustee shall be elected as a Chairperson of the Board of Directors
of companies with state participation.
A directive is issued on the topic of election of the Chairperson
of the Board of Directors in accordance with the Decree
of the Government of the Russian Federation No. 738 of
3 December 2014.
There is no practice of determining a senior independent director
in the Board of Directors during the reporting period.
At the same time, independent directors actively participate in
the work of the Board of Directors and have the opportunity to
communicate directly with both the Chairman of the Board
of Directors, the internal auditor and management
of the Company. In addition, the Company has established
Committees of the Board of Directors, two of which (the Audit
Committee and the HR and Remuneration Committee) consist
exclusively of independent directors. The activities of independent
directors in the Company are organised effectively and the
introduction of an additional Senior Independent Director position
will not lead to improvements in the corporate governance system
of the Company. Thus, the absence of the Senior Independent
Director does not entail additional risks for the Company
and its shareholders.
The Company does not plan to appoint a Senior Independent
Director.
The election of the Chairperson of the Board of Directors will be
held in accordance with the directive of the Government
of the Russian Federation.
2. Observed.
2.5.2.
2.5.3.
The Chairperson
of the Board
of Directors ensures
a constructive
atmosphere
of meetings, free
discussion
of issues included
in the agenda
of the meeting,
control over
the implementation
of decisions made
by the Board
of Directors.
The Chairperson
of the Board of
Directors shall
take the necessary
measures to provide
members
of the Board of
Directors with
information
necessary for
making decisions on
issues of the agenda
in a timely manner.
1. The performance
of the Chairperson of the Board
of Directors was assessed
as part of the procedure for
evaluating the Board of Directors’
effectiveness during
the reporting period.
observed
partially
observed
not observed
observed
partially
observed
not observed
1. The duty of the Chairperson
of the Board of Directors, which
is to ensure all Board members
are provided with relevant
information on the meeting’s
agenda in a timely manner, is set
out in the Company’s internal
documents.
2.6.
Members of the Board of Directors act in good faith and reasonably in the interests of the Company and its shareholders on the basis of sufficient knowledge
with due diligence and discretion
2.6.1. Members of the
Board of Directors
make decisions
taking into account
all available
information, in the
absence of a conflict
of interest, based
on equal treatment
of shareholders of
the Company, within
the framework of
ordinary business
risk.
2.6.2.
The rights and
obligations
of the members
of the Board of
Directors are clearly
stated and enshrined
in the Company’s
internal documents.
1. Internal documents of
the Company establish that
a member of the Board of
Directors is obliged to notify
the Board of Directors if he or
she has a conflict of interest
in relation to any item on the
meeting agenda of the Board of
Directors or a Board committee,
prior to the discussion of
the relevant agenda item.
2. The Company’s internal
documents stipulate that
a member of the Board of
Directors shall refrain from
voting on any item where he or
she has a conflict of interest.
3. The Company has established
a procedure that allows the
Board of Directors to receive
professional advice on matters
within its competence at the
expense of the Company.
1. The Company adopted and
published an internal document
that clearly defines the rights
and obligations of members
of the Board of Directors.
observed
partially
observed
not observed
observed
partially
observed
not observed
354
355
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Explanation of deviation from corporate governance
principles compliance criteria
Comments
Corporate
governance
principles
Corporate governance principle
compliance criteria
2.7.3.
The format
of the meeting
of the Board
of Directors is
determined with
regards to the
importance of
the agenda. Most
important issues
shall be resolved
face-to-face.
1. The Company’s Articles
of Association or internal
document provide that the most
important items (according
to the list in Recommendation
168 of the Code) shall be
considered at Board meetings
held in person.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
Corporate
governance
principles
Corporate governance principle
compliance criteria
2.6.3. Members of the
Board of Directors
have sufficient time
to carry out their
duties.
2.6.4.
All members of the
Board of Directors
have equal access
to documents
and information
of the Company.
Newly elected
members of the
Board of Directors
shall be provided
with sufficient
information on the
Company and the
work of the Board
of Directors as soon
as possible.
1. Individual attendance at
meetings of the Board of
Directors and committees, as
well as time spent in preparation
for participation in meetings,
was taken into account as
part of the Board of Directors’
assessment procedure, during
the reporting period.
2. In accordance with internal
documents of the Company,
members of the Board of
Directors are obliged to notify
the Board of Directors of their
intention to join the management
bodies of other organisations
(in addition to controlled and
affiliated organisations
of the Company), as well as of
the fact of such appointment.
1. In accordance with internal
documents of the Company,
members of the Board of
Directors have the right to access
documents and make inquiries
concerning the Company and
its controlled organisations, and
executive bodies of the Company
are obliged to provide relevant
information and documents.
2. The Company has a
formalised program of
orientation events for newly
elected members of the Board
of Directors.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
observed
partially
observed
not observed
Explanation of deviation from corporate governance
principles compliance criteria
Comments
1. Partially not observed.
The Company’s Articles of Association and internal documents
do not determine what issues shall be resolved at face-to-face
meetings of the Board of Directors.
According to the recommendations of the Corporate
Governance Code, issues to be resolved at face-to-face
meetings include the following:
z related to holding an Annual General Meeting of
Shareholders;
z in accordance with the directives of the Government of the
Russian Federation;
z approval of the Company’s material transactions;
z consideration of material business aspects of any legal
entities controlled by the Company;
z financial and operational activities of the Company’s
business (including financial and operational plans);
z other, including the results of the Board of Directors'
performance assessment, review of risk management
policy, etc.
Thus, a number of items that, according to the Code, require
face-to-face consideration by the Board of Directors involve
tight deadlines for consideration what does not allow to ensure
holding a Board of Directors face-to-face meeting within the
time specified by law due to a possible lack of quorum.
At the same time, the work plan of the Board of Directors
defines a range of priority issues that are considered at
face-to-face meetings, including approval of a business plan
(a consolidated business plan including indicators
of financial and economic activity of subsidiaries and
dependent companies), the investment programme
of the Company and the long-term development programme.
In 2018, a draft Corporate Governance Code was developed
with the need to consider issues defined by the Corporate
Governance Code at face-to-face meetings of the Board of
Directors taken into account. Currently, the draft of the Code is
being approved by the management bodies of the Company.
2.7.
Meetings of the Board of Directors, preparation for them and participation of members of the Board of Directors ensure the effective functioning of the Board of Directors
1. The Board of Directors held
at least six meetings during
the reporting period.
1. The Company approved an
internal document defining
the procedure of preparation
for and holding meetings
of the Board of Directors, which,
also establishes that the notice
of holding the meeting shall be
sent, as a rule, at least 5 days
in advance.
observed
partially
observed
not observed
observed
partially
observed
not observed
2.7.1. Meetings of
the Board of
Directors are held
as necessary, taking
into account
the scope of
activities and
the Company’s
objectives in
a certain period of
time.
2.7.2.
The internal
documents
of the Company
establish the
procedure for
preparing and
holding meetings
of the Board of
Directors, providing
the members of the
Board of Directors
with the opportunity
to prepare for a
meeting properly.
356
357
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Corporate
governance
principles
Corporate governance principle
compliance criteria
2.7.4.
Decisions
on the most
important issues
related to the
Company’s business
shall be made at a
meeting of the Board
of Directors by a
qualified majority
vote or by a majority
vote of all elected
Board members.
1. The company’s Articles
of Association provides
that decisions on the most
critical issues outlined in
Recommendation 170
of the Code shall be made at
a meeting of the Board of
Directors by a qualified majority
of at least three quarters of
votes or by a majority of votes
of all elected members
of the Board of Directors.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
Explanation of deviation from corporate governance
principles compliance criteria
Comments
1. Not observed.
The Company’s Articles of Association provides that decisions
on the most critical issues outlined in Recommendation 170
of the Code shall be resolved at a meeting of the Board of
Directors by a qualified majority of at least three quarters
of votes or by a majority of votes of all elected members
of the Board of Directors.
In accordance with paragraph 18.6 of the Charter, decisions at
a meeting of the Company's Board of Directors shall be made
by a majority vote of the members of the Board of Directors
participating in the meeting, except for cases as required by
the law of the Russian Federation or the present Articles of
Association.
Paragraph 18.8 of the Company’s Articles of Association
specifies the list of issues to be resolved by a two-thirds
majority of votes of the Board members participating
in the meeting. In particular, the list includes the issues,
stipulated by paragraph 4 and paragraph 8 of Recommendation
170 of the Code: approval of the Company’s material
transactions and consideration of material items relating
to activities of any legal entities controlled by the Company.
In addition, in accordance with the Articles of Association,
decisions are made by a two-thirds majority votes of the Board
of Directors by the members participating in the meeting
of the Company's participation in other organisations
and credit policy setting.
In practice, this Code recommendation is being implemented,
as in 2018 at least 10 of the 11 elected members
of the Board of Directors participated in 85 percent
of the Board of Directors' meetings. Accordingly, in most cases
a simple majority of the votes of the members of the Board
of Directors participating in the meeting is comparable
to the majority of the votes of all elected members
of the Board of Directors. It should also be noted that in 2018,
none of the issues at all meetings of the Board of Directors
was resolved by less than a half of the votes of all 11 elected
members of the Board of Directors.
The risks associated with incomplete implementation
of the recommendations of the Code are offset by the
traditionally high attendance of meetings by Board members,
as well as the decision-making procedures adopted by
the Company: decisions made by the Board of Directors shall
be based on the consensus of all Board members, and key
decisions shall be worked out within the scope of the work
of the Committees of the Board of Directors.
The Company does not currently plan to amend its Articles
of Association.
Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
2.8.
The Board of Directors establishes committees for preliminary consideration of the most important issues of the Company's activities.
observed
partially
observed
not observed
observed
partially
observed
not observed
observed
partially
observed
not observed
1. The Board of Directors
established an Audit Committee
composed of independent
directors only.
2. The Company’s internal
documents determine the
objectives for the Audit
Committee, including those set
out by Recommendation 172
of the Code.
3. At least one Audit Committee
member, who is an independent
director, has an experience
and knowledge in preparing,
analysing, evaluating,
and auditing accounting
(financial) statements.
4. The Audit Committee
meetings were held at least
quarterly during the reporting
period.
1. The Board of Directors
established a Remuneration
Committee composed entirely
of independent directors.
2. The Remuneration Committee
is chaired by an independent
director who is not
the Chairperson of the Board
of Directors.
3. The Company’s internal
documents determine the
objectives for the Remuneration
Committee, including those set
out by Recommendation 180
of the Code.
1. The Board of Directors
established a Nomination
Committee (or its objectives,
set out in Recommendation 186
of the Code, are delivered by
another committee), and
the majority of its members
are independent directors.
2. The Company’s internal
documents determine the
objectives for the Nomination
Committee (or another
committee with the relevant
functions), including those set
out by Recommendation 186 of
the Code.
2.8.1.
For the purpose
of preliminary
consideration
of any matters
relating to oversight
of the Company’s
business, it is
recommended
to establish an
Audit Committee
composed of
independent
directors.
2.8.2.
2.8.3.
For the purpose
of preliminary
consideration
of matters related
to the development
of efficient
and transparent
remuneration
practices, it is
recommended
to establish
a Remuneration
Committee
composed
of independent
directors and chaired
by an independent
director who shall
not be the Board
Chairperson.
For the purpose
of preliminary
consideration of
matters relating
to HR planning
(succession
planning),
professional
composition
and efficiency
of the Board of
Directors, it is
recommended
to establish
a nomination
committee
(nominations, HR)
with the majority
of its members
being independent
directors.
358
359
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
2.8.4.
2.8.5.
Taking into account
the scope of
activities and
the level of risk of
the Company,
the Board of
Directors is satisfied
that the composition
of its committees
fully meets the
objectives of
the Company's
activities. Additional
committees have
either been formed
or have not been
deemed necessary
(strategy committee,
corporate
governance
committee, ethics
committee, risk
management
committee, budget,
health, safety
and environment
committee, etc.).
The composition
of the committees
shall be determined
in such a way that
it would allow a
comprehensive
discussion of
considered issues
on a preliminary
basis with due
account of the
variety of opinions.
1. During the reporting period,
the Board of Directors of the
Company considered the issue
of suitability of the composition
of its committees for the tasks
of the Board of Directors and
the objectives of the Company's
activities. Additional committees
were either established or were
not recognised as necessary.
observed
partially
observed
not observed
1. Committees of the Board
of Directors are headed by
independent directors.
2. Internal documents (policies)
of the Company stipulate
provisions, according to which
non-members of the Audit
Committee, Nominations
Committee and Remuneration
Committee may attend
committee meetings only at
the invitation of the Chairperson
of the concerned committee.
observed
partially
observed
not observed
1. Partially not observed.
Three of the four committees — Human Resources
and Remuneration, Audit and Investment Committees — are
chaired by independent directors.
The Strategy Committee is chaired by a member of the Board
of Directors who is not an independent director — Pavel
Snikkars, Director of the Energy Development Department
of the Ministry of Energy of Russia.
PJSC FGC UES is a company with tariff regulation and
with state participation, included in the list of strategic
organisations of Russia, is a subject of natural monopoly.
Thus, in view of the competence of the Strategy Committee,
it is reasonable to elect a representative of the sectoral
ministry as its Chairperson.
According to the Regulations on the above Committees, taking
into account certain resolutions of the Government of the
Russian Federation, these Committees are composed mainly
of individuals who are not members of the Board of Directors
and provide an independent and thorough discussion of issues
and the development of preliminary recommendations
to the Board of Directors. Therefore, the risks associated with
the incomplete implementation of this recommendation
of the Code have not been identified.
2.8.6.
The Chairpersons
of the committees
shall inform
the Board of
Directors and its
Chairperson of
the work of their
committees on a
regular basis.
1. During the reporting period,
the Chairpersons
of the Committees reported
on the Committees’ work
to the Board of Directors
on a regular basis.
observed
partially
observed
not observed
Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
2.9.
The Board of Directors shall ensure evaluation of its own performance, and that of its Committees and members of the Board
1. Observed.
2. Not observed.
The results of the performance evaluation of the Board
of Directors conducted during the reporting period were
considered at the meeting of the Board of Directors on 29 May
2018, with voting held in absentia (Minutes No. 408 of 1 June
2018).
The internal document of the Company — the Regulation
on Conducting an Assessment of the Activities of the Board
of Directors of PJSC FGC UES, approved by the decision
of the Board of Directors (Minutes No. 355 of 20 February
2017) — provides that the results of the evaluation shall be
considered at the meeting of the Board of Directors held in
praesentia. The decision on the form of holding a meeting of
the Board of Directors shall be made by the Chairperson of
the Board of Directors in compliance with the Regulations on
the Board of Directors.
When assessing the effectiveness of the Board of Directors
in 2019 following 2018, the Company plans to consider
the results of the evaluation at the meeting of the Board of
Directors.
2.9.1.
2.9.2.
The Board
of Directors’
performance
evaluation shall be
aimed at determining
how efficiently the
Board of Directors,
its Committees
and Board members
work and whether
their work meets
the Company’s
needs, as well as at
making their work
more active and
identifying areas for
improvement.
1. The self-evaluation
or external evaluation
of the Board of Directors
performance conducted during
the reporting period included
the performance evaluation
of the committees, individual
directors and the Board as a
whole.
2. The results of the self-
evaluation or external evaluation
of the Board of Directors
performance, conducted in
the reporting period, were
considered at the Board meeting
held in praesentia.
observed
partially
observed
not observed
1. In order to conduct an
independent assessment
of the performance of the Board
of Directors during the last three
reporting periods, the Company
invited an outside organisation
(consultant) at least once.
observed
partially
observed
not observed
Performance
evaluation of the
Board of Directors,
its Committees and
Board members
shall be conducted
on a regular basis,
at least once a
year. To conduct
an independent
performance
evaluation, it is
recommended to
involve an outside
party (consultant)
on a regular basis,
at least once every
three years.
3.1.
The Company’s Corporate Secretary shall be responsible for efficient shareholder engagement, coordination of the company’s actions aimed at protecting
the shareholder's rights and interests, and support of efficient work of the Board of Directors
1. The Company adopted
and disclosed an internal
document — the Regulations
on the Corporate Secretary.
2. The Company’s website
and annual report provide
background information on
the corporate secretary with
the same level of detail as
for members of the Board of
Directors and the executive
management of the Company.
1. The Board of Directors
approves the appointment,
dismissal and additional
remunerations of the corporate
secretary.
3.1.1.
3.1.2.
The Corporate
Secretary has
the knowledge,
experience and
qualification
sufficient to carry
out the duties
entrusted to him,
an impeccable
reputation and
enjoys the trust
of shareholders.
The Corporate
Secretary shall be
independent enough
of the Company’s
executive bodies
and be vested
with powers and
resources required
to carry out his/her
tasks.
observed
partially
observed
not observed
observed
partially
observed
not observed
360
361
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
The amount of remuneration paid by the Company is sufficient to attract, motivate and retain persons possessing the necessary expertise and qualifications
for the Company. Remuneration to Board of Directors members, members of the executive bodies, and other key managers of the company shall be paid in
accordance with a remuneration policy approved by the Company
1. The Company has adopted
internal remuneration
document(s) — remuneration
policy (policies) for Board
members, executive bodies
and other key managers that
clearly defines the approaches
to the remuneration of the above
individuals.
observed
partially
observed
not observed
1. In the reporting period,
the Remuneration Committee
reviewed the remuneration policy
(policies) and the practice of its
(their) implementation and,
if necessary, submitted
the relevant recommendations
to the Board of Directors.
observed
partially
observed
not observed
1. The policy (policies)
of the Company on remuneration
contains transparent
mechanisms for determining
the amount of remuneration due
to members of the Board
of Directors, executive bodies
and other key management
bodies employees of the
Company, and also regulates
all types of payments, benefits
and privileges granted to these
persons.
observed
partially
observed
not observed
The amount of
remuneration paid
by the Company to
its Board members,
executive bodies,
and other key
managers shall
be sufficient to
motivate them to
work efficiently and
enable the Company
to attract and
retain competent
and qualified
professionals.
At the same time,
the Company avoids
a higher level of
remuneration than
necessary, as well
as an unjustifiably
large gap between
remuneration levels
of the said persons
and employees of
the Company.
The Company’s
remuneration policy
shall be developed
by its Remuneration
Committee and
approved by the
Board of Directors.
With the assistance
of its Remuneration
Committee, the
Board of Directors
shall monitor the
implementation of
and compliance with
the remuneration
policy in the
Company and also
review and amend it,
if necessary.
The Company’s
remuneration policy
contains transparent
mechanisms
used to determine
the amount of
remuneration due to
Board members,
the executive bodies,
and other key
managers
of the Company, as
well as to regulate all
types of payments,
benefits, and
privileges provided
to any of the above
individuals.
The term "other key
managers of
the Company" is not
applied according
to the Action Plan
("roadmap") on
introducing the
Corporate Governance
Code provisions
in the Company's
practice approved
by the decision of
the Board of Directors
No. 255 of 12 March
2015.
The term "other key
managers of the
Company" is not
applied according
to the Action Plan
("roadmap") on
introducing the
Corporate Governance
Code provisions
in the Company's
practice approved
by the decision
of the Board of
Directors No. 255
of 12 March 2015.
4.1.
4.1.1.
4.1.2.
4.1.3.
362
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
Corporate
governance
principles
Corporate governance principle
compliance criteria
1. The Company’s remuneration
policies (policy) or other internal
documents establish(es)
the rules on the reimbursement
of expenses to members
of the Board of Directors,
executive bodies and other key
managers of the Company.
4.1.4.
The Company is
recommended
to develop a
policy regarding
reimbursement
of expenses
(compensation),
which would contain
a list of reimbursable
expenses and
specify service
levels provided to
Board members,
the executive
bodies, and other
key managers of
the Company. Such
a policy may be
an integral part
of the Company's
remuneration policy.
Explanation of deviation from corporate governance
principles compliance criteria
Comments
The term "other key
managers
of the Company"
is not applied
according to
the Action Plan
("roadmap") on
introducing
the Corporate
Governance Code
provisions
in the Company's
practice approved by
the decision
of the Board
of Directors No. 255
of 12 March 2015.
4.2.
The remuneration system of Board members shall ensure aligning of the directors’ financial interests with the long-term financial interests of shareholders
1. Fixed annual remuneration
was the only monetary form
of remuneration of Board
members for serving on
the Board of Directors during
the reporting period.
observed
partially
observed
not observed
This criterion is not applicable because the Company’s remuneration policy(-ies) or
internal document(s) does not provide for granting the Company's shares to Board
members.
1. If the Company’s internal
document(s) — remuneration
policy(policies) provides for
granting shares to Board
members, clear rules for holding
shares by Board members,
aimed at encouraging long-term
ownership of such shares, shall
be available and disclosed.
observed
partially
observed
not observed
4.2.1.
4.2.2.
A fixed annual
remuneration shall
be paid
to the Board
members by
the Company.
The Company
doesn't pay
remuneration
for participation
in certain Board
of Directors' or
its committees'
meetings.
The Company
doesn't use any
form of short-term
incentives and
additional financial
incentives with
regard to Board
members.
Long-term ownership
of the Company's
shares contributes
the most to
aligning financial
interests of Board
members with the
long-term interests
of the Company’s
shareholders.
At the same time,
the Company does
not stipulate the
right to sell shares
by achieving certain
performance
indicators, and Board
members do not
participate in option
programmes.
363
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Explanation of deviation from corporate governance
principles compliance criteria
Comments
Corporate
governance
principles
Corporate governance principle
compliance criteria
Corporate
governance
principles
Corporate governance principle
compliance criteria
1. The Company does not have
any additional remuneration
or reimbursement in case of
the early termination of Board
members in connection with a
takeover of the Company or in
other circumstances.
4.2.3.
The Company
does not have
any additional
remuneration or
compensation in
case of the early
termination of
Board members
in connection with
a takeover of the
Company or in other
circumstances.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
4.3.
The remuneration system for members of the executive bodies and other key managers of the Company provides for the dependence of remuneration
on the Company’s performance results and their personal contributions to the achievement thereof
observed
partially
observed
not observed
4.3.1.
Remuneration due
to members of the
executive bodies and
other key managers
of the Company
shall be set in
such a way as to
ensure a reasonable
and justified ratio
between its fixed
portion and its
variable portion
that is dependent
on the Company’s
performance results
and employees’
personal (individual)
contribution to the
achievement thereof.
1. During the reporting period,
the annual performance
indicators approved by
the Board of Directors were
used to determine the amount
of variable remuneration of
members of executive bodies
and other key managers
of the Company.
2. During the most recent
evaluation of the remuneration
system for members
of the executive bodies and
other key managers, the Board
of Directors (the Remuneration
Committee) made sure
the Company applied an efficient
ratio of the fixed portion of
remuneration to the variable
portion.
3. The Company has a procedure
for repaying bonuses unlawfully
obtained by members
of the executive bodies and other
key managers.
The remuneration
system for members
of the Company’s
executive bodies
is based on the
achievement
of the approved
target values of Key
Performance Indicators
(KPI).
The Board of Directors
reviews the results of
the target achievement,
and payment of
remuneration according
to the results achieved
is possible only upon
the decision made by
the Board of Directors
to approve the relevant
report.
Thus, the possibility
to get remuneration
unlawfully is eliminated.
In addition, the results
of the Company’s
KPI achievement
are reviewed by an
independent auditor,
who evaluates
the achievement
of indicators
of the Company’s Long-
term Development
Programme and submits
all findings to the
Board of Directors, thus
mitigating the risk of
manipulating the report
data or other unethical
practices.
Explanation of deviation from corporate governance
principles compliance criteria
Comments
1. Not observed.
2. Not observed.
The Company does not have a long-term incentive programme
for members of the its executive bodies involving
the Company’s shares (financial instruments based
on the Company’s shares).
At the same time, the Company uses other tools to motivate
management based on achieving KPI established by the Board
of Directors. It should be noted that achieving a number of
indices affects the increase in capitalisation and long-term
growth of the Company's shareholder value.
The Company is considering the possibility of introducing a
long-term incentive programme for members of its executive
bodies involving Company's shares (financial instruments
based on Company's shares) based on market conditions,
state regulation and policy of PJSC Rosseti regarding this
issue.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
observed
partially
observed
not observed
1. The Company has put in
place a long-term incentive
programme for members
of the Company’s executive
bodies and other key managers
involving the Company’s shares
(financial instruments based on
the Company’s shares).
2. The long-term incentive
programme for members
of the Company’s executive
bodies and other key managers
implies that the right to sell
shares and other financial
instruments used under such
programme will not arise earlier
than three years after their
provision. The said right shall
be made conditional on the
achievement of certain targets
by the Company.
1. The amount of reimbursement
("golden parachute") paid
by the Company in the event
of early termination of a member
of an executive body or other key
managers at the initiative
of the Company, provided
that there have been no unfair
practices on the part of such
person, did not exceed two
times the fixed portion of his/her
annual remuneration
in the reporting period.
4.3.2.
4.3.3.
The Company
has put in place a
long-term incentive
programme for
members of the
Company’s executive
bodies and other key
managers involving
the Company’s
shares (options
or other derivative
financial instruments
the underlying assets
for which are
the Company’s
shares).
The amount of
reimbursement
(a so-called "golden
parachute") payable
by the Company
in the event of
early termination
of a member of an
executive body or
other key manager
at the initiative
of the Company,
provided that there
have been no unfair
practices on the
part of such person,
shall not exceed
two times the fixed
portion of his/her
annual remuneration.
5.1.
The Company has a sound risk management and internal control system aimed at providing reasonable assurance that the company’s goals will be achieved
5.1.1.
5.1.2.
The Board of
Directors shall
determine principles
of and approaches
to the establishment
of the Company’s
risk management
and internal control
system.
1. Functions of various governing
bodies and business units
at the Company in the risk
management and internal control
system are clearly defined in
the Company’s internal
documents/relevant policy
approved by the Board of
Directors.
observed
partially
observed
not observed
The Company’s
executive bodies
shall create and
maintain an efficient
risk management
and internal control
system in
the Company.
1. The Company’s executive
bodies ensured the distribution
of functions and powers related
to risk management and internal
control among managers (heads)
of business units and divisions
accountable thereto.
observed
partially
observed
not observed
364
365
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
1. The Company has approved
an anti-corruption policy.
2. The Company has organised
an affordable method of
informing the Board of Directors
or its Audit Committee of any
violations of legislation, internal
procedures and the ethics code
of the Company.
observed
partially
observed
not observed
1. In the reporting year,
the Board of Directors
or the Audit Committee
evaluated the efficiency
of the Company’s risk
management and internal control
system. Information
on the key findings of such
evaluation is included
in the Company’s annual report.
observed
partially
observed
not observed
5.1.3.
5.1.4.
The Company’s
risk management
and internal control
system shall enable
one to obtain an
objective, fair and
clear view
of the current
position and
prospects
of the Company,
integrity and
transparency of its
accounts and reports,
and reasonableness
and acceptability
of risks taken
by the Company.
The Board of
Directors shall
take sufficient
measures to ensure
that the existing
risk management
and internal
control system of
the Company is
consistent with
the principles of
and approaches to
its creation as set
forth by the Board of
Directors and that it
operates efficiently.
5.2.
For regular independent review of reliability and effectiveness of the risk management and internal control system and corporate governance practices,
the Company arranges for internal audits
1. To perform internal audits,
the Company has established
a separate structural unit that
performs internal audits and
reports functionally to the
Board of Directors, or has
engaged an independent outside
organisation subject to the same
reporting principle.
observed
partially
observed
not observed
1. During the reporting period,
as part of an internal audit,
the effectiveness of the internal
control and risk management
system was reviewed.
2. The Company applies
the generally accepted
approaches to internal control
and risk management.
observed
partially
observed
not observed
Internal audits are
carried out by a
separate structural
unit created by
the Company or
through engaging an
independent outside
party. The internal
audit department
shall have separate
lines of functional
and administrative
reporting.
Functionally,
the internal audit
department reports
to the Board of
Directors.
The Internal
Audit Department
evaluates
effectiveness of
the internal control
system and the
risk management
system, as well
as the corporate
governance system.
The Company applies
generally accepted
standards of internal
auditing.
5.2.1.
5.2.2.
366
Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
6.1.
The Company and its activities shall be transparent for its shareholders, investors and other stakeholders
6.1.1.
6.1.2.
The Company
developed and
implemented
an information
policy enabling
the Company to
efficiently exchange
information with
its shareholders,
investors and other
stakeholders.
The Company shall
disclose information
on its corporate
governance system
and practices,
including detailed
information on
compliance with
the principles and
recommendations
of the Code.
observed
partially
observed
not observed
observed
partially
observed
not observed
1. The Company's Board of
Directors has approved an
information policy developed
in compliance with the
Corporate Governance Code
recommendations.
2. The Board of Directors (or one
of its committees) considered
matters related to the Company’s
compliance with its information
policy at least once during
the reporting period.
1. The Company discloses
information on its corporate
governance system and the
general corporate governance
principles applied thereby,
including on its corporate
website.
2. The Company discloses
information on the composition
of its executive bodies
and the Board of Directors,
the independence of Board
members and their membership
in committees of the Board
of Directors (as defined
in the Code).
3. If there is a person who
controls the Company,
the Company discloses
a memorandum from the
controlling person concerning
the said person’s plans for
corporate governance
in the Company.
The Company has
no information
if the controlling
shareholder has
memorandum
concerning Company's
plans for corporate
governance
in PJSC FGC UES.
As soon as
the Company has
such a document
available, the latter
will be disclosed
in accordance
with the Corporate
Governance Code
recommendations.
6.2.
The Company shall disclose, on a timely basis, full, updated and reliable information about itself so as to enable its shareholders and investors to make informed
decisions
6.2.1.
The Company shall
disclose information
in accordance
with the principles
of regularity,
consistency and
timeliness, as well
as accessibility,
reliability,
completeness and
comparability of data
disclosed.
observed
partially
observed
not observed
1. The Company’s information
policy determines the
approaches to, and criteria for,
determining information that
could have a significant influence
on the Company’s value and its
securities, and the procedures
that ensure the timely disclosure
of such information.
2. If the Company’s securities
are traded in foreign markets,
equivalent material information
shall be disclosed in the Russian
Federation and in such markets
simultaneously in the reporting
period.
3. If foreign investors hold a
material share in the Company’s
capital, the Company shall
disclose information in Russian
and in a commonly used foreign
language in the reporting period.
The Company
provides disclosures
in accordance with
the requirements of
the Financial Services
Authority of the UK.
Disclosure of
information that the
Company considers
significant in
the Russian
Federation and
in the UK is
synchronous
and equivalent.
367
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Explanation of deviation from corporate governance
principles compliance criteria
Comments
Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
7.1.
Any actions which have or may have a material effect on the Company’s share capital structure and its financial position and, accordingly, on the position of its shareholders
(material corporate actions) shall be taken on fair terms and conditions ensuring that the rights and interests of shareholders as well as other stakeholders are observed
Corporate
governance
principles
Corporate governance principle
compliance criteria
6.2.2.
6.2.3.
The Company is
advised against
using a formalistic
approach to
information
disclosure; it shall
disclose material
information on its
activities, even if
disclosure of such
information is not
required by law.
The Company’s
annual report, being
one of the most
important tools for
communication with
shareholders and
other stakeholders,
shall contain
information enabling
one to evaluate
the Company’s
performance for
the year.
1. In the reporting period,
the Company disclosed annual
and interim IFRS financial
statements. The Company’s
annual report for the reporting
period includes the annual IFRS
financial statements with the
auditor’s statement.
2. The Company shall disclose
complete information on
the Company’s capital structure,
according to Recommendation
290 of the Code, in the annual
report and on the Company’s
website.
1. The Company’s annual
report contains the Company’s
operating and financial
highlights.
2. The Company’s annual
report contains information
on environmental and social
aspects of the Company’s
operations.
Status
of Compliance
with corporate
governance
principle
observed
partially
observed
not observed
observed
partially
observed
not observed
6.3.
The Company shall provide information and documents requested by its shareholders in accordance with the principle of equal and easy access
6.3.1.
The exercise by the
shareholders of
their right to access
the Company’s
documents and
information should
not be unreasonably
burdensome.
1. The Company’s information
policy specifies an easy
procedure for providing access
to shareholders to information,
including information on the
legal entities controlled by the
Company, upon the request of a
shareholder.
observed
partially
observed
not observed
1. Partially not observed.
Currently, the Information Policy of the Company does not
provide declarative obligations of the Company regarding
provision of information on legal entities controlled by
the Company upon a shareholder's request. At the same time,
information on legal entities controlled by the Company (their
businesses, contacts, composition of the governing
and control bodies, annual financial indicators) is disclosed
on the website of the Company and in the Company's annual
report.
Information on material transactions of legal entities
controlled by the Company is also disclosed in the Company's
annual report and on the website of the Company.
In 2019, the information policy will be amended regarding
provision of information on legal entities controlled by
the Company upon a shareholder's request.
1. In the reporting period,
the Company did not deny
shareholders’ requests for
information, or such denials were
justified.
2. In cases specified
in the Company’s information
policy, shareholders are informed
of the confidential nature
of information and undertake
to keep it confidential.
observed
partially
observed
not observed
6.3.2. When providing
information to
its shareholders,
the Company
shall maintain
a reasonable
balance between
the interests
of individual
shareholders and
its own interests
related to the fact
that the Company is
interested in keeping
confidentiality of
sensitive business
information that
might have a
material impact on
its competitiveness.
368
observed
partially
observed
not observed
1. The Company’s Articles of
Association specify a list of
actions and other efforts that
constitute material corporate
actions, and their determination
criteria. Decision-making on
material corporate actions
falls within the remit of the Board
of Directors. Where the taking
of these corporate actions is
directly referred by law to the
remit of the General Meeting
of Shareholders, the Board of
Directors makes the relevant
recommendations
to shareholders.
2. The Company’s Articles of
Association classify at least
the following as material
corporate actions: reorganisation
of the Company, acquisition
of 30 or more percent of its
voting shares (takeover), entering
into material transactions,
increase or decrease of its
authorised capital, listing
and delisting of the Company’s
shares.
1. Partially not observed.
2. Partially not observed.
The Company’s Articles of Association do not give a definition
of material corporate actions.
However, decision-making on issues related to the material
actions specified in Recommendation 303 of the Code
(for example: reorganisation of the Company, increasing or
decreasing its authorised capital, decision making on
the Company’s participation in other organisations, decision
making on application for delisting of the Company’s shares
and (or) equity securities convertible into its shares, decision
making on approval or subsequent approval of major
transactions, approval of other transactions of the Company
and its controlled entities) in accordance with the current
legislation and the Articles of Association of the Company
falls within the remit of the Board of Directors or the General
Meeting of Shareholders. When submitting any matters
to the shareholders' meeting, including material corporate
actions, the Board of Directors provides shareholders with
appropriate recommendations.
In addition, taking into account the inclusion of PJSC FGC UES
in a special list approved by the Order of the Government
of the Russian Federation No. 91-r of 23 January 2003,
as well as the list of strategic organisations approved by
the Decree of the President of the Russian Federation No.
1009 of 4 August 2004, the most important material corporate
actions are committed by the Company in accordance with
the directives of the Government of the Russian Federation,
and certain issues (for example, related to changes
in the Company’s authorised capital) are resolved in
accordance with the Decrees of the President of the Russian
Federation.
1. The Company has a procedure
whereby independent directors
declare their position on material
corporate actions prior to their
approval.
1. The Company’s Articles of
Association, taking into account
the particular features of its
business, established lower
minimum criteria for classifying
the Company’s transactions as
material corporate actions than
stipulated by law.
2. During the reporting period
all material corporate actions
were approved prior to their
implementation.
observed
partially
observed
not observed
observed
partially
observed
not observed
7.1.1. Material corporate
actions shall be
deemed to include
reorganisation of the
Company, acquisition
of 30 or more percent
of its voting shares
(takeover), entering by
the Company into any
material transactions,
increasing or
decreasing its
authorised capital,
listing and delisting
of its shares, as well
as other actions
which might result
in significant
changes in rights
of its shareholders
or violation of
their interests. The
Company’s Articles
of Association shall
determine the list of
(criteria for identifying)
transactions or
other actions falling
within the category
of material corporate
actions and provide
therein that decisions
on any such actions
shall fall within
the matters reserved
for the Company’s
Board of Directors.
The Board of
Directors shall
play a key role in
making decisions
or developing
recommendations
related to material
corporate actions;
for that purpose, it
shall rely on opinions
of the Company’s
independent
directors.
7.1.2.
7.1.3. When taking any
material corporate
actions which would
affect rights or
legitimate interests
of the Company’s
shareholders, equal
terms and conditions
shall be ensured for
all of shareholders; if
statutory mechanisms
designed to protect
the shareholder
rights prove to be
insufficient for that
purpose, additional
measures shall be
taken with a view to
protecting the rights
and legitimate interests
of the Company’s
shareholders. In
such instances, the
Company shall not only
seek to comply with
the legal requirements
but shall also be guided
by the principles of
corporate governance
set out in the Code.
369
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODEAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Corporate
governance
principles
Corporate governance principle
compliance criteria
Status
of Compliance
with corporate
governance
principle
Explanation of deviation from corporate governance
principles compliance criteria
Comments
APPENDIX 4
7.2.
The Company shall have in place such a procedure for taking any material corporate actions that would enable its shareholders to receive full information on such
actions in time and influence them, and that would also guarantee that the shareholder's rights are observed and duly protected in the course of taking such actions
observed
partially
observed
not observed
observed
partially
observed
not observed
7.2.1.
7.2.2.
Information on
material corporate
actions shall be
disclosed with
explanations
concerning reasons
for, conditions and
consequences of
such actions.
1. In the reporting period,
the Company disclosed
information on the Company’s
material corporate actions in
a timely manner and in detail,
including the reasons and time
frame for taking such actions.
Rules and
procedures in
relation to material
corporate actions
taken by
the Company shall
be set out in its
internal documents.
1. The Company’s internal
documents provide for
the procedure for engaging an
independent appraiser when
determining the value of property
to be acquired or disposed
of under a major transaction or a
related-party transaction.
2. The Company’s internal
documents provide for
the procedure for engaging
an independent appraiser
for determining a price
of the Company’s shares,
repurchased or redeemed.
3. The Company’s internal
documents do not provide for
an extended list of grounds on
which members of the Board
of Directors, as well as other
persons referred to in the
legislation, are deemed
to be interested in the Company’s
transactions.
1. Observed.
2. Observed.
3. Not observed.
The Company’s internal documents do not provide for an
extended list of grounds on which members of the Board
of Directors, as well as other persons referred to in the
legislation, are deemed to be interested in the Company’s
transactions.
Given the special aspects of activities of the holding
structure of PJSC Rosseti, which includes PJSC FGC UES,
transactions with legal entities controlled by PJSC FGC UES
and transactions with controlling entity of PJSC FGC UES,
PJSC Rosseti, and other entities controlled by PJSC Rosseti are
deemed to be related-party transactions.
Currently, the legislation is moving along the path of
simplifying the related-party transactions procedure, and
reducing their total number. Thus, Federal Law No. 343-FZ
of 3 July 2016, from 1 January 2017, introduced a new
related-party transactions procedure through notification to
members of management bodies, and also expanded the
list of transactions that are not recognised as related-party
transactions, including transactions with a price threshold,
before which the transactions can be made without corporate
procedures provided by Chapter XI of the Federal Law
No. 208-FZ of 26 December 1995 On Joint-Stock Companies.
The expansion of grounds on which members of the Board of
Directors and other persons referred to in the legislation are
deemed to be interested in the Company’s transactions could
hinder the activities of the Company due to the increase in the
number of related-party transactions.
Based on the above, the Company does not see the need
to expand the list of grounds on which members of the Board
of Directors of the Company and other persons stipulated by
the legislation are deemed to be interested in the Company's
transactions.
INFORMATION ON MAJOR TRANSACTIONS
AND TRANSACTIONS MADE BY PJSC FGC UES IN 2018,
RECOGNISED AS RELATED PARTY TRANSACTIONS UNDER
RUSSIAN LEGISLATION AND SUBJECTS TO APPROVAL
BY THE COMPANY’S AUTHORISED GOVERNING BODIES
Information on transactions made by PJSC FGC UES in 2018, recognised as major transactions under Russian
legislation
In 2018, the Company made no transactions recognised as major transactions in accordance with the Federal Law
on Joint-Stock Companies, as well as other transactions to which the major transaction approval procedure applies
pursuant to PJSC FGC UES's Articles of Association.
Information on transactions made by PJSC FGC UES in 2018, recognised as related party transactions under Russian
legislation and approved by the Company’s authorised governing bodies
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
N. Pozdnyakov
No. AM-914
of 13 February
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
28 February
2018
1.
Supplementary
Agreement No. 21
to Contract
No. TS/01
on Acting as
Customer
and Developer of
1 April 2008
Parties to Supplementary Agreement No. 21:
PJSC FGC UES (Company);
JSC TsIUS UES (Customer and Developer).
Subject and cost:
Amendment of Contract No. TS/01 on Acting as Customer and Developer
of 1 April 2008 (hereinafter, the "Contract").
The Parties agreed to terminate the Contract on 1 March 2018 based on
p. 1, Article 450 of the Civil Code of the Russian Federation.
The cost of services determined by Supplementary Agreement No. 21
for the period from 1 January 2017 to 28 February 2018 does not exceed
RUB 1,923,400,000 (one billion nine hundred twenty three million four
hundred thousand) 00 kopecks, incl. VAT (18%) in the amount of no more
than RUB 293,400,000 (two hundred ninety three million four hundred
thousand) 00 kopecks.
The total cost of services under the Contract for the period from 1 April
2008 to 28 February 2018 does not exceed RUB 23,842,313,000 (twenty
three billion eight hundred forty two million three hundred thirteen
thousand) 00 kopecks, incl. VAT (18%) in the amount of no more than
RUB 3,636,963,000 (three billion six hundred thirty six million nine
hundred sixty three thousand) 00 kopecks.
Term of Supplementary Agreement No. 21:
Supplementary Agreement No. 21 shall enter into force from the moment
it is signed and be valid until the Parties fulfil all their obligations.
The terms and conditions of Supplementary Agreement No. 21 in
relation to amended cl. 7.1.1 of the Contract shall apply to the Parties'
arrangements from 1 January 2017.
370
371
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 3REPORT ON COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE GOVERNANCE CODE Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
N. Pozdnyakov
No. AM-914
of 13 February
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
2.
The Contract
on Acting as
Technical
Customer
1 March
2018
Parties to the Contract:
PJSC FGC UES (Company);
JSC TsIUS UES (Technical Customer).
Subject of the Contract:
Under the Contract, the Technical Customer agrees to act as Technical
Customer and perform other functions stipulated by the Contract on behalf
of and at the expense of the Company, related to creation (construction,
reconstruction, overhaul) of facilities owned by the Company, as well as
facilities in respect of which the Company is authorised to carry out actions
for their creation, and the Company, in its turn, undertakes to pay for
rendered services in the amount and procedure stipulated in the Contract.
If there is a need to implement measures to connect electric grid facilities
to be created under the Contract to the electric grid facilities owned by third
parties, the Technical Customer undertakes to conclude relevant contracts
with the third parties on behalf of the Company and on terms agreed with
the Company in compliance with the procedure provided
by the organisational and administrative documentation.
As part of the Contract and in accordance with the Company's assignment,
the Technical Customer undertakes to provide:
– development of draft and project documentation;
– creation (construction, reconstruction, overhaul) of the Facility;
– supply of materials and equipment;
– approval of work results and commissioning of the facility in
compliance with the terms and conditions stipulated in the Contract;
– registration of rights to the facility;
– fulfilment of the target indicators according to the approved
construction schedule and the Company's Assignment;
– management of creation (construction, reconstruction, modernisation,
technical re-equipment, renovation) of the facility;
– participation in procurement procedures for selection of suppliers,
contractors and executors in accordance with the Company's
organisational and administrative documentation;
– conclusion of contracts with suppliers, contractors and executors aimed
at the implementation of the Contract on behalf of and at the expense of
the Company, in accordance with its terms, including contracts aimed at
settlement of land and legal relations, reimbursement for the use
of someone else's land for the period of the implementation of facility
creation works;
– supervision, control and monitoring over suppliers', contractors' and
executors' performance of their obligations under the contracts concluded
with them, as well as control over the construction of the Facilities;
– performing other actions necessary for the execution of the Contract in
agreement with the Company.
Cost of the Contract:
The remuneration for services of the Technical Customer for the period
from 1 March 2018 to 31 December 2020 amounts to RUB 7,746,537,111
(seven billion seven hundred forty six million five hundred thirty seven
thousand hundred eleven) 14 kopecks, incl. VAT (18%) in the amount of
RUB 1,181,675,152 (one billion one hundred eighty one million six hundred
seventy five thousand one hundred fifty two) 55 kopecks.
The amount of remuneration is determined based on the capital
investments the Technical Customer undertakes to provide for the term of
the Contract in the amount of RUB 279,319,805,394 (two hundred seventy
nine billion three hundred nineteen million eight hundred five thousand
three hundred ninety four) 39 kopecks, incl. VAT (18 %) in the amount of
RUB 42,608,105,907 (forty two billion six hundred eight million one hundred
five thousand nine hundred seven) 62 kopecks.
The remuneration for the Technical Customer's services consists of a fixed
mount, as well as a variable amount.
The amount of remuneration for the Technical Customer's services
for the period from 1 March 2018 to 31 December 2020 shall be specified
based on the amended investment programme approved by the Company
in case of a change in the capital investments volume from 1 March
2018 to 31 December 2020 for the projects included in the Company's
Assignment.
Total remuneration for the Technical Customer's services is specified
through a supplementary agreement to the Contract.
Term of rendering services under the Contract:
The term of services rendered by the Technical Customer is 3 (three) years
from the effective date of the Contract.
Term of the Contract:
The Contract shall enter into force from the moment it is signed
by the Parties and be valid until the Parties fulfil all their obligations.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
6 March
2018
3.
Service Contract
for Ensuring
Operation and
Development of
the Electric Grid
Complex
4.
5.
15 March
2018
Agreement
No. 2315
on Termination
of the Contract
for Ensuring
Operation
and Development
of the Electric
Grid Complex
of 30 September
2014
19 March
2018
Supplementary
Agreement No. 14
to Contract
No. 06/13 on
Repair and
Diagnostics
of Equipment
and Targeted
Programmes for
the SS and OHL of
MPS West Siberia
of 18 February
2013
Parties to the Contract:
PJSC Rosseti (Executor);
PJSC FGC UES (Customer).
Subject of the Contract:
The Executor undertakes to provide the Customer with a service for ensuring
operation and development of the electric grid complex in compliance with
the terms of the Contract, and the Customer undertakes to accept and pay
for the service in compliance with the terms of the Contract.
Cost of the Contract:
The cost of the Executor's services for one year does not exceed RUB
515,284,448 (five hundred fifteen million two hundred eighty four
thousand four hundred forty eight) 60 kopecks, incl. VAT (18 %)
in the amount of RUB 92,751,200 (ninety two million seven hundred fifty
one thousand two hundred) 75 kopecks.
The cost of PJSC Rosseti's services under the Contract for ensuring
operation and development of the electric grid complex may be revised.
Term of rendering services under the Contract:
Start: 1 January 2018;
End: 31 December 2020.
Term of the Contract:
The Contract shall enter into force from the date it is signed and be valid
until 31 December 2020. As for the settlements, the Contract shall be
valid until the Parties fulfil all their obligations.
Parties to the Agreement:
PJSC FGC UES (Customer);
PJSC Rosseti (Executor).
Subject and cost:
According to p. 1, Article 450 of the Civil Code of the Russian Federation,
the Parties agreed to consider the Service Contract No. 2315 for Ensuring
Operation and Development of the Electric Grid Complex of
30 September 2014 (hereinafter, the "Contract") terminated as
of 31 December 2017.
The total cost of services under the Contract, taking into account
Supplementary Agreement No. 1 of 12 December 2017 for the period
from 1 January 2014 to 31 December 2017, amounts to
RUB 2,275,040,018 (two billion two hundred seventy five million forty
thousand eighteen) 88 kopecks, incl. VAT (18 %) in the amount of
RUB 347,040,002 (three hundred forty seven million forty thousand two)
88 kopecks.
Term of the Agreement:
The Agreement shall come into force from the moment it is signed by
the Parties and is applied to the Parties' arrangements from
31 December 2017.
Parties to Supplementary Agreement No. 14:
PJSC FGC UES (Customer);
JSC Electrosetservice UNEG (Contractor).
Subject and cost:
Amendment of Contract No. 06/13 on Repair and Diagnostics of
Equipment and Targeted Programmes for the SS and OHL of MPS West
Siberia of 18 February 2013.
The total cost of works under the Contract, taking into account
supplementary agreements No. 1–14, does not exceed
RUB 1,399,271,352 (one billion three hundred ninety nine million two
hundred seventy one thousand three hundred fifty two) 46 kopecks, incl.
VAT (18 %) in the amount of no more than RUB 213,448,172 (two hundred
thirteen million four hundred forty eight thousand one hundred seventy
two) 41 kopecks.
Term of Supplementary Agreement No. 14:
Supplementary Agreement No. 14 shall enter into force from the moment
it is signed by the Parties and be valid for the term of the Contract.
According to p. 2, Article 425 of the Civil Code of the Russian Federation,
the terms and conditions of Supplementary Agreement No. 14 shall apply
to the legal relationship between the Parties existing since
1 January 2017.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
PJSC Rosseti
A. Murov
M. Poluboyarinov
A. Demin
No. AM-7816
of 26 December
2017
Board of Directors
of PJSC FGC UES
(Minutes No. 387
of 9 January 2018,
issue No. 9).
PJSC Rosseti
A. Murov
M. Poluboyarinov
A. Demin
No. AM-880
of 14 February
2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
PJSC Rosseti
No. AM-7929
of 29 December
2017
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
372
373
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONS Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
A. Solod
No. AM-690
of 6 February
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
A. Molsky
No. AM-388
of 24 January
2018
PJSC Rosseti
No. AM-1223
of 1 March
2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
6.
7.
19 March
2018
Supplementary
Agreement
No. 20 to
Agency Contract
No. 69 on
Implementation
of the Investment
Programme
of JSC Kuban
Trunk Grids on
Reconstruction
and Technical
Re-Equipment
of Electric Grid
Facilities of
29 May 2006
19 March
2018
Supplementary
Agreement
No. 5 to the
Contract for Sale
and Purchase
of Immovable
Property to be
Created of
1 August 2014
23 April
2018
8.
Contract
for repair,
maintenance
and diagnostics
of electric grid
facilities
Parties to Supplementary Agreement No. 20:
PJSC FGC UES (Executor);
JSC Kuban Trunk Grids (Customer).
Subject and cost:
Amendment of Agency Contract No. 69 on Implementation of the
Investment Programme of JSC Kuban Trunk Grids on Reconstruction
and Technical Re-Equipment of Electric Grid Facilities of 29 May 2006
(hereinafter, the "Contract").
As for 2018, the amount of payment determined by Supplementary
Agreement No. 20 to the Contract did not exceed RUB 193,725,000
(one hundred ninety three million seven hundred twenty five thousand)
00 kopecks, incl. VAT (18 %) in the amount of no more than
RUB 29,551,271 (twenty nine million five hundred fifty one thousand
two hundred seventy one) 19 kopecks.
The total amount of payment under the Contract, taking into account
supplementary agreements 1–20, does not exceed RUB 1,754,011,518
(one billion seven hundred fifty four million eleven thousand five hundred
eighteen) 32 kopecks, incl. VAT (18 %) in the amount of no more than
RUB 267,561,079 (two hundred sixty seven million five hundred sixty one
thousand seventy nine) 06 kopecks.
Term of Supplementary Agreement No. 20:
Supplementary Agreement No. 20 shall enter into force from the moment
it is signed by the Parties and be valid until the Parties fulfil all their
obligations.
Parties to Supplementary Agreement No. 5:
PJSC FGC UES (Buyer);
JSC TaigaEnergoStroi (Seller).
Subject and cost:
Amendment of the Contract for Sale and Purchase of Immovable
Property to be Created of 1 August 2014 (hereinafter, the "Contract").
The price of the property units under the Contract, taking into account
supplementary agreements No. 1–5, does not exceed RUB 7,778,557,862
(seven billion seven hundred seventy eight million five hundred fifty
seven thousand eight hundred sixty two) 36 kopecks, incl. VAT (18 %)
in the amount no more than RUB 1,186,559,673 (one billion one hundred
eighty six million five hundred fifty nine thousand six hundred seventy
three) 92 kopecks.
Term of Supplementary Agreement No. 5:
Supplementary Agreement No. 5 shall enter into force on the date it is
signed.
Parties to the Contract:
PJSC FGC UES (Customer);
JSC Electrosetservice UNEG (Executor).
Subject of the Contract:
Under the Contract, the Executor undertakes to perform repair,
maintenance and diagnostics of electric grid facilities in accordance with
the specifications of the Customer, and the Customer undertakes
to accept the result of the work and pay for it.
Cost of the Contract:
The cost of works under the Contract does not exceed RUB 1,001,575,406
(one billion one million five hundred seventy five thousand four hundred
six) 58 kopecks, incl. VAT (18 %) in the amount of no more than
RUB 152,782,689 (one hundred fifty two million seven hundred eighty
two thousand six hundred eighty nine) 13 kopecks.
Term of execution of the works under the Contract:
Start: 1 January 2018;
End: 31 December 2022.
Term of the Contract:
The Contract shall enter into force from the date it is signed, but shall
apply to the Parties' arrangements which arose from 1 January 2018
and be valid until the Parties fulfil all their obligations.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. AM-2076
of 6 April
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
PJSC Rosseti
No. AM-2319 of
18 April 2018
PJSC Rosseti
D. Vodennikov
No. AM-690 of
6 February
2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
24 April
2018
9.
Contract
for Repair,
Maintenance
and Diagnostics
of Electric Grid
Facilities
of PJSC FGC UES'
branch MPS
West Siberia
for 2018–2022
10.
11.
28 May
2018
Supplementary
Agreement No.7
to Contract
No. 01/13
for Repair,
Maintenance
and Diagnostics
of the Electric
Grid Facilities of
MPS Centre of
15 February 2013
31 May
2018
Supplementary
Agreement
No. 15 to Agency
Contract
No. 29/08-AD for
Implementation
of the Investment
Programme
of JSC Tomsk
Trunk Grids on
Construction,
Reconstruction
and Technical
Re-Equipment
of Electric Grid
Facilities of
21 November
2008
Parties to the Contract:
PJSC FGC UES (Customer);
JSC Electrosetservice UNEG (Executor).
Subject of the Contract:
Under the Contract, the Executor undertakes to perform repair,
maintenance and diagnostics of electric grid facilities (hereinafter,
the "works") in compliance with the specifications of the Customer, and
the Customer undertakes to accept the result of the work and pay for it.
Cost of the Contract:
The cost of works under the Contract does not exceed RUB 1,267,302,488
(one billion two hundred sixty seven million three hundred two thousand
four hundred eighty eight) 24 kopecks, incl. VAT (18 %) in the amount of
no more than RUB 193,317,328 (one hundred ninety three million three
hundred seventeen thousand three hundred twenty eight) 72 kopecks.
Term of execution of the works under the Contract:
Start: 15 March 2018;
End: 31 December 2022.
Term of the Contract:
The Contract shall enter into force from the date it is signed and be valid
until the Parties fulfil all their obligations.
In accordance with p. 2 Art. 425 of the Civil Code of the Russian
Federation, the terms of the Contract shall apply to the relationship
between the Parties existing since 15 March 2018.
Parties to Supplementary Agreement No. 7:
PJSC FGC UES (Customer);
JSC Electrosetservice UNEG (Executor).
Subject and cost:
Amendment of Contract No. 01/13 for Repair, Maintenance
and Diagnostics of the Electric Grid Facilities of MPS Centre
of 15 February 2013 (hereinafter, the "Contract").
The total cost of works under the Contract, taking into account
supplementary agreements No. 1–7, does not exceed RUB 1,934,723,788
(one billion nine hundred thirty four million seven hundred twenty three
thousand seven hundred eighty eight) 71 kopecks, incl. VAT (18 %) in
the amount of no more than RUB 295,127,357 (two hundred ninety five
million one hundred twenty seven thousand three hundred fifty seven)
60 kopecks.
Term of Supplementary Agreement No. 7:
Supplementary Agreement No. 7 is an integral part of the Contract and
shall come into force from the moment it is signed by the Parties.
Parties to Supplementary Agreement No. 15:
PJSC FGC UES (Executor);
JSC Tomsk Trunk Grids (Customer).
Subject and cost:
Amendment of Agency Contract No. 29/08-AD for Implementation
of the Investment Programme of JSC Tomsk Trunk Grids on Construction,
Reconstruction and Technical Re-Equipment of Electric Grid Facilities
of 21 November 2008 (hereinafter, the "Contract").
As for 2018, the amount of payment determined by Supplementary
Agreement No. 15 to the Contract did not exceed RUB 65,363,000 (sixty
five million three hundred sixty three thousand) 00 kopecks, incl. VAT
(18 %) in the amount of no more than RUB 9,970,627 (nine million nine
hundred seventy thousand six hundred twenty seven) 12 kopecks.
The total amount of payment under the Contract, taking into account
supplementary agreements No. 1–15, does not exceed
RUB 1,890,155,794 (one billion eight hundred ninety million one hundred
fifty five thousand seven hundred ninety four) 86 kopecks, incl. VAT
(18 %) in the amount of no more than RUB 28,832,850 (twenty eight
million eight hundred thirty two thousand eight hundred fifty) 06 kopecks.
Term of Supplementary Agreement No. 15:
Supplementary Agreement No. 15 shall enter into force from the moment
it is signed and be valid until the Parties fulfil all their obligations.
374
375
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONS No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
18 June
2018
12.
Supplementary
Agreement No. 1
to the Debt
Settlement
Agreement
of PJSC IDGC
of the South for
Electricity
Transmission
Services under
the UNEG
of 31 December
2017
18 June
2018
13.
Supplementary
Agreement
No. 1 to the Debt
Settlement
Agreement
of PJSC IDGC
of the South
for Electricity
Transmission
Services under
the UNEG
of 27 June 2017
20 June
2018
14.
Supplementary
Agreement No. 11
to Contract
No. 04/13
for Repair,
Maintenance
and Diagnostics
of Electric Grid
Facilities of
11 March 2013
Parties to Supplementary Agreement No. 1:
PJSC FGC UES (Lender);
PJSC IDGC of the South (Debtor).
Subject and cost:
Amendment of the Debt Settlement Agreement of PJSC IDGC
of the South for Electricity Transmission Services under the UNEG
of 31 December 2017 (hereinafter, the "Agreement").
The total outstanding debt under the Agreement amounts to
RUB 1,477,965,779 (one billion four hundred seventy seven million nine
hundred sixty five thousand seven hundred seventy nine) 94 kopecks,
incl. VAT (18 %) in the amount of RUB 225,452,407 (two hundred twenty
five million four hundred fifty two thousand four hundred seven)
11 kopecks.
The total cost of the Agreement for the entire validity period shall not
amount to or exceed 10 (ten) percent of the net book value
of PJSC FGC UES' assets according to its accounting statements
as of the latest reporting date.
Term of Supplementary Agreement No. 1:
Supplementary Agreement No. 1 shall enter into force from the moment
it is signed by the Parties and be valid for the term of the Agreement.
The terms and conditions of Supplementary Agreement No. 1 are applied
to the Parties' arrangements from 1 January 2018.
Parties to Supplementary Agreement No. 1:
PJSC FGC UES (Lender);
PJSC IDGC of the South (Debtor).
Subject and cost:
Amendment of the Debt Settlement Agreement of PJSC IDGC
of the South for Electricity Transmission Services under the UNEG
of 27 June 2017 (hereinafter, the "Agreement").
The total outstanding debt under the Agreement amounts to
RUB 4,110,466,911 (four billion one hundred ten million four hundred
sixty six thousand nine hundred eleven) 42 kopecks, incl. VAT (18 %) in
the amount of RUB 627,020,376 (six hundred twenty seven million twenty
thousand three hundred seventy six) 32 kopecks.
The total cost of the Agreement for the entire validity period shall not
amount to or exceed 10 (ten) percent of the net book value
of PJSC FGC UES' assets according to its accounting statements
as of the latest reporting date.
Term of Supplementary Agreement No. 1:
Supplementary Agreement No. 1 shall enter into force from the moment
it is signed by the Parties and be valid for the term of the Agreement.
The terms and conditions of Supplementary Agreement No. 1 are applied
to the Parties' arrangements from 1 January 2018.
Parties to Supplementary Agreement No. 11:
PJSC FGC UES (Customer);
JSC Electrosetservice UNEG (Executor).
Subject and cost:
Amendment of Contract No. 04/13 for Repair, Maintenance and
Diagnostics of Electric Grid Facilities of 11 March 2013 (hereinafter,
the "Contract").
The total cost of works under the Contract, taking into account
supplementary agreements No. 1–11, does not exceed
RUB 1,118,209,094 (one billion one hundred eighteen million two hundred
nine thousand ninety four) 16 kopecks, incl. VAT (18 %) in the amount
of no more than RUB 170,574,268 (one hundred seventy million five
hundred seventy four thousand two hundred sixty eight) 60 kopecks.
Term of Supplementary Agreement No. 11:
Supplementary Agreement No. 11 is an integral part of the Contract, shall
enter into force from the date it is signed by the Parties, apply to the
Parties' arrangements from 1 January 2017 and be valid until the Parties
fulfil all their obligations.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
PJSC Rosseti
No. AM-1167
of 27 February
2018
Board of Directors
of PJSC FGC UES
(Minutes No. 401 of
14 May 2018,
issue No. 1).
PJSC Rosseti
No. AM-1167
of 27 February
2018
Board of Directors
of PJSC FGC UES
(Minutes No. 401
of 14 May 2018,
issue No. 2).
PJSC Rosseti
No. AM-3062
of 22 May
2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
N. Pozdnyakov
No. AM-3062
of 22 May 2018
PJSC Rosseti
No. AM-3979
of 4 July 2018
PJSC Rosseti
A. Solod
No. AM-3979
of 4 July 2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
25 June
2018
15.
Supplementary
Agreement
No. 6 to Contract
No. 214-2016
for Performance
of Works
of 13 December
2016 under the
title: Construction
of a Smart
Distribution Grid
of 20/0.4 kV on
the Territory of
the Skolkovo
Innovation Centre,
Stage 2
25 July
2018
16.
Supplementary
Agreement No. 1
to Contract
No. 01/18
for Repair,
Maintenance
and Diagnostics
of Electric Grid
Facilities
of 23 April 2018
2 August
2018
17.
Report on
Determining
Shares
in the Joint
Ownership
Parties to Supplementary Agreement No. 6:
PJSC FGC UES (Customer);
JSC TsIUS UES (Contractor).
Subject and cost:
Amendment of Contract No. 214-2016 for Performance of Works
of 13 December 2016 under the title: Construction of a Smart Distribution
Grid of 20/0.4 kV on the Territory of the Skolkovo Innovation Centre,
Stage 2 (hereinafter, the "Contract").
The total cost of works under the Contract, taking into account
supplementary agreements No. 1–6, does not exceed
RUB 10,351,987,437 (ten billion three hundred fifty one million nine
hundred eighty seven thousand four hundred thirty seven) 73 kopecks,
incl. VAT (18 %) in the amount of no more than RUB 1,579,116,727
(one billion five hundred seventy nine million one hundred sixteen
thousand seven hundred twenty seven) 79 kopecks.
Term of Supplementary Agreement No. 6:
Supplementary Agreement No. 6 shall enter into force and be an integral
part of the Contract from the date it is signed by the Parties.
Parties to Supplementary Agreement No. 1:
PJSC FGC UES (Customer);
JSC Electrosetservice UNEG (Executor).
Subject and cost:
Amendment of Contract No. 01/18 for Repair, Maintenance and
Diagnostics of Electric Grid Facilities of 23 April 2018 (hereinafter, the
"Contract").
The total cost of works under the Contract, taking into account
Supplementary Agreement No. 1, does not exceed RUB 1,001,575,406
(one billion one million five hundred seventy five thousand four hundred
six) 58 kopecks, incl. VAT (18 %) in the amount of no more than
RUB 152,782,689 (one hundred fifty two million seven hundred eighty
two thousand six hundred eighty nine) 13 kopecks.
Term of Supplementary Agreement No. 1:
Supplementary Agreement No. 1 is an integral part of the Contract,
shall enter into force from the moment it is signed and be valid until the
Parties fulfil all their obligations.
The terms and conditions of Supplementary Agreement No. 1 are applied
to the Parties' arrangements from 1 January 2018.
Parties:
PJSC FGC UES;
JSC Kuban Trunk Grids.
Subject, cost and other material conditions:
Within the framework of Contract No. DI-73/107/30-49 for the Use of
Electric Grid Facilities of 30 December 2005, the Parties determine the
following:
– PJSC FGC UES' expenses, attributable to the 220 kV OHL facility
Shepsi-Dagomys (hereinafter, the "Facility"), amount to
RUB 1,983,668,000 (one billion nine hundred eighty three million
six hundred sixty eight thousand), excl. VAT;
– JSC Kuban Trunk Grids' expenses, attributable to the Facility, amount
to RUB 69,891,000 (sixty nine million eight hundred ninety one thousand),
excl. VAT.
The Parties agreed that:
– PJSC FGC UES's share in the joint ownership for the Facility amounts to
87.3 % (eighty seven point three percent);
- JSC Kuban Trunk Grids' share in the joint ownership for the Facility is
12.7 % (twelve point seven percent).
All income and expenses related to the use and operation of the Facility
jointly owned by the Parties shall be distributed among the Parties in
proportion to their share.
Term of the Report:
The Report shall enter into force on the date of signing by the Parties.
376
377
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONS 18.
19.
Supplementary
Agreement
No. 2 to Contract
No. 529/ID of 19
October 2016 for
the Performance
of Works Related
to the Second
Construction
Stage under
the title:
Construction
of the 500 kV
Beloberezhskaya
Substation
with the 500 kV
Novobryanskaya–
Eletskaya, 220 kv
Beloberezhskaya–
Tsementnaya,
and the 220 kv
Beloberezhskaya–
Bryanskaya HV
Approach Lines
for the Needs
of PJSC FGC UES'
Branch MPS
North-West
Supplementary
Agreement
No. 21 to
Agency Contract
No. 69 for the
Implementation
of the Investment
Programme
of JSC Kuban
Trunk Grids for
the Renovation
and Technical
Re-Equipment
of Electric Grid
Facilities of
29 May 2006
30 August
2018
31 August
2018
20.
Supplementary
Agreement
No. 1 to Contract
No. 06/18 for
the Repair,
Maintenance
and Diagnostics
of Electric
Grid Facilities
of PJSC FGC UES'
Branch MPS
West Siberia for
2018–2022 of
24 April 2018
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
22 August
2018
Parties to Supplementary Agreement No. 2:
PJSC FGC UES (Customer);
JSC TsIUS UES (Contractor).
Subject and cost:
Amendment of Contract No. 529/ID of 19 October 2016
for the Performance of Works Related to the Second Construction Stage
under the title: Construction of the 500 kV Beloberezhskaya Substation
with the 500 kV Novobryanskaya–Eletskaya, 220 kv Beloberezhskaya–
Tsementnaya, and the 220 kv Beloberezhskaya–Bryanskaya HV
Approach Lines for the Needs of PJSC FGC UES' Branch MPS North-West
(hereinafter, the "Contract").
The total cost of works under the Contract and supplementary
agreements No. 1 and 2 does not exceed RUB 2,005,000,000 (two
billion five million), incl. VAT (18 %) in the amount of no more than
RUB 305,847,457 (three hundred five million eight hundred forty seven
thousand four hundred fifty seven) 63 kopecks.
Term of Supplementary Agreement No. 2:
Supplementary Agreement No. 2 shall enter into force on the date
of signing.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. AM-4581
of 25 July 2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
PJSC Rosseti
A. Solod
No. AM-5010
of 9 August
2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
PJSC Rosseti
No. AM-3979
of 4 July 2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
Parties to Supplementary Agreement No. 21:
PJSC FGC UES (Executor);
JSC Kuban Trunk Grids (Customer).
Subject and cost:
Amendment of Agency Contract No. 69 for the Implementation
of the Investment Programme of JSC Kuban Trunk Grids for the
Renovation and Technical Re-Equipment of Electric Grid Facilities
of 29 May 2006 (hereinafter, the "Contract").
As for 2018, the amount of payment determined by Supplementary
Agreement No. 21 to the Contract did not exceed RUB 193,724,000
(one hundred ninety three million seven hundred twenty four thousand)
00 kopecks, incl. VAT (18 %) in the amount of no more than
RUB 29,551,118 (twenty nine million five hundred fifty one thousand
one hundred eighteen) 64 kopecks.
The total payment under the Contract and supplementary agreements
No. 1–21 does not exceed RUB 1,754,010,518 (one billion seven hundred
fifty four million ten thousand five hundred eighteen) 32 kopecks, incl.
VAT (18 %) in the amount of no more than RUB 267,560,926 (two hundred
sixty seven million five hundred sixty thousand nine hundred twenty six)
52 kopecks.
Term of Supplementary Agreement No. 21:
Supplementary Agreement No. 21 shall enter into force from the date
of signing by the Parties and be valid until the Parties fulfil all their
obligations.
Parties to Supplementary Agreement No. 1:
PJSC FGC UES (Customer);
JSC Electrosetservice UNEG (Contractor).
Subject and cost:
Amendment of Contract No. 06/18 for the Repair, Maintenance and
Diagnostics of Electric Grid Facilities of PJSC FGC UES' branch
MPS West Siberia for 2018–2022 of 24 April 2018 (hereinafter,
the "Contract").
The total cost of works under the Contract and Supplementary
Agreement No. 1 does not exceed RUB 1,267,302,488 (one billion two
hundred sixty seven million three hundred two thousand four hundred
eighty eight) 24 kopecks, incl. VAT (18 %) in the amount of no more
than RUB 193,317,328 (one hundred ninety three million three hundred
seventeen thousand three hundred twenty eight) 72 kopecks.
Term of Supplementary Agreement No. 1:
Supplementary Agreement No. 1 shall enter into force from the date
of signing by the Parties and be valid for the term of the Contract.
In accordance with p. 2, Art. 425 of the Civil Code of the Russian
Federation, the terms and conditions of Supplementary Agreement
No. 1 shall apply to the legal relationship between the Parties existing
since 15 March 2018.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. AM-5010
of 9 August
2018
PJSC Rosseti
No. AM-7864
of 19 December
20181
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
6
September
2018
30
November
2018
Parties to Supplementary Agreement No. 7:
PJSC FGC UES (Customer);
JSC TsIUS UES (Contractor).
Subject and cost:
Amendment of Contract No. 214-2016 of 13 December 2016
for the Performance of a Set of Works under the title: Construction
of a Smart Distribution Grid of 20/0.4 kV on the Territory of the Skolkovo
Innovation Centre, Stage 2 (hereinafter, the "Contract").
The total cost of works under the Contract, taking into account
supplementary agreements No. 1–6, does not exceed
RUB 10,351,987,437 (ten billion three hundred fifty one million nine
hundred eighty seven thousand four hundred thirty seven) 73 kopecks,
incl. VAT (18%) in the amount of no more than RUB 1,579,116,727
(one billion five hundred seventy nine million one hundred sixteen
thousand seven hundred twenty seven roubles) 79 kopecks.
Term of Supplementary Agreement No. 7:
Supplementary Agreement No. 7 shall enter into force and be an integral
part of the Contract from the date of signing by the Parties.
Parties to Supplementary Agreement No. 3:
PJSC FGC UES (Customer);
JSC NTC FGC UES (Contractor).
Subject and cost:
Amendments to the contract for performance of contract works (building
and assembly works, pre-commission, supply of physical resources
and equipment) under the title: Measures for Compensation of Reactive
Power in the Consolidated Power System of the North-West Region with
Installation of Two 10 kV Shunt Reactors 29.7 Mvar on 330 kV Substation
Velikoretskaya, Two 330 kV Shunt Reactors 100 Mvar on 330 Substation
kV Starorusskaya, 330 kV Shunt Reactor 100 Mvar on 330 kV Substation
Novosokolniki and Two Groups of Single-phase 330 kV TOR on 750 kV
Substation Leningradskaya for the needs of the branch PJSC FGC UES —
MPS North-West No. 479805 of 25 August 2017 (hereinafter,
the “Contract”).
The price of works under the Contract, taking into account additional
agreements No. 1–3, does not exceed RUB 1,177,675,240 (one billion
hundred seventy-seven million six hundred seventy-five thousand two
hundred forty) 40 kopecks, including VAT (18 %) not exceeding
RUB 179,645,375 (one hundred seventy-nine million six hundred forty-five
thousand three hundred seventy-five) 66 kopecks.
Term of Supplementary Agreement No. 3:
Supplementary Agreement No. 3 shall enter into force on the date it is
signed by the Parties.
21.
22.
Supplementary
Agreement
No. 7 to Contract
No. 214-2016
of 13 December
2016 for the
Performance
of a Set of Works
under the title:
Construction
of a Smart
Distribution Grid
of 20/0.4 kV on
the territory of
the Skolkovo
Innovation
Centre, Stage 2
Supplementary
Agreement
No. 3 to Contract
No. 479805 of 25
August 2017 for
the Performance of
Contract Works
(Building and
Assembly Works,
Pre-commissioning,
Supply of Physical
Resources and
Equipment) under
the title: Measures
for Compensation
of Reactive Power
in the Consolidated
Power System of
the North-West
Region with
Installation of
Two 10 kV Shunt
Reactors
29.7 Mvar on
330 kV Substation
Velikoretskaya,
Two 330 kV
Shunt Reactors
100 Mvar on
330 Substation kV
Starorusskaya, 330
kV Shunt Reactor
100 Mvar on 330
kV Substation
Novosokolniki
and Two Groups
of Single-phase
330 kV TOR on
750 kV Substation
4 December
2018
23.
Supplementary
Agreement
No. 3 to Contract
No. 529/ID of 19
October 2016
Parties to Supplementary Agreement No. 3:
PJSC FGC UES (Customer);
JSC TsIUS UES (Contractor).
Subject and cost:
Amendments to the contract No. 529/ID of 19 October 2016
(hereinafter — the “Contract”).
The total price of work under the Contract, taking into account
supplementary agreements No. 1–3, does not exceed RUB 1,868,255,288
(one billion eight hundred sixty-eight million two hundred fifty-five
thousand two hundred eighty-eight) 88 kopecks, including VAT
in the amount not exceeding RUB 284,988,094 (two hundred eighty-four
million nine hundred eighty-eight thousand ninety-four) 90 kopecks.
Term of Supplementary Agreement No. 3:
Supplementary Agreement No. 3 shall enter into force on the date it is signed.
PJSC Rosseti
R. Filimonov
No. AM-6943
of 15 November
2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
1 According to clause 24 of Resolution of the Plenum of the Supreme Court of Russia No. 27 of 26 June 2018, the requirement to obtain consent for the conclusion of a related-party
transaction may be sent at any time, including after the transaction has been completed. In this case, the relevant body of the company considers the subsequent approval
of the transaction.
378
379
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONS Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. МА-7268
of 28
November
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
PJSC Rosseti
No. AM-6756
of 6 November
2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
14
December
2018
24.
Supplementary
Agreement
No. 22 to
Agency Contract
No. 69 of
29 May 2006
on the
Implementation
of the Investment
Programme for
Construction,
Reconstruction
and Technical
Re-equipment
of Power Grid
Facilities
of JSC Kuban
Trunk Grids
25. Contract for
the Provision
of Independent
Guarantees
20
December
2018
Parties to Supplementary Agreement No. 22:
PJSC FGC UES (Executor);
JSC Kuban Trunk Grids (Customer).
Subject and cost:
Amendments to the Agency Contract on the implementation
of the investment program for the construction, reconstruction and
technical re-equipment of the power grid facilities of JSC Kuban Trunk
Grids No. 69 of 29 May 2006 (hereinafter — the “Contract”).
The total price of works under the Contract taking into account
supplementary agreements No. 1–22 is RUB 1,813,779,518 (one billion
eight hundred thirteen million seven hundred seventy-nine thousand
five hundred eighteen) 32 kopecks, including VAT in the amount of
RUB 276,678,231 (two hundred seventy-six million six hundred seventy-
eight thousand two hundred thirty-one) 61 kopecks.
Term of Supplementary Agreement No. 22:
Supplementary Agreement No. 22 shall enter into effect from
the moment it is signed and shall be in effect until the Parties fulfil
all their obligations.
Parties to the Contract:
PJSC FGC UES (Guarantor);
JSC Mobile GTES (Principal).
Subject of the Contract:
The Guarantor undertakes to provide the Principal with separate
independent guarantees as a proper fulfilment of the Principal's
obligations for the payment of petroleum products supplied under
Contract No. 100018/02044D of 12 April 2018 for petroleum products
supply, concluded between the Principal and PJSC Rosneft.
Price under the Contract:
The total amount of simultaneous effective independent guarantees
(hereinafter, the "Limit") shall not exceed RUB 2,600,000,000 (two billion
six hundred million).
Independent guarantees are provided to the Principal without paying
remuneration to the Guarantor.
Limit term under the Contract:
The Limit is valid form the conclusion date of the Contract to
30 April 2019. Each Guarantee, provided within the Limit, shall not expire
later than the termination date of the Limit. Herewith, the validity period
for each Guarantee shall be limited to a specific calendar date.
Term of the Contract:
The Contract shall enter into force from the date it is signed by
the Parties and is valid until the obligations of the Parties are terminated.
Other essential terms of the Contract:
Issuance of an independent guarantee shall be carried out upon
the written request of the Principal.
An independent guarantee is provided if there is an available Limit at
least the amount of the corresponding independent guarantee on
the date of issue.
The Principal undertakes to reimburse the Guarantor the amounts paid
by the Guarantor to the Beneficiary for each independent guarantee, no
later than 5 (five) business days from the payment date in favour
of the Beneficiary.
The Guarantor does not charge the Principal for the use of the money
that the Guarantor pays to the Beneficiary.
In case of non-performance or improper performance of the Principal's
obligations to the Guarantor under the Contract, the Principal shall pay
the Guarantor a penalty of 1/180 of the key rate of the Bank of Russia
acting on the date of occurrence of obligations from the amount of
unfulfilled or improperly executed obligation from the date following
the date of non-performance or improper performance of the Principal's
obligations to the Guarantor under the Contract and ending with the date
of their proper performance by the Principal for each calendar day
of delay in payment.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. AM-7184
of 23 November
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
20
December
2018
26. Contract on
Guarantee
Providing
Procedure and
Meeting the
Demands of the
Guarantor*
Parties to the Contract:
PJSC FGC UES (Guarantor);
JSC Electrosetservice UNEG (Borrower).
Subject of the Contract:
The Guarantor ensures the fulfilment of the obligations of the Borrower
to the Joint-Stock Company Vetroenergeticheskaya Otdelnaya Generating
Company (JSC VetroOGK), OGRN 1115074014967, INN 5036118291,
which arise from Contract No. 716/221-D/347/222-D of 7 August 2018
(hereinafter, the "Principal Obligation"), for the purpose of which the
Guarantor enters into a corresponding guarantee contract (contracts)
with JSC VetroOGK, the lender of the Borrower.
The total amount of guarantees provided under the guarantee contract(s)
of the Principal Obligation of the Borrower shall not exceed
RUB 1,020,510,127 (one billion twenty million five hundred ten thousand
hundred twenty-seven) (hereinafter, the "Limit").
Under the guarantee contract(s) between the Guarantor and the lender
of the Borrower (JSC VetroOGK) the following obligations of the Borrower
arising from the Principle Obligation can be ensured:
— on the return of the advance payment in the amount of
RUB 874,722,966 (eight hundred seventy-four million seven hundred
twenty-two thousand nine hundred sixty-six);
— on proper fulfilment of obligations worth 145,787,161 (one hundred
forty-five million seven hundred eighty-seven thousand one hundred
sixty-one).
The Contract defines the procedure and conditions for granting these
guarantees and reimbursement to the Guarantor of the sums paid to
the lender of the Borrower.
Cost of the Contract:
The Guarantor ensures the obligation of the Borrower under the Principal
Obligation to JSC VetroOGK without the Borrower's paying remuneration.
Limit term under the Contract:
The Limit is valid from the effective date of the Basic Obligation until
14 June 2019 (inclusive).
Other essential terms of the Contract:
The Borrower undertakes to reimburse the Guarantor for the amount paid
by the Guarantor for the Borrower to JSC VetroOGK, its lender no later
than 5 (five) business days from the date of the Guarantor's performance
of the obligations of the Borrower.
In case of non-performance or improper performance by the Borrower
of its obligations to the Guarantor under the guarantee contract,
the Borrower shall pay the Guarantor for each calendar day of delay in
reimbursement of the amount paid by the Guarantor for the Debtor
to its lender (JSC VetroOGK), penalty in the amount of 1/180
of the key rate of the Bank of Russia in effect on the date of occurrence
of the breach of obligations, from the amount of the non-performed or
improperly performed obligation from the date following the date
of non-performance or improper performance of the Borrower's
obligations to the Guarantor under the guarantee contract and ending
with the date of their proper performance by the Borrower.
Term of the Contract:
The Contract shall enter into force from the date it is signed by
the Parties and is valid until the obligations of the Parties are terminated.
380
381
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONS Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. AM-7184
of 23 November
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
27. Contract of
Guarantee*
21
December
2018
Parties to the Contract:
PJSC FGC UES (Guarantor);
JSC VetroOGK (Lender).
The body whose liabilities are protected by the Contract:
JSC Electrosetservice UNEG (Borrower, Beneficiary).
Subject of the Contract:
The Guarantor undertakes to be liable to the Lender for the performance of the
obligations of the Borrower provided by Contract No. 716/221-D/347/222-D for
the performance of general construction works, works on the construction of
substation and on the provision of technological connection within the framework
of the project Construction of 610 MW WPP and Wind Turbine Plant.
Adygeiskaya WPP (hereinafter, the "Principal Contract") concluded between the
Lender and the Borrower and (or) arising therefrom due to the provisions of the
Russian legislation, including, but not exclusively, obligations to pay money, including
penalties (fees, fines) provided for in the Principal Contract, reimbursement of legal
costs for debt collection and other losses of the Lender, which may arise in the
future (except for lost profits), in case of non-performance or improper performance
of obligations by the Borrower in respect of construction works of the SS facilities
(SS 220 Kv WPP with a switchgear 220 kV for 3 cells with the installation of two
transformers with the capacity of 2х80 MVA, as described in Appendix 1 to the
Principal Contract), provided for in the Principal Contract, within the amount of
RUB 42,557,693 (forty-two million five hundred fifty-seven thousand six hundred
ninety-three) and 50 kopecks (hereinafter, the "Principal Obligation").
Cost of the Contract:
The Guarantor shall be liable to the Lender for the due fulfilment of the basic liability
by the Borrower in the amount not exceeding RUB 42,557,693 (forty-two million five
hundred fifty-seven thousand six hundred and ninety-three) 50 kopecks.
Guarantee validity under the Contract:
Under the Contract the guarantee is valid until 14 June 2019 (inclusive).
Term of the Contract:
The Contract shall come into force on the date of occurrence of one of the following
events:
– effective date of the Principal Contract;
– date of receipt of the last consent (approval) of the authorised governing body
of the Parties, if such consent (approval) is required in accordance with the current
Russian legislation and/or constituent documents of PJSC FGC UES and/or
JSC VetroOGK;
– date of signing the Contract between PJSC FGC UES and JSC VetroOGK.
Guarantee is terminated if:
– it expires on 14 June 2019 (inclusive);
– the Principal Obligation is terminated, and if the liability is transferred to another
body in case the Guarantor did not agree to be liable for the new Borrower;
– the Lender refuses to properly fulfil liabilities under the Principal Contract proposed
by the Borrower or the Guarantor;
– other events provided for by the Russian legislation occur.
Other essential terms of the Contract:
The Guarantor and the Borrower are jointly and equally responsible to the Lender
under the Principal Obligation.
The Guarantor agrees that the Lender and the Borrower are entitled to make any
amendments to the Principal Contract with subsequent written notification of
the Guarantor, except for the amendments made to the Article 74 of the Principal
Contract subject to prior consent of the Guarantor.
The Guarantor gives prior consent to be liable to Lender in case of amendments to
the Principal Obligation under the changed conditions, but within the amount not
exceeding RUB 42,557,693 (forty-two million five hundred fifty-seven thousand six
hundred ninety-three) 50 kopecks.
Liabilities of the Guarantor under the Contract shall be considered fulfilled at the
moment of transaction of monetary funds to the settlement account of the Lender.
In case of a delay in the Borrower's due fulfilment of liabilities to the Lender, the latter
has a right to demand due fulfilment from the Borrower or the Guarantor, as well as
to carry out judicial recovery of the losses in accordance with the law. At the same
time the Lender is obliged to send a written request to the Borrower and Guarantor
regarding payment for documented losses enclosing all documents supporting such
losses.
The Guarantor is obliged to transfer the claimed funds to the Lender within 10 (ten)
working days from the day of the receipt of the Lender's claim.
The Guarantor has the right to raise objections against the Lender's claims, which
could be submitted by the Borrower, and submit a reasoned refusal to pay within
10 (ten) working days.
In case the Guarantor violates its obligations to the Lender under the Contract, the
Lender has the right to charge the Guarantor with a penalty. It amounts to 1/365 key
rate of the Bank of Russia, in effect as of the day of the breach of obligations, of the
amount the Lender demanded for each day of delay. This enters into force after
10 (ten) working days, provided to the Guarantor for money transfer to the Lender,
until transfer is completed.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. AM-7184
of 23 November
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as the
Company did not receive
a corresponding request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
28. Contract of
Guarantee*
21
December
2018
Parties to the Contract:
PJSC FGC UES (Guarantor);
JSC VetroOGK (Lender).
The body whose liabilities are protected by the Contract:
JSC Electrosetservice UNEG (Borrower, Beneficiary).
Subject of the Contract:
The Guarantor agrees that it will be liable to the Lender for the Borrower's
fulfilment of its obligations under the Principal Contract, concluded between
the Lender and the Borrower, and/or arising therefrom under the Russian
legislation. These obligations include, but are not limited to, monetary
payments, including penalties (fines, fees) provided for in the Principal Contract,
court costs reimbursement for debt recovery and other losses of the Lender
that may arise in the future (except for lost profits) due to failure or improper
fulfilment by the Borrower of its liabilities in terms of general construction
work (in accordance with article 1, section I of the Principal Contract within the
amount of RUB 103,229,467 (one hundred thee million two hundred twenty-nine
thousand four hundred sixty-seven) 50 kopecks (hereinafter — the Principal
Obligation)).
Cost of the Contract:
The Guarantor shall be liable to the Lender for the due fulfilment of the Principal
Obligation by the Borrower in the amount not exceeding RUB 103,229,467 (one
hundred thee million two hundred twenty-nine thousand four hundred sixty-
seven) 50 kopecks.
Guarantee validity under the Contract:
Under the Contract the guarantee is valid until 14 June 2019 (inclusive).
Term of the Contract:
The Contract shall come into force on the date of occurrence of one of the
following events:
– effective date of the Principal Contract;
– date of receipt of the last consent (approval) of the authorised governing
body of the Parties of the Contracts, if such consent (approval) is required in
accordance with the current Russian legislation and/or constituent documents
of PJSC FGC UES and/or JSC VetroOGK.
– date the Contracts are signed by PJSC FGC UES and JSC VetroOGK.
Guarantee is terminated if:
– it expires on 14 June 2019 (inclusive);
– the Principal Obligation is terminated, and if the liability is transferred to
another body in case the Guarantor did not agree to be liable for the new
Borrower;
– the Lender refuses to properly fulfil liabilities under the Principal Contract
proposed by the Borrower or the Guarantor;
– other events provided for by the Russian legislation occur.
Other essential terms of the Contract:
The Guarantor and the Borrower are jointly and equally responsible to the
Lender under the Principal Obligation.
The Guarantor agrees that the Lender and the Borrower are entitled to make
any amendments to the Principal Contract with subsequent written notification
of the Guarantor, except for the amendments made to the Article 74 of the
Principal Contract subject to prior consent of the Guarantor.
The Guarantor gives prior consent to be liable to Lender in case of amendments
to the Principal Obligation under changed conditions, but within the amount not
exceeding RUB 103,229,467 (one hundred thee million two hundred twenty-nine
thousand four hundred sixty-seven) 50 kopecks.
Liabilities of the Guarantor under the Contract of Guarantee shall be considered
fulfilled at the moment of transaction of monetary funds to the settlement
account of the Lender.
In case of a delay in the Borrower's due fulfilment of liabilities to the Lender, the
latter has a right to demand due fulfilment from the Borrower or the Guarantor,
as well as to carry out judicial recovery of the losses in accordance with the
law. At the same time the Lender is obliged to send a written request to the
Borrower and Guarantor regarding payment for documented losses enclosing
all documents supporting such losses.
The Guarantor is obliged to transfer the claimed funds to the Lender within 10
(ten) working days from the day of the receipt of the Lender's claim.
The Guarantor has the right to raise objections against the Lender's claims,
which could be submitted by the Borrower, and submit a reasoned refusal to
pay within 10 (ten) working days.
In case the Guarantor violates its obligations to the Lender under the Contract,
the Lender has the right to charge the Guarantor with a penalty. It amounts to
1/365 key rate of the Bank of Russia, in effect as of the day of the breach of
obligations, of the amount the Lender demanded for each day of delay. This
enters into force after 10 (ten) working days, provided to the Guarantor for
money transfer to the Lender, until transfer is completed.
382
383
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONS Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. AM-7184
of 23 November
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as the
Company did not receive
a corresponding request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
29. Contract of
Guarantee*
21
December
2018
Parties to the Contract:
PJSC FGC UES (Guarantor);
JSC VetroOGK (Lender).
The body whose liabilities are protected by the Contract:
JSC Electrosetservice UNEG (Borrower, Beneficiary).
Subject of the Contract:
The Guarantor agrees that it will be liable to the Lender for the Borrower's
fulfilment of its obligations under the Principal Contract, concluded between
the Lender and the Borrower, regarding the return to the Lender of the advanced
payment received by the Borrower under the Principal Contract. The payment
was made for works on construction of the substation (220 KV wind turbine
substation with 220 KV distribution plant on 3 cells with installation of two
transformers with capacity 2x80 MVA, as described in the Appendix 1 to the
Principal Contract). The payment shall be returned in cases provided for by
the Principal Contract and/or the Russian legislation, within the amount not
exceeding RUB 255,346,161 (two hundred fifty-five million three hundred forty-
six thousand one hundred sixty-one) but no more than the amount of advance
payment paid by the Lender in favour of the Borrower (hereinafter, the "Principal
Obligation").
Cost of the Contract:
The Guarantor shall be liable to the Lender for the due fulfilment of the basic
liability by the Borrower in the amount not exceeding RUB 255,346,161 (two
hundred fifty-five million three hundred forty-six thousand one hundred sixty-
one).
Guarantee validity under the Contract:
Under the Contract the guaran tee is valid until 14 June 2019 (inclusive).
Term of the Contract:
The Contract shall come into force on the date of occurrence of one of the
following events:
– effective date of the Principal Contract;
– date of receipt of the last consent (approval) of the authorised governing
body of the Parties, if such consent (approval) is required in accordance with
the current Russian legislation and/or constituent documents of PJSC FGC UES
and/or JSC VetroOGK.
– date of signing the Contract between PJSC FGC UES and JSC VetroOGK.
Guarantee is terminated if:
– guarantee expires on 14 June 2019 (inclusive);
– the Principal Obligation is terminated, and if the liability is transferred to
another body in case the Guarantor did not agree to be liable for the new
Borrower;
– the Lender refuses to properly fulfil liabilities under the Principal Contract
proposed by the Borrower or the Guarantor;
– other events provided for by the Russian legislation occur.
Other essential terms of the Contract:
The Guarantor and the Borrower are jointly and equally responsible to the
Lender under the Principal Obligation.
The Guarantor agrees that the Lender and the Borrower are entitled to make
any amendments to the Principal Contract with subsequent written notification
of the Guarantor, except for the amendments made to the Article 74 of the
Principal Contract subject to prior consent of the Guarantor.
The Guarantor gives prior consent to be liable to Lender in case of amendments
to the Principal Obligation under the changed conditions, but within the amount
not exceeding RUB 255,346,161 (two hundred and fifty-five million three
hundred forty-six thousand one hundred sixty-one).
Liabilities of the Guarantor under the Contract of Guarantee shall be considered
fulfilled at the moment of transaction of monetary funds to the settlement
account of the Lender.
In case of a delay in the Borrower's due fulfilment of liabilities to the Lender,
the latter has a right to demand due fulfilment from the Borrower or the
Guarantor, as well as to carry out judicial recovery of the losses in accordance
with the law. At the same time the Lender is obliged to send a written request
to the Borrower and Guarantor regarding payment for documented losses
enclosing all documents supporting such losses.
The Guarantor is obliged to transfer the claimed funds to the Lender within 10
(ten) working days from the day of the receipt of the Lender's claim.
The Guarantor has the right to raise objections against the Lender's claims,
which could be submitted by the Borrower, and submit a reasoned refusal to
pay within 10 (ten) working days.
In case the Guarantor violates its obligations to the Lender under the Contract,
the Lender has the right to charge the Guarantor with a penalty. It amounts to
1/365 key rate of the Bank of Russia, in effect as of the day of the breach of
obligations, of the amount the Lender demanded for each day of delay. This
enters into force after 10 (ten) working days, provided to the Guarantor for
money transfer to the Lender, until transfer is completed.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. AM-7184
of 23 November
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as the
Company did not receive
a corresponding request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
30. Contract of
Guarantee*
21
December
2018
Parties to the Contract:
PJSC FGC UES (Guarantor);
JSC VetroOGK (Lender).
The body whose liabilities are protected by the Contract:
JSC Electrosetservice UNEG (Borrower, Beneficiary).
Subject of the Contract:
The Guarantor undertakes to be liable to the Lender for fulfilment of liabilities
under the Principal Contract between the Lender and the Borrower.
The Borrower is obliged to return the advance payment for general
construction works (in accordance with the Article 1, Section I of the
Principal Contract) in cases provided for by the Principal Contract and (or)
the Russian legislation, within the amount of RUB 619,376,805 (six hundred
nineteen million three hundred seventy-six thousand eight hundred five), but
not exceeding the advance paid by the Lender to the Borrower (hereinafter,
the "Principal Obligation").
Cost of the Contract:
The Guarantor shall be liable to the Lender for the due fulfilment
of the Principal Obligation by the Borrower in the amount not exceeding
RUB 619,376,805 (six hundred nineteen million three hundred seventy-six
thousand eight hundred five).
Guarantee validity under the Contract:
Under the Contract the guarantee is valid until 14 June 2019 (inclusive).
Term of the Contract:
The Contract shall enter into force on the date of occurrence of one
of the following events, whichever is the later:
– effective date of the Principal Contract;
– date of receipt of the last consent (approval) of the authorised governing
body of the Parties, if such consent (approval) is required in accordance with
the current Russian legislation and/or constituent documents
of PJSC FGC UES and/or JSC VetroOGK;
– the date of signing the Contract between PJSC FGC UES and
JSC VetroOGK.
Guarantee is terminated if:
– guarantee expires on 14 June 2019 (inclusive);
– the Principal Obligation is terminated, and if the liability is transferred to
another body in case the Guarantor did not agree to be liable for the new
Borrower;
– the Lender refuses to properly fulfil liabilities under the Principal Contract
proposed by the Borrower or the Guarantor;
– other events provided for by the Russian legislation occur.
Other essential terms of the Contract:
The Guarantor and the Borrower are jointly and equally responsible
to the Lender under the Principal Obligation.
The Guarantor agrees that the Lender and the Borrower are entitled to
make any amendments to the Principal Contract with subsequent written
notification of the Guarantor, except for the amendments made to the
Article 74 of the Principal Contract subject to prior consent of the Guarantor.
The Guarantor gives prior consent to be liable to Lender in case of
amendments to the Principal Obligation under changed conditions, but
within the amount not exceeding RUB 619,376,805 (six hundred and nineteen
million three hundred seventy six thousand eight hundred five roubles).
Liabilities of the Guarantor under the Contract of Guarantee shall be
considered fulfilled at the moment of transaction of monetary funds
to the settlement account of the Lender.
In case of a delay in the Borrower's due fulfilment of liabilities
to the Lender, the latter has a right to demand due fulfilment from
the Borrower or the Guarantor, as well as to carry out judicial recovery
of the losses in accordance with the law. At the same time the Lender is
obliged to send a written request to the Borrower and Guarantor regarding
payment for documented losses enclosing all documents supporting such
losses.
The Guarantor is obliged to transfer the claimed funds to the Lender within
10 (ten) working days from the day of the receipt of the Lender's claim.
The Guarantor has the right to raise objections against the Lender's claims,
which could be submitted by the Borrower, and submit a reasoned refusal
to pay within 10 (ten) working days.
In case the Guarantor violates its obligations to the Lender under the
Contract, the Lender has the right to charge the Guarantor with a penalty.
It amounts to 1/365 key rate of the Bank of Russia, in effect as of the day of
the breach of obligations, of the amount the Lender demanded for each day
of delay. This enters into force after 10 (ten) working days, provided
to the Guarantor for money transfer to the Lender, until transfer is completed.
384
385
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONS Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
R. Filimonov
No. AM-7530
of 6 December
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
22
December
2018
Parties to Supplementary Agreement No. 3:
PJSC FGC UES (Customer);
JSC TsIUS UES (Contractor).
Subject and cost:
Amendments to the Contract No. 482667 of 20 October 2017 for
the development of the operational documentation, building and
installation works and commissioning with the supply of equipment in
the scope of all unfinished works under the title: Construction of
a 220 kV Overhead Line Neryungrinskaya GRES – Nizhny Kuranakh –
Tommot – Maya with the 220 kV Tommot Substation and
the 220 kV Maya Substation, Regarding Construction of the 220 kV
Tommot Substation and Expansion of the 220 kV Open Switchgear
in the 220 kV Nizhny Kuranakh Substation (hereinafter, the "Contract").
The price of works under the Contract, taking into account supplementary
agreements No. 1–3, does not exceed RUB 1,813,600,390 (one billion
eight hundred thirteen million six hundred thousand three hundred
ninety), including VAT (18 %) in the amount of no more than
RUB 276,650,906 (two hundred seventy-six million six hundred
fifty thousand nine hundred six) 95 kopecks.
Term of Supplementary Agreement No. 3:
Supplementary Agreement No. 3 shall enter into force from the date
it is signed by both Parties and will remain effective until the Parties fulfil
all their obligations.
31.
Supplementary
Agreement No. 3
to Contract
No. 482667 of
20 October 2017
for the
Development of
the Operational
Documentation,
Building and
Installation
Works and
Commissioning
with the Supply
of Equipment
in the Scope of
All Unfinished
Works under
the title:
Construction
of a 220 kV
Overhead Line
Neryungrinskaya
GRES – Nizhny
Kuranakh –
Tommot –
Maya with the
220 kV Tommot
Substation
and the 220 kV
Maya Substation,
regarding
construction
of the 220 kV
Tommot
substation
and expansion
of the 220 kV
open switchgear
in the 220 kV
Nizhny Kuranakh
substation
32. Contract
of Exchange
26
December
2018
Parties to the Contract:
PJSC FGC UES (First Party);
JSC DVEUK (Second Party).
Subject, price and other material conditions of the Contract:
Subject, price and other material conditions of the Contract are specified.
M. Tikhonova
E. Prokhorov
No. AM-7480
of 5 December
2018
33.
Supplementary
Agreement
No. 3 to the Loan
Contract of
13 January 2016
27
December
2018
Parties to Supplementary Agreement No. 3:
PJSC FGC UES (Lender);
JSC Mobile GTES (Borrower).
Subject and cost:
Amendments to the Loan Contract of 13 January 2016.
Term of Supplementary Agreement No. 3:
Supplementary Agreement No. 3 shall enter into force from the date
it is signed by the authorised representatives of the Parties and shall
be valid until the termination of the Loan Contract of 13 January 2016.
In accordance with clause 2 of Article 425 of the Civil Code of Russia,
the provisions of the Supplementary Agreement No. 3 in part 5 of the
Supplementary Agreement No. 3 shall apply to the relations of the Parties
arising from 4 July 2018.
PJSC Rosseti
No. МА-7312
of 29 November
2018
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
Related party(-
ies) to the
transaction
Notice of the
related party
transaction
(letter details)
PJSC Rosseti
No. МА-7312
of 29 November
2018
PJSC Rosseti
R. Filimonov
No. AM-7165
of 23 November
2018
The governing body who
has resolved to approve
the transaction or its
subsequent approval
(if there is such a
resolution, report details
are provided)
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
The issue of approval
of the transaction
conclusion on the terms
specified in the Notice
was not submitted for
review by the Company's
Board of Directors as
the Company did not
receive a corresponding
request.
No.
Transaction
Date of
transaction
Material terms of the transaction
(parties, subject, costi, term)
34.
Supplementary
Agreement
No. 3 to the Loan
Contract of 28
January 2016
27
December
2018
28
December
2018
35. Contract for
the Performance
of Works
(IRA, Equipment)
under the
Investment Project:
500 kV OHL
Nevinnomyssk —
Mozdok Extension
of 500 kV
Substation
Nevinnomyssk
and 330 kV
Substation Mozdok
(construction
of 500 kV outdoor
switchgear)
(construction
of 1–4 sections
of high OHL)
Parties to Supplementary Agreement No. 3:
PJSC FGC UES (Lender);
JSC Mobile GTES (Borrower).
Subject and cost:
Amendments to the Loan Contract of 28 January 2016.
Term of Supplementary Agreement No. 3:
Supplementary Agreement No. 3 shall enter into force from the date
it is signed by the authorised representatives of the Parties and shall
be valid until the termination of the Loan Contract of 28 January 2016.
In accordance with clause 2 of Article 425 of the Civil Code of Russia,
the provisions of the Supplementary Agreement No. 3 in part 5 of the
Supplementary Agreement No. 3 shall apply to the relations of the Parties
arising from 4 July 2018.
Parties to the Contract:
PJSC FGC UES (Customer);
JSC TsIUS UES (Contractor).
Subject of the Contract:
Under the Contract, the Contractor undertakes to perform a range
of works:
– construction of 500 kV OHL Nevinnomyssk — Mozdok-2, (1–4 sites in
the amount of unperformed work);
– construction of 10 kV OHL for own supply needs of short circuit switch
for ice melting on 500 kV OHL Nevinnomyssk — Mozdok-2 with the length
of 1 km;
– construction of a short circuit switch for ice melting and an automated
information system of ice load control (whole OHL);
– preparatory work;
– construction and installation, and commissioning works within the
scope of the Contract;
– acceptance testing and commissioning of facilities;
- arrangement of the designer's supervision;
– guarantee of performance of liabilities in accordance with the terms
of the Contract;
– soil reclamation;
– registration of the consent of the owners of rearranged objects for
the rearrangement and reconstruction of these objects of power grid
economy and conclusion of agreements on compensation of violated
rights;
– on the implementation of a complex of works on the rearrangement
(reconstruction) of objects owned by third parties, with registration of
title documents for land plots and permits, conclusion compensation
agreements and agency contracts;
– as well as ensuring that the Facility is equipped with materials,
equipment, spare parts for the equipment in accordance with the design
and working documentation, and deliver the result of the work to
the Customer, and the Customer undertakes to accept the result
of the work and pay the stipulated price in the manner prescribed by
the Contract.
Cost of the Contract:
The price of works under the Contract does not exceed
RUB 2,878,789,618 (two billion eight hundred seventy-eight million seven
hundred eighty-nine thousand six hundred eighteen) 64 kopecks, plus
VAT (VAT is calculated in accordance with the Russian legislation).
Term of execution of the works under the Contract:
Start: from the date the Contract is signed;
End: 31 December 2018.
Term of the Contract:
The Contract shall enter into force from the moment it is signed by
the Parties and remains effective until the Parties fulfil all undertaken
obligations.
* Contracts of guarantee between PJSC FGC UES and JSC VetroOGK and the Contract on the procedure of providing guarantee and meeting the demands of the Guarantor
between PJSC FGC UES and JSC Electrosetservice UNEG, which are interrelated and considered a related-party transactions (total price of liabilities under the Contracts exceeds
RUB 1 billion (Bank of Russia Instruction No. 4335-U of 31 March 2017)).
i Cost of disposed or purchased property or services shall be determined by the Company's Board of Directors based on market value and in accordance with Article 77 of the
Federal Law on Joint-Stock Companies.
386
387
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONSAPPENDIX 4INFORMATION ON MAJOR TRANSACTIONS APPENDIX 5
INFORMATION ON THE MATERIAL TRANSACTIONS
BY PJSC FGC UES AND ITS CONTROLLED ENTITIES
IN 2018
In accordance with the recommendations of the Corporate Governance Code approved by the Board of Directors
of the Bank of Russia on 21 March 2014, PJSC FGC UES qualifies the following transactions as material:
1. Sale of shares (interests) in any legal entities controlled by PJSC FGC UES which is material to the latter, where,
as a result of such transaction, PJSC FGC UES would lose control over such legal entities;
2. Transactions with property of PJSC FGC UES or any legal entities controlled thereby (including related
transactions, if any, entered into by PJSC FGC UES and one and/or more legal entities controlled thereby) whose
value exceeds a threshold amount specified in the Company’s Articles of Association or which is material to the
Company’s business operations:
2.1. Transactions involving the Company’s non-current assets in the amount exceeding 10 (ten) percent
of the book value of said assets as of the date of making a resolution on entering into said transaction;
2.2. Transactions (including several related transactions) involving disposal or potential disposal of property
constituting fixed assets, intangible assets and construction in progress intended for producing, transmitting,
dispatching and distributing electricity and heat, with a book value exceeding RUB 75 million;
2.3. Transactions (including several related transactions) involving disposal or potential disposal of property
constituting fixed assets, intangible assets and construction in progress not intended for producing, transmitting,
dispatching and distributing electricity and heat, with a book or market value exceeding RUB 150 million;
2.4. Major transactions entered into by subsidiaries and affiliates of PJSC FGC UES;
2.5. Transactions entered into by subsidiaries and affiliates (including several related transactions) involving
disposal or potential disposal of property constituting fixed assets, intangible assets and construction in
progress intended for producing, transmitting, dispatching and distributing electricity and heat, with a book
or market value exceeding RUB 15 million;
2.6. Transactions entered into by subsidiaries and affiliates (including several related transactions) involving
disposal or potential disposal of property constituting fixed assets, intangible assets and construction in
progress not intended for producing, transmitting, dispatching and distributing electricity and heat, with a
book or market value exceeding RUB 30 million;
3. Establishment of a legal entity controlled by PJSC FGC UES and being material for business operations
of PJSC FGC UES.
1. In 2018 there were no sale of shares (interests) in any legal entities controlled by PJSC FGC UES which is material
to the latter, where, as a result of such transaction, PJSC FGC UES would lose control over such legal entities.
2. Transactions with property of PJSC FGC UES or any legal entities controlled thereby (including related transactions,
if any, entered into by PJSC FGC UES and one and/or more legal entities controlled thereby) whose value exceeds a threshold
amount specified in the Company’s Articles of Association or which is material to the Company’s business operations.
2.1. In 2018 there were no transactions involving the Company’s non-current assets in the amount exceeding 10 (ten) percent
of the book value of said assets as of the date of making a resolution on entering into said transaction.
2.2. Transactions (including several related transactions) involving disposal or potential disposal of property constituting
fixed assets, intangible assets and construction in progress intended for producing, transmitting, dispatching and distributing
electricity and heat, with a book value exceeding RUB 75 million.
No.
Transaction
description
Transaction
parties
Transaction subject*
Transaction price
1.
Contract
of Exchange
PJSC FGC UES
(Party 1);
JSC DVEUK
(Party 2).
Party 1 undertakes to transfer
movable and immovable property,
comprising electric grid facilities,
for the ownership of Party 2 and
assign (transfer) its property rights
(rights of claim) to Party 2 for
movable and immovable property,
comprising electric grid facilities
and owned by Party 2.
The market value of the property being
the subject of the transaction amounts to
RUB 34,563,909,638 (thirty four billion five
hundred sixty three million nine hundred nine
thousand six hundred thirty eight) 00 kopecks
plus VAT under the current laws.
The price of the transaction for PJSC FGC UES
amounts to RUB 22,592,917,813 (twenty two
billion five hundred ninety two million nine
hundred seventeen thousand eight hundred
thirteen) 00 kopecks plus VAT under
the current laws.
Governing body that
resolved to approve
the transaction
(minutes' date and
number)
PJSC FGC UES
Board of Directors
(Minutes No. 433
of 26 December
2018).
* All material terms of the transaction are disclosed in the respective resolutions of the Directors' Board on approval of the transaction and available on website
www.fsk-ees.ru in section Investors/Corporate Governance/Decisions of the Board of Directors.
2.3. In 2018 there were no transactions (including several related transactions) involving disposal or potential disposal
of property constituting fixed assets, intangible assets and construction in progress not intended for producing, transmitting,
dispatching and distributing electricity and heat, with a book or market value exceeding RUB 150 million.
388
389
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 5INFORMATION ON THE MATERIAL TRANSACTIONSAPPENDIX 5INFORMATION ON THE MATERIAL TRANSACTIONS 1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Supplementary Agreement No. 3
of 22 March 2018 to Contract
No. 306/7-17 of 21 June 2017
for construction and assembly,
infrastructure improvements project,
and inventory supply
Supplementary Agreement No. 3
of 19 February 2018 to Contract
No. 305/7-17 of 3 July 2017
for construction and assembly,
infrastructure improvements project,
and inventory supply
Supplementary Agreement No. 3
of 19 February 2018 to Contract
No. 309/7-17 of 26 June 2017
for construction and assembly,
infrastructure improvements project,
and inventory supply
Supplementary Agreement No. 3
of 19 February 2018 to Contract
No. 308/7-17 of 26 June 2017
for construction and assembly,
infrastructure improvements project,
and inventory supply
Supplementary Agreement No. 2 of
29 March 2018 to Contract
No. 07/3-73 of 12 September 2016 for
design estimates preparation, detailed
design documentation preparation
Unnumbered Supplementary
Agreement of 22 March 2018 to State
Contract No. 80.KS of 1 October 2015
Supplementary Agreement No. 5 of
28 April 2018 to Contract
No. 298/7-17 of 21 April 2017 for
construction and assembly, pre-
commissioning, and inventory supply
Contract No. 07/3-94 of 4 May 2018
on amendments to the design
estimates
2.4. Major transactions entered into by subsidiaries and affiliates of PJSC FGC UES:
No.
Transaction description
Transaction parties
Transaction subject
Transaction price
Supplementary Agreement No. 4
of 23 January 2018 to Contract
No.298/7-17 of 21 April 2017
JSC TsIUS UES
and UEU LLC
Amendments
to the Contract
Supplementary Agreement No. 3
of 30 January 2018 to Supply Contract
No. 144 of 4 July 2016
JSC TsIUS UES
and Trading House
Avantazh LLC
Amendments
to the Contract
708,233,577.30
179,651,340.82
Supplementary Agreement No. 21
of 28 February 2018 to Contract
No. Ts/01 of 1 April 2008 on
performing the functions of customer
and developer
PJSC FGC UES
and JSC TsIUS UES
Amendments
to the Contract
23,842,313,000.00
Technical Customer Contract
No. Ts/02 of 1 March 2018
PJSC FGC UES
and JSC TsIUS UES
7,746,537,111.14
Not approved
To act as the Technical
Customer for and on
behalf of the Company
and to perform other
functions set forth by
the Contract
Supply Contract No. 185
of 12 January 2018
JSC TsIUS UES and
ROSTRADEGROUP LLC
Supply of goods
9,655,671.90
Governing body that resolved to
approve the transaction (minutes'
date and number)
extract from Minutes of
the Management Board
No. 1535/12 of 21 March 2018
extract from Minutes
of the Management Board
No. 1539/4/1 of 11 April 2018
extract from Minutes
of the Management Board
No. 1591/4/1
of 14 November 2018
extract from Minutes
of the Management Board
No. 1539/4/2 of 11 April 2018
extract from Minutes
of the Management Board
No. 1600/4/2
of 20 December 2018
extract from Minutes
of the Management Board
No. 1543/8 of 28 April 2018
JSC TsIUS UES
and USS LLC
Amendments
to the Contract
632,160,670.96
JSC TsIUS UES and
USS LLC
Amendments
to the Contract
999,436,298.24
JSC TsIUS UES and
Energostroyuniversal
LLC
Amendments
to the Contract
299,172,151.02
extract from Minutes
of the Management Board
No. 1547/1/1 of 16 May 2018
JSC TsIUS UES and
Energostroyuniversal
LLC
Amendments
to the Contract
815,395,729.18
extract from Minutes
of the Management Board
No. 1547/1/2 of 16 May 2018
JSC TsIUS UES
and UEU LLC
Amendments
to the Contract
217,013,456.10
extract from Minutes
of the Management Board
No. 1553/6 of 14 June 2018
Russian Energy Agency
of the Ministry of
Energy of the Russian
Federation and
JSC TsIUS UES
Amendments
to the State Contract
46,734,765,000.00
extract from Minutes
of the Management Board
No. 1562/3/4 of 16 July 2018
JSC TsIUS UES
and UES LLC
Amendments
to the Contract
708,233,577.30
JSC TsIUS UES
and Energo-Yug LLC
Amendments
to the design
estimates
97,500,000.00
extract from Minutes
of the Management Board
No. 1578/3
of 18 September 2018
extract from Minutes
of the Management Board
No. 1598/8/2
of 10 December 2018
extract from Minutes
of the Management Board
No. 1574/11 of
4 September 2018
14.
Supply Contract No. 198
of 1 June 2018
JSC TsIUS UES and
ROSTRADEGROUP LLC
Supply of goods
689,881.47
390
No.
Transaction description
Transaction parties
Transaction subject
Transaction price
JSC TsIUS UES
and UEU LLC
Amendments
to the Contract
1,872,202,580.00
Governing body that resolved to
approve the transaction (minutes'
date and number)
extract from Minutes
of the Management Board
No. 1550/2 of 30 May 2018
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
Supplementary Agreement No. 4
of 31 May 2018 to Contract
No. 283/7-16 of 12 May 2016 for
construction and assembly, pre-
commissioning, and inventory supply
Unnumbered Supplementary
Agreement of 6 April 2018 to State
Contract No. 80.KS of 1 October 2015
Unnumbered Supplementary
Agreement of 23 April 2018 to State
Contract No. 80.KS of 1 October 2015
Unnumbered Supplementary
Agreement of 24 April 2018 to State
Contract No. 80.KS of 1 October 2015
Unnumbered Supplementary
Agreement of 30 August 2018 to State
Contract No. 80.KS of 1 October 2015
Contract No. 07/3-96 of 30 July
2018 for amendments to the design
estimates
Unnumbered Supplementary
Agreement of 21 November 2018
to State Contract No. 80.KS of
1 October 2015
Unnumbered Supplementary
Agreement of 21 November 2018
to State Contract No. 80.KS of
1 October 2015
Supplementary Agreement No. 3 of
13 August 2018 to Contract
No. 07/3-73 of 12 September 2016 for
design estimates preparation, detailed
design documentation preparation
Supplementary Agreement No. 9 of
4 October 2018 to Contract
No. 256/7-15 of 27 April 2015 for
construction and assembly, pre-
commissioning, and inventory supply
Supplementary Agreement No. 4
of 21 November 2018 to Contract
No. 305/7-17 of 3 July 2017
for construction and assembly,
infrastructure improvements project,
and inventory supply
Notice of unilateral reduction
in the Contract price limit
No. 284/7-16
Supplementary Agreement No. 1
of 21 December 2018 to Supply
Contract No. 185 of 12 January 2018
Russian Energy Agency
of the Ministry of
Energy of the Russian
Federation and
JSC TsIUS UES
Russian Energy Agency
of the Ministry of
Energy of the Russian
Federation and
JSC TsIUS UES
Russian Energy Agency
of the Ministry of
Energy of the Russian
Federation and
JSC TsIUS UES
Russian Energy Agency
of the Ministry of
Energy of the Russian
Federation and
JSC TsIUS UES
JSC TsIUS UES and
Energo-Yug LLC
Russian Energy Agency
of the Ministry of
Energy of the Russian
Federation and
JSC TsIUS UES
Russian Energy Agency
of the Ministry of
Energy of the Russian
Federation and
JSC TsIUS UES
Amendments
to the State Contract
46,734,765,000.00
extract from Minutes
of the Management Board
No. 1562/3/3 of 16 July 2018
Amendments
to the State Contract
46,734,765,000.00
extract from Minutes
of the Management Board
No. 1564/7/2 of 24 July 2018
Amendments
to the State Contract
46,734,765,000.00
extract from Minutes
of the Management Board
No. 1564/7/1 of 24 July 2018
Amendments
to the State Contract
46,663,694,613.60
Contract No. 07/3-96
of 30 July 2018 for
amendments to the
design estimates
Amendments
to the State Contract
82,000,000.00
46,734,765,000.00
Amendments to the
State Contract
46,734,765,000.00
extract from Minutes
of the Management Board
No. 1591/4/3
of 14 November 2018
extract from Minutes
of the Management Board
No. 1606/1/2
of 1 February 2019
extract from Minutes
of the Management Board
No. 1595/7/4
of 21 November 2018
extract from Minutes
of the Management Board
No. 1595/7/1
of 21 November 2018
extract from Minutes
of the Management Board
No. 1607/2/1
of 4 February 2019
JSC TsIUS UES
and UEU LLC
Amendments
to the Contract
217,013,456.10
JSC TsIUS UES
and JSC UESC
Amendments
to the Contract
3,452,353,639.29
extract from Minutes
of the Management Board
No. 1572/7 of 24 August 2018
JSC TsIUS UES
and LEM LLC
Amendments
to the Contract
1,193,547,965.86
JSC TsIUS UES
and JSC Stroytransgaz
Notice of unilateral
reduction
in the Contract price
limit No. 284/7-16
6,356,965,773.84
JSC TsIUS UES and
ROSTRADEGROUP LLC
Amendments
to the Contract
9,045,795.14
extract from Minutes
of the Management Board
No. 1595/7/2
of 21 November 2018
extract from Minutes
of the Management Board
No. 1595/7/3
of 21 November 2018
extract from Minutes
of the Management Board
No. 1598/8/1
of 10 December 2018
391
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 5INFORMATION ON THE MATERIAL TRANSACTIONSAPPENDIX 5INFORMATION ON THE MATERIAL TRANSACTIONS No.
Transaction description
Transaction parties
Transaction subject
Transaction price
Governing body that resolved to
approve the transaction (minutes'
date and number)
APPENDIX 6
28.
Report on determining shares
in the joint ownership
PJSC FGC UES
and JSC Kuban Trunk
Grids
2,271,329,000.00 Meeting Minutes of the Board
of Directors No. 164
of 10 September 2018
Determination
of shares
of PJSC FGC UES
and JSC Kuban Trunk
Grids in the joint
ownership of the
OHL 220 kV Shepsi –
Dagomys, lit. L.
29.
Contract No. 716/221-D/347/222-D
of 7 August 2018 for civil works,
substation construction and
technological connection under
the project Construction of 610 MW
WPP and Wind Turbine Plant.
Adygeya Wind Power Plant
JSC Electrosetservice
UNEG
JSC NovaWind
JSC VetroOGK
Substation
construction
and technological
connection
3,188,878,750.00
extract from Minutes
of the Management Board
No. 1600/3
of 20 December 2018
2.5. Transactions entered into by subsidiaries and affiliates (including several related transactions) involving disposal or
potential disposal of property constituting fixed assets, intangible assets and construction in progress intended for producing,
transmitting, dispatching and distributing electricity and heat, with a book or market value exceeding RUB 15 million.
No.
Transaction
description
Transaction parties Transaction subject
PJSC FGC UES and
JSC Kuban Trunk
Grids
1.
Report on
determining
shares in the joint
ownership between
PJSC FGC UES and
JSC Kuban Trunk
Grids
Determination of shares in the joint ownership of
PJSC FGC UES and JSC Kuban Trunk Grids, being
a transaction, the subject of which is immovable
property resulting from the investment project:
Comprehensive technical refurbishment
and reconstruction of SS 220/110/35/10
kV Starominskaya" (location: Quarter 73,
Starominskaya village, Starominsky District,
Krasnodar Krai).
Transaction
price
Governing body that resolved
to approve the transaction
(minutes' date and number)
346,494,468.00
Meeting Minutes
of the Board of Directors
No. 164
of 10 September 2018
2.6. In 2018 subsidiaries and affiliates of PJSC FGC UES didn't enter into transactions (including several related transactions)
involving disposal or potential disposal of property constituting fixed assets, intangible assets and construction in progress
intended for producing, transmitting, dispatching and distributing electricity and heat, with a book or market value exceeding
RUB 30 million.
3. Establishment of a legal entity controlled by PJSC FGC UES and being material for business operations of PJSC FGC UES.
No controlled companies were established in 2018.
INFORMATION ON THE ACTUAL PERFORMANCE
OF INSTRUCTIONS OF THE PRESIDENT
AND THE RUSSIAN GOVERNMENT IN 2018
No.
Instruction
Registration data
Summary of the
incoming document
Information on the performance of relevant instructions and orders by PJSC FGC UES
1. DISPOSAL OF NON-CORE ASSETS
1.1.
Instruction of
the Russian
Government
No. ISH-P13-4065
of 7 July 2016
(cl. 1)
Ensuring
the development and
maintenance
of programmes
for disposal of non-
core assets
Since 2012, the Company has been carrying out activities to identify and dispose of non-core assets.
The Board of Directors of JSC FGC UES (an extract from Meeting Minutes of the Board of Directors
of JSC FGC UES No. 178 of 16 November 2012) approved the Management Programme for Non-core
Assets of JSC FGC UES (hereinafter, the "Management Programme for NA"), and the Board of Directors
of PJSC FGC UES (an extract from Meeting Minutes of the Board of Directors of PJSC FGC UES No. 311
of 14 March 2016) approved the revised Management Programme for NA.
Based on Directives of the Russian Government No. 4863p-P13 of 7 July 2016, and in accordance
with the Guidelines on the Identification and Disposal of Non-Core Assets developed by the Ministry
of Economic Development of the Russian Federation in conjunction with the Federal Property
Management Agency, PJSC FGC UES developed (and updated) the Programme for Disposal of Non-
Core Assets of PJSC FGC UES and its subsidiaries (hereinafter, the "Programme for Disposal of NA"),
approved by the Board of Directors of PJSC FGC UES (an extract from Meeting Minutes of the Board
of Directors of PJSC FGC UES No. 350/12 of 28 December 2016).
Furthermore, in order to improve the efficiency of the Programme for Disposal of NA implementation,
PJSC FGC UES approved the following orders:
– Order No. 163 of 4 April 2017 on Further Measures to Improve the Efficiency of Activities for the Sale
of Non-Core Assets of PJSC FGC UES and its Subsidiaries;
– Order No. 530 of 20 December 2017 on Approval of the Procedure for Conducting Competitive
Procedures (Trades) for the Sale of Non-Core Assets of PJSC FGC UES.
Based on Directives of the Russian Government No. 6604p-P13 of 18 September 2017, and in
accordance with the Resolution of the Board of Directors of PJSC FGC UES of 22 May 2018 (an extract
from Meeting Minutes of the Board of Directors of PJSC FGC UES No. 404/1 of 25 May 2018), the
following revised internal documents regulating the procedure for identifying and selling non-core
assets of PJSC FGC UES were approved:
– the Programme for Disposal of Non-Core Assets of PJSC FGC UES and Its Subsidiaries (Programme
for Disposal of NA);
– the Procedure for Organising Sales of Non-Core Assets of PJSC FGC UES and Its Subsidiaries.
In order to improve the efficiency of activities for the sale of non-core assets and develop the
Programme for Disposal of NA, the Company approved:
– Order No. 377 of 5 October 2018 on Approval of the Procedure for Gratuitous Transferring (Giving)
Non-Core Assets of PJSC FGC UES to the Property of Public Law Entities;
– Order No. 555p of 15 November 2018 on Approval of the Methodological Recommendations,
regulating the procedure for filling the form of the Register of Non-Core Assets.
In accordance with the provisions of the current Programme for Disposal of NA, the Board of Directors
of PJSC FGC UES should:
– approve the updated Register of Non-Core Assets of PJSC FGC UES at least once a year;
– review quarterly reports on progress and results of the Programme for Disposal of NA
implementation.
Information on the sale of non-core assets is quarterly published on the Interdepartmental Portal for
the Management of State Property (Federal Property Management Agency). Information on the results
of 2018 is reflected in full, taking into account the facilities sold, which are the property
of PJSC FGC UES subsidiaries.
Information on the disposal of non-core assets in 2018 is given
in Appendix 9 to the Annual Report.
392
393
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 6INFORMATION ON THE ACTUAL PERFORMANCE OF INSTRUCTIONS OF THE PRESIDENT AND THE RUSSIAN GOVERNMENTAPPENDIX 5INFORMATION ON THE MATERIAL TRANSACTIONS Information on the performance of relevant instructions and orders by PJSC FGC UES
No.
Instruction
Registration data
No.
Instruction
Registration data
Summary of the
incoming document
2. PURCHASE OF GOODS, WORKS AND SERVICES
2.1.
Instruction
of the President
of Russia
(sub-cl. 4, 5,
cl. 1)
Instruction of
the Russian
Government
No. Pr-2821
of 5 December
2014
No. AD-P9-9176
of 8 December
2014
Step-by-step
substitution of
purchases of foreign
products (works and
services) with those
of Russian products
(works, services) of
equivalent technical
parameters and
consumer properties
Purchases of
domestic software
necessary for
operations of joint-
stock companies
with the state
participation
Transition to the use
of mainly domestic
software for
2018–2021
2.2.
Instruction of
the Russian
Government
No. ISH-P13-1872
of 1 April 2016
No. 1 of 9
February 2018
Meeting
Minutes of the
Government
Commission
on the Use of
Information
Technologies
to improve the
quality of life
and business
environment
PJSC FGC UES activities in the field of import substitution are carried out in accordance with a Corporate
Plan of Import Substitution for 2017–2020 (Order of PJSC FGC UES No. 494 of 28 November 2017).
PJSC FGC UES developed the Corporate Plan of Import Substitution in accordance with the Methodological
Recommendations on the preparation of corporate import substitution plans by state corporations, state
companies and joint-stock companies, in which the share of the Russian Federation exceeds
50 %, organisations implementing investment projects included in the register of investment projects in
accordance with Decision of the Government Commission on Import Substitution No. 219R-AU
of 11 August 2016, approved by the Ministry of Economic Development of the Russian Federation, and taking
into account the Analytical Report “Assessment of the Potential of Import Substitution, its Main Directions
and the Conditions for their Implementation in the SDCs of PJSC Rosseti until 2019”, reviewed by the
Management Board of PJSC Rosseti (Minutes No. 386pr of 14 October 2015).
The PJSC FGC UES Corporate Plan of Import Substitution's goals and objectives are aimed at ensuring
technological safety of the power grid complex of the Russian Federation and reducing dependence on
foreign products, equipment, technical devices, as well as services/works of foreign companies and the use
of foreign software.
By the end of 2018, the share of purchases of domestic electrical equipment in the total volume
of PJSC FGC UES' purchases was 91 % (the share of domestic electrical equipment purchases increased
by 6 % compared to 2017).
Information on the historical dynamics of the relevant indicator can be found in section
Strategic Report/Results of Sustainable Development Activities/Procurement Activities/
Import Substitution Programme.
By the Resolution of the Board of Directors of PJSC FGC UES (Minutes No. 342 of 13 October 2016),
amendments were made to the Regulation on Purchases concerning the purchase of domestic
competitive software necessary for the Company’s operations.
As part of the implementation, amendments were made to the Regulation on the Purchase of Goods,
Works and Services for the needs of PJSC FGC UES (revision No. 342 of 13 October 2016).
The Customer’s right to establish priorities when purchasing Russian products is stipulated in Section 4.5
of the Unified Procurement Standard of PJSC FGC UES (Regulation on Purchases) (resolution
of the Board of Directors, Minutes No. 436 of 29 January 2019).
As part of the instruction performance, a letter from PJSC FGC UES No. FR-5925 of 14 October 2017 was
sent to SDCs.
Moreover, in accordance with the Regulation on Purchases, information on these purchases that was not
included in the Software Register shall be published on the Company's official site no later than 7 calendar
days from the date of publishing of notices and software procurement documentation in the unified
procurement information system (www.zakupki.gov.ru) and on specialised Internet sites.
As part of the instruction performance, relevant amendments were made to the internal documents
regulating the procedure for purchasing goods, works and services of the following PJSC FGC UES
subsidiaries and affiliates, which carry out procurement activities: JSC TsIUS UES, JSC Mobile GTES,
JSC MUS Energetiki, JSC NTC FGC UES, JSC ChitaTechEnergo, JSC Electrosetservice UNEG,
JSC ESSK UES, IT Energy Service LLC, JSC Kuban Trunk Grids, and JSC Tomsk Trunk Grids.
As part of the performance and in accordance with Directives of the Russian Government
No. 10068p-P13 of 6 December 2018 (Materials of the Board of Directors No. 4msd of 17 January 2019),
the Board of Directors shall review the matter related to PJSC FGC UES transition to the use of mainly
domestic software and the following draft resolution:
1. Instruct A. Murov, Chairman of the PJSC FGC UES Management Board, to ensure:
1.1. Preparation and approval of an action plan for 2018–2021 of PJSC FGC UES transition to the use
of mainly domestic software (hereinafter, the "Action Plan for 2018–2021") by the Board of Directors
of PJSC FGC UES and ICT Competence Centre, which includes:
– appointing an authorised person at a rank not below the Deputy Chairman of the Management Board
of PJSC FGC UES, responsible for carrying out activities related to PJSC FGC UES transition to the use of
mainly domestic software;
– deciding on organisational and technical measures aimed to ensure PJSC FGC UES transition to the use
of mainly domestic software;
– estimating financial resources with indication of terms, volumes and sources of financing to ensure
PJSC FGC UES transition to the use of mainly domestic software;
– setting key performance indicators for the transition to the use of mainly domestic software;
– evaluating risks of the Company's transition to the use of mainly domestic software.
Term: within 2 months from the approval date of this decision.
1.2. Introduction to the PJSC FGC UES Long-Term Development Programme of measures providing
for PJSC FGC UES transition to the use of mainly domestic software as part of the measures on import
substitution.
1.3. Provision to the Ministry of Digital Development, Communications and Mass Media of the Russian
Federation of reports on execution of Directives of the Russian Government No. 10068p-P13 of
6 December 2018 (hereinafter, the "Directives") and implementation of the Action Plan for 2018–2021
in the volume and structure according to the Appendices to Directives, on a quarterly basis and no later
than the 10th day of the month following the reporting quarter by publishing on the Interdepartmental
Portal for the Management of State Property.
1.4. Implementation of the above approach in subsidiaries whose total share of direct and/or indirect
participation in the authorised capital of the Company exceeds 50 %.
For more details on the Company's procurement activities please refer
to section Strategic Report/Sustainability Results/Procurement Activities.
2.3. Minutes of the
meeting with
the Chairman
of the Russian
Government
No. DM-P9-38pr
(cl. 7) of 14 June
2016
Summary of the
incoming document
Introduction of
amendments to
the Company's
Procurement
Policy in terms of
innovative building
materials
Information on the performance of relevant instructions and orders by PJSC FGC UES
By the resolution of the Management Board of PJSC FGC UES (Minutes No. 1422 of 2 November 2016),
it was recommended that the Board of Directors amend the Regulation on Purchases in terms of
setting the priority for purchases of Russian innovative building materials.
As part of the execution, amendments were made to the Regulation on Purchases of Goods, Works
and Services for the needs of PJSC FGC UES (revision No. 352 of 9 January 2017).
The priority for purchases of Russian innovative building materials is set by clause 4.5.9 of the Unified
Procurement Standard of PJSC FGC UES (Regulation on Purchases) (resolution of the Board of
Directors, Minutes No. 436 of 29 January 2019).
The Chairman of the Management Board was instructed to ensure the introduction of amendments
and additions to the Regulation on Purchases of Goods, Works and Services provided by subsidiaries.
As part of the instruction performance, relevant amendments and additions were made to the internal
documents regulating the procedure for purchasing goods, works and services of the following
PJSC FGC UES subsidiaries, which carry out procurement activities: JSC TsIUS UES, JSC Mobile GTES,
JSC MUS Energetiki, JSC NTC FGC UES, JSC Electrosetservice UNEG, JSC ESSK UES, IT Energy Service
LLC, JSC Kuban Trunk Grids, and JSC Tomsk Trunk Grids.
For more details on the Company's procurement activities please refer
to section Strategic Report/Sustainability Results/Procurement Activities.
3. STRATEGY DEVELOPMENT AND UPDATING, LONG-TERM PLANNING
3.1.
Instruction of
the President of
Russia
No. Pr-3013
of 27 December
2014
3.2.
Instruction
of the President
of Russia
No. Pr-3086
of 27 December
2013
Development and
approval of the list of
internal documents,
governing the
Company’s activities;
provision of reports
on progress of
the long-term
development
programmes
implementation
and achievement
of the approved
targets in respect
to key performance
indicators
Pursuant to cl. 2 of Pr-3013, the following documents were developed and approved by the Company:
– Regulation on Increasing Investment and Operational Efficiency and Cutting Expenses
of PJSC FGC UES (approved by the resolution of the Board of Directors, Minutes No. 312 of 28 March
2016);
– Regulation on Internal Audit (approved by the resolution of the Board of Directors, Minutes No. 291
of 19 November 2015);
– Regulations on the Risk Management System (approved by the resolution of the Board of Directors,
Minutes No. 291 of 19 November 2015, updated by the resolution of the Board of Directors,
Minutes No. 347 of 13 December 2016);
– Regulation on the Quality Management System (approved by the resolution of the Board of Directors,
Minutes No. 291 of 19 November 2015);
– Regulation on the Procedure for Developing and Implementing Innovative Development Programmes
(approved by Order of PJSC FGC UES No. 445 of 16 November 2015).
Pursuant to cl. 3 of Pr-3013 regarding the provision of reports on the long-term development
programmes implementation, according to Minutes of the Board of Directors No. 267 of 25 April 2015,
the Chairman of the Company's Management Board was instructed to ensure provision of materials
mandatory for the preparation and holding of annual general meetings of shareholders
of PJSC FGC UES, reports on the PJSC FGC UES Long-Term Development Programme implementation
and on achievement of the approved key performance indicators within the term established by Federal
Law No. 208-FZ on Joint-Stock Companies of 26 December 1995.
Pursuant to cl. 3 of Instruction of A. Dvorkovich, Deputy Chairman of the Government, No. AD-P36-4992
of 20 July 2016, a plan for review of quarterly reports on the PJSC FGC UES Long-Term Development
Programme implementation and achievement of KPIs at meetings of the Board of Directors
of PJSC FGC UES was approved by the resolution of the Board of Directors of PJSC FGC UES
of 25 October 2017 (extract from Minutes No. 381/2 of 27 October 2017).
The Report on the Long-Term Development Prorgamme Implementation in 2017 was included
in the 2018 AGM materials.
Currently, reports are being prepared on the achievement of KPIs approved by PJSC FGC UES in 2018
for their inclusion in the 2019 AGM materials.
For more details on the Company's key performance indicators refer
to section Strategic Report/Market Review, Strategy and KPIs/Key Performance
Indicators (KPI).
Development and
approval of the
Company's long-term
development
programme;
conducting an audit
of the long-term
development
programme
implementation and
approval of audit
standards
On 19 December 2014, the Board of Directors of JSC FGC UES (Minutes No. 243 of 22 December 2014)
approved the Long-Term Development Programme of JSC FGC UES for 2015–2019 and a forecast until
2030.
The Board of Directors of JSC FGC UES (Minutes No. 245 of 31 December 2014) approved the
standards for conducting an annual independent audit of the programme implementation, the results
of which are sent to the Ministry of Energy of Russia as proposals for appropriate amendment to the
programme no later than 10 July of the year following the reporting year.
The implementation of the Long-Term Development Programme is audited annually: in 2015 according
to the results of 2014, in 2016 according to the results of 2015, in 2017 according to the results of
2016, in 2018 according to the results of 2017 and in 2019 according to the results of 2018. In July
2018, the resolution of the Strategy Committee of the Board of Directors of PJSC FGC UES (Minutes
No. 70 of 1 August 2018) took note of the report of an independent auditor on the results of the audit
of the 2017 Report on the Long-Term Development Programme implementation. In accordance with
the resolution of the Strategy Committee of the Company's Board of Directors (Minutes No. 51 of
3 August 2017), PJSC FGC UES is developing a new revision of the Long-Term Development
Programme.
For more details on the PJSC FGC UES Long-Term Development Programme please refer to
section Strategic Report/Market Overview, Strategy and KPIs/Development Strategy.
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395
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 6INFORMATION ON THE ACTUAL PERFORMANCE OF INSTRUCTIONS OF THE PRESIDENT AND THE RUSSIAN GOVERNMENTAPPENDIX 6INFORMATION ON THE ACTUAL PERFORMANCE OF INSTRUCTIONS OF THE PRESIDENT AND THE RUSSIAN GOVERNMENT
No.
Instruction
Registration data
3.3.
Instruction of
the Russian
Government
No. AD-P36-6296
(cl. 5) of 15
September 2015
No. DM-P36-7563
of 7 November
2015
No. AD-P36-8381
(cl. 1) of 10
December 2015
Summary of the
incoming document
Innovative
development
and offers on
the development
of indicators of
state companies'
innovative activities
Comparison of
the technological
development
level and current
key performance
indicators of
the joint-stock
company with the
development level
and indicators of
leading foreign
counterparties
3.4.
Resolution of
the Russian
Government
No. 132 of 16
February 2015
Carrying out
technological
and price audit of
draft investment
programmes
and reports on
implementation
of the investment
programmes
Information on the performance of relevant instructions and orders by PJSC FGC UES
No.
Instruction
Registration data
3.5.
Instruction of
the Russian
Government
No. DM-P16-6658
of 30 September
2015 (cl. 6)
Instruction of
the President of
Russia
No. Pr-1891
of 17 September
2015 (cl. 1)
Resolution of
the Russian
Government
No. 232 of 6
March 2018
4. HR MANAGEMENT
4.1.
Instruction of
the President of
Russia
No. PR-1474
of 5 July 2013
Instruction of
the Russian
Government
No. ISH-P13-2043
of 27 March 2014
By the resolution of the Board of Directors of PJSC FGC UES (Minutes No. 352 of 9 January 2017),
amendments were made to the Long-Term Development Programme of PJSC FGC UES approved
by the resolution of the Board of Directors of JSC FGC UES of 19 December 2014 (Meeting Minutes
of the Board of Directors of JSC FGC UES No. 243 of 22 December 2014), by including, starting from
2016, an integral key indicator Efficiency of Innovation Activity in the list of key performance indicators
of the Long-Term Development Programme of PJSC FGC UES.
The Efficiency of Innovation Activity indicator is included in the Methodology for Calculating and
Evaluating the Performance of Key Performance Indicators of PJSC FGC UES Top Managers for 2016,
approved by the resolution of the Board of Directors of PJSC FGC UES (Minutes No. 354 of 9 February
2017), with a weight of 20 %.
By the resolution of the Board of Directors of PJSC FGC UES (Minutes No. 409 of 8 June 2018),
the Chairman of the Management Board of PJSC FGC UES was instructed to ensure the comparison
of the technological development level and current key performance indicators of PJSC FGC UES
with the development level and indicators of leading foreign counterparties and to send the results,
proposals for amendment to the Innovative Development Programme of PJSC FGC UES for 2016–2020
with a view to 2025 and the Long-Term Development Programme of PJSC FGC UES for 2015–2019 with
a forecast to 2030, and proposals on the structure and values of the integral key performance indicator
of PJSC FGC UES for 2019 to the Ministry of Economic Development of Russia no later than
1 November 2018.
The reporting materials on the results of comparison were sent by Letter No. KP-6672 of 31 October
2018 to the Ministry of Economic Development of Russia and the Ministry of Energy of Russia.
Corporate procedures are being carried out for discussion on the Board of Directors' meeting of
the approval of the report on comparison of the technological development level and current key
performance indicators of PJSC FGC UES with the development level and indicators of leading foreign
counterparties.
For more details on the Company's innovation activities refer
to section Strategic Report/Innovative Development.
For more details on the Company's key performance indicators refer
to section Strategic Report/Market Review, Strategy and KPIs/Key
Performance Indicators (KPI).
For more details on the remuneration of the Chairman and members of the Management
Board refer to section Report on Corporate Governance/Remuneration for Members of the
Board of Directors and Management Bodies/Remuneration for the Chairman and Members
of the Management Board.
In accordance with the resolution of the Board of Directors (Minutes No. 380 of 16 October 2017),
approved according to Directive of the Russian Government No. 1752p-P13 of 16 March 2017, starting
from 2017 the technological and price audit (hereinafter, the "TPA") of draft investment programmes
(hereinafter, the "IPs") (draft amendments made to the IPs) and reports on their implementation is
carried out at PJSC FGC UES.
TPA of draft investment programmes:
1. The conclusion on performing TPA of the IPs draft amendment was published as part
of the information on the draft amendment for public discussions at the official website of the Ministry
of Energy of Russia on 1 March 2018.
The conclusion of the expert organisation as part of the information on Recommendations
to the Board of Directors of PJSC FGC UES on Consideration of PJSC FGC UES's Investment Programme
Draft Amendment for 2016–2020 was reviewed at the meeting of the Company's Board of Directors
on 22 February 2018 (extract No. 393/1 of Meeting Minutes of the Board of Directors of 26 February
2018).
2. The conclusion on performing TPA of the IPs draft amendment improved upon the results of public
discussions was published as part of the information on the IPs draft amendment at the official
website of the Ministry of Energy of Russia on 5 April 2018.
3. The conclusion on performing TPA of the IPs draft amendment improved based on amendments
introduced by federal authorities was published at the official website of the Ministry of Energy of
Russia as part of the improved IPs draft amendment of 9 August 2018 (published on 19 August 2018).
4. The conclusion on performing TPA of the IPs final draft amendment was not disclosed as a request
to recall (cancel) the application on approval of the investment programme (and/or the amendments
to PJSC FGC UES' investment programme for 2016–2020 (ref. No. FR-7835 of 18 December 2018) was
sent to the Ministry of Energy of Russia and the investment programme draft amendment
of PJSC FGC UES for 2016–2020 was not approved by the Ministry of Energy Russia (No. 09-6459
of 20 December 2018).
TPA of reports on the investment programmes implementation:
The conclusions of the expert organisation on TPA of reports for Q1, Q2 and Q3 2018 are disclosed on
the website of the Federal State Information System at invest.gosuslugi.ru as part of information on
reports on the PJSC FGC UES' IPs implementation for Q2, Q3 and Q4 2018, respectively.
Summary of the
incoming document
Prioritising of
financing socio-
economic
development of
the Far East in
the framework of
implementation
of Russian state
programmes
and activities
of joint-stock
companies with
state participation,
including
implementation of
their investment
programmes
Use of key
performance
indicators to
evaluate the
performance of
management. KPIs
should be taken
into account when
making decisions
related to salaries
and staffing
Information on the performance of relevant instructions and orders by PJSC FGC UES
Pursuant to Instruction of the Russian Government No. 3538p-P13 of 25 May 2017 within
the framework of the investment programme materials submitted to the Ministry of Energy of Russia
and published on the Internet in accordance with Resolution of the Russian Government No. 977 of
1 December 2009 on Investment Programmes of Electric Power Industry Entities, PJSC FGC UES has
published an appendix with a list of projects ensuring priority funding to socio-economic development
of the Far East.
By the resolution of the Board of Directors of PJSC FGC UES (Minutes No. 435 of 17 January 2019),
the Chairman of the Management Board of PJSC FGC UES was assigned to ensure the implementation
of Resolution of the Russian Government No. 232 of 6 March 2018 regarding approval of the procedure
for approval of planned and programme destination documents with the Ministry for Development of
the Russian Far East and the specified ministry.
Instruction executed. The procedure for approval of planned and programme destination documents
with the Ministry for Development of the Russian Far East has been approved (Order of PJSC FGC UES
No. 43 of 7 February 2019).
The procedure for calculating and evaluating KPIs achievement by PJSC FGC UES' senior management
is based on the Methodological Guidelines for using key performance indicators by government-owned
corporations, government-owned companies and government-owned unitary enterprises as well as
business entities, in which the total share of Russia and a constituent entity of the Russian Federation
in the authorised capital exceeds 50 %.
The Board of Directors approved the procedures for calculating and evaluating KPIs achievement
by the senior management of JSC FGC UES for 2014 (Minutes No. 217 of 15 April 2014), for 2015
(Minutes No.243 of 22 December 2014); of PJSC FGC UES for 2016 (Minutes No. 354 of
9 February 2017); and PJSC FGC UES for 2017 (Minutes No. 370 of 13 June 2017).
In 2018, PJSC FGC UES operated a quarterly and annual bonus system based on the procedure
for calculating and evaluating KPIs achievement by PJSC FGC UES' senior management approved
by the Board of Directors of PJSC FGC UES (Minutes No. 370 of 13 June 2017, with Minutes No. 396
of 2 April 2018 taken into account).
In 2018, the Company's Board of Directors reviewed quarterly reports on KPIs achievement
by the senior management of PJSC FGC UES for the relevant period:
– reports on key performance indicators achievement by the senior management of PJSC FGC UES
for Q1 and Q2 2018 were approved by the resolution of the Board of Directors of 6 November 2017
(Minutes No. 428 of 21 November 2018);
– the report on key performance indicators achievement by the senior management of PJSC FGC UES
for Q3 2018 has been recommended for approval by the Management Board at the Board of Directors'
meeting (Meeting Minutes of the Management Board No. 1596 of 26 November 2018) and by the HR
and Remuneration Committee of PJSC FGC UES' Board of Directors (Minutes No. 57 of 5 December
2018).
For more details on the Company's key performance indicators refer to section Strategic
Report/Market Review, Strategy and KPIs/Key Performance Indicators (KPI).
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INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 6INFORMATION ON THE ACTUAL PERFORMANCE OF INSTRUCTIONS OF THE PRESIDENT AND THE RUSSIAN GOVERNMENTAPPENDIX 6INFORMATION ON THE ACTUAL PERFORMANCE OF INSTRUCTIONS OF THE PRESIDENT AND THE RUSSIAN GOVERNMENT No.
Instruction
Registration data
4.2.
Instruction of
the Russian
Government
No. 1250-r
of 9 July 2014
Summary of the
incoming document
Improving labour
productivity as per
clause 6, section 2
of the Action Plan on
Labour Productivity
Improvement,
Employment
Creation and
Modernisation of
Highly Productive
Workplaces
approved by
Resolution of the
Russian Government
No. 1250-r of 9 July
2014
Information on the performance of relevant instructions and orders by PJSC FGC UES
No.
Instruction
Registration data
Summary of the
incoming document
Information on the performance of relevant instructions and orders by PJSC FGC UES
By the resolution of the Board of Directors (Minutes No. 242 of 19 December 2014), the Chairman of
the Management Board was assigned to ensure that appropriate steps are taken to improve labour
productivity in the Company.
Procedures for improving labour productivity and efficiency of operations are set in the Long-Term
Development Programme of PJSC FGC UES.
The list of procedures aimed at improving operational efficiency of the Long-Term Development
Programme of PJSC FGC UES includes procedures for labour productivity improvement, reserves
identification and reducing work-time losses of industrial production personnel (hereinafter, the “IPP”).
In accordance with Order of PJSC FGC UES No. 152 of 10 May 2016, a Project on Improving the IPP
Productivity has been carried out, aimed at implementing the main provisions of the Long-Term
Development Programme:
Stage 1. Mobilisation and deployment of the IPP Project.
A procedure for conducting extended benchmarking in areas of the IPP activity has been developed
(the results have been adopted by the management committee, Minutes No. 4 of 17 June 2016).
Stage 2. Analysis of the current status (diagnostics) of the IPP Project.
Data for pilot Verkhne-Don EMPS were obtained and analysed (the results were adopted by the
management committee, Minutes No. 6 of 10 October 2016).
Stage 3. Development and coordination of activities/initiatives to increase the IPP productivity.
The list of initiatives on increasing the IPP productivity has been developed (the results were adopted
by the management committee, Minutes No. 7 of 12 January 2017).
Stage 4. Introduction of procedures for increasing the IPP productivity in pilot EMPSs.
The initiatives developed at Stage 4 have been implemented in pilot EMPSs (the results were adopted
by the management committee, Minutes No. 9 of 18 December 2017).
Stage 5. Preparation for distribution of the developed initiatives at all PJSC FGC UES branches
to improve labour productivity.
Two groups have been formed: 1) the initiatives taken into account (implemented) when preparing the
M&R Plan for 2019–2023; and 2) the initiatives implemented by general directors of MPS branches
of PJSC FGC UES under the methodological control of heads of the working groups. The results were
adopted by the management committee (Minutes of 2 March 2018).
In order to increase the efficiency of activities and achieve optimal use of human resources, the
Company implements consistent procedures aimed at improving labour productivity (including
pursuant to Resolutions of the Russian Government No. 2454p-P13 of 23 April 2014, No. 7389p-P13
of 31 October 2014, No. 2303p-P13 of 16 April 2015, and No. 4750p-P13 of 4 July 2016) and reducing
operating expenses by optimising staff costs.
Key procedure for increasing productivity in 2018 is the implementation of the Project for Construction
of Standard Functional Structures of Production Subdivisions at the EMPS Branches of PJSC FGC UES
(in terms of RMES, FMS, and MS), within the framework of which:
– functional structures and staffing schedules of production subdivisions at the EMPS branches of
PJSC FGC UES have been created in accordance with the developed criteria for creation of production
units and standard functional structures;
– division of responsibilities between management levels has been unified (EMPS as production units);
– basis for development and implementation of end-to-end management standards for production
activities was created.
The project Implementation made it possible to reduce the number of management levels, increase
the rate of manageability, level the staff workload and increase operations manageability.
The labour productivity indicator is included in the PJSC FGC UES Procedure for Calculating and
Evaluating KPIs Achievement by the Senior Management for 2016, approved by the resolution
of the Board of Directors of PJSC FGC UES (Minutes No. 354 of 9 February 2017), in the PJSC FGC UES
Procedure for Calculating and Evaluating KPIs Achievement by the Senior Management for 2017,
approved by the resolution of the Board of Directors of PJSC FGC UES (Minutes No. 370
of 13 June 2017), and in the PJSC FGC UES Procedure for Calculating and Evaluating KPIs Achievement
by the Senior Management for 2018, approved by the resolution of the Board of Directors
of PJSC FGC UES (Minutes No. 370 of 13 June 2017, with Minutes No. 396 of 2 April 2018 taken
into account).
For more information on labour productivity please
see section Strategic Report/Sustainability Results.
For more details on the Company's key performance indicators refer to section Strategic
Report/Market Review, Strategy and KPIs/Key Performance Indicators (KPI).
4.3.
Instruction
of the Russian
Government
No. 51193p-P13
of 14 July 2016
Implementation
of professional
standards
The matter of implementation of professional standards in PJSC FGC UES' activities was considered
at the meeting of the Board of Directors of PJSC FGC UES held on 24 November 2016, and
the Chairman of the Management Board of PJSC FGC UES was instructed to prepare materials for
initiating meetings of the Board of Directors of PJSC FGC UES at least once in every six months with
inclusion of the matter in the agenda and taking into account the provisions of Federal Law No. 122-FZ
on Amending the Labour Code of Russia, and Articles 11 and 73 of the Federal Law on Education in
the Russian Federation of 2 May 2015, based on approving and implementing the corresponding
plans and considering the work on the implementation of professional standards when evaluating and
rewarding HR managers of PJSC FGC UES.
The matter of implementation of professional standards in PJSC FGC UES' activities was considered
at the meeting of the Board of Directors of PJSC FGC UES held on 31 May 2017, and the Report on
the Implementation of Professional Standards in PJSC FGC UES' Activities was taken into account,
according to which the following activities aimed at implementing professional standards in activities
were carried out:
– Development and approval of an organisational and regulatory document regulating the
implementation of professional standards in PJSC FGC UES' activities (Order of PJSC FGC UES No. 222
on Creation of a Working Group for the Implementation of Professional Standards of 1 July 2016);
– Analysis of PJSC FGC UES' staffing schedules in order to identify jobs and positions to which the
professional standards should be applied.
The matter of implementation of professional standards in PJSC FGC UES' activities per results
of H2 2017 was considered at the meeting of the Board of Directors of PJSC FGC UES held
on 31 January 2018, and the Report on the Implementation of Professional Standards
in PJSC FGC UES' Activities was taken into account, according to which the following activities aimed
at implementing professional standards in the Company's activities were carried out:
– Approval of a standard list of positions in the MPS and EMPS branches of PJSC FGC UES (Order
of PJSC FGC UES No. 460 of 2 November 2017) in accordance with the requirements of professional
standards and in compliance with Order of PJSC Rosseti No. 66 of 27 April 2017;
– bringing in line staffing schedules of the MPS and EMPS branches of PJSC FGC UES with
the approved standard list of positions. No amendments were made to the staffing schedule
of PJSC FGC UES' Executive Office as positions of the employees are in line with the professional
standards;
– holding a training for PJSC FGC UES's employees who take part in the implementation of professional
standards;
– amendments were made to educational programmes implemented by the Personnel Training Centre
in accordance with provisions of the professional standards (Order of PJSC FGC UES No. 259r
of 5 June 2017);
– performing conformity assessment of PJSC FGC UES Executive Office's employees with the
requirements of the professional standards mandatory for implementation (educational level, work
experience, permits);
– participation of the Company in a methodological examination of the evaluation kit for its use within
the framework of an independent assessment of professional qualifications in the electric power
industry.
The matter of implementation of professional standards in PJSC FGC UES' activities per results
of H1 2018 was considered at the meeting of the Board of Directors of PJSC FGC UES held
on 16 August 2018, and the Report on the Implementation of Professional Standards in PJSC FGC UES'
Activities was taken into account, according to which the following activities aimed at implementing
professional standards in the Company's activities were carried out:
– Bringing in line the documents defining the functional structure of PJSC FGC UES (regulations on
structural subdivisions, work instructions for employees) with the professional standards;
– performing conformity assessment of employees of PJSC FGC UES' MPS and EMPS branches with
requirements of the professional standards mandatory for implementation (educational level, work
experience, permits);
– approval of the Regulations on Application of Professional Standards in PJSC FGC UES' Activities
(Order of PJSC FGC UES No. 193 of 31 May 2018) to ensure optimal and effective transition
of PJSC FGC UES to working under the conditions of professional standards.
The matter of implementation of professional standards in PJSC FGC UES' activities per results
of H1 2018 was considered at the meeting of the Board of Directors of PJSC FGC UES held
on 11 December 2018, and the Report on the Implementation of Professional Standards
in PJSC FGC UES' Activities was taken into account, according to which the following activities aimed
at implementing professional standards in the Company's activities were carried out:
– Performing conformity assessment of employees of PJSC FGC UES' MPS and EMPS branches
(hereinafter, the "branches") with requirements of the professional standards mandatory for
implementation in the Company's activities; As a result, the branches' employees who do not comply
with requirements of the professional standards were revealed.
– making plans for implementation of procedures aiming to ensure that the branches' employees
comply with requirements of the mandatory professional standards;
– performing conformity assessment of employees involved in training activities in the Personnel
Training Centres of the branches with requirements of the Vocational Training, Vocational Education
and Further Vocational Education Teacher professional standard. All employees involved in training
activities in the Personnel Training Centres of the branches meet the requirements of the professional
standard.
Qualifications of the employees involved in training activities in the Personnel Training Centres of the
branches eliminated the need to perform the procedures aiming to ensure their compliance with the
requirements of the professional standard.
398
399
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 6INFORMATION ON THE ACTUAL PERFORMANCE OF INSTRUCTIONS OF THE PRESIDENT AND THE RUSSIAN GOVERNMENTAPPENDIX 6INFORMATION ON THE ACTUAL PERFORMANCE OF INSTRUCTIONS OF THE PRESIDENT AND THE RUSSIAN GOVERNMENT No.
Instruction
Registration data
Summary of the
incoming document
Information on the performance of relevant instructions and orders by PJSC FGC UES
5. CONTROL OVER THE COMPANY'S ACTIVITIES
5. 1.
Instruction
of the Russian
Government
No. ISH-P13-321
of 26 January
2015
Analysing annual
results of creating
a unified treasury
of the joint-stock
company, its
subsidiaries and
affiliates
In 2018, PJSC FGC UES' current financial flow management system was analysed, including:
– Budget planning and monitoring mechanism;
– the procedure for selecting credit institutions, banks, and instruments to finance activities
of the Company, its subsidiaries and affiliates;
– documents regulating settlement and cash services.
Based on the analysis, the Company defined main directions for improving efficiency of PJSC FGC UES'
Unified Treasury.
The Company developed and approved a new Procedure for Intra-Group Financing of PJSC FGC UES,
its Subsidiaries and Affiliates. PJSC FGC UES' Executive Office is working to attract external financing.
In the event of cash gaps, the Company's subsidiaries and affiliates are financed through intra-group
loans. Operating costs, including external debt servicing costs, were significantly reduced through
the efficient use of intra-group financing.
In terms of cash and liquidity management, PJSC FGC UES Group uses the single account through bank
agreements on cash pulling technology (a virtual pulling for subsidiaries and affiliates in the retained
financing and %; a material pulling for branches on the zero retained financing principle); a single
payment calendar is maintained taking into account payments of branches and monitoring payments
made by the subsidiaries and affiliates. All Company payments are made from accounts
of PJSC FGC UES' Executive Office.
PJSC FGC UES approved new limits of credit organisations for the subsidiaries and affiliates.
The Company drew up a list of banks where it is possible to open settlement and other bank accounts
and to allocate free funds, as well as determined end limits for one-time placement of funds by
subsidiaries and affiliates (approved by the Boards of Directors of the subsidiaries and affiliates).
At the same time, more than 98 % of liquidity is concentrated on PJSC FGC UES.
By Letter No. 95-09-11/05-330 of 10 May 2018, the Interregional Operational Department of the Federal
Treasury informed PJSC FGC UES that information on creating unified treasuries is not required.
By the resolution of the Board of Directors of PJSC FGC UES (Minutes No. 426 of 2 November 2018),
the Chairman of the Management Board of PJSC FGC UES was instructed to ensure valuation of
intellectual property rights to perform further procedures for ensuring legal protection
of the intellectual property rights of PJSC FGC UES, transferring them to the balance as intangible
assets for inclusion in the financial turnover and determining their value, if necessary.
5.2.
Instruction
of the Russian
Government
No. ISH-P13-1925
of 5 April 2018
Valuation of
intellectual property
rights to perform
further procedures
for ensuring legal
protection of the
intellectual property
rights of the joint-
stock company,
transferring them
to the balance as
intangible assets
for inclusion in the
financial turnover
and determining their
value, if necessary
APPENDIX 7
INFORMATION ON PARTICIPATION
OF PJSC FGC UES IN PROFIT AND NON-PROFIT
ORGANISATIONS IN 2018
GRI 102-13
REGULATING DOCUMENTS AND POLICIES ON MANAGING
SUBSIDIARIES AND AFFILIATES
MANAGING SUBSIDIARIES AND BUSINESS ENTITIES IN WHICH PJSC FGC UES PARTICIPATES IS REGULATED
BY THE COMPANY'S INTERNAL DOCUMENTS:
zz Regulations on Managing PJSC FGC UES' Subsidiaries,
Affiliates and Other Business Entities in which
PJSC FGC UES Participates;
zz Standard for Drawing Up Summary Instructions for
Representatives of PJSC FGC UES on Issues Included in
Agendas of General Meetings of Shareholders/Participants
and Meetings of the Boards of Directors (Supervisory
Boards) of Entities in which PJSC FGC UES Participates;
zz Procedure for Calculating and Evaluating KPIs Achievement
by Subsidiaries and Other Entities in which PJSC FGC UES
Participates;
zz Business Planning Procedure for PJSC FGC UES'
Subsidiaries and Affiliates;
zz Regulations on Ensuring Financial Sustainability
of PJSC FGC UES' Subsidiaries, Affiliates and Other Entities
in which PJSC FGC UES Participates;
zz Procedure
for
Interaction of Depar tments
of PJSC FGC UES' Executive Office with PJSC FGC UES'
Subsidiaries and Affiliates when Collecting Information and
Verifying the Data Received for Calculation and Evaluation
of KPIs Achievement;
zz Order of PJSC FGC UES on Approval of Standards
and Model Regulations on Managing Subsidiaries and
Affiliates;
zz Order of PJSC FGC UES on Organisation of Work
of PJSC FGC UES' Representatives on the Boards of
Directors and Committees of Organisations that are not
PJSC FGC UES' Subsidiaries, and other organisational and
administrative documentation of PJSC FGC UES.
The key document regulating matters related to management
of subsidiaries and affiliates is the Regulations on Managing
PJSC FGC UES' Subsidiaries, Affiliates and Other Business
Entities in which PJSC FGC UES Participates.
THE MANAGEMENT SYSTEM FOR PJSC FGC UES' SUBSIDIARIES AND AFFILIATES;
DISTRIBUTION OF RESPONSIBILITY AND POWER BETWEEN THE COMPANY'S
MANAGEMENT BODIES, SUBSIDIARIES AND AFFILIATES
THE MAIN FORMS OF INTERACTION OF THE COMPANY WITH ITS SUBSIDIARIES AND AFFILIATES:
zz PJSC FGC UES’ Board of Directors reviews issues
pertaining to the Company representatives’ position on
draft decisions on issues included in agendas of General
Meetings of Shareholders/participants and meetings
of the Boards of Directors (Supervisory Boards) of
subsidiaries and affiliates;
zz participation in preparation of proposals and decision-
making by the management bodies of subsidiaries
and affiliates through the Company’s representatives at
the General Meeting of Shareholders/participants and
meetings of the Boards of Directors (Supervisory Boards)
of subsidiaries and affiliates;
zz PJSC FGC UES’s Management Board reviews issues
on interaction of the Company with its subsidiaries
and affiliates according to its competence determined
by PJSC FGC UES' Articles of Association.
400
401
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 7INFORMATION ON PARTICIPATION OF PJSC FGC UES IN PROFIT AND NON-PROFIT ORGANISATIONS IN 2018 APPENDIX 6INFORMATION ON THE ACTUAL PERFORMANCE OF INSTRUCTIONS OF THE PRESIDENT AND THE RUSSIAN GOVERNMENT Information on participation of PJSC FGC UES in profit organisations as of 31 December 2018
No. Company's
abbreviated
name 1
Core activity
Purpose of
participation
Form of
participation
Share of PJSC
FGC UES in
the Company's
authorised
capital as of
31 December
2018
Financial
participation
(share book
value) as of
31 December
2018,
RUB thousand
Financial indicators for 2018
Revenue,
RUB
thousand
Net profit,
RUB
thousand
Amount of
dividends
paid on the
Company's
shares owned
by PJSC FGC UES
in the reporting
year,
RUB thousand
The
Company's
charity and
sponsorship
support
expenses in
2018,
RUB
thousand
No. Company's
abbreviated
name 1
Core activity
Purpose of
participation
Form of
participation
1. INFORMATION ON SUBSIDIARIES WITH PJSC FGC UES' STAKE IN THE AUTHORISED CAPITAL FROM 50 % + 1 SHARE TO 100 %
1.1. Core subsidiary companies
1.2. Non-core subsidiaries
10.
JSC Mobile
GTES
Electricity production
Organisation, development
and operation of distributing
networks in the fuel and
energy sector
Support
for PJSC FGC UES'
core business
Conducting research,
development, design and survey
work and providing expert
services in the field of electric
power
Support
for PJSC FGC UES'
core business
JSC MUS
Energetiki
JSC NTC
FGC UES
JSC TsIUS
UES
JSC ESSK
UES
JSC
Electroset-
service
UNEG
Index
Energetiki —
FGC UES LLC
Project management in
the field of construction
(including acting as the
customer and developer
and provision of engineering
services for the construction,
renovation and technical re-
equipment of technically
difficult facilities)
Organising and conducting
procurement procedures
for selecting suppliers,
contractors and executors
Diagnostics, maintenance,
repair and emergency repair
works at grids and other
facilities of the UNEG electric
grid economy
Operations with securities
Support for
PJSC FGC UES'
core business
Support for
PJSC FGC UES'
core business
Support for
PJSC FGC UES'
core business
The stake in
the Company's
authorised capital
was obtained in
accordance with
the separation
balance sheet of
JSC RAO UES of
Russia upon the
merger of
JSC RAO UES of
Russia with
JSC FGC UES
during the
reorganisation of
the companies on
1 July 2008.
Assets
accumulation
(securities, stakes
in the authorised
capitals of
business entities)
for PJSC FGC UES
100.00 %
19,997
1,551,590
47,516
29,961
100.00 %
2,307,097
3,974,285
95,555
100.00 %
833,000
15,219,541
–39,404
0
0
100.00 %
206,250
203,631
36,862
132,557
100.00 %
872,486
3,208,873
–67,750
100.00 %
0
0
1,233
100.00 %
2,740,277
182,645
1,365
100.00 %
747,169
461,919
–3,8 41
0
0
0
0
87.164 %
1,574,500
191,120
6,058
2,068
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
Shareholding
in the
Company's
authorised
capital:
Shareholding
in the
Company's
authorised
capital:
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
0
0
0
0
0
0
0
0
0
11.
JSC Chita–
TechEnergo
Communication services,
designing and operation of
communication lines
12.
JSC APBE
Development of forecasts in
the electric power industry
13.
IT Energy
Service LLC
Software development,
consulting on computer
hardware, activities on the
creation and use of databases
and information resources.
14.
JSC
Nurenergo
Supply (sale) of electricity
and heat at the set tariffs in
accordance with the dispatch
schedules of electrical and
heat loads.
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
Shareholding
in the
Company's
authorised
capital:
Ownership
of the
Company’s
shares
The shares were
obtained in
accordance with
the separation
balance sheet of
JSC RAO UES of
Russia upon the
merger
of JSC RAO UES
of Russia with
JSC FGC UES
during
the reorganisation
of the companies
on 1 July 2008.
The shares were
acquired through
the reorganisation
of JSC Chita
Trunk Grids, who
holds 100 % of the
Company's shares,
by merging with
JSC FGC UES on
1 July 2008.
The shares were
obtained in
accordance with
the separation
balance sheet upon
the merger
of JSC RAO UES
of Russia with
JSC FGC UES
during
the reorganisation
of the companies
on 1 July 2008.
The shares were
obtained in
accordance with
the separation
balance sheet
of JSC RAO UES
of Russia upon
the merger of
JSC RAO UES
of Russia with
JSC FGC UES
during
the reorganisation
of the companies
on 1 July 2008.
Shares of the
additional issue
were received as
repayment of loans
previously granted
to the Company.
Resolution of the
Board of Directors
of JSC FGC UES
of 20 May 2004
(Minutes No. 15)
Operations with securities
FGC – Asset
Management
LLC
JSC Kuban
Trunk Grids
Provision of electric power
transmission and distribution
services
Consolidation
and management
of UNEG's facilities
JSC Tomsk
Trunk Grids
Provision of electric power
transmission and distribution
services
Consolidation
and management
of UNEG's facilities
Share of PJSC
FGC UES in
the Company's
authorised
capital as of
31 December
2018
Financial
participation
(share book
value) as of
31 December
2018,
RUB thousand
Financial indicators for 2018
Revenue,
RUB
thousand
Net profit,
RUB
thousand
Amount of
dividends
paid on the
Company's
shares owned
by PJSC FGC UES
in the reporting
year,
RUB thousand
The
Company's
charity and
sponsorship
support
expenses in
2018,
RUB
thousand
100.00 %
9,064,594
10,758,021
767,663
0
2,607
100.00 %
4,093
439,303
28,423
0
0
100.00 %
0
805
–5,728
0
0
79.999 %
378,540
959,391
17,419
460
0
76.9996 %
0
2
2
0
3
1 Data on the companies' names as of 31 December 2018.
2 Financial statements were not presented as of 12 March 2019.
3 The Company's data were not presented to PJSC FGC UES as of 12 March 2019.
403
1.
2.
3.
4.
5.
6.
7.
8.
9.
402
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 7INFORMATION ON PARTICIPATION OF PJSC FGC UES IN PROFIT AND NON-PROFIT ORGANISATIONS IN 2018 APPENDIX 7INFORMATION ON PARTICIPATION OF PJSC FGC UES IN PROFIT AND NON-PROFIT ORGANISATIONS IN 2018 No. Company's
abbreviated
name 1
Core activity
Purpose of
participation
Form of
participation
Share of PJSC
FGC UES in
the Company's
authorised
capital as of
31 December
2018
Financial
participation
(share book
value) as of
31 December
2018,
RUB thousand
Financial indicators for 2018
Revenue,
RUB
thousand
Net profit,
RUB
thousand
Amount of
dividends
paid on the
Company's
shares owned
by PJSC FGC UES
in the reporting
year,
RUB thousand
The
Company's
charity and
sponsorship
support
expenses in
2018,
RUB
thousand
2. INFORMATION ON AFFILIATES WITH A STAKE IN PJSC FGC UES' AUTHORISED CAPITAL FROM 20 % TO 50 %
2.1. Core affiliates
JSC IPS Sak–
15.
Rusenergo
Electric power transmission
services
2.2. Non-core affiliates
16.
CJSC
Severovostok-
energo
Production and sales
of electricity and heat
17.
JSC ENIN
Performance of research,
design, experimental, and
process works in the field of
electric power
50.00 %
763,227
898,1554
386,7264
27,352
49.00 %
0
0
9
0
0
0
38.239 %
0
2
2
0
0
Ensuring
the development
of PJSC FGC UES'
core business
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
The shares were
obtained in
accordance with the
separation balance
sheet of JSC RAO UES
of Russia upon
the merger
of JSC RAO UES
of Russia with
JSC FGC UES during
the reorganisation
of the companies
on 1 July 2008.
The shares were
obtained in
accordance with the
separation balance
sheet of JSC RAO UES
of Russia upon
the merger
of JSC RAO UES
of Russia with
JSC FGC UES during
the reorganisation
of the companies
on 1 July 2008.
3. INFORMATION ON BUSINESS ENTITIES WITH PJSC FGC UES' STAKE IN THE AUTHORISED CAPITAL FROM 2 % TO 20 %
9.239 %
37,530,295
53,901,083
18,938,776
2,201,569
15,487
3.1. Core entities
PJSC Inter
18.
RAO
Electricity and heat
production, supply (sale)
of electricity and heat
19.
JSC ACRA
Rating activity
3.2. Non-core entities
20.
CJSC
EnergoRynok
Publishing
Financial
investments
Financial
investments
Financial
investments
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
shares
3.704 %
111,112
8.50 %
1
2
2
4. INFORMATION ON BUSINESS ENTITIES WITH PJSC FGC UES' STAKE IN THE AUTHORISED CAPITAL OF LESS THAN 2 %
4.1. Core entities
21.
PJSC Rosseti Management of holding
companies
Financial
investments
22.
CJSC Taiga-
EnergoStroy
Electric power transmission
services, acting as the
customer and developer in the
construction of buildings and
structures, construction of
buildings and structures
Ensuring the
development of
PJSC FGC UES' core
business
4.2. Non-core entities
23.
JSC Stend
Installation and commissioning
of the GTD-110 gas
turbine engines and their
modifications; electricity
production and sales
Financial
investments
0.151 %
422,743
0.00067 %
(1 share)
0
0.826 %
434
Ownership
of the
Company’s
shares
Ownership
of the
Company’s
share
Ownership
of the
Company’s
shares
2
2
2
1 Data on the companies' names as of 31 December 2018.
2 Financial statements were not presented as of 12 March 2019.
3 The Company's data were not presented to PJSC FGC UES as of 12 March 2019.
4 At the exchange rate of the National Bank of Georgia as of 29 December 2018: RUB 100 = GEL 3.8588.
404
2
2
2
2
2
0
0
22,561
0
0
3
3
3
3
3
Information on PJSC FGC UES' participation in non-profit organisations as of 31 December 2018
No.
NPO
Brief profile of the organisation (types of activities)
Term of
participation
Purpose of participation
1.
2.
All-Russian industrial
association of
employers in energy
sector «Employers
Russian Association
of Energy»
(Association «ERA of
Energy»)
Non-profit
partnership Council
of Energy Industry
Veterans
Representing the interests of employers in the electric
power industry, protection of their rights in public and local
authorities and in relations with trade unions.
Representing the interests of employers in the electric
power industry in negotiating and concluding industrial tariff
agreements (ITAs) and other agreements regulating social
and labour and other related relations.
Since 2004
to the present
day
Implementation of activities aimed at providing
comprehensive assistance to energy industry veterans.
Since 2008
to the present
day
Participation in preparation of ITAs and
its use in the preparation of PJSC FGC
UES' regulatory documents.
Guaranteed right to use ITAs in tariff
regulation.
Receiving informational, advisory and
other support in matters of social and
labour and other related relations from
Association «ERA of Energy».
Preservation of historical memory and
traditions in the electric power industry.
Use of professional knowledge and
experience of veterans in developing
solutions to ensure reliable operation
and development of the power grid
complex.
Financial support of veterans.
Financial
participation
(types of
payments/amount,
RUB thousand)
Membership
fee per year —
2,450.00.
Membership fee per
year — 20,000.00.
3.
NP "CTSCenter UES"
Training and research activities
Since 2007
to the present
day
Development of public and private
partnership in the field of personnel
training in the electric power industry.
Membership fee
per year — 950.00.
4.
Construction Industry
Companies Support
Syndicate (SRO ASO
POSO)*
* transition on a
territorial basis in
accordance with
Federal Law No. 372-FL
on Amendments to the
Urban Development
Code of the Russian
Federation and Certain
Legislative Acts of the
Russian Federation
of 3 July 2016
5.
Association “NP
Market Council”
SRO ASO POSO is a non-profit corporate organisation
established to coordinate business activities, represent
and protect common interests, including professional, to
achieve socially useful objectives, as well as other lawful and
non-profit purposes, and to unite legal entities and individual
entrepreneurs carrying out their activity in the field of
construction, renovation, and overhaul of capital construction
facilities.
Since
30 June 2017
to the present
day
Compliance with the requirements
of Russian legislation. As part
of PJSC FGC UES's investment
activity, PJSC FGC UES' MES branches
perform construction and installation
operations in-house. These activities
are regulated by federal statutes –
Urban Development Code of the
Russian Federation No. 190-FZ
of 29 December 2004.
Since 2008
to the present
day
Ensuring purchase of electricity and
capacity in order to compensate for
losses in the UNEG grids in accordance
with Federal Law No. 35-FZ on Electric
Power Industry of 26 March 2003.
In accordance with clause 1, Article 33 of Federal Law
No. 35-FZ on Electric Power Industry of 26 March 2003,
“NP Market Council” was established aimed to ensure
operation of the market's commercial infrastructure, provide
effective interconnection of wholesale and retail markets,
creation of favourable conditions for attracting investments
to the electric power industry and availability of a common
position of the wholesale and retail markets' participants in
the course of development of regulatory documents for
the electric power industry, organise effective wholesale
and retail trade of electricity, capacity, and other products
allowed for circulation on the wholesale and retail markets
based on self-regulation, in order to ensure the energy
security of Russia, integrity of the economic area, freedom
of economic activities and competition on the wholesale
and retail markets, to strike a balance of the interests of
producers and buyers of electricity and capacity, meeting
public needs for reliable and sustainable electricity supply.
Total from
1 January 2018
to 31 December
2018 — RUB 105.00
thousand (VAT
exempt), including:
– membership
fee for Q1, Q2, Q3
and 4Q 2018 —
RUB 25.00
thousand. Total
= RUB 100.00
thousand.
– target
membership fee
for payment of the
mandatory annual
membership fee
of SRO ASO POSO
to the National
association of
builders, NOSTROY
— RUB 5.00
thousand.
Membership fees
to the property of
Association “NP
Market Council”:
2018 —
RUB 1,880.00
thousand
405
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 7INFORMATION ON PARTICIPATION OF PJSC FGC UES IN PROFIT AND NON-PROFIT ORGANISATIONS IN 2018 APPENDIX 7INFORMATION ON PARTICIPATION OF PJSC FGC UES IN PROFIT AND NON-PROFIT ORGANISATIONS IN 2018 Financial
participation
(types of
payments/amount,
RUB thousand)
Membership
fee per year —
RUB 300.00
thousand.
EUR 40,000
annually,
VAT exempt.
No.
NPO
Brief profile of the organisation (types of activities)
Term of
participation
Purpose of participation
6.
Association of Real
Estate Investors
(AREI)
AREI is an association that unites companies who own land
and real estate, as well as investing in real estate in Russia.
Its members are institutional investors operating on the real
estate market and other enterprises owning and managing
profitable real estate, as well as carrying out financial
investments in real estate, and other companies serving the
needs of such enterprises.
Since 2004 to
the present
day
7.
The Russian National
Committee of the
International Council
on Large Electric
Systems
Since 2005 to
the present
day
The International Council on Large Electric Systems, CIGRE
(Conseil International des Grands Réseaux Electriques,
CIGRE) is the biggest international non-governmental and
non-profit organisation in the field of electric power industry.
It was founded in France in 1921 and now it is one of the
most reputable scientific and technical associations that
unites scientists and energy specialists from around the
world and has a strong influence on the development of the
industry's strategy in many countries.
The CIGRE’s Headquarter is located in Paris. At present, Klaus
Froehlich (Switzerland) is the President of CIGRE. Since May
2014, Philippe Adam (France) has been appointed as the new
Secretary General.
According to its Articles of Association, the CIGRE's major
goal is to coordinate researches and share the experience
and scientific and technological information related to
functioning of electric power systems. Design, construction,
and maintenance of HV equipment are at the core of CIGRE's
mission, as well as planning and operation of power systems,
development and implementation of new technology for
information collection and processing and management
systems.
CIGRE's activities form strategic vision on the power system
development for the energy policy and are closely connected
with the scientific research and development, defining key
directions in the integration processes.
To date, over 1,000 organisations and 7,000 experts involved
with all areas of the electric power industry are members
of CIGRE. The main organisational principle of CIGRE
is operating via national committees that unite industry
companies and institutions of their countries or region. At
present, CIGRE counts members in 95 countries.
Participants of AREI are PJSC FGC UES,
PJSC Gazprom, PJSC “MMC “Norilsk
Nickel”, PJSC Rosneft, PJSC HydroOGK,
PJSC RZD, and others.
AREI carries out activities to prepare
and amend legislative acts of the
Russian Federation in the field of land
and property relations in the interests
of its participants, represents the
interests of AREI members against
municipal and federal authorities and
responsible persons that determine the
state policy on the market of land and
investments in real estate, and together
with its members participates in public
events and procedures for developing
the real estate and land market.
z Learning new practices and the best
technologies for managing power
systems and producing electric
equipment for the purpose
of implementing import
substitution programmes
adopted at PJSC FGC UES.
z timely identification of risks and
threats based on the international
experience, facilitating the
identification of ways to mitigate
them, which includes attracting
the world's leading specialists and
share of experience with partners at
international sites.
z improving the quality of long-term
planning of scientific and technical
activities of PJSC FGC UES by
means of analysing international
experience and developing
analytical models and creating
favourable conditions for using
state-of-the-art international
developments and technologies
for the benefit of PJSC FGC UES
and the power grid complex of the
Russian Federation.
z to increase the efficiency of
operating activities, PJSC FGC UES,
within the framework of CIGRE,
interacts with foreign electric grid
companies in terms of sharing
experience in operation of electrical
equipment.
No.
NPO
Brief profile of the organisation (types of activities)
Term of
participation
Purpose of participation
8.
SRO NP Peterburg–
EnergoAudit
9.
Non-profit
Partnership Scientific
and Technical
Council of Unified
Energy System
Financial
participation
(types of
payments/amount,
RUB thousand)
Membership fee —
18.00 (incl. VAT),
quarterly.
Since 2011
to the present
day
The possibility of conducting
mandatory energy inspections
of PJSC FGC UES using its own
resources partially or completely.
The measuring stage of the mandatory
energy inspection of PJSC FGC UES in
2017 was performed by the staff of the
branches only which allowed to reduce
the inspection costs.
SRO NP PeterburgEnergoAudit controls its members'
activities related to compliance with the requirements of
Russian legislation, as well as internal documents of SRO by
means of scheduled and unscheduled inspections.
The Supervisory Committee of SRO NP PeterburgEnergoAudit
controls the compliance of SRO members with the
requirements of current legislation and internal documents
of SRO.
Scheduled inspections of activities of each member are
performed at least once a year in accordance with the
calendar of scheduled inspections.
The grounds for unscheduled inspections are:
z inquiry of federal state authorities, state authorities of
constituents of the Russian Federation or local authorities;
z an individual's complaint due to the actions (inaction) of a
SRO member, except for anonymous complaints;
z resolution of SRO's management bodies and(or) its
specialised bodies.
If a SRO member violates the requirements of SRO's
standards, rules and membership conditions, all inspection
materials shall be submitted to the Disciplinary Committee
of SRO NP PeterburgEnergoAudit to consider the cases on
taking disciplinary action against the SRO member.
Non-profit Partnership Scientific and Technical Council of
Unified Energy System was established on 20 May 2008 after
liquidation of JSC RAO UES of Russia and taking a decision
to keep the Scientific and Technical Council of Unified Energy
System as a separate legal entity (Minutes of the Board of
Directors of JSC RAO UES of Russia No. 273 of 29 February
2008).
In accordance with the establishing minutes of Non-profit
Partnership Scientific and Technical Council of Unified Energy
System, PJSC FGC UES is a member of the Supervisory Board
of the partnership, which is a permanently acting collegial
management body of the partnership, and performs overall
management of the partnership's activities.
Along with PJSC FGC UES, Non-profit Partnership Scientific
and Technical Council of Unified Energy System includes the
following key enterprises of the industry: JSC SO UES,
PJSC Rosseti, PJSC RusHydro, and PJSC Inter RAO UES.
The areas of the partnership's activities include review and
decision-making of the most significant issues involving
operations of UES and its entities:
z expert review of various projects and works;
z analysis of the UES development concept and strategy;
z new engineering solutions and technology;
z priority development areas of the industry;
z R&D programmes;
z technical regulation and standardisation;
z publishing and other activities.
Membership fee
per year — 2,000.00
(VAT exempt).
Since 2008
to the present
day
Participation of PJSC FGC UES in
consideration of issues relevant
to the industry and the Company
regarding engineering (technology)
development, regulatory and technical
documentation and policy documents
on development.
Formation of scientifically-grounded
technical policy, analytical and expert
support of projects, analysis of
scientific and technical and innovative
activities of PJSC FGC UES, and
identification of current trends in the
development of the power grid complex
are necessary for the creation
of PJSC FGC UES' targeted
development programmes.
406
407
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 7INFORMATION ON PARTICIPATION OF PJSC FGC UES IN PROFIT AND NON-PROFIT ORGANISATIONS IN 2018 APPENDIX 7INFORMATION ON PARTICIPATION OF PJSC FGC UES IN PROFIT AND NON-PROFIT ORGANISATIONS IN 2018 No.
NPO
Brief profile of the organisation (types of activities)
Term of
participation
Purpose of participation
Since 2002
to the present
day
Support of research and innovations in
the field of the electric power industry.
Financial
participation
(types of
payments/amount,
RUB thousand)
Membership fee per
year — 58,200.00
(VAT exempt).
10.
Global Energy
Association
11.
All-Russian Industry
Association of
Employers “Union
of Machine Builders
of Russia”
The Global Energy Association is a highly regarded and
renowned organisation. The organisation's key focus is the
support of research and innovations projects in the field of
global energy, and managing an international award Global
Energy Prize.
The Global Energy Association defines the world’s leading
researchers deserving the award, the most interesting and
useful projects, surveys, and inventions, and operates with
the support of the leading Russian energy companies:
PJSC Gazprom, JSC Surgutneftegas, and PJSC FGC UES.
The Global Energy Prize was established in 2002 at the
initiative of a group of famous Russian scientists and
supported by the President of Russia. In November 2002,
at the Russia–EU summit Vladimir Putin, the President of
the Russian Federation, announced on inception of this new
scientific award. The new international prize very quickly
became one of the most famous and prestigious awards of
its kind. Sometimes mass media unofficially names it the
Energy Nobel.
One of the major goals of the association is to establish
a development strategy for the engineering industry of
Russia, to participate in establishing active governmental
policy mechanisms for modernisation and development of
the national engineering network at the leading industrially
developed countries level.
Its governing bodies include representatives of PJSC RZD,
PJSC OAK, JSC Rosoboroneksport, MC ROSNANO,
PJSC KAMAZ, JSC Scientific Industrial Corporation
Uralvagonzavod, JSC United Shipbuilding Corporation,
PJSC United Aircraft Corporation, etc.
Rostech's facilities comprise the basis of the Union of
Machine Builders of Russia. They have a significant
potential to implement measures for import substitution and
digitalisation of the economy.
None
Partnership in terms of digitalisation of
the energy sector, industrial innovation,
development and implementation of
information and telecommunication
technologies and security systems for
power grid enterprises complex. The
interaction of FGC UES with the Union
of Machine Builders of Russia implies
constant sharing of information, joint
activities, development of proposals
to improve the legal framework and
cooperation with the authorities,
providing comprehensive assistance to
power engineers, etc.
12.
The Russian Union
of Industrialists and
Entrepreneurs (RSPP)
The main objectives of RSPP include improving the business
environment of Russia, raising the status of domestic
entrepreneurs in the country and in the world, and maintaining
the balance of interests of the society, government and
business. 400 organisations representing the key economic
industries are members of the RSPP.
Joining RSPP allowed PJSC FGC UES
to participate in influencing
the economic policy and in furthering
legislative initiatives of the association
with the trunk electric grid network
interests taken into account.
Membership fee
per year — RUB
300.00 thousand
(VAT exempt).
APPENDIX 8
INFORMATION ON CONCLUDED PURCHASE CONTRACTS
OF SHARES, STOCKS, EQUITY INTEREST OF BUSINESS
PARTNERSHIPS AND BUSINESS ENTITIES INCLUDING
INFORMATION ON THE PARTIES, SUBJECT, PRICE, AND
OTHER TERMS OF THE CONTRACTS
In 2018, FGC UES concluded the following alienation contracts for shares owned by FGC UES:
zz On 29 June 2018, a share purchase contract was concluded between PJSC FGC UES (Seller) and DVB Leasing Ltd (Buyer):
Issuer
Issuer's address
Public Joint-Stock Company Inter RAO UES, OGRN 1022302933630
Russian Federation, Moscow
Type, category, form of shares
ordinary registered uncertified shares
State registration number of the
shares issue
1-04-33498-E
Amount of shares (pieces)
3,132,000,000 (three billion one hundred thirty-two million) pieces
Nominal value of one Issuer's share
RUB 2.809767 (two point eight hundred nine thousand seven hundred sixty-seven) per share
Keeper of the register of the Issuer's
shareholders
JSC VTB Registrar
Share storage location
Vendor's securities account in DCT Ltd
Share value
RUB 10,480,611,600 (ten billion four hundred eighty million six hundred eleven thousand
six hundred)
zz On 29 June 2018, a share purchase contract was concluded between PJSC FGC UES (Seller) and Praktika Ltd (Buyer):
Issuer
Issuer's address
Public Joint-Stock Company Inter RAO UES, OGRN 1022302933630
Russian Federation, Moscow
Type, category, form of shares
ordinary registered uncertified shares
State registration number of the
shares issue
1-04-33498-Е
Amount of shares (pieces)
699,357,212 (six hundred ninety-nine million three hundred fifty-seven thousand two
hundred twelve) pieces
Nominal value of one Issuer's share
RUB 2.809767 (two point eight hundred nine thousand seven hundred sixty-seven) per share
Keeper of the register of the Issuer's
shareholders
JSC VTB Registrar
Share storage location
Vendor's securities account in DCT Ltd
Share value
RUB 2,340,259,038 (two billion three hundred forty million two hundred fifty-nine thousand
thirty-eight) and 52 kopecks
408
409
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 8INFORMATION ON CONCLUDED PURCHASE CONTRACTS OF SHARES, STOCKS, EQUITY INTERESTAPPENDIX 7INFORMATION ON PARTICIPATION OF PJSC FGC UES IN PROFIT AND NON-PROFIT ORGANISATIONS IN 2018 zz On 29 June 2018, a share purchase contract was concluded between PJSC FGC UES (Seller) and JSC INTER RAO CAPITAL (Buyer):
APPENDIX 9
Issuer
Issuer's address
Public Joint-Stock Company Inter RAO UES, OGRN 1022302933630
Russian Federation, Moscow
Type, category, form of shares
ordinary registered uncertified shares
State registration number of the
shares issue
1-04-33498-E
Amount of shares (pieces)
6,608,642,788 (six billion six hundred eight million six hundred forty-two thousand seven
hundred eighty-eight) pieces
Nominal value of one Issuer's share
RUB 2.809767 (two point eight hundred nine thousand seven hundred sixty-seven) per share
Keeper of the register of the Issuer's
shareholders
JSC VTB Registrar
Share storage location
Vendor's securities account in DCT Ltd
Share value
RUB 22,114,501,361 (twenty-two billion one hundred fourteen million five hundred one
thousand three hundred sixty-one) and 48 kopecks
zz On 28 August 2018, a share purchase agreement was concluded between PJSC FGC UES (Seller) and
GENNORD PROJECTS LIMITED (Buyer):
Issuer
Issuer's address
Rosseti Public Joint-Stock Company, OGRN 1087760000019
Moscow, Russia
Type, category, form of shares
ordinary registered uncertified shares
State registration number of the
shares issue
1-01-55385-E
Amount of shares (pieces)
1,080,646,965 (one billion eighty million six hundred forty-six thousand nine hundred sixty-
five) pieces
Nominal value of one Issuer's share
RUB 1 (one) per share
Keeper of the register of the Issuer's
shareholders
JSC STATUS
Share storage location
Vendor's securities account in DCT Ltd
Share value
RUB 900,000,000 (nine hundred million)
NON-CORE ASSETS DISPOSAL IN 2018
The revised Programme for Disposal of Non-Core Assets of PJSC FGC UES and its subsidiaries (hereinafter, the "Programme
for Disposal of NA") has been developed in accordance with the Instruction of the Russian Government No. 6604p-P13
of 15 September 2017 and approved by the resolution of the Board of Directors of PJSC FGC UES on 22 May 2018.1
In order to improve the efficiency of non-core assets management, PJSC FGC UES approved the following documentation
as part of the programme development:
zz the Procedure for Organising Sales of Non-Core Asset of PJSC FGC UES and its subsidiaries;2
zz the Procedure for Gratuitous Transferring (Giving) Non-Core Assets of PJSC FGC UES to the Property of Public Law Entities;3
Methodological Recommendations for filling the following forms: 4
1) Register of Non-Core Assets;
2) Report on the Implementation of the Register of Non-Core Assets;
3) Action Plan for Disposal of Non-Core Assets;
4) Register of Cash Generating Units of Management Accounting.
THE COMPANY'S KEY PRINCIPLES APPLIED TO IMPLEMENT THE PROGRAMME FOR DISPOSAL OF NA:
zz transparency – public availability of information on the methods and approaches applied to identify non-core assets
from the assets portfolio;
zz consistency – regular review of the assets portfolio to identify non-core assets;
zz clarity – open and public procedures for selling non-core assets and disclosing information on such sales in a way that
potential buyers could access it;
zz efficiency – reasonable from the economic point of view sale of non-core assets;
zz maximisation of revenues – selling non-core assets on a reimbursable basis;
zz minimisation of costs – reducing costs of illiquid assets maintenance.
THE COMPANY'S KEY TARGETS FOR SELLING NON-CORE ASSETS:
zz optimising the composition and structure of assets;
zz improving assets utilisation efficiency;
zz reducing costs related to non-core assets management and maintenance;
zz using extra sources of financing;
zz improving the competitiveness and investment attractiveness;
zz adding the value.
THE COMPANY'S MAIN GOALS IN MANAGING NON-CORE ASSETS:
zz reviewing the assets portfolio to identify non-core assets;
zz creating and keeping the Register of Non-Core Assets (Register of NA);
zz arranging activities on non-core assets disposal in accordance with the Programme for Disposal of NA, the Company's
internal organisational and regulatory documents and on the basis of the Register of Non-Core Assets approved by the
Board of Directors;
zz supervising execution of resolutions on non-core assets disposal and submitting reports on the Programme for Disposal
of NA implementation.
1 The extract of Meeting Minutes of PJSC FGC UES' Board of Directors No. 404/1 of 25 May 2018.
2 The extract of Meeting Minutes of PJSC FGC UES' Board of Directors No. 404/1 of 22 May 2018.
3 Approved by Order of PJSC FGC UES No. 377 on Approval of the Procedure for Gratuitous Transferring (Giving) Non-Core Assets of PJSC FGC UES to the Property of Public Law Entities
of 5 October 2018;
4 Approved by Order of PJSC FGC UES No. 555r on Approval of the Methodological Recommendations of 15 November 2018.
410
411
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 9INFORMATION ON SALE OF NON-CORE ASSETS IN 2018APPENDIX 8INFORMATION ON CONCLUDED PURCHASE CONTRACTS OF SHARES, STOCKS, EQUITY INTEREST Information on disposal of non-core assets of PJSC FGC UES in 2018
APPENDIX 10
Asset (according
to the Register of NA)
Number (if
applicable)
The balance sheet's
line item showing
the asset as at
the reporting date
preceding the date
of disposal
The balance
sheet's line
item (including
itemisation)
showing income
and expenditure
from the asset
disposal
Asset book
value, RUB
thousand
Actual disposal
proceeds, RUB
thousand, excl.
VAT
Deviation
between actual
disposal
proceeds and
the asset book
value, RUB
thousand
Cause
of the deviation
between actual
disposal
proceeds and
the asset book
value
Plumbing with a water
measuring unit of the
220 kV substation (from
the water measuring
unit of the Bezhetsk
substation to the
connection point on
the territory of the SOM
plant)
Road to residential
buildings of the 750 kV
Bely Rast substation
Access road
of 2,048 m long
to the 500 kV Vladivostok
substation
1.
2.
3.
0211-2-12-
09515
1132
0209-1-12-
02432
1132
0800-2-12-
15792
1132
9120034102
10.93
–
–10.93
9120034102
0.00
–
0.00
9120034102
49,448.27
–
‒49,448.27
Charge free
transfer to
municipal
ownership
Charge free
transfer to
municipal
ownership
9110021101;
9120031110
9110021101;
9120031110
9110021101;
9120031110
9110021101;
9120031110
9110021101;
9120031110
9110021101;
9120031110
9110021101;
9120031110
9110021101;
9120031110
2340
2350
2340
2350
10,392.58
10,392.60
0.02
9,793.00
106,270.00
96,477.00
434,000.00
434,000.00
0.00
131.83
13,315.29
13,183.46
1132
1132
1132
1132
1132
1132
1132
1131
1150
1150
4.
P-Tolyatti 178
4.1.
Administrative building,
lit. E
0500-1-11-
30001
4.2. Warehouse, lit. A
4.3. Warehouse, lit. B
4.4. Warehouse, lit. G
4.5. Warehouse, lit. D
4.6
Reinforced concrete
fence
0500-1-11-
30002
0500-1-11-
30003
0500-1-11-
30004
0500-1-11-
30005
0500-2-11-
30006
Land plot of the 220 kV
Ilyich Plant substation
0304-2-19-
34921
Joint-Stock Company
of Power and
Electrification Ispytatelny
Stend of Ivanovskaya
GRES (JSC Stend)
Joint-Stock Company
Non-state Pension Fund
of the Electric Power
Industry
(JSC NPF of the Electric
Power Industry)
–
–
5.
6.
7.
412
THE SPECIES LISTED IN THE IUCN RED LIST
AND THE RED DATA BOOK OF THE RUSSIAN FEDERATION,
WHOSE HABITATS ARE LOCATED WITHIN
THE TERRITORIES OF PJSC FGC UES
Listed in the Red Data Book
of the Russian Federation
Listed in the Red List of
the International Union for
Conservation of Nature
Status
0 — Considered to be Extinct
1 — Endangered Ones
2 — Declining Species
3 — Rare Ones
4 — Undefined by Status
5 — Recoverable and Recovering Ones
CR — Critically Endangered Species
EN — Endangered Species
VU — Vulnerable Species
NT — Near Threatened
LC – Least Concern
Name of the protected
natural area
List of species
Animals
Plants
Fungi
–
8
44
24
3
2
5
5
16
7
7
1
6
29
69
3
–
–
2
3
1
11
–
–
–
12
–
–
–
–
–
–
–
Baikal State Nature
Biosphere Reserve
Bolshekhekhtsirsky State
Nature Reserve
Species included in the Red Data Book of the Russian Federation:
15 plant species: Asahinea scholanderi, Cypripedium macranthos, Coccocarpia erythroxili, Calypso
bulbosa, Leptogium hildenbrandi, Lobaria pulmonaria, Allium altaicum, Lobaria retigera, Neckera borealis,
Omphalina hudsoniana, Galium paradoxum, Fritillaria dagana, Swertia baicalensis, Tridactylina kirilowii,
Cetrelia alaskana.
11 animal species: golden eagle, saker falcon, demoiselle crane, eastern imperial eagle, white-tailed
eagle, Apollo, steppe eagle, peregrine falcon, osprey, reindeer, black stork.
3 fungi species: Hericium coralloides, Leccinum percandidum, Clavariadelphus pistillaris.
Species included in the Red Data Book of the Russian Federation:
16 plant species: Pogonia japonica, Watershield, Cypripedium calceolus, Trapa natans, Gastrodia elata,
Panax ginseng, Japanese water iris, Lilium callosum, Neottianthe cucullata, Paeonia lactiflora, Paeonia
obovata, Galium paradoxum, Trapa, Fritillaria ussuriensis, water caltrop, buffalo nut.
15 animal species: Siberian tiger, Steller's sea eagle, golden eagle, greater spotted eagle, oriental stork,
white-naped crane, mandarin duck, white-tailed eagle, Indian paradise flycatcher, peregrine falcon, osprey,
mountain weasel, black stork, red-crowned crane, grey-faced buzzard.
3 fungi species: Mutinus ravenelii, violet webcap, netted stinkhorn.
413
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 10SPECIES LISTED IN THE IUCN RED LIST AND THE RED BOOK OF THE RUSSIAN FEDERATION, WHOSE HABITATS ARE LOCATED WITHIN APPENDIX 9INFORMATION ON SALE OF NON-CORE ASSETS IN 2018 Name of the protected
natural area
List of species
Name of the protected
natural area
List of species
Voronezh State Nature
Biosphere Reserve
Species included in the Red Data Book of the Russian Federation:
3 plant species: Stipa pennata, Iris aphylla, Pulsatilla pratensis.
4 animal species: saker falcon, griffon vulture, greater spotted eagle, stag beetle.
4 fungi species: Polyporus umbellatus, Sparassis crispa, Polyporus umbellatus, lingzhi mushroom.
Ilmen State Nature
Reserve
Lapland State Biosphere
Nature Reserve
Prioksko-Terrasny State
Nature Biosphere Reserve
Khopyor State Nature
Reserve
Nechkinsky National Park
Orlovskoye Polesye
National Park
Species included in the Red Data Book of the Russian Federation:
14 animal species: golden eagle, Eurasian curlew, greater spotted eagle, azure tit, black-throated loon,
European mink, Dalmatian pelican, Eurasian oystercatcher, Eastern imperial eagle, calosoma sycophanta,
peregrine falcon, Eurasian eagle-owl, dunlin, black stork.
6 plant species: Anemone uralensis, Minuartia helmii, Minuartia krascheninnikovii, Epipogium aphyllum,
Cephalanthera longifolia, Orchis militaris.
4 animal species are also included in the IUCN Red List: European mink, Dalmatian pelican, Eastern
imperial eagle, peregrine falcon.
Species included in the Red Data Book of the Russian Federation:
6 plant species: Calypso bulbosa, Cotoneaster cinnabarinus, Carex livida, Dactylorhiza traunsteineri,
Isoetes maritima, Isoetes lacustris.
6 animal species: golden eagle, gyrfalcon, freshwater pearl mussel, white-tailed eagle, peregrine falcon,
osprey.
Species included in the Red Data Book of the Russian Federation:
5 plant species: Cypripedium calceolus, Eottianthe cucullata, Fritillária ruthénica, Neotinea ustulata,
Orchis militaris.
6 animal species: greater spotted eagle, European bison, Apollo, osprey, great grey shrike, Eurasian eagle-owl.
1 animal species is also listed in the IUCN Red Book — the European bison.
Species included in the Red Data Book of the Russian Federation:
13 plant species: Trapa natans, Cephalaria litvinovii, Stipa pennata, Stipa pulcherrima, Iris aphylla, Stipa
dasyphylla, Pulsatilla pratensis, Fritillaria ruthenica, Trapa, Tulipa schrenkii, water caltrop, buffalo nut,
Orchis militaris.
25 animal species: Rosalia longicorn, Eurasian stone-curlew, greater spotted eagle, saker falcon, golden
eagle, aquatic warbler, great bustard, middle spotted woodpecker, Levant sparrowhawk, stag beetle,
short-toed snake eagle, Eurasian oystercatcher, eastern imperial eagle, clouded Apollo, white-tailed eagle,
Calosoma sycophanta, Eurasian beaver, Russian desman, osprey, Saga pedo, peregrine falcon, lesser
kestrel, little bustard, Eurasian eagle-owl, black stork.
Species included in the Red Data Book of the Russian Federation:
4 plant species: Cypripedium calceolus, Calypso bulbosa, Neottianthe cucullata, Cephalanthera rubra.
14 animal species: Volga pikeperch, brown long-eared bat, Eurasian curlew, greater spotted eagle,
Carabus menetriesi, European bullhead, Siberian taimen, white-tailed eagle, Russian desman, Alburnoides
bipunctatus, Sterlet, osprey, Eurasian eagle-owl, black stork.
Species included in the Red Data Book of the Russian Federation
9 plant species: Trapa natans, Neottianthe cucullata, Dactylorhiza traunsteineri, Dactylorhíza baltica,
Pulsatilla pratensis, Dactylorhiza maculata, Trapa, water caltrop, buffalo nut.
10 animal species: great spotted eagle, Russian desman, greater noctule bat, middle spotted woodpecker,
short-toed snake eagle, European bison, clouded Apollo, lesser spotted eagle, hazel grouse, black stork.
1 animal species is also listed in the IUCN Red Book — the European bison.
Samarskaya Luka
National Park
Smolny National Park
Sochi National Park
Khvalynsky National Park
Shorsky National Park
Species included in the Red Data Book of the Russian Federation:
20 plant species: Astragalus zingeri, Cypripedium calceolus, Trapa natans, Iris pumila, Stipa pulcherrima,
European feather grass, Hedysarum grandiflorum, Hedysarum razoumowianum, Euphorbia zhiguliensis,
Neottianthe cucullata, Artemisia salsoloides, Cephalanthera rubra, Fritillaria ruthenica, Thymus cimicinus,
Koeleria sclerophylla, Lathyrus litvinovii, water caltrop, buffalo nut, Globularia trichosantha.
28 animal species: Rosalia longicorn, saker falcon, ivory gull, golden eagle, greater noctule bat, black-
throated loon, stag beetle, short-toed snake eagle, red-breasted goose, sociable lapwing, Eurasian
oystercatcher, long-legged buzzard, little tern, eastern imperial eagle, clouded Apollo, white-tailed
eagle, great grey shrike, European bullhead, Calosoma sycophanta, Xylocopa valga, Russian desman,
Alburnoides bipunctatus, Saga pedo, sterlet, osprey, pallid harrier, Pallas's gull, black stork.
Species included in the Red Data Book of the Russian Federation:
6 plant species: Trapa natans, Neottianthe cucullata, Cephalanthera rubra, Trapa, water chestnut, buffalo nut.
17 animal species: golden eagle, Eurasian curlew, greater spotted eagle, short-toed snake eagle, Eurasian
oystercatcher, clouded Apollo, Eastern imperial eagle, little tern, Apollo, great grey shrike, white-tailed
eagle, Xylocopa valga, osprey, lesser kestrel, pallid harrier, little bustard, Eurasian eagle-owl.
Species included in the Red Data Book of the Russian Federation:
35 plant species: Anacamptis pyramidalis, Colchicum speciosum, Colchicum umbrosum, Stipa
orientalis, Epimedium colchicum, Dioscorea caucasica, Genista suanica, Ruscus colchicus, Ficus
carica, Erythronium caucasicum, Staphylea colchica, Campanula autraniana, Lilium kesselringianum,
Leptopus colchicus, Lilium caucasicum, Limodorum abortivum, Epipogium aphyllum, Ophrys oestrifera,
Dactylorhiza triphylla, Galanthus woronowii, Cephalanthera damasonium, Cephalanthera rubra, Paeonia
wittmanniana, Buxus colchica, Spiranthes spiralis, Serapias vomeracea, Steveniella satyrioides, English
Yew, Traunsteinera globosa, Tulipa humilis, Globularia trichosantha, Crocus vallicola, Crocus speciosus,
Anacamptis coriophora, Orchis militaris.
56 animal species: Rosalia longicorn, Alburnus mento, griffon vulture, greater horseshoe bat, golden
eagle, bearded vulture, Carabus hungaricus, greater noctule bat, Vipera dinniki, Vipera kaznakovi,
Aphodius bimaculatus, Anax imperator, Aporrectodea dubiosa, Carabus biebersteini constantinovi,
Carabus miroshnikovi, Stag beetle, short-toed snake eagle, Eisenia transcaucasica, European bison,
Rhaesus serricollis, Caucasian grouse, red kite, Lutra lutra meridionalis, Caucasian wildcat, Сarabus
caucasicus, Xylosteus caucasicola, Protaetia speciosa, brown trout, Caucasian toad, Caucasian parsley
frog, Parnopes grandior, leopard, lesser horseshoe bat, lesser spotted eagle, southern banded newt,
clouded Apollo, white-tailed eagle, common bent-wing bat, lesser mouse-eared bat, Triturus vulgaris
lantzi, Apollo, Orussus abietinus, Mehely's horseshoe bat, Calosoma sycophanta, Pleroneura dahli,
Xylocopa valga, peregrine falcon, osprey, Greek tortoise, Geoffroy's bat, Southern crested newt, Cerambyx
nodulosus, Ukrainian brook lamprey, Aesculapian snake, black stork, cinereous vulture.
Listed in the IUCN Red Book: the European bison.
Species included in the Red Data Book of the Russian Federation:
14 plant species: Astragalus zingeri, Cypripedium calceolus, Daphne cneorum, Hyssopus cretaceus, Iris
pumila, Stipa pulcherrima, Iris aphylla, Hedysarum razoumowianum, European feather grass, Hedysarum
grandiflorum, Potentilla volgarica, Paeonia tenuifolia, Anthemis trotzkiana, Fritillaria ruthenica.
16 animal species: saker falcon, golden eagle, greater spotted eagle, levant sparrowhawk, stag beetle,
short-toed snake eagle, Dalmatian pelican, eastern imperial eagle, marbled duck, white-tailed eagle,
Russian desman, Bombus fragrans, peregrine falcon, osprey, little bustard, Eurasian eagle-owl.
Species included in the Red Data Book of the Russian Federation:
9 plant species: Aconitum paskoi, Cypripedium macranthos, Cypripedium calceolus, Siberian fawn lily,
tree lungwort, Liparis loeselii, Dactylorhiza baltica, Rheum altaicum, Orchis militaris.
6 animal species: golden eagle, Siberian taimen, peregrine falcon, osprey, Eurasian eagle-owl, black stork.
414
415
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 10SPECIES LISTED IN THE IUCN RED LIST AND THE RED BOOK OF THE RUSSIAN FEDERATION, WHOSE HABITATS ARE LOCATED WITHIN APPENDIX 10SPECIES LISTED IN THE IUCN RED LIST AND THE RED BOOK OF THE RUSSIAN FEDERATION, WHOSE HABITATS ARE LOCATED WITHIN Name of the protected
natural area
List of species
Name of the protected
natural area
List of species
Shushensky Bor
National Park
Ugra National Park
Species included in the Red Data Book of the Russian Federation:
14 plant species: Aconitum sajanense, Cypripedium macranthos, Cypripedium calceolus, Bupleurum
martjanovii, Siberian fawn lily, European feather grass, Allium tytthocephalum, tree lungwort, Neottianthe
cucullata, Carex insaniae, Sticta limbata, Tuckneraria laureri, Cetraria Laureri, Orchis militaris.
20 animal species: Asian dowitcher, saker falcon, golden eagle, greater spotted eagle, demoiselle crane,
gyrfalcon, Bewick's swan, eastern imperial eagle, white-tailed eagle, lesser white-fronted goose, osprey,
peregrine falcon, lesser kestrel, pallid harrier, steppe eagle, Eurasian eagle-owl, black stork, hooded crane,
Pallas's gull, pied avocet.
Species included in the Red Data Book of the Russian Federation:
9 plant species: Cypripedium calceolus, Trapa natans, European feather grass, Dactylorhiza baltica,
Cephalanthera longifolia, Trapa, water caltrop, buffalo nut, Orchis militaris.
23 animal species: saker falcon, golden eagle, Eurasian curlew, greater spotted eagle, aquatic warbler,
greater noctule bat, black-throated loon, middle spotted woodpecker, short-toed snake eagle, Eurasian
oystercatcher, lesser spotted eagle, Eastern imperial eagle, great grey shrike, European bullhead, white-
tailed eagle, Russian desman, Alburnoides bipunctatus, peregrine falcon, osprey, pallid harrier, sterlet,
Eurasian eagle-owl, black stork.
Voronezh State Nature
Biosphere Reserve
Species included in the Red Data Book of the Russian Federation:
3 plant species: European feather grass, Pulsatilla pratensis, Fritillaria ruthenica.
4 animal species: saker falcon, griffon vulture, greater spotted eagle, stag beetle.
4 fungi species: Polyporus umbellatus, Sparassis crispa, lingzhi mushroom, Polyporus umbellatus.
Historic and landscape
complex Bogolyubov
Medow — The Church
of the Intercession
of the Holy Virgin
on the Nerl River
Davydov Nature Reserve
Species included in the Red Data Book of the Russian Federation:
3 plant species: Isoetes setacea, Diphasiastrum tristachyum, Dactylorhiza traunsteineri.
8 animal species: golden eagle, greater spotted eagle, European bison, short-toed snake eagle, Russian
desman, osprey, black-throated loon, black stork.
1 species is listed in the IUCN Red Book: the European bison.
Species included in the Red Data Book of the Russian Federation:
1 plant species: Salvinia natans.
2 animal species: willow ptarmigan, Russian desman.
Kologrivsky Forest State
Nature Reserve
Species included in the Red Data Book of the Russian Federation:
3 plant species: Cypripedium calceolus, tree lungwort, Dactylorhiza traunsteineri.
7 animal species: golden eagle, greater spotted eagle, short-toed snake eagle, European bullhead,
grayling, osprey, peregrine falcon.
Kaluzhskie Zaseki State
Nature Reserve
Species included in the Red Data Book of the Russian Federation:
1 plant species: early-purple orchid.
19 animal species: greater spotted eagle, Eurasian curlew, golden eagle, Russian desman, greater noctule
bat, middle spotted woodpecker, European bison, short-toed snake eagle, clouded Apollo, lesser spotted
eagle, white-tailed eagle, European bullhead, great grey shrike, brook lamprey, Alburnoides bipunctatus,
osprey, peregrine falcon, pallid harrier, black stork.
9 fungi species: Gyroporus cyanescens, Grifola frondosa, Hen-of-the-wood, coral tooth fungus, Dog
stinkhorn, Cortinarius violaceus, Clavariadelphus pistillaris, Sparassis crispa, Gyroporus cyanescens.
1 species is listed in the IUCN Red Book: the European bison.
Dmitrievsky State
Regional Fauna (Hunting)
Reserve for Preservation
of Elks and Roe Deers
Blagoveshchensky State
Nature Reserve
Taganai National park
East Ural Nature Reserve
Donsky Nature Park
Species included in the Red Data Book of the Russian Federation:
3 animal species: saker falcon, white-tailed eagle, peregrine falcon.
Species included in the Red Data Book of the Russian Federation:
2 plant species: European feather grass, Stipa zalesskii.
18 animal species: Asian dowitcher, golden eagle, red-breasted goose, sociable lapwing, demoiselle
crane, glossy ibis, little tern, white-tailed eagle, Pallas's fish eagle, marbled polecat, great white pelican,
white-headed duck, pallid harrier, lesser kestrel, black-winged stilt, Pallas's gull, Caspian tern, pied avocet.
Species included in the Red Data Book of the Russian Federation:
6 plant species: Anemone uralensis, Minuartia helmii, Epipogium aphyllum, Cephalanthera longifolia,
Cephalanthera rubra, Orchis militaris.
10 animal species: black stork, golden eagle, clouded Apollo, Apollo, peregrine falcon, osprey, Saga pedo,
Bombus wurflenii, slender-billed curlew, Eurasian eagle-owl.
Species included in the Red Data Book of the Russian Federation:
4 plant species: Cypripedium calceolus, Lilium martagon, Pulsatilla vernalis, lily.
8 animal species: golden eagle, Dalmatian pelican, white-tailed eagle, saker falcon, peregrine falcon,
osprey, Eurasian eagle-owl, Pallas's gull.
Species included in the Red Data Book of the Russian Federation:
9 plant species: Trapa natans, Genista tanaitica, Stipa pulcherrima, European feather grass, Lepidium
meyeri, Jurinea cretacea, Scrophularia cretacea, Serratula tanaitica, water caltrop.
6 animal species: short-toed snake eagle, eastern imperial eagle, white-tailed eagle, steppe eagle, little
bustard, Eurasian eagle-owl.
Shalov-Perechitsky State
Integral Nature Reserve
Species included in the Red Data Book of the Russian Federation:
4 plant species: Sand pink, Pulsatilla pratensis, Eastern pasqueflower, Onobrychis arenaria.
9 animal species: white stork, golden eagle, Eurasian curlew, Eurasian bittern, whooper swan, osprey,
Eurasian eagle-owl, black stork, black-throated loon.
416
417
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 10SPECIES LISTED IN THE IUCN RED LIST AND THE RED BOOK OF THE RUSSIAN FEDERATION, WHOSE HABITATS ARE LOCATED WITHIN APPENDIX 10SPECIES LISTED IN THE IUCN RED LIST AND THE RED BOOK OF THE RUSSIAN FEDERATION, WHOSE HABITATS ARE LOCATED WITHIN Total number of species listed on the IUCN Red List and the National List of Protected Species
127 plant species: Asahinea scholanderi, pyramidal orchid,
Astragalus zingeri, Pogonia japonica, watershield, Aconitum
paskoi, Aconitum sajanense, Colchicum speciosum,
Colchicum umbrosum, Cypripedium macranthos, lady's-
slipper, Anemone uralensis, Stipa orientalis, Bupleurum
martjanovii, Daphne cneorum, Epimedium colchicum,
Cephalaria litvinovii, Gastrodia elata, Sand pink, Dioscorea
caucasica, Genista tanaitica, Genista suanica, Panax
ginseng, Hyssopus cretaceus, Ficus carica, Ruscus
colchicus, Coccocarpia erythroxili, Calypso, Japanese
water iris, Iris aphylla, Stipa dasyphylla, European feather
grass, Stipa zalesskii, Lepidium meyeri, Cotoneaster
cinnabarinus, Hedysarum grandiflorum, Hedysarum
razoumowianum, Erythronium caucasicum, Staphylea
colchica, Campanula autraniana, Iris pumila, Siberian
fawn lily, Leptogium hildenbrandii, tree lungwort, Allium
altaicum, Lobaria retigera, Leptopus colchicus, Lilium
caucasicum, Limodorum abortivum, Lilium kesselringianum,
Potentilla volgarica, Liparis loeselii, Lilium callosum,
Allium tytthocephalum, lily, Minuartia helmii, Minuartia
krascheninnikovii, Euphorbia zhiguliensis, Neckera borealis,
Neottianthe cucullata, Epipogium aphyllum, Jurinea
cretacea, Scrophularia cretacea, Omphalina hudsoniana,
Carex insaniae, Ophrys oestrifera, Carex livida, Galium
paradoxum, Chinese peony, Paeonia obovata, Galium
paradoxum, Pulsatilla pratensis, Cephalanthera longifolia,
Isoetes lacustris, Dactylorhiza traunsteineri, Isoetes
maritima, Cephalanthera rubra, Dactylorhiza baltica,
Dactylorhiza maculata, Artemisia salsoloides, Dactylorhiza
triphylla, Galanthus woronowii, Paeonia wittmanniana,
Pulsatilla vernalis, Paeonia tenuifolia, Anthemis trotzkiana,
Cephalanthera damasonium, Eastern pasqueflower,
Pulsatilla pratensis, Fritillaria dagana, Trapa, Fritillaria
ussuriensis, Fritillaria ruthenica, Rheum altaicum, Fritillaria
meleagris, Swertia baicalensis, Buxus colchica, Serapias
vomeracea, Steveniella satyrioides, Spiranthes spiralis,
Sticta limbata, Lilium martagon, Serratula tanaitica, Salvinia
natans, Tridactylina kirilowii, Thymus cimicinus, Koeleria
sclerophylla, Tulipa schrenkii, English Yew, Traunsteinera
globosa, Tulipa humilis, Tuckneraria laureri, Cetraria laureri,
Cetrelia alaskana, water caltrop, buffalo nut, Lathyrus
litvinovii, Globularia punctata, Globularia trichosantha,
Crocus speciosus, Crocus vallicola, Onobrychis arenaria,
Anacamptis coriophora, Early purple orchid, Orchis militaris,
Burnt-tip orchid.
123 animal species: Siberian tiger, Eurasian stone-curlew,
Rosalia longicorn, Alburnus belvica, Asian dowitcher,
white stork, saker falcon, griffon vulture, golden eagle,
Steller's sea eagle, greater spotted eagle, Eurasian curlew,
Volga pikeperch, brown long-eared bat, ivory gull, greater
horseshoe bat, Eurasian bittern, aquatic warbler, Vipera
dinniki, Vipera kaznakovi, greater noctule bat, Oriental stork,
white-naped crane, great bustard, Aphodius bimaculatus,
Anax imperator, grayling, black-throated loon, European mink,
azure tit, middle spotted woodpecker, Levant sparrowhawk,
demoiselle crane, Carabus menetriesi, Aporrectodea dubiosa,
Carabus biebersteini constantinovi, Carabus miroshnikovi,
Freshwater pearl mussel, stag beetle, European bison, Eisenia
transcaucasica, short-toed snake eagle, Rhaesus serricollis,
Eurasian oystercatcher, Gyrfalcon, Dalmatian pelican, red-
breasted goose, sociable lapwing, long-legged buzzard,
Сarabus caucasicus, Xylosteus caucasicola, Protaetia
speciosa, Parnopes grandior, Caucasian toad, Caucasian
parsley frog, brown trout, Caucasian grouse, red kite, Lutra lutra
meridionalis, Caucasian wildcat, glossy ibis, leopard, mandarin
duck, eastern imperial eagle, lesser spotted eagle, clouded
Apollo, little tern, southern banded newt, lesser horseshoe bat,
white-tailed eagle, steppe eagle, Apollo, European bullhead,
Siberian taimen, Lissotriton vulgaris, common bent-wing
bat, lesser mouse-eared bat, Pallas's fish eagle, Calosoma
sycophanta, Xylocopa valga, Orussus abietinus, Pleroneura
dahli, Mehely's horseshoe bat, lesser white-fronted goose,
marbled polecat, Indian paradise flycatcher, Russian desman,
brook lamprey, great white pelican, hazel grouse, Eurasian
beaver, Alburnoides bipunctatus, peregrine falcon, reindeer,
mountain weasel, great grey shrike, osprey, Saga pedo, lesser
kestrel, little bustard, sterlet, pallid harrier, Greek tortoise,
Bombus fragrans, white-headed duck, Geoffroy's bat, Bombus
wurflenii, southern crested newt, slender-billed curlew,
Cerambyx nodulosus, Ukrainian brook lamprey, Eurasian
eagle-owl, black-winged stilt, black-bellied sandpiper, Pallas's
gull, cinereous vulture, black stork, black stork, Aesculapian
snake, grey-faced buzzard, red-crowned crane.
15 fungi species: Polyporus umbellatus, Gyroporus
cyanescens, Grifola frondosa, hen-of-the-wood, coral
tooth fungus, Mutinus ravenelii, Dog stinkhorn, Leccinum
percandidum, Cortinarius violaceus, Clavariadelphus pistillaris,
Phallus duplicatus, Sparassis crispa, Gyroporus cyanescens,
Polyporus umbellatus, Lingzhi mushroom.
APPENDIX 11
THE LIST OF ENVIRONMENTALLY SENSITIVE
AREAS WHERE PJSC FGC UES OPERATES
GRI 304-1
EMPS
Information on the electric grid facility
Environmentally sensitive area
Name
Location
Name
Length, km –
for OHL and
ACL; occupied
area,
ha – for SS.
Level of
importance
Location
in respect to
the territory
Type of
territory
Type
of activity
MPS CENTRE
Verkhne-
Donskoye
EMPS
220 kV dual circuit OHL: Yuzhnaya
Usman-Tyagovaya, Kirovskaya
POST 474
Voronezh Region,
Verkhnehavsky District
12.27
Voronezh State Nature
Biosphere Reserve named after
V. Peskov
Federal
Within
the territory
Ground
Production
Volgo-Donskoye
EMPS
500 kV Balashovskaya-Lipetskaya
Vostochnaya (towers No. 894–915)
Voronezh Region,
Novokhopersky District
8.47
Khopyor State Nature Reserve
Federal
Within
the territory
Ground
Production
Volga-Okskoye
EMPS
500 kV Balashovskaya-Lipetskaya
Zapadnaya (with branch line to
Novovoronezhskaya NPP) (towers
No. 894–916)
220 kV Vladimirskaya CHPP-
2 — Vladimirskaya with branch
line to Rayonnaya SS and 220 kV
Vladimirskaya — Zarya 2, chain with
branch line to Rayonnaya SS
220 kV Vladimirskaya CHPP-
2 — Vladimirskaya with branch
line to Rayonnaya SS and 220 kV
Vladimirskaya CHPP-2 — Zarya
220 kV Manturovo–Semenov OHL
Voronezh Region,
Novokhopersky District
Vladimir Region, Suzdalsky
District
8.78
1.60
Ground
Production
Historic and landscape complex
Bogolyubov Medow — The
Church of the Intercession of
the Holy Virgin on the Nerl River
Regional
Within
the territory
Ground
Production
Vladimir Region,
Kameshkovsky District
2.50
Davydov Nature Reserve
Regional
Within
the territory
Ground
Production
Kostroma Region,
Manturovsky District
19.30
Kologrivsky Forest State Nature
Reserve
Federal
Within
the territory
Ground
Production
Moskovskoye
EMPS
220 kV Kashira-Oka OHL 1, 2
Moscow Region,
Serpukhovsky District
4.00
Prioksko-Terrasny State
Biosphere Nature Reserve
Federal
Within
the territory
Ground
Production
Priokskoe
EMPS
500 kV Smolenskaya NPP —
Kaluzhskaya OHL
Kaluga Region,
Yukhnovsky District
8.00
Ugra National Park
Federal
220 kV Cherepetskaya GRES–
Liteynaya OHL
Kaluga Region, Kozelsky
District
220 kV Cherepetskaya GRES–
Tsementnaya OHL
Kaluga Region, Kozelsky
District
18.00
18.00
Within
the territory
Within
the territory
Ground
Production
Ground
Production
Ground
Production
500 kV Smolenskaya NPP–
Mikhaylovskaya OHL
Kaluga Region, Ulyanovsky
District
15.00
Kaluzhskie Zaseki State Nature
Reserve
Federal
Within
the territory
Ground
Production
Chernozemnoe
EMPS
330 kV Stary Oskol–OEMK 1 OHL
Belgorod Region,
Starooskolsky District
500 kV Stary Oskol —
Metallurgicheskaya OHL
Belgorod Region,
Starooskolsky District
Dmitrievsky State Regional
Fauna (Hunting) Reserve for
Preservation of Elks and Roe
Deers
1.50
4.00
Regional
Within
the territory
Ground
Production
Regional
Within
the territory
Ground
Production
500 kV Novobryanskaya — Elets OHL
(towers No. 212–308)
Orlov Region, Khotynetsky
District
1.20
Orlovskoye Polesye National
Park
Federal
Within
the territory
Ground
Production
418
419
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 11REGISTER OF SPECIALLY PROTECTED NATURAL AREASAPPENDIX 10SPECIES LISTED IN THE IUCN RED LIST AND THE RED BOOK OF THE RUSSIAN FEDERATION, WHOSE HABITATS ARE LOCATED WITHIN EMPS
Information on the electric grid facility
Environmentally sensitive area
Name
Location
Name
Length, km –
for OHL and
ACL; occupied
area,
ha – for SS.
Level of
importance
MPS SIBERIA
Kuzbasskoye
EMPS
500 kV Sayano-Shushenskaya
HPP–Novokuznetskaya No. 1 ACL
Kemerovo Region
78.50
Shorsky State National Park
Federal
500 kV Sayano-Shushenskaya
HPP–Novokuznetskaya No. 2 OHL
Kemerovo Region
78.50
Khakasskoe
EMPS
500 kV Sayano-Shushenskaya HPP –
Novokuznetskaya No. 1 ACL
Republic of Khakassia
183.23
500 kV Sayano-Shushenskaya
HPP–Novokuznetskaya No. 2 ACL
220 kV Minusinskaya tower–
Shushenskaya tower circuit 1, 2 OHL
(D-37/38)
220 kV Sushenskaya tower–Ergaki
OHL (D46)
Republic of Khakassia
182.65
Krasnoyarsk Krai
48.70
Shushensky Bor National Park
Federal
Krasnoyarsk Krai
125.50
Zabaikalskoe
EMPS
220 kV Mysovaya–Vydrino OHL
(OHL-273)
Republic of Buryatia
220 kV Mysovaya–Vydrino OHL
(OHL-274)
500 kV Irkutsk–Gusinoozernaya
GRES OHL (IG-582)
Republic of Buryatia
Republic of Buryatia
3.54
3.54
3.54
Protective zone of the Baikal
State Nature Biosphere Reserve
Federal
Baikal State Nature Biosphere
Reserve
Location
in respect to
the territory
Type of
territory
Type
of activity
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
220 kV Goryachinskaya SS
Republic of Buryatia
5.50
Baikal State Nature Biosphere
Reserve
Federal
Within
the territory
Ground
Production
MPS EAST
Khabarovskoye
EMPS
220 kV Khekhtsir-Gidroliznaya/
Khekhzir–Dormidontovka/t OHL
L-227/228
Khabarovsk Krai
9.78
Territory of the
Bolshekhekhtsirsky State
Nature Reserve
Federal
Within
the territory
Ground
Production
2.80
Khekhtsirsky State Nature
Reserve
Federal
Within
the territory
Ground
Production
220 kV Khekhtsir-Gidroliznaya/
Khekhzir–Dormidontovka/t OHL
L-227/228
Khabarovsk Krai
220 kV Khekhtsir CHPP-3–
Khekhtsir-2 OHL L-223/224
220 kV Khekhtsir CHPP-3–
Khekhtsir-2 OHL L-225/226
Khabarovsk Krai
Khabarovsk Krai
500 kV Khabarovskaya–Khekhtsir-2
OHL L-513
Khabarovsk Krai
500 kV PrimGRES–Khekhtsir-2
OHL L-516
Khabarovsk Krai
Amurskoye
EMPS
220 kV Amurskaya-
Blagoveshchenskaya No. 1 OHL
220 kV Amurskaya–
Blagoveshchenskaya No. 2 OHL
Amur Region
Amur Region
25.65
24.00
4.44
13.13
7.80
7.80
Within
the territory
Within
the territory
Within
the territory
Ground
Production
Ground
Production
Ground
Production
Ground
Production
EMPS
Information on the electric grid facility
Environmentally sensitive area
Name
Location
Name
Length, km –
for OHL and
ACL; occupied
area,
ha – for SS.
Level of
importance
Location
in respect to
the territory
Type of
territory
Type
of activity
MPS URALS
Sverdlovskoye
EMPS
500 kV BNPP-2–Yuzhnaya OHL (500
kV Yuzhnaya–Shagol OHL)
Sverdlovsk Region,
Sysertsky District
220 kV Beloyarskaya NPP–
Mramornaya OHL
Sverdlovsk Region,
Sysertsky District
500 kV Kozyrevo–Reftinskaya
GRES OHL
Sverdlov Region,
Bogdanovichsky District
17.30
39.90
32.10
Bazhovskie Mesta Nature
Reserve.
Bazhovskie Mesta Nature
Reserve.
Bogdanovichsky State Fauna
Hunting Nature Reserve.
Regional
Regional
Regional
Within
the territory
Within
the territory
Within
the territory
Ground
Production
Ground
Production
Ground
Production
220 kV Reftinskaya GRES–
Travyanskaya circuit 2 OHL
Sverdlov Region,
Bogdanovichsky District
34.90
Bogdanovichsky State Fauna
Hunting Nature Reserve.
Regional
Within
the territory
Ground
Production
Sverdlov Region,
Bogdanovichsky District
10.10
Bogdanovichsky State Fauna
Hunting Nature Reserve.
Regional
Within
the territory
Ground
Production
Sverdlov Region,
Bogdanovichsky District
24.80
Bogdanovichsky State Fauna
Hunting Nature Reserve.
Regional
Within
the territory
Ground
Production
220 kV Reftinskaya GRES–Anna
OHL (220 kV Reftinskaya GRES–
Travyanskaya circuit 1 OHL)
220 kV Anna–Travyanskaya
OHL (220 kV Reftinskaya GRES–
Tranyanskaya circuit 1 OHL)
220 kV Sredneuralskaya GRES–
Pervouralskaya circuit 2 OHL
220 kV Sredneuralskaya GRES–
Pervouralskaya circuit 1 OHL with a
branch line to Trubnaya SS
220 kV Emelino–Trubnaya OHL
220 kV Sredneuralskaya GRES–
Pervouralskaya circuit 2 OHL
Sverdlov Region,
Sredneuralsky District,
Verkhnepyshminsky
District
Sverdlov Region,
Sredneuralsky District,
Verkhnepyshminsky
District
Sverdlov Region,
Pervouralsky District,
Verkhneye Dubrovo District
Sverdlov Region,
Pervouralsky District,
Verkhneye Dubrovo District
220 kV Sredneuralskaya GRES–
Pervouralskaya circuit 1 OHL with a
branch line to Trubnaya SS
Sverdlov Region,
Pervouralsky District,
Verkhneye Dubrovo District
220 kV Salda SS–Koshai SS OHL
Sverdlov Region,
Verkhnetursky District,
Alapaevsky District
1.66
1.66
4.33
10.72
10.72
Lake Iset and Surrounding
Forests Landscape Nature
Reserve
Lake Iset and Surrounding
Forests Landscape Nature
Reserve
Forests at the Geographical
Border of Europe and Asia
Landscape Reserve
Forests at the Geographical
Border of Europe and Asia
Landscape Reserve
Forests at the Geographical
Border of Europe and Asia
Landscape Reserve.
Regional
Within
the territory
Ground
Production
Regional
Within
the territory
Ground
Production
Regional
Within
the territory
Ground
Production
Regional
Within
the territory
Ground
Production
Regional
Within
the territory
Ground
Production
13.70
Dobrovolsky Trakt Landscape
Nature Reserve
Regional
Within
the territory
Ground
Production
220 kV Sredneuralskaya GRES–
Pervouralskaya circuit 1 OHL with a
branch line to Trubnaya SS (a branch
line to Trubnaya SS)
Sverdlovsk Region,
Pervouralsky District
4.90
Environmentally sensitive
natural area of the state
landscape reserve of regional
importance – Forests at the
Geographical Border of Europe
and Asia Landscape Nature
Reserve.
Regional
Within
the territory
Ground
Production
Blagoveshchensky State Nature
Reserve
Regional
Within
the territory
Ground
Production
Ground
Production
500 kV Reftinskaya GRES–Tagil OHL
Sverdlovsk Region,
Rezhevsky District
16.70
Rezhevsky Nature Mineral
Reserve
Regional
Yuzhno-
Uralskoe EMPS
500 kV Zlatoust–Chelyabinskaya
tower 107–128 OHL
Chelyabinsk Region,
Miassky District
5.40
Ilmen State Nature Reserve
Federal
7.10
Taganai National park
Federal
13.00
East Ural Radiation Reserve
Federal
500 kV Zlatoust–Chelyabinskaya
tower 17–45 OHL
Chelyabinsk Region,
Zlatoustovsky District
500 kV Beloyarskaya NPP-2–Shagol
(500 kV Yuzhnaya–Shagol OHL)
tower 440–469 OHL
Chelyabinsk Region,
Kunashaksky, Kaslinsky
Districts
500 kV Beloyarskaya NPP-2–Shagol
OHL (500 kV Yuzhnaya–Shagol OHL)
towers 498–533
220 kV Shagol–Kashtak OHL,
towers 33–41
Chelyabinsk Region,
Chelyabinsk, Sosnovsky
District
12.00
2.90
Kashtaksy Bor Botanic Natural
Monument of the Regional
Significance
Regional
Within
the territory
Ground
Production
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
420
421
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 11REGISTER OF SPECIALLY PROTECTED NATURAL AREASAPPENDIX 11REGISTER OF SPECIALLY PROTECTED NATURAL AREAS EMPS
Information on the electric grid facility
Environmentally sensitive area
Name
Location
Name
Length, km –
for OHL and
ACL; occupied
area,
ha – for SS.
Level of
importance
Permskoye
EMPS
500 kV Vyatka–Votkinskaya HPP
OHL towers 881–896
Udmurt Republic,
Votkinsky District
5.80
Nechkinsky National Park
Federal
220 kV VHPP–Izhevsk 1 central OHL
towers 7–43
220 kV VHPP–Izhevsk 2 central OHL
towers 7–48
220 kV branch line to the Siva
settlement 1 central OHL towers
1–22
220 kV branch line to the Siva
settlement 2 central OHL towers
1–22
220 kV Kauchuk–Metallurg OHL
towers 23–42
Udmurt Republic,
Sarapulsky District
220 kV Kauchuk–Kama OHL towers
23–42
220 kV Kauchuk–Metallurg OHL
towers 81–101
220 kV Kauchuk–Kama OHL towers
81–104
220 kV Kauchuk–Pozim OHL towers
69–101
7.69
7.80
6.74
7.02
7.60
7.60
7.77
7.18
10.35
MPS SOUTH
Rostovskoe
EMPS
330 kV Yuzhnaya–Rostovskaya OHL
220 kV R20–T10 OHL, circuit 1
220 kV Rostovskaya–Т15 OHL
Rostov Region,
Kuibyshevsky District
Rostov Region,
Myasnikovsky District
Rostov Region,
Myasnikovsky District
220 kV Novocherkasskaya GRES–
NZB OHL
Rostov Region, Oktyabrsky
District
220 kV Pogorelovo–Donetskaya OHL
Rostov Region, Kamensky
District
500 kV Rostovskay NPP–Shakhty
OHL
Rostov Region,
Tsymlyansky District
220 kV Tsymlyanskaya HPP–Shakhty
OHL
500 kV Rostovskaya NPP–
Nevinnomysk OHL
Rostov Region, Proletarsky
District
1.03
Lysogorka
Regional
2.22
Kamennaya Balka
Regional
0.63
Chulekskaya Balka
Regional
0.50
Persianovskaya Preserved Area
Regional
0.60
Glubokaya River Chalk Deposit
Regional
23.64
Donsky Nature Park
Regional
12.24
20.31
Rostov Oblast Wetlands —
Veselovskoe Water Reservoir
and Lake Manych-Gudilo
Regional
Location
in respect to
the territory
Type of
territory
Type
of activity
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
EMPS
Information on the electric grid facility
Environmentally sensitive area
Name
Location
Name
Length, km –
for OHL and
ACL; occupied
area,
ha – for SS.
Level of
importance
Sochinskoye
EMPS
110 kV Mzymta SS
Krasnodar Krai
0.45
Sochi National Park
Federal
110 kV Roza Khutor SS
Krasnodar Krai
110 kV Laura SS
Krasnodar Krai
110 kV Sportivnaya SS
Krasnodar Krai
Kubanskoye
EMPS
220 kV Shepsi SS
Krasnodar Krai
220 kV Poselkovaya SS
Krasnodar Krai
220 kV Sochi CHPP–Psou ACL
Krasnodar Krai
220 kV Sochi CHPP–Dagomys ACL
Krasnodar Krai
220 kV Psou–Poselkovaya OHL
Krasnodar Krai
220 kV Psou–Bzybi OHL
Krasnodar Krai
110 kV Psou–Leselidze OHL
Krasnodar Krai
220 kV Shepsi–Dagomys ACL
Krasnodar Krai
220 kV Chernomorskaya–
Poselkovaya ACL
Krasnodar Krai
220 kV Adler CHPP–Psou ACL
Krasnodar Krai
220 kV Dagomys–Chernomorskaya
ACL
Krasnodar Krai
220 kV Centralnaya–Dagomys ACL
Krasnodar Krai
220 kV Adler HPP–Chernomorskaya
ACL
Krasnodar Krai
Stavropolskoe
EMPS
330 kV Mashuk SS
Stavropol Krai, Pyatigorsk
330 kV 03 HPP-2–Mashuk OHL
Stavropol Krai,
Zheleznovodsk
330 kV 04 Mashuk–Prokhladnaya
OHL
Stavropol Krai,
Zheleznovodsk
0.48
0.46
0.33
4.32
1.81
34.04
17.14
51.39
2.44
0.81
61.59
50.88
9.67
75.52
61.99
7.52
5.51
0.07
0.07
Caucasian Mineral Water Spas
(territories of health recreation
areas and resorts)
Federal
MPS VOLGA
Nizhne-
Volzhskoye
EMPS
220 kV Saratov HPP-Kubra OHL with
branch line to Vozrozhdenie SS
Saratov Region
11.85
Khvalynsky National Park
Federal
Nizhegorodskoe
EMPS
500 kV Ulyanovskaya–Severnaya
OHL (newly named Veshkaima–
Osinovka)
Republic of Mordovia,
Ichalkovsky District
24.47
Smolny National Park
Federal
500 kV Ulyanovskaya–Yuzhnaya
OHL (newly named Veshkaima-
Arzamasskaya)
Republic of Mordovia,
Ichalkovsky District
24.40
Samarskoye
EMPS
Sredne-
Volzhskoye
EMPS
220 kV Syzran-1-2 OHL
Samara Region
25.00
Samarskaya Luka National Park
Federal
500 kV HPP Veshkaima–Severnaya
OHL
500 kV HPP Veshkaima–Yuzhnaya
OHL
Ulyanovsk Region
17.00
Samarskaya Luka National Park
Federal
Ulyanovsk Region
17.00
Location
in respect to
the territory
Type of
territory
Type
of activity
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
422
423
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 11REGISTER OF SPECIALLY PROTECTED NATURAL AREASAPPENDIX 11REGISTER OF SPECIALLY PROTECTED NATURAL AREAS Location
in respect to
the territory
Type of
territory
Type
of activity
APPENDIX 12
Within
the territory
Ground
Production
I. INTRODUCTION
EMPS
Information on the electric grid facility
Environmentally sensitive area
Name
Location
Name
Length, km –
for OHL and
ACL; occupied
area,
ha – for SS.
Level of
importance
MPS NORTH-WEST
Karelskoe
EMPS
Valaam DPP
35 kV Valaam SS
PTL-397 330 kV Kolskaya
NPP–Monchegorsk OHL, towers No.
91–105 (10 suspension towers and
4 anchor towers) on the territory of
the reserve
located in Sortavalsky
District of Republic of
Karelia, in the northern
part of Ladoga Lake,
22 km away from the
coastline
located in Sortavalsky
District of Republic of
Karelia, in the northern
part of Ladoga Lake,
22 km away from the
coastline
Murmansk Region,
Monchegorsky District
(western part of Kola
peninsula)
1.33
Valaam Archipelago
Natural Park
Regional
Within
the territory
Ground
Production
0.19
Within
the territory
Ground
Production
2.17
Lapland State Biosphere
Nature Reserve
Federal
Within
the territory
Ground
Production
PTL-398 330 kV Kolskaya
NPP–Monchegorsk OHL, towers No.
88–102 (10 suspension towers and
4 anchor towers)
Murmansk Region,
Monchegorsky District
(western part of Kola
peninsula)
35 kV Läskäla–Valaam No. 1,
35 kV Läskäla–Valaam No. 2
Sortavalsky District of the
Republic of Karelia, in the
northern part of Ladoga
Lake, 22 km away from the
coastline
Novgorodskoe
EMPS
330 kV Luzhskaya SS
Leningrad Region, Luzhsky
District
330 kV Gatchinskaya–Luzhskaya
OHL
110 kV Nizovaya-1 OHL
110 kV Severnaya-1 OHL
110 kV 531 Tarkovichi SS–305
Severnaya SS
110 kV OHL to Luga SS
110 kV Syrets-1 OHL
2.17
27.25 km —
underwater
part along
the bottom of
Ladoga Lake
3.89 km — on
Valaam
Islands
5.20
4.83
0.20
0.20
1.04
0.20
1.51
Valaam Archipelago
Natural Park
Regional
Within
the territory
Ground
Production
Shalov-Perechitsky State
Integral Nature Reserve
Regional
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Within
the territory
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
Ground
Production
There are no subsurface and underground plots owned, leased or controlled by the Company.
OPINION OF THE AUDIT COMMISSION
OF PUBLIC JOINT-STOCK COMPANY
FEDERAL GRID COMPANY
OF THE UNIFIED ENERGY SYSTEM
Approved by the Audit Commission of PJSC FGC UES
Report No. 5/2018 dated 30 April 2019
30 April 2019 Moscow
1. INFORMATION ON MEMBERS OF THE AUDIT COMMISSION
Members of the Audit Commission were elected
by the resolution of the General Meeting of Shareholders
Resolution of the regular General Meeting of Shareholders
of PJSC FGC UES of 25 June 2018 (Minutes No. 20 of 2 July 2018)
Chairman and Secretary of the Audit Commission were elected
by the resolution of the Audit Commission
Meeting Minutes No. 1/2018 of the Audit Commission
of PJSC FGC UES of 31 July 2018
Chairman of the Audit Commission
Deputy Chairman of the Audit Commission
Secretary of the Audit Commission
Members of the Audit Commission
Marina Lelekova
Ekaterina Snigiryova
Aleksander Batalov
Tatyana Zobkova
Vladimir Khvorov
Audit period: Pursuant to the resolution of the Audit
Commission of PJSC FGC UES of 28 March 2019 (Minutes
No. 4/2018 of 28 March 2019), financial and economic
activities of PJSC FGC UES for 2018 shall be audited from
1 April 2019 to 20 June 2019. The data reliability
in the 2018 Annual Report, the Accounting (Financial)
Statements for 2018 and the 2018 Related Party Transactions
Report shall be assessed from 1 April 2019 to 29 April 2019.
Basis for the audit: Federal Law No. 208-FZ on Joint Stock
Companies of 26 December 1995, PJSC FGC UES' Articles
of Association, Regulations on the Audit Commission,
and Resolution of the Audit Commission of PJSC FGC UES
of 28 March 2019 (Minutes No. 4/2018 of 28 March 2019).
Purpose of assessment: To express an independent
opinion on the data reliability in the 2018 Annual Report,
the Accounting (Financial) Statements of PJSC FGC UES
for 2018, and the Related Party Transactions Report
for 2018 (hereinafter, the Reporting). In all material respects,
reliability is understood as the degree of the Reporting
accuracy, which allows shareholders to make correct
conclusions about the operation results, financial and property
status of the Company and make informed decisions based
on these conclusions. In accordance with the Civil Code of the
Russian Federation, Federal Law No. 208-FZ on Joint Stock
Companies of 26 December 1995 and PJSC FGC UES Articles
of Associations, the Company's sole executive body shall be
responsible for the preparation and reliability of the Reporting.
Audited period: 1 January 2018 through 31 December 2018.
Audited items: PJSC FGC UES' 2018 Annual Report, Accounting
(Financial) Statements for 2018, Related Party Transactions
Report for 2018, management decisions, management
reports, accounting ledgers, primary accounting documents
and other documents of its financial and economic activities.
424
425
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 12REPORT OF THE AUDIT COMMISSION OF PJSC FGC UES FOR 2018 APPENDIX 11REGISTER OF SPECIALLY PROTECTED NATURAL AREAS The audit inspection was governed by the following regulations:
3. INFORMATION ON THE COMPANY'S AUDITOR
zz Federal Law No. 402-FZ on Accounting of 6 December
2011;
zz Federal Law No. 208-FZ on Joint Stock Companies
of 26 December 1995;
zz the Civil Code of the Russian Federation;
zz Order of the Ministry of Finance of Russia No. 34n on
Approval of the Regulations for Accounting and Reporting
in the Russian Federation of 29 July 1998;
zz Accounting Regulations (standards);
zz Order of the Ministry of Finance of Russia No. 66n on
Accounting Forms of 2 July 2010;
zz Regulations No. 454-P on Information Disclosure by Equity
Securities Issuers, approved by the Bank of Russia on
30 December 2014;
zz Order No. 4335-U of the Bank of Russia on Setting Maximum
Amounts on Transactions of Joint Stock Companies
and Limited Liability Companies upon Exceeding of Which
Such Transactions May Be Recognised as Related Party
Transactions of 31 March 2017;
zz Accounting Policy of PJSC FGC UES for 2018 approved
by Order No. 535 of PJSC FGC UES of 30 December
2015 (as amended by orders of PJSC FGC UES No. 128
of 14 April 2016, No. 506 of 29 December 2016, No. 554
of 29 December 2017; No. 387 of 12 October 2018);
zz other laws and internal organisational and administrative
documents of PJSC FGC UES.
Full corporate name
Ernst & Young Limited Liability Company
Short corporate name
Ernst & Young LLC
Registered Address:
77 Sadovnicheskaya Emb., Build. 1, Moscow, Russia, 115035
INN/KPP
7709383523/770501001
OKPO (Russian National Classifier
of Businesses and Organisations)
59002827
OGRN
An entry was made in the Unified State Register of Legal Entities on
5 December 2002, state registration number 1027739707203 was assigned
Contact information
Telephone: + 7 (495) 755-97-00 Fax: + 7 (495) 755-97-01 www.ey.com
2. INFORMATION ON THE COMPANY
Additional Information
Full corporate name
Short corporate name
Registered address:
Postal address
Public Joint Stock Company
Federal Grid Company of the Unified Energy System (hereinafter, the Company)
PJSC FGC UES (hereinafter, the Company)
Moscow, Russian Federation
5 A Academic Chelomey St., Moscow, 117630
Primary State Registration Number (OGRN)
1024701893336 dated 20 August 2002
Taxpayer Identification Number (INN)
4716016979
z MPS Volga; Sredne-Volzhskoye EMPS; Nizhne-Volzhskoye EMPS; Samara EMPS;
Nizhny Novgorod EMPS;
z MPS East; Khabarovsk EMPS; Primorsky EMPS; Amur EMPS;
z MPS North-West; Bryansk EMPS; Karelian EMPS; Novgorod EMPS;
Vyborg EMPS; Leningrad EMPS; Northern EMPS;
z MPS Siberia; West-Siberian EMPS; Krasnoyarsk EMPS; Omsk EMPS;
Khakassky EMPS; Kuzbass EMPS; Transbaikal EMPS; Tomsk EMPS;
z MPS Ural; Sverdlovsk EMPS; South Ural EMPS; Orenburg EMPS; Perm EMPS;
z MPS Centre; Volga-Don EMPS; Chernozemnoye EMPS; Priokskoye EMPS;
Vologda EMPS; Volga-Okskoye EMPS; Verkhne-Donskoye EMPS; Valday EMPS;
Moscow EMPS; Bely Rast (St. Petersburg);
z MPS South; Stavropol EMPS; Rostov EMPS; Kuban EMPS; Caspian EMPS;
Sochi EMPS;
z MPS West Siberia; Central EMPS; Southern EMPS; Yamalo-Nenets EMPS;
Eastern EMPS.
A. Murov, elected as Chairman of the Management Board pursuant
to the resolution of the Extraordinary General Meetings of Shareholders
of 11 November 2013 (Minutes No. 14 of 11 November 2013), and
of 19 November 2018 (Minutes No. 21 of 21 November 2018)
Andrey Noskov, elected as Director of Accounting and Reporting, Head
of the Accounting and Reporting Department (Chief Accountant) under Order
No. 690/1R of 18 August 2011
Branches and separate divisions
with separate balance
Sole Executive Body
Chief Accountant
426
The Company is a member of the Self-Regulatory Organisation of Auditors
“Russian Union of Auditors” (Association), abbreviated name: SRO RUA
(GRN 2137799142314, entry made in EGRUL on 3 August 2016) Ernst & Young LLC
is included in the control copy of the register of auditors and audit organisations
with the main registration number 11603050648
Resolution of the Annual General Meeting of
Shareholders on approval of the auditor
Resolution of the Annual General Meeting of Shareholders of PJSC FGC UES
(Minutes No. 20 of 2 July 2018)
Basis for entering into the audit contract
An open single-stage tender without pre-qualification announced following Order
No. 595p of PJSC Rosseti dated 30 October 2017 for the right to enter into a
mandatory contract on audit of PJSC Rosseti subsidiaries' and affiliates' reports
for 2018—2020 conducted by Rosseti PJSC in accordance with the Regulations on
Procurement of Goods, Works and Services for Subsidiaries and Affiliates
of PJSC Rosseti acting as customers. Ernst & Young LLC won the contract (Meeting
Minutes No. 13/595p of the Rosseti Tender Commission of 16 March 2018
and Minutes No. 14/595p of pre-contract negotiations of 16 April 2018)
Audit Contract
Audit Contract No. ECU-2018-00126 (2018) of PJSC FGC UES dated 23 July 2018
Auditor's opinion
Independent auditor's opinion on the accounting (financial) statements
of PJSC FGC UES for 2018 of 20 February 2019
We planned and conducted the audit to obtain reasonable
assurance that the Company's 2018 Reporting is free
of material misstatement.
The audit inspection was planned and carried out on a
random basis and included the study of evidence supporting
the importance and disclosure in the Reporting of information
on related-party transactions concluded in the reporting
year, on the Company's financial and economic activities,
assessment of accounting principles and methods preparation
of accounting (financial) statements, determination
of material estimated values. During the audit inspection we
determined the level of materiality (the level of the aggregate
permissible error of the distortion of the reporting indicators).
By materiality, we mean the property of information disclosed
in the statements to influence the decisions made by users
of these statements. The level of admissible error shall be
a criterion to confirm the reliability of the Company's Reporting.
In the course of the audit, we selectively reconciled data
from accounting ledgers, primary accounting documents,
accounting (financial) statements, the Annual Report and
the Related Party Transactions Report for the reporting year.
We examined the results of the Company's asset and liability
recognition. Based on the Company's accounting (financial)
statements, we analysed the financial position and financial
status of the Company.
During the audit, we reviewed the Company's compliance with
the legislation of the Russian Federation and the Company's
internal regulations, compliance of the Reporting with
the content of operations and events so that their reliable
presentation was ensured. We examined the compliance
of the Company's financial and economic transactions with
the legislation in order to obtain reasonable and sufficient
assurance that the Reporting does not contain material
misstatements.
427
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 12REPORT OF THE AUDIT COMMISSION OF PJSC FGC UES FOR 2018 APPENDIX 12REPORT OF THE AUDIT COMMISSION OF PJSC FGC UES FOR 2018 We also examined the completeness of random disclosures:
zz compliance of the Company's Annual Report with
the requirements of the Regulations No. 454-P on
Information Disclosure by Equity Securities Issuers,
approved by the Bank of Russia on 30 December 2014;
zz compliance of the Company's accounting (financial)
statements with Federal Law No. 402-FZ on Accounting
of 6 December 2011 and with the Russian Accounting
Standards;
zz compliance of the Related Party Transactions Report
for the reporting year with the requirements of
Federal Law No. 208-FZ on Joint Stock Companies of
26 December 1995, and Order No. 4335-U on Setting Maximum
Amounts on Transactions of Joint Stock Companies
and Limited Liability Companies upon Exceeding of Which
Such Transactions May Be Recognised as Related Party
Transactions of the Bank of Russia of 31 March 2017.
II. ANALYSIS
As of the date of this opinion, the Company's 2018 Annual
Report, submitted for approval by the Annual General Meeting
of Shareholders, and Related Party Transactions Report
for 2018, have not yet been approved by the Company's Board
of Directors.
In the course of assessing the accuracy of the Reporting,
the Audit Commission relied, inter alia, on the first stage
results of the audit of the Company's financial and economic
activities for 2018, the opinion of the Company's auditor
Ernst & Young LLC dated 2 February 2019, the opinion of
JSC BDO Unicon based on the results of the technological
and price audit of the Reports on the Company's investment
programme implementation performed under Contract No.
497735 dated 29 December 2017.
In the reporting year, the Company's accounting methods
constituting the Accounting Policy 2018 complied with
the accounting legislation of the Russian Federation and with
federal standards.
increased by 5.1 % in the reporting year due to the net profit
of the reporting year, increase in the reserve capital and
bringing it up to 3.4 % of the authorised capital, and due to
the results of revaluation of non-current assets.
The Company's asset and liability recognition was performed
in accordance with the requirements of the legislation.
The results of the inventory were included in the accounting
(financial) statements of the Company.
The Company's accounting (financial) statements for
2018 were prepared in accordance with the accounting
reporting procedure established in the Russian Federation, in
all material respects.
As of 31 December 2018, the book value of the Company's
assets amounted to RUB 1,487,063 million. The Company's
assets increased by RUB 62,023 million (4.4 %) in 2018.
As of 31 December 2018, the value of non-current assets
amounted to RUB 1,266,954 million, which is RUB 16,180
million (1.3 %) more than the value of the Company's non-
current assets as of 31 December 2017. The increase in
the value of the Company's non-current assets was caused
by the increase in the value of fixed assets as a result
of commissioning of completely constructed facilities.
Concurrently, the cost of long-term financial investments
significantly decreased, mainly due to the sale of shares of
PJSC Inter RAO and PJSC Rosseti.
As of 31 December 2018, the share of current
assets accounted for 15 % of all assets, which is
RUB 220,108 million. Receivables constitute the largest part
(77 %) of current assets, which is RUB 169,856 million, including
long-term receivables (42 % of the current asset value) and
short-term receivables (35 % of the current asset value).
The value of current assets, in comparison with their value
as of 31 December 2017, increased by 26.3 % mainly due to
the increase in receivables.
As of 31 December 2018, the Company's equity is 73 %
and amounts to RUB 1,090,394 million. The Company's equity
Outside liabilities account for 27 % of the equity and liabilities.
Outside liabilities increased by RUB 9,201 million (14.1 %)
in the reporting year. As of 31 December 2018, they
amounted to RUB 396,669 million. The largest part of the
outside liabilities was constituted by borrowed funds (62 %
or RUB 246,709 million) and payables (18 % or
RUB 68,223 million) as of 31 December 2018. Borrowed funds
decreased by 10.1 % in the reporting year, while payables
increased by 25.2 %.
In 2018, the Company's activities resulted in the net profit
amounting to RUB 56,187 million, which is 32.6 % higher than
the net profit in the previous reporting period.
As of 31 December 2018, the net asset value was
RUB 1,091,037 million and exceeded the Company's
authorised capital. The net asset value increased by 5.1 %
in the reporting year.
The Company's financial stability indicators are within
the recommended values, which indicates stable financial
status.
The Audit Commission revealed no facts of violation
of the Russian legislation by the Company's financial
and economic activities which could significantly affect
the contents of the Company's financial statements.
The Audit Commission found no evidence of misinterpretation
of the information contained in the Related Party Transactions
Report for 2018.
The Company's Annual Report submitted for approval
by the Annual General Meeting of Shareholders contains
information provided for by Regulations No. 454-P on
Information Disclosure by Equity Securities Issuers, approved
by the Bank of Russia on 30 December 2014.
III. SUMMARY
In the opinion of the Audit Commission, as of 31 December
2018 the Company's accounting (financial) statements, in
all material respects, reliably reflect the Company's financial
position, results of its financial and business activities for
2018 and conform with the Russian accounting laws.
Besides, the Audit Commission also found no material
misstatement in the financial information contained in
the Company's 2018 Annual Report and in Related Party
Transactions Report for 2018.
The Company's Reporting includes the following documents
confirmed by the Audit Commission:
No.
Reporting form
Signing date/Board
review date
Number of sheets
per document
1.
2.
3.
4.
5.
6.
7.
Balance Sheet as of 31 December 2018
Profit and Loss Statement for 2018
Statement of Changes in Equity for 2018
Cash Flow Statement for 2018
Explanatory Notes to the Balance Sheet and the Profit and Loss Statement
for 2018 with appendices
Integrated Annual Report of PJSC FGC UES excluding appendices
Related Party Transactions Report of PJSC FGC UES for 2018
20 February 2019
20 February 2019
20 February 2019
20 February 2019
20 February 2019
undated
9 April 2019
2
2
2
2
62
259
54
This Auditor's opinion shall be considered together with all supported forms of the Accounting (Financial) Statements and
Explanatory Notes to the Balance Sheet and the Profit and Loss Statement for 2018 in text and tabular form, which are
integral parts of the Company's 2018 Annual Report 2018, as well as the Related Party Transactions Report for 2018.
Chairman of the Audit Commission
Members of the Audit Commission
M. Lelekova
E. Snigireva
A. Batalov
T. Zobkova
V. Khvorov
428
429
INTEGRATED ANNUAL REPORT FOR 2018 I PJSC FGC UES IAPPENDIX 12REPORT OF THE AUDIT COMMISSION OF PJSC FGC UES FOR 2018 APPENDIX 12REPORT OF THE AUDIT COMMISSION OF PJSC FGC UES FOR 2018
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