Sustainability Report 2019

Home , Beeline (brand), Chats (subgroup), Hot (Israel), Kaspiysk, Rosreestr, Rostekhnadzor

Delivering on Digital

SUSTAINABILITY REPORT 2019

SUSTAINABILITY REPORT 2019 Delivering on Digital ROSTELECOM'S SUSTAINABILITY REPORT 2019

Table of Contents

Chairman’s Statement ...... 4 E-government infrastructure ...... 130 Letter from the President ...... 6 Unified Public Services Portal ...... 130 2019 Highlights ...... 8 Integrated Identification and Authentication System ...... 132 Rostelecom’s Structure and Geography of Operations ...... 10 Unified System of Interdepartmental Our Employees Electronic Cooperation ...... 132 Our Environment 3 Smart City project ...... 132 5 4.3. Digital Equality Integrated Social Programme...... 134 ABC of the Internet computer literacy project We are Rostelecom for senior citizens ...... 134 3.1. The Company’s Approach...... 77 Growth distance learning and socialisation project 5.1. The Company’s Approach...... 163 1 3.2. Attractive Working Conditions...... 81 for children in orphanages and foster homes, as well 5.2. Environmental Initiatives ...... 167 Equal opportunities ...... 81 as children deprived of parental care...... 136 Waste Management ...... 168 Remuneration and incentives ...... 85 Learn the Internet — Manage It! Emission management ...... 172 Social benefits and compensation ...... 88 digital literacy project for Russian internet users ...... 138 Reduction of water consumption ...... 173 Area improvements ...... 175 1.1. Development Strategy and Business Model ...... 15 Improving working conditions...... 90 Social Impact Award Russia, 5.3. Energy Efficiency ...... 176 Development Strategy ...... 15 3.3. Corporate Culture and Internal Communications ...... 92 an international programme supporting Business Model ...... 20 3.4. Employee Training and Development...... 95 Energy consumption ...... 177 early-stage social entrepreneurs ...... 140 Energy efficiency programmes and initiatives ...... 178 Operating Review ...... 22 Investment in training ...... 96 Internet for Social Infrastructure Facilities project ...... 141 Management skill building programmes ...... 98 5.4. Fostering Environmental Culture ...... 182 1.2. Corporate Governance ...... 24 Computerisation of Orphanages project ...... 142 Rostelecom’s Corporate Governance Framework ...... 24 Professional skill building programmes ...... 99 5.5. Occupational Safety ...... 186 Project of the ProeKTOriYA All-Russian Forum Remuneration ...... 30 Digital skill building programmes ...... 100 Fire safety ...... 187 of Professional Navigation ...... 142 Risk Management ...... 33 Rostelecom’s Corporate Online University...... 101 Industrial safety ...... 187 1.3. Supply Chain ...... 38 3.5. Cooperation with the Public Education System...... 104 Children’s Technology Parks project Promoting the National SME Development Policy ...... 43 Engaging school students...... 104 promoting additional education ...... 143 1.4. Responsible Business Practice...... 44 Engaging with students...... 106 Educational programme in cyber security Employee Training ...... 44 Work experience placements and internships at the Sirius educational centre ...... 144 Feedback Channels ...... 46 at Rostelecom ...... 108 Safe Internet project for school students ...... 145 Conflict of Interest Management ...... 46 3.6. Ensuring Workplace Safety...... 110 4.4. Charitable Activities and Volunteering Projects...... 146 Our Customers Relations with Subsidiaries and Affiliates ...... 47 Employee volunteering project competition ...... 149 6 Public Endorsement of the Results Run and Help charitable sports project ...... 149 of the Implementation of the Anti-Corruption Midday volunteering project ...... 150 Charter of the Russian Business ...... 48 Exciting Readings volunteering project ...... 151 1.5. Protection of Human Rights ...... 49 Social telecoms project for the severely disabled ...... 152 6.1. The Company’s Approach ...... 191 6.2. Modern Digital Services ...... 195 Our Country Donor Day and donor initiatives ...... 153 Rostelecom for households ...... 195 4 Digital Education project to develop digital skills ...... 153 Corporate and government customers ...... 200 Digital Class project for school students ...... 154 Operators ...... 208 Digital location in the Manufaktoriya 6.3. Safe User Environment ...... 210 Our Sustainability Story children’s city of professions ...... 154 Cyber security at Rostelecom ...... 210 4.1. The Company’s Approach...... 119 Way to the Top, a project to prepare children Rostelecom Group’s cyber security services ...... 211 2 4.2. Rostelecom’s Involvement in Projects for social and professional life ...... 155 to Develop a Digital Economy in Russia ...... 124 NotJust Ceramics inclusive workshop Bridging the Digital Divide project ...... 124 charitable project ...... 156 Arranging for video surveillance and Support for volunteer activities and APPENDICES Our ESG priorities ...... 53 ensuring the operation of the broadcasting portal during environmental movements ...... 156 2.1. The Company’s Approach...... 54 the Unified State Examination and the Single Voting Day ...... 126 Let’s Help Together crowdfunding charitable 2.2. Strategic Objectives and Priorities 5G mobile network development in Russia ...... 127 programme to help severely ill children and seniors ...... 157 in Sustainable Development...... 56 Unified Biometric System ...... 128 About the Report ...... 216 2.3. Supporting the Global Sustainable Construction of the Sakhalin–Kuril Islands submarine Become a Santa charitable campaign ...... 158 Glossary ...... 220 Development Goals ...... 58 fibre-optic cable link ...... 129 Bravery Box charitable campaign to collect Membership of Associations...... 226 Contribution towards first priority SDGs ...... 58 Internet access and data services toys for children undergoing treatment Awards...... 227 Contribution towards second priority UN SDGs...... 64 for social infrastructure facilities ...... 129 in healthcare facilities ...... 158 Key Performance Indicators ...... 230 2.4. Stakeholder Engagement ...... 66 Connecting facilities of the Federal State-Owned Support for the KnowTeach socio-educational Rostelecom Against COVID-19 ...... 238 Stakeholder Engagement as Part Enterprise Russian Television and Radio Broadcasting project for children who undergo lengthy GRI Standards Table ...... 242 of the Report Preparation Process...... 72 Network to fibre ...... 130 inpatient treatment ...... 159 UNCTAD Indicators Table ...... 248 Opinion of The Rspp Board ...... 252 Feedback Questionnaire ...... 256

2 3 ROSTELECOM'S SUSTAINABILITY REPORT 2019

Chairman’s Statement

Dear Colleagues, 102-14 As demonstrated by our top positions in Rus- security and artificial intelligence, as well as many other sian corporate transparency indices, Rostelecom is strategic areas of technological progress. Rostelecom has been emphatically building best practices in corporate governance and As a responsible business, Rostelecom is expanding its reaffirming its status as a key partner transparency through disclosures under multiple in- range of suppliers to include more small- and medi- ternational and Russian standards and by reporting its um-sized enterprises, driving the creation of new jobs to government and society programme and project data. High standards of busi- while supporting entrepreneurship and the development ness ethics and open dialogue with stakeholders re- of micro- and small-sized enterprises across its footprint. in the digitalisation of key sectors main our core operating principles. The Company strives to improve the use of upstream of the national economy. Rostelecom has been consistently integrating the United and downstream resources while remaining fully com- In 2019, the Company successfully Nations Sustainable Development Goals into its practic- mitted to protecting the environment and preserving es, which is evidenced by our specific programmes and natural heritage. delivered on its ambitious projects for society, businesses and government. The In the current context, with society facing major eco- Company has been actively developing reliable tele- sustainability agenda. nomic, social and environmental challenges, initiatives coms infrastructure, including regional and cross-bor- embracing sustainability and corporate social respon- der, while providing equal access to high-tech digital sibility prove to be ever more effective. Rostelecom channels and services. remains strongly committed to these principles and is Rostelecom is one of the government's key partners confident about its future. On behalf of the Board of Di- for the Digital Economy of the Russian Federation pro- rectors, I wish to express my heartfelt gratitude to col- gramme. As Russia's only nationwide universal service leagues, employees and partners for their outstanding operator, Rostelecom has been making a considerable performance in 2019, and I feel confident about our fu- contribution to promoting economic, social and eco- ture success. logical links between urban, suburban and rural areas. The Company has been progressively expanding citizens' access to public services and other socially significant services, including healthcare, banking, insurance and finance. The 100 % consolidation of Tele2 Russia was the key highlight of 2019. Considering the growth of innovative products and technologies, 5G in particular, this deal will further enhance our contribution to improving the quality and accessibility of our services for citizens. Rostelecom's priorities currently include digital govern- Sergey Ivanov, ment, the Internet of Things and the digitisation of mu- Chairman of the Board, nicipal services under the Smart City programme, cyber PJSC Rostelecom

4 5 ROSTELECOM'S SUSTAINABILITY REPORT 2019

Over the course of the year, Rostelecom We strive to provide comfortable working the challenges of the times we live in. Draw- Letter Dear Colleagues and Partners, continued to support ambitious national conditions for our people and create oping on our experience, cutting-edge solu- programmes aimed at building the digital portunities for development and self-fulfil- tions and technology developments, we are from the President In 2019, Rostelecom Group cemented economy of Russia. These include the Dig- ment. In 2019, over 55 thousand employ- confident about our future, and are doing its position as a key provider of digital ital Economy of the Russian Federation na- ees completed upskilling courses at our our best to effectively address the challeng- tional programme, building and developing Corporate Online University. To attract and es posed by digital transformation with the services for society, businesses and e-government infrastructure, cyber securi- retain top talent, Rostelecom has devel- best interests of all stakeholders in mind. I government and made considerable ty, digital transformation of healthcare and oped and approved an employer branding am confident that 2020 will bring us am- education, providing broadband connec- programme for 2019–2020. We are proud bitious new initiatives and projects, which progress towards the digital tivity to social infrastructure facilities, and to announce that Rostelecom's efforts in will maintain our leadership and deliver a transformation of Russia. Rostelecom other programmes. 2019 were recognised by the inclusion in new quality of life for existing and future In 2019, we came close to achieving our key the 2020 Bloomberg Gender-Equality In- generations. has not only consolidated its leadership goal in the Bridging the Digital Divide proj- dex (GEI). in the markets for cloud services, data ect — to provide free-of-charge Wi-Fi in- Words cannot express how much we value ternet access for 14,000 small rural settle- the engagement and contribution of our em- centres and broadband and Interactive ments across Russia. During the last year, ployees to the Company's socially-orientat- TV services but has also considerably we also delivered high-speed connectivity ed initiatives: they are actively involved in to over 8,000 healthcare centres and over volunteering and charitable events across expanded its range of high-tech 7,000 remote social infrastructure facilities the country on a regular basis. In 2019, Rost- services, offering innovative digital across 44 Russian regions. elecom Group's total spending on charitable The Rostelecom-operated nationwide Pub- and volunteering initiatives exceeded RUB solutions across all segments. lic Services Portal celebrated its 10th an- 176.6 million, but most importantly, our em- niversary in 2019, with its user base now ployees take the lead in organising various exceeding 100 million people. The portal Good Deeds projects, which include not has become one of the most popular dig- just digital initiatives, but also social, cultural, ital interfaces between government and sports and environmental projects. citizens, regardless of their place of res- With the direct support of its employees, idence, and continues to add electronic Rostelecom continues to consistently roll services, with over 29 thousand currently out its own nationwide Digital Equality so- Through the consolidation of 100 % of Tele2 available to users. cial programme, which encompasses our Russia, the mobile market's fastest growing largest initiatives. The programme's goal player, Rostelecom became Russia's largest This success would not be possible with- remains unchanged — improve the quali- integrated provider of digital services and out our employees, who remain central to ty of life in Russia by removing digital bar- significantly strengthened its competitive achieving our goals. In 2019, the Group's riers and providing access to communica- position in the Russian telecommunications headcount came close to 127 thousand peo- tions and modern digital services to older market in 2019. In 2020, we are planning to ple, each of them contributing to building a people, children in orphanages, children present an updated development strategy digital and sustainable Russia. from disadvantaged families and children to our stakeholders. Occupational health and safety remains a with special needs. We are heavily invested in achieving sus- top priority for us. In 2019, the Company Rostelecom has been unwaveringly commit- tainability and are committed to do our best adopted a new HSE and fire safety policy, ted to addressing environmental and sus- to support nationwide sustainability in the which outlines the key objectives, principles tainability challenges, with the aim to mini- global context. In 2019, we continued to in- and focus areas needed to create safe work- mise our environmental footprint and ensure corporate the United Nations Sustainable ing conditions, keep all employees protect- a sustainable and comfortable world for fu- Development Goals into all of Rostelecom's ed and healthy and ensure overall safety in ture generations. In 2019, our environmen- activities, all the while considering the im- these areas. In 2019, Rostelecom joined Vi- tal expenditure totalled RUB 159.6 million. pact of every social project, whether na- sion Zero, a global campaign for zero acci- Mikhail Oseevsky, tionwide or local, on achieving the priori- dents, in order to enhance its occupation- The current requirements for Rostelecom's President tised SDGs and related targets. al safety culture. sustainability across all areas are down to of PJSC Rostelecom

6 7 ROSTELECOM'S SUSTAINABILITY REPORT 2019

2019 Highlights

• 30 January: The number of • 26 April: Rostelecom’s Board • 15 July: PJSC Rostelecom and • 11 September: Rostelecom • 28 October: Rostelecom • 16 December: The Unified 01 the Public Services Portal us- of Directors decided to con- Rostec State Corporation set provided video surveillance presented Smart Helmets, a Public Services Portal cele- January ers increased by 30% in 2018. vene the Annual General up LLC Digital Medical Ser- on the Single Election Day for preventive industrial risk man- brated its 10th anniversary. Shareholders’ Meeting and vices (Tsifromed) to consoli- elections at different levels of agement system promoting • 27 December: The Bank of approved the new version of date the two companies’ best government. safe working conditions, to Russia registered Rostele- the Dividend Policy. digital healthcare capabilities. • 19 September: Rostelecom Arkhangelsk-based industrial com’s follow-on offering of • 5 February: At an open meet- • 25 July: Rostelecom acquired and Rostec partnered to enterprises. ordinary shares as part of 02 ing of the Innovation and a 100% stake in LLC Prome establish the Architectural the deal to consolidate 100% February R&D Directors Club, Rostele- tey, a communications oper- Council to implement the 5G shares in Tele2 Russia. com presented the main ap- 27 May: Rostelecom won the ator in Saint Petersburg and development agreement with proaches to developing the • 05 award of the Russian Union the Leningrad Region. the Russian Government. digital transformation strategy. May of Industrialists and Entre- • 29 July: Rostelecom — Data • 6 November: Rostelecom em- • 27 February: Over 85 thou- preneurs (RSPP) for the Processing Centres commer- 11 ployees were named the best sand senior citizens complet- high quality of sustainability cially launched the Udomlya November fibre infrastructure building ed trained under the ABC of reporting. data centre — the largest experts in Eurasia. the Internet programme in project under the strategy for • 15 October: Rostelecom • 13 November: Rostelecom an- 2018. building a national geograph- 10 topped the ranking in the October nounced the consolidation of ically distributed network of Russian commercial data 100% of Tele2 Russia to be- data centres implemented centre market according to 1 June: Rostelecom scrapped come the largest integrated • by Rostelecom jointly with iKS-Consulting. the charges for calls made provider of digital services in • 4 March: The Company ac- 06 Rosenergoatom. 18 October: In the Republic of June from universal service pay- • Russia. 03 quired LLC Infolink, one of the Buryatia, Rostelecom installed March phones to any landline num- • 30 July: Rostelecom complet- leading internet providers in th • 18 November: Following the ed the acquisition of a stake its landmark 10,000 access the Chuvash Republic. bers across Russia. announcement regarding the in LLC National Technologies. point under the BDD project. KEY EVENTS • 5 June: Rostelecom closed a consolidation of 100% of • 22 March: Rostelecom joined 20 October: Rostelecom re- AFTER THE REPORTING PERIOD deal to acquire a 51% stake • Tele2 Russia, Fitch affirmed the Association of Big Data ceived the Crystal Pyramid in the charter capital of LLC Rostelecom’s investment- Market Participants. 2019 award for its achieve- CoreClass, the owner and grade rating of BBB–. • 13 January: Rostelecom • 26 March: Rostelecom and ments in three categories. developer of the Safe City • 1 August: Rostelecom launched 01 closed the deal to acquire LUKOIL presented a pilot proj- Rostelecom’s HR management • 20 November: Rostelecom’s hardware/software platform the Game Market platform with January LLC DataLine. ect to monitor and control oil 08 team was recognised by the Board of Directors approved solution. August more than 2,200 games from and gas equipment remotely. expert community as HR Team the acquisition of LLC • 21 January: Rostelecom 48 Russian and international • 7 June: Rostelecom and of the Year and awarded the DataLine. was included in the 2020 developers. ROSATOM signed a mem- Grand Prix of the Crystal Pyr- • 21 November: Following the Bloomberg Gender-Equality orandum of cooperation to • 5 August: Rostelecom ac- amid 2019. announcement regarding Index (GEI). develop the Russian digital quired AllianceTelecom, one • 9 April: Rostelecom officially 21 October: Rostelecom be- the consolidation of 100% economy across a number of of the largest internet and pay • 04 launched The Victory, a new came the single operator for of Tele2 Russia, S&P Global April areas. TV providers in the Primorye channel in its TV network, fo- Rosenergoatom’s nuclear Ratings affirmed Rostelecom’s Territory. cused on the Great Patriotic • 10 June: ACRA affirmed the power plant data network. credit rating at BB+. War of 1941–1945. Company’s credit rating at • 30 August: Fitch affirmed Ros- 22 October: PJSC Rostele- • 17 March: Rostelecom com- AA(RU) with a stable outlook. telecom’s investment grade • • 10 April: Rostelecom was com’s Sustainability Report 03 pleted the consolidation of rating of BBB–. March ranked first by number of 2018 won the international 100% of Tele2 Russia. virtual PBX customers in the MarCom Award by the Amer- • 30 March: VTB Bank (PJSC) 2018 TMT Consulting rating. ican Association of Marketing • 11 December: Rostelecom, and PJSC Rostelecom regis- • 15 April: Rostelecom passed • 2 July: Rostelecom’s video sur- and Communication Profes- 12 MegaFon, VimpelCom and tered LLC Big Data Platform, the landmark of 100 thou- 07 veillance system transmitted a • 3 September: Rostelecom sionals (AMCP). The Compa- December MTS signed a memorandum which will focus on the devel- sand home video surveillance July total of 4.6 million hours of live 09 rolled out a system to monitor ny was named the Platinum of understanding to set up opment and monetisation of cameras sold since the sales video feeds during the 2019 September and optimise waste collection Winner in the Print Media — a joint venture to free up 5G products based on big data launch. Unified State Examination. on the Yamal Peninsula. Annual Report category. spectrum. technology.

8 9 ROSTELECOM'S SUSTAINABILITY REPORT 2019

Rostelecom telecoms Rostelecom’s Structure has direct networks and Geography of Operations connectivity with150 in 70 countries

Rostelecom is Russia’s largest Major subsidiaries and aliates LLC T2 RTK Holding integrated provider of digital LLC Rostelecom — Retail Systems services. JSC RTComm.RU PJSC Bashinformsvyaz LLC SafeData JSC RT Labs Far East Rostelecom comprises seven macroregional branches LLC Rostelecom Information Technologies (MRFs) and several dozen subsidiaries and aliates 1 JSC MC NTT 7 engaged in providing services across Russia. LLC Regional Information Centre LLC Solar Security PJSC GIPROSVYAZ JSC Severen-Telecom CJSC GNC-ALFA

Joint ventures JSC Digital Television Russia (www.digitalrussia.tv) Key events of 2019 across Rostelecom macroregional branches JSC Macomnet (www.macomnet.ru)

Centre Ural 1 Rostelecom won nine online tenders oated 5 Rostelecom commercially launched its rst regional by the Russian Ministry of Digital Development, core data centre outside the Central Federal District — North-West Communications and Mass Media to implement the hub was opened in Yekaterinburg under the relevant Siberia projects under the Digital Economy national federal project. 2 programme in Russia’s Central Federal District. Ural Centre Volga 6 North-West Siberia 2 In October, Rostelecom completed stage 2 upgrade 6 Rostelecom provided video surveillance and 3 5 of dedicated high-speed communications systems communications services for the construction 1 in the Northwestern Federal District. sites of new buildings that will house the people The upgrade will boost their data speed aected by the summer 2019 ood. to 200 Gbps.

Volga Far East 3 With the Network as a Service (NaaS) project rolled 7 Rostelecom completed the Sakhalin–Kuril Islands South out in the Volga Region, Rostelecom now oers local Submarine FOCL. Iturup, Kunashir and Shikotan Islands mobile operators infrastructure and technical solutions now have unlimited internet access and advanced 4 for mobile coverage of smaller communities and digital communications services. adjacent highways.

South 4 Rostelecom presented Taganrog as the rst smart city in the south of Russia. 1 For more details on the list of material subsidiaries included in the consolidated nancial statements of Rostelecom see PJSC Rostelecom’s Annual Report 2019.

10 11 ROSTELECOM'S SUSTAINABILITY REPORT 2019

SUSTAINABILITY REPORT Number of high-speed access Revenue share 2019 points installed in small communities of content and under the BDD project digital services

We are Rostelecom

12 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM We are 1 Rostelecom 1.1 Development Strategy and Business Model

DEVELOPMENT STRATEGY 2019 — DELIVERING ON DIGITAL 102-7 201-1

Metric 2016 2017 2018 2019 2019/2018, % transforming the Company from a telecoms operator into a digital partner for house- Revenue, RUB bn 297.4 305.3 320.2 337.4 5 holds, businesses and government custom- Share of revenue from content and digital services, % 44 48 55 59 4 pp. ers. This strategy has already proved effec- OIBDA 1, RUB bn 96.8 2 96.7 100.9 106.5 6 tive in responding to the explosive growth in Free cash flow, 3 RUB bn 13.3 20.4 14.8 22.8 55 digital services and the stagnation in tradi- 102-1 102-2 102-4 102-6 tional communications services by enabling Net profit, RUB bn 12.2 14.1 15 16.5 10 Rostelecom to expand its customer base, im- CAPEX, excluding government-sponsored programmes, RUB bn 53.8 55.9 59 71.8 22 PJSC Rostelecom is Russia's largest integrat- In 2019, Rostelecom continued to implement prove customer loyalty and deliver consis- 4 ed provider of digital services and solutions its strategy, which was approved in 2018. Ros- Broadband and VPN subscribers, million 12.3 12.7 13 13.2 2 tently stronger financial performance. operating across all market segments. Ros- telecom's Strategy 2018–2022 is aimed at Pay TV subscribers, million 9.3 9.8 10.2 10.4 3 telecom is a recognised technology lead- Revenue growth in content and VAS services, % 28 43 42 35 — er in innovative solutions for e-government Backbone network capacity, Tbps 13.7 15.5 20.3 25.2 24 systems, mobile communications, cyber se- Data centre racks, thousand 4.1 5.3 5.9 11.5 5 95 curity, data centres, cloud computing, bio- Delivering on digital Headcount, thousand 142.5 133.7 128.6 126.9 (1) metrics, healthcare, education and utilities. The Company is a key participant in the Dig- We are confident that by delivering and achievements — our employees, Salary expenses, RUB bn 66.0 67.2 69.8 74.7 7 ital Economy of the Russian Federation pro- customer excellence and improving customers and business partners. We Investment in training, RUB m 452.6 463.6 496 575.4 16 gramme implementing nationwide techno- the accessibility of communications put a high value on the academic prog- Contributions to Telecom-Soyuz and Alliance private pension funds, RUB m 703.6 163.5 756.7 1,020 35 logical and IT projects. and digital services we contribute to ress of school students and senior economic growth and sustainable citizens enrolled in our programmes Health and safety expenses, RUB m 550.6 640.8 697.8 772.8 11 Rostelecom comprises seven macroregional development of Russia. Bridging the and care about the well-being of many Income tax, RUB m 4,692 4,856 4,427 2,047 (54) branches (MRFs) — Centre, North-West, Vol- digital divide, providing access to the millions of Russian families, who can Other taxes, RUB m 5,079 4,661 5,747 5,114 (1) ga, South, Ural, Siberia, and Far East, as well latest internet technology, helping all stay connected thanks to our daily work. as subsidiaries and affiliates engaged in pro- age categories to develop their dig- Member fees, charitable giving, payments to trade unions, RUB m 660 697 767 821 7 viding services across Russia. ital skills and supporting vulnerable In this Report, we have attempted to Environmental investments and expenditures, RUB m 128.8 104.6 111.9 159.6 43 groups — all these efforts substantially cover all aspects of Rostelecom Group's change people's lives for the better. activities, not only highlighting its busi- Therefore, as a high-tech company, ness performance but also focusing we continue to harness technology on its role in society, its sustainability and innovation to serve the needs of efforts and corporate social respon- every Russian citizen. While building sibility. Therefore, this Sustainability our digital capabilities, we celebrate the Report 2019 will be themed around 1 Rostelecom calculates OIBDA as operating income before depreciation, amortisation and one-off items. In 2018, Rostelecom changed the OIBDA calculation method- people behind our digital successes our digital successes ology by excluding expenses related to Rostelecom’s private pension fund programme. For historical OIBDA numbers for 2016–2019 see the OIBDA breakdown table in the Financial Overview section of PJSC Rostelecom’s Annual Report 2019. 2 OIBDA for 2016 is provided as reported in 2016. 3 Starting from 2019, free cash flow (FCF) is calculated based on the statement of cash flows as the net cash from operating activities, net of CAPEX, plus proceeds from sale of property, plant and equipment and intangible assets, plus interest received, plus subsidies from the government. The 2016–2018 comparatives have been presented as reported in the corresponding period. 4 Including VPN B2B subscribers in 2018–2019 and excluding them in 2016–2017. 5 Following the purchase of LLC DataLine. 6 For more details on the list of material subsidiaries included in the consolidated financial statements of Rostelecom see PJSC Rostelecom’s Annual Report 2019.

14 15 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

Rostelecom’s strategic objectives and priorities for 2018–2022 102-52 Rostelecom Group is committed to viding solutions for a wide range of applica- • The benefit of having the government as ensuring the sustainable development of its In 2019, Rostelecom won the Change tions with superior customer service. a reliable customer, including for long- business with a particular focus on its ESG 1 term nationwide initiatives Management. Visionaries national Prior to the consolidation, Tele2 Russia had performance. The Company strictly complies annual award in the Sustainable Devel- implemented its own strategy in the mo- A relevant ecosystem will be built around each Developing product ecosystems with all applicable Russian laws, is guided by opment Strategy Reporting category. bile market, teaming up with Rostelecom on of our customer segments to meet both cur- and improving customer experience the principles of transparency and account- a number of projects. rent and future customer needs. • Developing product and service ecosys- ability, and complies with the highest stan- tems around customers dards of ethical behaviour when engaging Long-Term Development Programme with external and internal stakeholders. In its • Ensuring high standards of customer In 2019, we continued implementing Rostele- 4-5% public corporate reporting, Rostelecom is service com Group's Long-Term Development Pro- accelerating revenue CAGR also committed to a high level of disclosure We are increasing the integration of the Unit- gramme for 2018–2022, developed in ac- • Developing and enhancing partner on assessing and managing its economic, ed Nations Sustainable Development Goals 2 cordance with the directives of the Russian platforms social, environmental and financial impacts. (SDGs) into our activities with each passing year. We are also enhancing our focus on Government and guidelines of the Russian • Scaling-up traditional business We publish our Annual Report and Sustain- Ministry of Economic Development. ability Report on an annual basis in line with making SDGs part of our day-to-day oper- best practices and leading international re- ations and our new social projects and pro- The scope of the Long-Term Programme cov- porting standards. grammes. ers all aspects of Rostelecom's activities in Technology platform upgrade In 2018, we reviewed our strategic sustainabil- consolidating its market position, driving in- • IT landscape upgrade and centralisation ity priorities and benchmarked them against frastructure development, supporting inno- • Expansion of fibre networks the 17 UN SDGs. The review identified the vation-driven growth and improving business + Rostelecom's Annual Report 2018 sustainable development goals that are the performance. Adequate resources were allo- 32% was awarded in the Best Corporate most relevant to our business and have the cated to support the activities set out in the OIBDA margin Governance Disclosure and the Best greatest priority for Rostelecom, enabling Long-Term Programme. These activities are Human capital development Strategy and Investment Story cat- us to better structure our efforts. In 2019, well balanced to reflect the financing capa- nd • Building digital skills and capabilities egories at the 22 Annual Reports the Company moved further in this import- bilities of the Company. Contest organised by the Moscow ant direction and used an in-depth analysis • Staff retraining and internal migration Exchange. to identify SDG targets that have the most Developing product ecosystems Adaptation of approaches to staff • relevance for Rostelecom within each first and improving customer experience development priority SDG. 3 For more details see the Our Rostelecom’s strong position across all seg- • Corporate culture improvements to meet Sustainability Story section of this Report. ments and its unique wealth of expertise digital company requirements make it well-positioned for building a digi- PJSC Rostelecom's Sustainability Updated development strategy tal ecosystem and achieving the Company’s down to Report 2018 won the international Following the closure of the deals to con- ambitious goals: Operational excellence 17% MarCom Award by the American As- solidate 100 % of mobile operator Tele2 Rus- CAPEX/revenue • Leadership in high-opportunity markets sociation of Marketing and Commu- sia and provider of cloud services DataLine, by market share and customer acquisition • Continued implementation of the oper- (excluding government-sponsored nication Professionals (AMCP). The Rostelecom plans to reveal its updated de- rate ational efficiency programme programmes) Company was named the Platinum velopment strategy in 2020, aimed at trans- Real estate portfolio optimisation Winner in the Print Media — Annual • Secure, fault-tolerant, high-speed IP • forming the Company into Russia's largest Report category. network with wide geography, covering • Improved decision-making and business integrated provider of digital services, pro- over 37 million households processes

2 For more details on UN SDGs see www.un.org/sustainabledevelopment/ru/sustainable-development-goals/. 3 A set of relevant SDG targets was determined for each of the 17 global UN goals. Each target is expected to contribute to the achievement of the set goals by the global community. A total of 169 targets were identified to ensure the achievement of the 17 SDGs. The goals and targets drive the integration of ESG aspects, and 1 Environmental, social, governance aspects — environmental and social factors, and corporate governance practices. recognise the linkages between them in ensuring the sustainable development of our planet.

16 17 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

• Increase international market shares: rev- Employees are central to the Company's busi- Ecosystems 102-2 102-6 enue retention in the existing Central Asia ness development: and CIS markets, boost direct sales and • Up to 20 % of total workplaces are slated enter new markets. Households B2B Strategic goals: for > 80 % automation up to Rostelecom's ecosystem around retail cus- • Strengthen technology leadership in Technology platform upgrade • Gen Zs will make up 20 % to 25 % of total workforce by 2022 20% tomers is being built around basic products traditional markets, switch to fibre and We aim to extend our technology leader- of work places are to be such as broadband, IPTV and telephony. develop SDN networks ship by enhancing our network infrastruc- • Growing percentage of digital natives in robotized by over 80% • Focus on major customers (acquiring ture and IT systems. the workforce B2C Strategic goals: federal-level customers and top-100 Strategic goals: • Demand for digital talent • Bring connectivity to new-build proper- customers in every region), improve mar- • Expand the backbone network to prepare ties at the construction phase, thereby gins by customising product offers and Operational excellence it for heavy content delivery and ensure securing high service penetration rates transforming technical support it meets new speed requirements Internal operational efficiency will remain the and creating potential for partnerships • Leadership in the SME market through Company's top priority throughout 2022. Optimise the access network to improve + with other operators in promoting Smart • best-in-class bundled solutions and en- Strategic goals: 20 City initiatives quality, reduce outages and provide con- hanced customer touchpoints RUB billion nectivity for the Internet of Things / Smart • Promote OTT video and consolidate mar- • Real estate portfolio optimisation expected effect from improving • Aggressive growth in new and adjacent Home / Smart City devices ket position in this segment Continued implementation of the oper- operational efficiency over markets • Adopt NFV / SDN to enable better net- the period up to 2022 • Increase profitability through anchor • ational efficiency programme work control and reduce operating and products B2G Strategic goals: • Improved decision-making maintenance costs • Expand the mobile base by selling con- • Develop application services: E-Govern- The economic benefit from continued oper- Enhance the service platform to stream- verged bundles ment, Education, Healthcare, Geodata, • ational efficiency improvements will total RUB line the development and customisation Energy, and Security 20 billion in incremental revenue for the pe- • Develop a new product ecosystem: Smart of product offers Home and Online Education solutions • Grow the existing Smart City (Area) busi- riod until 2022. Migrate to a target IT architecture to im- ness: Safe Roads, Video Surveillance, • For more details on the implementation of our • Improve customer satisfaction, the quality prove control of product launches and Emergency Management Systems, En- development strategy and strategic priorities of services and customer service. marketing activities ergy, and Public Address Systems see PJSC Rostelecom's Annual Report 2019. • Transform the IT landscape to automate • Contribute to the optimisation of national sales, connection, customer service and Corporate and government ICT infrastructure: Smart City unified na- B2O Strategic goals: maintenance processes customers tional cloud platform and other initiatives • Develop the О2О project: provide in- Rostelecom's ecosystem targeting corpo- • Provide support to other government ini- frastructure maintenance services for Human capital development rate customers is based on anchor prod- mobile and fixed-line operators, enable tiatives: Bridging the Digital Divide (BDD) We are strongly focused on developing hu- ucts such as broadband, data centres, vir- infrastructure for 5G programme, programme to connect pub- man capital. Our employees are central to tual PBX and cloud services. lic healthcare providers and other social • Standardise Rostelecom's infrastructure our business development, as the main as- Rostelecom will remain the key partner of infrastructure facilitie. services: development of a single cata- set and key driver of Rostelecom's digital the Digital Economy of the Russian Federa logue of products and services, elimi- transformation. tion national programme. nating gaps in infrastructure accounting Strategic goals: The ecosystem for government custom- Operators • Develop and optimise backbone network Help employees to fulfil their full potential ers is based on anchor products such as Rostelecom positions itself as a single digi- infrastructure: the Transit Europe — Asia • e-government solutions, broadband and all tal infrastructure operator for other telecoms (TEA) cable system to improve connec- • Improve employee performance types of telephony services, as well as ser- operators, with an offering based on anchor tivity between Russia, Europe and Central • Transform employees into change agents vices for the public education and health- products such as voice and IP transit, line Asia, with speeds between 2 Tbps and throughout the organisation while main- care systems. leases and IP VPN services. 4 Tbps taining their engagement levels

18 19 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM Business Model

Resources

Finance Employees Brand and reputation Environment

RUB bn — Revenue thousand people 2 in top-of-mind awareness RUB m OIBDA — RUB 106.5 bn Total headcount in broadband Environmental .4 FCF — RUB 22.8 bn .9 in top-of-mind awareness .6 investments 337 CAPEX1 — RUB 71.8 bn 126 No1 in Pay TV 159 and expenditures

Strategic priorities Consolidation of 100% of Tele2 Russia sets new strategic priorities

Human capital development Development of digital service Increase in labour and customer service ecosystems productivity by 7% B2C B2O Smart Home Insurance 12.2 m broadband subscribers Voice and IP transit Technology platform IPTV Telemedicine 5.5 m IPTV subscribers Line leases upgrade OTT Video Mobile 37 m households IP VPN Higher backbone network Games Broadband connected to bre Infrastructure maintenance capacity at 25.2 Tbps Antivirus Fixed-line services for mobile and Cloud software MVNO xed-line operators Operational excellence Online education Video surveillance Cost savings Financial products Connectivity with more than RUB 16 bn 150 telecoms networks in 70 B2B/G countries Data centres and cloud Business: Government: Partnerships with 50 national solutions + DataLine 65% of customers connected 11.1 thousand communities and international xed-line Virtual PBX to bre connected under the BDD and and mobile operators Corporate TV 1.1 m broadband and VPN project Risk management Federal Wi-Fi subscribers 64 m veried accounts on the 350 Gbps capacity growth Information security 11.5 thousand data centre Public Services Portal for the Transit Europe–Asia racks 50% growth in revenue from cable system Value creation Smart City projects in 2019

Shareholders Employees Government Society Customers

RUB per share RUB m RUB bn RUB m Advanced, high-performance 1 Excluding government-sponsored Total dividend Salary Aggregate taxes Member fees, charitable giving, programmes. .2 digital ecosystems covering 2 According to Brand Health 5 for 2019 106 expenses 7.1 in 2019 821 payments to trade unions a wide range of tasks for Tracking (BHT) study by IRC. private, business and Investment in training — RUB 575.4 m government customers

20 21 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

OPERATING REVIEW Revenue by segment In 2019, we have updated PJSC Rostele- com’s Dividend Policy. Our goal is to allocate В2С B2B/G to dividend payouts on ordinary and prefer- ence shares for 2018–2020 at least 75% of the Company’s FCF in each reporting year and ensure that the annual dividend per or- In 2019, Rostelecom continued expanding dinary share is at least RUB 5. the digital segment of its business, which resulted in a revenue increase of over 5 % to by 3 by 16 RUB 337.4 billion. This was achieved through RUB billion or up 2%: RUB billion or up 13%: well-coordinated efforts across all custom- year-on-year revenue growth year-on-year revenue growth er segments involved in the digital transformation and by the promotion of advanced Revenue by customer segment digital services. Fibre broadband revenue Growth in revenue from growth: up 9 %, i.e. 2x faster broadband and VPN: up 10%, The digital segment has become the steady 42% than the market or by RUB 4 billion main driver of business growth, expanded by 13 % year-on-year to RUB 200 billion. The Year-on-year growth 16% 1% growth was primarily driven by significant More than 2x revenue in revenue from the Gaming achievements in the public and corporate growth in the Cyber Security tariff: up 45% segments (up 13 % year-on-year) and retail segment business (up 2 % year-on-year). Year-on-year growth in revenue from the Home Video Growth in revenue from the Surveillance service: 2x Video Surveillance cloud- based service: up 59% Year-on-year mobile revenue growth: 2x, driven by the Growth in revenue from the rollout of a truly converged Virtual Data Centre service: 41% proposition across Russia up 56% 2 — absolute leadership by data centre rack count B2C В2В/G B2O Growth in revenue from the Other B2О Virtual PBX service: up 57%, driven by the market-leading customer base The O2O project 1 generated RUB 2 billion in revenue Growth in revenue from the from maintenance of MVNO services: up 80%; num- For more details on the key products and 161 thousand km of fibre and ber one in the B2B segment, services of the Company and on our 2019 75 thousand base stations with a 56% market share 3 performance across customer segments see the Our Customers section of this Re- The capacity of Transit Approximately 30% of Solar port and PJSC Rostelecom's Annual Re- Europe–Asia was expanded appScreener revenue is gen- port 2019. 1 Operator to Operators project. to 3 Tbps erated by international sales 2 According to iKS-Consulting data for 2019. 3 According to TMT Consulting data for 2019.

22 23 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

1.2. Corporate Governance

ROSTELECOM’S CORPORATE GOVERNANCE FRAMEWORK Corporate governance self-assessment • the Board of Directors (elected by the Corporate governance General Shareholders’ Meeting to guide Rostelecom has an efficient corporate governance framework in place, Since 2015, Rostelecom has conducted framework the Company’s strategic management) in line with Russian laws, the Rules of Moscow Exchange and global self-assessments of its corporate governance by benchmarking its standards against the the President and the Management Board ++ best practices. We consistently enhance our corporate governance • while ensuring protection of shareholder and other stakeholder rights. key provisions of the Corporate Governance (appointed by the Board of Directors Code. In 2019, the assessment scored our to manage the Company’s day-to-day 7 Principles Key policies corporate governance at 93%, much higher operations). (advanced corporate governance practice) — corporate governance • Balance between the interests of PJSC Rostelecom has in place 17 policies and internal regulations 1 governing its corporate than the minimum 65% requirement of the rating assigned by the Russian shareholders, management and governance system, 8 of which were revised in 2019. Federal Agency for State Property Manage- Institute of Directors 2 stakeholders ment (Rosimushchestvo). Equal treatment of all shareholders • GOVERNING BODIES and protection of their rights Key corporate governance policies of PJSC Rostelecom

• Accountability of the Board of Di- Document name Last effective date rectors, the President and the Man- agement Board to shareholders Charter 14 June 2019

• Informational and financial trans- Regulations on the General Shareholders’ Meeting 14 June 2019 102-18 102-22 102-26 parency Regulations on the Audit Commission 18 June 2018 In accordance with the Charter, Rostelecom

Regulations on the Board of Directors 18 June 2018 is governed by:

Regulations on the President 18 June 2018 • the General Shareholders’ Meeting Priorities Regulations on the Management Board 18 June 2018 • Focus on stakeholder interests Corporate Governance Code 27 December 2007 and relations Corporate governance level • Compliance with business conduct Code of Ethics 15 October 2019 and ethics Anti-Corruption Policy 6 December 2019

• Timely and accurate information Internal Audit Policy 26 April 2019 Minimal requirement 65% disclosure Risk Management Policy 24 November 2015 Corporate social responsibility Social responsibility, • 87% Environmental Policy 2 April 2019 business ethics Information Disclosure Policy 30 September 2015 Risk management, Dividend Policy 26 April 2019 internal control 100% Enhancement focus and audit Policy of Access to Insider Information 28 October 2015

• Continuous improvement of inter- Transparency Regulations on receiving, reviewing and retaining complaints and 2 October 2008 97% nal controls and audit claims related to accounting, accounting internal control procedures, and information disclosure fraud, audit examinations and the Code of Ethics compliance • Continuous improvement of corporate governance practices Regulations on the Corporate Secretary and the Corporate 13 September 2019 Secretary’s Office Executive management 100% • Electronic voting at General Shareholders’ Meetings Board of Directors 87% • Introduction of an IT system to automate the Management Board and Committees’ processes 1 For more details on internal corporate governance documents see the Internal Regulations section on Shareholder rights 95% PJSC Rostelecom’s website 2 Rating confirmed in April 2020.

24 25 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

General Shareholders’ Meeting Board of Directors Agenda items discussed by the Board of Di- No conflicts of interest involving members rectors: of the Board of Directors were identified in The General Shareholders’ Meeting is the Company’s supreme governing body. Its activi- 102-24 The Board of Directors is a collec- 1 2019. Board members fill in quarterly ques- ties are regulated by Russian laws, Rostelecom’s Charter and the Regulations on the Gen- tive governing body responsible for the Com- • Approval of transactions restricted by eral Shareholders’ Meeting. 2 the Charter tionnaires listing all potential drivers of a con- pany’s growth strategy and general manage- flict of interest situation. ment. The powers of the Board are detailed • Management of subsidiaries and affiliates Rostelecom’s Annual General Shareholders’ Meeting was held on 14 June 2019, and the For more details on the Board of Directors in the Charter and the Regulations on the Remunerations Extraordinary General Shareholders’ Meeting was held on 18 December 2019. • and Committees’ performance report see Board of Directors 3. • Approval of internal documents the Corporate Governance section of PJSC Corporate governance framework For biographical details of all members of the • Agenda of General Shareholders’ Meet- Rostelecom’s Annual Report 2019. Board of Directors see PJSC Rostelecom’s ings Assessment of the Board of Directors’ General Annual Report 2019. Organising the activities of the Board of Audit External • performance Shareholders’ Commission auditor We have in place induction procedures for Directors and its Committees Meeting 102-28 In 2019, an independent consultant, newly elected members of the Board of Di- • Strategy and development JSC VTB Registrar, assessed the overall per- rectors. New members become familiarised • Audit, risk management and internal formance of the Board of Directors, the per- with all of the Company’s internal documents control formance of its Committees and each Board Corporate regulating the proceedings of the Board, and Secretary • Management of non-core assets member, including the Chairman. The aver- hold meetings with members of the Man- • Mergers and acquisitions age score for the Board of Directors’ perfor- agement Board as well as internal and ex- mance assessment was 4.96 out of 5. The in- Approval of interested party transactions ternal auditors. • dependent assessment covered the Board Budget approval In 2019, the Board of Directors had 20 meet- • members serving between 18 June and 24 ings, including 4 in person and 16 in absen- • Branch management December 2018. Board of Directors Management Board tia, and reviewed 200 matters. • HR management Audit Committee President / Chairman of the In 2019, the average Management Board Nomination and score for the Board Remuneration Committee Budget and Investment Committee Strategy Committee of Directors’ Compensation Committee Director independence Corporate Governance performance Committee Risk Management Committee 7 assessment was Investment Committee Charity Committee 4.96 out of 5 1

In 2020, the Board of Directors self-assessed its 2019 performance. The self-as- Non-executive sessment comprised the overall assessment Risk Internal Asset Internal Independent of the Board of Directors, the assessment of Management Audit Protection Control 1 New version No. 19 was approved by the Company’s its Committees and each Board member, in- divisions Unit Department Unit Executive AGM on 14 June 2019; Minutes No. 1 dated 18 June cluding the Chairman. 2019. The full text of the new version is available at https://www.company.rt.ru/en/ir/corporate_gover- nance/docs/Charter_ver19_eng.pdf . 2 New version No. 11 was approved by the Company’s Dedicated o cials responsible 3 New version No. 16 was approved by the AGM on 14 June 2019; Minutes No. 1 dated 18 June for countering money laundering, Company’s AGM on 18 June 2018; Minutes No. 3 2019. The full text of the new version is available the nancing of terrorism, and 1 dated 20 June 2018. The full text of the new at https://www.company.rt.ru/en/ir/corporate_gov- Governing bodies Elects/appoints version is available at https://www.company.rt.ru/ ernance/docs/Regulations_General_Sharehold- the nancing of the proliferation en/ir/corporate_governance/docs/Regulations_ ers_Meeting_ver11_eng.pdf . Control bodies Reports to of weapons of mass destruction 1 BoD_ver16_eng.pdf .

26 27 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

• Decommissioning of analogue network Division of authority tion with the centralised support functions equipment Rostelecom Group comprises PJSC Rostele- and subsidiary coordinators. • Changes in the organisation of the Com- com, its subsidiaries and affiliates. 1 PJSC Rostelecom’s policies, regulations and pany’s branches. PJSC Rostelecom includes branches and other key documents regulating its econom- The Company’s growth representative offices, which are not legal ic, environmental and social impacts apply to all companies within the Group, and are ap- Monitoring the progress of the Compa- entities and participate in the Company’s • proved and introduced by relevant orders of ny’s Strategy 2022 business on behalf of the Company, on the basis of individual regulations on the branch Rostelecom subsidiaries and affiliates. Strategies of the business segments and • or representative office as approved by the key subsidiaries Board of Directors. PJSC Rostelecom is lia- • Target IT architecture development and ble for obligations arising in the process of transformational solutions for telecoms the branches’ participation in business on networks behalf of the Company. Risk management: Subsidiaries and affiliates are separate legal • Progress of the Risk Management entities, which are not liable for the Compa- Programme ny’s obligations, and the Company is not liable for the obligations of its subsidiaries and Enhancement of corporate governance stan- affiliates unless the applicable laws of the Rus- dards: sian Federation provide otherwise. Development and approval of the Risk • Subsidiaries and affiliates have their own su- Management Programme preme governing bodies. Operating relation- • Internal control development concept ships with subsidiaries and affiliates within Preparation of materials and matters referred Rostelecom Group are structured according to the Board of Directors: to the segment-function management principle, i.e. the subsidiaries’ centralised support • Preview of interested party transactions functions (including HR, social programmes, Social responsibility: HSE and energy efficiency management) are • Charity and sponsorship initiatives managed by the corresponding functions at PJSC Rostelecom’s Headquarters and MRFs. Corporate Secretary • Implementation status and key priorities of Rostelecom’s production system Each subsidiary is assigned a Rostelecom The Corporate Secretary facilitates the coor- In 2019, the Management Board 102-29 No conflicts of interest involving Vice President-level coordinator responsi- Procurement optimisation dination between the Company and its share- comprised 8 members and held 24 • members of the Management Board were ble for overseeing the subsidiary’s business meetings in person. holders, and assists the Company’s governing • Monitoring the progress of key strategic identified in 2019. management and coordination on behalf of bodies in corporate governance. The Corpo- projects: The Board of Directors and the Management the shareholder (participant). rate Secretary is elected by and reports to • Bridging the Digital Divide Board are authorised to review economic, PJSC Rostelecom’s Department of Subsid- the Board of Directors. Key agenda items discussed by the • Providing Internet Access for Hospitals environmental and social matters as well as iaries’ Business Corporate Management is re- Management Board and Out-Patient Clinics delegate these matters to employees sub- President and Management Board sponsible for corporate management of all Operations and operational excellence: Construction of the Sakhalin–Kuril ject to their qualifications and functional roles. subsidiaries and affiliates and communica- For more details on the membership of the • Islands submarine fibre-optic cable link Management Board and the Management • Reports on budget performance and Board and Committees’ performance report drafting the budget for 2019 • Arranging for Video Surveillance and Ensuring the Operation of the see the Corporate Governance section of • Enhancement of corporate project Broadcasting Portal during the 1 A company is a subsidiary if another (or principal) company by virtue of dominant participation in its charter capital (i.e. 50% or more) or in accordance with a con- PJSC Rostelecom’s Annual Report 2019. management tract concluded between them or in another manner has the possibility of determining decisions taken by such a company. For significant subsidiaries and affiliates Elections in Russia; see Note 11 to consolidated financial statements presented in PJSC Rostelecom’s Annual Report 2019.

28 29 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

REMUNERATION Individual payments to members of the Board of Directors, RUB 102-36 No reimbursement of expenses or other payments were made to members of the Board of Directors in 2019, no loans (credit facilities) were granted. In 2019, members of the Board of Directors who were not employed by the Company did not participate in the long- Name Remuneration Remuneration for Remuneration Remuneration for Remuneration term incentive programme for the Company’s management. for serving on serving on the for serving on serving on the for serving on 4 the Board of Audit Committee the Strategy Nomination and the Corporate RUB million — No annual remuneration is paid to the members of the Board of Directors holding public offices Directors Committee Remuneration Governance fixed annual remuneration payable or employed by the Company, or to the members who voluntarily waived their remuneration. Committee Committee

to each member of the Board Ruben A. Aganbegyan 4,000,000 400,000 320,000 400,000 0 of Directors Alexander A. Auzan 4,000,000 400,000 320,000 320,000 0

Kirill A. Dmitriev 4,000,000 0 0 0 0

Anton A. Zlatopolsky 0 0 0 0 0

Sergey B. Ivanov 0 0 0 0 0

Sergey B. Kalugin 2 974,586 0 0 0 0

Nikolay A. Nikiforov 3 1,900,552 0 0 0 0

Konstantin Yu. Noskov 4 0 0 0 0 0

Mikhail E. Oseevsky 0 0 0 0 0 1.5 1.25 400 Mikhail I. Poluboyarinov 4,000,000 0 0 0 0 factor applied to the Chairman factor applied to the Board RUB thousand — of the Board of Directors of Directors’ Committee Chairman annual remuneration payable Alexander A. Pchelintsev 5 2,099,448 0 0 0 0 to members of the Audit Committee Vadim V. Semenov 4,000,000 500,000 320,000 0 of the Board of Directors Alexey A. Yakovitsky 0 0 0 0 0

TOTAL, by type of payment 24,974,586 1,300,000 640,000 1,040,000 0

TOTAL 27,954,586

Remuneration paid to the Board of Directors, RUB m 1 Reduction of remuneration due to absence from meetings held in person or in absentia

175.0 24.7 32.2 32.8 27.7 28.0 1. Absence

320 Remuneration 100% RUB thousand — annual remuneration payable 2. Absence <25% to members of other Committees 1 Paid to a member of the Board of Directors not Remuneration 90% -10% of the Board of Directors later than one month after holding the Annual General Shareholders’ Meeting for the year when 3. Absence 25-50% he/she was elected to the Board of Directors. 2 Stepped down from the Board of Directors on 24 December 2018. Remuneration 70% -30% 3 Joined the Board of Directors on 24 December 2018. 4. Absence >50% 4 Stepped down from the Board of Directors on 24 December 2018. 5 Joined the Board of Directors on 24 December Remuneration -100% 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 2018.

30 31 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

Remuneration to the President No special remuneration is payable to Man- and the Management Board agement Board members for serving on the Payments to the Management Board and the highest paid employees in 2019, RUB

102-35 102-36 102-38 The President’s com- Management Board. Payment type Payments to Management Board members Payments to Top 5 highest paid employees pensation package is determined in his con- Severance is paid upon termination of em- (key executives) tract approved by the Board of Directors. Fur- ployment by the Company in line with the thermore, in line with the Board of Directors’ Labour Code of the Russian Federation. The Salary 236,656,641 175,282,834

resolution, the President’s pay may include severance pay does not exceed the employ- Bonuses, including: 735,946,268 533,054,416 an annual bonus for good-faith performance ee’s triple average monthly earnings. of his duties and performance against bud- short-term incentives 165,540,720 112,853,035 get targets. long-term incentives 570,405,548 420,201,381

Fees 0

Components of remuneration payable to members of the Management Board Benefits 0

Reimbursement of expenses 0 Salary Short-term Long-term incentives incentives Other 0

Type of remuneration Basic salary Annual bonus Long-term incentive TOTAL 972,602,909 708,337,250 programme Objective Attract and retain Achieve annual business Achieve long-term KPIs: professional managers KPIs Net Profit, FCF, ROIC No loans (credit facilities) were granted by the Company to members of the Management Board. by offering competitive salaries Target ratio of remunera- 50% 50% The multi-year tion components programme is based on a share matching plan and offers shares as remuneration RISK MANAGEMENT ties and on capturing identified opportunities Risk management is based on a system of to achieve strategic goals. Risk management concise, clear and measurable corporate Remuneration paid to the Management Board, excluding long-term incentives, is carried out in full compliance with interna- goals set by Rostelecom shareholders and RUB m tional and national standards. The Company management. The Board of Directors ap- 102-30 Rostelecom has in place a risk man- updates its risk management regulations on proves Rostelecom’s Risk Management Pro- agement system (RMS) for the effective mod- a regular basis. gramme every year and monitors its execution 443.8 392.2 212.3 251.7 388.5 402.2 elling, assessment and mitigation of risks, struc- Rostelecom’s key internal documents regu- on a quarterly basis. Additionally, quarterly progress reports on the Risk Management tured in full compliance with the requirements lating risk management: of domestic and international regulators. The Programme and other relevant matters are • Charter Company monitors and promptly adopts best reviewed at the Management Board’s Risk Risk Management Policy practices in risk management, focusing on con- • Management Committee, which approves tinued automation and digitisation of its risk • Regulations on the Board of Directors follow-up risk management initiatives. management system to further enhance its and its Audit Committee reliability. Rostelecom also strives to consider • Regulations on the Integrated Risk Man- sustainability risks in conducting its business. agement System The Company’s risk management system • Regulations on the Risk Management emphasises effective management deci- Committee of the Management Board 2014 2015 2016 2017 2018 2019 sion-making regarding risks and uncertain- • Risk Management Procedure

32 33 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

Risk Management Programme

Simulation modelling A list of strategic Key strategic risk Strategic risk 11 committee members of actual/plan variance risks, and strategic risk indicators management activities are the membership of the Risk ranges for business scenarios and thresholds Management Committee plan items

At least once a year, the Company’s internal day-to-day operations and product and • Delegating responsibility for simulation The Company’s management is involved in audit function conducts an internal indepen- service development, such as: modelling from the Risk Management De- the activities of the Risk Management Com- dent evaluation of the risk management sys- • risk indicator dashboards for business partment to project and product manag- mittee as risk owners and risk mitigation owners to assess TTM impact on project-re- tem’s effectiveness and performance over the processes ers. The Committee membership includes 11 lated KPIs and KPIs for new products reporting period. members of the Risk Management Commit- • project life cycle metrics. and services tee (President, Senior VPs, VPs). Rostelecom • Development and rollout of a simulation Automating the follow-through on the 2019 initiatives to enhance the risk manage- • President is the Risk Management Commit- modelling methodology to evaluate the Risk Management Programme ment system included: impact of Time-to-Market 1 (TTM) on pro tee’s Chairperson. • Further development and automation of ject-related KPIs and KPIs for new prod- Training programmes are run on a regular • A rollout of a visualisation programme risk indicator dashboards for business ucts and services. to support management reporting and processes and projects to provide man- basis for employees involved in risk mana embed operational risk management into RMS development plans for 2020 include: agement with quick access to data. gement.

Risk management interactions within Rostelecom Group Risk management actors

Actor Roles and responsibilities Management Board President Board of Directors Board of Directors Defines the operating principles and improvement areas of the risk management system; performs overall monitoring of risk management performance

Audit Committee Oversees the operation of, and identifies gaps in, the risk management system; makes recommendations Senior Vice President Audit Committee to the Board of Directors Risk Management Committee Chief Financial Ocer The Company’s management Manages key risks and regularly monitors the risk Internal Audit management system

Internal Audit and Internal Control units Assess risk management performance and advise on Chief Financial Ocer improvements Risk Management Department Senior Risk Manager Vice

Senior Risk Manager and Risk Management units Build, monitor and maintain the risk management President system Risk Manager Aliate Board of Directors Aliate CEO 3 Business units and employees Manage risks within their areas of responsibility 1 Time-to-Market (TTM) refers to the amount of 3 3 Headquarters Administrative reporting 4 time it takes to design and manufacture a product Subsidiary/Aliate CFO Aliate Risk Manager before it is available to buy. Macroregional Functional reporting 3

34 35 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

Rostelecom Group risks

102-15 Below are Rostelecom’s strategic Risk radar risks included in the Risk Management Pro- gramme. Strategic risks arise at the level of strategic decision-making and have an impact on targets set out in the Company’s Long- Term Development Programme and Strategy.

Market risks caused by more intense competition in the telecoms market remained the most critical risks in 2019. The Company estimates that these risks will Сritical remain material in the short term Important

To mitigate market risk impacts, Rostelecom is costs of services. To minimise this risk, the jection of illegally obtained benefits, trans- developing new services and solutions while Company has prepared an action plan to mi- parent procurement procedures, financial taking steps to increase the loyalty of exist- grate to predominantly Russian software in control, employee training and supervision, Reasonable ing customers. 2019–2021. assistance to law enforcement authorities and other measures. In the medium term (three to five years ahead), Apart from strategic risks, Rostelecom strives the Company’s key risks will include the data to consider sustainability risks in conducting For more details on Rostelecom’s risk man- integrity and reliability risk and risks related its business. In 2019, we assessed the cor- agement framework as well as the results of Unimportant to import substitution. ruption risk, passed an anti-corruption au- the analysis of the principal risks for 2019 dit for compliance with the requirements of see PJSC Rostelecom’s Annual Report 2019. The data integrity and reliability risk is asso- the Anti-Corruption Charter of the Russian ciated with a potential increase in the per- Business and initiated the development of a centage of attacks against users and infor- corruption risk model. Rostelecom has been mation security incidents that lead to actual issued a Certificate of Public Endorsement damage. To minimise this risk, Rostelecom has of the Results of the Implementation of the prepared an action plan for 2020. Anti-Corruption Charter of the Russian Busi- Market Legal Technology Suppliers/ Import substitution risks are associated with ness, which releases the Company from the contractors the risk of changes in requirements for im- obligation to submit Declarations of Com- port substitution, a step-up in import sub- pliance with the Anti-Corruption Charter of stitution with regard to infrastructure equip- the Russian Business for five years following Р Financial IT HR ment caused by geopolitical risks and growing the issue date. The Charter provides for re-

36 37 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

1.3. Supply Chain

Key requirements for suppliers we have mostly focused on operational and Procurement process at Rostelecom Group Further automation We have developed and adopted docu- service excellence. Rostelecom leverages ro- ments formalising key requirements to sup- botics, advanced supply chain management and centralisation pliers, in particular concerning the ESG as- technologies, outsourcing and lean HR op- take service levels Demand planning/Inventory erations to drive operational excellence. At Procurement pects. PJSC Rostelecom’s Code of Supplier management the same time, further automation and cen- to new heights 102-9 Rostelecom Group responsibly man- Business Ethics sets out the overall sus- tralisation take service levels to new heights. ages its supply chain, striving to enhance tainable development and corporate so- its stability and effectiveness. Rostelecom’s cial responsibility criteria to be complied suppliers are located across all Russian re- with by suppliers: gions, and in selecting, screening and work- Feedback/Adjustments Contracting/Logistics • Quality of products, works and services ing with our suppliers we take into account • Environmental protection the economic, social and environmental im- • Occupational health and safety plications of our interaction. Best governance • Protection of employee rights practices are applied throughout the lifecy- Rostelecom has already started integrating Goods, Works and Services by Certain Types cle of goods and services. UN SDGs into business management. As far of Legal Entities dated 18 July 2011 (as amend- The Code of Supplier Business Ethics is publicly available at www.zakupki.rostelecom.ru/ We pay special attention to effective man- as the supply chain is concerned, we have fo- ed and supplemented) and PJSC Rostelecom’s docs/code (in Russian). agement in the supply of goods and ser- cused on contributing to UN SDG 8. The Group Regulations on Procurement. PJSC Rostele- vices, taking into account the Group’s im- places special emphasis on SDG 8.3: “Promote com also has in place its Code of Supplier Acting within the Russian legal framework and pact when building our supply chain. Thus, development-oriented policies that support Business Ethics. demonstrating our accountability to stake- we control the quality and timeliness of pro- productive activities, decent job creation, en- Our top priorities in procurement: holders and transparency, we procure goods trepreneurship, creativity and innovation, and and services online, with information on all cured products as these aspects are related Transparency and openness of the encourage the formalisation and growth of mi- • to the working conditions of the personnel. procurement cycle corporate procurements available at the Uni- We are strongly focused on demand plan- cro-, small- and medium-sized enterprises, in- fied Procurement Information System’s web- • Competitive procurement ning, inventory management and logistics cluding through access to financial services”. site (zakupki.gov.ru, in Russian) PJSC Rost- to reduce our environmental footprint. Ros- In 2019, we focused on expanding our coop- • Implementation of the import substitution elecom’s website (zakupki.rostelecom.ru, in strategy telecom is building relationships with equip- eration with small and medium-sized enter- Russian), and websites of electronic mar- ment and material manufacturers taking into prises (SMEs). • Support and development of small- and ketplaces. medium-sized enterprises. account its strategic goals and priorities for PJSC Rostelecom’s procurement is guided by In recent years, digital transformation has sustainable development. Federal Law No. 223-FZ On Procurement of been impacting the supply chain. In line with its strong commitment to the values of sustainable development, Rostelecom Group uses the Internet of Things to enable integrated automation of enterprises interacting with each other, thus enabling better man- Supply management at Rostelecom Group agement of the ESG aspects along the entire supply chain. For example, by using anyLogis- tix supply chain simulation, optimisation and analytics software tool, we have reduced lo- Ensures safety Underpins the economic gistic costs and improved Rostelecom’s sup- Drives the strategic Promotes environmental and decent working and financial health of ply chain performance. agenda protection conditions the Group companies In order to successfully implement our corporate strategy in logistics and procurement,

38 39 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

Collecting feedback from suppliers framework agreements, with orders dis- Top strategic priorities in logistics and procurement support tributed publicly and in real time PJSC Rostelecom has in place several hotlines, through which suppliers can address • A pre-qualification scheme for suppliers their queries regarding procurement activi- was put in place to test, select and add ties, planned and current procurement, as well new companies to the potential supplier register as feedback or complaints about complet- 70.2 ed procurement, including the universal ho- • To address anti-dumping concerns, a new thousand counterparties across Russia tline zakupki.rostelecom.ru and the dedicated approach to online rebidding was imple- had interactions with Rostelecom hotline for SMEs [email protected]. In 2019, queries mented, with bid increments controlled by Group in 2019 Rostelecom. This functionality has been from more than 50 suppliers were resolved. CPFR 3PL added to the electronic marketplace to We seek to make our public tenders for goods enable awarding contracts to a required VMI Full llment and services as friendly as possible for po- number of winners at a single price tential suppliers. In 2019, Roseltorg Unified • PJSC Rostelecom’s Regulations on Pro- Electronic Marketplace, our principal online curement were updated to include critical S&OP Insourcing marketplace accumulating the bulk of PJSC provisions allowing procurement docu- Rostelecom’s public tenders, significantly im- mentation to be amended to permit a proved its functionality to remove barriers to bidder to submit alternative proposals supplier access to procurement. We are ac- when a procuring entity considers it ap- Minor Capability SCM solutions Outsourcing propriate to compare different options procurement building tively organising minor procurements (up to 244.9 RUB 500,000) on electronic marketplaces of to meet its needs, and also providing for RUB billion — Gazprombank, Sberbank-AST and RTS-tender. multi-lot procurement where a public the total cost of procured products tender participant may bid for a single and services In 2019, PJSC Rostelecom made significant lot or multiple lots changes to its procurement activities: Dispatching Operational Employees Motivation • Minor procurement functionality (up to excellence Robotics • To reduce the risks related to awarding RUB 500,000, including VAT) on e-mar- Service contracts under framework agreements, ketplaces was strongly enhanced Rostelecom implemented an order distri- excellence As a result of these initiatives, PJSC Rostele- Placement Warehouses bution engine based on the Smart Pro- com has improved its procurement perfor- and execution Goal and warehousing curement IT system, providing all suppli- of orders operations ers appointed to framework agreements mance, as well as added new reliable part- with a shared account to access PJSC ners delivering contracts on time and in full Rostelecom’s orders under the existing to its existing supplier base. Automation Centralisation Supplier engagement Contracting Drivers

Integrated Working Business capital Planning management Activities/ P2P initiatives Centralised process purchasing Accounting Integration operations of subsidiaries and aliates

40 41 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

Major categories of products and services procured by Rostelecom Group in 2019, RUB billion PROMOTING THE NATIONAL SME DEVELOPMENT POLICY

Operational services 146.105 PJSC Rostelecom To support the national SME de- SMEs access to Rostelecom’s Supply chain management is crucial to en- is a permanent velopment policy and as part of procurement suring the Company’s sustainable develop- PJSC Rostelecom’s SME Part- The aggregate value of contracts signed with ment. Therefore, Rostelecom strives to select nership Programme, we interact suppliers strictly in line with the highest stan- Investment services 47.029 top-level resident SMEs in 2019 amounted to RUB 80.1 billion, of the National with small and medium enterpris- with SME share of procurement contracts at dards, including those regulating environmen- es on a regular basis. 66% (65% in 2018). The aggregate value of tal protection, occupational health and safety compliance, and respect for human rights. Fixed-line and radio network Procurement Rostelecom actively encourages wider par- contracts awarded to SMEs through special 17.695 equipment Transparency Ranking, ticipation in procurement, including SMEs. procurement procedures amounted to RUB By pursuing this strategy, we contribute to 22.5 billion, with SME share of special pro- th at 5 place in 2019 SDG 8.3. curement contracts at 18.5% in 2019. General-purpose industrial 6.344 automation instrumentation In 2019, LLC SibirDomStroy and LLC Perepra- va joined PJSC Rostelecom’s SME Partner- ship Programme, bringing the total number of Computers 5.187 participants to 42. For more details on PJSC Rostelecom’s SME Partnership Programme goals and targets see www.zakupki.rostele-

Cable products 3.119 com.ru/msb (in Russian). Supplier education goes a long way in helping us to improve supplier engagement. In Radio and TV communication 2019, through a partnership with RSMB Cor- 3.020 and broadcasting equipment poration, Rostelecom held a series of workshops on SME participation in procurement by certain entities in line with Federal Software and information 2.761 Law No. 223-FZ On Procurement of Goods, products or computers Works and Services by Certain Types of Le- Our focus areas under the procurement gal Entities dated 18 July 2011. The work- excellence programme run since 2013 in- Electrical equipment shops discussed in detail the procurement 1.939 clude enhancing procurement transparen- and materials activities of major customers, specifics of cy, clear division of procurement responsi- SME participation in procurement under the bilities between business units, streamlining above federal law, emphasised the need to Special-purpose procurement-related business processes 1.932 comply with anti-corruption laws and busi- automation instrumentation and optimising the Company’s costs. Keep- ness ethics standards, as well as highlighting suppliers engaged (including small and ed the existing programmes of financial and medium-sized enterprises) is a key principle Oil, petroleum products non-financial support for SMEs. A total of 43 1.908 underpinning Rostelecom’s procurement ap- and alternative fuels. Gas workshops were held during the year across proach. The average number of bidders in a the Company’s footprint, attended by 4,726 public tender was 3.2 in 2019 (3.3 in 2018). Trac control, agricultural machinery SMEs. Saint Petersburg, Vladivostok, Yekat- maintenance and auxiliary 1.562 A highly competitive procurement process is erinburg, Krasnodar and other major cities communications equipment, steel structures not only a fundamental indicator of the suc- hosted our workshops. cess of our procurement transformation but also a lever to make corporate purchasing Equipment 1.005 more cost-effective.

42 43 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

1.4. Responsible Business Practice

In 2019, PJSC 102-16 205-3 We are commit- Similar documents and compliance process- Every two years, Rostelecom employees in ted to openness, transparen- es are implemented at subsidiaries and affil- positions exposed to corruption risk (11% of Rostelecom ranked cy and integrity in everything iates in which PJSC Rostelecom’s effective the total headcount) undergo an enhanced first among telecoms we do. We have in place internal interest is above 50% (i.e. in most compa- classroom (2 hours) and online (1.5 hours) regulations and ethical standards as well as a nies of the Group). training on preventing and combatting cor- operators in the framework of corporate documents to ensure Key anti-corruption focus areas in 2019: 3 ruption. ~30 thousand employees Corporate Transparency compliance with responsible business best • Employee training In line with Rostelecom Group’s strategy of practices and requirements of Russian laws. digital coverage of anti-corruption efforts, a of PJSC Rostelecom took online • Feedback channels training in 2019 on the Code of Ethics Ranking of the Russian The Asset Protection Department provides dedicated anti-corruption portal ( www.no- • Conflict of interest management and on corruption prevention and Regional Integrated oversight on compliance at PJSC Rostele- corruption.rt.ru , in Russian) Зis in place and Subsidiary relations counter fighting com, including: • is constantly improved. The portal comprises Reporting Network Rostelecom’s anti-corruption internal regula- • corporate culture development in terms • Earning public endorsement of the results tions and materials on preventing and coun- of anti-corruption, prevention of embez- of the implementation of the Anti-Cor- zlement and conflicts of interest, and ruption Charter of the Russian Business tering corruption. compliance with ethical standards No confirmed cases of corruption or brib- • analysing and monitoring the activities ery were reported across the Group in 2019. of PJSC Rostelecom and its subsidiaries and affiliates related to asset protection EMPLOYEE TRAINING • maintaining the whistleblowing hotline and an anti-corruption portal. Anti-corruption compliance procedures at PJSC Rostelecom are governed by special- International Anti-Corruption Day 205-2 PJSC Rostelecom holds regular an- ised regulations: ti-corruption trainings for its employees. All On 9 December 2019, PJSC Rostelecom • All Rostelecom employees with an au- “We, at Rostelecom, have regular, various • Anti-Corruption Policy (developed in new employees of the Company take a man- marked the International Anti-Corruption tomated workstation were assigned the compliance events, both offline and 2014, updated in 2019) 1; datory 45 min online induction course on the Day to raise employees’ awareness of Code of Ethics distance learning course online, and we always put thoughtful • Code of Ethics 2; key principles set out in the Code of Eth- internal anti-corruption regulations in a new format including video cases preparation and creativity into them. • Code of Corporate Conduct ics. In late 2019, the course was relaunched and ethical standards ensuring an- (to facilitate the perception of training Statistical analysis already demon- in a new interactive format. The course now ti-corruption compliance. The activities materials and further raise the course strates that the activities held during • Code of Supplier Business Ethics uses real-life video scenarios prompting the held as part of the event included the passing threshold) the International Anti-Corruption Day • Regulations on the Conflict of Interest audience to join the main character in mak- following: Themed banners were published on the have helped our employees achieve 1 Management • For more details on Rostelecom’s Anti-Corruption ing decisions based on the Company’s eth- excellent results in their Code of Ethics Policy see https://www.company.rt.ru/en/ir/corpo- • A video announcement of the forth- intranet and in the Corporate Online Regulations on Giving and Receiving Gifts rate_governance/docs/anticorruption_policy_Ros • ical principles. coming launch of the Code of Ethics University distance learning course.” telecom_v3_Eng.pdf . • Regulations on Donations and Charitable 2 For more details on Rostelecom’s Code of Ethics As part of compliance processes, manage- distance learning course was pre- • A fun video quiz on compliance was see https://www.company.rt.ru/en/ir/corpo- Giving ment of subsidiaries and affiliates take class- pared and displayed on screensav- Arina Sabitova rate_governance/docs/Этический_кодекс_ПАО_ prepared and launched on corporate TV Deputy Director of PJSC Rostelecom’s Ростелеком_ред.2_англ.pdf . The procedures ensuring compliance with room training on preventing corruption. Every ers of corporate computers at PJSC across the Company’s offices 3 For more details on Rostelecom’s other anti-cor- anti-corruption laws are also stipulated in subsidiary and affiliate of the Group builds Rostelecom several days before the Asset Protection Department ruption focus areas see Appendix 2. Governing its own training processes according to its event and Control Bodies to PJSC Rostelecom’s Annual the Company’s business process regu Report 2019. lations. capabilities and resources.

44 45 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

FEEDBACK CHANNELS • through the Ethics Hotline at ethics@ positions exposed to a higher corruption risk RELATIONS WITH SUBSIDIARIES ti-corruption clause allowing them to termi- rostelecom.ru. regularly complete relevant electronic dec- AND AFFILIATES nate a contract with a counterparty due to The Company guarantees that no retaliation, larations. Using pre-determined criteria, the violations of the obligation to refrain from any harassment or pressure will be attempted system automatically identifies employees actions prohibited by anti-corruption laws. against employees or third parties report- who should submit declarations, and monitors timely completion of declarations by 102-17 Rostelecom has in place several ing or involved in the investigation of such these employees, thus excluding the human whistleblowing channels for the Group em- breaches. In 2019, we continued to develop anti-corrup- factor from mandatory disclosures. ployees and third parties to report cases of The charts below show the total number of re- tion processes at subsidiaries and affiliates in corruption, fraud, breaches of PJSC Rostele- ports received via the whistleblowing hotline Substantial improvements and upgrades of which Rostelecom’s effective interest is above com’s Code of Ethics or other breaches of and anti-corruption portal in 2018 and 2019. the system in 2019 accelerated the conflict 50%. For these subsidiaries and affiliates, Ros- law related to the Group’s operations. Such of interest declaration review and resolu- telecom is developing anti-corruption road- breaches can be reported: CONFLICT OF INTEREST tion process. maps which include adjustments of PJSC Ros- • by calling the whistleblowing hotline at MANAGEMENT Further automation of recording, processing telecom’s standard anti-corruption regulations, 8 800 181 18111 and reviewing reports from employees and evaluation of corruption risks, implementation of controls, management of conflicts of inter- • via a feedback form on the anti-corrup- third parties was continued through devel- est, anti-corruption training and handling re- tion portal www.nocorruption.rt.ru (in oping a standalone report handling module Russian) for the Compliance Control automated sys- ports received via feedback channels. • by reporting in person to a member of 102-25 Since June 2018, PJSC Rostelecom tem. Testing and commissioning of this mod- Expenditure agreements of PJSC Rostelecom the Asset Protection Department team has been using an automated Compliance ule have been scheduled for 1H 2020. and its subsidiaries and affiliates use an an- Control system to resolve conflicts of interest. • by reporting to the Audit Committee of the Company’s Board of Directors In case of a conflict of interest, employees in

Report topics in 2018 Report topics in 2019 Review of conflicts of interest and conflict of interest declarations at PJSC Rostelecom in 2018 3 and 2019

4% 6% 25% 11% 18% 9% 11%

89% 18%

22% 82% Potential Con icts of interest Declarations received con icts of interest 75% resolved reviewed

20% 1 Violation of anti-corruption and monopoly legis lation, conflict of interests, abuse of entrusted power, fraud. 40% 2 Redundancy/dismissal, bonus payment, conflict 21% with a manager, breach of internal regulations and 49% the labour law of the Russian Federation. Improvement 3x Improvement 8x Improvement 4.5x 3 Manual and automated review combined.

Subscribers Compliance 1 HR processes 2 Other Purchasing 2018 2019

46 47 ROSTELECOM'S SUSTAINABILITY REPORT 2019 1. WE ARE ROSTELECOM

1.5. Protection of Human Rights

The Joint Committee for the Implementation ucational, charitable, or community activities We are committed Involvement in legislative provided that these activities do not impact of the Anti-Corruption Charter of the Russian initiatives the performance of their immediate jobs to promoting and Business issued to Rostelecom the highest level and do not contradict or harm the Compa- On 24 April 2019, the Chamber ny’s interests. protecting human rights 103-1 103-2 408-1 409-1 411-1 (score 5.0) Certificate of Public Endorsement of Commerce and Industry of the To ensure the respect for human rights across in society Russian Federation hosted an initi- Rostelecom Group protects and respects hu- all our operations, we have been consistent- of the Results of the Implementation ated discussion on Anti-Corruption man rights by assuming relevant obligations, ly enhancing information sharing on human Motivation for Entrepreneurs: Stick of the Anti-Corruption Charter assessing the Group’s risks and impacts, en- rights issues within the Group, developing or Carrot? During the event, gov- gaging with stakeholders and communicating trainings and monitoring and assessing prog- of the Russian Business ernment and business community the Company’s ethical behaviour standards ress. All our employees and suppliers are re- representatives discussed proposals to employees and contractors. quired to complete trainings and a series of to encourage corporate engagement in anti-corruption efforts. We conduct our business in full compliance courses on human rights. Based on the results of the initi- with the labour law of the Russian Federa- Employees can report violations of their rights ated discussion, the Chamber of tion. PJSC Rostelecom’s Code of Ethics and via all feedback channels of the Group. For PUBLIC ENDORSEMENT OF THE RESULTS OF THE IMPLEMENTATION Commerce and Industry of the a number of internal policies and proce- more details see the Responsible Business OF THE ANTI-CORRUPTION CHARTER OF THE RUSSIAN BUSINESS Russian Federation sent proposals dures on human rights ensure our compli- Practice section of this Report. to encourage business engagement ance with national and international require- In 2019, an accredited expert There have been no incidents of forced or on anti-corruption to the Russian ments in this area. agency conducted a compre- compulsory labour or infringements on the Government. hensive audit of PJSC Rost- The Company strictly adheres to the princi- rights of indigenous and small-numbered elecom’s compliance with the ple of non-discrimination in labour rights and peoples at Rostelecom Group. We do not Anti-Corruption Charter of the Russian Busi- freedoms, or benefits against employees on use child labour. grounds of gender, race, age, skin colour, eth- ness. The audit was based on 183 criteria “Larger companies can use the Rostelecom promotes a responsible ap- nicity, language, origin, material, marital, so- in accordance with the Guidelines for An- ‘carrot’ of anti-corruption measures proach to human rights in its business rela- cial or official status, place of residence, reli- ti-Corruption Measures Assessment for the to raise investment and grow their tionships with all business partners and en- gious views, beliefs, membership in (or failure Purposes of Declaring and Earning Public business. Many foreign countries re- courages them to protect and respect human to join) particular public associations or so- Endorsement of the Results of the Imple- lease companies that have success- rights. The Group’s suppliers are expected to cial groups, or any other circumstances un- mentation of the Anti-Corruption Charter fully implemented anti-corruption share our corporate ethos, and their activi- related to the employee’s professional per- of the Russian Business. Rostelecom re- measures from liability, passing it ties must comply with the relevant applicable formance. Mutual respect and trust lie at the ceived the highest level (score 5.0) Certif- to the specific offending individual, laws. Only those suppliers who comply with heart of our corporate culture. icate of Public Endorsement of the Results the employee at fault. Using this the law, have zero tolerance for corruption, of the Implementation of the Anti-Corrup- tool in the Russian context would Remuneration at Rostelecom is determined respect human rights, and promote employ- require a statutory definition of tion Charter of the Russian Business. The in line with the applicable regulations cover- ee health and safety can become our long- what ‘good looks like’ on the ad- Certificate confirms the Company’s acces- ing the minimum wage, standard work hours term partners. equacy of measures implemented sion to the Anti-Corruption Charter of the and overtime. PJSC Rostelecom has signed by companies.” Rostelecom Group is engaged in Russia’s Russian Business and releases it from the a collective bargaining agreement to make Information Society National Programme obligation to submit Declarations of Com- sure relationships with employees are based (2011–2020) aimed, among other things, at pliance with the Anti-Corruption Charter of on the principles of social partnership and promoting human rights and fundamental the Russian Business for five years. Mikhail Nikulshin protection of their social and labour interests. freedoms, including the right of every per- Director of PJSC Rostelecom’s Asset We do not limit our employees’ right to form son to information. In offering our products, Protection Department or join non-governmental organisations rep- we also strive to achieve an information se- resenting their interests. PJSC Rostelecom’s curity level that protects private life, person- corporate Code of Ethics sets out the em- al and family privacy and ensures security of ployees’ right to engage in any political, ed- restricted information.

48 49 SUSTAINABILITY REPORT 2019 Growth in revenue from Smart City projects

Age of the oldest participant of the 5th Thanks to the Internet 2019 all-Russia contest

Our sustainability story ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY Our Sustainability 2 Story

2019 — DELIVERING ON DIGITAL OUR ESG PRIORITIES

Environment 1 Society Governance 9.7% 42% 91% Environment Society total reduction of the workforce are women 1 of Board members in greenhouse gas emissions are non-executive directors (Scope 1, 2 and 3) ESG 4% 7% 94% reduction increase in labour of free cash flow in water consumption productivity 1 allocated to dividend payments

Reducing emissions Supporting diversity Energy eciency Employee training and development 3% 56% 36.5% Responsible water use Governance Increasing employee total waste reduction of employees completed of shares in free float Reducing waste engagement training programmes 2 Incentive programmes Occupational health share / vote Shareholder rights and safety 159.6 772.8 1 Corporate governance Philanthropy best practices RUB million RUB million One ordinary share = Technologies for better environmental investments health and safety one vote Fair remuneration life 3 and expenditures investments High standards Digital Economy of procurement programme

1 Data for Rostelecom Group. 2 Data for PJSC Rostelecom. 3 Data for Rostelecom Group.

52 53 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

2.1. The Company’s Approach

Rostelecom Group seeks to contribute in ev- pany. For more details see the Our Environ- affordable communications not only in cities, to over 150 telecoms operators in 70 coun- Sustainability awards velopment indices compiled by RSPP (Re- ery possible way to sustainable social, envi- ment section. but also in the most remote and small commu- tries, stakes in international cable systems In 2019, Rostelecom won the Change Man- sponsibility & Transparency and Sustainability ronmental, cultural, and economic develop- nities. One of the more important focus areas and partnerships with 600 national and in- agement. Visionaries annual award in the Vector) for the third consecutive year. Employees ment of Russia. Our projects and programmes is Bridging the Digital Divide (BDD) project ternational fixed-line and mobile operators. Sustainable Development Strategy Report- PJSC Rostelecom’s Sustainability Report are aligned with the national policy and Rus- Rostelecom Group seeks to create and con- which aims at bringing affordable telecoms Rostelecom is a member of ITU’s Telecommu- ing category. 2018 won the MarCom Award by the Ameri- sia’s digital transformation strategy. tinuously improve an environment that is services to people in remote areas. nication Standardisation Sector (ITU-T), the PJSC Rostelecom ranked among the top can Association of Marketing and Communi- conducive to the personal and professional We are committed to ensuring the sustainable With each kilometre of fibre laid, we erase Telecommunications and Infocommunication 10 companies in the Corporate Philanthro- cation Professionals (AMCP). The Company development of every employee: providing development of our business with a particu- borders, bridge vast distances, improve the Operators Board of the Regional Common- py Leaders in the Sustainable Development was named the Platinum Winner in the Print opportunities for training and involvement in lar focus on its ESG performance. We strictly quality of public and municipal services, and wealth in the Field of Communications (RCC Paradigm 2019 project. Media — Annual Report category. comply with all applicable Russian laws, are major projects and ensuring a safe and sup- build a digital environment for schools, hos- TIOB), Pacific Telecommunications Coun- Rostelecom’s performance placed the Com- guided by the principles of transparency and portive work environment, fair compensation pitals and kindergartens. In other words, we cil (PTC) and International Cable Protection pany among the leaders of sustainable de- accountability, and comply with the highest and additional social protection. In 2019, we get people connected globally. Committee (ICPC). signed a new collective bargaining agree- standards of ethical behaviour when engag- We are developing sectoral information sys- 1 ment for 2019–2021, detailing the full list of ing with external and internal stakeholders. tems in healthcare and education. We active- rights enjoyed by the Company employees. In its public corporate reporting, Rostelecom ly contribute to the modernisation of many maintains a high level of disclosure on finan- In the reporting year, we invested over RUB industries, including energy, agriculture and cial and non-financial impact management. 575 million in Rostelecom employee train- transport. Rostelecom also implements tech- To further enhance its ESG profile, the Com- ing, with training spend per employee up by nological solutions for the dissemination of pany set up a dedicated ESG Information 2, 20%. For more details see the Our Employ- timely information on emergencies and nat- section on its official website in 2019, high- ees section. ural disasters.

lighting the Company’s key ESG metrics, 3 Society, business Our employees contribute to significant so- 102-12 Endorsing sustainable development standards and initiatives documents and policies. In addition to cor- and government cial causes by joining charitable, donor, and porate reporting, the Company’s ESG pre- volunteering programmes run through part- Standard/Initiative Rostelecom’s membership 2019 was the second year of successfully sentation and aggregate information were nerships. For more details see the Our Coun- implementing PJSC Rostelecom’s Strategy published in this section for the first time try section. UN and ILO Conventions Endorse and integrate into internal regulations in 2019. 2022 which drives the Company’s transfor- UN Sustainable Development Goals for 2030 Endorse, integrate into operations and report on mation into a digital business working for the Governing bodies Environment benefit of people, businesses and the state. 4 Rostelecom has in place an effective cor- United Nations Conference on Trade and Development’s (UNCTAD) core indicators Report on for entity reporting on the contribution towards the implementation of the SDGs In the context of business economic growth, We partner with the government in imple- porate governance framework. The Com- the Group is committed to ensuring environ- menting the Digital Economy of the Russian pany’s Board of Directors and the Manage- Bloomberg’s 2020 Gender-Equality Index Participant Federation national programme and strive to mental protection. The Group’s key objectives ment Board have the necessary authority to Anti-Corruption Charter of the Russian Business Signatory in environmental protection are sustainable change lives of fellow citizens for the bet- review economic, environmental and social use of natural resources, managing Rostele- ter every day. topics. For more details see the Corporate Russian Union of Industrialists and Entrepreneurs (RSPP) Member com’s environmental footprint and maintain- Rostelecom Group seeks to contribute as Governance section. Sustainable development indices compiled by RSPP (Responsibility & Transparen- Participant ing a healthy environment for future genera- much as it can towards societal development cy and Sustainability Vector) tions. In 2019, we developed an HSE and fire International cooperation across all Russian regions. We focus our ef- GOST R ISO 14001 PJSC Rostelecom successfully passed an external audit for compliance with safety policy which outlines the environmen- forts on supporting social projects and pro- Rostelecom continues to build internation- GOST R ISO 14001-2016 in 2019 tal safety principles adopted by the Com- grammes and ensuring digital equality and al partnerships. We have direct connectivity

1 For more details see the Stakeholder Engagement subsection of this Report. 3 For the full list of memberships of associations see the Membership of Associations appendix to this Report. 2 For more details see. https://www.company.rt.ru/en/ir/results_and_presentations/esg_information/ . 4 For more details see the UNCTAD’s Table of Selected Core SDG Indicators appendix to this Report.

54 55 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

2.2. Strategic Objectives and Priorities in Sustainable Development

Rostelecom’s strategic objectives Developing product and service ecosystems and improving customer experience Technology platform upgrade Human capital development Operational excellence for 2022

Sustainability goals Development Ensuring high Developing and Scaling-up IT landscape Expansion Building digital Staff retraining and Adaptation of Corporate culture Continued Real estate Improved decision- and priorities of product standards of enhancing partner traditional upgrade and of fibre networks skills and internal migration approaches to improvements to implementation portfolio making and business and service customer service platforms business centralisation capabilities staff development meet digital company of the operational optimisation processes ecosystems requirements efficiency around customers programme

Enable systematic development and deployment of digital technology Contribute to Russia’s transition to innovative development

Become a technology leader in innovative solutions

Make telecommunications technology accessible and safe

Ensure high quality of customer service in line with the highest standards Conform to the highest standards of business ethics

Reduce corruption and bribery

Improve the quality of life for Russian citizens by bridging digital divides and ensuring accessibility of communications services for all Improve customer satisfaction

Contribute to ensuring equal access to education and improving the computer literacy of Russian citizens Become an employer of choice attracting highly skilled talent

Ensure a healthy and safe working environment

Contribute to making cities and communities more inclusive, safe, and sustainable Reduce Rostelecom’s environmental footprint and preserve the environment for future generations Reduce energy consumption and switch to green energy

Profit People Planet

56 57 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

2.3. Supporting the Global Sustainable PJSC Rostelecom’s contribution towards first priority SDGs

First priority SDG targets Related projects Key results 2019 Next steps Development Goals and activities of Rostelecom Group

Digital Economy of the Rus- • As at 31 December 2019, the length of FOCLs • Lay 16,691 km of fibre in 2020 sian Federation programme: was 85,323 km (construction completed) Rostelecom started integrating the United For the first time, Rostelecom Group’s Sus- • Under the BDD project, 12,243 facilities First priority SDGs • Bridging the Digital Divide • Rostelecom hit 100 % of its 2019 targets for the (88 %) are expected to be connected Nations Sustainable Development Goals (UN tainability Report 2019 also features United 9.1 Develop quality, reliable, sus- project project to construct the Sakhalin — Kuril Islands by the end of 2020, and 13,958 facil- SDGs) into its operations in 2016. We enhance Nations Conference on Trade and Develop- tainable and resilient infrastructure, • E-government services submarine fibre-optic cable link (SFOCL) by ities connected by the end of 2021 including regional and transborder • Integrated Identification and laying approximately 815 km of fibre cable at The Internet Access and Data Services Goal 4. Ensure inclusive and our focus on making SDGs part of our day- ment’s (UNCTAD) core indicators for entity infrastructure, to support economic • Authentication System depths up to 3,000 metres for Social Infrastructure Facilities proj- development and human well-being, equitable quality education and to-day operations and our new social proj- reporting on the contribution towards the • Unified System of Interde- Rostelecom employees were named the best ect is expected to be 58 % complete in with a focus on affordable and eq- • 2 partmental Electronic Co- fibre infrastructure building experts in Eurasia. 2020 and 100 % complete by the end promote lifelong opportunities ects and programmes with each passing year. implementation of the SDGs. For us, it is an uitable access for all. operation (USIEC) of 2021 (29,790 social infrastructure for all. important step towards improving transparen- Unified Biometric System • The BDD project is 22 % complete, exceeding In 2018, we reviewed our sustainability goals • our 2019 targets. As at 31 December 2019, the facilities) cy and public accountability as well as com- • Connecting facilities of the Chosen SDG targets: 4.1, 4.4, 4.5 and priorities and benchmarked them against Federal State-Owned Enter- number of communities where universal service • The Unified Biometric System project is provided via access points totalled 11,107, or is expected to be 58 % complete by the 17 UN SDGs. The review identified the paring our contribution to sustainable devel- prise Russian Television and Radio Broadcasting Network 79.57 % of the total number of access points the end of 2020 and 100 % complete opment with the global agenda. 8.10 Strengthen the capacity of in Russia by the end of 2021 sustainable development goals that are the domestic financial institutions to (RTRN) to fibre most relevant to our business and have the encourage and expand access to • The Company operates 148 thousand public pay- • The project to provide fibre connectiv- Goal 8. Promote sustained, in- banking, insurance and financial phones. As of 1 June 2019, Rostelecom scrapped ity to RTRN facilities is expected to be greatest priority for Rostelecom, enabling us the charges for calls made from universal service 64 % complete by the end of 2020 and clusive and sustainable econo PJSC ROSTELECOM’S services for all. to better structure our efforts. Goals 9, 8, 4, 11 payphones to any landline numbers across Rus- 100 % complete by the end of 2021. mic growth, full and productive CONTRIBUTION TOWARDS sia, and since 1 November 2019, calls to mobile In 2020, Rostelecom plans to bring and 10 were identified as first priority SDGs, employment and decent work FIRST PRIORITY SDGS phones within Russia are also free of charge internet connectivity to another 1,505 RTRN facilities and build a television for all. while Goals 17, 16, 12, 13 and 15 were classi- • Rostelecom's project Internet Access and Data Services for Social Infrastructure Facilities is 26 % exchange network in certain regions fied as second priority SDGs. In 2019, to further integrate UN SDGs into our 11.a Support positive economic, Chosen SDG targets: 8.2, 8.3, complete. The Company provided high-speed of the Russian Federation. High-speed social and environmental links be- activities, we compared Rostelecom Group’s connectivity to over 8,000 healthcare centres internet connectivity is expected to 8.4, 8.5, 8.6, 8.10 In 2019, we made another step in this direc- tween urban, peri-urban and rural across Russia and over 7,000 remote social in- be brought to 1,451 facilities in Siberia key projects, their results in 2019 and our fu- areas by strengthening national tion and used in-depth analysis to identify frastructure facilities in 44 Russian regions by 2023 ture plans with the chosen SDG targets. This and regional development planning. SDG targets that have the most relevance • Over 120 thousand people are registered in the • Following the closure of the deals to for Rostelecom within each first priority SDG approach helped us to analyse the contribu- Unified Biometric System. As at the end of 2019, consolidate 100 % of mobile operator Tele2 Russia and provider of cloud Goal 9. Build resilient infra- 1 tion we are already making to the goals and 232 banks were connected to the system, now (SDG targets). The following criteria were services DataLine, Rostelecom plans structure, promote inclusive collecting customer biometric data in over 13 used when selecting the SDG targets: how we can contribute in the future. Corpo- thousand offices across Russia to reveal its updated development and sustainable industrialisation rate sustainability KPIs will be based on the 10.2 By 2030, empower and pro- strategy in 2020, aimed at transform- • Rostelecom can make the most positive mote the social, economic and po- • Almost 63 million transactions totalling over RUB ing the Company into Russia's largest and foster innovation. results of this analysis. 66 billion were registered on the Public Services contribution to achieving the target litical inclusion of all, irrespective of integrated provider of digital services, age, sex, disability, race, ethnicity, Portal as at the beginning of December 2019. providing solutions for a wide range Chosen SDG targets: 9.1, 9.5, 9.с. The Public Services Portal had over 500 million • Rostelecom’s operations can potentially As SDG targets are interrelated, we grouped origin, religion or economic or other of applications with superior customer some of them by the specific profile of our status. visits in 2019 service influence the target achievement in the • 34.9 billion transactions were processed in the most negative way programmes. USIEC (+11 % year-on-year) Goal 11. Make cities and com- • By the end of 2019, the Integrated Identification munities inclusive, safe, resilient and Authentication System received 2.4 billion 9.c Significantly increase access to authorisation requests (up 30 % year-on-year), and sustainable. information and communications with 17 million users registered Chosen SDG targets: 11.4, 11.а technology and strive to provide • Rostelecom has delivered fibre to 1,692 RTRN universal and affordable access facilities with bandwidths up to 850 Mbps un- to the Internet in least developed der the project to provide connectivity to RTRN countries by 2020. facilities, with the project now 34 % complete.

Goal 10. Reduce inequality within and among countries. Chosen SDG targets: 10.2

1 A set of relevant SDG targets was determined for each of the 17 global UN goals. Each target is expected to contribute to the achievement of the set goals. A total of 169 targets were identified to ensure the achievement of the 17 SDGs. The goals and targets drive the integration of ESG aspects, and recognise the linkages between them in ensuring the sustainable development of our planet. For more details on UN SDGs see https://www.un.org/sustainabledevelopment/. 2 For more details see the UNCTAD’s Table of Selected Core SDG Indicators appendix to this Report.

58 59 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

PJSC Rostelecom’s contribution towards first priority SDGs (continued) PJSC Rostelecom’s contribution towards first priority SDGs (continued)

First priority SDG targets Related projects Key results 2019 Next steps First priority SDG targets Related projects Key results 2019 Next steps and activities and activities of Rostelecom Group of Rostelecom Group

Rostelecom’s innovation • Rostelecom is one of the government's key part- • Rostelecom aims to become a leader PJSC Rostelecom’s strategy 2019 financial highlights: Strategic objectives for 2018–2022: priorities: ners for smart city initiatives in the Russian market for Smart Home for 2018–2022 • Revenue grew by 5 % year-on-year to RUB 337.4 • Revenue: 4 % — 5 % accelerating CAGR • Digitisation of municipal • As of November 2019, Rostelecom was the leader solutions by 2020. We plan to expand billion 9.5 Enhance scientific research, up- our smart ecosystem and the range of 8.2 Achieve higher levels of eco- • OIBDA margin: > 32 % services (Smart City pro- of the Russian data centre market with 6,700 • OIBDA margin increased to 31.6 % grade the technological capabilities gramme) rack units available customer premises equip- nomic productivity through diver- • CAPEX / revenue: down to 17 % (ex- of industrial sectors in all countries, ment as well as increase our customer sification, technological upgrading • Net profit increased by 10 % to RUB 16.5 billion cluding government-sponsored in particular developing countries, • Data centre and cloud • Rostelecom is the leader in the market for cyber base and innovation, including through programmes) services security centre services by the number of pro- • CAPEX excluding government-sponsored pro- including, by 2030, encouraging • Rostelecom-Solar is getting ready to a focus on high-value added and grammes increased by 22 % year-on-year to RUB • Increase in labour productivity: 40 % innovation and substantially increas- • Cyber security tected organisations, with 1.1 million cyber attacks labour-intensive sectors. repelled in 2019 and 40,000 servers and 1,200 launch the following strategic projects 71.8 billion (21.3 % of revenue) in 2022 vs 2018 ing the number of research and • Digital government in 2020: development workers per 1 million services under protection Big data analytics people and public and private re- • • A centre of excellence in access control systems • Cyber Range, a platform providing search and development spending. • Artificial intelligence (AI) was established, boasting Russia's largest and hands-on training in information security skills to students, special- Industrial Internet of Things most experienced team of subject matter experts • ists and managers • Expanding the range of pro- The aggregate value of contracts signed with SMEs About 200 entries, 50 participants and (IIoT) • Our information security product range was sig- An early-warning system for cyber curement participants, also amounted to RUB 80.1 billion. Contracts with SMEs eight main winners are expected in 2020. Digital transformation of nificantly expanded by launching Solar Dozor 7, a • • attacks and threats, as well as ser- by engaging SMEs accounted for 66 % of all contracts (65 % in 2018). Along with monetary prizes, finalists will Russian industries. data leak prevention solution leveraging the latest 8.3 Promote development-orient- have a chance to compete for travel User Behaviour Analytics (UBA) technology, and vices based on this system • Social Impact Award (SIA), 119 entries from 31 cities and towns were submitted ed policies that support produc- a project supporting social to the SIA competition in 2019, with three winners grants for studies and networking. Solar webProxy, a secure web gateway • A cyber security awareness pro- tive activities, decent job creation, gramme for general public enterprise announced. Rostelecom set up a special category • The Company has developed its AI strategy in- entrepreneurship, creativity and within the competition — the Internet for a Better house (without engaging external consultants). • A joint venture between Rostelecom innovation, and encourage the for- World. Over ten products offered by Rostelecom already and VTB Bank focusing on Big Data malization and growth of micro-, use artificial intelligence technologies, with more expects to launch its first pilots be- small– and medium-sized enter- than 100 projects being piloted fore the end of 2020. Both partners prises, including through access to • The Company uses AI technologies to support will invest RUB 1 billion in the platform, financial services. decision making and optimise its activities, spe- according to a preliminary estimate cifically in the following areas: • Rostelecom will present its AI Strategy • Analysis of global technology trends assisted in 2020 by natural language processing • The Company plans to implement the • Recruitment using automated candidate following AI technologies: • Environmental policy • Rostelecom Group’s environmental investments The Company intends to continue its en- search and attrition prediction assisted by • Computer vision (video stream • Energy policy and expenditures totalled RUB 159.6 million vironmental protection and energy pro- natural language processing analysis) in safe/smart city projects • Rostelecom Group's paper waste generation was grammes in 2020 8.4 Improve progressively, through • Energy conservation and en- Network fault identification using machine Natural language processing in 321.05 tonnes (down 56.9 % year-on-year), with • • 2030, global resource efficiency in ergy efficiency programme learning-based specialist software IQPLATFORM until 2023 321.05 tonnes (up 19.1 % year-on-year) handed consumption and production and over for recycling • We launched our Cyber Security Lab, Russia's • Decision making support systems endeavour to decouple economic • E-billing (paperless invoi first APCS to run large-scale analytics of tech- and recommendation engines on growth from environmental deg- cing) • We negotiated better deals with providers of nological security across the industrial network the DataLab platform radation, in accordance with the last resort, rolled out an automated commercial • Annual energy saving and power metering system across seven regions of infrastructure Computer vision and speech rec- 10-Year Framework of Programmes • energy efficiency activities Russia, replaced power supply units and installed Rostelecom and VTB Bank agreed to set up a ognition in the Unified Biometric on Sustainable Consumption and • in the Company’s branches balanced ventilation systems. The total impact: joint venture focusing on Big Data System Production, with developed coun- Smart City tries taking the lead. • RUB 16 million Rostelecom has developed a number of IIoT Natural language processing (chat- • • 88,388 fluorescent lamps were replaced with services and products. A joint pilot was launched bot) in call centre services • LED lamps across 1,449 facilities to develop and refine a Crop Tracking System Recommendation engines in Wink/ • 26 boiler facilities were upgraded, with two new for Russia's largest agricultural holding company. IPTV • The Smart Utilities project now includes energy boiler facilities built and four decommissioned. 11.4 Strengthen efforts to protect consumption metering, data analytics, remote • Recommendation engines for auto- The costs of these projects totalled RUB 23.4 and safeguard the world’s cultural control of devices, report generation and utility matic network fault detection million and natural heritage. failure logging. Rostelecom and Tele2 Russia mo- • Systems to support decision mak- • 26 energy service contracts were signed for bile operator successfully completed joint testing ing in energy efficiency projects street lighting upgrades of IoT solutions for industrial applications in Saint • Decision making support systems Petersburg. Rostelecom and Softline completed and recommendation engines in • Preservation of natural • Rostelecom was named the winner of the annual • Plans for 2020 include a number of the deployment of the Smart Helmet positioning information security projects heritage Champions of Good Deeds competition in the environmental initiatives in many MRFs, system on the Istochnoye field operated by ARMZ Participation in the Clean Environment category for its support of the Clean including the installation of containers subsidiary Khiagda • Vuoksa initiative Vuoksa volunteer initiative for batteries and waste paper in Rost- elecom offices • Installation of forest fire vid- • Rostelecom’s Forest Fire Monitoring project won eo surveillance systems the top award of the People Investor competition • Plans also include further deployment in the Environmental Efficiency category of forest fire monitoring video cameras: • Initiatives to save Lake Baikal • As of 31 December 2019, 64 IP cameras installed 22 cameras in Perm and 10 cameras in by Rostelecom supported forest fire monitoring Yamal in 2020, and another 15 cameras in the Urals in Perm in 2021. • Over 100 Rostelecom employee volunteers joined efforts to collect rubbish on the shores of Lake Baikal clearing as part of the 360 environmental volunteer marathon

60 61 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

PJSC Rostelecom’s contribution towards first priority SDGs (continued) PJSC Rostelecom’s contribution towards first priority SDGs (continued)

• HR Management Strategy • A new collective bargaining agreement of PJSC • Key objectives of the HR Management Digital Growth The Company provided access to quality tailored Plans for 2020 include extending the until 2022 Rostelecom for 2019–2021 was signed Strategy until 2022: Equality education over the internet for 222 children from Growth project to new regions, increas- • HR policy • HR Strategy Project Office was set up • Top 10 in IT employer ranking 30 child care institutions in 21 Russian regions. ing the number of students to 300, with 8.5 By 2030, achieve full and pro- 4.1 By 2030, ensure that all girls 7,000 classes planned in all subjects ductive employment and decent • The Online Lectorium edu- • Rostelecom was included in the 2020 Bloomberg • Ecosystem of knowledge for em- and boys complete free, equitable relevant for the examination. work for all women and men, includ- cational project Gender-Equality Index (GEI) ployees and Russian citizens and quality primary and secondary ing for young people and persons • Employee retraining pro- • The amount of training increased by 16 % • Increase in labour productivity by education leading to relevant and with disabilities, and equal pay for grammes year-on-year 40 % in 2022 vs 2018 effective learning outcomes. work of equal value. • Over 55 thousand unique users are enrolled in • eNPS score on par with the best Children’s • In April 2019, the first republican hackathon, • Rostelecom plans to broaden its role the Corporate Online University employers Technology Melting Pot of Projects, was held in Petrozavodsk in Children’s Technology Park activities, Parks • In Krasnodar, the Company sponsored the Robo- focusing on cyber security educational • The reach of training was up 8 % at 56 % in 2019, • 25 % of employees at the Knowl- courses, jobs of the future, biometrics from 48 % in 2018 edge-based level quant competition in robotics, the Success Tra- 4.5 By 2030, eliminate gender dis- jectory project ideas contest for school students and video analytics. Plans also include 8.6 By 2020, substantially reduce • The Online Lectorium delivered 35 lectures, with • 20 % of total workplaces are slated for parities in education and ensure and ran the IT-SKILLS and IT-KHOD hackathons. lectures on biotechnology and the In- the proportion of youth not in em- a total of 15 thousand lecture views over the year . > 80 % automation by 2022 equal access to all levels of educa- ternet of Things as well as classes on ployment, education or training. • Gen Zs will make up 20 % to 25 % of tion and vocational training for the • In autumn 2019, Quantorium in Syktyvkar hosted internet safety a daytime camp focused on cutting-edge topics total workforce by 2022 vulnerable, including persons with • Plans include staging the PRO-hack • The Online Lectorium plans for 2020 disabilities, indigenous peoples and in mathematics, informatics and IT and attended by 105 school students engineering hackathon and sponsoring target 1,500 unique users per year with children in vulnerable situations. the First Element competition 90 thousand views • Our subsidiary Rostelecom-Solar has become an 10.2 By 2030, empower and pro- • Plans are in place to launch an IT De- official industrial partner of the Altair children's • The Company plans to set up six Smart mote the social, economic and po- partment within the Corporate Online technology park launched on 28 August 2019 Home educational booths and produce litical inclusion of all, irrespective of University at MIREA — Russian Technological University a study guide featuring tests on the subject. age, sex, disability, race, ethnicity, • The Programming School project is • The Company set up four educational booths origin, religion or economic or other planned to be continued. showcasing Smart Home solutions. status. Digital Internship 365° 3,905 students successfully completed work expe- The Company plans to continue its in- Equality leadership rience placements at Rostelecom, with 38 gaining ternship programmes and student en- programme further full-time employment with the Company gagement activities in 2020

4.4 By 2030, substantially increase the number of youth and adults ABC of the Entrepre- The programme covers 55 thousand pensioners. We plan to roll out the programme across who have relevant skills, includ- Learn the Over 17 thousand people registered to take part In 2020, we plan to hold an all-Russian Internet neurial skills More than 4,500 entries from 79 regions were all Russian regions, design two new mod- ing technical and vocational skills, Internet — in the online championship online championship in 50 Russian re- development, submitted to the 2019 Thank You, Internet! contest ules, and boost the number of companies for employment, decent jobs and Manage It! gions and bring the number of project job retraining that run courses based on the ABC of entrepreneurship. users to 100 thousand the Internet study guide through cooperation with all interested organisations and agencies. ProeKTOriYA Rostelecom provided support to 320 school stu- The Company plans to continue co- dents in grades 8 to 11 from 80 Russian regions, operation within the project, support over 100 teachers/mentors, 50 experts and 30 open online lessons, and get involved in 4.5 By 2030, eliminate gender dis- educational group coordinators organising the forum in Yaroslavl parities in education and ensure equal access to all levels of education and vocational training for the vulnerable, including persons with The Midday In 2019, 50 Rostelecom employee volunteers took In 2020, we plan to grow the number of disabilities, indigenous peoples and project part in the Midday project, hosting 80 educational volunteers, extend the project to three children in vulnerable situations. role plays at seven orphanages new regions and deliver the Golden Age programme. The programme will cover over 600 children from 48 orphanages through 480 sessions in 14 Russian regions.

Programmes • The Cyberchallenge competition on information We plan to scale up the project in 2020. at the Sirius security: 72 finalists invited to the finals hosted Plans are in place for two educational educational by the Sirius educational centre programmes on the most important cyber centre • Cyberchallenge: Next Level, an information secu- security issues: one for talented high- rity training programme for students: out of the school students and the other for stu- 415 participants who solved at least one problem, dents from industry-related universities 60 students reached the final

Rostelecom The project launched its own learning platform, Plans for 2020 include additions to train- Lyceum with over 600 exclusive lessons produced and ing materials on the platform, updating more than 40 courses developed by educational the platform design, adding new gaming partners, all posted on the platform and educational mechanics and acting as an educational partner for school students.

62 63 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

CONTRIBUTION TOWARDS SECOND Second priority SDGs Rostelecom Group’s contribution in 2019 PRIORITY UN SDGS

During the year, the Company continued Goal 12. • Investments in energy saving and energy efficiency totalled RUB 244.5 million contributing to the second priority UN SDGs. Responsible consumption • Heat supply systems and heat metering units were upgraded, including automation of heating substations and production of individual buildings and installation of modern weather compensated systems • PJSC Rostelecom received an official confirmation of compliance of its environmental management system with GOST R ISO 14001–2016 • Total waste handed over for disposal grew by 19 % year-on-year to 1,429.44 tonnes. PJSC Rostelecom selected Food Will Save the World eco-catering service, a project that helps reduce the amount of discarded food products, as a winner of the national stage of the Social Impact Award (SIA) competition • Rostelecom set up a dedicated ESG Information section on its official website in 2019, highlighting the Company's key ESG metrics, documents and policies • Rostelecom released its ninth annual sustainability report.

Goal 13. • Total waste reduction was 3 % Climate action • Reduction in water consumption in 2019 was 4 % • Four-year (2016 to 2019) reduction of resource consumption: Natural gas: 40 % Second priority SDGs Rostelecom Group’s contribution in 2019 • • Liquefied petroleum gas (propane): 32 % • Coal: 12 % Goal 17. • Rostelecom paid RUB 2,047 million in income tax. Other taxes paid totalled RUB 5,114 million. • Diesel fuel: 11 % Partnerships for the goals • Rostelecom joined Vision Zero, a global campaign for zero accidents • PJSC Rostelecom upgraded heat supply systems and heat metering units, which included automation of • Rostelecom jointly with the International Telecommunication Union launched a project to establish the In- heating substations of individual buildings and installation of modern weather compensated systems, op- ternational Research and Testing Centre for Equipment, New Technologies and Services based at the Saint timised space utilisation, installed thermal insulation on building facades and replaced window units with Petersburg State University of Telecommunications modern energy-saving ones. As a result, heating consumption went down by 4.9 % in 2019 • Rostelecom subsidiary Rostelecom-Solar has become an official industrial partner of the Altair children's technology park launched on 28 August 2019 at MIREA — Russian Technological University • Rostelecom was a partner of the ProeKTOriYA nationwide career guidance forum held in Yaroslavl from 23 Goal 15. • Rostelecom develops a forest fire monitoring system, installing 36 IP cameras in Yamal in 2019 to 26 November 2019 Life on land • As part of the 17 Trees of Spring initiative, PJSC Rostelecom employees along with volunteers from other • Rostelecom implemented a nationwide in-house trainer development programme, RT Lab, jointly with the companies planted avenues and groves in Irkutsk International College of Business Trainers (ICBT) • Employees of the Rostelecom's Tomsk Branch took part in national social project Green Games and collected • In June, the Company and Autonomous Non-profit Organisation Russia — Land of Opportunity signed an 20 kg of used batteries for recycling agreement on cooperation in the Professional Internship project • Employees of Rostelecom's Kaliningrad Branch participate in the international environmental campaign • Rostelecom was a digital partner for the 2019 Mashuk North Caucasus Youth Forum. March for Parks every year. In 2019, the Company employees helped to clean up litter from a national park • In 2019, the Company's MRFs conducted a number of voluntary cleanups, including in Svyazist garden square in Magadan and at the seashore near Yuzhno-Sakhalinsk. Goal 16. • Rostelecom received the highest level (score 5.0) Certificate of Public Endorsement of the Results of the Peace, justice and strong Implementation of the Anti-Corruption Charter of the Russian Business institutions • PJSC Rostelecom has in place 17 policies and internal regulations governing its corporate governance system, 8 of which were revised in 2019 • The new version of PJSC Rostelecom's Code of Ethics (as approved on 15 October 2019) includes the Ethical Business Conduct section with provisions on non-discrimination against employees on grounds of gender, race, colour, ethnicity, language or other factors • Rostelecom has in place five whistleblowing channels for the Company employees and third parties to report cases of corruption, fraud, breaches of the Rostelecom's Code of Ethics or other breaches of law • The Talent and Success educational foundation designed a new educational programme on cyber security with support from PJSC Rostelecom and its subsidiary Rostelecom-Solar • The nationwide Cyber Range project run under the Digital Economy programme provides hands-on training in countering real-life cyber threats • During the state examinations, we repelled a number of DDoS attacks up to 10 Gbps against the www.smotriege.ru portal. In addition to the ten prioritised UN SDGs, Rostelecom Group’s activities contribute towards • Queries from more than 50 suppliers were resolved via the universal hotline at www.zakupki.rostelecom.ru all other UN SDGs. More details on our contribution can be found in this Report as each sec- and the dedicated hotline for SMEs at [email protected] . tion is marked with an applicable SDG icon.

64 65 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

2.4. Stakeholder Engagement

• international sustainable development • confidentiality of information that consti- Rostelecom Group uses a wide range of complement to the newsletter. The Corporate TV standards tutes a state secret or a trade secret in munication channels to engage its stakehold- covers all regions of Rostelecom’s operation. accordance with the Company’s internal • internal documents of PJSC Rostelecom, ers. The Company publishes information on all The Company discloses information on the documents its subsidiaries and affiliates. material aspects of its business on the web- corporate information disclosure website run 102-43 control over the use of insider information. site https://www.company.rt.ru/en/ . In 2019, We recognise that information trans- The Board of Directors establishes the rules • by Interfax (www.e-disclosure.ru). Annual re- the website had 4.2 million visitors and 17.6 parency is an indispensable component of of, and approaches to, disclosures, which are The Company continuously improves its com- ports and sustainability reports also serve as 130.8 million pageviews. Our customers can find up- trust-based relationships with stakeholders. formalised in PJSC Rostelecom’s Information munication infrastructure — for instance, a a public communication vehicle to engage thousand mentions of Rostelecom to-date information on the Company’s prod- As part of our active stakeholder engagement, Disclosure Policy. KPI system was introduced at PJSC Rostele- all stakeholders. in the mass media during 2019 Rostelecom provides quality information on com’s press service as part of the efforts to ucts and services www.rt.ru. In the reporting Key principles of the information policy are operational, environmental, social and cor- improve its performance. Rostelecom tracks period, the B2C traffic amounted to 48 mil- Identifying stakeholders • timely, consistent, and prompt provision lion (24.8 million users) and B2B traffic to 4.9 porate governance performance results. This the number of its publications, evaluates text 102-40 102-42 To identify stakeholders, of information million (3.5 million users). The Wink — TV On- approach helps us to balance the interests quality and runs surveys of members of the Rostelecom considers the level of mutual im- accessibility, objectivity, completeness, line digital platform (wink.rt.ru) had 4.9 million of all stakeholders and avoid potential risks. • media to look into the service performance. pact and common interests of stakeholders. accuracy and comparability of disclosed users and 9.7 million pageviews in 2019. Ros- To further enhance our investment case and The identification and selection of stakehold- information telecom subsidiaries and affiliates also have maintain a trust-based dialogue with our ers is based on their estimated impact on the their own corporate websites. stakeholders based on openness, transpar- • equal rights of all stakeholders to obtain Company’s current operations and strategy, information in compliance with all ap- ency and public accountability, Rostelecom We have a significant social media presence: as well as our existing practice for engaging plicable laws, standards and regulations 4.2 discloses information in line with: Rostelecom and its subsidiaries maintained with stakeholders and their dependence on million users of PJSC Rostelecom’s • information disclosure regardless of spe- a total of 23 social media accounts with an • Russian laws PJSC Rostelecom’s performance. While pre- website, www.company.rt.ru , in 2019 cific individual or group interests aggregate audience exceeding 1.9 million in paring the Sustainability Report 2019, we up- • requirements and recommendations of • reasonable balance between the Com- 2019. Over 1,500 enquiries are submitted via dated the stakeholder map. the Bank of Russia pany’s transparency and protection of its social media and promptly handled by our Rostelecom’s key stakeholders: • requirements of the Moscow Exchange business interests employees every day. • Government authorities Rostelecom publishes news on corporate • Shareholders projects, incentive programmes and employee benefits on its intranet portal. 1 Over 90 • Local communities and residents thousand employees were registered on the • Investors and business partners Mentions of Rostelecom projects in the Text quality ratings in 2018–2019, points Mass media survey ratings of the press portal in 2019, while the number of unique • Customers daily visitors totalled about 40 thousand. We 17.6 mass media over the last five years, service performance in 2017–2019, • Employees thousand points continue to publish the Rostelecom Vestnik, a million pageviews of PJSC Rostelecom’s corporate newsletter for employees of Rost- • Expert community 130.8 9.5 website, www.company.rt.ru , in 2019 21.4 elecom Group. Twice a year, the Rostelecom • Non-governmental organisations PRO customer magazine is issued as a sup- • Mass media.

7.5 120 17.6

1 Accessible to Rostelecom employees and certain employees of Rostelecom subsidiaries and 2015 2016 2017 2018 2019 2018 2019 2017 2018 2019 affiliates.

66 67 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

Rostelecom Group’s stakeholder map in 2019 102-44 Stakeholder engagement

Stakeholders Key expectations and interests Key engagement mechanisms Key events and projects in 2019 of stakeholders

Shareholders 1. Strategy implementation • Holding general sharehold- On 26 April, the Company’s Board of Directors decided to convene the Annual Non-governmental Government ers’ meetings including the General Shareholders’ Meeting and approved the new version of the Dividend 2.0 2. Cost efficiency organisations authorities Annual General Sharehold- Policy 3. High financial stability in a ers’ Meeting (management 1.8 competitive market presentation to share On 10 June, ACRA affirmed the Company’s credit rating at AA(RU) with a stable Shareholders 4. Shareholder value growth holders) outlook 1.6 5. Dividend policy • Disclosing information on an On 14 June, Rostelecom held its Annual General Shareholders’ Meeting 6. Openness and transparency external website (publica- 1.4 of business processes. tion of press releases and presentations) On 21 November, following the announcement regarding the consolidation of 100% of Tele2 Russia, S&P Global Ratings affirmed Rostelecom’s credit rating 1.2 • Regular reporting (financial at BB+ statements and other ma- 1.0 terials for the reporting pe- On 18 December, the Extraordinary General Shareholders’ Meeting was held Local Business riod) communities partners 0.8 • Engaging with rating agen- PJSC Rostelecom took part in seven investment conferences cies (Fitch Ratings, Standard & Poor’s, ACRA). An e-voting system for shareholders was launched. 0.6

0.4

0.2 Scientic and expert 0 Investors community

1. Complying with Russian laws • Signing cooperation agree- Digital Economy of the Russian Federation national programme 2. Contributing to Russia’s so- ments cio-economic development • Participating in the imple- On 8 September, Rostelecom provided video surveillance during the Russian State Duma elections 3. Participating in the im- mentation of national programmes Government plementation of national By 2 July, Rostelecom’s video surveillance system transmitted a total of 4.6 authorities projects • Participating in public million hours of live video feeds during the 2019 Unified State Examination events Environmental Employees 4. Contributing to Russia’s transition to innovative • Expert work in committees In July 2019, as directed by the President of Russia, a tripartite agreement was organisations development and commissions. signed between the Government of the Russian Federation, PJSC Rostelecom 5. Conforming to the highest and Rostec State Corporation for the development of 5G Mobile Networks in standards of business ethics the Russian Federation Sustainable development 6. Rostelecom successfully completed a major project to build an advanced over the longer term. infrastructure and provide a full range of services for seven ministries and agencies at the IQ-Quarter complex in the Moscow International Business Centre “Moscow City”.

Customers Mass media

Stakeholder’s inuence on the Company

The Company’s inuence on stakeholder

68 69 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

Stakeholders Key expectations and interests Key engagement mechanisms Key events and projects in 2019 Stakeholders Key expectations and interests Key engagement mechanisms Key events and projects in 2019 of stakeholders of stakeholders

1. Decent salary • Collective bargaining agree- A new collective bargaining agreement of PJSC Rostelecom for 2019–2021 Providing reliable • Interaction under contracts, Rostelecom implemented projects to transform the customer service-related 2. Safe and comfortable work- ment was signed telecommunications services agreements and coopera- business processes, including in B2B connections and customer service ing environment • Remuneration system and tion agreements HR Strategy Project Office was set up Rostelecom launched a project to develop and deploy an Integrated Service 3. Fair remuneration and social employee incentives (short- • Regular consumer surveys term and long-term) Monitoring System Employees benefits for employees An employer branding programme for 2019–2020 was developed and approved Customers • Protecting the security of 4. Protection of human rights • Employee satisfaction and services The Company measured customer satisfaction with Wink, Smart Home, Video engagement surveys 5. Opportunities for profes- PJSC Rostelecom was included in Bloomberg’s 2020 Gender-Equality Index • Higher quality of services Surveillance and Antivirus products sional development and • Corporate media and por- • Improved customer expe- career advancement tals In July 2019, a financial incentive scheme was launched to supplement the rience Rostelecom carried out 15 large-scale projects to protect critical IT infrastructure corporate pension scheme and connect enterprises to the State System for Detecting, Preventing, and • Skill building programmes Communications within the • Mitigating Computer Attacks (GosSOPKA) Rostelecom’s Corporate blogosphere • In September 2019, Rostelecom introduced the value ambassador programme Online University aiming to more deeply engage employees on corporate values • Higher accessibility of ser- Unified Biometric System • Occupational health and vices. safety training Also in September 2019, Rostelecom conducted an employee satisfaction survey E-billing, self-service terminals, NPS index, call centre • Business process gamification A comprehensive employee training system was developed 23 social media accounts maintained by Rostelecom Group. Social partnership • Rostelecom completed the redesign of its corporate training portal in 2019, and • Public reporting. now all employees have access to the Corporate Online University

Rostelecom joined Vision Zero, a global campaign for zero accidents. 1. Business process transpa • Arranging for press events The 9th Together into the eFuture regional journalism contest rency (briefings, media scrums, 1. Financial performance Participating in investment Rostelecom made go / no-go decisions on a number of investment projects and • 2. Ensuring easy access to in- press conferences, etc.) Annual evaluation of PJSC Rostelecom’s press service performance forums and conferences programmes for 2019 and 2020 2. Stable position in a compet- formation about the Com- Timely update of the infor- (one-on-one and small • th itive market pany’s activities. mation on websites and in Media tour to the 7 Looking into the Digital Future national forum group meetings with man- The Company's senior management and IR team participated in over 65 one-on- Mass 3. Dividend policy social media agement) one meetings and conference calls with about 100 investors in the reporting year media Media tour to the St Petersburg International Economic Forum (SPIEF) Handling mass media enqui- Investors 4. Strong corporate gover- Disclosing information on an • • ries and requests nance external website (publica- Rostelecom made four quarterly disclosures of financial and operating results Media tour to the FINOPOLIS Forum of Innovative Financial Technologies 5. Conforming to the highest tion of press releases and • Press conferences and me- standards of business ethics presentations) 40 press releases containing financial information were published in 2019 dia tours Media tour to Iturup, Kunashir and Shikotan Islands to cover the launch of the Openness and transparency Media tours for the mass Sakhalin–Kuril Islands Submarine FOCL 6. • Presentations for investors Rostelecom's investors and shareholders were provided with communications • and professional commu- 2 media and bloggers 7. Risk management. support for the deal to consolidate 100 % shares in Tele Russia, the biggest Media tour to the Sirius educational centre to provide coverage for the cyber nities (financial statements Public reporting. deal in the Russian telecoms market • security programme hosted for Russian university students. and other materials for the reporting period) To further enhance its ESG profile, the Company set up a dedicated ESG Infor- • Communications with in- mation section on its official website in 2019. vestment bank analysts • Meetings with potential investors in the Company se- Reducing the environmental • Partner programmes and PJSC Rostelecom’s environmental policy was updated curities. footprint projects • Social and charitable pro- An HSE and fire safety policy was approved grammes Rostelecom successfully passed an external audit for compliance with 1. Creating a transparent, com- • Signing agreements with Rostelecom consolidated 100% of Tele2 Russia Environmental • Public reporting. GOST R ISO 14001-2016 petitive environment manufacturers organisations 2. Using market pricing • Handling complaints and PJSC Rostelecom, PJSC MegaFon, PJSC VimpelCom and PJSC MTS signed a 26 Rostelecom’s boiler facilities were upgraded memorandum of understanding to consolidate efforts in jointly developing and 3. Conforming to the highest queries optimising the usage of 5G mobile networks (5G/IMT-2020) in Russia Rostelecom continued its separate waste collection programme Business standards of business ethics • Participating in exhibitions and conferences, joint work- partners 4. Sustainable development Russia’s first Cyber Security Lab was launched to run large-scale analytics of En+ Group’s 360 Minutes environmental marathon over the longer term shops technological security across the industrial networks infrastructure 5. Mutually beneficial • Monitoring of satisfaction E-billing cooperation levels Rostelecom continued its Infrastructure Operator to Operators O2O project Anti-Corruption Policy. • Bilateral visits Energy efficiency projects 6. Rostelecom became the general partner of the 4th Security and Import Sub- Holding public tenders • stitution national conference Following the review of PJSC Rostelecom’s report by the Carbon Disclosure • Signing long-term agree- Project, the Company’s environmental rating was upgraded from category ments with transparent pric- PJSC Rostelecom implemented an order distribution system based on the Smart D to C in 2019 ing terms Procurement intelligent system • Implementing social pro- Environmental projects, campaigns, voluntary cleanups and special events in grammes Rostelecom partnered with RSMB Corporation to hold 43 workshops on SME the Group’s regions of operation. participation in procurement by certain entities.

1 NPS (Net Promoter Score) An index reflecting consumer loyalty to a product or company (likelihood to recommend) and used to gauge repurchase intent.

70 71 ROSTELECOM'S SUSTAINABILITY REPORT 2019 2. OUR SUSTAINABILITY STORY

Stakeholders Key expectations and interests Key engagement mechanisms Key events and projects in 2019 Incorporation of key stakeholders’ suggestions into the 2019 Report of stakeholders

1. Contributing to the de- • Partner programmes At the 5 March open meeting of the Innovation and R&D Directors Club, Rost- Key stakeholders’ suggestions or requests for topics The Report section incorporating the stakeholders’ suggestion velopment of science and • Research and education elecom presented the main approaches to developing the digital transformation or request for topic technology conferences strategy 1. Disclose HSE performance figures on a per-unit basis Incorporated into the UNCTAD Indicators Table 2. Applying innovations and • Commissioned R&D. appendix solutions mitigating the Rostelecom and VTB Bank agreed to set up a joint venture focusing on Big Data Scientific environmental footprint and expert Technology projects community 3. Digital transformation of the 2. Make a focus in the report on Rostelecom’s viability disclosure Incorporated into the Development Strategy and Busi- economy. Quantorium technology parks for children ness Model section

Educational programme in cyber security at the Sirius educational centre. 3. Explain the choice of the priority topic Incorporated into the Development Strategy and Busi- ness Model section

4. Identify the metrics impacted by all employee training and Incorporated into the Our Employees section development programmes implemented at PJSC Rostelecom 1. Receiving information on • Working and expert groups, Digital Equality integrated social programme the Company’s growth pros- commissions pects • Cooperation and partner- Charitable and volunteer projects. 5. Include only key information about projects in the Report Incorporated into all sections of the Report 2. Contributing to social sta- ship agreements in order to keep its size under control bility in the regions of op- Local • Joint events — voluntary eration cleanups, trainings, exer- communities Expand the Report scope by including PJSC Rostelecom Incorporated into all sections of the Report 3. Implementing social pro- cises 6. subsidiaries grammes • Sponsorship and charitable 4. Supporting Russian manu- programmes facturers. • Public reporting. 7. Disclose information about employee training and develop- Incorporated into the Our Employees section ment at subsidiary companies

1. The Company’s perfor- • Forums, conferences, exhi- Five projects to measure demand for digital solutions in Russia’s regions (jointly 8. Disclose relevant information as per the updated GRI Stan- Information about development plans was incorpo- mance and growth pros- bitions, round tables with Autonomous Non-Commercial Organisation Digital Economy) dards, with an emphasis on development plans and KPI rated into all sections of the Report and the table pects • Public reception offices achievementI detailing Rostelecom’s contribution to SDG targets in 2. Key events Social Impact Award programme supporting social enterprise among young the Our Sustainability Story section • Public opinion research people Non- 3. Corporate social respon- • Volunteer projects. sibility. governmental Internet for Social Infrastructure Facilities project 9. Implement programmes to teach children healthy internet Incorporated into the Our Country and Our Customers organisations use considering potential hidden threats sections Computerisation of Orphanages

Children’s technology parks 10. Provide figures of employee engagement on social projects Incorporated into the Our Employees and Our Country in more detail (for example, the ambassador programme) sections Partnership with the Sirius educational centre.

11. Continue disclosing information about the Learn the In- Incorporated into the Our Country section ternet — Manage It! educational project on IT and internet literacy for beginners

12. Provide more detailed information on broadband, Smart City, Incorporated into the Our Customers section STAKEHOLDER ENGAGEMENT openness and public accountability. Stake- RSPP, industry media, the heads of Rostele- medicine projects, etc., including via social media and blogs AS PART OF THE REPORT holders contribute to the improved quality com’s business units, and employees of the PREPARATION PROCESS of our disclosures, including through regu- Company’s regional branches. The partici- 13. Add an Our Partners section with supplier-related figures Incorporated into the Supply Chain section lar meetings held prior to report publication. pants presented their suggestions and rec- On 18 February 2020, we had a dialogue with ommendations on disclosing the prioritised 14. Provide more detailed information on activities in the regions, Incorporated into the Our Country section topic and discussed the list of material dis- particularly describing the sustainability projects implement- our stakeholders as part of the Sustainability ed in these specific regions Report 2019 preparation process. The meet- closures. All remarks and comments were . ing reviewed the 2018–2019 reporting cam- incorporated into Rostelecom’s new report 15. Use cross references to the Annual Report Incorporated into all sections of the Report 102-43 Rostelecom uses sustainability re- paign and discussed the concept of the next porting as a communication vehicle to inform Sustainability Report and key suggestions its stakeholders about its key achievements, regarding its content and disclosures. The challenges and plans, thus demonstrating meeting gathered partners, experts, repre- the Company’s sustainability, transparency, sentatives of non-commercial organisations,

72 73 SUSTAINABILITY REPORT Increase 2019 in labour Number of employees productivity who completed training at the Corporate Online University

Our employees ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES 3 Our Employees

3.1. The Company’s Approach

2019 — DELIVERING ON DIGITAL

126.9 31.12 55+ 103-1 103-2 Rostelecom Group is one of Our top priority is to provide a safe, healthy from professional training, we focus on de- thousand people hours on average were spent thousand unique users completed Russia’s largest employers with a headcount and secure working environment for our em- veloping digital and leadership skills and go the total headcount on training per trained employee training at the Corporate Online close to 127 thousand people, each of them ployees so that they could develop along beyond by actively engaging educational in- of Rostelecom Group of PJSC Rostelecom University contributing to our mission of building a dig- with Rostelecom and make their own contri- stitutions of all types, spreading digital liter- ital Russia. bution to achieving humanity’s global goals. acy among the young (SDG 9). We seek to create and continuously improve By providing social protection, additional Thus, our HR management policy is at all lev- an environment that is conducive to the per- health insurance, pension schemes and em- els directly linked to achieving sustainability sonal and professional development of every ployee housing support, Rostelecom builds goals both in Russia and globally. a better future for both its employees and employee: providing opportunities for train- Human capital development is one of the four 7% 5.5 111+ ing and involvement in major projects and their families. pillars of Rostelecom’s Strategy 2022. Our ar- growth of Group RUB thousand thousand man-courses ensuring a safe and supportive working en- Equality is a top priority for us, as we fo- eas of focus include: employees’ productivity are PJSC Rostelecom annual training the volume of optional training vironment, fair compensation and addition- cus on providing decent work for all women • building employee digital skills and expenditures per employee provided by the Corporate Online al social protection. We are proud that ev- and men in line with SDG 8.4, including for capabilities University ery employee can contribute to a common young people and other persons with dis- search for solutions and propose his/her own abilities, and ensure equal pay for work of • staff retraining and internal migration ideas for optimising Rostelecom’s business equal value. In early 2020, our gender equal- • new approaches to employee develop- processes by simply using a modern digital ity efforts earned global recognition as Ros- ment and labour management 74.68 400 772.8 application or programme. telecom was included in Bloomberg’s 2020 • improving the corporate culture and in- Rostelecom’s long-term HR management and Gender-Equality Index. teraction models. RUB billion thousand man-courses — RUB million employee development goals are directly We strive to increase the number of youth In 2018, a five-year HR management strate- Rostelecom Group payroll expenses yearly volume of distance learning Rostelecom Group’s investment linked to the UN’s 2030 Agenda for Sustain- and adults who have relevant skills for de- gy until 2022 was also developed, aimed at (up by 7% over the year) (12% growth since 2018) in occupational health and safety able Development. We recognise global chal- cent employment (which also contributes to improving labour productivity and employ- lenges and focus our HR strategy on achiev- SDG 4.4, the target relevant to Rostelecom) ee loyalty as well as building an ecosystem ing UN SDGs 4, 8, 10, 11, 16 and 17, which have and invest into employee training, providing of knowledge for both Rostelecom employ- been identified by the Company as the most both offline and online learning opportuni- ees and Russian citizens in general. 575.4 200+ relevant to Rostelecom’s business. ties under our corporate programmes. Apart RUB million new items of online educational PJSC Rostelecom’s total employee materials were developed training costs

76 77 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

HR management system The Group’s human capital management mat- Operations Management Department — ad- In 2019, we were strongly focused on im- fore, each year, the Company invests millions Key areas of employee development: HR management at Rostelecom is guided ters are reserved to the Organisational De- ministration of HR functions. proving our HR management, including by of roubles in employee training. To provide by international, Russian and internal cor- velopment and HR Management Unit which Talent Management Department — recruit- making changes to the Group’s organisa- an even wider range of training and devel- porate regulations. The Nomination and comprises the following departments respon- ment and onboarding, talent pool manage- tional structure, and also implemented proj- opment opportunities for its employees, in Remuneration Committee of PJSC Rost- sible for key HR roles: ment, development of evaluation tools, the ect management, cross-functional and dig- 2019, Rostelecom designed a comprehen- elecom’s Board of Directors oversees the HRM Technology and Analytics Department — Group’s employer brand management. ital teams, remote work and programmes to sive training system which ensures holistic Soft skills improve labour productivity. In 2019, an HR employee development though the use of adoption and implementation of the Com- automation of HR services, research as re- Knowledge Management Department — de- Strategy Project Office was established, with various integrated training formats — class- pany’s remuneration policy, the implemen- quested by HR functions. velopment of training methodologies and the following roles: room, blended learning and online. tation of incentive programmes and perfor- Internal Communications and Corporate Cul- programmes, conducting and evaluating the Defining employee loyalty management mance assessments of executive bodies ture Department — employee communica- results of trainings, development of Rostele- • policy and key managers. tions, corporate culture development, em- com’s Corporate Online University, employ- The Compensation Committee of Rostele- ployer brand positioning within the Company. ee assessments. • Positioning management and employer Hard skills branding com’s Management Board is responsible for Organisational Development and HR Manage- Rostelecom Group’s business units — PJSC Building digital economy professional building an effective employee compensa- ment Department — the Company’s organi- Rostelecom and Rostelecom subsidiaries — • communities. tion system that drives the Company’s com- sational structure and employee remunera- have their own HR management functions to petitiveness and long-term success. tion, incentives and development. implement the HR management policy. Rostelecom’s comprehensive programme to improve labour productivity includes the transformation of the Company’s operating Digital skills model, business process optimisation, digitalisation, automation, goal-setting, motiva- HR management organisation at PJSC Rostelecom tion, and initiatives by subsidiaries and affiliates. These efforts resulted in a 7% increase in labour productivity in the reporting period. Overall development Board of Directors — Nomination Management Board — We understand that the ambitious goals the 16% and Remuneration Committee Compensation Committee Group set itself can only be achieved with growth of Rostelecom’s training a team of high-skilled professionals. There- volume owing to the holistic approach

Organisational Development and HR Management Unit The Group’s employee productivity increased

Internal Communications Organisational Development by 7% in 2019, with revenue per employee growing HRM Technology and Corporate Culture and HR Management and Analytics Department to RUB 2.7 million from RUB 2.5 million in 2018 Department Department

Talent Management Knowledge Management Operations Management Department Department Department

HR Strategy Project Oce

78 79 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

3.2. Attractive Working Conditions

In 2019, to attract and retain the right talent, moter Score (eNPS) which gives an insight Year and awarded the Grand Prix of the Crys- Rostelecom developed and approved its em- into employee satisfaction with the Company. tal Pyramid 2019. The Company’s IT Trans- Rostelecom Group’s average headcount, people ployer branding programme for 2019–2020, formation programme became the winner in In September 2019, PJSC Rostelecom con- 2016 2017 2018 2019 which aims at improving employer brand po- ducted an employee satisfaction survey which the Organisational and Culture Transforma- Group total 142,532 133,684 128,530 126,880 sitioning and employer branding within the covered about 50% (55 thousand) of em- tion 2019 category; moreover, the predic- Company, promoting Rostelecom values via ployees, collecting and processing 37 thou- tive analytics tools used by Rostelecom in PJSC Rostelecom 121,316 112,594 107,930 105,754 brand ambassadors, developing professional talent management were the Best HR Tech sand responses. The survey findings showed Subsidiaries and affiliates 21,216 21,090 20,600 21,126 communities and implementing programmes Solution 2019. that eNPS grew to +10. EQUAL OPPORTUNITIES to enhance employee loyalty. PJSC Rostelecom’s shared services centre Human capital development awards won the WOW!HR 2019 2 international busi- 102-8 As part of its commitment to sus- HR management assessment Rostelecom’s average headcount by employment type, people Rostelecom’s achievements in HR manage- ness HR management award with its gamifi- tainability, Rostelecom promotes diversi- The performance of Rostelecom’s HR mana ment and development were recognised at cation project to involve employees in the ty and equal opportunity at work for both 2016 2017 2018 2019 gement system is regularly evaluated by nom- the 20th Russia and CIS HR Directors Sum- innovation process. In February, the centre men and women, supports employees from Men Women Men Women Men Women Men Women ination and remuneration committees and mit. Rostelecom received the Crystal Pyra- piloted an interactive platform to visualise vulnerable groups and avoids discriminating compensation committees. Each year, we mid 2019 award 1 in three categories. Rostele- results of the innovation process, which was against any person. Indefinite contract 68,897 47,437 63,602 44,727 61,762 42,323 61,923 40,091 measure labour productivity metrics, employ- com’s HR management team was recognised voted the winner of the PLAY HARD gamifi- Rostelecom Group’s average headcount was ee engagement level and employee Net Pro- Fixed-term contract 1,299 3,786 1,185 3,159 1,193 2,709 1,221 2,518 by the expert community as HR Team of the cation category. 126.9 thousand as at end-2019, with women accounting for 42.33% of the total. Full-time 71,811 45,144 65,562 40,105 62,721 37,588 61,422 35,427 The majority of the Group’s workforce is hired Part-time 1,690 2,774 2,195 4,811 2,910 4,767 3,971 4,934 on a permanent basis (over 91%), and about eNPS Dynamics Under civil contracts 16,418 17,815 22,200 26,192 8% are employed under fixed-term contracts. In 2019, the headcount was slightly down (by less than 1.5%) year-on-year as a result of the programme to increase labour pro- Share of PJSC Rostelecom employees with disabilities ductivity and organisational changes within the Group. 2016 2017 2018 2019 3 10 20 405-1 In line with Rostelecom’s Code of Eth- Share of employees 0.0082 0.0081 0.0085 0.0087 April 2018 September 2019 2022 Target ics, the Company strictly adheres to the prin- with disabilities ciple of non-discrimination against employees in labour rights and freedoms, or benefits, on grounds of gender, race, age, colour, eth- PJSC Rostelecom employees by category, people * nicity, language, origin, material, marital, social or official status, place of residence, reli- 2016 2017 2018 2019 gious views, beliefs, membership in (or failure Over 50 thousand Specialists 80,921 68,823 66,919 79,843 to join) particular public associations or social employees took part groups, or any other circumstances unrelated Blue-collar workers 33,837 28,325 26,147 25,587 in the survey to the employee’s professional performance. Heads of functions 12,150 12,014 12,149 12,833

Top managers 153 95 86 212

Other employees 172 115 112 107

Total 127,233 109,257 105,301 118,582 1 The Crystal Pyramid award is given to teams and individual specialists for the achievements in HR management that drive the development of HR management in Russia and the CIS. 2 WOW!HR is the leading business award in employee development and internal communication technologies. The winners are determined following a conference * Based on the headcount data, including internal and external part-time employees. where nominees present their projects to the public.

80 81 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

In 2019, the majority of Rostelecom Group Freedom of association policy PJSC Rostelecom employees that took parental leave/returned to work after parental PJSC Rostelecom’s gender balance, % employees (over 60%) were specialists (77,118 PJSC Rostelecom may freely participate people), and about 30% were blue-collar leave, people in commercial organisation associations — Share of women, % 2016 2017 2018 2019 workers (38,548 people). 13,692 employees 2016 2017 2018 2019 unions, associations, cross-industry and re- All managers 31.36 30.89 30.81 31.00 were function heads and 317 — top managers. gional associations, financial and industry Men Women Men Women Men Women Men Women groups. The shareholders’ meeting decides Junior managers 32.78 32.49 32.44 32.66 Parental leave Total number of 8,875 8,189 8,265 7,529 7,768 6,831 7,504 6,020 by voting on the Company’s participation in Top managers 20.51 18.86 19.81 19.28 401-3 PJSC Rostelecom offers parental leave employees that were such organisations. The key condition is that for both female and male employees. In 2019, entitled to parental Managers of revenue-generating 85.62 83.42 80.44 78.88 leave the participation terms need to be regulat- units 1,487 people went on parental leave, includ- Total number of 86 2,251 106 1,916 76 1,640 86 1,401 ed by the Russian legislation and compliant IT managers 29.24 29.71 31.99 31.45 ing 86 men and 1,401 women. Additionally, employees that took with Russian antitrust legislation. Rostelecom makes one-off childbirth or child parental leave Company total 42.17 42.43 41.63 40.15 In addition, all Rostelecom employees have adoption payments to the employees with at Total number of em- 69 518 89 839 109 1,328 78 1,883 the freedom of association and the right to least two years of employment at the Com- ployees that returned to work after parental collective bargaining, may join various trade pany. In the reporting year, 2,709 employees leave ended unions and professional associations. Rost- of subsidiaries and affiliates were entitled to elecom suppliers and contractors share and The basic rights of employees are set out in New employee hires and employee parental leave; 1,361 women and 6 men exer- support the Company’s approach. PJSC Rostelecom's internal labour regulations turnover cised this right, and 1,330 women and 10 men and employment contracts. Rostelecom also 401-1 Rostelecom does not pursue the pol- returned to work after parental leave. Protection of employee rights has in place policies on human rights pro- icy of a predominantly local workforce and at the workplace tection — the Code of Ethics and Corporate selects candidates to fill vacancies based on Governance Code. For more details see the PJSC Rostelecom was included in the 2020 Bloomberg Gender-Equality Index To ensure protection of employee rights at their education level, qualifications and pro- We Are Rostelecom section of this Report. the workplace, all divisions of Rostelecom are fessional skills. In 2019, PJSC Rostelecom In early 2020, PJSC Rostelecom was included in Bloomberg’s 2020 Gen- compliant with the Russian labour law and la- Employees can report perceived violations of hired 24,882 new employees (61 % men and der-Equality Index (GEI). The index tracks the financial performance of public bour standards set out in the International their human rights to the corporate Hotline 39 % women), with men under 30 making companies committed to disclosing their efforts to support gender equality Bill of Human Rights, ILO Declaration on Fun- at [email protected] or 8 800 181 1811 or the largest share and women above 50 — through policy development, representation and transparency. damental Principles and Rights at Work and directly to the Asset Protection Department the smallest one. For 2020, Bloomberg expanded the eligibility for the index to nearly 6,000 other international regulations. at PJSC Rostelecom’ Headquarters. companies across 84 countries. Rostelecom’s inclusion in the index reflected its high level of disclosure and overall performance against all related metrics within the GEI framework, with the Company providing a comprehensive look at its investment in workplace gender equality and the communities in which it operates.

“Diversity and inclusion are instrumental a supporter of the UN SDGs, we see to Rostelecom’s business strategy. We reducing inequalities as one of our top are honoured to be recognised for our priorities.” efforts to drive transparency and further advance gender equality through Mikhail Oseevsky Rostelecom’s corporate culture. As President of PJSC Rostelecom

82 83 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

Employee turnover in 2019 increased by less Permanent and temporary personnel and customer premises equipment installa- gust. In the southern regions, higher employ- PJSC Rostelecom’s new hires by age and gender, people than 1% year-on-year. Importantly, the invol- In 2019, Rostelecom Group personnel em- tions. Temporary workforce was also hired to ee churn in summer is linked to the local fo- untary turnover rate keeps decreasing with ployed people under civil contracts for cer- perform jobs related to handling customer cus on agriculture as employees have farms each passing year while the voluntary turn- calls as part of first line support and periodic of their own. In the Far East, employees usu- 2016 2017 2018 2019 tain jobs, with the average headcount of PJSC over rate shows slight increases. The Group’s Rostelecom employees working under civil business support tasks during peak periods. ally leave during fishing seasons. Men Women Men Women Men Women Men Women overall turnover rate was 13.4%, with involun- contracts in the reporting period at 26,192. There are also seasonal variations in employ- tary turnover at 5.9%. Under 30 3,700 3,219 4,628 5,438 5,803 5,536 7,146 4,812 More than 92% of these workers were en- ment at Rostelecom, mainly in the southern The highest turnover is observed among Ros- 31–49 2,257 2,761 2,971 5,390 3,803 4,069 6,328 3,991 gaged in Rostelecom service connections regions and the Far East from June to Au- telecom employees under 30, with the highest rate shown by women under 30. The turn- Over 50 972 1,093 1,021 1,740 1,157 910 1,706 839 over rate among employees over 50 is very low, 3% among men and 2% among women on average. Employee turnover at PJSC Rostelecom, %

2016 2017 2018 2019

Overall employee turnover 7.0 8.4 9.7 10.6 REMUNERATION AND INCENTIVES

Voluntary employee turnover 7.0 8.0 10.0 11.0 NO POVERTY PJSC Rostelecom’s remuneration and incentive system is as shown below Involuntary employee turnover 8.4 10.5 6.6 6.3

Employee turnover at PJSC Rostelecom by age and gender, %

2016 2017 2018 2019

Men Women Men Women Men Women Men Women

Under 30 17 22 21 29 24 35 28 35 Management Board President 31–49 6 7 7 9 8 10 10 11

Over 50 3 2 3 2 3 2 4 2

approves

PJSC Rostelecom permanent and temporary workers, people

2016 2017 2018 2019 Regulations on the Mone- Targeted incentive Р tary Incentives for Employ- Average headcount (staff only, 127,233 120,699 117,114 118,582 Payroll Policy systems excluding workers under civil ees Based on Performance contracts) Average headcount of part-time 4,465 7,171 7,983 9,635 workers Average headcount of temporary 5,328 4,653 4,232 4,193 Local payroll policies workers under fixed-term contracts Average headcount of workers under 16,418 17,815 22,200 26,192 civil contracts (excluded from the total All employees except for Certain categories of headcount) certain categories of All employees employees of technical employees of technical and and commercial units commercial units

84 85 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

Rostelecom provides fair pay, gradually in- agement at Rostelecom subsidiaries and af- Since 2016, the Group’s payroll has increased 405-2 creasing payroll and annually indexing pay filiates, while for other employee categories, Women-to-men remuneration ratio at PJSC Rostelecom rates. Pay indexation is calculated individ- by 13%, from RUB 66.02 billion in 2016 to RUB men were paid on average twice as much ually and takes into account the consum- as women. Position level 2016 2017 2018 2019 er price index (CPI), the employee’s income 74.68 billion in 2019. The average monthly pay for The Company has put in place grade-based Women aver- Women aver- Women aver- Women aver- level and the local minimum wage in the rel- employees has risen by almost 33%, from RUB employee incentive programmes. age salary/men age salary/men age salary/men age salary/men evant region. 40 thousand in 2016 to RUB 53 thousand in 2019 average salary average salary average salary average salary To catch up with telecoms majors in terms Long-term incentives Top managers (salary only) 0.9 0.9 0.8 0.9 of pay rates and strengthen employee mo- PJSC Rostelecom has a long-term incen- tivation, Rostelecom had in place the Regu- tive programme for employees in grades 6 lations on the Long-Term Bonus Programme Rostelecom Group’s salary expenses, RUB billion to 11. Under the programme, employees may All managers (salary only) 0.9 0.9 0.9 0.9 for Employees for 2017–2019. choose to use a portion of their variable re- 2016 2017 2018 2019 To enhance its remuneration system, in 2019, muneration to buy Rostelecom securities. In All managers (salary and 0.8 0.8 0.7 0.8 PJSC Rostelecom 56.85 58.16 62.77 65.29 other payments) PJSC Rostelecom launched the Fair Pay proj- this case, they are entitled to additional re- ect aimed primarily at achieving the target Rostelecom Group 66.02 67.2 69.8 74.68 muneration in the form of Rostelecom shares Other employees 1.1 1.1 1.1 1.1 market average wage levels by 2020. Within depending on their position, amount of in- the project, the Company benchmarked the vestment and individual and corporate per- current pay rates for its employees against formance. the average rates for similar positions in the The Programme includes three cycles, which same region and identified the employee cat- In 2019, PJSC Rostelecom increased pay rates for were launched annually: in 2017, 2018 and egories paid below the market. 45 thousand employees in grades 1 to 4 by 7.5% 2019. The maximum total number of shares 2019 saw the first stage of the project which owned by Programme participants may not included a centralised review of salaries and on average exceed 6% of the Company’s charter capi- wages for employee grades 1 to 4. Payment tal. The maximum number of shares owned increases were calculated individually based by Programme participants in each cycle may not exceed 2% of the Company’s char- on the employee’s pay rate vs the market, in- Average monthly pay of Rostelecom Group employees, RUB thousand dividual performance and the length of em- ter capital. The Programme is implemented ployment with the Company. As of 1 July 2019, 2016 2017 2018 2019 via RTK-Razvitie, a closed-end unit investment fund. pay rates were increased for 45 thousand em- PJSC Rostelecom 39 44 47 59 ployees. We have continued this project and Short-term incentives are making further payroll investments, de- Rostelecom Group 40 44 46 53 veloping new incentive programmes. The Company also has an annual bonus scheme for top and middle managers. In PJSC Rostelecom makes sure that its em- 2019, targeted incentive schemes and KPIs ployees’ pay rates are aligned with the min- were finalised for the B2C and B2B seg- imum wage through quarterly monitoring of Rostelecom also takes rules on work hours In 2019, the gender pay gap for PJSC Rost- ments and the Technical Infrastructure Unit changes in the federal minimum wage and very seriously. Overtime is regulated by the elecom management was insignificant — the based on 2018 performance. benchmarking the current pay rates against Labour Code of the Russian Federation, ratio was at 0.8:0.9 while it stood at 1.1 for it. If an employee’s pay rate is found to be PJSC Rostelecom’s internal labour regula- other employees. Thus, for women in man- Yet another employee motivation tool used below the federal minimum wage, it must be tions and internal regulations of subsidiar- agement roles, remuneration is slightly less by PJSC Rostelecom is quarterly assess- raised to the required level. Subsidiaries and ies and affiliates. In case of working overtime than that of men and higher on average than ments of in-house services. Such assess- were expanded to regional branches, with affiliates run their own monitoring procedures or on holidays, employees are compensat- for men across other employee categories. ments improve cross-functional commu- a wider coverage for the IT function (100% for benchmarking employee pay against the ed accordingly in line with the Russian La- At the same time, the women-to-men sala- nication. Their results are used to enhance employees of the function) and improved minimum wage. bour Code. ry ratio was between 0.6 and 0.8 for man- in-house services. In 2019, assessments feedback tools.

86 87 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

404-3 System of KPIs sion scheme: an additional incentive contri- on the corporate level. The Programme gar- Voluntary health insurance In 2019, Rostelecom’s voluntary health bution was paid to the individual pension ac- nered a positive response from the Company Voluntary health insurance is yet another The Company’s KPI system is based on the counts of the programme participants hitting employees. The 2020 Recognition award will competitive advantage of PJSC Rostelecom insurance programme covered a total of 115,947 achievement of targets in a period under re- over 90% of KPI targets in 2018. For more be integrated with a new competence model as an employer. The total number of insured employees for a total of RUB 37,353.98 million view. Employee assessments are conducted details see the subsection on corporate pen- and values and include an expanded list of employees was 115,947 at end-2019. The in- every year, covering 100% of PJSC Rostele- sion insurance of this Report. categories for professional skills. surance programme covers out- and inpa- com employees. The assessment considers In 2019, Rostelecom introduced the Rec- tient treatment, dental and emergency med- employees’ position and their individual con- ognition award — a non-financial incentive ical services. tribution to corporate KPIs and is used to cal- programme to celebrate the Company’s top culate the amount of remuneration payable performing employees. In 2019, about 6,000 Housing Programme highlights end, in 2019, PJSC Rostelecom acquired 44% for each employee. employees were awarded for their perfor- Between 2015 and 2019, Rostelecom has been successfully imple- in the subsidiary pension fund JSC NPF Al- In July 2019, a financial incentive scheme was mance in 2018 on the local and regional lev- a total of 5,244 employ- menting its Housing Programme since 2015 as liance, becoming its controlling shareholder, launched to supplement the corporate pen- el, and 120 people received Golden Badges ees have received an a tool to help employees purchase own home. with a 95% stake. aggregate amount of In 2019, the Company provided a total of RUB To further motivate its employees, in 2019, 287 million in financial assistance to 1,115 em- Rostelecom conducted individual perfor- RUB 1,617 million as ployees (up by RUB 14 million year-on-year) mance assessments of all employees against SOCIAL BENEFITS AND COMPENSATION assistance under the as interest-free loans or reimbursement of relevant KPIs, paying additional incentive con- interest on mortgage loans taken by em- tributions to the individual pension accounts The new agreement covers 100% of em- In 2019, the Cafeteria Plan was expanded to of the programme participants hitting 90% or NO Housing Programme ployees earlier. POVERTY ployees. Benefits and reimbursement of ex- include compensations for trips to health re- more of KPI targets in 2018. The total amount 1,260 employees are expected to benefit penses are provided to all workers for whom sorts and treatment programmes to employ- to purchase housing of incentives paid to our employees was RUB from the Programme in 2020. Rostelecom is the principal place of employees and their children, coverage of expenses and reimburse interest 655.4 million. ment, both full-time and part-time. All bene- on additional education services, gym mem- on mortgage loans Private Pension Insurance Rostelecom ensures a consistent approach fits and social guarantees offered to employ- berships, financial assistance for holidays, to the social protection of its employees by ees are formalised in the collective bargaining gifts for children, etc. Employees with at least taken earlier The Company continues to improve its Pri- providing social guarantees, benefits and agreement. To address the individual needs of two years of employment at Rostelecom are vate Pension Insurance Programme. To this compensations as approved within the bud- each employee, the document divides ben- eligible to participate in the Cafeteria Plan. gets for social programmes. We continuous- efits into two groups: basic, covering all em- ly monitor the implementation of social pro- ployees, and the Cafeteria Plan, from which grammes, analyse the collected data and use employees can independently choose ad- these insights to improve our approaches to ditional social benefits to match their indi- 2019 highlights of the Private Pension Insurance: social protection of employees. vidual needs. Basic benefits are benefits or payments made A new collective bargaining agreement available to employees for certain life events 102-41 401-2 The full list of the rights en- (childbirth allowance, awards, extra paid com- joyed by Rostelecom Group employees is passionate leave, etc.). The Cafeteria Plan is 98% 39,374 368.4 655.4 of employees with at least two detailed in Rostelecom’s new collective bar- a set of social benefits and compensations years of employment at Rostelecom employees covered by the fund’s RUB million — intergenerational RUB million — additional incentive gaining agreement for 2019–2021 and the for an employee to choose from within the participated in the Cafeteria Plan corporate pension scheme solidarity contributions contributions from the Company collective bargaining agreements of our sub- available money limit which is the same for in 2019 (46.04% of those eligible to sidiaries. all employees within a given MRF. participate in the Programme) 37,636 155 employees received the additional employees enrolled in the private incentive contributions pension scheme at NPF Alliance

88 89 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

In 2019, over 1,200 function, and the owner is notified of the time- In 2019, the Company developed a smart space frame for issue resolution. Once the issue is children aged 5.5 to Coding classes for employees’ children resolved, the employee confirms it, and the standard which will be used as single benchmark ticket is closed. In the reporting period, the 16 completed at least The children of Rostelecom employees can learn what need to know about for renovating and building new office spaces online platform was piloted in 21 branches of using digital technology at the League of Robots’ robotics and coding classes PJSC Rostelecom. About 60% of all report- one semester of on preferential terms, under the co-financing scheme where 50% is covered ed issues are promptly resolved, and some by Rostelecom and the other 50% is paid by the employee. The scheme is robotics and coding are added to office renovation plans. In 2020, already rolled out in 30 cities. The young IT learners are taught robotics de- Improving the working environment at PJSC GIPROSVYAZ the project will be rolled out to all branches, classes at the League sign and coding as well as logical thinking, negotiating and teamwork skills. and the platform will be available as a more Within its programme to create com- no older than 5 years were installed at of Robots convenient mobile app. fortable working conditions, PJSC workplaces in operational units, and GIPROSVYAZ set itself a target to 25% of workplaces were equipped In our intellectual drive to enable an even equip 100% of workplaces in opera- with two computer displays. The em- more comfortable working environment, we “I never thought anything could out- and how they interact. This is really tional units with advanced hardware ployees based in Krasnodar, Nizhny decided to create remote work opportuni- weigh my six-year-old son’s passion great. There are also children in the and software and improve transport Novgorod, Novosibirsk and Yekater- ties. The remote workplace project allows em- for railways. However, the League of group whose parents are employed accessibility, reducing the commute inburg moved to new offices in areas ployees to work outdoors in the fresh air, in- Robots has changed it all! Semyon always elsewhere, and each time I am secretly time for its employees. with improved transport links, and cluding in parks, during the summer months, looks forward to Saturdays. Each class proud that my company in many ways To achieve this target within the pro- the Moscow office of GIPROSVYAZ providing them with access to IT infrastruc- means a new design, another step in helps my child to discover the world.” gramme, in 2019, personal computers was renovated. ture and laptops for remote work within des- the mechanics and a wave of emotions ignated areas. in the children’s audience. You can hear behind the doors that they all really love the subject and their teacher. Joking aside, robotics even at the beginner level truly expands children’s horizons Yulia Seryogina and teaches them to think about how a director at the External Communications things and mechanisms are designed Department of PJSC Rostelecom

IMPROVING WORKING CONDITIONS

project, aimed at using employee feedback • Regular (at least twice a year) assess- to continuously improve our office spaces. ments of the working environment comfort level by employees. Comfortable Office initiatives: In 2019, the Company launched an online • Creation of co-working areas platform where any employee can report To provide even more comfortable working • “Green” workplaces any workplace-related issue online and add conditions that drive employee performance, • Setting up remote workplaces with ac- a supporting photo. The flagged issue is im- Rostelecom runs the Comfortable Office cess to the Company’s IT resources mediately reviewed by the relevant support

90 91 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

3.3. Corporate Culture and Internal Communications

GOOD HEALTH ing and additional motivation based on point In 2019, the Company introduced portal sec- Employees can also leave a question for any AND WELL-BEING Rostelecom’s corporate values awards which can be exchanged for corpo- tions on the Company’s strategy and em- top manager using the Online Reception sec- "Our intranet portal is a vivid example rate souvenirs. ployee training and development. The new tion of the intranet portal. of our technology-driven growth and HR services have enabled employees to re- evolution. Four years ago, when I went Regional branches hold informal in-person Promoting a healthy lifestyle among solve organisational and HR issues online. In- Adaptability: adapting on parental leave, I saw the portal as and online meetings between management employees ternal communications were also enhanced technology to find a solution a telephone directory and a source of and employees approximately once every two 403-6 Rostelecom is promoting a proactive through the development and implementa- corporate news, but now it is a treasure weeks. The meetings are led by either local attitude and cares about employees’ health. tion of functionalities supporting a corporate trove of useful knowledge. Here I can find managers or top executives during their trips The Company makes efforts to popularise culture section, a birthday notification ser- to regions and offer an opportunity to dis- Development: a multitude of helpful services and resolve 102-16 Rostelecom has common corporate both sporting activities and cultural events for vice and other features. most work-related issues. The education cuss various matters including working con- creating the future values and standards for all employees. Our its employees, organising professional skills The portal has become a key platform to pro- section offers a great opportunity for ditions, growth and career development, the corporate culture is based on two strategic competitions, creative contests, sports tour- mote corporate values. In 2019, it was used to self-development, without the need to Company’s plans for new projects and op- principles — efficiency and customer focus. naments and competitions. Each region and run a number of online events for employees visit educational institutions." portunities for employees to get involved in Human touch: Rostelecom's Code of Corporate Conduct branch have their own sports teams in football, to better understand Rostelecom’s values and the implementation of new tasks. working for people sets outs the core values of its corporate cul- volleyball, table tennis, basketball and yoga. how to apply them in day-to-day activities. To collect feedback on the implementation of ture. Our corporate values, including adapt- A Rostelecom employee Rostelecom employees are active participants (an anonymous survey respondent) its collective bargaining agreement for 2019– ability, development, human touch and sim- in sports competitions and charity runs. On 2021, PJSC Rostelecom has a standing bi- Simplicity: making complex plicity, help us build internal interactions and 28 September 2019, Vladivostok hosted the The intranet portal is lateral collective bargaining commission. In things simple earn the trust of our customers and partners. fourth Galaxy Vladivostok Marathon charity an important platform line with the Company’s digitalisation strat- From March to June 2019, Rostelecom ran run that brought together about 4,000 ath- egy, the automated Compliance Control sys- the Month of Value awareness campaign to letes from all over the world. Rostelecom’s supporting the work Communication between management tem was significantly upgraded and improved promote its corporate values. Each month team of 49 runners won the Corporation Cup of our employees. and employees in 2019, increasing the number of reviewed during the campaign was dedicated to one in the Biggest Team category. 102-33 Rostelecom uses several approach- conflict of interest declarations and resolved specific value, with employees participating Within its loyalty programmes, Rostelecom There are currently over es to communication between employees conflicts of interests. in a range of themed activities, including con- offers its employees preferential terms for and management, with the Direct Line, On- In 2019, further automation of recording, tests, flash mobs, video marathons and case 1,000 groups and more memberships in chain fitness gyms across line Receptions and meetings with employ- processing and reviewing reports from em- studies, all aimed at not just learning the con- the country and for health resort treatment, than 400 GB of files ees in regions being the most popular com- ployees and third parties was also continued cepts and slogans around the relevant val- covering a total of about 65% of employees. on the portal. Over munication channels. through developing a standalone report han- ue but also at putting them into practice. The To support a healthy lifestyle, the Company’s Any employee can ask a question of the dling module for the Compliance Control au- activities covered over 50% of all employees offices additionally have gyms equipped for 30 thousand employees Company’s President Mikhail Oseevsky via across the country. both group and individual training and vend- use Rostelecom’s intranet the monthly Direct Line live link. All questions Additionally, in September 2019, Rostelecom ing machines with healthy snacks. There are are thoroughly reviewed and used to devel- introduced the value ambassador programme also outdoor sports grounds and horizontal portal every day op employee engagement programmes. Over aiming to more deeply engage employees on bars as well as bicycle parking lots available the time since our first live session two years corporate values. All employees were invited outside our offices. An updated version of the portal is scheduled ago, the most frequently asked and urgent to join, with the candidates who passed the for launch in 2020 to improve collaboration matters have been incentives and review of value knowledge test getting an opportunity Rostelecom’s intranet portal on documents and in groups. The portal will salaries and wages, social benefits, oppor- to become ambassadors of one or more val- The intranet portal remains the Company’s become the main platform for business pro- tunities for career development and training ~5 ues, depending on their test results. key information and communication platform. thousand employees applied for cess gamification developed by the Company. and the Company’s strategy. Its development is aligned with business re- the value ambassador programme, Throughout 2020, the ambassadors will be quirements and makes part of our commu- with 2,000 of them designated as assigned tasks related to the promotion and nications policy. ambassadors of one or more values support of corporate values and receive train-

92 93 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

3.4. Employee Training and Development

tomated system. The module is expected to QUALITY EDUCATION be tested and go live in the first half of 2020.

Employee satisfaction and engagement surveys by It is important for us to know that people are 103-1 103-2 404-1 Rostelecom’s strategy The existing training system enables every 16% willing to jointly contribute to Rostelecom’s focuses on developing human capital. Train- employee to develop and fulfil their profes- increased the amount of training success. This is why Rostelecom’s functions ing employees across all functions and roles sional and personal potential by doing their received by PJSC Rostelecom in all regions conduct annual employee sat- is a key tool to drive our continuous and sus- jobs at the Company. employees year-on-year in 2019 isfaction surveys, with their results consid- tainable development. In 2019, the Knowledge Management Depart- ered when planning HR motivation, employee The Knowledge Management Department is ment continued the transformation of inter- training and development projects. The most responsible for employee training and devel- nal employee training, with the following out- recent survey conducted in September 2019 opment at the Company. The Department’s comes achieved over the year: showed an increase of eNPS to +10 pp. For mission is to create a favourable environment • Developed uniform business processes more details see the HR Management As- for the continuous development of each em- to assess, train and develop employees sessment section of this Report. ployee throughout their entire careers with • Implemented training standards and Rostelecom regularly collects employees’ Rostelecom. methodology, as well as requirements feedback via surveys, with a total of over 200 for the development and implementation surveys run in 2019. The findings of each sur- Rostelecom’s training system: of nationwide skill-building programmes vey are used to develop an action plan to ad- • Updated the model of corporate dress the pain points identified. • Corporate Online University competencies • Knowledge Management Department • Created the centralised catalogue of internal programmes to build soft skills • Training centres of excellence across segments and in the Technical Infrastructure • Centralised training of trainers. Unit • In-house trainers

The average amount of training received by PJSC Rostelecom employees (per employee)

Employee category 2016* 2017* 2018 2019

Men Women Men Women

Key topics covered by employee Top managers 36.21 34.1 49.8 59.3 56.19 54.86 surveys: Managers 38.28 52.04 35.9 32.3 33.92 30.74 • Feedback on new products and pilot launches Specialists 27.39 31.22 22.4 15.2 26.35 22.86 • Feedback on internal services and training Blue-collar workers 29.01 34.93 24.6 10.7 18.4 11.58 • Feedback and suggestions on corporate events held Average across all categories 32.72 38.07 21.04 31.12 • Feedback on management performance • Team morale assessment * No breakdown by gender was made in 2016–2017.

94 95 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

Employee training effectiveness assessment INVESTMENT IN TRAINING Building a talent pool at Rostelecom’s Call Centre To assess training effectiveness, the Knowl- 404-2 In 2019, our subsidiary Rostele- The programme for training specialists QUALITY We continue to invest heavily in employee development, with more edge Management Department regularly EDUCATION com’s Call Centre (JSC MC NTT) put in involved 83 employees. Through webi- analyses performance against training KPIs than RUB 575 million invested by PJSC Rostelecom in employee place a talent pool development pro- nars and conference calls, the partici- as well as the amount and scope of employ- training in 2019. Overall, training spend per employee has increased gramme for management and training pants have learned a holistic approach ee training by function, the quality of train- by 53% over the past four years. specialists. to structuring their training and explored ing programmes, and trainer performance. the ins and outs of their profession. 31% As part of the management programme, Key training effectiveness assessment ob- of the programme’s participants were jectives at Rostelecom: employees were building their lead- PJSC Rostelecom’s employee training costs in 2016–2019, RUB thousand promoted on its completion. ership and communication skills. The • Improve the training quality to achieve programme covered 69 employees, the Company’s strategic goals 2016 2017 2018 2019 with 22% of the programme graduates Enhance knowledge management • Total employee training costs * 452,565 463,570 496,042 575,373 promoted on its completion. effectiveness • Enhance the effectiveness of specific Annual training cost per employee 3.6 3.5 4.6 5.5 training programmes and events. Training effectiveness at Rostelecom is as- * Including extra costs related to employee training and development. sessed using the following metrics: Creating a catalogue of internal proach was applied to designing internal pro- Nationwide trainer development • Satisfaction with training and willingness programmes to build soft skills grammes and training in-house trainers in programme to recommend (NPS score) — measured Soft skills are a cluster of flexible non-techni- 2019, the amount of classroom training de- In 2019, we implemented a nationwide in- by reviewing feedback forms completed In 2019, PJSC cal abilities used by employees to successfully livered under internal soft skills programmes house trainer development programme, RT after each training event Rostelecom’s employee engage in a working process, interact within a totalling 9,800 man-course and over 15,500 Lab, designed and delivered together with • Applicability of training — measured team and enhance their labour productivity. man-courses completed in distance learning. the International College of Business Train- through surveys of trainees and their training costs grew In 2019, the Knowledge Management De- ers (ICBT). The programme was available on- immediate supervisors to RUB 5,500 per partment continued to work on creating a line to reach employees across different re- Knowledge, skills and capabilities of train- • centralised corporate-wide catalogue of in- gions, with over 400 people enrolled in the ees — measured through tests, cases and employee, up 20% ternal programmes to build soft skills. The programme. On completion of the training, other tools from RUB 4,600 programmes were designed in the blended 90 best trainers of Rostelecom were awarded • Post-training performance of the rele- learning format: distance learning of theoret- international Business Trainer T certificates. vant division or the Company in gen- in 2018 ical material via the Corporate Online Univer- The Company intends to use the programme eral — measured through quantitative sity and practising the newly acquired skills 83 to build its in-house trainer development and qualitative analysis of performance The NPS score for internal at face-to-face trainings and master classes. framework in 2020. Trainer development will over the reporting period at the level of soft skills programmes the Company, divisions and individual In 2019, a total of 17 new soft skills distance focus on basic trainer skills, training pro- projects. learning courses were included in the Cor- We will continue expanding the catalogue of gramme methodology and the implementation of innovative training formats to ensure The assessment results are used to deter- porate Online University’s catalogue, and soft skills in 2020 so as to enable employees high quality and accessibility of training ac- mine subsequent corrective actions imple- In 2019, we were strongly focused on im- ning programme and operate the Talent Pool another 12 soft skills programmes designed to build skills and capabilities that are most tivities for all employees of Rostelecom. mented to enhance training effectiveness at proving cooperation between employees, programme to insource talent for most va- for face-to-face trainings. A centralised ap- relevant to Rostelecom. Rostelecom. employee onboarding and motivation, and cant positions. Overall, internal candidates development of corporate and profession- filled close to 30%–40% vacant positions al capabilities. at the Group during 2016–2019. The in- The Company has in place a mentorship sourcing percentage across regional divi- and onboarding programme for new hires. sions is slightly higher than at Rostelecom’s We also have a well-developed career plan- Headquarters.

96 97 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

Online Lectorium and Development Environment digest newsletter MANAGEMENT SKILL BUILDING PROGRAMMES PROFESSIONAL SKILL BUILDING PROGRAMMES Online Lectorium is a space to get new knowl- QUALITY To boost the managers to engage in corporate digital transfor- QUALITY We have been con- development. Over 200 applications were B2C Leadership Challenge edge and inspiration through a live link with EDUCATION EDUCATION experts from across business, healthcare, IT, agement skills of mation processes and the implementation of sistently developing submitted for the programme, with 40 Launched in November 2019, the B2C Lead- science and many other areas. current and future Rostelecom’s strategy. the professional ex- applicants selected. Far from civilisation, ership Challenge programme focuses on managers across the pertise of employ- the participants shared their experience developing B2C employees. Over the five In 2019, Online Lectorium featured 35 lec- The module was highly popular among em- corporate hierarchy, Rostelecom offers in- ees and ensuring a with the market’s best product managers months of the programme, its 55 partici- tures on topics from robotics and Big Data to ployees, with 3,700 applications submit- house and external training programmes. consistent approach to training, tailored to and fast-tracked the development of new pants are trained to become leaders in the finding sources of energy in work and tips on ted and two cohorts of students formed for During the training, managers master tools the business requirements of each division. products to be launched by Rostelecom. segment through studying project and team museum visiting. In 2019, the audience of the the programme. 1,642 employees, who have for efficient team management and incentiv- During the Camp training, participants management and developing finance man- Lectorium totalled 15 thousand people, with passed the qualifications and completed all During 2019, over 2,400 IT employees com- ising and leading their employees to achieve from 14 Russian cities completed over 40 agement and pricing skills. The programme’s 82 thousand views of lecture records via the training modules and home assignments, have pleted online courses on: the best results. hours of training and created prototypes participants work in teams on real projects Corporate Online University. The NPS score received professional development diplomas • DevOps Basics for eight products, some of which were within the segment. for Online Lectorium was 83. The New Rostelecom Leadership Develop- from the Higher School of Economics. A third • Jira for Users eventually vetted for development. ment programme has been developed to- training cohort is planned to be launched un- The projects are planned to be completed Employees are also offered weekly, themed Working with Job To Be Done and User In 2020, we are planning to repeat gether with the SKOLKOVO Moscow School der the programme in 2020. • and the results of the programme wrapped digest newsletters, Development Environment, Story Product Camp B2C and launch Product of Management for top managers. 55 people up in 2020. which feature a range of useful facts, meth- Camp B2B. successfully completed the programme in • Working with Product Backlogs ods and tools to build corporate and profes- May 2019. 18 executives completed and an- Product Strategy Development sional skills and capabilities. 47 digest news- • other 17 people started their training in the letters were issued in 2019, collecting 7,740 • Jira for Administrators second stream of Sberbank 2020, another likes from employees. • Usability Studies. programme for C-suite executives. Support lab iMBA. Skills of a Digital Company Leader Rostelecom’s Support Lab pro- In May 2019, Rostelecom implemented its Jointly with the National Research Universi- gramme won the Tagline Awards Support Lab programme designed to de- ty Higher School of Economics, we have de- competition for interactive projects velop B2C technical support employees signed an online programme, iMBA. Skills of and digital achievements. The pro- 1,642 through building their communication skills, a Digital Company Leader, for seasoned, be- employees gramme won silver at the Tagline and enhance their customer focus. The pro- ginner and aspiring leaders. The programme have successfully completed Awards 2019 competition in two gramme has been completed by 94 region- focuses on developing basic management iMBA. Skills of a Digital Company categories: Best HR Campaign in al employees. abilities and knowledge in line managers and Leader — Rostelecom’s most ambitious Social Media and Best Feedback. helps building a set of skills required for man- programme for training line managers Results achieved by Support Lab:

• The number of non-scripted answers grew by 48% • The number of customer requests escalated to the second line customer “I join others in thanking the course organisers. Apart from the time machine that has sent support decreased by 15% me back into my first student years (I wish I had had such motivation at the time), I got • The number of positive social mentions intense aesthetic delight from the branded design of the materials and received plenty received by the Company rose by 19%. “Many thanks to the organisers. If we rate of positive vibes from those high-quality webinars hosted by super professionals! The Product Camp as a product, its score is follow-up chat support was straight fire! The organisers have been relentlessly role-mod- Product Camp B2C 100 out of 100!” elling patience for us.” In August 2019, Rostelecom held Product A Product Camp B2C participant A member of the iMBA. Skills of a Digital Company Leader Camp B2C for its B2C employees. (an anonymous survey respondent) (an anonymous survey respondent) Product Camp B2C is an off-site immersion programme for digital product

98 99 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

DIGITAL SKILL BUILDING PROGRAMMES ROSTELECOM’S CORPORATE ONLINE UNIVERSITY

QUALITY The Company focus- ital literacy of employees was complement- ence Data. Close to 200 employees complet- QUALITY Rostelecom com- learning programmes, preparing applications al skills among B2O employees. In 2019, the EDUCATION EDUCATION es on developing ed with a 5G series. ed the Science Data course and received a pleted the rede- for external training and in-depth analysis and B2O Training Centre of Excellence developed digital competen- Nine digital technology online courses were course completion certificate from the High- sign of its corpo- reporting across all training formats. two training programmes: cies of its employ- developed in 2019, with external and internal er School of Economics, the course partner. rate training portal Rostelecom places a special focus on de- • Relationship Development: A Step Closer ees through a number of immersion pro- experts invited by the Company explaining In 2020, the Digital Economy. Jobs of the in 2019, and now all employees have access veloping the professional expertise of em- to the Customer grammes for digital technologies and digital to over 500 courses offered by the Corpo- technologies such as data science, the Indus- Future programme will be expanded to cov- ployees and ensures a consistent approach • Tools to Win New Business. economy trends, enhanced coding skills and trial Internet of Things, blockchain, virtual reer new areas such as data analysis, data en- rate Online University, which can be quick- to training, tailored to the business require- Training under the new B2O training pro- Rostelecom’s key programming languages. ality, robotics, Agile, digital marketing, quan- gineering and secure digital product devel- ly found using user-friendly tag search, with ments of each division. To upskill its employ- grammes was completed across all macrore- The Company has in place a coding school tum technology and cyber security. About opment. portal navigation streamlined through con- ees, the Company engages the best external gional branches of Rostelecom. where employees can learn a number of pro- 26 thousand unique users visited the edu- tent structuring. We also started creating our providers of professional training services as gramming languages at the junior and mid- cational project’s website (learn.digital.rt.ru). own online content and developed over 200 well as the strongest in-house experts from dle levels depending on their remit. new educational materials in 2019. its centres of excellence. Middle level participants have also been se- Digital Economy. Jobs of the Future lected, with 70 applicants enrolled in the Over 18 thousand employees completed the Technical Training Centre of Excellence In 2019, the activities school to learn Python for Machine Learn- Digital Economy. Jobs of the Future courses In 2019, the training centre of excellence of of the B2O Training ing, C#, C++, Java and JavaScript in 2020. in 2019. The most popular courses included the Technical Infrastructure Unit set up the In 2019, the Basics of the Digital Economy on- the Industrial Internet of Things, Basics of Mar- process for in-house development of dis- Centre of Excellence line educational series offered to raise dig- keting and Digital Communications, and Sci- tance learning content. increased the number A total of 15 educational programmes were of trained B2O 55+ designed, including 14 distance learning thousand unique users completed and one blended learning programme. Eight employees by 30% 1,644 applications for training at Rostelecom’s Corporate published distance learning courses focus Online University in 2019 on Rostelecom’s products and are intended year-on-year the coding school were for field customer service specialists of the submitted in 2019. Technical Infrastructure Unit. In 2019, distance learning courses were com- 507 applicants qualified pleted by close to 38 thousand employees of for the junior level, with the Technical Infrastructure Unit, with class- B2B Training Centre of Excellence room training courses under the Custom- In 2019, the B2B Training Centre of Excel- 70% of them success- er Focus for Field Technicians and the B2B lence was transformed into the B2B and B2G fully completing the 111+ Cross-Selling for the Technical Infrastruc- Training Office of PJSC Rostelecom’s Head- thousand man-courses — ture Unit Agents internal programmes com- quarters. The Office approved the B2B/B2G training and mastering the annual amount of optional training pleted by 17 thousand employees. About employee training strategy and set targets Python, Go, Java and 700 employees of the Technical Infrastruc- for 2019 and 2020. ture Unit completed centralised training of- The B2B and B2G Training Office’s targets for Python for Machine fered by vendors. 2019 and 2020: Learning increase the reach of training by 22.5% In 2020, we are planning to set up, test and B2O Training Centre of Excellence • launch extended training management func- In 2019, the Knowledge Management De- • Increase educational load by 21% tionality of the Corporate Online University partment set up its B2O Training Centre of • Increase the share of distance learning such as planning and completing blended Excellence to focus on building profession- courses and video content.

100 101 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

Performance of the B2B and B2G Training Office in 2019 Drawing on the new format, Blended Learning, and the nationwide B2C incentive programme, Distance learning: Segments covered by classroom training into revenue growth and better individual the Sales Department has achieved 100.7% of its programmes: performance. Focus areas of the B2C Train- ing Centre of Excellence: targets since the launch of the distance learning • Large Corporate Customers • B2C product distance learning • Small and Medium Enterprises (SMEs) format, with new hires’ performance improved by • Training agents of the Technical Infra- 17 National Customers 20%–30% • structure Unit interactive product • B2G training courses designed • Development of B2C mentors. for B2B/B2G employees • Applied Projects In 2019, we launched the B2C incentive and Mentorship 2.0 • B2B/B2G segment trainers. training portal complementing the Corpo- In Q2 2019, the Company launched its Men- rate Online University. Employees can use torship 2.0 pilot project. As part of the proj- the portal to track progress against their KPIs, ect, existing and new employees completed A unique programme was designed and im- learn about all existing and new products and training under a uniform programme, us- plemented in 2019 — Long-term Partnership. best sales practices, and track group busi- ing tools as close as possible to the men- 42 ness KPIs. A total of 15.2 thousand employ- Working with Federal Executive Authorities, tor’s actual job tools. 40 B2C mentors suc- webinars on driver covering the following topics: ees were trained via the B2C portal. cessfully completed the training across three products were organized • The Budgeting Cycle of Federal Executive In 2019, all B2C distance learning programmes sales channels. Authorities and Structures of Organisa- were standardised, with 55 courses created In 2020, the project is expected to be com- tional IT Budgets and published by an in-house team. plemented by Blended Learning courses, with • Decision-Making within Federal Executive the Mentorship 2.0 course launched across Authorities from the Standpoint of Their In 2019, the B2C all B2C sales channels. Priority Products and IT Services Training Centre of 3,000+ • Principles of Long-term Partnership and Effective Communication Strategies for B2B/B2G employees trained on Excellence held B2G Customers products 21,480 trainings, 90 % of the B2G team have built up their soft skills via training programmes such as 2,500 webinars, 1,200 the Customer League, Service and Support, “The trainings have greatly improved my and the Customer League — Sales. interactive product knowledge games and ability to communicate with customers B2C Training Centre of Excellence and pass my knowledge on to new hires over 8,000 field hands- who have just started their journey with 2,500 Our B2C training focuses primarily on de- the Company.” employees were covered by two signing fully meaningful, hands-on and ac- on sessions visited Mentorship 2.0 participant courses on business processes tionable programmes catering for each par- (an anonymous survey respondent) ticipant, which is particularly important for by more than 230 translating knowledge and skills acquisition thousand employees

102 103 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

3.5. Cooperation with the Public Education System

QUALITY EDUCATION ENGAGING SCHOOL STUDENTS Nationwide competition on information security for school students Hackathon with Kalashnikov Academy QUALITY Fully aware of the In 2020, Rostelecom is planning to continue PJSC Rostelecom, Rostelecom-Solar score of the Unified State Examination, EDUCATION importance of at- its involvement in the above initiatives on or- and National Technology Initiative joint- opening doors for them to be admit- Kalashnikov Academy is a youth Rostelecom is interested in attracting top tracting young talent, der to promote its employer brand and ex- ly with the Sirius educational centre ted to IT departments of Russia's best technology park created by Ka- young talent and runs a wide range of pro- we seek out promis- pertise among high-school talents, provide have designed the Cyberchallenge universities. We will support them in lashnikov Group in Izhevsk as an grammes in partnership with educational insti- ing students starting career guidance for school students and gen- competition on information security their training and help them under- additional education centre for tutions, fosters talent development in school from school age. Our goal is to fully engage erally build a community loyal to our brand. for school students. stand the industry and Rostelecom's students in grades 8 through 11. students, and is actively involved in organising school students in IT, explain the industry and We are also planning to hold cyber days at business profile. In December 2019, Kalashnikov hackathons, contests and competitions. Rost- In 2019, the competition was held for highlight Rostelecom’s business and career Sirius by offering a two-day training on safe Academy held an information se- elecom has anchor departments in a number the second time, bringing together In 2020, we are planning to step up opportunities. internet use. This event will target both school curity hackathon for the students of leading Russian universities to train talent 5,590 participants, including 2,378 the challenge by increasing the num- students and other audiences. In 2020, the of the Information Technology under programmes designed with the Com- Rostelecom-Solar is actively engaged in our who made it to the second round of ber of participants to 8,000 people cyber days will bring together a total of al- course. The hackathon focused pany’s support. Rostelecom organises annu- work with school students. Its hallmark proj- the competition and were included in the new season, with the finals to most 700 participants. As a digital services on developing a personal identi- al internships for university students, offer- ects in this area include: in the Company's talent pool. 72 fi- be held across five universities. By leader, Rostelecom seeks to promote safe nalists were selected through a fair spring 2021, we want to expand the fication system. Rostelecom-Solar ing them further employment. an agreement with MSU Cyberschool — • and positive online behaviour, demonstrating designed and provided a challenge a cyber security club for high-school and competition, all of them already experts number of partner universities to ten its expertise and corporate social responsi- for the hackathon and formulated younger university students at the Fac- in information security, despite their and raise the number of prizes avail- the rating criteria for participants. ulty of Computational Mathematics and bility to wider society. young age. 18 winners of the compe- able to talented school students to Cybernetics of Moscow State University tition were awarded with the highest 180 — a tenfold increase. • industrial partnership with the Altair children's technology park of MIREA — Rus- “Our productive joint efforts with sian Technological University. In 2019, Kalashnikov Group and Rostele- Rostelecom-Solar organised educational “Information security is currently among every effort to change the situation com-Solar helped us run a compre- programmes, career guidance and cyber the most rapidly growing industries. The for the better by sourcing new talent hensive assessment of our students’ literacy lectures as well as tours of its Se- ubiquitous digitization creates demand for the industry and helping the most curity Operations Centre for 75 students knowledge in information security, for protection against digital threats talented to achieve success in their of Altair. For more details see the Our In 2019, the IT system design, teamwork and and for people who can manage these profession.” Country section of this Report public speaking.” Cyberchallenge technologies. Talent gap remains the open lessons, career festivals held as • industry’s biggest issue, and Rostele- Igor Lyapunov part of the ProeKTOriYA All-Russian Fo- competition on Alfiya Konshina com, as a leader in this segment, takes Vice President of PJSC Rostelecom rum of Professional Navigation. For more information security Director of Kalashnikov Academy details see the Our Country section of this Report was included in the list • involvement in the organisation of the of the Russian Council BlackMirrorCTF 2019 information security competition. The online round attracted of Competitions for 126 players, with 103 participants short- listed for the offline round, including 40 School Students as school students part of the Kruzhok • involvement in the development and holding of a session at the Sozvezdiye movement of the educational centre in the Khabarovsk Ter- National Technology ritory. 50 school students were trained in 2019. Initiative

104 105 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

ENGAGING WITH STUDENTS

QUALITY To engage high- EDUCATION ly qualified, ambi- Involvement in WorldSkills Russia tious and creative young IT talent in fu- WorldSkills is a global movement that In early 2020, Rostelecom sponsored ture, we are continu- seeks to enhance talent training stan- the organisation of the Fifth Regional ously promoting our employer brand among dards. As part of its cooperation with Competition of WorldSkills Russia held young people by organising hackathons and WorldSkills Russia (WSR), Rostelecom in Kaspiysk, the Republic of Daghestan. competitions, and engaging with universi- introduced the Backbone Lines. Fibre The Company supplied the necessary ties on new technology and solution devel- Construction and Operation skill category equipment, helped equip the venue opment. During 2019, Rostelecom held the into WSR’s skills list in 2016. To promote and provided expert assistance for Cyberchallenge: Next Level online competi- the new category, the Company helps the fibre fusion splicing competition tion, organised training at the Sirius educa- to arrange competition venues and held within the IT Cable Networks skill tional centre for the winners and supported sponsors this skill at all championships. competitions. the Digital Breakthrough nationwide compe- For more details on the project see tition as a partner. www.worldskills.ru (in Russian). In 2020, Rostelecom-Solar experts are organising online workshops on cyber security ahead of the Cyberchallenge: Next Level annual competition. Rostelecom is also plan- “All three first places in the IT Cable employment chances. I would like to ning to stage a hackathon among students Networks category were taken by stu- thank the organisers and Rostelecom as part of FINOPOLIS, one of Russia’s key fi- dents from our college, which of course for their support, encouragement and nance and technology events. delights both us and our instructors prizes.” and mentors. Importantly, we were able to apply our skills and capabilities and Cyberchallenge: New Level compete to win. Positive competition Imran Omarov drives aspiration for greater profes- student at Makhachkala Ashuraliyev Technical In 2019, Rostelecom held the Cy- they took a training programme on cyber sional achievements and improves College berchallenge: New Level nationwide security at the Sirius educational centre. “In developing theoretical and practical competition on information security At Sirius, they completed theoretical and training, we focused on two objectives: involving 2,381 students from across practical training on cyber security for provide talented young people with 269 Russian cities and towns. Out of automated systems, vulnerabilities of online consistent hands-on knowledge on the 415 participants who solved at least applications, computer viruses, reverse detecting and countering cyber attacks one problem, 60 students reached engineering and forensics. Lectures were and, equally importantly, explain the the final. read by leading information security experts significance of ethics in information After the online competition, the high- and employees of Rostelecom-Solar, who In December 2019, the Backbone Lines. Fibre security.” est scoring students were interviewed discussed real-life cases related to cor- Construction and Operation skill category by Rostelecom-Solar’s experts, who porate and banking infrastructure security Igor Lyapunov sponsored by Rostelecom became a key skill selected 40 winners. The winners were and shared best practices in detecting, Vice President for Information Security of PJSC awarded with a trip to Sochi, where analysing and investigating cyber attacks. Rostelecom of WorldSkills Russia and was included into the current list of skills compliant with WSR’s standards

106 107 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

The finals of the students successfully completed Digital Breakthrough Digital Breakthrough work experience placements at competition held in Rostelecom was the key partner of working on their projects spanning PJSC Rostelecom, with 38 gaining the Digital Breakthrough nationwide 20 categories. further full-time employment with 2019 broke the record competition, a flagship project of the Rostelecom has proposed the develop- 3,905 the Company in 2019 as the world’s largest Russia — Land of Opportunity presiden- ment of a new digital service for smart tial platform. The competition focuses cities as a new category in the com- IT hackathon according on students from industry-related uni- petition. The participating teams were versities and young specialists aged tasked to develop a prototype of an Professional Internship 2.0 Internship 365° to Guinness World between 18 and 30. information service system to monitor Records The final hackathon of the Digital waste recycling stations. Such a service Professional Internship is a joint proj- Russia — Land of Opportunity signed We continued our business- Breakthrough competition has be- is strongly needed and would play a ect between the Russia — Land of an agreement on cooperation in the focused Internship 365° programme come the world’s largest IT competition major role in addressing environmental Opportunity platform and the Rus- Professional Internship project. Acting in 2019. The programme aims and is now listed in Guinness World issues in metro areas. The category was sian Popular Front (ONF). The project as a partner employer of the project at quickly finding university Records. The participants have set a won by the RSX team bringing together aims to create a new mechanism for under the agreement, the Company students and graduates meeting new world record, with over 3,000 participants from Moscow and Saint engagement between students, their offered students ten cases on infor- Rostelecom’s expectations to educational institutions and future mation security, information technol- IT specialists from across 77 Russian Petersburg. The awards were presented offer them internships with the employers involving work experience ogy, marketing and logistics. During regions working at the venue at the to the winners by Kirill Menshov, Senior Company. The project included placements and internships as a so- the year, PJSC Rostelecom experts WORK EXPERIENCE PLACEMENTS same time. The teams spent 48 hours Vice President for IT at PJSC Rostelecom. a cross-university approach and cial lift for young talent. The project will supervise the participants’ work. AND INTERNSHIPS AT ROSTELECOM a large-scale marketing campaign covers Moscow, the Moscow Region The best students will be offered an attracting 869 students from 15 QUALITY and Russia’s Far East. internship at Rostelecom. EDUCATION best universities of Moscow. In just In June 2019, Rostelecom and Au- “This hackathon was in many ways the venue offering trainings, master two months after the campaign’s tonomous Non-profit Organisation different from what I had seen before. classes, consultations and advice on start 30 students meeting our The participants demonstrated a very teamwork.” business requirements completed all selection procedures and were Rostelecom Group strongly focuses on in- high level of projects, working out offered a one-year paid internship spiring and attracting young talent by fos- every detail. We helped all teams to at Rostelecom. The interns have tering cooperation with multiple universities achieve a result and invested a lot Kirill Menshov formed the core of the Company’s in different regions of Russia, participating of knowledge, not money: dozens Senior Vice President for IT at PJSC “Before re-launching the project in a and theses as they will be prepared talent pool. in job fairs, Career Days and educational fo- of our specialists were present at Rostelecom new format, we gathered feedback from for companies that can offer them an rums, developing and running internship pro- students, employers and universities internship or employment in future.” A mentor was assigned to every grammes, and offering students work expe- from across the country. The new plat- intern under the programme to rience placements which can lead to further form will enable students to directly determine their development employment with the Company. engage with employers and receive pathway. If an intern needs to go practice-oriented assignments — cas- deeper, the mentors will choose For example, in 2019, our subsidiary JSC MC es — from them. Such communication individual courses for their assignees NTT held 176 meetings with students across Alexey Komissarov will encourage future talents to put via the Corporate Online University. 48 educational institutions. The meetings Most activities of JSC RT Labs related to er student events brought seven more new Co-Chairman of the Central Staff of ONF more effort into their term papers and CEO of Russia — Land of Opportunity Additionally, Rostelecom has in were attended by representatives of our engagements with educational institutions employees to the company. place a number of community and recruitment and training functions, as well took place in Voronezh. 28 students were of- In 2019, PJSC Rostelecom’s Headquarters soft skills building initiatives such as by division heads, who shared their ca- fered work experience placements at RT Labs held the Internship 365° integrated pro- as onboarding, business games reer highlights with the students. As a re- during 2019, with four out of them eventually gramme. In 2020, we are planning to scale it and DemoDays with employers. sult of these meetings, JSC MC NTT hired hired by the company. The active involvement up to three macroregional branches of the 200 young talents. of RT Labs in university taster days and oth- Company.

108 109 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

3.6. Ensuring Workplace Safety

103-1 103-2 The health and Key principles of Rostelecom for HSE and ing a component of the quality management Rostelecom joined fire safety: system, OHSMS identifies, assesses, manag- safety of our people and con- “Fostering an occupational safety culture es and mitigates risks through improved safe tractor employees is an abso- • Managers at all levels take the lead in is an important task for the Company. We Vision Zero, a global lute priority for Rostelecom. Therefore, the HSE and fire safety working processes. pay special attention to the development campaign for zero Company is committed to providing fully safe and implementation of occupational health • Each employee is responsible for their Macroregional and regional branches have ef- accidents in 2019 772.8 and favourable working conditions, drives ac- own safety and the safety of others and fective risk assessment and management reg- and safety standards in line with the Gold- RUB million countability for safe work practices and pro- has the right to interfere if work is unsafe ulations. The Occupational Health and Safety en Rules of Vision Zero. Regular initiatives Rostelecom Group’s expenditure aim to reduce injury rates in operations. motes healthy lifestyle among employees. • Employee safety, life and health as well Centre has plans in place to develop stan- on occupational health and safety We strive to continuously improve the oc- 403-1 403-3 403-8 as equipment and property protec- dard risk assessment and management reg- cupational health and safety system and in 2019 tion take precedence over operational ulations in the second quarter of 2020 which PJSC Rostelecom’s Occupational Health and make workplace conditions safer for our performance will be later adapted for the whole Company. Safety Management System (OHSMS) fully employees.” Besides, a workshop for occupational health complies with governmental regulations as • Prevention takes precedence over containment of, and recovery from, events and safety functions is planned for 2020 to well as the best international practices and causing adverse impact on employee life train OHS managers and specialists in oper- Pavel Ivanov safety rules on the telecommunications mar- and health, equipment, property and the ational risk assessment. The training will cov- Director of Occupational Health and Safety ket. OHSMS is based on the new HSE and Centre at PJSC Rostelecom Headquarters quality of the environment er risk assessment techniques, such as HAZ- fire safety policy. Employee health and safety Managerial decisions shaping the Com- ID (hazard identification) and HAZOP (hazard provisions are also included in PJSC Rostele- • pany’s development strategy are made and operability study), to ensure safe design, com’s new collective bargaining agreement with due consideration of potential safety operation and higher reliability of the Com- for 2019–2021 and the collective bargain- risks. pany’s assets at all stages of their life cycle. ing agreements of all subsidiary companies. Occupational Health and Safety Management HAZID will help Rostelecom to make deci- System is an integral part of the Company’s sions on activities involving risks in advance, overall management system and applies to when the activities are at early stages, to mi- all employees of the Group. OHSMS activ- nimise the risks of injuries. ities are coordinated by the Occupational The Vision Zero concept was introduced by Health and Safety Centre at PJSC Rostelecom the International Social Security Associa- Headquarters (the Occupational Health and tion (ISSA) in 2017. Vision Zero is a transfor- An HSE and fire safety policy was approved in Safety Centre). MRFs and subsidiaries have mational approach to workplace conditions occupational health and safety functions re- comprising three core values: safety, health 2019, which outlines the key objectives, principles sponsible for preventing injuries and foster- and well-being at all levels of work. Upon and focus areas to create safe working conditions, ing safety culture at the local level. joining the Vision Zero campaign, Rostele- keep all employees safe and healthy and ensure OHSMS is an element of the internal control com started the implementation of its Sev- system, managing professional risks related en Golden Rules to improve the occupation- 1 industrial, fire and environmental safety to occupational health and safety (OHS). Be- al safety culture.

1 PJSC Rostelecom’s policy on occupational, fire, industrial and environmental safety, which is also approved and introduced by relevant orders of subsidiaries and affiliates in Rostelecom Group.

110 111 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

403-5 In 2019, strategic sessions and train- In 2019, the Occupational Health and Safety ees advise management of hazardous work- tions, fibre deployment and other hazardous ing on Conscious Safety and Zero Accidents Centre completed more than 10 audits and place conditions. activities. In 2019, the Company spent RUB were held for the personnel of PJSC Rost- identified over 90 violations. The outcomes 445.688 million to purchase special person- elecom’s macroregional and regional branch- of the audits were reported to the top man- Workplace accident prevention al protective equipment for employees, pro- es and the Headquarters. In total, over 80 agement and analysed at meetings with the 403-7 Every year Rostelecom launches a vided additional training, conducted special 83 thousand employees were trained, includ- Senior Vice President for Technical Infra- number of initiatives to ensure safety of em- assessments of working conditions, health 445.7 thousand employees ing more than 30 heads of OHS functions. structure. Corrective actions were identified ployees engaged in installation, operation checks, etc. RUB million completed health and safety Plans for Vision Zero implementation in 2020 to eliminate the violations and are monitored and maintenance of towers and base sta- the Company spent to purchase training in 2019 include a workshop for occupational health in accordance with prevention plans. special personal protective equipment and safety functions, which will feature train- The Occupational Health and Safety Cen- for employees in 2019 ing of the function heads and discussion of tre, jointly with PJSC Rostelecom HQ Oper- corporate OHS standards. Training will yield ational Control Division periodically reviews a comprehensive assessment of conformity the HSE and fire safety policy as and when of the Company’s health and safety manage- necessary, but at least once every two years. ment practices and processes to the Gold- en Rules of Vision Zero. Another training in Tiered control system 2020 will focus on the Hazards Identified — 403-4 Risks under Control rule. PJSC Rostelecom uses tiered control to improve the efficiency of workplace OHSMS performance assessment safety control. This is a mechanism of so- Below is a description of occupational health cial partnership between the employer and and safety system assessment in PJSC Ros- trade union in occupational health and safe- telecom. Pursuant to PJSC Rostelecom’s ty. Commissions at all stages of tiered con- Regulations on the Occupational Health and trol include Rostelecom managers and duly Safety Management System, the Company’s authorised trade union representatives. In OHS functions organise and conduct OHS in- OHSMS, tiered control enables OHS con- spections in business units of the Company’s trol both vertically — from a macroregional branches. OHSMS performance is assessed branch to a regional branch, to a telecoms and OHS activities are monitored in accor- operation centre, to individual facilities — and dance with regulations on tiered control at a horizontally between regional branches, fa- macroregional branch level. The Occupational cilities, etc. MRFs conduct annual scheduled Health and Safety Centre also conducts an- OHS audits in their respective branches of nual audits of occupational health and safe- PJSC Rostelecom. Over 50 branches were ty in macroregional and regional branches. audited in 2019, with accident prevention OHS system performance is also analysed plans for all branches approved and mon- by comprehensive audits of PJSC Rostele- itored at the level of MRF technical direc- com branches targeting operation and con- tor. Tiered control involves direct dialogue trol of core communications networks in ac- on workplace safety between personnel cordance with annual audit plans. and Rostelecom managers to let employ-

112 113 ROSTELECOM'S SUSTAINABILITY REPORT 2019 3. OUR EMPLOYEES

Rostelecom Group’s occupational Various categories of employees including ing at height. Also in 2019, Conscious Safety 403-2 403-9 403-10 es (18%), falling from ladders and stairs health and safety expenditures, managers are trained in occupational health and Zero Accidents training was delivered to In 2019, employees had no occupational (16%) and falling from towers (11%). In 2019, RUB million and safety. Training is delivered in accor- 30 heads of the OHS functions of regional diseases. Despite all efforts, there were 47 there were no fatalities caused by employ- dance with Resolution No. 1/29 of the Minis- branches and macroregional branches. work-related injuries in the reporting peri- ee violations of OHS requirements in Rost- try of Labour and Social Protection and Min- elecom Group. Unfortunately, one employ- by 2016 od. Most injuries were related to transport istry of Science and Higher Education of the In PJSC Rostelecom, contractor person- (44% of total), falling while moving about ee of Rostelecom, while on duty, was killed 29% Russian Federation On the Approval of Pro- nel and secondees are obliged to com- the premises, in buildings and indoor spac- in a traffic accident caused by a third party. dropped the number of high- cedure for Occupational Health and Safety ply with the Instruction on the Procedure consequence injuries in the Group .6 Training and Examination of Employee Knowl- for Issuing Work Permits to External Per- year-on-year in 2019 edge of Occupational Health and Safety Re- sonnel and PJSC Rostelecom Secondees 550 quirements dated 13 January 2003, as well as at PJSC Rostelecom’s Facilities as well as Work-related injuries at Rostelecom Group internal regulations of Rostelecom following Guidelines for Occupational Health and approved OHS training schedules. During the Safety Requirement Compliance Verifica- 2016 2017 2018 2019 year, personnel engaged in tower installation tion Conducted to Issue Work Permits to Number of work-related injuries 42 39 30 47 and maintenance, besides OHS and electrical External Personnel and PJSC Rostelecom safety training, was also trained in safe work- Secondees at PJSC Rostelecom’s Facilities. 2017 Including:

• high-consequence injuries 11 12 14 10

.8 • fatalities 5 0 1 1 640 Breakdown by gender:

• injured women 6 6 8 5

• injured men 36 33 22 42

Rate of work-related injuries per 1,000 employees 0.34 0.31 0.27 0.44 2018

Rate of work-related fatalities per 1,000 employees 0.04 0 0.01 0.01 697.8 Lost days resulting from incidents 2,078 4,503 2,145 2,199 PJSC Rostelecom conducts online moni- Rate of work-related injuries in Rostele- toring of injuries as well as quarterly and com in 2019 stood at 0.44. The increase annual root cause analysis. In 2019, all in- from previous years was caused by strict- juries were followed by investigation, iden- er requirements for injury registration. At 2019 tification of causes and corrective actions the same time, the number of high-con- and distribution of letters on prevention of sequence injuries in the Group in 2019 772.8 such accidents in the future. dropped by 29% year-on-year

114 115 SUSTAINABILITY REPORT The number Market share 2019 of active users captured on the DC of the public service service market 1 portal (gosuslugi)

Our country

1 Source: iKS-Consulting, including DataLine ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY 4 Our Country

4.1. The Company's Approach

2019 — DELIVERING ON DIGITAL

103-1 103-2 Rostelecom is Russia’s larg- Quality Education; SDG 11 Sustainable Cit- • We aim for maximum openness and trans- 120+ ~63 3.5 est provider of digital services and solutions. ies and Communities; and SDG 10 Reduced parency of our social activities. thousand people million transactions totalling thousand volunteers participated in We operate in all market segments, act as a Inequalities. • We are continuously improving our social registered in the Unified over RUB 66 billion registered the Group’s volunteering programmes single universal service provider across Rus- In implementing all of its social projects and activities taking into account the Group’s Biometric System on the Public Services Portal sia, and contribute significantly to societal programmes, Rostelecom is guided by the priority business objectives and society’s social dynamics. development in all regions of the country. Russian laws, PJSC Rostelecom’s Charter Rostelecom’s advanced developments and and external social policy, and the follow- solutions are aimed at promoting Russia’s in- ing principles. formation transparency and digital transfor- We see social projects as an essential el- mation, bridging the digital divide and assist- • ement of corporate social responsibility. 2.4 130.8 640 ing people in the most efficient way. • When implementing our projects, we strive billion authorisation requests received thousand publications employees took part Rostelecom has been expanding its corporate to align the strategic interests of the Group, for the Integrated Identification and and mentions in the media in blood donor sessions social activities for more than 10 years. All our its shareholders, and the interests of the Authentication System received by PJSC Rostelecom projects target complex social and environ- state concerning social development. mental issues in line with our core priorities — • We aim to maximise the development ensuring a stable social environment and im- of digital infrastructure and promote a proving the quality of life for Russian citizens. wide range of telecommunications solu- Rostelecom’s strategic goals in implementing tions and services for various stakeholder ~55 8.6 groups. social projects and programmes are closely thousand people thousand publications linked to the sustainable development goals • We invest in addressing social issues completed the ABC and mentions in the media defined by the UN as top priorities for the through our infrastructure and services, of the Internet programme in the context of social policy whole world until 2030. Every year, we strive and develop technologies to offer diverse and charitable programmes to contribute even more to achieving these opportunities to improve the quality of life goals and ensure their deeper integration for various social groups and enable them throughout Rostelecom’s operations, includ- to enhance their potential. ing in external social policy. We are primar- • We prioritise long-term projects that target ily focused on achieving the goals that are the most pressing social issues and drive 4.6 176,7 lasting social change. the most relevant for our business: SDG 9 In- million hours of live video feeds RUB thousand dustry, Innovation and Infrastructure; SDG 8 • We strive to comply with relevant interna- transmitted during the Unified spent by the Group Decent Work and Economic Growth; SDG 4 tional norms and standards. State Examination on charitable activities

118 119 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

Rostelecom Group makes a positive Our owned infrastructure, telecommunica- and local communities, provides free finan- egory. The award ceremony was held in ear- contribution to Russian society in tions resources, a wide range of services cial assistance to organisations and individ- ly December as part of the 8th Moscow In- the following focus areas: and well-established relations with regional uals, financially supports cultural and sport- ternational Forum Corporate Volunteering: authorities enable us to effectively address ing events, as well as preservation of cultural Business and Society. both the issues faced by individual groups heritage, contributing to UN Sustainable De- Rostelecom was named the Philanthropist of Involvement in major national and more global challenges across multiple velopment Goals 16 and 17. the Year in Kuzbass. The Company was rec- and government-sponsored areas of public life. Thus, the implementation of our external so- ognised as the leader in corporate philan- programmes to build a digi- Since 2017, Rostelecom has been a key par- cial policy at all levels is aligned with efforts to thropy among the organisations based in tal economy in the Russian ticipant in the Digital Economy of the Rus- address both domestic and global objectives. Kemerovo. Federation sian Federation programme implementing nationwide information and technology projects. Awards for supporting and developing The programme sets a number of objectives the regions of operation for the Group, each critically important and In 2019, PJSC Rostelecom’s projects were Own social programmes run by affecting virtually every citizen of Russia. We nominated for the Award of the World Sum- Rostelecom independently or structure our efforts to develop Russia’s dig- mit on the Information Society (WSIS) of in collaboration with partners ital economy in line with our commitments to the International Telecommunication Union achieve priority SDG targets (SDGs 8.3, 9.1, (ITU): the ABC of the Internet project was 10.2 and 11.a1). announced a WSIS Prizes 2020 Champi- Rostelecom delivers on numerous IT objec- on by the International Expert Group, and Partnerships with non-com- tives set by the state, such as the creation the Growth project was included in the ITU’s mercial organisations, NGOs, and development of an e-government infra- database as an example of the WSIS best and state-owned and private structure (including the Public Services Por- practices. companies tal), telecommunications support for the elec- Rostelecom’s Smart Home integrated solution process and Unified State Examination, tion in Novosibirsk was awarded the Novo- providing broadband connectivity to social sibirsk Brand quality mark. infrastructure facilities, and other activities. Employee volunteering — the The Midday project was included in the top We closely link the implementation of these Group employees contribute five initiatives to prevent violence among projects with the achievement of our priori- to significant social causes by teenagers at the 2nd all-Russian conference ty SDGs 9.1, 9.5, 8.10 and 11.а. joining volunteering projects on the experience and role of non-commer- run through partnerships Another important focus area for the Group cial organisations in child protection and wel- is Bridging the Digital Divide project aimed fare, promoting the consolidation of efforts, at at bringing affordable telecoms services to the session devoted to preventing violence people in remote areas. One of our goals in among teenagers. implementing this project is to ramp up our Financial assistance to organi- In 2019, experts of the Hospital Organisa- contribution to UN SDG 9.c, an SDG target All our social and charitable projects are grouped sations or individuals to address tion of Pedagogues in Europe listed the social issues particularly relevant for us. by an area comprising integrated programmes — KnowTeach project implemented in Russia While implementing numerous projects within among global best practices with a unique Digital Equality, Health, Care, Spiritual Heritage, the Digital Equality programme across Rus- background. The project also received the sian regions we also aim to make a significant Award of the City of Moscow in the field of Sports, and the Environment. The Digital Equality Free financial support for causes contribution to achieving global SDGs 4.1, 4.4, education. and initiatives in culture, sports 4.5, 8.3, 8.6 and 10.2 that we have prioritised. programme is Rostelecom’s most important and For its support of the Clean Vuoksa volun- and preservation of cultural The Company constantly develops its social teer initiative, Rostelecom was named the ambitious integrated social programme heritage partnerships, joining efforts with government winner of the annual Champions of Good authorities, non-commercial organisations Deeds competition in the Environment cat- 1 The relevant UN SDG targets are detailed in the Our Sustainable Story section of this Report.

120 121 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

The Great Arctic State Yakutia, the largest country Eurasia’s tallest active volcano, Rostelecom Group Nature Reserve, the largest subdivision in the world Klyuchevskaya Sopka nature reserve in Russia in Kamchatka operates throughout Russia and third largest by area 3,084,000 km² in the world 4,850 m and has a presence in very In 2019, Rostelecom completed 41,692 km² the construction of intra-district In 2019, Rostelecom unique parts of our country bre backbone networks in completed the construction Rostelecom continues the Nyurbinsky District of the of a GPON1 network in the to roll out innovative Republic of Sakha (Yakutia). Seroglazka microdistrict of solutions to save energy During two years starting from Petropavlovsk-Kamchatsky and enhance energy 2018, the Company laid 350 eciency in the region kilometres of bre in the within the Russian Nyurbinsky District, excluding Arctic Zone Curonian Spit, the largest Lake Ladoga, the largest installations within villages sand-dune spit on Earth fresh water lake in Europe 98,000 m 276,000 km²

On 20–21 April 2019, In 2019, a team of divers — employees of Rostelecom’s Rostelecom communications Kaliningrad Branch joined specialists inspected the March for Parks communications lines laid environmental campaign across 27 water bodies in Rostelecom: from Derbent to Pevek, held at the Curonian Spit the North West of Russia: from Anadyr to Baltiysk National Park in the the Northern Dvina, Svir, Kaliningrad Region Pechora and Neva rivers, Ladoga and Middle Kuyto Derbent, the southernmost city in Russia. lakes, and others In April 2019, Rostelecom signed an agreement with the city administrations of Makhachkala, Derbent and Kaspiysk to implement the Clear Sky project to move operators’ overhead communications lines from power transmission towers into The Siberian taiga, underground conduits. The Volga, the longest the largest forest river in Europe in the world Pevek, the northernmost city in Russia. 3,530 km In September 2019, PJSC Rostelecom and 3,900,000 km² JSC Rosenergoatom signed a contract to provide In July 2019, Rostelecom a range of telecommunications services to In 2019, Rostelecom arranged for a live webcast the world’s rst ¢oating nuclear heat and power installed solar panels and of the Navy Day celebration plant (FNHPP) currently moored in Chukotka The world’s longest bridge a wind turbine to power in Astrakhan, from the Volga and expected to be based in Pevek. beyond the Arctic Circle, a satellite universal service Elbrus, the highest River’s embankment peak in Europe located on the Yamal payphone in the village of Lake Baikal, the deepest Anadyr, the easternmost city in Russia. peninsular Pakina Poma (Ivdel urban lake on the planet As part of the Digital Economy of the Russian 5,642 m district). The village is Federation national project, within four years, ~ 4,000 m situated deep in the taiga 1,642 m unlimited high-speed internet will be delivered In April 2019, Rostelecom and is only accessible by to Chukotka with the launch of a submarine arranged for a live webcast In 2019, Rostelecom brought all-terrain vehicles or In 2019, employees of bre-optic cable link to Anadyr. of the world’s highest bre optic to more than snowmobiles in winter Rostelecom’s Irkutsk altitude festival, EL’3,500 10 thousand households Branch took part in the Baltiysk, the westernmost city in Russia. in the Yamal-Nenets 360 volunteer marathon — In 2019, an automated weigh station was installed Autonomous Area the main national cleanup on the 44th kilometre of the Kaliningrad–Baltiysk campaign to collect rubbish highway. 1 GPON – Gigabit Passive Optical Network on the shores of Lake Baikal

122 123 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

BDD in Novosibirsk BDD in villages in the Khabarovsk Territory 4.2. Rostelecom’s Involvement in Projects Rostelecom has completed the activities with 500 to 1,000 residents. During the planned for 2019 within the regional 500+ year, Rostelecom laid 241 km of fibre Rostelecom has delivered on its to Develop a Digital Economy in Russia project in the Novosibirsk Region. The in eight districts across the region as commitments under the federal project is implemented in collaboration part of the project. The total length programme to bridge the digital with the regional government. It of installed fibre lines is now 902 km, divide in the Khabarovsk Territory. complements the Bridging the Digital with the total number of communities Wireless access points were installed an IT infrastructure. Within the programme, ic connectivity projects. Rostelecom makes Divide federal programme and helps covered by digital services brought in 56 small rural communities, Rostelecom implements current digital proj- full use of its R&D and production capabili- bring high-speed internet to communities to 72. with more than 18 thousand local ects for the benefit of the state, in particu- ties to deploy fibre across all Russian regions. residents now benefitting from free public internet access. Almost 500 lar, the Company acts as the operator of the In line with the programme, by 2024, broad- km of fibre were constructed in 15 As a reliable supplier of advanced technology public services portal and the Unified Sys- band internet access will be available to 97% “By pooling efforts with the Government District. Digital technologies in these districts across the Khabarovsk solutions, PJSC Rostelecom has been desig- tem of Interdepartmental Electronic Coop- of households and 100% of social infrastruc- of the Novosibirsk Region, this year communities are also now available at Territory. nated the key provider for the Digital Econ- eration (USIEC). ture facilities. we brought the benefits of high- social infrastructure facilities, i.e. schools, omy of the Russian Federation national pro- The Company’s priorities include building speed internet to 14 more villages, hospitals, primary care centres, libraries, gramme (the “programme”), with which the a modern information and telecommunica- or 9,723 residents. In particular, high- and rural administrations.” Company’s strategy for 2018–2022 is aligned. tions infrastructure both at the national and quality connectivity was delivered to “Rostelecom implements major Business, expert communities, the govern- regional levels. We have already started us- Morozovo and Sosnovka villages in federal programmes in the ment, and civil society have been pooling ing fibre-optic communications lines (FOCL) the Iskitimsky District, Kama village Khabarovsk Territory, including the their efforts to achieve the programme’s goals to bring broadband services to healthcare in the Kuybyshevsky District, Troitsky programme aimed at bridging the by 2024 across five focus areas: regulation, centres across Russia, and have been deliv- Yuri Kupriyanov settlement in the Kochkovsky District, and digital divide, which helps bridge education and talent pipeline, cyber securi- ering fibre broadband to schools and other Director of PJSC Rostelecom’s Repyevo settlement in the Toguchinsky Novosibirsk Branch the digital divide between urban ty, enhancing R&D capabilities, and building social infrastructure facilities within specif- and rural areas. A wireless access point provides enough bandwidth to use the Public Services Portal, BRIDGING THE DIGITAL DIVIDE PROJECT browse websites, or chat on social media. According to statistics, the access points deployed within the BDD proj- average monthly data traffic via all access points installed in the ect is provided free of charge. Wi-Fi access BDD in the Kaliningrad Region points are located so as to cover social in- Khabarovsk Territory exceeds 6.7 frastructure facilities in communities: schools, In 2019, Rostelecom completed the 127 local communities with 250 to 500 TB, which confirms the popularity Bridging the Digital Divide project in residents, having laid over 700 km of of the service with local residents.” Bridging the Digital Divide (BDD) project is an rural health posts, polling places, EMERCOM the Kaliningrad Region. The Company fibre lines. important focus area for Rostelecom Group. facilities, libraries, etc. Residents can connect to the internet from any device that sup- installed free public access points in The project is aimed at bringing affordable Elena Khitrova ports Wi-Fi, upon authentication via a text telecoms services to people in rural areas, pri- Director of PJSC Rostelecom’s message or a verified account on the pub- marily in remote and hard-to-reach locations, Khabarovsk Branch including communities located close to the lic services portal. More details on the proj- national border. Rostelecom is the only uni- ect are available at https://www.company.rt. “Statistics show that Wi-Fi access points businesses and government across the versal service provider implementing a proj- ru/en/projects/. in small communities are popular with entire Kaliningrad Region, not just in ect to bridge the digital divide under a 10- As at 31 December 2019, the number of com- residents. Over the past year alone, 150 major cities and towns.” year government contract with the Federal munities where universal service is provided TB of data were used, with the number Communications Agency (Rossvyaz) for the via access points totalled 11,107, or 79.57% of of active users almost doubled and the provision of universal service. The universal the total number of access points in Russia. number of registered users quadrupling. service contract provides for the installation The total length of FOCLs is 85,323 km (con- This is the evidence of the important of internet access points with bandwidths of struction completed). social impact of this project, which is part of a digital ecosystem currently Alexey Semenov at least 10 Mbps at communities with a popu- By the end of 2020, we plan to provide uni- being built in the region. Internet access Director of PJSC Rostelecom’s lation between 250 and 500 people. Access versal service and internet access via access becomes available to local residents, Kaliningrad Branch points are to be installed in almost 14 thou- points across Russia in 12,243 communities sand rural communities across Russia with a with 250 to 500 residents, and by the end total population of about 4 million. Starting of 2021, the project is expected to be imple- from August 2017, internet access via Wi-Fi mented in full.

124 125 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

ARRANGING FOR VIDEO SURVEILLANCE AND ENSURING THE OPERATION OF THE BROADCASTING 5G MOBILE NETWORK PORTAL DURING THE UNIFIED STATE EXAMINATION AND THE SINGLE VOTING DAY DEVELOPMENT IN RUSSIA

• turn the live video feed on and off In July 2019, the Government of the Rus- workstreams to implement the roadmap are • view general information, check the loca- sian Federation, PJSC Rostelecom and Ros- 5G spectrum allocation, and building the re- tion and angle of cameras or availability Unified State Examination 2019 “We registered several hacker attacks on tec State Corporation signed a tripartite quired communications infrastructure, an eco- of UPSs in Siberia the video surveillance portal, but these agreement for the development of 5G Mo- system and a market for 5G-enabled digi- • download reports on the inspections of attempts to disrupt the website’s stable Rostelecom’s video surveillance bile Networks in the Russian Federation. The tal services. Video surveillance during the Unified State facilities, classrooms, and camera angles. operation came to nothing. Rostelecom system ran trouble-free throughout Agreement outlines the key workstreams and Further plans include securing the release of Examination is one of Rostelecom’s major specialists were quick to repel the cyber the Unified State Examination Rostelecom specialists monitored the oper- delineates each party’s area of responsibility. public sector spectrum into civil use; build- infrastructure projects. The Company also attacks, keeping the servers running. I can campaign across Siberia, ensuring ation of software, ensured technical support Preparation and implementation of a road- ing the infrastructure and rolling out 5G net- provides efficient video surveillance during say with confidence that our system is uninterrupted transmission of live of the portal, and protected it against DDoS map for 5G Mobile Network development is works by 2024; coordinating the development elections at different levels of government. resilient to such attacks. Nevertheless, video feeds of final tests. The attacks. During the examination, several DDoS the key implementation mechanism for the of the digital services market. Rostelecom’s system proved to be reliable attacks up to 10 Gbps were stopped, with no the Company will continue enhancing principal attestation campaign for Agreement. For PJSC Rostelecom, the key during the Russian presidential election effect on the operation of the video surveil- protection against external threats to school graduates in 2019 took place and the State Duma elections. Every year, lance portal. minimise the possibility of DDoS attacks between 27 May and 1 July. Video throughout the Unified State Examination Rostelecom, MegaFon, VimpelCom Rostelecom, MegaFon and Nokia In 2019, Rostelecom pioneered the provision in the future. Throughout the Unified cameras were installed in 9,291 period, live video feeds are transmitted on State Examination period, Rostelecom’s rooms, and the system transmitted and MTS signed a memorandum made the first international video of consultative support throughout the peri- of understanding to set up a JV to call on a Russian 5G network the www.smotriege.ru portal. ensured the smooth running of the entire about 1.2 million hours of live od of the Unified State Examination at 70 ex- free up 5G spectrum In 2019, a record 4.6 million hours of live vid- amination venues in overseas educational es- examination process. In this way, we not video feeds. 95% of cameras in Rostelecom, MegaFon and Nokia eo feeds were recorded. In addition, we up- tablishments based at embassies, consulates, only bring our technological capabilities Siberia operated online, with video PJSC MegaFon, PJSC Rostelecom, teamed up to make the first PJSC VimpelCom and PJSC international video call over a Russian graded the portal’s functionality. New sections, and military units in 54 countries. The system to the Unified State Examination campaign feeds directly transmitted to the MTS signed a memorandum of 5G network, connecting Russia’s including Testing, Schedule, and Reports, en- ran smoothly throughout the principal 2019 but also contribute to the transparency and www.smotriege.ru website. understanding to consolidate efforts northern capital and Helsinki ahead able users to: Unified State Examination campaign. objectivity of the examination process.” in jointly developing and optimising of the St Petersburg International Mikhail Oseevsky the usage of 5G mobile networks Economic Forum 2019. Russia’s President of PJSC Rostelecom In 2019, Rostelecom also arranged for vid- (5G/IMT-2020) in Russia. The parties first international video call on eo surveillance during the Single Voting Day, are considering various options a 5G network marked the start of ensuring the smooth operation of 11.5 thou- to pool efforts in building a 5G the actual operation of the next- sand cameras during the four-day broad- radio subsystem for the prioritised generation mobile networks. Another casting period, from 7 to 10 September. The frequency bands where available call made during the event confirmed The Unified State Examination 2019 comprised: Company’s plans include arranging for video spectrum is highly limited, including an the feasibility of 5G infrastructure surveillance and online statistical reporting option to set up a joint venture with sharing by several operators. Russia’s during the Single Voting Day 2020. equity equally distributed between first 5G call connected subscribers the operators. The joint venture will of Tele2 Russia and MegaFon. focus on freeing up spectrum for 102.2 51.9 4.6 the deployment of the participants’ thousand video cameras thousand connected classrooms million hours own 5G networks. of live video feeds from cameras 7.5+ 20.8 thousand federal and thousand users regional online monitors of the www.smotriege.ru portal

126 127 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

UNIFIED BIOMETRIC SYSTEM CONSTRUCTION OF THE SAKHALIN–KURIL ISLANDS SUBMARINE FIBRE-OPTIC CABLE LINK Internet connectivity for social infrastructure facilities in Nizhny ing to visit a branch in person. For more de- Novgorod tails on the Unified Biometric System see about 20% of user traffic in Yuzhno-Sakha- The first stage of the Information www.bio.rt.ru/about (in Russian). linsk, while the population of the Kuril Islands is much less than that of Yuzhno-Sakhalinsk. Infrastructure project within the In 2019, the key focus areas for developing The Unified Biometric System is a federal dig- Rostelecom has built modern networks on Digital Economy of the Russian biometric services were determined: pub- ital platform operated by Rostelecom pursu- The Sakhalin–Kuril Islands submarine FOCL the Kuril Islands using the GPON technology Federation national programme lic services and the social sector, transport, ant to a decree of the Russian Government. was launched in February 2019. The effort which enables data transfer at 100 Mbps and was completed in the Nizhny retail, payment services, systems for access The digital platform is a key part of a remote included laying about 815 km of communi- above, and also upgraded the islands’ exist- Novgorod Region. High-speed control and management. identification solution using the individual’s cations lines at a depth of up to 3,000 m ing communications lines. internet connectivity was provided biometric characteristics — voice and face. Tinkoff Bank, Post Bank, Sovcombank, to bring unlimited internet access and ad- to 288 regional social infrastructure The system was launched on 1 July 2018, and Promsvyazbank, Home Credit & Finance vanced digital communications services to facilities. Starting from 1 December, already now, along with the Integrated Iden- Bank, Raiffeisenbank, AK BARS Bank, Ros- Iturup, Kunashir and Shikotan Islands. Over digital services are available at 107 tification and Authentication System, it en- selkhozbank and other financial institutions one year, Kuril residents used the fibre line schools, 79 rural health posts, 20 ables banks to open accounts or deposits, have started offering financial products -us to download over 5,000 GB of data, which is fire departments, 17 National Guard or issue loans without the customer needing the Unified Biometric System. units, and 65 facilities of government and local authorities. INTERNET ACCESS AND DATA SERVICES FOR SOCIAL INFRASTRUCTURE FACILITIES As at the end of 2019, over 120 thousand users were registered in the Unified Biometric System and 232 banks were connected to the we are required to provide internet connec- “The national project has made tivity to 29,790 social infrastructure facilities high-speed internet available not system, now collecting customer biometric data in over 13 thousand across all Russia by the end of 2021. only at schools in major cities and towns but also in small rural In 2019, 7,776 social infrastructure facilities offices across Russia communities. This is clearly the 203-1 Rostelecom is the contractor for the were provided with internet connectivity — imperative of our time: irrespective project to provide internet connectivity to 26% of the target. All connections were pro- of their place of residence, our social infrastructure facilities in 44 regions vided in full compliance with applicable re- In 2020, we expect to complete the connec- children should have instant access of the Russian Federation under the Infor- quirements, with 97% of facilities connected tion of credit institutions and deploy solu- to all online educational resources Rostelecom completed a project to connect Promsvyazbank to the Unified mation Infrastructure federal project, imple- via fibre. Plans for 2020 include bringing in- tions enabling them to comply with the ap- as they may require. Notably, the Biometric System mented as part of the Digital Economy of the ternet connectivity to another 9,500-plus plicable biometric data security requirements, project is implemented in stages. Russian Federation national programme. As social infrastructure facilities. In September 2019, Rostelecom completed needing to visit a PSB branch, simply by as well as roll out the services available with So far, more than a quarter of target per the Terms of Reference for the project, a project to connect Promsvyazbank confirming their identity using personal biometric identification to non-financial mar- facilities have been connected, (PSB) to the remote identification service biometric data — face image and voice kets. We plan to fully implement the project and by February 2021, we expect within the Unified Biometric System, characteristics. by the end of 2021. Social infrastructure facilities to provide internet connectivity making PSB one of the first banks to over 1,100 facilities.” enabled to provide financial services using biometric identification. Customers Rural health posts Educational facilities can use remote identification to open Gleb Nikitin an account, make a transfer or apply for Governor of the Nizhny Novgorod Region a loan at PSB. Any citizen registered in Polling places The National Guard the Unified Biometric System can now become the bank’s customer without EMERCOM The Ministry of Internal Affairs

128 129 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

Top five most popular services Users also often go to the portal to apply The key trend of 2019 was the digital trans- by the number of queries CONNECTING FACILITIES OF THE FEDERAL for Russian national and travel passports (1.2 formation of public services — creation of (as at December 2019): STATE-OWNED ENTERPRISE RUSSIAN TELEVISION million and 5 million, respectively), get regis- super-services. According to the concept, AND RADIO BROADCASTING NETWORK TO FIBRE tered at the place of residence (3 million), republic services will be grouped around life quest a permit for storing and carrying hunt- events, with citizens enabled to obtain these broadcast traffic and overhead transit, as well ing weapon (1.4 million). services automatically, all at once. The portal as traffic transit services to social infrastruc- users will have an opportunity to get involved ture facilities. In 2019, the Company provid- Since 2009, Russian citizens have filled in in developing and testing these services: the ed fibre connectivity to 1,692 RTRN facilities, and submitted more than 325 million elec- By Russian Government’s Decree No. 1809-r tronic requests for public services, with 50% Super-Services section of the website al- dated 14 August 2019, Rostelecom was desig- with bandwidths up to 850 Mbps. of the total, or over 145 million (as at Decem- ready features 15 super-service prototypes. ~60 nated as the sole contractor to provide con- The project is expected to be fully complet- million queries ber 2019), submitted in 2019. The top 10 re- nectivity services to facilities of the Federal ed before the end of 2021, with internet con- booking a doctor appointment gions by the number of submitted requests State-Owned Enterprise Russian Television nectivity delivered to 4,998 RTRN facilities. Over the past decade, include Moscow and the Moscow Region, and Radio Broadcasting Network (RTRN) for Tyumen and Sverdlovsk Regions, Saint Pe- citizens have made almost tersburg, Krasnodar Territory, Chelyabinsk 142 million payments via Unified Public and Municipal and Novosibirsk Regions, Republic of Bash- Services Portal in the Trans-Urals kortostan, and Samara Region. Over the past the public services portal, E-GOVERNMENT INFRASTRUCTURE UNIFIED PUBLIC SERVICES PORTAL decade, citizens have made almost 142 mil- On 29 August, an award was given for a total of over RUB to the 500 thousandth “e-citizen” lion payments via the public services portal, + Rostelecom ensures the smooth for a total of over RUB 150 billion. The 2019 150 billion — a new user registered on the 24 operation of the e-government figures have already exceeded historical re- Unified Public Services Portal — in million queries infrastructure providing citizens the Trans-Urals. “E-citizens” is an cords: as at the beginning of December, more The Russian Ministry of Digital Development, retirement benefits details and organisations with digital ac- informal name for people with an than 63 million transactions were registered, Communications and Mass Media acts as cess to public services. The e-government In 2019, the Unified Public Services Portal cel- account on the www.gosuslugi.ru for a total of over RUB 66 billion. the government customer and owner of the services are steadily gaining traction, with ebrated its 10th anniversary. Since July 2010, portal. The landmark user of the portal. The portal is operated by PJSC Ros- the number of visits to the Public Services over 100 million Russian citizens have reg- public services portal was Mark telecom in collaboration with JSC RT Labs. Portal exceeding 500 million in 2019 and the istered on the Public Services Portal, which The number of citizens Fomin, a resident of Kurgan. number of services requested via the rele- currently offers over 29 thousand electronic registered on the vant mobile application up 2.5x year-on-year. services. For more details on the project see www.gosuslugi.ru (in Russian). public services portal Unified Public and Municipal Services Portal in the Perm “I recently registered on the portal. exceeded 100 million. Territory 9 I needed to have a new passport million queries During 2019, an average For the first time in the Perm Territory, issued and decided to do it via the vehicle registration of 1.4 million new users doctor appointment booking became public services portal. As a result, the most popular service on the I saved time and got my passport enrolled on the portal Unified Public Services Portal. In quickly and without any queuing. every month 2019, residents of the Perm Territory This is how, quite unexpectedly, I used this service more than 180 became the landmark user of the thousand times, which accounts for Public Services Portal.” almost a quarter of all electronic + requests submitted by the region’s Mark Fomin 7 6 residents on the www.gosuslugi.ru user of the public services portal million queries million queries website promoted by Rostelecom as kindergarten enrolment application for a test part of the E-Government project. to get a driver’s licence

130 131 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

The implementation and operation of the Safe City hardware/software solution (an INTEGRATED IDENTIFICATION integrated multi-level public safety, law-enforcement and environmental safety system) is AND AUTHENTICATION SYSTEM a major element of the Smart City project. regional and municipal services. Owners of As at the end of 2019, more than 2.4 billion accounts in the Integrated Identification and authentication requests were submitted via Authentication System may apply for docu- the Integrated Identification and Authenti- ments (passport, driver’s licence, etc.), book cation System. Development of services within the Safe City solution in 2019 Rostelecom set up the Integrated Identifica- a doctor appointment, enrol a child to a kin- tion and Authentication System eight years dergarten, pay a utilities or phone bill, and re- ago, as requested by the Russian Ministry of quest many other services online. Registra- Street Lighting (part of the Energy Efficiency project) Digital Development, Communications and tion in the system is available via the Unified Rostelecom presented the Digital Water Utility project in Yaroslavl Mass Media. The number of users registered Public Services Portal at www.gosuslugi.ru. in the Integrated Identification and Authenti- Any individual, legal entity or organisation In 2019, Rostelecom signed 26 energy Rostelecom, in cooperation with the Moscow Factory of Thermal Automatics cation System grows with each passing year. can register in the system free of charge, service contracts for street lighting upgrades. (MZTA), presented the Digital Water Utility product at the Yaroslavl Investment The system is designed to register, identi- with the enrolment procedure available to Forum. The solution makes part of the Smart City project and automates all fy and authenticate users of all public infor- all internet users. Energy efficiency of grids business processes at a water utility company, from wells and water treatment mation systems to enable access to federal, systems to billing. Smart metering systems with remote control and reading via Tele2 Russia or Rostelecom’s GSM channels (MVNO). Over UNIFIED SYSTEM OF SMART CITY Smart cities comprise: 230 thousand smart meters were installed INTERDEPARTMENTAL PROJECT in 2019. Taganrog — a smart city ELECTRONIC COOPERATION Rostelecom implemented a range of smart solutions in Taganrog, making it the first safe roads Regional utilities (formerly, the Unified smart city in Russia. Taganrog residents can now benefit from systems including Information and Analytical System for Smart Lighting, Safe City, Intelligent Video Surveillance, e-services for healthcare and energy efficiency Utilities) digital home-school books. By August 2019, we replaced almost 11 thousand street Rostelecom has an extensive track record of lamps with energy-efficient lamps integrated within an intellectual control system. electronic education To enable smarter decision making The Unified System of Interdepartmental implementing digital solutions fundamental to for municipal and regional authorities, Electronic Cooperation (USIEC) is a part of creating the infrastructure for smart cities. The the emergency 112 hotline Rostelecom is developing digital passports the e-government federal infrastructure and is Smart City project is aimed at making Rus- for apartment blocks, as well as analytics developed solely by Rostelecom. The USIEC sian cities more competitive, improving the healthcare engines, and management decision control “Taganrog has a vast potential for straightforward. They help balance public transfers data on payments made by bank- efficiency of city management and creating a and support modules. innovation. The city is home to industrial demands against municipalities’ capabilities ing institutions to the State Information Sys- safe and comfortable environment for urban urban video surveillance enterprises and a cluster for IT talent, to create a transparent interface for tem for State and Municipal Payments. Public residents. As a partner to the state, business- and we actively promote local cultural interactions and set up a feedback sector institutions connected to the system es and residents, we act as a key contractor e-government traditions and tourism. This requires channel for the city’s residents. The share information independently, with all fed- to build a database of smart city solutions appropriate opportunities and conditions: future belongs to smart cities.” eral executive authorities in Russia connect- accessible via a single digital platform. Digi- emergency warning systems a comfortable and safe environment ed to the system. tal transformation experience suggests that for the city’s residents and guests. Our smart city components can be both used in In 2019, 34.9 billion transactions were pro- intelligent urban transport systems practical experience has proved that Andrey Lisitsky cessed in the USIEC (+11% year-on-year). individual institutions (such as schools) and these digital solutions are accurate and Head of the Taganrog Administration scaled up to the entire city. For more details the environment on the project see https://russiasmartcity.ru/ .

132 133 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

4.3. Digital Equality Integrated Social Programme

Under the Digital Equality programme, Digital Equality integrated social Rostelecom places a great emphasis on im- Rostelecom: programme: proving the quality of life for senior citizens Starting from 2014, by offering training in computer and inter- over 305 thousand In 2019, PJSC Rostelecom’s projects • provides people with access to the latest 1. ABC of the Internet computer literacy net skills and providing assistance in obtain- were nominated for the Award of the telecommunications technology project for senior citizens ing public services online. Rostelecom has senior citizens have World Summit on the Information • improves education in telecommunications 2. Growth distance learning and socialisation been running the ABC of the Internet proj- taken advantage of Society (WSIS) of the International Telecommunication Union (ITU): the • develops distance learning project for children in orphanages and ect on an ongoing basis since 2014 in part- foster homes, as well as children deprived nership with the Pension Fund of the Rus- the ABC of the Internet ABC of the Internet project was • creates and supports educational portals The key goal of the Digital Equality pro- of parental care sian Federation. The project is designed to programme announced a WSIS Prizes 2020 gramme, Rostelecom’s most significant and • promotes engagement in social interac- 3. Learn the Internet — Manage It! digital help senior citizens acquire basic computer Champion by the International ambitious integrated social programme, is to tion and application of acquired skills in literacy project for Russian internet users and internet skills, so that they can visit pub- Expert Group. improve the quality of life for millions of Rus- practice 4. Social Impact Award (SIA) Russia, an lic services portals, connect with friends and sian citizens by bridging digital divides and • ensures internet safety for children, se- international programme supporting family on social media, book a doctor appoint- Webinars for instructors and organisers of ensuring accessibility of digital solutions for niors, and other vulnerable groups early-stage social entrepreneurs ment, search for useful information on the in- socially vulnerable groups such as senior ternet, make purchases and pay bills online, the ABC of the Internet courses have great- • provides a free federal phone number 5. Internet for Social Infrastructure Facilities citizens, children in orphanages, children in ly contributed to the project’s success. The (8 800). project and stay socially active. A special manual for needy families, children with special needs, senior citizens, Internet ABC Book, has been webinar held in May 2019 was attended by 6. Computerisation of Orphanages project and many others. We have combined Rostelecom Group’s so- developed as part of the project by teachers, over 1,400 representatives of regional social cially significant projects driving the adop- 7. Project of the ProeKTOriYA All-Russian gerontological psychologists and IT special- policy ministries, library staff and university tion of advanced technology and solutions Forum of Professional Navigation ists. For more details on the project see www. faculty from 51 regions. within the Digital Equality integrated social 8. Children’s Technology Parks project azbukainterneta.ru (in Russian). The annual Thank You, Internet! contest was programme. promoting additional education Online content is evolving rapidly, with web- established to support the ABC of the In- 9. Educational programme in cyber security site design and layout improved, new ser- ternet project: its participants present their at the Sirius educational centre vices added and new ways to contact gov- stories of how the internet can benefit peo- ernment agencies emerging. With this in mind, ple aged above 50 and how it changed and we have redesigned the entire course (the improved their life. More than 4,500 entries basic study guide and all seven addition- from 79 regions were submitted to the 2019 ABC OF THE INTERNET COMPUTER LITERACY al modules). Materials for instructors have Thank You, Internet! contest, up 23% year- PROJECT FOR SENIOR CITIZENS also been updated. Free access to the con- on-year. Residents from medium and small tent maximises the programme’s accessibil- towns or rural areas accounted for 81% of 1 2 3 ity to all those interested but makes it diffi- the stories submitted. The most senior par- cult to obtain accurate data on the number ticipant was 95 years old. of people completing the training. To clarify Our plans include rolling out the ABC of the the number of project participants, we sent Internet programme across all Russian re- Implementation of the ABC of the Internet project letters to regional heads and received official gions, designing two new modules, and boost- replies regarding the use of the ABC materials ing the number of companies that run cours- 2017 2018 2019 from 21 regions, indicating that 165,113 more es based on the ABC of the Internet study

Number of senior participants 65,000 85,000 55,000 seniors completed the ABC of the Internet guide through cooperation with all interest- training between 2014 and 2019. ed organisations and agencies.

Funds allocated to the programme, 2,250 2,250 2,250 RUB thousand

Number of training modules 5 7 7 1 Education 2 Care 3 Digital equality

134 135 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

Development, education, socialisation and Examination among children enrolled in the employment of children in orphanages and programme. ABC of the Internet in Irkutsk ABC of the Internet in the Krasnoyarsk Territory foster homes, as well as children deprived of In 2019, Autonomous Non-Commercial Or- On the eve of the New Year, In November 2019, Rostelecom teamed up with the Krasnoyarsk Territory parental care are the key areas of the Growth ganisation ROST and the Institute of Psy- Rostelecom delivered yet another Centre for Career Guidance and Qualification Enhancement to train senior distance learning project run by PJSC Ros- chology of the Russian Academy of Scienc- ABC of the Internet course in citizens in basic computer and internet skills. This year, the regular training telecom in cooperation with Autonomous es studied the value orientations, aspirations, Irkutsk. Every day for two weeks, course was expanded in response to participants’ requests. Non-Commercial Organisation ROST since educational and cognitive motivation, and so- Irkutsk-based senior citizens learned 2014. Special electronic textbooks devel- cialisation specifics of teenagers in the insti- computer and social media skills, oped for the project combine texts and ed- tutions covered by the project. The findings studied search engines, set up their ucational multimedia materials (video lessons of the study are not finalised yet, but it is al- e-mail boxes and sent e-mails. They and teacher audio and video comments). The ready clear that children participating in the also learned to use Skype and “We were happy to support Rostelecom’s the college students to gain practical project involves highly qualified instructors Growth project share many values with chil- government websites, including initiative to offer training to senior experience in teaching. And of course it from across Russia, who prepare students dren who live in families, which suggests bet- the Unified Public Services Portal. citizens this year, and we enhanced is a great way to promote communication for the Unified State Examination. Volunteers ter socialisation of the project participants. the social and educational aspects of across generations.” and instructors from Germany, Holland, France the programme by engaging future The study results will be presented as scien- and the United States also participate in the tific publications in leading psychology and system administrators — students of the distance learning project. Advanced online Aerospace College of the Reshetnev pedagogy journals. “Computer literacy is a crucial skill education technologies help achieve a high Siberian State University of Science in today’s fast-changing world. rate of success in passing the Unified State and Technology — as instructors. It is Senior citizens are always ready Zulfia Ismagilova a unique opportunity for older people to acquire new skills and knowledge Director of the Krasnoyarsk Territory in Krasnoyarsk to learn basic computer and, most importantly, they are Centre for Career Guidance and skills free of charge, and a chance for Qualification Enhancement willing to learn, and we are always A total of over 800 children from 66 social care here to support them in doing so.” institutions in 27 Russian regions have completed training under the Growth project since its inception. Nadezhda Kozlova Head of the Irkutsk Region Branch of the Many of them successfully passed the Unified Pension Fund of the Russian Federation, Chairwoman of the Management Board GROWTH DISTANCE LEARNING AND SOCIALISATION PROJECT State Examination and were enrolled in universities of the Irkutsk Chapter of the Russian FOR CHILDREN IN ORPHANAGES AND FOSTER HOMES, AS WELL including Lomonosov Moscow State University and Pensioners’ Union, an all-Russia non- AS CHILDREN DEPRIVED OF PARENTAL CARE governmental organisation the Higher School of Economics

The number of participants in the project subjects relevant for the examination and roll grows with each passing year, a sign of in- out the Growth project to 10–12 more insti- In 2019, PJSC Rostelecom’s projects Implementation of the Growth project creasingly stronger interest and better under- tutions working with children deprived of pa- standing of the Growth project’s value among rental care. were nominated for the Award of the 2017 2018 2019 children and administrations of orphanages. World Summit on the Information Number of participants 95 170 222 Society (WSIS). The Growth project In 2020, we plan to extend the project to was included in the database of the new regions (the Stavropol Territory, Volgo- Number of institutions covered 16 22 30 International Telecommunication grad, Sverdlovsk and Kurgan Regions) and Union as an example of the WSIS to increase the number of students in reg- Number of Growth project 43 69 113 best practices. participants who passed ular attendance to 300. During the school the state exams year, we intend to hold 7,000 classes in all

136 137 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

LEARN THE INTERNET — MANAGE IT! DIGITAL LITERACY PROJECT FOR RUSSIAN INTERNET USERS Learn the Internet — Manage It! project implementation plan for 2020

Initiative Area 2020 target

School of real deeds Case work with school teams 2 game module scripts, each comprising 5 interactive tasks

Quiz • Content update in the Main, Eng and 25RU 50 new questions Learn the Internet — Manage It! sections (20 rounds of 28 questions each) Implementation of the Learn the Internet — Manage It! project • Content development for 2 new modules

2017 2018 2019 Family IT marathon Preparation and holding in two stages: 80 family teams Stage 1: infographics design based 20 Russian regions Registered portal users 72,000 89,000 98,000 on the Knowledge section Stage 2: online tournament

Learn the Internet — Manage It! 14,000 11,100 17,500 Interactive portal (Knowledge section) Content development for 3 modules 15 new interactive tasks nationwide online championship (each comprising 4–5 interactive tasks) participants Nationwide online championship • Content development 20 interactive tasks • Funds allocated to the project by PJSC 800,000 800,000 800,000 Design layout development 10,000 participants • Rostelecom, RUB Coding, testing 50 Russian regions • Advertising (bulk messaging, SMM) 8 federal districts of Russia • Holding the championship, summing up Key project initiatives • Nationwide online championship • Nationwide online championship • ВсеNationwide online championship the results • School of real deeds (11,100 participants) (17,500 participants) • 88 local online tournaments • Family IT marathon (80 teams from • Family IT marathon (180 teams from • 10 on-site events 30 Russian regions) 20 Russian regions) Training applications • Content update 40 new questions • School of real deeds • School of real deeds • Adding new tests • 91 local online tournaments • 17 local online tournaments • 10 on-site events • 10 on-site events The second inter-regional cyber literacy dictation • Content development based on the Learn 20 cities • Closed online tournament within for middle school students the Internet — Manage It! project materials 400 participants the Cadet Sports Competition (590 • Holding the championship, summing up teams, 4,000 participants) the results

A series of initiatives (quizzes, local tournaments, • Developing information materials • 2 types of leaflets digital literacy lessons) in regions (leaflets, brochures) (championship, safety rules) • Holding events (at least 10 events) • 10 on-site events One of our priorities is to attract the atten- As at the start of 2020, the project had 141 In 2020, we plan to hold the Learn the Inter- tion of school and university students to thousand participants and the portal had over net — Manage It! nationwide online champi- modern information technology, as well as 186 thousand registered users from eight fed- onship in 50 Russian regions and bring the to provide the younger generation with new eral districts of Russia. A number of IT mar- number of accounts (project users) to 100 professional development opportunities in athons, online tournaments and quizzes are thousand. The partnership programme will the IT industry. To achieve these objectives, held under the project, as well as the main be expanded through the expert support PJSC Rostelecom actively supports educa- event of each year — the Nationwide Online from Rostelecom Lyceum project organisers. tional projects in IT. Learn the Internet — Man- Championship on Cyber Literacy. age It! is a socio-educational project for in- The participants were challenged to solve ternet beginners, providing basic knowledge problems of different complexity based on of the internet, its structure and capabilities. the key IT trends of 2019 and technologies Its primary goal is to increase digital literacy of the future: robotics, artificial intelligence, among young users with the help of modern internet and domain management, the 25th interactive training format, and teach them to anniversary of the .ru domain and national use IT services and apply acquired skills in domains. Participants who made it to the top practice. For more details on the project see 10 in the championship ranking were award- https://xn----7sbikand4bbyfwe.xn--p1ai/en/. ed valuable prizes.

138 139 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

from the regions. About 200 entries, 50 par- have a chance to compete for travel grants SOCIAL IMPACT AWARD RUSSIA, AN INTERNATIONAL PROGRAMME ticipants and 8 main winners are expected in for study and networking. SUPPORTING EARLY-STAGE SOCIAL ENTREPRENEURS 2020. Along with monetary prizes, finalists will

Implementation of the Social Impact Award project INTERNET FOR SOCIAL INFRASTRUCTURE FACILITIES PROJECT 2017 2018 2019 Since 2014, together with the Impact Hub 197 entries from 91 entries from 119 entries from Moscow centre for support of social enter- 55 cities and towns, 36 cities and towns, 31 cities and towns, Internet for Social Infrastructure Facilities in the Vologda Region prises, PJSC Rostelecom has been selecting 32 finalists, 2 winners 13 finalists, 2 winners 45 finalists, 3 winners winners of the Russian stage of the Social Rostelecom specialists provided internet connectivity to 205 social infrastructure Impact Award (SIA) competition, an interna- facilities in all municipalities of the Vologda Region. By the end of 2021, we tional programme promoting social enter- Over the past five years, the events held within the will deliver internet connectivity to 785 social infrastructure facilities in 500 prise among young people and designed in communities across the region. 2010 by the University of Vienna with par- competition attracted entries from more than 4,000 The availability of high-speed internet access ticipation from the international Impact Hub people from 105 Russian cities and towns. 86 teams is essential for the successful development network. The competition is held annually in of regions and social welfare organisations. 20 European countries for young entrepre- obtained expert support, and the winners received The construction of fibre lines increases the “A large-scale project to provide internet across the region, which means that neurs under 30 from across Russia who ad- availability of digital services, provides inter- connectivity to social infrastructure residents will be able to get digital dress significant societal and economic chal- RUB 1.7 million to launch their business projects and net access to social infrastructure facilities, facilities has been implemented in the government services electronically, in lenges. For more details on the programme were provided with access to investment enables residents of a region’s most remote Vologda Region as part of the Digital a new, digital format. And of course it is see www.russia.socialimpactaward.net. communities to take up popular telecoms Economy of the Russian Federation very important that high-quality internet services. As high-speed internet becomes national programme. Already during phase access services will become available The 2019 competition winners: internet technology to create a product or available in remote rural areas, new oppor- one, in challenging weather conditions, to local healthcare and educational a key tool to promote their ideas. • Dmitry Stenko — CCOVER, a project fo- tunities for taking advantage of remote ser- Rostelecom has promptly completed the institutions.” cused on producing covers for lower limb In 2019, the competition followed an expand- vices in healthcare and education are open- activities to connect over 200 facilities. prostheses using a 3D printer, Yaroslavl ed programme, attracting 45 projects from 13 ing up for local residents. Residents of small The project implies providing high- Vitaly Tushinov Russian regions — the highest number of en- • Alexandra Rubtsova — See With Your communities get access to high-quality tele- speed internet connectivity to a total Deputy Governor Heart gallery-in-the-dark, a project that tries for project incubation in the entire histo- coms services and are able to benefit from of 785 social infrastructure facilities of the Vologda Region “The Social Impact Award programme helps blind people find an employment, ry of Social Impact Award in Russia. In Mos- modern digital technology same as those grows as young people are increasingly Yekaterinburg cow, Saint Petersburg and Yekaterinburg, the choosing to set up social enterprises. This living in cities. Anna Balakhonsteva — Food Will Save the programme comprised on-site events: partic- year, we have tripled (to 75 people) the • World eco-catering service, a project that ipants met their coordinators in person, at- number of participants in the incubator; helps reduce the amount of discarded food tended meetings and master classes. Online now we have regional partners in Saint products and teaches people to cook us- Petersburg and Yekaterinburg where the events were held for participants from other ing the recovered food, Saint Petersburg Internet for Social Infrastructure Facilities in the Jewish Autonomous Region participants will meet in person. We have cities and towns. Daria Dolgova — a counselling room for also added an open online course to help • In 2020, the programme will be titled the 90 Rostelecom specialists deployed 23 km and local authorities, schools, educational senior citizens, Nizhny Novgorod entrepreneurs determine their aspirations Days Challenge. of fibre to bring internet access to institutions of secondary vocational and prepare a compelling entry, and we have Gleb Likhobabin (Geek Teachers educa- • Significant amendments were made to the in- 45 social infrastructure facilities in education, primary care centres and also expanded our work with mentors for tional project, Moscow) was the winner in cubator programme. First, the minimum age 19 communities in all districts of the rural health posts, election commissions, finalists to support project development a special category established by Rostele- of participants is now set at 18, with no upper Jewish Autonomous Region. Internet and fire departments and stations. post incubator.” com within the competition — the Internet connectivity was provided to government for a Better World. The Company has an- age limit. Second, the programme has been supplemented with new tracks, for instance, Ekaterina Khaletskaya nounced this category within the compe- for female social entrepreneurs. Third, at least Head and Co-Founder of Impact Hub Moscow tition for five years running. The category covers the authors of the projects that use 75% of the participants will now be enrolled

140 141 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

COMPUTERISATION OF ORPHANAGES PROJECT CHILDREN’S TECHNOLOGY PARKS PROJECT PROMOTING ADDITIONAL EDUCATION

Within the Computerisation of Orphanages tical challenges through modern information project, Rostelecom traditionally provides and communications technology. children with computer equipment and com- In 2019, under the Computerisation of Or- munications means required to access the phanages project, we provided 26 comput- Rostelecom actively cooperates with children’s most up-to-date knowledge, opening up ers to 18 orphanages which are home to a technology parks. Our employees give lectures, new opportunities for children in orphanag- total of over 2,300 children. es, supporting their development, broaden- host master classes and contests, participate ing their horizons, and helping them acquire in celebrations and get involved in projects new knowledge and skills and address prac- as experts and mentors to encourage teenagers to develop interest in digital technology. We run the IT-SKILLS and IT-KHOD hackathons and support the Vostok-1 aero en- PROJECT OF THE PROEKTORIYA gineering hackathon (area monitoring using ALL-RUSSIAN FORUM OF PROFESSIONAL NAVIGATION MAVROS (for drones in the OFFBOARD flight mode), and Clover drone programming and Quantorium in Petrozavodsk piloting), the Roboquant regional competition ProeKTOriYA in Yaroslavl in robotics, the Success Trajectory 2.0 proj- On 6 April 2019, the first republican hackathon, the Melting Pot of Projects, ect ideas contest, and a Rube Goldberg ma- was held in Petrozavodsk. The event was organised by the Quantorium Sampo Rostelecom was a partner of the ProeKTOriYA nationwide career guidance chine contest. technology park and Petrozavodsk State University. The forum’s participants ProeKTOriYA is the All-Russian Forum of Pro- forum held in Yaroslavl from 23 to 26 November 2019. The event was attended Quantorium technology parks for children were school students from Petrozavodsk and Medvezhyegorsk aged between fessional Navigation established by the Rus- by 320 school students in grades 8 to 11 from 80 Russian regions, over 100 13 and 18. They developed and defended projects to improve existing IT products sian Ministry of Education in cooperation with Quantorium children’s technology parks have teachers/mentors, 50 experts and 30 educational group coordinators. Over of the organisations acting as partners to the event. Rostelecom invited young the ProeKTOriYA portal. The Forum, launched been set up in Russia since 2014 based on a 30 thousand schools across Russia connected to the event via a live video coders to work on the Company’s Smart Home service. The winner in the IT in 2013, brings together experts from major new model of additional education for chil- link. Along with providing a telecoms infrastructure for the forum, Rostelecom category was a team of grade 10 students from the University Lyceum, with Russian companies, the country’s best ed- dren. The parks offer a new format of work- engaged experts from among its employees who challenged the forum a project to control a smart home using a voice assistant and complement the ucators and motivated school students to ing with children in beautiful venues equipped participants to solve a range of practical problems during the days of the system with light and humidity adjustment sensors. address current challenges in career guid- event and present their results. with hi-tech devices. The innovative engage- ance and self-determination. PJSC Rostele- ment formats used in modern settings help com supports the project throughout each inspire technical creativity in even more chil- stage by providing high-quality digital ser- dren, developing them for future professional “Participation in hackathons enables to continue our cooperation, with the vices. For more details on the forum see “Rostelecom has been the forum’s part- is particularly relevant to companies careers. The main objective of Quantoriums is kids to boost their skills and unlock their next major event scheduled as early www.proektoria.online (in Russian). ner for many years, helping children such as Rostelecom, since these chil- to unlock creative potential and educate fu- potential within a short timeframe in close as this autumn.” choose a development path and find dren will later become our employees ture high-class specialists in strategically im- Rostelecom plans to continue cooperation to real life settings. We thought it was their place in the future. We see the and drive our growth across all sectors portant areas of Russian science and tech- within the project, support open online les- important to engage solid partners as forum’s audience grow bigger with each of the economy.” nology. Children are taught free of charge, sons and get involved in organising the forum. customers and thus show the participants passing year, with even the toughest and funding is provided by federal and re- that their views, insights and ideas are challenges getting solved very effi- gional authorities, with the involvement of valued and sought after. Rostelecom Ksenia Sazonova ciently. And most importantly, the par- Dmitry Kim private and public investors and partners in- was just the right kind of partner for Head of the Quantorium Sampo ticipants solve them using advanced Vice President and Director of Rostelecom’s terested in strengthening their talent pipe- us. We thank the Company and hope technology park information and digital technology. This Centre Macroregional Branch lines, including Rostelecom. For more details on Quantorium technology parks see www.roskvantorium.ru/en/.

142 143 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

a 100-point score for the Unified State Ex- amination in informatics or mathematics. Altair children’s technology park “Solving the challenge required participants Safe Internet in the Tula Region to demonstrate a wide range of knowledge The competition finals were held in the Sir- Our subsidiary Rostelecom-Solar has educational programmes at the technology of their study at the technology park, in network technology, information security ius educational centre and involved 72 Cy- Rostelecom has delivered first become an official industrial partner park. By 2021, 50 deferred employment students will be able to develop and and solutions for automated process control berchallenge finalists in 2019. The competi- lessons on smart online behaviour of the Altair children’s technology contracts are expected to be signed with defend an individual or team project. systems. The final task wasn’t easy, and tion spanned six months, with the following for Tula-based school students park launched on 28 August 2019 at the technology park graduates. A successful project defence will earn Sochi Park provided a test ground to render outcomes: 5,590 registration entries, 2,378 within the autumn session of its MIREA — Russian Technological Uni- The technology park will host three educa- them ten extra points when they ap- every support to educational projects and people passed on to the second stage, 514 Safe Internet project launched versity. The children’s technology park tional clusters in Information Technology, ply to a university, in addition to the give talented kids a chance to show their participants solved at least one problem at in early 2019. The first classes covers a total of 1,800 sq m and can Biomedical and Chemical Technology, and score received at the Unified State abilities.” the second stage, 18 winners scored 100 in the new school season were simultaneously accommodate 60 stu- Radio Electronics to offer high-quality Examination. points for the Unified State Examination in held for students of Educational dents. Every year, more than 5,000 additional education opportunities using informatics. Centre No. 1 in the Tula Region’s high-school students will enrol in free specially equipped labs. Upon completion Konstantin Kareyev Novomoskovsk and involved over Head of the Information Technology and Software Department at Sochi Park 100 students in grades 6 to 8. During the lessons, the Company SAFE INTERNET PROJECT FOR SCHOOL STUDENTS specialists discussed ways to protect oneself against negative content EDUCATIONAL PROGRAMME IN CYBER SECURITY AT THE SIRIUS EDUCATIONAL CENTRE and malware, smart use of personal In 2019, 2,381 students from 269 Russian cit- data on the internet, safe online ies and towns competed in Cyberchallenge: behaviour rules and netiquette. Next Level. Out of the 415 participants who Discussions were also focused on solved at least one problem, 60 students online threats, such as phishing, reached the final. Following the final selec- The Safe Internet project is aimed to fos- spam and trolling. tion stage, 40 of them went to Sirius where ter smart and safe online behaviour among The Sirius educational centre was launched panies. For more details on the centre see off the attraction’s illumination. The students they completed a programme on cyber se- the younger generation, targeting primarily by Talent and Success Foundation in 2015. www.sochisirius.ru (in Russian). were tasked with restoring the illumination curity and acquired in-depth knowledge in schoolchildren and their parents. PJSC Rost- The centre is focused on the early identifi- In 2019, Talent and Success Educational Foun- and investigating the incident as an infor- APCS security, protection of web applica- elecom runs the project in three areas: class- cation, education, development and further dation, with the support of PJSC Rostelecom mation security breach. The winning team, tions, research on modern attack vectors, re- room-based instruction (dedicated lessons professional support of children demonstrat- and Rostelecom-Solar, developed a new ed- Cyberchallenge Speedrun, completed the verse engineering and computer forensics. on Safe Internet for school students), parents’ ing outstanding abilities in arts, sports, nat- task in 3 hours 27 minutes. meetings, and training workshops for teach- ucational programme on cyber security, com- In 2020, the Sirius educational centre plans to ural sciences and technical creativity. Every ers. The Safe Internet lessons are delivered in prising theoretical and practical training in run a joint educational programme on cyber month, Sirius hosts up to 800 children aged an interactive format to engage students in the security of automated process control security in the credit and finance industry de- between 10 and 17 coming from across Rus- an open dialogue with the instructor and en- systems (APCS), protection of web applica- veloped by Rostelecom and Rostelecom-So- sia. Training at the centre is delivered by lead- courage them to draw on their own personal tions, research on modern attack vectors, re- lar in partnership with the Bank of Russia and ing teachers of physical and mathematical experiences to review online behaviour-reverse engineering and computer forensics. National Research Nuclear University MEPhI or chemical and biological sciences, sports lated cases. The training programme culminated in an un- for students of relevant universities. schools, Russian art workers engaged in ac- conventional format cyber exercise involving ademic music, classical ballet and fine arts. Rostelecom also continues its programmes 40 students in years 1 to 4 — winners of Ros- Since 2018, Sirius has regularly enrolled stu- for school students at the Sirius educational telecom’s nationwide competition in infor- dents, including its graduates, as well as re- centre. In 2019, Rostelecom’s nationwide Cy- mation security Cyberchallenge: Next Level. cipients of grants from the President of the berchallenge Competition on information se- Russian Federation for fundamentally new ed- The exercise challenged the students to turn curity for school students was included in the ucational programmes, in its intensive educa- on the illumination of the Wheel of Time in 31.2 list of competitions of the National Technolo- tional programmes. Top graduates of these Russia’s first themed park, Sochi Park, within thousand school students have gy Initiative and the list of the Russian Coun- programmes receive job and internships of- a set timeframe. According to the script, an completed educational programmes cil on Competitions for School Students — fers from the Foundation’s partner com- intruder hacked into the system and turned at Sirius since 2015 the competition winners will be awarded

144 145 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

4.4. Charitable Activities and Volunteering Projects

NO Key charitable priorities: Goals and objectives of Rostelecom Group’s charitable activities PJSC Rostelecom has in place an effective POVERTY Key areas of Rostelecom Group’s • Creating a favorable environment for effi- system for managing the Company’s charita- charitable activities cient development ble activities, as well as an approved proce- Goals Objectives 41% • Cooperation with government authorities dure for evaluating these activities. Decisions • Supporting initiatives in education, sci- • Providing access to the latest telecommu- on the allocation of donations and charita- to develop the telecoms industry and en- ence, culture, arts, enlightenment and nications technology. ble giving to individuals and organisations are sure information security personal spiritual development. • Raising the level of education in tele- made by an authorised body of the Compa- • Participation, jointly with regional admin- • Supporting children’s and youth’s scien- communications. ny’s Management Board — the Charity Com- istrations, in national information develop- tific/technical and artistic creative efforts. Philanthropy and volunteering are an inte- ment projects and programmes to bridge • Promoting engagement in social interac- mittee. PJSC Rostelecom’s External Commu- gral part of Rostelecom Group’s activities. 25% the digital divide in the regions • Supporting socially significant youth ini- tion and application of acquired skills in nications Department (ECD) and the ECDs of We strive not only to provide communica- tiatives and projects, children’s and youth practice. macroregional branches are constantly coor- • Ensuring a stable social environment and movements and organisations. tions services to our customers but also to improving the quality of life for Russian • Providing assistance to healthcare and dinating our charitable activities and dona- contribute to improved quality of life in the citizens • Contributing to social support and pro- rehabilitation centers, supporting projects tions. Data is gathered and compiled using country by supporting educational, sports, tection of citizens, including improvement aimed at combating dangerous diseases. a model assessment system by ECD special- cultural and environmental events, and run- of the economic well-being of the needy, • Providing assistance to socially vulnerable ists based in standalone regional divisions, as ning charitable projects. The key areas of our social rehabilitation of the unemployed, groups and children deprived of parental well as in the Company’s headquarters. The disabled and other persons unable to charitable activities are set out in our exter- care. overall evaluation of PJSC Rostelecom’s char- 12% 21% exercise their rights or pursue their le- nal social policy, which serves as a tool for 1% itable activities, and of the efficiency of -so gitimate interests independently due to • Contributing to the preservation and de- cial investments is performed by the Com- the strategic management of social factors their special physical or intellectual needs, velopment of major cultural centres, the- Education Care Spiritual heritage of sustainable development, optimisation of or other circumstances. atres and museums. pany’s Management Board. our contribution to addressing the tasks of Environment Sports • Ensuring social rehabilitation of orphans, • Supporting sports projects and national socio-economic development and children deprived of parental care, aban- federations/teams. the development of the regions of opera- The allocation of funds by focus area did not doned children and children in difficult • Supporting projects aimed at improving tion, as well as strengthening our reputation. change significantly versus 2018. life situations. the environmental situation, including • Promoting patriotic, spiritual and moral through the use of own telecommunica- education of children and young people. tions infrastructure. • Supporting activities related to physical culture and sports (excluding professional sports). • Supporting activities aimed at protecting people’s health, supporting wellness and prevention, as well as promoting a healthy lifestyle and improving people’s moral and psychological state. • Ensuring protection and proper maintenance of buildings, sites and areas of historical, religious, cultural or environmental importance.

146 147 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

Rostelecom Group Projects with a clear potential for rollout Every year, Rostelecom implements EMPLOYEE VOLUNTEERING PROJECT COMPETITION RUN AND HELP CHARITABLE carried out over across Rostelecom Group’s footprint: charitable projects: SPORTS PROJECT

cheers up readers of all ages and fosters GOOD HEALTH 1 180 volunteering • Employee volunteering project competition • Let’s Help Together crowdfunding chari- AND WELL-BEING the love of books in children.” • Run and Help charitable sports project table programme focused on helping se- projects and allocated verely ill children and seniors • Midday volunteering project Daria Dyogina RUB 176,658 thousand • Become a Santa charitable campaign a lead specialist of the External • Exciting Readings volunteering project A volunteering project competition for PJSC Run combined 100 thousand km to raise • Bravery Box charitable campaign to collect Communications Department Rostelecom employees was launched in 2018. RUB 1 million and donate the money to the to charity in 2019 • Social telecoms project for the severely toys for children undergoing treatment in of the Siberia Macroregional Branch disabled healthcare facilities The competition’s main categories are edu- Life Line foundation to treat children with In 2019, employees of Rostelecom’s region- rare diseases — this is the primary goal of • Donor Day and donor initiatives Support for the KnowTeach socio-education, health, sports, care, environment and al divisions initiated, implemented and con- • the all-Russian charitable sports project Run • Digital Education project to develop digital cational project for children who undergo spiritual heritage. Finalists are selected by an tinued to systematically develop social and Within the 2020 volunteering project compe- and Help launched by Rostelecom in 2018 skills lengthy inpatient treatment expert panel comprising Company employ- charitable, volunteering and environmental tition, we plan to involve more employees in together with the Life Line Charity Founda- Digital Class project for school students ees as well as representatives of non-com- projects targeting special categories of ben- • projects, and to improve the previously pro- tion. Within the project, our team took part The Company’s management highly appre- mercial organisations and charitable founda- eficiaries. Our capabilities and the efforts of • Digital location in the Manufaktoriya chil- posed programmes. in the largest all-Russian runs: in Vladivostok, ciates our volunteers’ efforts: in 2019, Mikhail tions. Experts assess the competition entries employee volunteers enable us to improve dren’s city of professions Yekaterinburg, Krasnodar, Moscow, Nizhny Oseevsky, President of PJSC Rostelecom, and compile a ranking to determine the win- the quality of life for our beneficiaries and Way to the Top, a project to prepare chil- Novgorod, Novosibirsk and Saint Petersburg. • presented letters of gratitude and commem- ners based on the relevance of the issue ad- provide opportunities for their social fulfil- dren for social and professional life orative awards to 78 most active Company dressed, the project’s level of elaboration, the Between April 2018 and December 2019, ment, access to modern technologies, build- • NotJust Ceramics inclusive workshop char- employee volunteers from all macroregion- project idea’s detailed social impact, creativi- about 2,000 employees and 500 volunteers ing monitoring and warning systems, improv- itable project al branches. ty and novelty, synergies with the Company’s across the country participated in the Run ing the environmental situation, along with • Support for environmental volunteer other social projects, the project team’s own and Help charitable project. The kilometers access to many other opportunities. movements contribution and partnerships with non-com- run were tracked on an online platform and mercial organisations. The competition win- converted to roubles: 1 km gave the partici- ners receive a monetary grant to implement pants RUB 10. The funds raised were donat- their projects. ed to the Life Line Foundation to finance an In 2019, over 170 employee volunteers took endoprosthetic surgery. In 2019, our sub- part in the competition, with the judging pan- sidiary Rostelecom — Retail Systems joined el choosing 10 winning volunteering projects the project. in different areas, which were subsequently implemented.

“At the end of 2019, we launched a new campaign, Reading is Great!, to support young patients in city hospitals. Rostelecom employee volunteers have teamed up with Novosibirsk Globus Theatre actors for monthly readings of poems, stories and fairy-tales to children staying in hospitals. The first such event was held in November in Novosibirsk Children’s Clinical Emergency Hospital. The project 1 Sports

148 149 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

In 2018–2019, agers. With the support from the Committee for Public Relations and Youth Policy of Mos- Run and Help at the Moscow Marathon RUB 3 million were cow, we plan to develop the Animagic mo- The Midday project was included in the top five initiatives to prevent violence raised through the Run On 22 September, Rostelecom employees for the second time took part in bile game helping children learn about be- among teenagers at the 2nd all-Russian conference on the experience and role Russia’s largest running event, the Moscow Marathon, featuring 35 thousand haviour strategies to deal with bullying and of non-commercial organisations in child protection and welfare, promoting and Help project participants. A huge number of runners, volunteers and enthusiasts who came providing valuable information on where to the consolidation of efforts, at the session devoted to preventing violence to support their relatives, friends and colleagues gathered at the start area of get help if you are being bullied. among teenagers. We plan to expand the project’s geography the marathon at the Luzhniki Sports Complex. Rostelecom employees from and involve a maximum number of employees. Moscow and the Moscow Region, Belgorod, Vladivostok, Vladimir, Yekaterinburg, In winter, we intend to organise skiing races, Krasnodar, Nizhny Novgorod, Saint Petersburg and other cities competed at launch an online and offline running school the distances of 10 and 42 km. All Rostelecom athletes crossed the finish line for beginners, and raise RUB 2 million in one successfully, having added precious kilometers to the overall count. EXCITING READINGS VOLUNTEERING PROJECT year to help children with special needs.

Rostelecom employee volunteers visited patients of children’s hospitals in Krasnoyarsk MIDDAY VOLUNTEERING PROJECT Rostelecom employee volunteers participate in the Employees of Rostelecom’s Krasnoyarsk Branch, together with Komsomolskaya Midday project on a regular basis. Between 2013 The Exciting Readings project was launched Pravda Publishing House, organised Exciting Readings in children’s hospitals in 2018 in Krasnoyarsk. Participants of the and 2019, more than 390 educational events were across the city. Mini celebrations involving books, handicrafts, presents and meetings held within the project get together socialising help children learn new things and escape from the hospital routine. to read aloud and discuss classical and mod- organised, covering over 300 children from 14 or- Volunteers read Pushkin’s fairy-tales to children, sang together, discussed ern literature with patients of children’s hos- Starting from 2013, PJSC Rostelecom and phanages and involving about 200 Rostelecom extracts from The Little Prince, and even introduced teenagers to books by pitals, make handicrafts and conduct educa- Future Games, an interregional public or- Max Fry and Sergey Lukyanenko. During handicraft classes, small kids learned tional experiments. ganisation for educational and creative en- employee volunteers to make lava lamps from materials at hand, and a magic portal from a sheet of In 2019, a team of Rostelecom employee vol- tertainment, have been running an interac- paper. Older children enjoyed mastering the art of fibre splicing. unteers committed to independently develop, tive educational programme for children in In 2019, more than 50 employee volunteers 98% of teachers have rated this format as an prepare and host classes for little patients. In orphanages and boarding schools provid- hosted 80 educational role plays at seven efficient and effective way to engage teen- addition, employees of the Company’s Kras- ing social adaption and career guidance with orphanages. The role plays were focused on agers. noyarsk Branch collected over 100 children’s a focus on the telecoms industry. The pro- digital equality, financial literacy, social risks, In 2020, the project is expected to roll out books and donated them to hospital libraries. gramme’s primary goal is to ensure social communication and reasoning. Volunteers to another three regions, cover the Compa- A similar project was rolled out in Novosi- adaptation of children in orphanages within were also involved in organising a ball for ny’s North-West Macroregional Branch and “The recovery process depends directly healing effect than any of these gadgets. birsk. Rostelecom employee volunteers and the Midday project through educational role children from Moscow orphanages. In 2019, add more volunteers. on the patient’s mood. Children are This is why my colleagues and I take plays addressing social issues faced by or- a role play centred around cyberbullying particularly sensitive to the hospital every opportunity to visit children in Novosibirsk Globus Theatre actors launched There are also plans to expand the range of phans and children in difficult life situations. prevention in a digital space was developed environment, especially when their illness hospitals.” a new initiative, Reading is Great!, to support events by introducing the Golden Age pro- The project helps children develop indepen- to help children learn to build their own be- is often the reason they are separated young patients of city hospitals. gramme supported by the Presidential Grants dent living skills for adult life in society: set- haviour strategy when faced with cyberbul- from their loved ones. Today, many Foundation and designed to teach the 19th ting tasks, organising teamwork, communi- lying, and to understand the implications of healthcare facilities provide internet century Russian history using a cross-disci- cating with people and constructively solving cyberbullying for all those involved. access to their patients, and we often plinary approach. The programme will cov- problems as they arise. meet kids with tablets of smartphones, Evgeny Petrov More than 150 young The primary objective of the role play is to er over 600 children from 48 orphanages but I am confident that the warmth of Director of PJSC Rostelecom’s For more details see www.thenoon.ru (in teach children to help them learn to protect through 480 sessions in 14 Russian regions. patients of children’s Russian). their personal data online and surf the in- simple human contact has a greater Krasnoyarsk Branch Other plans include expansion of the range ternet safely. hospitals took part in of educational formats used to engage teen- the Exciting Readings project in 2019

150 151 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

SOCIAL TELECOMS PROJECT DONOR DAY AND DONOR INITIATIVES FOR THE SEVERELY DISABLED 1 Rostelecom employees take part in blood donor sessions on a In 2019, 640 employees regular basis. These sessions contribute significantly to replen- In 2019, Kvartal Louie opened a comput- ishing the supplies of blood and its components required dai- took part in blood er classroom at the House of Veronica, with “New Shores is a place where people ly to support the emergency treatment provided to severely ill access to digital services provided by Rost- with different disabilities can live and work. hospital patients. Traditional Donor Days are held across our entire footprint. donor sessions. A total Over 20 people from different regions elecom. The internet will enable young peo- In future, Rostelecom plans to continue participating in blood donor sessions and involve in- of 286 litres of blood have come to live here — families with In 2017, PJSC Rostelecom’s Penza Branch ple with special needs residing in the board- creasingly more employees. launched a social telecoms project for Auton- ing house and in various districts across the adopted children, young couples. Many was donated omous Non-Commercial Organisation Kvartal region to enrol in a specially designed, on- of them asked about the availability of Louie. Penza was the first Russian city to host line educational programme, take tests and reliable internet connection in this rural Donor Day in Vologda Donor Day in Siberia the House of Veronica, a boarding house for work remotely at partner companies. The My area. We told them that Rostelecom was severely disabled young people, which the Business online accounting service, Rostele- taking care of it. We thank the Company Donor Day was held at Rostelecom’s Rostelecom employees in Novosibirsk DIGITAL EDUCATION PROJECT Company connected to fibre at its own ex- com’s major corporate customer, is a partner for the opportunities it has provided!” Vologda Branch on 18 December. took part twice during the year in an TO DEVELOP DIGITAL SKILLS pense. An internet access node comprising of the educational project. A total of 50 ses- A mobile team of medics from the off-site session organised by the 32 ports was installed in the technical room of sions and master classes were held in 2019 Maria Lvova-Belova regional blood transfusion station Novosibirsk Clinical Blood Centre. the boarding house. A wireless Wi-Fi network for over 30 people with special needs. Executive Director of Autonomous Non- deployed an off-site blood donation A total of 34 litres of blood was donated. was deployed on the ground and first floors Kvartal Louie initiated another major project Commercial Organisation Kvartal Louie point in the assembly hall at the of the building, with the internet connection in the Penza Region. The construction of New Company’s headquarters. In three available to both residents of the House of Shores, a multi-functional residential complex hours, over 50 Company employees Veronica and the hostel guests. In addition, designed specifically for people with different admitted to the procedure following “Such off-site sessions are of course The project aims to help students and new our specialists installed a video surveillance disabilities, stared in early 2019 in Bogoslov- In 2020, fibre will be brought to workshop a medical check-up donated their blood. extremely important as they help top up employees in the ICT industry expand their system with four cameras. ka village, with Rostelecom also contributing premises, classrooms and a mini hotel. A to- blood supplies. Statistics show that our digital skills. As a leading player in the Rus- In 2018, the House of Veronica launched as the project’s telecoms partner. Compa- tal of 15 employees from different divisions regular off-site sessions make people sian market for digital services and solutions, a workshop to help young people learn new ny specialists installed an individual wireless of PJSC Rostelecom’s Penza Branch are in- into repeat donors. In addition, new Rostelecom is committed to building a pipeline of in-demand talent. The Company has trades and develop skills enabling them network in each apartment to provide resi- volved in the projects initiated by Kvartal “It is very important for me to be a donor. donors join in: first they decide to set up a team of “digital ambassadors” in Ros- to earn a living. Subsequently, the premis- dents with seamless internet connection. We Louie: the press secretary, sales managers I feel particularly rewarded when I get donate blood along with others, and tov-on-Don, comprising key experts from es were also equipped with a printing shop, also supplied Wink set-top boxes with a built- in the SME segment, managers and instal- a text message saying that my blood then they become regular donors.” among its employees, developed a training with Rostelecom providing high-speed in- in Wi-Fi module to people moving into new lation specialists of the VIP customer ser- has helped somebody. Donating blood ternet connectivity to the Creative Work- homes. Rostelecom’s Wink service gives ac- vice team, the manager and specialists of programme for educational institutions, and is neither scary nor painful, so I can tell Irina Kozintseva shop to enable disabled youngsters to cess to more than 200 channels and thou- the sales support team, and customer help- intends to sign agreements with the region’s those who think of becoming donors a transfusiologist at the Novosibirsk take and process orders for printed prod- sands of movies and TV series in digital qual- desk technicians. The implementation of key universities and relevant colleges. that there is nothing to be afraid of.” Clinical Blood Centre ucts and souvenirs, as well as place sample ity. While connecting the service, Rostelecom these projects has helped involve employ- The Digital Education project already cov- products on the website of the workshop’s specialists ran a number of master classes to ees in addressing socially significant prob- ers eight PJSC Rostelecom branches in five Alexey Shipitsyn store or on its official social media page at help residents learn to use Wink. lems in the region, build a sense of owner- federal districts. At the moment, the educa- PJSC Rostelecom employee www.instagram.com/tipografiya_kvartal.lui. ship and promote corporate volunteering. tional programme comprises ten topics relevant for digital economy. A total of 20 Russian universities have already joined the project as partners.

1 Health

152 153 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

DIGITAL CLASS PROJECT FOR SCHOOL STUDENTS WAY TO THE TOP, A PROJECT TO PREPARE CHILDREN “Unmanned aviation is a rapidly growing in- FOR SOCIAL AND PROFESSIONAL LIFE dustry with a shortage of skilled workers. It In March 2019, PJSC Rostelecom’s Tambov is best to train technical talent starting from Branch teamed up with the Centre of Ex- school, and with this in mind we support the Way to the Top in Belgorod cellence in Unmanned Aviation Systems of initiative of Rostelecom’s Tambov Branch to Derzhavin Tambov University to hold a les- Rostelecom’s Belgorod Branch offered Ahead of the 2019 school year, the Way hold lessons on unmanned aircraft for the In 2019, employees of the Company’s Tam- son devoted to unmanned aircraft for the vocational guidance for children at to the Top corporate volunteering team digital class students of the Skolkovo school. Way to the Top is a comprehensive pro- bov Branch continued hosting extra-curric- digital class students of the Skolkovo-Tam- Razumensky Orphanage. Compre- organised for children from Razumen- Only someone who did everything from aero- gramme for grade 8 through 11 school stu- ulum classes at Rostelecom’s IT classroom at bov school. hensive activities were conducted sky Orphanage a vocational guidance dynamics and aircraft design study to model dents aimed at helping them become inde- the Skolkovo-Tambov school. The project is in a corporate classroom and at the tour of the Belgorod cold-storage building can become a true professional in pendent, responsible, socially mobile and aimed to help school students in the Tam- technical facilities of Rostelecom’s Be- facility. During the tour, the children this area. This is what will drive the next cy- capable of successful integration into so- bov Region acquire high-quality knowledge logorod telecommunications operation visited the facility’s museum, where cle of growth for the industry.” ciety. The programme includes career test- of digital technology. The Company has sup- ing, goal setting and building confidence, as and maintenance centre. Introduction they watched a video on ice cream plied the classroom with equipment for prac- well as individual professional growth of chil- to the world of telecommunications making and took part in a quiz. After tical training, including IoTic educational sets dren, unlocking their potential and developing started with a tour of a line equip- that, they learned how to operate designed to demonstrate practical applica- leadership skills, as well as tours and tryouts. ment room. Then the children were a wafer cup baking machine, visited tions of the Internet of Things (IoT): Smart Dmitry Rybakov shown a distribution frame, Electronic labs and a deep freezer cold room Greenhouse and Smart Home. Our special- Head of the Centre of Excellence in Digital Switching System (EWSD) and with a perma-winter environment of- ists have developed the lesson themes and Unmanned Aviation Systems of Derzhavin a quasi-electronic PBX. Rostelecom fering temperatures down to –30 °C. Tambov University content to enable children to get immersed specialists explained how uninter- In 2020, Razumensky Orphanage will in a digital world in an accessible and fun way. rupted, high-quality communication join the Learn and Do! volunteering is ensured, how broadband and TV project. services are delivered to homes, and how landline and cell phones work. During a master class, the children DIGITAL LOCATION IN THE MANUFAKTORIYA made patching cords, tested them, and CHILDREN’S CITY OF PROFESSIONS “It is symbolic that our upgraded digital location for children opens just when the grad- tried splicing and laying a fibre-optic uates of the Razvitie centre supported by cable and tested it for continuity. help establish a telephone connection be- Rostelecom start their adult life. We did our tween a children’s hospital, a police depart- best to make the Smart Home ground as in- ment and Manufaktoriya’s Ministry of Emer- teresting and educational as possible. Chil- gency Situations. The Manufaktoriya children’s city of profes- dren learned about the service’s vast poten- sions has been set up at the Maxi shopping In April 2019, Rostelecom deployed a Smart tial, and then applied the new knowledge at mall in Tula. Starting from 2016, Manufaktoriya Home location in Manufaktoriya, where men- an interactive booth in a simulated situation. features a Rostelecom facility where children tors showed children a wide range of bene- I am confident tzhat Rostelecom’s location aged from 5 to 14 can take master classes fits offered by a smart service used to control in the children’s city of professions will be- and try their hand as communications spe- multiple devices: door and window opening come a powerful magnet drawing children to cialists, installation specialists, or managers sensors, water leak, movement and smoke smart technology.” promoting modern communications services. sensors, external and internal video camer- Adult mentors show children how to connect as, and many others. Following the master a telephone, internet and television, talk about class, children were invited to test their new Andrey Kartashov modern telecommunications technologies, knowledge at an interactive booth in a sim- Director of PJSC Rostelecom’s teach them to set up video surveillance and ulated situation. Tula Branch

154 155 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

in the Clean Ladoga and Clean Vuoksa vol- NOTJUST CERAMICS INCLUSIVE unteer camps in the unique natural area of WORKSHOP CHARITABLE PROJECT the Ladoga skerries. Activists ran 30 environ- Rostelecom was named the winner of the annual Champions of Good Deeds made during the classes or hand them over In 2019, 240 classes and 5 open master class- mental trainings themed “How to Make Your competition in the Environment for sale. A catalogue of products made by es for children with disabilities were held, at- Region Better and Cleaner” in two districts category for its support of the “special” artisans and available for purchase tended by 45 people with special needs. A of the Leningrad Region. Clean Vuoksa volunteer initiative. as corporate merchandise and other items is total of 23 Rostelecom employee volunteers Clean Vuoksa’s plans for 2020 include clean- helped with group classes, 12 people helped The award ceremony was held in PJSC Rostelecom’s South Macroregional planned for the near future. ing up lakes in the Novgorod Region (Lake relocate the workshops. early December as part of the Branch supported the launch of the NotJust Ilmen). 8th Moscow International Forum Ceramics inclusive workshop by the Dob- Plans for 2020 include continued collabo- Corporate Volunteering: Business ry-Yug charitable organisation. The workshop ration, attracting 20 new employee volun- and Society. is an inclusive space where people with spe- teers and launching a new art studio NotJust cial needs can communicate, learn and work, Graphics. NotJust Graphics is a project for “We played with the idea for a long time, but i.e. make home accessories, pottery and oth- young people diagnosed with autism who are it just required a lot of resources. By winning er items. People with mental health problems good at drawing on paper. Boys and girls will the Presidential Grants Foundation’s contest, aged 16 and above are invited to join class- be able to obtain professional training from and with charitable assistance from Rostele- es at any time, with the workshop organisers a master artist and draw on his instruction com and dozens of kind-hearted people we planning to hold charity fairs in the future, as or independently, using graphics tablets, so were able to launch in 2019. Finally, we found well as master classes for employees of Kras- that their artwork could be used for print- the premises and bought core equipment; LET’S HELP TOGETHER CROWDFUNDING CHARITABLE PROGRAMME nodar companies and their families. The pared products and thus give them an oppor- now we practice professional skills with boys TO HELP SEVERELY ILL CHILDREN AND SENIORS ticipants will be able to keep the handicrafts tunity to make a living from art. In addition, and girls. In addition to ceramics, we opened the workshop will offer distance learning and a sewing workshop and a cooking workshop. support for young people with special needs I am glad that we managed to launch an im- who live in the Krasnodar Territory and can’t portant and unique project for Krasnodar and visit Krasnodar regularly, in the format of a the entire region.” remote online course. Within the Let’s Help Together donation pro- In 2019, Company gramme, PJSC Rostelecom employees help Dana Rudneva severely ill children and seniors. The pro- employees raised Head of Dobry-Yug charity gramme is run in cooperation with the Life RUB 652,987 through Line and Old Age Is Fun charitable foundations, with Rostelecom’s dedicated section private donations set up on the www.donatenow.ru website for people to make a donation using a bank within the campaign card and learn more about the activities of these foundations. In addition, the website SUPPORT FOR VOLUNTEER ACTIVITIES will post regular news and reports on the AND ENVIRONMENTAL MOVEMENTS use of funds donated by Company employ-

1 lished in 2013. The project’s volunteers work sand young trees were planted; over 250 ees, with 1,605 Rostelecom employees reg- in natural recreational areas of the Leningrad tonnes of garbage was collected (including istered in the programme since 1 June 2016. Region and the Republic of Karelia. batteries and other environmentally hazard- Plans for 2020 include further employ- In 2019, the movement helped remove gar- ous materials). ee fundraising campaign for the charitable Instil a culture of environmentally friendly rec- bage from 80% of islands in Lake Vuoksa Campaigns organised by Clean Vuoksa in- foundations, including integration of the Life reation, with zero garbage and minimised en- and some islands in the Ladoga skerries; sev- volved more than 4,000 people, 850 of which Line foundation’s fundraising platform into vironmental footprint — this is the goal of the eral tourist areas across the Leningrad Re- (including several employees of Rostelecom’s the website of the Run and Help corporate Clean Vuoksa volunteer movement estab- gion were cleaned up; more than 40 thou- North-West Macroregional Branch) took part sports project. 1 Ecology

156 157 ROSTELECOM'S SUSTAINABILITY REPORT 2019 4. OUR COUNTRY

BECOME A SANTA CHARITABLE CAMPAIGN SUPPORT FOR THE KNOWTEACH SOCIO-EDUCATIONAL PROJECT FOR CHILDREN WHO UNDERGO LENGTHY INPATIENT TREATMENT To fulfill a child’s cherished wish on New Year’s to decide on a child to give a New Year pres- Eve — this is the idea behind Rostelecom’s ent to. In December, our volunteers collect pating in scholarly competitions. In 2019, stu- ing the use of telecommunications technolo- Become a Santa charitable campaign. Every and deliver all these presents to orphanag- dents of the KnowTeach school presented us gies in teaching children with special needs year, PJSC Rostelecom employees wish a es and shelters. This way, Rostelecom fulfils with the Dream art panel. who undergo lengthy treatment in hospitals Happy New Year to children from orphanages, the New Year dreams of thousands of chil- In the reporting period, the KnowTeach proj- and at home through an advanced train- boarding schools, and social care institutions dren deprived of parental care or in a diffi- ect expanded its federal network to reach the ing programme for teachers of the project’s for children in difficult life situations. On the cult life situation. following audiences through its main and ad- schools and clubs for parents of children who intranet portal, every employee can access ditional educational programmes: suffer or are recovering from oncohematology. the lists of children from the orphanages supported by Rostelecom and see their wishes – 15 thousand pre-school and school children who undergo difficult lengthy treatment in children’s hospitals at the flagship site in Become a Santa in Omsk Moscow (Dmitry Rogachev National Research Centre of Pediatric Hematology, Oncology Ahead of New Year 2020, Rostelecom Santa and his assistant, Snow Maiden, and Immunology, Russian Children’s Clini- launched a campaign to collect presents gave presents to the children at a party cal Hospital, Morozov Children’s City Clinical 2+ for children in the Znamensky District hosted by the centre on 26 December. Hospital, Russkoye Pole Clinical Rehabilita- In 2019, experts of the Hospital thousand children social rehabilitation centre. Within the In their turn, the children performed tion Research Centre and Lighthouse Chil- Organisation of Pedagogues in in 38 institutions across Russia were Become a Santa volunteering project, New Year songs and dances, sending dren’s Hospice) Europe listed the KnowTeach project given their New Year presents in 2019 36 children received sweet presents good vibes to everyone. The children among global best practices with – About 30 thousand pre-school and school and educational games. Children asked presented the symbol of the year to For three years, Rostelecom has been sup- a unique background. The project children who undergo difficult lengthy treat- Santa for chocolate boxes, arts and Rostelecom — a handmade mouse. porting the KnowTeach socio-education- also received the Award of the City ment in children’s hospitals across the Know- crafts sets, puzzles, educational and al project launched in 2014 to help children of Moscow in the field of education. Teach project’s 34 regional sites. table games. who undergo lengthy inpatient treatment in oncohematology wards at hospitals receive The KnowTeach project has developed the a comprehensive school education, enrol in Methodological Guidelines for Teaching Chil- additional educational programmes and cre- dren Who Undergo Lengthy Inpatient Treat- ative workshops, learn new skills, and gain ment, approved by the Russian Health and BRAVERY BOX CHARITABLE CAMPAIGN TO COLLECT TOYS knowledge in IT and design. These activities Education Ministries. FOR CHILDREN UNDERGOING TREATMENT IN HEALTHCARE FACILITIES inspire children to get well soon and sup- In 2020, preparations were started to open port their family members. KnowTeach has new sites within the KnowTeach project. The been repeatedly named the winner of an- KnowTeach project also collaborates with the In partnership with the DaDobro volunteer a toy out of the box as a reward for his or her nual awards. For more details on the project United Nations Information Centre in Moscow movement, PJSC Rostelecom ran the annu- bravery and patience. see www.uchimznaem.ru. and the United Nations Association of Rus- sia on a programme dedicated to the 75th al Bravery Box charitable campaign, timed to We plan to expand the project’s geography At the project’s sites, PJSC Rostelecom runs coincide with the World Children’s Day cele- its Steps to Success! socio-educational pro- anniversary of the UN. The project’s schools Throughout the campaign, Rostelecom and involve more employees. brated annually on 20 November. In 2019, the gramme involving young patients together hold events dedicated to Global Sustainable employees collected about 2,500 DaDobro Corporate Volunteering Centre ex- campaign covered all of the Company’s mac- with their parents. Through training in me- Development Goals. In autumn 2020, we ex- presents for little patients. A total of pressed its special gratitude to Rostelecom as roregional branches, with employees bring- dia technology, personal development, and pect to hear a report on the implementation 5.5 tonnes of toys were collected across the most active participant in the campaign. ing toys, books and arts and crafts sets to be art theory, the programme provides children of the KnowTeach project in the relevant sec- Russia — enough to supply medical donated to regional children’s hospitals. Ev- with a distraction from their illness to acquire tion of the UN General Assembly. treatment rooms at 43 regional hospitals. ery time a child has to undergo an unpleas- self-presentation skills and confidence nec- In 2020, the key focus area to develop the ant and painful procedure, he or she takes essary for passing state exams and partici- KnowTeach project’s content will be expand-

158 159 SUSTAINABILITY REPORT Electronic 2019 invoices issued

Environment protection expenditures and investment

Our environment ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT Our 5 environment

5.1. The Company's Approach

ing on reducing groundwater use for a few The policy was reviewed and updated by the 2019 — DELIVERING ON DIGITAL years thus improving water use efficiency in Company’s top management in April 2019. line with SDG 6: Clean Water and Sanitation. The policy provisions were brought into con- Pursuant to SDG 12.5, we have successfully formity with the changes made to effective implemented and continually improve a sep- laws after its approval. For example, an ob- arate waste collection system, which has al- ligation to restore disturbed land or take it ready resulted in a major reduction in waste out of use was added to the soil protection landfilling and an increase in waste recycling. section along with the requirement to train Rostelecom Group is an environmentally re- employees in charge of waste management. We have established an effective operational 9.7% 30.6 338 sponsible company integrating activities for The scheduled review period of PJSC Rost- control system driving sustainable operation total reduction in greenhouse RUB million employees responsible for environmental protection throughout its op- elecom’s environmental policy was increased of our facilities to ensure safe and comfort- gas emissions (Scope 1, 2 and 3) industrial safety expenditures environmental safety trained in erations. We strive to minimise adverse en- from one to two years. able workplaces in line with SDG 8.3 and im- environmental protection vironmental impacts by complying with all prove the environment in line with SDG 8.4. environmental regulations and a number of Rostelecom is committed to promoting envi- international agreements on environmental ronmental culture among its employees and protection, implementing innovative ener- builds partnerships with customers, suppliers, gy-efficient technologies, increasing envi- contractors and partners in line with SDG 17 ronmental awareness of our employees and to better deal with environmental challeng- their families and improving digital services es and preserve the environment for future 4% 244.5 +19% provided to our customers. generations. reduction in water consumption RUB million increase in waste disposal Our long-term goals for environmental pro- investments in energy saving tection and industrial, fire and environmen- Environmental policy and energy efficiency tal safety are aligned with the United Nations Our environmental activities are governed by Sustainable Development Goals 11, 12, 13, 15 the environmental policy of PJSC Rostelecom. and 17. Rostelecom prioritised these goals The policy establishes the fundamental prin- under the global 2030 agenda. ciples of the Company’s environmental re- Rostelecom’s energy saving and energy effi- sponsibility as well as ways and procedures ciency programme reduces greenhouse gas to implement these principles. The environ- 3% 159.6 emissions and thus contributes to SDG 13: mental policy provisions are taken into ac- total waste reduction RUB million Climate Action. count by Rostelecom management in making environmental investments To cut down water consumption, we deploy managerial decisions as well as medium- and and expenditures water saving systems and have been work- long-term planning of the Group’s activities.

162 163 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

In addition, in 2019 we developed an HSE PJSC Rostelecom has developed, imple- Currently, Rostelecom has 9,473 facilities that In 2019, within Key objectives of Rostelecom Group in and fire safety policy which outlines the en- Organisational structure mented and continually improves environ- have adverse environmental impact and re- environmental protection and safety: vironmental safety principles adopted by of environmental safety mental management system (EMS) in accor- quiring environmental operational control, in- the Company’s management in Rostelecom Group • Sustainable use of natural resources the Company. For more details on the poli- dance with GOST R ISO 14001-2016 enabling cluding 4,288 sources of air emissions and environmental • Minimising our environmental footprint cy see the Ensuring Workplace Safety sec- a comprehensive approach to managing en- 5,185 sources of waste. • Preserving the environment for future tion of this Report. vironmental aspects of our operations and Environmental operational control covers operational control generations President helping to prevent or mitigate environmental all of Rostelecom’s facilities with potential- Organisational structure framework, 621 internal of PJSC Rostelecom impact. In 2019, Rostelecom’s EMS success- ly adverse environmental impact. EOS in- Below is a description of Rostelecom Group’s fully passed an external recertification audit Rostelecom’s environmental safety volves both the Headquarters Operational audits (454 on-site environmental protection and environmental for compliance with GOST R ISO 14001-2016, obligations: Control personnel and authorised employ- safety structure. President of PJSC Rostele- with the certificate of conformity renewed ees of regional divisions who have complet- audits and 167 desk • Minimise the Company’s adverse com approves the environmental protection for one year. Senior Vice President — ed specialised training or upskilling in envi- audits) were performed, environmental impact, reduce the policy and evaluates the Company’s environ- Chief of Sta of Environmental risks are assessed and man- ronmental safety. specific consumption of non-renewable mental performance. Senior Vice President — Rostelecom’s President with 1,182 facilities aged under an integrated corporate risk man- Environmental operational control also in- natural resources, implement energy and Chief of Staff of Rostelecom’s President has agement system with established intervals. In cludes internal audits of the Company’s di- resource saving technologies general supervision of Rostelecom’s envi- audited and 761 gaps the 2019 risk matrix, environmental risks were visions. 1,182 facilities were audited in 2019, • Make sure pollutant concentrations in ronmental activities and environmental man- assessed as negligible. up 21% year-on-year (974 in 2018), with the identified and rectified emissions and wastewater do not exceed agement system and communicates environ- Director number of identified gaps down by 26% from the established limits mental performance to top management. The of the Administrative Environmental operational control 1,029 in 2018 to 761 in 2019. Department • Manage waste on the Company’s premises Administrative Department of PJSC Rostele- Environmental operational control (EOC) is In order to rectify identified gaps, corrective in an environmentally safe manner com Headquarters comprises the Operation- an important part of environmental safety actions were designed and are monitored in al Control Division responsible for managing measures. EOC is governed by the regula- accordance with gap rectification plans. Prin- the Group’s environmental activities, analysing tions on environmental operational control cipal results of activities under the environ- the environmental performance and prepar- Operational and is part of PJSC Rostelecom’s operation- Control mental management system are reported to ing quarterly reports to the Company man- al control system. agement. The Division employees responsible Division the Company President on a quarterly basis. for environmental safety coordinate environmental aspects of Rostelecom’s activities in- Environmental operational control goals Specialised training and objectives: To ensure the environmental safety of Rost- cluding legal compliance, development of in- Operational control units ternal regulations, environmental protection of macroregional • Make sure that business and other ac- elecom Group, we arrange specialised training training, collection and compilation of infor- and regional branches, tivities of the Company include due of managers and employees responsible for mation on the Company’s environmental ac- subsidiaries and aliates measures for environmental protection, making decisions that could have adverse en- tivities for analysis by top management, and sustainable use and restoration of natural vironmental impact, and employees respon- provide methodical support to PJSC Rost- resources sible for managing Hazard Class 1–4 wastes. elecom’s branches and subsidiaries. At the • Ensure compliance with the requirements Employees are trained in certified centres un- local level, operational control units (divi- of environmental protection and other der programmes specially designed to suit sions, functions, groups) in each PJSC Ros- laws applicable to interaction with the different training levels. telecom’s branch and their counterparts in environment and its components our subsidiaries are charged with ensuring environmental safety.

164 165 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

5.2. Environmental Initiatives

Environmental safety training of Rostelecom employees in 2019

Specialised training (upskilling) programme Training time, Number of Training costs, 103-2 To mitigate its adverse impact on the environment, the Group invests in boiler facility 338 hours people trained RUB thousand upgrade and conversion to more environmentally friendly fuels, implements separate waste 159.6 employees responsible for Environmental safety for managers and 72 76 396.79 collection initiatives, reduces the number of water wells in use, selects environmentally safe RUB million general business management specialists environmental safety and materials and technologies for use in office and communication facilities construction and Rostelecom’s environment protection

environmental operational Environmental safety for managers and 90 5 40 upgrade, restores land and vegetation, launches volunteer environmental protection initia- expenditures and investments in 2019 control were trained on specialists with environmental protection and tives and events. environmental protection environmental control functions

in 2019 Specialised training required for Hazard Class 112 246 1,090.32 1–4 waste management Rostelecom Group’s total environmental expenditures and investments, RUB m Other programmes 16-240 11 44.93

Total 338 1,572.04 2016 2017 2018 2019

Waste management and environmental damage 93.55 83.50 99.83 97.90 remediation Performance assessment Environmental protection and energy Soil, surface water and groundwater restoration 3.26 5.61 5.91 6.48 Environmental protection management sys- efficiency awards and protection against pollution, wastewater tem performance is assessed by the Presi- In 2019, Rostelecom was named the winner of treatment dent of PJSC Rostelecom during quarterly the annual Champions of Good Deeds com- Air pollution control and climate change mitigation 2.33 2.43 5.75 5.74 meetings with the Senior Vice President — petition in the Environment category for its

Chief of Staff of Rostelecom’s President, who support of the Clean Vuoksa volunteer ini- Area improvements and urban greening 2.19 1.64 2.13 2.50 communicates environmental performance tiative aimed at instilling a culture of environ- and results of the environmental manage- mentally friendly recreation. For more details Employee training and upskilling 1.49 2.35 1.57 1.58 ment system to top management. see the Our Country section of this Report. Emission charges to the federal budget 1.24 0.64 0.76 0.87 The Headquarters Operational Control Divi- The Company’s project Forest Fire Monitor-

sion periodically reviews the environmental ing enabling early fire detection and warn- Charges to the federal budget for municipal solid 32.55 18.96 10.41 7.50 policy and the regulations on environmental ing and thus helping to preserve the Kama waste landfilling operational control as and when necessary, River Region and Yamal forests won the top but at least once every two years. award of the corporate project contest Peo- Other environmental activities 36.25 30.39 33.12 37.05 ple Investor 2019 in the Environmental Effi- Total 172.85 145.51 159.49 159.6 ciency category.

166 167 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

36 branches of the Company collect used batteries. In 2019, 136 facilities provided WASTE MANAGEMENT with special containers collected and handed over for neutralisation 1.78 tonnes of used consumer batteries.

Waste management by Rostelecom Group, tonnes A total of 248 tonnes of paper, 74 tonnes of Total Handed Handed over Handed over Reuse for own over for for disposal for landfilling operational cardboard, 1.8 tonnes of batteries, 17 tonnes 306-2 In waste management, Rostelecom neutralisation needs Group aims to reduce waste generation, in- of plastics, 241 tonnes of scrap metal and 13 crease waste recycling and change waste 2016 37,102.51 2,253.10 978.99 33,825.53 44.89 management culture among our employees, tonnes of aluminium scrap were handed over contractors and customers. Thanks to sepa- 2017 34,607.20 1,296.63 2,348.69 30,280.83 681.04 for recycling in 2019 rate waste collection and waste disposal programmes, as well as electronic document flow, 2018 34,109.46 2,019.69 1,201.43 30,616.72 271.62 We buy only environmentally safe chlo- we reduced landfilled waste amount by 4,121.6 rine-free paper for our offices and only recy- tonnes (12%) from 2016. Total waste handed 2019 33,226.47 1,887.72 1,429.44 29,703.90 205.40 “The electronic document flow system has cled toilet paper for lavatories. If one tonne over for disposal was up by 19% to 1,429.44 been functioning in the Company since 2011. of collected waste paper saves 10 trees, then tonnes in 2019 from 1,201.43 tonnes in 2018. Working with documents is more transparent, Rostelecom employees saved 3,220 trees in accessible and faster now.” 2019, up by 520 year-on-year. Separate waste collection Paper waste management by Rostelecom Group, tonnes Rostelecom is actively engaged in separate We plan to expand separate waste collection to new offices in 2020. Moreover, we are -go waste collection. As most of our waste (85% 2016 2017 2018 2019 Tatiana Opanasenko ing to increase the number of waste types by weight) is office waste and outdoor clean- Head of Document Support and Record Total paper waste 998.23 632.45 745.83 321.05* sorted for recycling. ing waste, separate collection is implemented Keeping, PJSC Rostelecom Headquarters in stages, starting with major facilities, admin- Electronic document flow istrative centres of districts and regions and Paper waste handed over for recycling (including 145.57 346.00 269.50 321.05* office paper and cardboard) buildings with a large number of occupants. We normally use electronic document flow, with internal documents circulating in elec- Green Office principles In 2019, separate collection of used office tronic format only. The system functionality paper was adopted at 249 facilities in 52 re- In addition to separate waste collection, Ros- was expanded in 2019: we digitised a large gional branches and two subsidiaries. telecom actively implements the Green Of- part of document flow to and from suppliers “Environmental matters are a priority for the fice principles in operating office spaces: Amendments to Article 12 of Federal Law and contractors. This was enabled by the use Company. We attach particular importance energy and water consumption is reduced, No. 89-FZ On Production and Consump- of electronic signatures. Now contracts are to the Green Office principles: the Company environmentally safe consumables are used, tion Waste dated 24 June 1998 which pro- signed and payment documents are issued digitised the document flow a few years ago, paper use is decreased through electronic hibit landfilling waste containing valuable and received in the electronic format. This saving up to 150 tonnes of paper every year. document flow and fossil fuel consumption is components that are supposed to be recy- has saved a large amount of paper and con- Offices have separate waste collection facili- cut through wider use of videoconferencing. cled, including paper waste, took effect in sumables and made work easier for all stake- ties and automatic energy-saving and heating early 2019. In 2019, in line with the new re- holders as information exchange is now sim- systems. Our employee volunteers regularly quirements, Rostelecom Group handed over pler and more efficient. participate in Siberian regional environmen- for recycling all paper waste including office tal initiatives.” paper and cardboard.

Yuri Kupriyanov Director of PJSC Rostelecom’s Novosibirsk Branch

* Total of paper waste (246.78 tonnes) and cardboard waste (74.27 tonnes) generated in 2019.

168 169 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

E-billing service E-bills issued for Rostelecom’s services, millions Rostelecom promotes e-billing for its services Tomsk Branch supported social initiative for consumer battery collection which is an excellent alternative to hard-co- 2017 2018 2019 py bills. The number of customers who opt- The Company’s environmental policy a green apple bearing a “Yes!” sticker ed for e-billing grows every year. Number of e-bills 143 153 157.8 raises the environmental awareness of symbolising care for the environment The service supports payments via a bank our employees. The staff of our divisions from a basket provided beforehand. In “Rostelecom’s social policy includes the card, online bank, online wallet or other re- actively participates in social initiatives just one day, the Tomsk Branch staff Environment programme, under which we mote payment methods. It is a more conve- 1 aimed at proper management of municipal collected 20 kilograms of used batteries, run projects to improve environmental nient and cost-efficient, as well as safer, fast- Contribution to urban waste management optimisation waste. For example, in 2019, employees which were sent to a full-cycle plant conditions. For example, the Tomsk er, and greener option. of PJSC Rostelecom’s Tomsk Branch Megapolisresurs in Chelyabinsk, recycling Branch has almost fully transitioned Rostelecom does not limit its initiatives to container filling and plan an efficient took part in Green Games, a national the batteries to make pencils, mineral to electronic document flow helping better management of waste immediately waste collection route. social project held annually by volunteer fertilisers and rails. to save trees. 17 thousand electronic resulting from our activities. We The online service monitors the container movement DaDobro. documents were processed in 2018.” actively contribute to the optimisation statuses and can display all sensor Under this project, on 20 March, global and digitisation of urban solid waste data. The service tracks movements Earth Day, employees set up a special management systems. A good case in of waste collection vehicles and their Alexey Makhorin box in the branch office to collect point is the city of Salekhard in the drivers’ working time. Dispatchers are Director of PJSC Rostelecom’s Tomsk Branch used batteries brought from home. Yamal-Nenets Autonomous Area. promptly notified of any deviations Each participant would take, as a gift, In 2019, Rostelecom and Innovative from the waste collection plan. This Technologies launched a project to project of Rostelecom made the city optimise and control waste collection residents’ life more comfortable, safe in the city. Under Stage 1 of the project, and eco-friendly. shock-resistant sensors were installed in waste containers at five waste collection sites. The devices can detect if the container is full or empty and measure temperature and humidity. The information is then fed into an online system which uses the data to forecast

“The waste collection monitoring rectifying the problem. The system system is an element of the Smart can also forecast landfill capacity City project. The service provides and prevent their overflowing.” real-time information on municipal 157.8 solid waste accumulation and million e-invoices for Rostelecom quality of removal. For instance, we services were delivered in 2019 can quickly respond to complaints Alexander Vorobyov on poor quality of waste removal Deputy of Salekhard Administration by identifying the situation and Head for Municipal Services

1 Ecology

170 171 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

EMISSION MANAGEMENT GHG emissions in tonnes of CO₂ equivalent by Rostelecom Group, tonnes In 2019, following the review of PJSC 2016 2017 2018 2019 using natural gas were built in the reporting drop of methane emissions in 2019 was due to Rostelecom’s climate Gross direct (Scope 1) GHG 178,625.14 187,173.08 181,428.80 184,415.18 period, and four coal- and diesel-fired boil- the upgrades and the sale of a large gas-fired emissions in CO equivalent 2 change report by the er facilities were decommissioned as sources boiler facility by the Yekaterinburg Branch. of nitrogen and sulphur dioxides, particulate Carbon Disclosure Gross energy indirect (Scope 2) 1,032,014.72 994,848.75 973,255.08 850,941.55 103-2 305-7 matter and soot. Investments in the upgrades GHG emissions in CO2 equivalent Boiler facility upgrades totalled RUB 23.4 million. For more details on Project, the Company’s boiler facility upgrades see the Energy Effi- In 2019, Rostelecom upgraded 26 boiler fa- Gross other indirect (Scope 3) 93,482.0 86,234.09 85,812.12 85,213.72 environmental rating cilities. Outdated boilers and equipment were ciency section of this Report. GHG emissions in CO equivalent 2 was upgraded from replaced with modern, higher performance The initiatives reduced major pollutant emis- units, and gas distribution points and gas sions by 9% in 2019 (from 1,313.13 tonnes in Total 1,304,121.86 1,268,255.92 1,240,496.00 1,120,570.45 category D to C. grids were upgraded. Two new boiler facilities 2018 to 1,194.78 tonnes in 2019). The sharp Thus, the Company made it to the top 10 Significant air emissions of Rostelecom Group, tonnes most environmentally REDUCTION OF WATER CONSUMPTION Year Nitrogen Sulphur Carbon oxide Nitrogen Soot Methane Total emissions of major pollutants responsible companies dioxide (NO₂) dioxide (SO₂) (CO) oxide (NO) (CH₄) in Russia tion reduced by 10.5%, from 229.6 thousand cu m to 205.5 thousand cu m. 2016 111.7 107.3 916.4 22.8 158.6 7.9 1,324.66 The Company has been running its ground- 2017 117.1 105.5 904.4 22.1 147.3 7.8 1,304.16 water optimisation programme since 2012. 303-3 303-5 Rostelecom Group reduces Over this period, the total number of wells 2018 131.4 116.0 857.2 22.6 178.7 7.2 1,313.13 its groundwater consumption every year: in operated by PJSC Rostelecom dropped by 2019, it accounted for only 8% of total wa- 62% from 208 to 80. 2019 140.2 103.2 767.1 23.5 159.7 1.1 1,194.78 ter consumption. In 2019, the number of water supply wells in use decreased by 16.6% (from 96 to 80), with groundwater consump- Greenhouse gas emissions PJSC Rostelecom has been issuing climate sumed energy. The reports also disclose in- 305-1 305-5 change reports in accordance with the Car- formation on PJSC Rostelecom’s climatic as- Being aware of climatic risks for the global bon Disclosure Project (CDP) requirements pects management structure, climate change Rostelecom Groups’ total water withdrawal by source, community, Rostelecom Group works to re- since 2016. CDP is a not-for-profit charity that risks and opportunities and their impact on thousand cu m duce its greenhouse gas (GHG) emissions. To runs the global disclosure system for inves- the business strategy, the Company’s goals accomplish this, we implement fuel and ener- tors, companies, cities, states and regions to in GHG emission reduction and the use of 2016 2017 2018 2019 gy-saving initiatives, upgrade boiler facilities manage their environmental impacts. low-carbon products and energy consump- Groundwater (wells) 377.97 375.57 229.55 205.5 running on fossil fuels and invest in energy We prepare the reports for public disclo- tion. CDP scores each item in a report and efficiency. For more details see the Energy sure of information on the Company’s cli- then assigns an overall score to the compa- Surface water 0 0 0 0 Efficiency subsection below. mate footprint and making this information ny. According to the 2018 data, only one Rus- sian company was scored A; two companies Municipal or other water utilities 2,773.25 2,425.24 2,266.51 2,162.48 Our efforts reduced total Scope 1, 2 and available to our stakeholders, including in- received a B score; four companies scored 3 GHG emissions by 9.67% in 2019: from vestors. The reports include data on green- C; and ten companies — D. CDP will publish Total water withdrawal 3,151.22 2,800.81 2,496.06 2,367.98 1,240,496 tonnes of CO2 equivalent in 2018 house gas emissions broken down by GHG general data for 2019 in August 2020. to 1,120,570 tonnes of CO2 equivalent in 2019. types, regions, activities and type of con-

172 173 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

In order to reduce water consumption, 303-4 306-1 Most of the water used by • River Gzhat (Gagarinsky District, Smolensk • River Dyorzha (Zubtsovsky District, Tver Operating wells Rostelecom installs water saving systems, Rostelecom is delivered into public sewage Region) Region) such as sensors on sink taps and dual flush 208 185 153 141 121 104 96 80 systems under existing contracts. Only ap- • Vass Brook (Klyazma River, Noginsky Dis- • Bezymianny Brook (Kashinsky District, Tver toilets, and informs the Company’s personnel proximately 1.3% of water is discharged into trict, Moscow Region) Region) of the need to save water. At the end of 2019, water bodies directly. This water is treated • Lyubuchanka Brook (Rozhaika River, Chek- In 2019, equipment upgrades (transition 67 buildings with a total area of 287,626.5 sq by the Company’s treatment facilities before hovsky District, Moscow Region) from analogue to digital) reduced water m, or 3.4% of total floor area of Company’s discharge. Water bodies into which we dis- • Bezymianny Brook (Darenka River, Istrinsky consumption in cooling systems and sale buildings, were equipped with water sav- charge wastewater are listed below: District, Moscow Region) or shutdown of some facilities with own ing systems. • Lake Otradnoye (Priozersky District, Len- • River Gzhelka (Ramensky District, Moscow wastewater treatment reduced water dis- Rostelecom’s initiatives reduced its total water ingrad Region) Region) charge by 26% year-on-year. consumption in 2019 by 4% (from 2,374.20 thousand cu m to 2,282.12 thousand cu m).

Total water discharge by Rostelecom Group, thousand cu m

2016 2017 2018 2019

Into water bodies 43.23 39.81 40.33 29.96 2012 2013 2014 2015 2016 2017 2018 2019 (water ejectors)

Into public sewage systems 2,639.75 2,327.41 2,065.34 2,204.38 (under contracts)

Total 2,682.98 2,367.22 2,105.67 2,234.34 Total water consumption by Rostelecom Group, thousand cu m

2016 2017 2018 2019

Centralised water supply: 2,773.25 2,425.24 2,266.51 2,162.48

• Cold water 2,398.38 2,208.74 2,066.50 1,942.79

• Hot water 374.87 216.5 200.01 219.69 AREA IMPROVEMENTS Groundwater (wells) 213.81 159.18 107.69 119.64

Water consumption 0.00 0.00 0.00 0.00 in areas with water stress

Total water consumption 2,987.06 2,584.42 2,374.20 2,282.12

We improve our facilities to create a com- This MRF also improved the premises of fortable and welcoming environment for our Svyazist recreation camp in Artyom and a garden square in Magadan 2,496 employees, customers and partners. In 2019, RUB thousand 34,742 sq m of land were improved, with ap- • Centre MRF improved area around MTTS, Rostelecom’s area improvement Water supplied to third parties, thousand cu m* proximately 110 trees and 200 shrubs plant- greened the area and watered and cut expenditures in 2019 ed and 3,260 sq m of flowerbeds and lawns trees on the premises of the central office 2016 2017 2018 2019 made, including the following: of the Lipetsk Branch Supply to third parties 164.16 216.39 121.86 85.86 • Training and Production Centre Branch • Ural MRF greened two office buildings of (individuals, organisations) greened Bekasovo recreation centre the Yekaternburg Branch, three facilities of the Chelyabinsk Branch and all seven Far East MRF improved the premises of • facilities of the Khanty-Mansi Branch management offices of the MRF, Primor- * Water is withdrawn by Rostelecom but consumed by third parties (individuals, organisations). ye, Magadan and Sakhatelecom branches. • Volga MRF greened six of its facilities

174 175 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

5.3. Energy Efficiency

The key objective of the Company for energy The Headquarters Energy Management Group establishes the principles and strategic ob- ENERGY CONSUMPTION saving and energy efficiency is to create jectives of Rostelecom’s energy efficiency improvement efforts and analyses perfor- organisational, legal, economic, scientific, 302-4 103-2 mance indicators at planned time intervals. PJSC Rostelecom con- grew by 36% from 2016 to RUB 1,375.4 mil- Rostelecom continuously improves its energy technical and technological conditions enabling Macroregional branches, subsidiaries and af- sumes the following types of lion, up by RUB 503 million, due to higher energy: electricity, heating, fuel energy prices. efficiency and considers it a driver of digital higher efficiency of energy consumption and filiates maintain and operate the energy man- economy development. We strive to reduce agement system, develop and implement en- (gasoline, diesel fuel, natural gas, In the reporting period, gasoline consump- energy consumption and help our custom- utilisation of new unused energy sources with ergy efficiency projects to upgrade or repair coal and others). tion increased by 26% to 35,985.4 thousand ers, partners and suppliers to follow suit. To systems, equipment and buildings consuming We consistently reduce fossil fuel consump- litres in 2019 from 28,644.6 thousand litres in accomplish this, the Company deploys more due consideration of the features of regions energy, as well as collect and analyse data to tion. Specifically, in four years (from 2016 to 2018. The significant increase was caused by energy efficient equipment, uses natural re- where PJSC Rostelecom provides evaluate the performance of completed en- 2019), natural gas consumption was reduced additions to our vehicle fleet and its more in- sources sustainably and upgrades networks telecommunications services ergy efficiency projects. by 40%, liquefied petroleum gas (propane) tense use. This was due to partial return from and infrastructure. The key performance indicator for energy by 32%, coal by 12% and diesel fuel by 11%. outsourcing to the use of own vehicles and PJSC Rostelecom developed and follows its efficiency improvement is the reduction of Moreover, energy consumption for heat- the implementation of the Operator to Oper- energy policy, which defines our intentions specific energy consumption, for example, ing and hot water supply was reduced by ators project, under which Rostelecom main- maintenance. The policy covers all Rostele- PJSC Rostelecom’s energy policy also ap- and activities related to our own energy effi- electricity consumption per 1 sq m of floor 17% from 2016, with electricity consumption tained and repaired other telecoms opera- com’s core business lines: plies to the Group’s subsidiaries, which re- ciency. The policy establishes a framework of area in buildings, kWh/sq m. KPI targets are down by 13%. tors’ network infrastructure. flects the Group’s intention to improve en- action and provides a basis for energy goals • Core operations of providing communi- based on statistical data, analysis of process Renewable fuel consumption in 2019 totalled ergy efficiency. and objectives. cation services improvement potential as well as comparative 18,558 thousand kWh, down 23% from 2018. PJSC Rostelecom’s energy policy is focused • Commissioning of new facilities and analysis using analogous equipment and pro- This is attributed to the fact that fuel bri- equipment on reducing the energy component of the cesses both in the Company and elsewhere. quette consumption in 2019 was decreased cost of services and cutting operating ex- • Energy management by more than half from 503 tonnes in 2018 penses on building and electrical equipment • Procurement of goods and services to 231 tonnes in 2019 due to decommissioning of a number of buildings with the con- sequent shutdown of boiler facilities which Rostelecom’s energy efficiency management structure were burning this fuel to heat the buildings. In addition, abnormally warm weather at the end of 2019 resulted in a significant reduc- South Centre Ural North-West tion of firewood consumption by boiler fa- Macroregional Branch Macroregional Branch Macroregional Branch Macroregional Branch cilities running on this fuel. Overall, both electricity and heating consumption per square meter of floor area decrease every year. In 2019, electricity consumption stood at 0.1615 thousand kW/sq PJSC Rostelecom Headquarters External consultants: audits of PJSC m of floor area in use, down 2% from a year Energy Management Group Rostelecom’s energy management system ago. Heating consumption went down by 7% during the year from 0.1599 Gcal/cu m in 2018 to 0.1493 Gcal/cu m in 2019. Despite a significant reduction in consumption of different types of fuel, Rostelecom’s Siberia Volga Far East expenditures on energy resources for ve- Macroregional Branch Macroregional Branch Macroregional Branch hicles and mechanical equipment in 2019

176 177 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

Rostelecom’s fuel and energy expenses, RUB thousand Rostelecom Group’s investments in energy efficiency initiatives in 2019, RUB thousand 2016 2017 2018 2019 Type of initiative Facilities Expenditures, Total expenses on fuel consumption for self-generation of energy 400,362.3 369,791.3 386,529.4 402,169.8 RUB thousand

Water supply system upgrades, installation of meters 17 40 Natural gas 175,149.1 156,443.6 145,718.5 132,398.7 244.5 and water saving systems RUB million Gasoline 23,408.8 17,728.8 30,907.6 53,030.4 Rostelecom Group invested in energy Gas supply system upgrades, meter installation 10 2,143.6 efficiency initiatives In 2019 Coal 37,314.3 26,920.4 32,749.3 33,897.0 District heating substation upgrades including retrofitting 24 12,886 weather compensated heating systems Diesel fuel/oil 146,343.0 151,715.6 160,658.5 168,773.9 Installation and upgrades of heat meters 171 27,044 Wood 15,370.1 14,202.9 14,047.0 12,220.6 Heat supply system repairs and upgrades 82 44,979.5 Fuel briquettes 2,776.9 2,780.1 2,448.5 1,849.2 (outdoor and indoor lines, heating systems)

Total expenses on fuel for vehicles and mechanical equipment 872,010.1 874,396.6 1,075,973.0 1,375,361.2 Boiler facility upgrades (including shutdown 32 23,397 of existing and construction of new facilities) Gasoline 729,320.6 729,814.6 923,856.1 1,211,918.3 Building upgrades and renovation to reduce thermal losses, 242 134,029.8 Diesel fuel 122,769.5 127,066.1 133,210.4 147,485.8 including:

Liquified petroleum gas (propane) 19,919.9 17,515.8 18,906.5 15,957.1 • installation of PVC windows 189 100,195

Total expenses on energy purchased from external suppliers 9,930,020.9 8,986,321.6 9,126,032.2 9,304,727.6 • thermal insulation of roofs 34 17,232

Electricity purchased from external suppliers 7,773,165.9 6,870,476.4 6,929,256.1 7,082,343.2 • thermal insulation of facades 8 9,270

Heating purchased from external suppliers 2,156,855.0 2,115,845.2 2,196,776.1 2,222,384.4 • other work 11 7,332.8

Expenses on energy efficiency projects n/a 173,568.4 198,130.8 244,519.9 Total 820 244,519.9

Energy efficiency is one of the key focus -ar • Concluding electricity supply contracts total RUB 4,935 million, including RUB 4,050 ENERGY EFFICIENCY PROGRAMMES AND INITIATIVES eas outlined in Rostelecom’s Innovative De- with independent electric utilities to get million for electricity initiatives and RUB 885 velopment Programme for 2016–2020. The a discount off the sales markup of state- million for heating initiatives. owned enterprises • Increase energy efficiency of existing pow- • Reduce building operating and mainte- following major projects were completed in er equipment nance costs 2019 under the Programme: • Energy service contracts • Reduce energy losses in utilities c) Social: • Outdoor and indoor lighting system In 2018, pursuant to the energy policy, upgrades PJSC Rostelecom’s Energy Saving and Ener- • Optimise heat supply • Improve employee comfort Key focus areas of Rostelecom’s energy con- • Deployment of balanced ventilation gy Efficiency Programme1 for 2019–2023 was Improve the thermal performance of build- servation and efficiency initiatives: • • Improve workplace conditions systems developed and approved. The Programme ings and utilities a) Operations: • Train/retrain personnel in energy • Replacement of low-efficiency power sup- calls for a 6.7% reduction of specific heat • Reduce energy consumption conservation consumption and a 14.76% reduction of spe- • Decommission equipment that has reached ply systems with modern high-efficiency Improve power supply reliability the end of its service life • • Improve PJSC Rostelecom’s power supply systems cific electricity consumption by 2023 from facility personnel motivation for energy 2018 taken as a base year. Planned invest- Reduce specific energy consumption for b) Business: • Deployment of an automated commercial • conservation ments required to complete the programme electricity and heating generation • Buy energy at the lowest possible price power metering system

1 The programme applies to PJSC Rostelecom only

178 179 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

The Company intends to achieve its targets In total, 26 boiler facilities of all types were Nonetheless, the number of hybrid wind and not only by technical and organisational initia- upgraded, four boiler facilities were shut solar power systems in the North-West Mac- Energy efficiency of the Company’s buildings and offices in 2019 tives but also by creating a sustainable culture down (two coal-fired, one diesel-fired and roregional Branch doubled over the report- Types of energy/resource-saving systems Number of buildings Total floor area of buildings of conservation and responsible consump- one wood-fired) and two new gas-fired boil- ing period. In 2019, the systems powered 65 using the systems using the systems tion of energy embraced by all employees of er facilities were built in 2019. Total expendi- facilities of the MRF, compared to 34 in 2018. pcs % sq m % PJSC Rostelecom. This will include mandato- tures stood at RUB 23,397 thousand. In total, 134 facilities of the Company used Energy-saving (LED) lamps 3,142 10.5% 1,121,923 13.2% ry interactive online courses in energy effi- alternative sources of electricity in 2019, ciency, posting energy conservation tips on Energy conservation initiatives including: Weather-compensated (climatic) heating controllers 425 1.4% 1,664,814.34 20% computer desktops, setting up an ideas bank In order to implement energy conservation • 33 solar power systems (15 facilities in the for energy conservation on a web-portal, re- technologies in the operation of office build- Sensor-based lighting controllers (in common areas) 371 1.2% 519,523.52 6.1% South MRF, 18 facilities in the Ural MRF) gional branch rating, creation of video con- ings and spaces, Rostelecom has been fitting tent on the Programme implementation, etc. out its premises with LEDs, weather-compen- • 19 microturbine systems (19 facilities in Control valves on heating appliances 656 2.2% 1,344,167 15.8% the Far East MRF) sated heating controllers, water saving devic- Water saving systems 67 0.2% 287,626.5 3.4% Energy efficiency initiatives es, and materials that reduce heat loss. • 82 hybrid wind and solar power systems (sensor taps, dual flush toilets, etc.) Heat supply systems and heat metering units (65 facilities in the North-West MRF, The Company gradually phases out fluores- 17 facilities in the Far East MRF). Integrated electronic heat and energy control systems 13 0.04% 157,247.8 1.9% were upgraded in 2019, which included au- cent lamps, which are an environmental haz- (Smart Office) tomation of heating substations of individual ard, and replaces them with LED lamps. In buildings and installation of modern weath- Structural materials that reduce heat loss 1,437 4.8% 1,788,326.35 21.0% total, 88,388 lamps were replaced at 1,449 (PVC windows, wall and roof insulation, etc.) er compensated systems. The Company also facilities in 2019, almost three times as many optimised space utilisation, installed thermal as in 2018 (31,300 lamps). Modern light- Free cooling 518 1.7% 374,894.634 4.4% (data centres, server rooms, process equipment) insulation on building facades and replaced ing systems are now installed in 10.5% of all window units with modern energy-saving operated buildings, illuminating an area of ones. As a result, heating consumption went 1,121,923 sq m. down by 4.9% in 2019. A number of PJSC Rostelecom branches con- Alternative sources of electricity verted some of their boiler facilities from coal, There were no significant changes in the use Solar payphone in Ovalyngort village, Yamal-Nenets Autonomous Area firewood or diesel fuel to natural gas, which of alternative energy sources for Rostelecom We use alternative energy sources to Calls are free because Rostelecom stopped payphone should be operational at all is more environmentally friendly and cheaper operations in 2019. Such sources are used provide uninterrupted communications charging for domestic long-distance calls times for use in emergency or when and has higher energy content. In some cas- mainly to power telecommunications equip- to people in remote areas of Russia. For from universal service payphones as from visitors are in the village as there are es, we stopped using our own less environment installed in sparsely populated areas instance, in 2019, Rostelecom installed 1 June 2019. only woods and rivers around the place. mentally friendly boiler facilities and switched far from power grids. solar panels for a payphone in the We solved the problem by installing to district or electric heating. Owing to this, village of Ovalyngort, Shuryshkarsky solar panels and upgrading equipment.” the Company reduced its diesel fuel con- District. The Company installed three sumption over the year by 7.3%. Specific energy consumption reduction targets until 2023 solar panels and a 100-Ah battery 2019 also saw an upgrade of boiler facilities capable of powering the payphone for “The payphone is the only communications where old gas-fired boilers were replaced Indicator Unit of 2018 2023 Change 24 hours after sunset, on the roof of means of Ovalyngort dwellers and visitors. with more advanced ones with higher effi- measurement a diesel-generator container supplying The villagers go fishing to the ‘big river’ Alexander Oboltin ciency and modern automatic control with electric power to the village in wintertime. in the summertime and come back home Director of PJSC Rostelecom’s Yamal- Specific electricity consumption per kWh/sq m 157.2 134.0 14.76% Nenets Branch a weather compensation option. As a result, 1 sq m of floor area in buildings The villagers can now call any fixed- when winter is close. They shut off the natural gas consumption was down 14.6% de- line number across Russia at any time. generator when they are away. But the spite the conversion of some boiler facilities Specific heating consumption per 1 Gcal/sq m 0.149 0.139 6.7% sq m of floor area in buildings from other fuels to gas.

180 181 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

5.4. Fostering Environmental Culture

In 2019, 64 cameras International environmental campaign March for Parks in the Perm Territory Employees of Rostelecom’s Kaliningrad reserve was arranged on 21–22 April 2019 “The effectiveness of the forest fire million hectares. Forest fire monitoring We consistently foster environmental culture and Yamal-Nenets Branch participate in the international under the motto of “Save the habitats monitoring system in the Perm Territory has been used in Yamal since 2017, and promote environmental values among our environmental campaign March for Parks of plants and animals!” Over 2,000 Autonomous Area has already been proved: during this where the system helped to detect and employees, partners, customers and other every year. The campaign sponsored by volunteers participated in the campaign, year, 40 fires were detected, and they quickly extinguish eight fires last year.” stakeholders. PJSC Rostelecom is a media helped to detect and the Biodiversity Conservation Centre reinforcing protective dunes, cleaning were all put out within one day. The sponsor of educational, awareness and pro- (Moscow) has been running since 1995. and painting information boards, fences promptly extinguish system saved hundreds of hectares of motional initiatives for environmental protec- Its events are timed to coincide with and wooden furniture. Rostelecom’s forests, to say nothing of the destructive tion, sustainable use of natural resources, na- 48 fires the global Earth Day celebrated on Kaliningrad Branch employee volunteers impact of fires on the whole ecosystem ture reserve management, and protection of 22 April. cleaned up litter from the national park. of the region. We plan to add 15 video Sergey Gusev rare plant and animal species. As part of March for Parks, a visit of cameras next year, which will expand Vice President and Director a large number of volunteers to a nature In Rostelecom’s regions of operation, it im- video surveillance coverage to two of PJSC Rostelecom’s Ural MRF plements greening, area improvement and clean-up programmes, holds environmental education events and exhibitions, and participates in environmental initiatives launched “We live in a fine place with beautiful bags. I want to save this unique nature by local administrations and environmental nature. It does not make sense to me for posterity.” organisations. Besides, Rostelecom imple- when recreation leaves so much litter ments environmentally focused projects to in the woods. I pick litter in the forest Participation in National Forest Planting Day Svyatoslav Sakharov The Forest Fire Monitoring System in conserve Russian forests. even when I am there for mushrooms. chairman of the youth council the Perm Territory won the corporate Besides saving forests from fires, we from Unilever, Philip Morris and the We filled four big bags with litter near of the shop-floor organisation project contest People Investor also actively participate in planting new regional branch of EMERCOM planted one campsite in just ten minutes: plastic of PJSC Rostelecom’s Kaliningrad 2019 in the Environmental Efficiency forests. In May 2019, under the National two hectares of pines and spruces in and glass bottles, polyethylene film, Branch trade union category. Forest Planting Day campaign, employees Bilimbai Forestry. of PJSC Rostelecom’s Tyumen and Kurgan PJSC Rostelecom’s Ural Branch received branches planted Siberian spruces a Letter of Acknowledgement from the in a suburb of Tyumen. Employees of Deputy Minister and Director of the the Yekaterinburg Branch, Ural MRF, Forestry Department of the Sverdlovsk multifunctional shared services centre, Region recognising its contribution to Forest fire prevention Administrative Department, B2B and this environmental campaign. IT functions along with volunteers We particularly focus on forest fire emergency management centre. The forest cameras to monitor forest fires in Perm prevention. For this purpose, Rostelecom fire monitoring system was first deployed by and 10 cameras in Yamal in 2020, with installs video surveillance systems for Rostelecom in the Perm Territory in 2016. another 15 cameras to be installed in automatic forest monitoring and early As at the end of 2019, the systems are Perm in 2021. detection of forest fires. The monitoring successfully functioning in two regions of “The campaign is very important for the system will automatically detect a white the Urals. 10 video-surveillance IP-cameras region for its contribution to our future, cloud of smoke against the green in the Perm Territory monitor 770 thousand our environmental culture. We change Tatiana Ivshina our attitude to natural resources and forest background, determine the hectares of forests and 54 cameras in Yamal Senior Environmental Engineer coordinates of the forest fire outbreak cover practically all fire-prone areas around our mindset from a consumer model at the Ural MRF of PJSC Rostelecom, and immediately send the information local municipalities. Future plans of the to care.” the campaign organizer to the regional dispatch centre and Company call for the installation of 22 video

182 183 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

Save Forest campaign Irkutsk activists

Employees of PJSC Rostelecom’s regional governmental officials, Rostelecom employees in Irkutsk actively letter cites Rostelecom employees for Kalmykia Branch participating in the students, members of youth sports participate in the region’s environmental initiative and active participation in 6 national environmental campaign Save non-governmental organisations. The initiatives. In 2019, under the 17 Trees of a city-wide voluntary cleanup, “Our city thousand trees Forest took part in the greening of volunteers planted 6,000 trees. Spring initiative, our colleagues along greatly benefited from your diligent were planted by volunteers in the Buddhist Temple Syakusn-Syume in with volunteers from other companies work, responsibility and ambition.” course of Save the Forest campaign Kalmykia. In total, over 3,000 people planted avenues and groves with rowans took part in the environmental event, and lilacs on Konnyi Island in Irkutsk. including the Company employees, Irkutsk administration issued a Letter of Acknowledgement to Rostelecom for supporting environmental voluntary cleanups in all settlements of the Irkutsk “We immediately decided to join this Alexey Osipov Region with Rostelecom’s offices. The campaign, which is so important to acting Director of PJSC Rostelecom’s our region. Thanks to colleagues who Kalmykia Branch personally contributed to environmental development!” “Rostelecom annually invests in envi- Yuri Timan ronmental initiatives. Our employees Director of PJSC Rostelecom’s also contribute individually. Fostering Irkutsk Branch an environmental culture in society is important to us, so we participate in sanitary cleanup and urban greening Teleconference for an All-Russian Open Lesson on Ecology initiatives in Irkutsk and other areas of The All-Russian Open Lesson on environmental professions are needed, how believe such initiatives are necessary the region to leave a clean home to Ecology was held for high-school climate change can be stopped, how natural because it is in high school that kids our children and grandchildren.” students in Voronezh, Belgorod, Lipetsk resources can be used sustainably, how set their life priorities. Today, thanks to and Orenburg in January 2019. The one can create one’s own waste recycling modern telecommunications capabilities, lesson was organised by the Ministry business, etc. we were able to get Orenburg students of Science and Higher Education of in touch with the leading experts of the Russian Federation jointly with our country.” the ProeKTOriYA portal. Rostelecom arranged a teleconference with Russian experts in environmental protection “Rostelecom is always willing to support for the lesson attendants. educational projects for schoolchildren. This The Engineering Centre of High- is a great opportunity to communicate with Complexity Prototyping “Kinetica” at the new generation, which is just entering Alexander Pyzhov MISiS National University of Science and the world of universal digital transformation, Director of PJSC Rostelecom’s Technology was the main venue of the environmental thinking, ergonomics of space Orenburg Branch lesson. The experts told students which and other innovations in all parts of life. I

184 185 ROSTELECOM'S SUSTAINABILITY REPORT 2019 5. OUR ENVIRONMENT

5.5. Occupational Safety

submitted to the President every quarter. Key objectives of the operational control Management is also notified of any and all FIRE SAFETY Fire incidents at PJSC Rostelecom system for fire and industrial safety: fires and accidents which resulted in signif- facilities icant damage to property and/or ill health 1. Organise and coordinate work to 48 50 32 22 Occupational safety and favourable work- ensure compliance with the fire safety of people. A special commission investi- ing conditions for Rostelecom’s employ- requirements of the Russian Federation gates each of these accidents and identifies ees, partners and customers is something laws and other regulations as well as corrective and preventive actions to make we take very seriously. To accomplish this, ensure the functioning of a fire safety sure such accidents do not happen again. In order to prevent fires, PJSC Rostelecom Rostelecom’s efforts reduced the number of the Company has in place an operational monitoring system in PJSC Rostelecom’s continues to upgrade and renovate buildings fires at its facilities to 22 in 2019 from 48 in control system to ensure sustainable op- divisions and install fire protection systems. RUB 140 2016, or by 54%. Fire damages in this year eration of its facilities and compliance with 2. Develop, deploy and monitor compliance million was spent in 2019 to install these sys- totalled RUB 4.7 million, a 2.6 decrease year- fire and industrial safety regulations. This with organisational and technical fire- tems at 71 facilities. In 2019, fire authorities on-year. The major root causes were iden- work is organised by the Operational Con- safety initiatives in the Company “Rostelecom has in place an operational audited 151 facilities and recommended 463 tified as non-compliance with electrical in- trol Division at the Administrative Depart- 3. Organise and carry out operational control system to ensure sustainable corrective actions to eliminate the identified stallation and grid regulations and vehicle ment of PJSC Rostelecom’s Headquarters. control over industrial safety at hazardous operation of its facilities and compliance gaps. No fines were imposed on the Com- malfunctions. Heads of operational control departments/ operational facilities within the Company’s with fire regulations and industrial and pany for fire safety violations in 2019, which services/teams in PJSC Rostelecom’s MRFs area of responsibility environmental safety laws. The system is a testament to our improved performance and branches and heads of the same func- Rostelecom President is the highest-rank- lowers the risks of fires and fire outbreaks, on fire prevention. tions in subsidiaries and affiliates are -re ing officer of the Company responsible for prevents accidents and injuries at hazardous 2016 2017 2018 2019 sponsible for direct management of fire fire and industrial safety. The operation- facilities, and mitigates adverse environmental and industrial safety. al control system performance results are impact of operations.”

Andrey Golovnitsky INDUSTRIAL SAFETY Head of Operational Control Division at the Administrative Department of PJSC Rostelecom’s Headquarters 30.6 RUB million The Company has a total of 182 officially reg- safety audits and provided operational safety industrial safety expenditures istered hazardous facilities, including 91 facil- training and certification to employees across in 2019 ities classified as Hazard Class 3 (gas grids). our branches. All of these facilities are registered with the There were no accidents nor incidents at Federal Environmental, Industrial and Nucle- PJSC Rostelecom’s hazardous facilities and ar Supervision Service (Rostekhnadzor) and no fines nor warnings were received from reg- insured. Annual hazardous facility insurance ulators in 2019. In 2019, we had 722 internal operating expenses are about RUB 1.6 million. industrial safety audits at Rostelecom’s haz- During the year, we also renewed contracts ardous industrial facilities (up 6% year-on- with emergency response and rescue teams, year), which identified and eliminated 343 vi- developed accident containment and re- olations, down 28% year-on-year. sponse action plans, carried out operational

186 187 SUSTAINABILITY REPORT The number of business 2019 customers using information securities services

The total duration of video surveillance transmission during the Unied Final Exams

Our customers ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS Our 6 customers

2019 — DELIVERING ON DIGITAL 6.1. The Company's Approach

As the country’s telecoms champion, Rost- the Digital Divide project, Universal Service elecom plays a key role in digitising the na- Obligation, etc.) Our Smart City project and 13.2+ 12.2 5.6+ tional economy. We are proud to participate multiple other initiatives which help devel- million of broadband million households (and over 1 million million families in projects that are vital to the entire nation. op high-quality, reliable infrastructure bring and VPN service subscribers of businesses and state organizations) use Interactive TV (IPTV) service We develop and implement multiple advanced us closer to achieving SDGs 9.1 and 11.a. For Rostelecom broadband revenue growth across the entire country were provided solutions to cater for the needs of Russia’s example, Rostelecom’s Geodata product rate is double the market growth rate with Internet access by the year end key industries in high-quality information and can be used as a basis to develop technol- communications technology (ICT) solutions ogies that make cities, rural areas and natu- 102-2 Modern telecommunications tech- and ensure a high level of information secu- ral ecosystems safe and sustainable. In line nology provides users with opportunities rity for the government, organisations and with SDG 9.5, the Company seeks to up- which would have been hard to imagine not citizens as we deliver our services and de- grade the technological capabilities of in- Up to long ago. Rostelecom’s mission is to provide 38% 3 11.1 velop the digital content sector. dustrial sectors (data centre services, cloud convenient and high quality digital services Rostelecom market share Tbps is the capacity of Transit thousand services, cyber security, digital government, for a comfortable life and effective business. Sustainability lies at the heart of everything in terms of operator revenues in PayTV Europe-Asia super-high bandwidth Growth of the number of WiFi hotspots big data analytics, artificial intelligence and we do. Rostelecom Group is aware of its re- market segment (the largest market link (growth by 350 Gbps) under the digital inequality elimination Rostelecom Group operates across all mar- many others). Rostelecom actively cooper- sponsibility for contributing to the efforts to share among the operators) project ket segments, providing services to millions ates with government, financial and banking solve global and local problems, so its long- of households, public and private entities. Our institutions to contribute to SDG 8.10. We term goals for digital services and solutions strategic goal is to develop and offer digital also train the younger generation in internet are aligned with the United Nations Sustain- services to households, business and gov- safety, encourage talented young people by able Development Goals (UN SDGs). We have ernment customers while continually improv- providing growth and development opportu- identified priority goals on which we can have 127% 240+ 225% ing our customer service. nities, help build a young talent pool and act the greatest impact: UN SDGs 4, 8, 9, 10 and 11. growth of revenue generated over thousand cameras the cumulative growth growth rate of active subscriber base as partner for youth competitions and forums. the year by subscriptions to antivirus of the total number of cameras installed of Wink product In line with SDG 10.2, we pay special atten- Thereby, Rostelecom Group contributes to software in comparison to 2018 with Rostelecom video surveillance tion to providing equal access for all cit- SDG 8.6, “By 2020, substantially reduce the service (the subscriber base was izens to affordable information and com- proportion of youth not in employment, ed- increased by more than 2.5 times) munications technology solutions (Bridging ucation or training”.

Rostelecom is a market leader in high-speed 45% 2.4 internet access and Pay TV. The Company also growth of 2019 revenue generated times leads the Russian market in telecommunications by gaming products compared sales growth rate of cybersecurity services to 2018 revenue (1.1 million attacks were repelled) services for government authorities and corporate users

190 191 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

102-6 Rostelecom today:

№ 1 in the market for ultrafast № 1 contributor to government № 1 in the B2B MVNO (Mobile Acquisition of Tele2 Russia

broadband for households, busi- digital programs Virtual Network Operator) market “Our sustained competitive position in The acquisition of 55% interest in customer base by offering products

ness, and government customers broadband and pay TV markets allows us T2 RTK Holding following a decision made and services with even better quality

to concentrate our efforts on the further late in 2019 has brought Rostelecom’s to build lasting trust with customers. development of our digital solutions, including stake in the operator’s charter capital to Strategic considerations for the Tele2

№ 1 in the pay TV market (by № 1 by fibre coverage in both cloud and data centers, cyber-security, as well 100%. The combination of the country’s Russia deal: revenue) and the leader in cable urban (37 million households) as smart products for households, business largest fibre network and subscriber Acquisition of a rapidly growing and interactive TV and rural areas (11.1 thousand • and the state.” base of Rostelecom and the expertise of high-margin mobile business communities with populations Tele2’s team in building and developing between 250 and 500 peo- • Capturing considerable upside poten- a mobile business will result in a unique № 1 in IPTV, the most innovative ple and more than 8 thousand tial for fixed and mobile assets Mikhail Oseevsky telecoms platform unprecedented for segment of the pay TV market healthcare centres across the • Capturing 5G potential in Russia country — a solid platform for the President of PJSC Rostelecom Russia. The expanded ecosystem of Synergy realisation opportunities launch of telemedicine services, new services and solutions will boost •

with over 7 thousand remote the Company’s financial results, solidify For more details on the Tele2 Russia № 1 in the data centre market social infrastructure facilities its competitive position and improve deal see PJSC Rostelecom’s Annual by number of rack units operating in 44 Russian regions) overall profitability while expanding our Report 2019.

As at the end of 2019, the Company provided The recent growth in fibre networks has internet connectivity to 12.2 million house- spurred government-sponsored infrastruc- holds across the country and over 1 million ture projects involving the deployment of Improved service quality and customer Rostelecom’s Area Master project drives a third-party contractor (partner) and subse- public and business entities, which makes it hundreds of thousands of kilometres of high- relations stronger focus on improving the quality of quent maintenance. Engineers are empow- the largest provider of all internet-related speed fibre (bridging the digital divide, inter- The Company conducts regular customer sat- services provided to subscribers through the ered to upskill themselves and take owner- benefits and opportunities to Russian citi- net connectivity for hospitals and schools, isfaction surveys, using the results to develop transformation of connection and service de- ship of the entire technical cycle within their zens and companies. Fibre network devel- deployment of submarine FOCLs to con- new and improve existing services, as well as livery business processes for mass custom- respective customer network section. opment leads to growth in high-speed in- nect Magadan, Kamchatka and the Kuril Is- upgrade business processes. We maintain a ers. A key principle of the project is assigning The Guard project aims to improve custom- ternet users, as fibre is one of the fastest lands, etc.). By taking part in these projects, we relentless focus on improving customer ser- personnel to a specific area and increasing er service quality by transforming connec- and most reliable internet access technolo- can increase data rates available to custom- vice, and it delivers results, as demonstrat- their responsibility for customer manage- tion and service delivery business process- gies. We continue building new GPON lines. ers from all segments in remote and sparsely ed by higher satisfaction levels in key touch ment, from the connection date throughout es for B2B customers. The project includes These are multi-service broadband access populated areas and thus contribute to sus- points and overall NPS. To improve Rostele- the customer’s entire life cycle. This reduces a range of initiatives to consolidate a num- networks using a single fibre to deliver inter- tainable development and improved well-be- com’s performance, projects are underway the risk of customer issues occurring at in- ber of activities such as equipment installa- net, telephony and TV services with guaran- ing of people. on the ground to transform customer-fac- terfaces between different areas of respon- tion and set-up, technical support and B2B teed service quality. ing business processes. sibility, for example between installation by a customer needs surveys.

192 193 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

6.2. Modern Digital Services

To achieve high customer satisfaction rates, robotics to service operations, driven by ar- Rostelecom’s Kaluga Branch won the Brand In recent years, the Company has complet- cloud computing, biometrics, healthcare, ed- reduce infrastructure maintenance costs and tificial intelligence and integration with corpo- of the Year 2019 regional contest in the Ser- ed major business transformations and to- ucation and digitisation of utilities. We build ensure predictive network maintenance, the rate IT systems, as well as the implementation vice and Trade Sector category. day provides a broad range of digital ser- convenient, robust ecosystems providing a Technical Infrastructure Unit is working to- of technologies improving the recognition of Rostelecom also won the Brand of the Year vices. Rostelecom is a leader in the Russian wide range of services to every customer gether with stakeholder units to launch a proj- customer queries and named entities. 2019 regional contest of popular consum- broadband and Pay TV markets, as well as segment: residential (B2C), corporate (B2B) ect to develop and deploy an Integrated Ser- er brands in Ulyanovsk, in the Leadership in in innovative digital products for e-govern- and government (B2G) customers, as well as Product and service quality awards vice Monitoring System (covering internet the Telecommunications Industry category. ment systems, cyber security, data centres, other telecoms operators (B2O). access, digital telephony and other services) The Company was named Russia’s leading PJSC Rostelecom received the Orel Busi- at different data network levels (backbone, provider of cryptographic solutions for gov- ness 2019 award in the Telecommunications regional, access networks). The key objec- ernment and corporate customers’ commu- category. tive of the project is to improve customer nications channels. Rostelecom won the Consumer Confidence service quality for users of IPTV, broadband, In 2019, Rostelecom’s proprietary information ROSTELECOM FOR HOUSEHOLDS 2019 in Vladimir, the 8th regional contest, in VoIP and eventually other digital services, in- security solution won a Runet Award for the the Digital Service, Solution and Telepho- cluding in-depth analysis of digital services. first time: Solar appScreener won the award ny Provider category as the best high-tech services — home internet, interactive TV and bining three services — home internet, in- A project to develop an AI/Machine Learning in the Economics and Business category for communications and telecoms company in mobile — into a single account linked to the teractive TV and mobile — into one person- chatbot and deploy it at the Company’s con- its contribution to Runet users’ data protec- the region. user’s telephone number. It allows a customer al account. It allows a customer to pay for all tact centre (MC NTT, a Rostelecom subsid- tion and the overall security of the Russian to pay for all services in one fixed sum via a services in one fixed sum via a single per- iary) has been implemented to improve the segment of the internet. The New Year’s Ball of Fortune online game, created for our loyalty programme members, single personal account — a very convenient sonal account — a very convenient solution efficiency and reduce the costs of handling Rostelecom won the Tula Brand 2019 award has won us the top Gamification of the Year solution saving money for the user. saving money for the user. customer queries in digital channels, reduce by popular vote, in the Communications, award from Loyalty Awards Russia 2019. Apart from the anchor products of broad- response and resolution times for chats and Telecommunications and Cloud Services As user demands continuously evolve, we fo- band access, IPTV and telephony, Rostele- improve the customer experience. The proj- category. ect includes digitisation and application of cus on improving technologies, creating and com offers retail customers a broad range expanding new markets, enhancing our prod- of educational, healthcare, entertainment as uct offerings to best meet the needs of retail well as data storage, management and se- customers and further improving the quality curity services. Specifically, digital solutions of communications services. This enables us for smart homes improve security, save re- to make sure our customers get all the ben- sources and prevent emergencies, thus im- efits of modern communications technology. proving the quality, comfort and sustainabil- In 2019, the retail segment accounted for over ity of life for our customers. 40% of Rostelecom’s total revenue, with the Fibre access network provides a physical residential segment growing by 2% (+RUB 3 foundation enabling an unlimited range of billion) to RUB 140 billion. The Company in- digital services. In 2019, Rostelecom contin- creased its broadband coverage to 37 mil- ued building GPON networks (fibre-to-the- lion households in 2019, with broadband sub- home), with a fibre cable brought directly to scriber base up by 7% year-on-year. In 2019, a subscriber’s apartment or house. The fi- Rostelecom’s broadband market share in the bre cable is protected against adverse en- B2C segment stood at 41% by operator rev- vironmental conditions, which ensures the enue. During the year, our mobile subscriber high reliability and perfect quality of con- base grew by more than 1.4 times to 1.7 mil- nection. The fibre-to-the-home connec- lion, with MVNO revenue doubling. Within our tivity enables subsequent rollout of multi- MVNO project, we launched a fully converged ple new services. Our new solutions include product across our footprint, combining three the Convergent, a converged product com-

194 195 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

Advanced digital services for The Company developed its own learning Plans for 2020 include additions to training a household ecosystem platform with exclusive content in 2019. Train- materials, updating the platform design, add- Rostelecom’s 2020 plans for the mass segment prioritise a number of focus areas We offer a range of digital services for house- ing materials were prepared by contractors ing new gaming and educational mechan- holds and families capable of meeting every- with expertise in educational content engag- ics and acting as an educational partner for body’s needs and based on high-speed fi- ing faculty from the Higher School of Eco- school students. bre broadband access and the Wink digital nomics, Presidential School and Lomonosov The Wink multimedia platform also includes platform. Rostelecom also offers convenient School. Partners’ educational courses such an educational section, Lectorium, with pro- and effective cloud-based video-surveillance as MAXIMUM, Foxford, Umnazia, IQSHA and grammes on business, science, nature and 1. 2. 3. Peremena are also available from the Rost- (over 240 thousand video cameras have been travel. Continued consolidation of the Development and dramatic growth Launches of new digital products sold since the sales launch), control and secu- elecom Lyceum platform at a discount. active subscriber base for traditional in digital video surveillance products: to meet additional needs of our rity solutions for smart homes. Our customers 2019 highlights: Gaming segment services — broadband, interactive Wink and Rostelecom Key customers. The Company’s products benefit from access to various partner prod- Rostelecom was the first operator to start de- TV (ITV) and mobile — by bundling form a fully integrated ecosystem 1) Own learning platform for school students ucts such as Rostelecom Lyceum, Rostele- veloping an ecosystem of services for gamers them into a DUAL/TRIPLE PLAY built around the customer and their launched com Books and antivirus software subscrip- based on its Gaming tariff plan. The plan com- package (bundles of two/three everyday needs 2) More than 600 exclusive lessons created tion service, as well as the exclusive Cloud bines an ultra-high-speed access with vari- or more services) or enhancing and posted tariff plan combining high-speed broadband ous options from game publishers available to the oers with VAS services 3) Over 40 courses by the service and unlimited space in Yandex.Disk. All this tariff plan subscribers only and allowing them educational partners published helps to improve citizens’ quality of life and to speed up their path to online victories. In the access to information and communica- Q3,2019, the Company launched the Game Cable and interactive TV try in 2019 (existing Interactive TV customers tions technology (ICT) solutions. Market platform with more than 2,200 games Rostelecom is the largest operator of cable can also transition to the new platform). Wink The Victory, a new channel launched in from 48 Russian and international develop- E-learning services TV and interactive TV networks in the Rus- is a new-generation interactive TV platform Rostelecom’s TV network in April, is fully ers. We have also made available to gamers sian market by subscriber base and reve- comprising a mobile application, a web por- focused on the most important event Rostelecom is developing e-learning ser- subscription to GFN.RU, a new cloud gam- “The Lyceum service is intended for school nue. In 2019, our Pay TV base grew 2% to tal and a Smart TV application. in the 20th century Russian history: vices to make quality education accessible ing service capable of turning any comput- students in grades 1 to 11, for whom we have 10.3 million households, with the number of Wink provides access to TV channels, online the Great Patriotic War of 1941–1945. for every Russian citizen. Educational proj- er into a powerful gaming machine for the collected video lessons by teachers from pay TV subscribers up by 3% year-on-year video streaming services, as well as entertain- The channel features round-the-clock ects receive special attention as they im- best gaming experience in the most popu- leading Russian schools, with lesson notes to 10.4 million. ment and educational services. Thus, in ad- broadcasts of Soviet and Russian prove the quality of learning, aim to devel- lar online games. and tests available to reinforce learning. dition to hundreds of TV channels, Wink us- war films, series, documentaries, new op the youth, reduce youth unemployment For more details on gaming services see PJSC Interactive TV (IPTV) is the Company’s unique The Lyceum solution offers online training ers have access to over 30 thousand films series of programmes produced by and help young people to learn profession- Rostelecom’s Annual Report 2019. nationwide service used by more than 5.6 mil- under a programme compliant with the and series, school lessons, various courses Rostelecom using previously unknown al skills for improved decent job prospects. lion households. This is a multimedia enter- Federal State Educational Standards and (from fitness to cooking), live performances archive materials and newsreels, veterans’ Our e-learning services are widely accessi- tainment centre for the whole family, which provides opportunities to catch up on topics by stars and broadcasts of major UFC fights. accounts, interviews with historians ble and enable individually tailored learning. adapts to the tastes and preferences of the that have been missed or are difficult to Wink includes a recommendation engine se- and experts, family memories of The courses are developed by teams of ex- user. Rostelecom offers a selection of over understand, do homework without parental lecting content to match user interests. people participating in the Immortal perts, reflecting a particular emphasis on the 260 different TV channels and about 25 thou- help, consolidate learnings with texts and Regiment march as well as findings quality of learning, Rostelecom Lyceum be- sand films and episodes of TV series. Interac- Wink can be accessed by Rostelecom cus- tests, prepare for the Basic State Examination and discoveries of voluntary crews ing one such project. tive TV supports a maximum range of extra tomers (using a digital set-top box) or by any and Unified State Examination.” features such as an on-screen TV guide, Pa- internet user as a streaming platform (through searching old battlefields. Rostelecom Lyceum is a learning platform rental Control (restricting children’s access to its website or application). for school students in grades 1 to 11. The platform’s purpose is to provide high-quali- content based on age labelling), on-screen For more details on cable and interactive TV Kirill Brylyov ty, safe and affordable supplementary edu- information services and others. in the B2C segment see PJSC Rostelecom’s Office Director, Promising Digital Products for cation for school students. For more details Digital video service Wink was made available Annual Report 2019. the Mass Segment, PJSC Rostelecom about the Rostelecom Lyceum platform see to all new IPTV subscribers across the coun- www.lc.rt.ru (in Russian).

196 197 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

By the end of 2019 to Rostelecom Key Rostelecom Key erans were given up to 100 free voice min- ber 2019, all calls to fixed-line and mobile product were connected: utes for landline and mobile phones between phones within Russia are free to users. This The Rostelecom Key nationwide platform inte- "We keep improving the accessibility and Universal service payphones on 25 April and 10 May. In the same time peri- initiative has further increased demand for grating services for both residents and prop- ease of use of the universal services one the Yamal Peninsula od, veterans could also send free telegrams payphone services, with the number of calls erty management companies was launched step at a time. As of 1 June 2019, Rostelecom within Russia and to some CIS countries. To growing 1.6 times year-on-year in 2019. Thus, Rostelecom retrofitted a Lithium- in 2019. The Rostelecom Key platform offers offers calls to any landline phones within mark the 75th anniversary of the Great Vic- by maintaining public payphones, we play a ion battery to a satellite universal solutions for digitisation of building entrances Russia free of charge and without a pre- tory, The Victory, a new channel fully focused role in ensuring that all citizens can access service payphone in the village of and outdoor spaces: a smart intercom, smart paid phone card. Another step was taken Sangymgort, Shuryshkarsky District on this key event in the Russian history, went communications services and help bridge barrier gate, communal and individual elec- on 1 November 2019, when calls to mobile to provide stable power supply. on air under number 75 on the list of Rost- + tricity, water, heat and gas meters, integrated the digital divide. In case of a power outage, the phones of all Russian operators were made 100 video surveillance of the property and out- elecom’s interactive TV channels. battery can power the payphone multi dwelling units free. Earlier, we stopped charging for using for 36 hours. Our employees also door Wi-Fi. For instance, Smart Intercom al- public Wi-Fi hotspots deployed in small Universal service payphones installed a special charger which can lows a user to open the front door using a rural communities. I am confident that the voice assistant, smartphone or by generating Universal service payphones serve primarily charge the public phone equipment’s universal services will be in even higher battery in just a few minutes after one-time digital keys that can be issued by a social function, remaining the only commu- demand and maximise the number of external power supply is restored. residents to their guests, couriers or health- nications means in many remote and hard- everyday tasks people in rural areas can The need for backup power to-reach locations across Russia. A large care professionals. The first products made perform using them at no charge — from supply is due to the difficulties + available on the platform were an integrated proportion of payphone calls are emergen- calls to friends and relatives to using the of supplying electricity to remote 400 video surveillance solution (intercom camer- cy calls (ambulance, police, fire or anti-ter- door intercom boards Public Services Portal." areas of Russia’s Far North, with many as and building’s CCTV system with access ror hotlines), and people’s lives, health and municipalities lacking connection to archived CCTV footage), smart intercom, safety depend on these calls. to power transmission lines. meters and barrier gate. All services of the Rostelecom was designated as a single fed- Mikhail Oseevsky Rostelecom Key platform share a common eral universal service provider, maintaining President of PJSC Rostelecom interface accessible from all popular mobile 148 thousand universal service payphones platforms or from a web browser. across the Russian Federation. They are in- + stalled in 131 thousand locations, 188 thou- 800 Going forward, we plan to add new features to video surveillance cameras the solution for seamless integration with the sand, or 80%, of which have populations of Safe City and other services to enable clos- less than 500 people. Under the universal er cooperation with property management service obligation, any Russian citizen needs “Public payphones in remote areas companies and property developers. These to have access to a universal payphone within of Yamal, such as Sangymgort, are the only available communications solutions are aimed at providing a comfort- an hour’s walk. The payphones can be used to: means. They have an important social Smart City projects are becoming able and safe living environment for people. make calls to emergency services (01, 02, • function as they are the only phones increasingly popular across Russia as they 03, 04, 112) help create a better living environment For more details on the Rostelecom Key villagers can use for emergency • make calls to any numbers of Russian calls when people’s lives, health for citizens through digital technology services see PJSC Rostelecom’s Annual Re- port 2019. telecoms operators (local, intra-zone and and safety are at stake.” embedded in everyday life, assisting with domestic long-distance) utilities management, energy supply, Services for the Great Patriotic War receive incoming calls road infrastructure, education and • (WWII) veterans healthcare. These projects promote • contact a help desk at 8 800 100 0800. Alexander Oboltin Ahead of the Victory Day, Rostelecom tra- the development of safe and reliable In 2019, we took further steps to improve Director of PJSC Rostelecom’s ditionally provides benefits to the Great Pa- Yamal-Nenets Branch high-quality urban infrastructure. For the availability of basic telephone services triotic War veterans and disabled persons more details on smart cities see the by completing the phased process of scrap- and launches charitable campaign. Specif- Our Country section of this Report. ping the charges for calls made from uni- ically, in 2019, the Great Patriotic War vet- versal service payphones. As of 1 Novem-

198 199 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

CORPORATE AND GOVERNMENT CUSTOMERS

these efforts promote employment, creation of digitisation of Russian regions. Key focus digital educational content, other focus ar- dating the capabilities of different companies of decent jobs, innovation and the develop- areas of Rostelecom projects: eas include segments such as digital class- to develop solutions and deliver services for ment of entrepreneurship and micro-, small- 1. Security (Safe City software/hardware room registers and mark books, distance healthcare informatisation. and medium-sized enterprises, thus contrib- solutions, intelligent video surveillance learning, education quality assessment and uting to sustainable economic growth. (IVS), EMERCOM warning systems, etc.) monitoring services, certification and pro- The main purpose of the Unified Digital fessional development of teachers. For this In 2019, revenue from corporate and gov- 2. Management (intelligent transport Healthcare Platform: 30 ernment customers was up 13%, or by RUB systems, digitisation of utilities, energy purpose, Rostelecom established joint ven- Russian regions Improve the healthcare system’s perfor- Rostelecom continues building digital eco- 16 billion. efficiency, municipal solid waste tures with the leaders of respective market • use the full package of the Unified mance through the Healthcare National systems for businesses and government, with management) segments in 2019. State Healthcare Information System Project 2019–2024, as well as this segment seen as a driver of strategic Applied projects to digitise Russian 3. Comfortable urban environment For example, in 2019, Rostelecom and Dnevnik. services, with another 10 regions using Develop mechanisms for the interaction transformations in Russia. The Company of- regions (environmental monitoring, solutions to ru, a Russian provider of educational IT solu- • individual solutions and modules of all healthcare facilities through the Uni- fers a broad range of digital solutions for in- The Applied Projects Unit at PJSC Rostele- digitise municipal services). tions, launched RTK-Dnevnik, a JV focused on fied State Healthcare Information System dustries across the economy. We are also a driving the adoption of modern digital tech- com operates as a dedicated unit in charge The following major applied projects were (USHIS). The platform is currently used by reliable contractor in government-sponsored completed in 2019: nologies at Russian schools. The JV plans 30 Russian regions, with 10 regions using initiatives at the regional and federal levels, in to provide integrated digital school-related • Intelligent urban video surveillance plat- individual solutions and modules particular, we work on strategic projects with- services using the existing digital platform form development in Moscow Region, Saint Platform components: in the Digital Economy of the Russian Fed- Petersburg and Tyumen Dnevnik.ru, which already enables keeping eration national programme and cooperate digital classroom registers and mark books, • Health information systems • Rollout of energy-saving and energy-effi- with government institutions. In this way, we online school enrolment and comprehensive Laboratory information systems ciency solutions in more than 20 Russian • seek to enable the digital transformation of regions monitoring of student progress and educa- • Monitoring of obstetric services the entire nation, address inequalities and tion quality. Deployment, maintenance and upgrade of • Oncocluster promote equal rights and opportunities. To • Safe City hardware/software solutions in implement the Digital Economy programme, Digital transformation of the healthcare • Central archive of medical images 11 Russian regions. Rostelecom actively expands infrastructure, sector Functionality: Over 50 IT and digitisation cooperation builds new communications networks and The Russian healthcare system is entering a Coverage of all categories of medical agreements were signed with Russian re- • works towards its strategic goal of driving the new stage of development, with digitisation services adoption of modern practices across busi- gions in 2019. driving improvements in medical care qual- • Automation of healthcare facility activities nesses and government. The Digital Economy ity, automation of healthcare professionals’ Digital transformation of the education Specialised registers of diseases of the Russian Federation programme sets work and improved accessibility of medical • sector new requirements for communications and services to patients. In July 2019, PJSC Rost- • Development of remote consultations: information systems and services, motivat- E-learning is impossible without the inter- elecom and Rostec State Corporation set up telemedicine ing us to pursue ambitious projects requir- net. In 2019, we set out to create integrat- a joint venture LLC Digital Medical Services • Electronic services for patients ing complex infrastructure solutions. ed solutions for digital education to provide (Tsifromed) to deliver a broad range of digi- additional capabilities helping the industry Innovative developments play a special role tal medical services to the population under to keep abreast of the times, and improving in our activities as innovation is critical to a the Unified Digital Healthcare Environment the quality and efficiency of traditional -ed successful digital transformation of business. project. The JV’s purpose is to consolidate ucation. The national library and information We are particularly focused on areas such as the best digital capabilities of Russia’s larg- centre platform developed in 2018–2019 is clouds and data centres, cyber security, smart est software developers: RT Labs, SWAN, RT transforming into a nationwide marketplace cities, the Internet of Things, the Industrial In- MIS, Bars Group and the National Informati- of educational content. Aside from access to ternet of Things (IIoT) and many others. All sation Centre. Tsifromed is a centre consoli-

200 201 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

Projects for state-owned and private Wi-Fi for Business The number of hotspots offered via the Managed companies Rostelecom’s network for businesses is one “Rostelecom has successfully completed In 2019, Rostelecom completed a project to of the largest in the Russian market. The avail- a formidable task of providing almost all Wi-Fi service exceeded 45 thousand in 2019, build a high-reliability corporate data net- ability of free Wi-Fi in cafes, shopping malls, offices of the bank across the country which translated into a service revenue increase work for JSC Rosenergoatom, linking nine hotels and other public places has long be- with stable and secure wireless internet of 32% year-on-year 6% nuclear power plants (NPP). The project income a service expected by visitors, not a rare connection for our customers, as well growth in the number of broadband creased the capacity of Rosenergoatom NPP benefit. Rostelecom offers not only an -au enabling a convenient, protected access Mobile services numbers of calls as they enable automatic Internet access and VPN subscribers data transmission channels by 2.5 times on thentication service but also a turnkey inte- to all of the bank’s internal services for customer call forwarding depending on time in the corporate user segment in 2019 Assignment of 8 800-prefixed telephone average, while cutting their costs almost by grated Wi-Fi for Business solution, which in- employees.” of day and caller location as well as the sup- as compared to the same period in 2018 numbers is one of Rostelecom’s most popular half. The Company was also designated as cludes the internet access service with user port office location. (the total subscriber number reached B2B services. A customer issued such num- the single operator of data networks of State authentication as well as consumer premis- Vasily Palatkin ber can receive toll-free calls from custom- For more details on the mobile market see 1.1 million) Space Corporation ROSCOSMOS. es equipment and technical support. Internal Structural Unit ers based in any Russian region. The 8 800 PJSC Rostelecom’s Annual Report 2019. channel manager, Sberbank We have also implemented a major project Rostelecom provides businesses with reli- numbers are indispensable in handling large to ensure resilience and disaster recovery able, high-quality communications services for the Federal Service for State Registra- priced so as to let businesspeople optimise tion, Cadastre, and Cartography (Rosreestr) their business processes and save on calls by providing communications services as well and data. “Byt v plyuse” (Plus Account) is the Rostelecom’s Managed Wi-Fi service is as network infrastructure, data centre and in- most popular bundle with businesses as it al- popular with both public and corporate formation security services through a ser- lows saving not only on mobile costs but also sector customers. This is a comprehensive vice-based model. Rostelecom implemented on the costs of other digital services. SMEs solution enabling organisations to set up Wi-Fi an innovative project to install cryptobiocab- can use these bundles to address virtually hotspots with authorisation, advertising, ins at multi-purpose public service centres all tasks related to increasing their custom- redirection to various web pages, limited across Russia to provide citizens with an alter- ers’ loyalty. Our bundled services allow pro- session times and many other features. native way to submit data for passports and viding wireless internet access to a client’s For more details on the Wi-Fi for Business visas, in addition to specialised institutions, customers and employees, optimising incom- service see PJSC Rostelecom’s Annual Re- in all cities with a population in excess of 50 ing call management, delivering high-quality port 2019. thousand. Importantly, the technical solution TV content to visitors and setting up a video used in this project was developed and pro- surveillance system. The rollout of 5G mobile duced in the Russian Federation. networks across Russia, vital for a full-scale digital economy, is another key project be- Broadband services ing implemented jointly by the Company and Rostelecom provides a 1 Gbps fibre broad- the government. band service to corporate customers, en- The Company has been designated as the abling them to access the most advanced single provider of Wi-Fi services to Sberbank services, including resource intensive ones, branches across Russia. In November 2019, and ensuring high-speed connection and Rostelecom completed the installation of Wi- high resilience of services, thus improving Fi-based local area networks in 6,300 Sber- the overall business process performance. bank offices, enabling the bank’s customers In 2019, the Company’s broadband market to access the online services of the bank’s share in the B2B segment stood at 38% by ecosystem when visiting its branch. operator revenue. In this way, we are improving access to bank- For more details on broadband services see ing services and contribute to sustainable de- PJSC Rostelecom’s Annual Report 2019. velopment of the national economy.

202 203 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

Corporate TV lya mega data centre in the Tver Region was Major projects: Digital Region The Safe City hardware/software Safe City offering Corporate TV enables broadcasting to an an important milestone in infrastructure de- 1. In the Omsk Region, RusGIS has been In 2019, Rostelecom launched its Digital solution unlimited number of TV screens with an op- velopment. It is the largest project under the deployed as a geodata information Region project on Sakhalin and in Nizhny The Safe City hardware/software solution is performance results tion to group screens or to control each in- strategy for building a national geographical- system for the region’s Digital Farming Novgorod to drive a comprehensive trans- an integrated multilevel smart system de- in 2019: dividual screen. ly distributed network of data centres com- platform. The system’s deployment formation of urban environment, transport, signed to ensure public safety, maintain law pleted jointly by Rostelecom and Rosener- included developing new functional tools The hardware and Rostelecom Screens, a new product which power supply, utilities, and public adminis- and order and create a safe living environ- goatom. The project is unique in its close and populating the system with various allows B2B clients to centrally manage adver- tration and safety. The project is expected ment. The system comprises monitoring and proximity to a nuclear power plant and thus agricultural spatial data and land remote software units were tising and other media content across geo- to facilitate: response information systems integrated into benefits from the best possible electricity sensing data (satellite images, aerial installed in 4 regions. graphically distributed screens in real time, photography). The project has enabled optimisation of public spending on energy a single platform. They include automation of price. The design capacity of Udomlya Data • was launched in 2019. The product adds ex- programmes to improve agricultural land and maintenance of utility infrastructures dispatch services of Single Emergency Re- Centre is 4,000 rack units. Comprehensive design tra capabilities for customer communication, use efficiency in the Omsk Region. and social care institutions sponse Centres, video surveillance in busy In 2019, the number of virtual machines in- areas and existing elements of public an- was completed in including display of relevant content and col- 2. In the Udmurt Republic, a project was • regional economic development through lection of visitor data including gender and creased by 90% to 10,000. Following the completed to identify real estate not digital technology and improved emer- nouncement systems as well video surveil- 3 regions. age. The Rostelecom Screens service helps acquisition of Data Line, the total capacity registered in the land cadastre in order gency response times lance and traffic enforcement systems. The increased to 11.5 thousand rack spaces. Av- Safe City solution also includes new Sys- our clients effectively introduce their prod- to increase the revenue of the Republic’s • improved public satisfaction through Design and implemen- ucts and services to customers, advertise cur- erage infrastructure availability for all Rost- consolidated budget. As a result, the involving citizens in city management tem-112 projects: in 2019, the Company par- tation is underway in rent promotions and special offers and under- elecom data centres was 99.9972% in 2019 Sarapul District administration was processes. ticipated in the implementation of System-112 vs the TIER III requirement of 99.982%. provided with information on the real projects in 56 regions to deploy the solution 6 regions-constituent stand their customers better. Smart screens The Company participated in the develop- estate that was not taxed. which receives emergency calls and redirects enable targeted advertising on video screens For more details on commercial data centres ment and approval process for the City IQ in- entities of Russia. 3. We completed the development of the them to dispatch services. for different target audiences and analysing see PJSC Rostelecom’s Annual Report 2019. dex compiled by the Russian Ministry of Con- Leningrad Region Spatial Data Fund, and the performance of completed campaigns. struction, Housing, and Utilities. Rostelecom The Safe City solution is a major segment of integrated RusGIS with System-112 in the Geodata the Smart City project. For more details see For more details on the corporate TV segment Republic of Karelia. We also enhanced the also sponsored 89 digitisation events, par- In 2019, Rostelecom continued building up the Our Country section of this Report. Such see PJSC Rostelecom’s Annual Report 2019. functionality of the Arkhangelsk Region ticipated in four regional digital transforma- solutions help build sustainable infrastructure its capabilities in geoinformation technolo- investment portal including by adding an tion projects jointly with Digital Economy NPO Data centres gy and rolling out its proprietary software interactive investment map, and designed and delivered professional retraining cours- and make cities inclusive, safe and resilient. With data volumes growing faster with each product RusGIS across Russian regions to a state urban development information es to support Digital Economy projects joint- passing year, Rostelecom’s geographical- promote the sustainability of regions, rural system for the Krasnoyarsk Territory. ly with RANEPA. ly distributed network of data centres offers areas and ecosystems. a reliable digital infrastructure to B2B and B2G customers regardless of where they are based. In this way, we promote inclusive industrialisation, infrastructure modernisation and build-up of technological potential of industrial sectors, and drive innovation, ul- During the year, Rostelecom’s data centre network timately enabling productivity gains across (excluding DataLine’s data centres) grew by a total the economy. In 2019, Rostelecom cemented its position in the data centre market by of 816 rack units. As a result, the Company retained launching new data centres in Udomlya and its leading position in 2019 by new capacity Yekaterinburg and expanding its Data Centre M9 in Moscow. The launch of the new Udom- additions, with Rostelecom’s market share at 26%

204 205 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

Video surveillance In this way, we contribute to road safety and the UN SDG target of reducing the number of Video surveillance in an essential element of Rostelecom completed Rostelecom implemented deaths and injuries from road traffic accidents. security systems. Rostelecom’s Video Surveil- the Smart Helmets project a crop tracking system for Rusagro lance service allows viewing from anywhere in for ARMZ Uranium Holding, Industrial Internet of Things (IIoT) + the world live and recorded video from cam- a mining division of state-owned In 2019, Rostelecom and Rusagro Group, Russia’s largest vertically integrated 40 eras, changing individual settings (for exam- The Industrial Internet of Things (IIoT) is a corporation ROSATOM agricultural holding company, launched a beet and pulse crop tracking sys- thousand IP-cameras ple, enable notifications and motion record- concept of building an ICT infrastructure to tem. The system tracks crop produce movement throughout the production in over 10 thousand organizations in all ing) and storing recorded footage on remote connect any commercial devices, equipment, During the year, Rostelecom and process, from harvesting, acceptance and handover between harvesters to the Russian regions were connected by servers. Cameras can be viewed in different sensors, detectors, and an automated process IT company Softline completed transportation and delivery to the collection point, across Rusagro Group’s the company to the video surveillance modes (real time, event archive, history). The control system, and integrate these elements the deployment of the Smart footprint. The tracking system uses IIoT technologies. service according to 2019 results service quality was improved in 2019. Also in between each other enabling the emergence Helmet positioning system on Projects like these improve productivity and adoption rates of reliable agri- 2019, the Company significantly expanded of new business models to create and de- the Istochnoye field operated by cultural techniques. its video surveillance expertise through the liver products or services to consumers. Im- ARMZ subsidiary Khiagda in the acquisition of JSC Netris, a specialist com- provements in industrial production process Bauntovsky Evenki District, Republic pany that has independently developed and performance and reduced CAPEX require- of Buryatia. A total of 150 digital continues improving an intelligent video sur- ments are the key driver of the IIoT adoption. devices were launched, enabling + veillance platform: the core of our Smart City The IIoT is intended for manufacturing indus- remote monitoring of compliance “When we were selecting the approaches the rollout of the developed system to tries, oil and gas production, agriculture and 3.1 solutions and Digital Region standard. In ad- with safety rules on the ground, to achieving our target objective reduce crop losses across all stages thousand of traffic monitoring and power industry, optimising business process- dition to driving public safety, the platform thus promoting health and safety and building a crop tracking system and improve the transparency of photo and video recording units to es, promoting efficient and sustainable use provides a powerful tool for urban environ- at work. architecture, we analysed a number of crop produce movement from field record traffic regulations violations of resources and helping to improve citizens’ ment management, including monitoring the products available on the market. We to storage.” were installed in 47 regions of Russia quality of life. Demand for the IIoT technol- construction of infrastructure facilities, area went for Rostelecom’s newly developed by the year end, including 720 units ogies is expected to grow at an even faster improvement and urban greening projects, product as it met all our requirements. installed in 2019 pace in the future. waste and snow removal and multiple other We employed a number of technical aspects of the overall well-being of a mod- “This year, ROSATOM joined the solutions to improve data reliability ern megalopolis. All this promotes the sus- Vision Zero initiative; therefore, the and delivery speed for machinery tainable development of regions. main goal of Smart Helmet rollout in out in the field with less than 100% operations is to improve employee Pavel Dreiger For more details on the Video Surveillance safety. The first 150 helmets will be mobile internet coverage. We expect CIO, Rusagro Group service see PJSC Rostelecom’s Annual Re- used by our employees working port 2019. at hazardous industrial facilities.” Photo and video enforcement The Company installs photo and video enforcement equipment to make Russian cities Andrey Gladyshev more comfortable by improving road safety General Director, Khiagda and quality. In 2019, PJSC Rostelecom remained a leader in deploying hardware for photo and video enforcement of traffic rules and ensuring secure data transfer from these installations.

206 207 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

creating business value (customers and busi- Central Asia. The Company’s key clients in- OPERATORS ness impact) while Rostelecom takes care of clude Chinese, Japanese and other global Smart Wells for PJSC LUKOIL areas such as the operators’ network infra- telecoms operators. In 2019, Rostelecom and LUKOIL completed a pilot project to monitor and structure installation and operation. In 2019, control oil and gas equipment remotely. The newly developed IT solution was the project was taken to a new quality lev- NaaS project deployed on the Aspinskoye field in the Perm Territory. The oil company uses el, gaining strategic importance for Rostele- NaaS (Network as a Service) can deliver sig- 2.1 a range of data from hard-to-reach production facilities to monitor and control com Group. nals to locations as far as 20 km away from RUB billion equipment remotely. is the total revenues generated As the largest infrastructure integrator, Ros- The project provides operation, maintenance, existing base stations of mobile operators. The project will promote sustainable development and efficient use of natural by O2O business in 2019 with some telecom sees its mission in building trans- recovery and repair services for mobile in- Rostelecom offers mobile operators its mobile resources. 161 thousand km of fiber lines and parent and mutually beneficial relationships frastructure and FOCLs of telecoms opera- phone repeaters to boost mobile signals for 75 thousand base stations being with all B2O market players, thus promoting tors as well as survey, design, construction improved coverage of small locations using operated by the company the sustainable development of business and and installation (construction of FOCLs, base the Company’s fibre channels and all other overall economy’s growth. By leveraging its stations and towers, undergrounding), com- requisite infrastructure. In 2019, Rostelecom boosted its profile as an infrastructure oper- “We were set an ambitious, non-trivial took over everything that had to do with extensive experience and range of innova- munications network upgrades and develop- ator by launching NaaS services in the Vol- task of setting up data acquisition infrastructure, sensors, data acquisition tive solutions and products, today the Com- ment, expansion of mobile operator coverage ga Region jointly with MegaFon. A pilot proj- from facilities in remote areas with and security.” pany can offer the industry turn-key services (ADAS), maintenance of non-core infrastruc- ect to bring mobile connectivity to Morskoy no GSM coverage and do it without for telecoms infrastructure installation, de- ture (power backup) and other services. in the Yeysk District was completed through major capital investment and using velopment and maintenance. Regional op- The project covers Rostelecom’s entire foot- partnerships with MTS and Huawei. Rostele- Russian equipment. We also had to erators which have been increasingly active print, with contracts signed with all Big Four com NaaS offering not only drives business 3 enable remote process control. The recently need capabilities and technologi- operators (MTS, Beeline, MegaFon and Tele2 Tbps cal solutions for effective operation and de- growth but also makes communications ser- is the total available bandwidth of project allowed the oil company’s staff Sergey Gusev Russia) and other telecoms operators. velopment of their own telecoms infrastruc- vices accessible to citizens in the most re- Transit Europe-Asia (TEA) fiber-optic to focus on operations, production and Vice President of PJSC Rostelecom’s Ural An M2M solution providing direct interface ture locally. Rostelecom is willing to take on mote parts of the country. cable route (growth by 350 Gbps in sales while we as a telecoms operator Macroregional Branch between a customer’s incident logging and these tasks and share its existing develop- 2019). Over 60% of the capacity has management system and Rostelecom’s sys- ments which may involve engaging its part- been already ordered by customers. tems was deployed in 2019. ners leading the industry in their respective fields. As a national telecoms operator, we Expanding transit backbone are already constructing and maintaining fi- infrastructure bre-optic networks not only for the Big Four Rostelecom’s infrastructure has connected Weight and dimension compliance operators but also for regional players under Asia and Europe to transfer all types of traffic In 2019, we continued the implementation of the Operator to Operators (О2О) project. During 2019, Rostelecom completed for over a decade. The expansion of backbone regional weight and dimension compliance 8 investment projects for weight and In 2019, revenue in the B2O segment re- networks enables us to access internation- projects rolling out a solution which com- dimension compliance on regional mained stable at RUB 55.1 billion, with the al markets and expand our geographic foot- prises automatic weigh stations, photo and roads: 80 hardware/software systems segment’s share of total revenue at 16%. print. Rostelecom is traditionally the leading video enforcement cameras, an information for weight and dimension measurement wholesale broadband provider for CIS oper- system for issuing special permits, a moni- O2O project without slowing traffic were installed ators (in Kazakhstan, Turkmenistan and Uz- toring centre and a data processing and stor- in 18 Russian regions. The O2O project is an infrastructure initiative bekistan), with the Company accounting for age centre. The projects are part of the na- focused primarily on offering a new operating over 50% of traffic in the networks of -op tional project Safe and High-Quality Roads. model enabling operators to focus more on erators active in major CIS countries across

208 209 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

6.3. Safe User Environment

During the year, the Cyber Security Cen- tre provided protection services for over ROSTELECOM GROUP’S CYBER SECURITY SERVICES 20 national projects (for example, the Pub- lic Services Portal, elections, direct line with 103-1 Continuous improvement of infor- an undisputed leader in the market for infor- We attach great importance to the cyber se- the President, Universiade 2019, Basic/Uni- mation security is one of our top priorities. mation security services leveraging superi- curity of own products, services and infra- fied State Examination, etc.). We implement IT security is becoming a growing concern or technological and managerial resources structure as well as national projects in which a comprehensive package of measures for as our customers’ needs for data protec- and offering its customers a broad range of we participate. As a cyber security expert, we each project we undertake to protect. In Our subsidiary Rostelecom-Solar is Rus- tion and information confidentiality grow information protection services. In this way offer customers a wide range of cyber secu- 2019, the Centre carried out exercises to test sia’s largest cyber security centre and pro- with each passing year. New technology de- we contribute to improved security of the rity services to better protect their life and stable operation of the internet in the Rus- vider of information security services. The velopments and innovations are needed to Russian segment of the internet. work against cyber threats. sian Federation. Content filtering has been centre provides its services to over 100 counter threats. Rostelecom Group remains implemented in Rostelecom’s network across top Russian companies and organisations, all Russian regions under the Digital Econo- including federal agencies, regional gov- In 2019, Rostelecom’s solution for my. Unified Data Transport Network project. ernments, financial institutions and ener- information security won a Runet CYBER SECURITY AT ROSTELECOM Also in 2019, the Centre specialists spoke gy companies. Rostelecom-Solar has dou- Award 2019. Solar appScreener won at OSCE and UN summits as members of bled the range of protection technologies the award in the Economics and Russia’s Foreign Ministry delegation and used in its services. Due to its growing cus- Business category for its contribution participated in other international confer- tomer base and wider geographic footprint to Runet users’ data protection and ences as speakers. The Centre also staged of its services, Rostelecom-Solar opened the overall security of the Russian the first corporate cyber security champi- an office in Nizhny Novgorod, hosting first segment of the internet. onship for Rostelecom employees, held to and second line cyber attack monitoring 103-2 PJSC Rostelecom’s information se- Cyber Security and Protection Centre of Strategy for 2019–2022 the WorldSkills standards. specialists. curity activities are governed by high-level PJSC Rostelecom corporate documents, while specific actions In 2019, PJSC Rostelecom’s Cyber Security was approved in 2019 of persons with overall responsibility for in- and Protection Centre, one of Russia’s larg- for the Centre for formation security are guided by individual est corporate cyber security centres with regulations and guidelines. Information se- a wide range of capabilities, continued im- Cyber Security and curity activities are coordinated by special- proving the cyber security of Rostelecom’s in- Protection ised commissions, committees and execu- frastructure, services and products as well as tive bodies with duly formalised mandates. the national projects in which we participate. PJSC Rostelecom’s key documents covering At the year end, the Cyber Security Centre information security: employed more than 115 experts.

1. PJSC Rostelecom’s Information Security 418-1 The Cyber Security Centre moni- Policy — this policy and the regulations it tors cyber threats and responds to all de- references govern all information security tected incidents round the clock. The num- matters in the Company. ber of detected information security incidents 2. Privacy Policy — the document (along with grew by 21% to 4,346 during the year (from the regulations it references) establishing 3,597 in 2018). The Centre responded to all the policies and procedures for handling incidents in line with the information secu- personal data in the Company. rity incident response guidelines developed 3. Information Security Policy for Critical and maintained by the Centre. In 2019, per- Information Infrastructures — this formance against service level agreements policy and the regulations it references (SLAs) for information security incident res- govern all matters related to ensuring olution was 99.94%. the information security of critical infrastructures in the Company.

210 211 ROSTELECOM'S SUSTAINABILITY REPORT 2019 6. OUR CUSTOMERS

Another highlight of the year was the estab- Protection of Russia’s critical IT Also in 2019, the Sozvezdiye educational cen- Growth of cybersecurity services in 2019 lishment of a centre of excellence in access infrastructures tre hosted the #Cloud27 cyber security train- control systems within Rostelecom’s organisa- In 2019, Rostelecom carried out 15 large-scale ing. Partnership agreements were signed with tional structure. At present, the centre boasts projects to protect critical IT infrastructure eight leading Russian universities. Russia’s largest (over 80 people) and most and connect oil and gas, power, fuel and en- During the year, we were also strongly fo- experienced team of experts in access con- ergy sector organisations and executive au- cused on information security and digital lit- trol systems. The centre’s services cover the в thorities to the State System for Detecting, eracy programmes for the secondary edu- 2.4x 1.1 №1 full cycle of building an access control sys- Preventing, and Mitigating Computer Attacks cation system: service sales growth million attacks were thwarted on the Russian market of cryptographic tem, from a diagnostic to technical support (GosSOPKA). The Company provided its cus- • A cooperation agreement was signed with protection of communications circuits using an array of programmes. Solar inRights, tomers with information resource protection the Technology Park of MIREA — Russian our proprietary access control and adminis- for the government and businesses in accordance with Federal Law No. 187-FZ Technological University tration platform, enables the centre to un- On the Security of Critical Information Infra- A cooperation agreement was signed with dertake import substitution projects replac- • structure of the Russian Federation, dated Quantoriums. For more details see the Our ing foreign-made systems. 26 July 2017, setting up corporate and gov- Country section. During the year, our information security solu- ernmental GosSOPKA centres and providing An all-Russian information security compe- Russia’s first Cyber Security Lab tions and services were used across all sec- connections to the GosSOPKA centres us- 232 ~30% was set up to undertake large-scale tition for school students was held by the tors of the Russian economy: ing a service-based model, i.e. through the Russian banks are connected of Solar appScreener service sales research of technological security Kruzhok movement of the National Technol- • Cyber security of federal digital transfor- Rostelecom-Solar cyber threat monitoring to the Unified Biometric System were on export account of industrial networks ogy Initiative. mation projects of ministries and other and response centre. using secure communications circuits government agencies as well as cyber protection of digital infrastructures of a Cyber security as part of our social number of regional executive authorities responsibility • Projects for financial, retail, food industry, Rostelecom Group attaches considerable im- IT and public sector organisations to as- portance to information security education: sess the maturity of cyber security of the • Products added to the information security service range we develop educational programmes to im- organisation’s information resources and prove cyber security awareness, engage with their vulnerability to internal and external the younger generation, support young tal- intruders ent, among many other things. • Projects for energy companies to protect In 2019, the Sirius educational centre hosted them against internal threats and monitor Russia’s first cyber security educational pro- and respond to cyber attacks gramme for students — Cyberchallenge: Next • Protection of government organisations, Level, launched by Talent and Success edu- Solar MSS — Russia’s big- Solar Dozor 7 — security Solar webProxy — a secure Qualys-based service to healthcare, educational and agricultural or- cational foundation and sponsored by Rost- gest ecosystem of cyber solution which prevents web gateway control network infrastruc- ganisations against multiple cyber threats elecom and its subsidiary Rostelecom-Solar. security services to protect leaks of sensitive information ture vulnerabilities in the • Projects for financial institutions to protect The programme involves top-performing stu- Russian companies against through its innovative user Russian cloud environment them against cyber crime and money theft dents from Russian universities in the most cyber threats behaviour analytics feature via their information systems important R&D projects of Russian technol- • Over 30% of top-50 Russian banks were ogy champions. For more details on the Sir- provided with a secure connection to the ius educational centre see the Our Coun- Unified Biometric System. try section.

Origin Event Inspection service protecting customers’ web resources from DDoS attacks at the applications level

212 213 SUSTAINABILITY REPORT The dividend amount 2019 per share

Shareholders made use of online voting at general shareholders meetings 1

APPENDICES

1 In terms of number of shares ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Appendices

About the Report

102-50 102-51 102-52 102-54 • AA1000 Stakeholder Engagement Stan- nications Department and involved all the Report structure • Provision of quality, affordable and safe the “Company”), its macroregional branches dard (SES) products and services Rostelecom Group’s Sustain- Group’s key business units. The Sustainabil- (MRFs), subsidiaries and affiliates. ability Report 2019 (the Report) • UN’s Global Compact Communication on ity Report is available to stakeholders in Rus- The Report uses references to PJSC Rost- In the 2019 Report, we present a fuller view of is our ninth report representing Progress (CoP) Policy sian and English in print form, as well as in elecom’s Annual Report 2019 and corporate Rostelecom Group’s activities and attempt to our sustainability initiatives from 1 January • ISO 26000:2010, Guidance on social electronic and interactive formats on PJSC website, which makes the Report more infor- align the sustainability reporting boundaries 2 2019 to 31 December 2019 and addressing responsibility. Rostelecom’s corporate website . mative and easier to read. with Rostelecom’s consolidated financial re- 3 a diverse range of stakeholders. It covers Since 2017, the Company has been reporting There were some changes in disclosure of porting . The 2019 Report covers the most important events that occurred after the re- its contribution to the United Nation’s Sustain- several topics in 2019. This is due to sever- material impacts of subsidiaries and affiliates porting period but are closely connected able Development Goals (UN SDGs) outlined al factors: on the Group’s economic, environmental and to it, as well as Rostelecom Group’s plans 102-48 102-49 social performance. in Transforming our World: The 2030 Agen- The aim of this Report is • Changes in the sustainability context in in the medium term. da for Sustainable Development that was ad- to provide stakeholders with material infor- which the Company operates, particularly mation on the economic, social and envi- We adhere to an annual reporting cycle, opted in 2015. This approach was incorpo- due to the COVID-19 pandemic that influ- The Company’s legal address: with the previous Report issued in 2019 fol- rated in this Report as well. For more details ronmental aspects of Rostelecom Group’s enced the global community and economy 15 Dostoevskogo St., Saint Petersburg, lowing the reporting year 2018. For other see the We Are Rostelecom, Our Sustainabil- operations, including the description of the at the end of 2019 and in the first half of 191002, Russian Federation. reports see https://www.company.rt.ru/en/. ity Story, Our Employees, Our Country, Our following focus areas: 2020 Environment and Our Customers sections. Rostelecom continuously improves its report- • Development strategy and business model • Stakeholders’ expectations established during the identification of material top- ing process and strives to present as detailed In 2018, we reviewed our sustainability goals • Corporate governance ics to cover in the Report, in particular, information as possible on its performance to and priorities, benchmarked them against the • Risk management during PJSC Rostelecom’s dialogue with all stakeholders. The Report has been pre- UN SDGs and prioritised the list of SDGs to • Supply chain management and supplier stakeholders to discuss the concept of pared in accordance with the new Sustain- identify the first priority areas where Rostele- engagement the Sustainability Report 2019, as well as ability Reporting Standards of the Global Re- com Group could contribute the most: Goals following the Opinion of the RSPP Board Business ethics, human rights and porting Initiative (the GRI Standards: Core 9, 8, 4, 11 and 10, while Goals 17, 16, 12, 13 and • anti-corruption • Enhancement of the applied non-financial Option). While preparing the 2019 Report, 15 were classified as second priority SDGs. reporting standards Sustainability management system Rostelecom took into account key provisions In 2019, under each first priority SDG, Rostele- • • Disclosure of Rostelecom Group’s con- of Directive 2014/95/EU of the European com identified the most significant SDG tar- • Stakeholder engagement tribution to the UN SDGs in line with in- Parliament as regards disclosure of non-fi- gets, to the achievement of which the Compa- • HR management, employee development, ternational best practices, including the nancial and diversity information by certain ny can make a particularly significant positive training and engagement Guidance by UNCTAD large undertakings and groups1, in particu- or negative contribution. With this approach, • Occupational health and safety lar, methodology and information disclosure we can assess the progress on achieving the Report boundaries Support and development of local com- indicators. The Report also complies with: SDGs more effectively and manage our efforts • munities in the Company’s regions of 102-46 The Report is published by Rostele- some United Nations Conference on Trade to boost the Group’s performance. • 1 Directive 2014/95/EU on disclosure of non- operation com Group (the “Group”, “we”) and discloses 3 For more details on the list of material and Development’s (UNCTAD) core indica- financial and diversity information. The 2019 Report preparation was coordinat- the most material sustainability performance subsidiaries included in the consolidated tors for entity reporting on the contribution 2 For more details see www.company.rt.ru/social/ • Environmental protection and energy ef- financial statements see PJSC Rostelecom’s ed by PJSC Rostelecom’s External Commu- towards the implementation of the SDGs report. ficiency improvement indicators of PJSC Rostelecom (“Rostelecom”, Annual Report 2019.

216 217 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Reporting principles • the analysis of RSPP’s recommenda- Key material topics: Internal procedures to ensure quality tions received as part of the public While determining the Report’s content, Ros- • Contribution to the digital economy and accuracy of the report assurance of the Company’s 2018 Sus- telecom Group was guided by the GRI Stan- Rostelecom Group has an internal reporting tainability Report as regards material • Contribution to societal development dards. An appendix to the Report compris- system and business units responsible for the topics to disclose in future reports. • Improving the quality of life in the regions es a GRI compliance table which contains of operation collection and provision of consolidated data relevant information on the GRI disclosures. In 2019, in addition to the above-mentioned on every aspect of the Group’s key sustain- stakeholder engagement tools, PJSC Rost- • Responsible business practice and The comments and recommendations of ability dimensions. Their scope of responsi- elecom held a dialogue with stakeholders to anti-corruption the RSPP Board on Non-Financial Report- bility includes the accuracy of both text and summarise the 2018–2019 reporting cam- • Creating an attractive and safe working ing, which had been received following the quantitative information. paign and discuss the concept of the Sus- environment assurance of the 2018 Report, were consid- tainability Report 2019. The follow-up com- Rollout of innovations Public assurance of the report ered during the preparation of the Report. • ments and proposals were considered when • Higher accessibility of services. 102-56 The document was assured by an preparing this Report. For more details see Material topics independent party — the RSPP Board on the Stakeholder Engagement subsection of Principles for defining report quality Non-Financial Reporting. Our Sustainability Story. In the future, we plan The quality of the Report is assured through on improving our approach to incorporating We will take into account RSPP recommen- applying the key principles of the GRI Stan- the stakeholders’ opinions in reporting. dations and comments received during the dards: public assurance of the 2019 Report and in- Material topics 102-43 102-47 When defining material top- • Balance. The Report provides unbiased corporate them into our future reports. ics to cover, we were guided by the GRI Stan- • Contribution to societal development information both on the positive and neg- dards and: • Contribution to the digital economy ative aspects of the Group’s performance Disclaimer • made a list of potential material topics con- • Improving the quality of life in the regions • Comparability. The Report comprises the The Report includes estimates or for- sidering the telecommunications industry of operation Company’s indicators over time, which ward-looking statements related to metrics specifics, based on the GRI methodology allows stakeholders to assess all perfor- that may be influenced by a range of factors • Effective stakeholder dialogue mance indicators important for them • assessed the materiality topics based on beyond our control, such as politics, econ- Supply chain the analysis of the internal and external • • Accuracy. All material topics are disclosed omy and law. The COVID-19 pandemic that environment, including: • Employee development in detail so that the stakeholders can eval- started in late 2019 and continued in 2020, uate the Group’s performance. All data is • the analysis of internal environment — • Creating an attractive and safe working became an unexpected challenge and pro- officially recognised by Rostelecom Group monitoring regulations on multiple environment duced a significant economic impact on many and is confirmed by internal and publicly aspects of operations; interviewing countries of the world. As at the time of re- • Responsible business practice and available documents representatives of key business units anti-corruption porting, its duration and consequences re- responsible for sustainability • Clarity. The Report is written in a manner main unknown and may influence the Group’s • Human rights that is understandable and accessible to • the analysis of external environment — forecasts and plans. • Philanthropy the majority of stakeholders and comprises reviewing sustainability reports of Rus- Rostelecom Group thus informs that estimates Rollout of innovations a glossary sian and international telecommuni- • or forward-looking statements in this Report cations companies; analysing the Reliability. All data to be included in the • Infrastructure development and upgrade • are not guarantees of future performance. media space (monitoring the cover- Report is provided by the Group’s core Higher quality of services age of relevant topics by mass media); • business units, and its accuracy is checked. analysing the stakeholders’ opinions • Higher accessibility of services The Report has links to data sources received following the publication of • Safety of services • Timeliness. The Report contains informa- the Company’s sustainability reports Reducing the environmental footprint tion for 2019 and is published in 2020 during meetings and via e-mail ad- • dresses and phone numbers specified • Energy efficiency in Contact Details • Climate action

218 219 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Glossary

3PL (Third Party Logistics services or a variety of B2G COVID-19 Coronavirus disease 2019 EMS Environmental management Logistics) services from delivery and order Business-to-Government system labelling to order management and tracking, warehouse and transport logistics B2O Business-to-Operator CPFR Collaborative Planning, Fore- eNPS (Employee A method to measure employ- casting and Replenishment, Net Promoter ee loyalty a technology aimed at uniting Score) 5G The fifth generation of mobile the efforts of counterparties in technology achieving higher the supply chain and integrating BDD Bridging the Digital Divide ESG Environmental and social fac- their marketing and logistics bandwidths than 4G, driving project tors and corporate governance business processes to meet greater mobile availability, practices extremely reliable large-scale customer needs networking of devices, lower latencies, bandwidths of Big Data Large amounts of varied struc- F FCF Free cash flow 1–2 Gbps, and lower energy tured and unstructured data CPI Consumer price index consumption by batteries. 5G efficiently processed by hor- adoption will drive the expan- izontally scaled software tools sion of the Internet of Things FOCL Fibre-optic communications line Cyberbullying A form of psychological abuse, Biometrics Data on a person’s biometric humiliation and harassment on features that are unique and A ACRA Analytical Credit Rating Agency social networks and other in- stable enough to be used as ternet resources identifiers FTTB (fibre-to- Broadband network architec- the building)/ ture using optical fibre to pro- FTTx vide all or part of the local loop D Data centre Data processing centre AGM Annual General Shareholders’ Blended learning A concept of education that used for last mile telecommu- Meeting combines traditional classroom nications methods with online training

Fulfilment The complete process of de- DDoS (Distrib- An attempt to make an online ANO Autonomous non-commer- Broadband Broadband internet access livering an order placed by an uted Denial of service unavailable by over- cial organisation internal or external customer, Service) whelming it with traffic from from acceptance to delivery multiple sources to the customer

Anti-phishing Phishing protection C CAPEX Capital expenditures for acquiring or upgrading non-current Digital Economy The Digital Economy of the G Gamification Application of gaming ap- assets Russian Federation programme proaches that are widely used approved by the Russian Gov- in computer games in non-game ernment’s Decree dated 28 July contexts to engage people in B B2B Business-to-Business Corporate social A concept according to which 2017 developing applied solutions, responsibility organisations take into account using products and services and the interests of society, taking strengthen customer loyalty responsibility for the impact of E Employee Emotional and intellectual com- their activities on companies engagement mitment of employees to go B2C and other public stakeholders above and beyond in doing GHG Greenhouse gases Business-to-Consumer their job

220 221 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

GosSOPKA State System for Detecting, Information So- Russian state programme to L LED Light-emitting diode OTT (Over the Delivery of video signals from Preventing, and Mitigating ciety, 2011–2020 improve life quality, ensure the Top) a content provider directly to Computer Attacks national competitiveness, devel- a user’s device over the internet op the economic, social, politic bypassing an operator and cultural spheres of life and GPON Gigabit Passive Optical Network enhance the state management M MRF A macroregional branch of PJSC system using IT and telecom- Rostelecom Outsourcing An agreement in which one or- munications technologies ganisation contracts another one, which has expertise in a need- GRI Standards The GRI Sustainability Reporting ed area, to be responsible for (The Global Re- Guidelines offer an international Integrated Busi- The automated planning and MVNO (Mobile A telecommunications operator certain types of operations or porting Initiative) standard for the preparation of ness Planning supply management process Virtual Network that does not own the mobile functions voluntary sustainability reports and IT solution Operator) network infrastructure over by organisations which it provides services to its customers under its own P P2P The transaction linking a pur- IoT (Internet of A global network of physical brand (Peer-to-Peer) chase and payment Hackathon An event in which software de- Things) devices (“things”) that are velopers collaborate to solve connected to the internet, a problem equipped with sensors and N NaaS Network as a Service able to transfer data PaaS Platform as a service HAZID Risk assessment technique based on hazard identification IP Internet Protocol NFV (network Technologies enabling network function virtu- expansion without installing a lot Pay TV Subscription-based television HAZOP Risk assessment technique alisation)/SDN of equipment as well as fast services provided by both an- based on hazard and opera- (software-de- product launch to the market alogue and digital cable and IPTV A system through which tele- bility study fined network) satellite television, as well as via vision services are delivered digital terrestrial and internet using the internet protocol television NPS (Net Pro- An index reflecting consumer HR Human Resources suite over a packet-switched network such as a LAN or the moter Score) loyalty to a product or company internet (likelihood to recommend) and PBX Private Branch Exchange used to gauge repurchase intent

HRM Human resource management ITU International Telecommunica- tion Union O O2O Rostelecom’s project, Operator to Operators, aimed to offer Phishing A type of fraud which makes network infrastructure support, use of the internet to obtain HSE Health, safety and environment operation and development sensitive user data — logins IVS Intelligent video surveillance services to other operators and passwords

PJSC Public Joint Stock Company OHSMS Occupational health and safety I IaaS Infrastructure as a service J JV Joint venture management system

PVC Polyvinyl chloride ICT Information and communica- Onboarding The process of integrating a new K KPIs Key performance indicators tions technology employee into the organisation

222 223 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

R R&D Research and development Smart Home A high-tech solution for in- UNCTAD United Nations Conference on WSIS UN World Summit on the In- tegrating diverse household Trade and Development formation Society systems under artificial intelligence control

Regions of Regions where the organisation USHIS Unified State Healthcare In- WSR Global movement that seeks to operation has production facilities and Smart TV An advanced television set with formation System (WORLDSKILLS enhance talent training standards key personnel integrated internet and digital RUSSIA) interactive feature RMS Risk management system V VAS Value-added services SMEs Small and medium-sized enterprises

RSPP Russian Union of Industrialists and Entrepreneurs VIRTUAL PBX A service which allows IP telephony operators to replace Soft skills(flexi- A cluster of non-technical traditional on-premise telephony ble skills) abilities that are important for hardware one’s career as they are used S S&OP (Sales A process involving sales and by employees to successfully and Operations operation planning and a set of engage in a working process and Planning) monthly measures to implement enhance their labour productivity VMI (VEN- A range of business approaches the Company’s strategic plan DOR-MANAGED and models where the buyer into practice INVENTORY) provides a certain information Stakeholder An individual, group or entity to a vendor and the vendor SaaS Software as a service that can be affected by the takes full responsibility for main- Company and/or who can affect taining an agreed inventory of the Company the material at the warehouse or at the buyer's consumption location SCM Supply chain management Subscriber An individual or an entity with a valid contract who has used any service entailing data traffic, VPN/IP VPN A virtual private network for a subscription fee or a service (VIRTUAL PRI- expanding a dedicated network SDN (Soft- An approach facilitating com- charge in the past six months VATE NETWORK) through a public network (the ware Defined puter network management internet), enabling desktops Network) to send and receive data via Sustainability Societal development that meets a shared or public network as if the needs of the present gen- the desktop was directly con- Agreement setting out quality SLA (Ser- erations without compromising nected to the private network, standards for IT services pro- vice Level the ability of future generations while taking advantage of the vided to business Agreement) to meet their own needs public network functionality, security policy and management capabilities Smart City A project aimed at making Rus- sian cities more competitive, U UN SDG 17 Goals and 169 targets that improving the efficiency of city all members of the United Na- management and creating a safe tions (193 countries) agreed W WI-FI Wireless local area networking and comfortable environment to achieve by 2030 (WLAN) of devices for urban residents

224 225 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Membership of Associations Awards

Sustainability and reporting awards In 2019, Rostelecom won the Change Man- Environmental protection and energy Name Date of admission Type of membership PJSC Rostelecom’s performance placed agement. Visionaries national annual award efficiency awards Association for Educational, Scientific and Business Collaboration 1992 Member the Company among the leaders of sus- in the Sustainable Development Strategy Rostelecom was named the winner of the between Educational Institutions, Businesses and Organisations in Reporting category. 102-13 the Telecommunications Industry Sodeystviye tainable development indices compiled by annual Champions of Good Deeds com- the Russian Union of Industrialists and En- Rostelecom’s Annual Report 2018 was petition in the Environment category for Regional Commonwealth in the Field of Communications 1997 Member trepreneurs (RSPP) (Responsibility & Trans- awarded in the Best Corporate Governance its support of the Clean Vuoksa volunteer parency and Sustainability Vector) for the Disclosure and the Best Strategy and Invest- initiative. The award ceremony was held in International Telecommunication Union 1999 Member of Telecommunication Standardisation Sector third consecutive year. ment Story categories at the 22nd Annu- early December as part of the 8th Moscow Rostelecom ranked among the Top 10 com- al Reports Contest organised by the Mos- International Forum Corporate Volunteering: Union of InfoComm Design Engineers ProjektSvyazTelekom 2011 Member panies in the Corporate Philanthropy Lead- cow Exchange. Business and Society. ers in the Sustainable Development Para- The Company’s project Forest Fire Monitor- Russian Institute of Directors 2011 Member Human capital development awards digm 2019 project. ing enabling early fire detection and warn- Innovation and R&D Directors Club 2012 Member Rostelecom’s achievements in HR manage- In 2019, PJSC Rostelecom’s projects were ing and thus helping to preserve the Kama ment and development were recognised National Association of Procurement Institutes 2012 Member nominated for the Award of the World Sum- River Region and Yamal forests won the top at the 20th Russia and CIS HR Directors mit on the Information Society (WSIS) of the award of the corporate project contest Peo- National Radio Association 2012 Member Summit. Rostelecom received the Crystal International Telecommunication Union: the ple Investor 2019 in the Environmental Effi- Pyramid 2019 award in three categories2. Association of Electronic Document Communications 2013 Member ABC of the Internet project was announced ciency category. Rostelecom’s HR management team was a WSIS Prizes 2020 Champion by the In- Media Communication Union 2014 Member recognised by the expert community as HR Product and service quality awards ternational Expert Group, and the Growth Team of the Year and awarded the Grand Prix project was included in the International Rostelecom was named Russia’s leading pro- Association of Cable TV of Russia 2014 Member of the Crystal Pyramid 2019. The Compa- Telecommunication Union’s database as an vider of cryptographic solutions for govern- ny’s IT Transformation programme became International Cable Protection Committee 2014 Member example of the WSIS best practices. ment and corporate customers’ communi- the winner in the Organisational and Cul- cations channels. Anti-Corruption Charter of the Russian Business 2014 Signatory Rostelecom was named the Philanthro- ture Transformation 2019 category, and the In 2019, Rostelecom’s proprietary informa- pist of the Year in Kuzbass. The Compa- predictive analytics tools used by Rostele- National Association of Contact Centres 2015 Member tion security solution won a Runet Award ny was recognised as the leader in corpo- com in talent management were the Best for the first time: Solar appScreener won Industrial Internet Consortium 2015 Member rate philanthropy among the organisations HR Tech Solution 2019. based in Kemerovo. the award in the Economics and Business Russian Association for Electronic Communications 2015 Member The Company’s shared services centre won category for its contribution to Runet us- PJSC Rostelecom’s Sustainability Report the WOW!HR 2019 international business ers’ data protection and the overall secu- Russian Association of Industrial Internet 2016 Member 2018 won the international MarCom Award1 3 HR management award . The Company rity of the Russian segment of the internet. by the American Association of Market- presented a gamification project to involve Construction Association (Association of Self-Regulatory 2017 Member The New Year’s Ball of Fortune online game, Organisations) ing and Communication Professionals. The employees in the innovation process, which created for our loyalty programme mem- Company was named the Platinum Winner became the winner of the PLAY HARD gam- Autonomous Non-Commercial Organisation Digital Economy 2017 Member in the Print Media — Annual Report category. ification category. Russian Union of Industrialists and Entrepreneurs 2017 Member

FinTech Association 2017 Member

Internet of Things Association 2018 Member

TM Forum 2018 Member

ITW Global Leaders’ Forum 2019 Member

1 Association of Big Data Market Participants 2019 Member The winners were announced on 22 October 2019. 2 The Crystal Pyramid award is given to teams and individual specialists for achievements in HR management that drive the development of HR management in Russia and the CIS. SRO Association CENTRIZYSKANIYA 2019 Member 3 WOW!HR is the leading business award in employee development and internal communication technologies. The winners are determined following a conference where nominees present their projects to the public.

226 227 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

bers, has won us the top Gamification of the Rostelecom won the Consumer Confidence plementation of the Anti-Corruption Char- Year award from Loyalty Awards Russia 2019. 2019 in Vladimir, the 8th regional contest, ter of the Russian Business. Rostelecom won the Tula Brand 2019 award in the Digital Service, Solution and Tele- PJSC Rostelecom is a permanent top-level by popular vote, in the Communications, phony Provider category as the best high- resident of the National Procurement Trans- Telecommunications and Cloud Services tech communications and telecoms com- parency Ranking, at 5th place in 2019. category. pany in the region.

Rostelecom’s Kaluga Branch won the Brand Responsible business practice awards of the Year 2019 regional contest in the Ser- 7++ (advanced corporate governance prac- vice and Trade Sector category. tice) — corporate governance rating as- Rostelecom also won the Brand of the Year signed by the Russian Institute of Directors. 2019 regional contest of popular consum- In 2019, Rostelecom ranked first among tele- er brands in Ulyanovsk, in the Leadership in coms operators in the Corporate Transpar- the Telecommunications Industry category. ency Ranking of the Russian Regional Inte- Rostelecom’s Smart Home integrated solu- grated Reporting Network. tion in Novosibirsk was awarded the Novo- The Joint Committee for the Implementa- sibirsk Brand quality mark. tion of the Anti-Corruption Charter of the PJSC Rostelecom received the Orel Busi- Russian Business issued to Rostelecom the ness 2019 award in the Telecommunica- highest level (score 5.0) Certificate of Pub- tions category. lic Endorsement of the Results of the Im-

1 Rating was assigned in March 2020.

228 229 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Key Performance Indicators

ENVIRONMENT

Rostelecom Group’s payments to water suppliers, RUB thousand Rostelecom Group’s total environmental expenditures and investment, RUB thousand

2016 2017 2018 2019 № Item 2016 2017 2018 2019

7 Fees for emission inventory, the development of emission limits, obtaining air pollution 29,325.33 15,154.48 12,827.00 9,874.55 Cold water 60,748.74 57,210.45 57,806.48 54,630.02 permits

Hot water 8,176.35 7,680.40 8,277.52 7,168.02 8 Fees for inventory of waste sources, the development of draft waste generation rates 10,958.23 10,175.00 2,151.00 and disposal limits, obtaining approvals for waste generation rates and disposal limits Total centralised water supply costs 68,925.09 64,890.84 66,084.00 61,798.04 9 Expenses related to obtaining subsoil licences (for wells) (excluding duties) - 856.51 1,206.80 1,086.00

10 Employee training and upskilling 1,489.79 2,351.71 1,566.80 1,575.04

11 Expenses related to setting up separate waste collection (procurement of containers, - 879.4 657.00 4,012.86 305-7 Other significant air emissions Reclamation of disturbed land setting waste collection sites, waste sorting, etc.) of Rostelecom Group, tonnes by Rostelecom Group 12 Expenditures on area improvements and urban greening 2,188.35 1,642.62 2,133.50 2,496.13 2019 2016 2017 2018 2019 13 Expenditures on air pollution control and climate change mitigation (filter installation 2,333.27 2,425.04 5,753.10 5,736.00 and repairs, air sampling and analysis, developing adverse weather conditions action Persistent organic pollutants (POP) 0 Expenses related to reclamation, 0 150 0 0 plans, etc.) RUB thousand Volatile organic compounds (VOC) 35.4 14 Expenditures on surface water and groundwater pollution control, and wastewater 3,262.84 2,465.74 1,507.30 2,189.08 Reclaimed land area, sq m 0 312 0 0 treatment (renovation and refurbishment of water treatment facilities, water well Hazardous air pollutants (HAP) 42.8 reconstruction and liquidation, cleaning of river beds, setting up sanitary protection zones around water bodies and wells, etc.) Particulate matter (PM), excluding soot 175.2 15 Expenditures on soil contamination control (sampling, decontamination, reclamation, - - 69.00 88.95 etc.) Total 253.5 16 Expenses on wastewater laboratory testing - 3,139.77 2,334.30 2,038.58

17 Expenses on groundwater laboratory testing - - 1,997.10 2,165.23

Rostelecom Group’s total environmental expenditures and investment, RUB thousand 18 Expenses related to the development and approvals of draft projects to establish - - 1,746.90 15,688.77 sanitary protection and source water protection zones № Item 2016 2017 2018 2019 19 Fees for official registration of facilities affecting the environment - - 241.7 910.43

1 Landfill disposal fees for household solid waste 83,774.71 70,803.62 88,685.60 85,462.26 20 Fees for the development of environmental operational control programmes and - - 4,147.00 5,296.21 progress reports 2 Disposal/neutralisation fees for non-landfill wastes 9,772.59 11,815.94 10,489.70 8,421.95 21 Fees for waste certification - - 64.8 712.53 3 Environmental charges for air pollution 1,235.94 636.07 764.8 866.76 22 Noise measurements at the borders of a sanitary protection zone in line with the - - - 124.82 4 Environmental charges for waste landfill 32,546.79 18,956.10 10,412.70 7,500.32 monitoring programme

5 Third party fees for drafting an environmental charge declaration 185.00 593.02 514 .00 849.04 23 Other 6,731.40 1,430.79 763.6 292.8

6 Permit/license fees and duties - 1,398.10 1,428.50 61.7 Total 172,846.01 145,507.18 159,486.20 159,601.00

230 231 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

307-1 Monetary value of significant fines imposed on Rostelecom Group Energy consumption by Rostelecom Group for non-compliance with environmental laws and regulations, RUB thousand

2016 2017 2018 2019 Fuel and energy Unit of Consumption measurement

Monetary value 74 154 90 93 2016 2017 2018 2019

Gas (including gas condensate) thousand 38,317 30,540 27,208 23,226 cu m

Liquified petroleum gas (propane) l 1,266,922 1,123,053 1,087,580 866,569

Other indicators of Rostelecom Group’s performance Wood cu m 10,128 9,861 9,238 7,367

2016 2017 2018 2019 Renewable fuel consumption thousand kWh 26,239 25,560 24,197 18,558

For vehicles and mechanical equipment Length of business trips (air travel), km 26,477,657* 38,208,820 49,487,878 46,287,589 Gasoline l 24,991,425 23,873,014 27,730,666 34,497,168 Length of business trips (railway), km 6,782,138* 7,511,571 8,861,602 8,413,977 Diesel fuel l 4,105,650 4,027,284 3,762,341 3,765,624

Liquified petroleum gas (propane) l 1,266,922 1,123,053 1,087,580 866,569

* The 2016 data does not include subsidiaries and affiliates For energy generation

Natural gas thousand 38,317 30,540 27,208 23,226 cu m Paper consumption by Rostelecom Group, tonnes Coal t 12,364 10,011 10,695 10,846 Diesel fuel/oil l 4,518,874 4,508,234 4,194,507 3,887,378 2016 2017 2018 2019 Gasoline l 782,581 574,216 913,888 1,488,235 Paper consumption, tonnes n/a 1,367.518 1,567.516 1,672.000 Fuel briquettes t 485 475 503 231

Wood cu m 10,128 9,861 9,238 7,367

Total energy generation thousand kWh 319,805 297,245 218,397 200,972

Electricity generated thousand kWh 4,254 3,358 2,065 4,169

ENERGY EFFICIENCY Heating generated Gcal 271,325 252,697 186,012 169,220 Total energy consumption thousand kWh 3,411,839 2,999,429 2,854,350 2,771,121

by energy type

Energy consumption by Rostelecom Group Electricity consumption thousand kWh 1,685,223 1,397,559 1,344,116 1,335,164

Fuel and energy Unit of Consumption Heating and hot water consumption Gcal 1,484,623 1,377,361 1,298,568 1,234,700 measurement Electricity consumption per sq m of gross area thousand n/a 0.1674 0.1656 0.1615 2016 2017 2018 2019 kWh/sq m

Heating consumption per sq m of gross area Gcal/sq m n/a 0.1650 0.1599 0.1493

Total energy consumption by data centres thousand kWh 85,637 n/a n/a 144,601 Coal t 12,364 10,011 10,695 10,846 by type Diesel fuel/oil l 8,624,524 8,535,518 7,956,848 7,653,002 Average power usage effectiveness (PUE) ratio 1.637 n/a n/a 1.8 Gasoline l 25,774,006 24,447,230 28,644,554 35,985,403 Total electricity consumption by data centres thousand kWh 79,529 n/a n/a 126,608 Fuel briquettes t 485 475 503 231

232 233 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Energy consumption by Rostelecom Group 405-1 PJSC Rostelecom employees by category, %

Fuel and energy Unit of Consumption measurement Age Top managers Heads of functions Specialists Workers Other employees

2016 2017 2018 2019 Men Women Men Women Men Women Men Women Men Women

Total heating consumption by data centres Gcal 5,252 n/a n/a 15,471 2017 Total energy sold thousand kWh 36,547 49,758 17,974 12,963 Under 30 0.00 0.00 0.51 0.26 6.40 7.69 3.21 0.30 0.00 0.03 by type 31–49 0.09 0.02 4.06 2.24 13.37 19.44 10.01 0.87 0.00 0.05 Electricity sold thousand kWh 1,609 0 0 0 Over 50 0.02 0.01 2.26 0.81 8.76 9.88 8.87 0.81 0.00 0.03 Heating and hot water sold Gcal 30,041 42,785 15,455 11,146 Total 0.12 0.03 6.82 3.31 28.53 37.01 22.10 1.98 0.00 0.11 Cooling sold thousand kWh 0 0 0 0 2018 Steam sold thousand kWh 0 0 0 0 Under 30 0.00 0.00 0.51 0.28 6.74 7.33 2.93 0.22 0.00 0.02

Total energy purchased from external suppliers thousand kWh 3,128,581 2,751,943 2,653,927 2,583,112 31–49 0.11 0.03 4.26 2.42 14.23 19.17 9.56 0.70 0.00 0.05

by type Over 50 0.02 0.01 2.24 0.79 8.99 9.84 8.77 0.74 0.00 0.03

Electricity purchased from external suppliers thousand kWh 1,682,578 1,394,200 1,342,051 1,330,995 Total 0.14 0.04 7.01 3.49 29.96 36.34 21.27 1.66 0.00 0.10

Heating purchased from external suppliers Gcal 1,243,339 1,167,449 1,128,011 1,076,626 2019

Under 30 0.00 0.00 0.51 0.28 7.32 6.79 2.79 0.15 0.00 0.01

31–49 0.12 0.03 4.47 2.57 15.57 18.51 9.16 0.55 0.00 0.05

Over 50 0.03 0.01 2.17 0.78 9.24 9.74 8.47 0.66 0.00 0.03

Total 0.14 0.04 7.15 3.63 32.14 35.04 20.42 1.35 0.0 0.09

HR MANAGEMENT

405-1 PJSC Rostelecom employees by category, % PJSC Rostelecom employees by function, people

2016 2017 2018 2019 Age Top managers Heads of functions Specialists Workers Other employees

Technical team 89,611 83,037 79,904 79,914 Men Women Men Women Men Women Men Women Men Women

Commercial team 20,385 21,761 21,083 20,839 2016

Under 30 0.00 0.00 0.46 0.25 6.01 7.37 3.66 0.49 0.00 0.02 Administrative team 2,577 2,319 2,174 2,109

31–49 0.07 0.02 3.74 2.10 12.77 18.74 10.76 1.23 0.00 0.07 Other 15,396 14,189 14,542 16,664 Over 50 0.02 0.00 2.15 0.80 8.72 10.01 9.45 1.03 0.01 0.04 Total 127,969 121,306 117,703 119,526 Total 0.10 0.03 6.35 3.15 27.50 36.12 23.87 2.75 0.01 0.13

234 235 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

405-2 Ratios of entry level wage in PJSC Rostelecom by gender, % Rostelecom Group’s gender balance, % Employee turnover at Rostelecom Group, %

2016 2017 2018 2019 Share of women, % 2019 2019

Men Women Men Women Men Women Men Women All managers 37.84 Overall employee turnover 13.4

Top managers 52 48 53 47 51 49 51 49 Junior managers 39.50 Voluntary employee turnover 13.4

Managers 48 52 48 52 48 52 48 52 Top managers 26.32 Involuntary employee turnover 5.9 Specialists 51 49 51 49 50 50 50 50 Managers of revenue-generating units 79.36

Workers 52 48 52 48 52 48 52 48 IT managers 32.79

Total 42.33

HR MANAGEMENT AT ROSTELECOM GROUP Note: internal and external part-time employees are excluded from IN 2019 the 2019 consolidated data for Rostelecom Group but were included in the data for PJSC Rostelecom’s Sustainability Reports 2016–2018. Rostelecom Group’s new hires by age and gender, people

2019 Rostelecom Group’s average headcount by employment type, people Men Women Men Women Total Under 30 5,084 2,512 Indefinite contract 71,152 45,089 116,241 31–49 5,052 2,899 Fixed-term contract 3,426 7,213 10,639

Full-time 72,867 46,980 119,847 Over 50 1,569 762

Part-time 1,732 5,301 7,032

Under civil contracts 26,192

Rostelecom Group employees by category, %

Age 2019 Rostelecom Group employees by category, people* Rostelecom Group employees by function, people

Top managers Heads of functions Specialists Workers Other 2019 2019 employees

Specialists 77,118 Technical team 84,534 Men Women Men Women Men Women Men Women Men Women

Workers 38,548 Commercial team 34,332 Under 30 0.09 0.04 0.78 0.42 10.14 6.89 1.66 0.08 0.10 0.22 Heads of functions 13,692 Administrative team 3,187 31–49 1.89 0.38 7.21 2.43 21.82 15.49 6.45 0.43 0.27 0.45 Top managers 317 Other 14,557 Over 50 0.39 0.09 2.30 0.90 9.00 8.06 5.42 0.46 0.05 0.24 Other employees 130 Total 136,609 Total 129,805 Total 2.37 0.50 10.28 3.75 40.97 30.43 13.53 0.98 0.41 0.91

* Based on the headcount data.

236 237 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Rostelecom Against COVID-19

How we help to fight COVID-19

remote working policy for some employee Well-balanced and effective solutions im- existing customers. Rostelecom has also Mass Media to design new services for the categories is under development for after plemented by Rostelecom to keep customer introduced a 60-day test period for mo- Public Services Portal to help citizens trav- the COVID-19 pandemic. The initiative will business processes going have increased bile and virtual telephony for new custom- elling abroad to return to Russia. generate more attractive working conditions in value amidst the pandemic. ers. Home Office is a Virtual-PBX-enabled Rostelecom has established a federal hotline for staff and allow significant cost savings on We are offering our customers internet ac- service to support SMEs. The new offer- to help people during the COVID-19 pan- office rent and maintenance going forward. cess services, Virtual Private Networks (VPN), ing will enable entrepreneurs to maintain demic under the stopcoronavirus.rf project. efficient channels of communications with Our Corporate Online University continues secure remote access, virtual data centre Hotlines are especially important during employees, customers and partners, while its work, with its experts, including health- services and protection against DDoS at- the pandemic. All-Russia People’s Front, staying at home. care professionals, sharing online their ad- tacks to support remote access to their in- Roscongress Foundation and Rostelecom vice on safety precautions against the coro- formation resources. In particular, Russian The Company has also introduced a special have established #InThisTogether, a volun- navirus. Helicopters, employing a total of some 40 offer for landline phone subscribers who can teer hotline aimed to support senior and thousand people, has used Rostelecom’s apply for a payment extension at no extra reduced mobility citizens during the pan- Our customers and suppliers technical solutions to transition about 90% fee. Until the lockdown is released, there will demic and available in all Russian regions. Despite the COVID-19 pandemic, Rostele- of its management company’s staff to re- be no service suspension for overdue bills All people in need of assistance can call com has secured the resilience of the na- mote work. and the Company will restore service for 24/7 toll-free number 8 800 200 3411. All tional communications network by designing Rostelecom offers large enterprises a unique accounts suspended due to nonpayments. 8 800 calls are free from any Russian re- and implementing a range of organisational integrated solution for highly precise re- We have also introduced unlimited on-net gion. Volunteers help pay utility bills, take and technical measures to maintain stable mote body temperature screening of peo- calls to Tele2 Russia and Rostelecom mo- sick leave, as well as deliver food, medicine work of telecoms infrastructure. ple passing by based on thermal imaging biles. Landline calls to Tele2 Russia and and other essentials. The COVID-19 pandemic has proved a test munication, we use our intranet portal and For example, measures to upgrade and ex- cameras. This contactless highly precise Rostelecom (MVNO) mobiles are also free. A hotline informing the Great Patriotic for the entire world. As this Sustainability RT Life mobile app. pand the backbone and access networks solution can measure body temperature of War-disabled people and veterans, as wells Report 2019 was being prepared, the pan- Wink and Rostelecom’s IPTV subscribers At the same time, we need to maintain un- were taken by us in advance. In particular, up to 80 people per second at a time, min- as the Leningrad siege survivors of the ben- demic was still raging, and its impact on now have free access to a collection of interrupted operation of the telecommu- Rostelecom has upgraded and enhanced re- imising the risk of virus propagation across efits available to them at 8 800 200 7766 economies, society and our business is yet Russian movies, series, cartoons and edu- nications and IT infrastructure, ruling out liability of its core network and data trans- the enterprise. Stationary thermal imaging (toll-free) has been launched on 27 April to be fully assessed. In this challenging sit- cational content for children. Online con- remote work for some of our employees. mission network nodes across 61 facilities. cameras have already been installed by Al- 2020. Operators are giving details on how uation, Rostelecom Group is actively taking certs featuring top performers and musi- Rostelecom’s technicians continue con- As part of this programme, we have con- rosa, JSC Academician M.F. Reshetnev In- to apply for the Veteran tariff plan and are the necessary steps to secure its business cians are regularly streamed live on Wink. necting services and going onsite to pro- nected additional communities to balance formation Satellite Systems, Korall agricul- ready to collect information of any subscrib- stability, protect its employees, guarantee Wink and Rostelecom’s IPTV now also of- vide repairs, while our call centre operators out the network load. tural holding company, JSC Vagonremmash, er not on the campaign participant list to uninterrupted service and provide further fer free access to five best culture and art also remain in office. We are digitising our We have upgraded the network core in time Ryazan State Instrument-making Enterprise promptly take measures. support for our regions of operation. TV channels featuring classical music, vari- installation services, with nine out of ten (RSIE) and other enterprises. to improve the reliability and stable opera- ous concerts, plays and virtual tours of best UNITED RUSSIA, Volunteers of the Victory, work orders already created remotely and Our employees tion of universal service access points. Rost- A new product, Dedicated Virtual Confer- museums in Russia and around the world. and Rostelecom have launched a joint cam- employees receiving assignments via their Due to the COVID-19 outbreak, we began elecom has started a phased programme to ence Room, has been developed, enabling paign whereby volunteers and party mem- smartphones to minimise their visits of at to transition our office staff to remote work transition fibre access network subscribers companies to deploy their own virtual server Our country bers will call veterans and siege survivors the Company’s facilities. starting from 16 March. Currently, about 63 to higher data speeds. For example, higher with all the software required for their needs. In this difficult time, we are committed to to inform them of available benefits and te- thousand employees (43% of Rostelecom Continuous monitoring systems have been data speeds were offered to 100 thousand Rostelecom also helps securing the inter- helping people and tackling the most press- lephony services. Group’s total headcount) have shifted to re- put in place to protect the health of our subscribers in Central Russia, 210 thousand ests of SMEs. Until the COVID-19 lockdown ing social issues. Rostelecom actively co- mote positions. To facilitate this shift to re- people and their families. We protect our in the Far East and 114 thousand in the Urals. is released, we will not block fixed-line ser- operates with the Russian Government and Corporate governance and economic mote work, we have launched a special por- employees against the virus by providing Other regions continue working on free-of- vices for SMEs and retail customers even coronavirus response centre and receives performance tal at remote.rt.ru. We also have in place an them with the necessary personal protec- charge connection of subscribers to high- if they delay in paying their bills. 100 extra new tasks every day. The Company has Rostelecom’s management closely mon- audio and video conferencing platform for tive equipment and disinfecting our business er data speeds. minutes of mobile connectivity and 10 Gb been instructed by the Russian Ministry of itors developments with the coronavirus. remote meetings. To speed corporate com- premises on a regular basis. A permanent of internet capacity have been added for Digital Development, Communications and On behalf of the Government, Rostelecom

238 239 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

has submitted to the Board of Directors a plement the corporate Dividend Policy. Cur- as best coronavirus response practices for plan to respond to the negative impact of rently, there are significant uncertainties sur- this challenging time. The platform is a place the pandemic both to protect its employees rounding the lockdown period, the extent where operators/regulators from across the and to ensure the stability of the Company. of support to industries and households world can share information on “How are The plan involves a package of measures and macroeconomic indicators. In this re- you using ICTs to help your community re- in terms of personal protective equipment, gard, the Company plans to present a fore- spond COVID-19?” These projects are es- technical and IT teams and organization of cast of key figures for 2020 taking into ac- pecially important as they contribute to the procurement. count the updated consolidation scope in UN Sustainable Development Goals. Rostelecom has designed a range of organ- subsequent reporting periods. Rostelecom’s Virtual PBX is the organisa- isational and technical measures to main- tion of telephony via the internet with the Rostelecom’s projects have been includ- tain stable work of the national telecoms functions of call forwarding, distribution ed into ITU’s Global Network Resiliency and IT infrastructure. Several scenarios for and recording. Platform dedicated to sharing best the economy have been modelled with re- global practices to improve COVID-19 Rostelecom’s thermal imaging camera sys- spective response options driven by such responses tems are a unique integrated solution en- factors as business, consumer and govern- abling instant on-site no-touch high-preci- ment activity. Under the existing crisis sce- PJSC Rostelecom’s handling of the coro- sion measurements of visitors’ temperature narios, Rostelecom will be able to avoid navirus pandemic has received internation- using thermal imaging camera units for or- layoffs and short hours. In the existing en- al recognition. Virtual PBX and no-touch ganisations not suited for the shift to re- vironment, Rostelecom’s management is fo- high-precision IA-based thermal imaging mote work. cused on enabling the Company and de- camera system have been listed in the Coro- livering performance required to maintain navirus (COVID-19) Response — ICT Case debt burden at manageable levels and im- Repository, a part of ITU’s1 digital platform,

1 ITU is the United Nations specialised agency for information and communication technologies. ITU’s global membership includes 193 Member States..

240 241 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

GRI Standards Table

102-55

General Standard Description Section of the Report General Standard Description Section of the Report Disclosure Disclosure

GRI 102 General Disclosures GRI 102-22 Composition of the highest governance body and its 1. We are Rostelecom. Corporate Governance committees Organisational profile GRI 102-23 Chair of the highest governance body Chairman of PJSC Rostelecom’s Board of Directors GRI 102-1 Name of the organisation 1. We are Rostelecom. Development Strategy and Business Model is not an executive director of the Company

GRI 102-2 Activities, brands, products, and services 1. We are Rostelecom. Development Strategy and Business Model GRI 102-24 Nominating and selecting the highest governance body 1. We are Rostelecom. Corporate Governance 6. Our customers. GRI 102-25 Conflicts of interest 1. We are Rostelecom. Responsible Business Practice GRI 102-3 Location of headquarters Legal address: 15 Dostoevskogo St., Saint Petersburg, 191002, Russian Federation GRI 102-26 Role of highest governance body in setting purpose, 1. We are Rostelecom. Corporate Governance values, and strategy GRI 102-4 Location of operations 1. We are Rostelecom. Development Strategy and Business Model GRI 102-28 Evaluating the highest governance body’s performance GRI 102-5 Ownership and legal form Public Joint Stock Company “Rostelecom” GRI 102-29 Identifying and managing economic, environmental, GRI 102-6 Markets served 1. We are Rostelecom. Development Strategy and Business Model and social impacts 6. Our customers. The Company’s Approach GRI 102-30 Effectiveness of risk management processes GRI 102-7 Scale of the organisation 1. We are Rostelecom. Development Strategy and Business Model GRI 102-33 Communicating critical concerns 3. Our employees. Corporate Culture and Internal Communications GRI 102-8 Information on employees and other workers 3. Our employees. Attractive Working Conditions GRI 102-35 Remuneration policies 1. We are Rostelecom. Corporate Governance GRI 102-9 Supply chain 1. We are Rostelecom. Supply chain GRI 102-36 Process for determining remuneration GRI 102-10 Significant changes to the organisation and its supply No significant changes were made to the Company chain and its supply chain in the reporting period GRI 102-38 Annual total compensation ratio

GRI 102-11 Precautionary Principle or approach Following the Precautionary Principle, Rostelecom Group strives to avoid any GRI 102-39 Percentage increase in annual total compensation ratio See PJSC Rostelecom’s Annual Report 2019 potential negative impact on the environment or local communities, even if the negative impact of a particular activity is not scientifically substantiated Stakeholder engagement

GRI 102-12 External initiatives 2. Our sustainability story. The Company’s Approach GRI 102-40 List of stakeholder groups 2. Our sustainability story. Stakeholder Engagement

GRI 102-13 Membership of associations Appendices Membership of Associations GRI 102-41 Collective bargaining agreements 3. Our employees. Attractive Working Conditions

Strategy GRI 102-42 Identifying and selecting stakeholders 2. Our sustainability story. Stakeholder engagement

GRI 102-14 Statement from senior decision-maker Chairman’s statement. GRI 102-43 Approach to stakeholder engagement 2. Our sustainability story. Stakeholder engagement 3. Our employees. Attractive Working Conditions GRI 102-15 Key impacts, risks, and opportunities 1. We are Rostelecom. Corporate Governance Appendices. About the Report

GRI 102-44 Key topics and concerns raised 2. Our sustainability story. Stakeholder engagement Ethics and integrity Reporting practice GRI 102-16 Values, principles, standards, and norms of behaviour 1. We are Rostelecom. Responsible Business Practice Our employees. Corporate Culture and Internal Communications 3. GRI 102-45 Entities included in the consolidated financial statements See PJSC Rostelecom’s Annual Report 2019

GRI 102-17 Mechanisms for advice and concerns about ethics 1. We are Rostelecom. Responsible Business Practice

Governance

GRI 102-18 Governance structure 1. We are Rostelecom. Corporate Governance

GRI 102-21 Consulting stakeholders on economic, environmental, and The Group has no process in place for stakeholders to consult directly with the social topics supreme governing body on economic, environmental, and social matters

242 243 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

General Standard Description Section of the Report General Standard Description Section of the Report Disclosure Disclosure

GRI 102-46 Defining report content and topic Boundaries Appendices. About the Report GRI 302-4 Reduction of energy consumption 5. Our environment. Environmental Initiatives

GRI 102-47 List of material topics GRI 303 GRI 303: Water

GRI 102-48 Restatements of information GRI 303-3 Water withdrawal by source 5. Our environment. Environmental Initiatives

GRI 102-49 Changes in reporting GRI 303-4 Water discharge

GRI 102-50 Reporting period GRI 303-5 Water consumption

GRI 102-51 Date of most recent report GRI 305 GRI 305: Emissions

GRI 102-52 Reporting cycle 1. We are Rostelecom. Development Strategy and Business Model GRI 103-2 The management approach and its components 5. Our environment. Environmental Initiatives Appendices. About the Report GRI 305-1 Direct (Scope 1) GHG emissions GRI 102-53 Contact point for questions regarding the report PJSC Rostelecom’s External Communications Department E-mail: [email protected] GRI 305-5 Reduction of GHG emissions E-mail for mass media: [email protected] Phone: +7 499 999 8283 GRI 305-7 Nitrogen oxides (NOX), sulphur oxides (SOX), and other 5. Our environment. Environmental Initiatives significant air emissions Appendices. Key Performance Indicators GRI 102-54 Claims of reporting in accordance with the GRI Standards Appendices. About the Report GRI 306 GRI 306: Effluents and Waste GRI 102-55 GRI content index Appendices. GRI Table GRI 103-2 The management approach and its components 5. Our environment. Environmental Initiatives GRI 102-56 External assurance Sustainability Report 2019 has passed the public assurance process at the RSPP Board. For more details see the Opinion of the RSPP Board Appendix GRI 306-1 Water discharge by quality and destination Appendices. About the Report GRI 306-2 Waste by type and disposal method

GRI 200 GRI 200: Economic GRI 306-3 Significant spills Not relevant

GRI 201 GRI 201: Economic Performance GRI 307 GRI 307: Environmental Compliance

GRI 201-1 Direct economic value generated and distributed 1. We are Rostelecom. Development Strategy and Business Model GRI 307-1 Monetary value of significant fines and total number of Appendices. Key Performance Indicators See also PJSC Rostelecom’s Annual Report 2019 non-monetary sanctions

GRI 203 GRI 203: Indirect Economic Impacts GRI 400 GRI 400: Social GRI 103-1 Explanation of the material topic and its Boundary 4. Our country. The Company’s Approach GRI 401 GRI 401: Employment GRI 103-2 The management approach and its components GRI 103-1 Explanation of the material topic and its Boundary 3. Our employees. The Company’s Approach GRI 203-1 Infrastructure investments and services supported Our country. Rostelecom’s Involvement in Projects to Develop 4. GRI 103-2 The management approach and its components a Digital Economy in Russia Digital Equality Integrated Social Programme GRI 401-1 New employee hires and employee turnover 3. Our employees. Attractive Working Conditions

GRI 401-2 Benefits provided to full-time employees that are not

GRI 205 GRI 205: Anti-corruption provided to temporary or part-time employees GRI 205-2 Communication and training about anti-corruption We are Rostelecom. 1. GRI 401-3 Parental leave policies and procedures Responsible Business Practice

GRI 205-3 Confirmed incidents of corruption and actions taken GRI 402 GRI 402: Labour/Management Relations

GRI 300 GRI 300: Environmental GRI 402-1 Minimum notice periods regarding operational changes In compliance with applicable Russian laws

GRI 302 GRI 302: Energy

GRI 103-2 The management approach and its components 5. Our environment. Environmental Initiatives GRI 403 GRI 403: Occupational Health and Safety

GRI 302-1 Energy consumption within the organisation Appendices. Key Performance Indicators

244 245 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

General Standard Description Section of the Report General Standard Description Section of the Report Disclosure Disclosure

GRI 103-1 Explanation of the material topic and its Boundary 3. Our employees. Ensuring Workplace Safety GRI 406 GRI 406: Non-discrimination

GRI 103-2 The management approach and its components GRI 406-1 Incidents of discrimination and corrective actions taken No incidents of discrimination in the reporting period

GRI 403-1 Occupational health and safety management system

GRI 403-2 Hazard identification, risk assessment, and incident GRI 408 GRI 408: Child Labour investigation GRI 408-1 Operations and suppliers at significant risk for incidents No incidents of child labour in the reporting period GRI 403-3 Occupational health services of child labour

GRI 403-4 Worker participation, consultation, and communication on GRI 409 GRI 409: Forced or Compulsory Labour occupational health and safety GRI 409-1 Operations and suppliers at significant risk for incidents No incidents of forced or compulsory labour in the reporting period GRI 403-5 Worker training on occupational health and safety of forced or compulsory labour

GRI 403-6 Promotion of worker health 3. Our employees. Corporate Culture and Internal Communications GRI 411 GRI 411: Rights of Indigenous Peoples Ensuring Workplace Safety GRI 411-1 Incidents of violations involving rights of indigenous No incidents of violations involving rights of indigenous peoples peoples in the reporting period GRI 403-7 Prevention and mitigation of occupational health and 3. Our employees. safety impacts directly linked by business relationships Ensuring Workplace Safety GRI 412 GRI 412: Human Rights

GRI 403-8 Workers covered by an occupational health and safety GRI 103-1 Explanation of the material topic and its Boundary 1. We are Rostelecom. Responsible Business Practice management system

GRI 403-9 Work-related injuries GRI 103-2 The management approach and its components

GRI 403-10 Work-related ill health GRI 418 GRI 418: Customer Privacy

GRI 404 GRI 404: Training and Education GRI 103-1 Explanation of the material topic and its Boundary 6. Our customers. Safe User Environment

GRI 103-1 Explanation of the material topic and its Boundary 3. Our employees. Employee Training and Development GRI 103-2 The management approach and its components GRI 103-2 The management approach and its components GRI 418-1 Substantiated complaints concerning breaches of GRI 404-1 Average hours of training per year per employee customer privacy and losses of customer data

GRI 404-2 Programmes for upgrading employee skills and transition assistance programmes

GRI 404-3 Percentage of employees receiving regular performance 3. Our employees. Attractive Working Conditions and career development reviews

GRI 405 GRI 405: Diversity and Equal Opportunity

GRI 405-1 Diversity of governance bodies and employees 3. Our employees. Attractive Working Conditions Appendices. Key Performance Indicators GRI 405-2 Ratio of basic salary and remuneration of women to men

246 247 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

UNCTAD Indicators Table

Area Indicators Rostelecom Group’s performance indicators in 2019 Area Indicators Rostelecom Group’s performance indicators in 2019

A Economic area В.2 Waste management B.2.1: Reduction of waste In 2019, 33,226.47 tonnes of waste was generated. Waste generation per net value generation added was 0.2 tonnes per RUB 1 million of net value added. Waste generation reduced by 2.6% year-on-year in the reporting period. А.1 Revenue and/or (net) value added A.1.1. Revenue RUB 331.631 billion For more details see the Our Environment section of this Report

A.1.2. Value added RUB 210.442 billion

B.2.2: Waste reused, re- In 2019, 205.4 tonnes of waste generated (0.62%) was reused for own operational A.1.3. Net value added RUB 163.706 billion manufactured and recycled needs. Waste reuse reduced by 24.4% year-on-year in the reporting period. А.2 Payments to the Government A.2.1. Taxes and other payments to RUB 73.523 billion (including VAT) For more details see the Our Environment section of this Report the Government

New investment/expenditures Green investment RUB million1. These expenditures account for 0.03% А.3 A.3.1 112.611 B.2.3: Hazardous waste In 2019, 20,703.61 tonnes of Hazard Class 1–42 waste was generated (62% of the of the Group’s revenue in 2019 total waste generated). Generation of Hazard Class 1–4 waste per net value added was 0.126 tonnes per RUB 1 million of net value added. A.3.2. Community investment The Group has no consolidated records of social investments. Treated hazardous waste (environmental Hazard Class 1–4, handed over for Charity expenses, which are a part of our external social policy, neutralisation and disposal) amounted to 2,650.39 tonnes (7.98% of the total waste amounted to RUB 176.658 million in 2019 (0.05% of the revenue) generated). The amount of waste of environmental Hazard Class 1–4 handed over for neutralisation and disposal reduced by 8% year-on-year in the reporting period. A.3.3. Total expenditures on RUB 7.552 billion These expenditures account for 2.28% For more details see the Our Environment section of this Report research and development of the Group’s revenue in 2019

А.4 Local supplier/purchasing A.4.1. Percentage of local In 2019, Rostelecom’s costs of local procurement for infrastructure programmes procurement construction amounted to RUB 145 billion (38% of the total procurement В.3 Greenhouse gas emissions B.3.1: Greenhouse gas emissions In 2019, Scope 1 GHG emissions amounted to 184,415.18 tonnes of CO2 equivalent spending in 2019) (Scope 1) (16.5% of the total GHG emissions). Scope 1 GHG emissions per net value added were 1.13 tonnes of CO2 equivalent per RUB 1 million of net value added. В Environmental area Scope 1 GHG emissions grew by 1.65% year-on-year in the reporting period due to an increase in gasoline consumption. For more details see the Our Environment section of this Report В.1 Sustainable use of water B.1.1: Water recycling and reuse The Company does not recycle or reuse water. Water supplied by public utilities or withdrawn from the Company’s own water supply wells is used in one production cycle and then sent for treatment to public or own sewage systems (in the latter case, after treatment water is discharged into water bodies). For more details see the Our Environment section of this Report B.3.2: Greenhouse gas emissions In 2019, Scope 2 GHG emissions amounted to 850,941.55 tonnes (Scope 2) of CO2 equivalent (75.9% of the total GHG emissions). Scope 2 GHG emissions per net value added were 5.2 tonnes of CO2 equivalent per RUB 1 million of net B.1.2: Water use efficiency Water consumption by the Group in 2019 amounted to 2,282.12 thousand cu m. value added. Water use per net value added was 13.94 cu m per RUB 1 million of net value added. Scope 2 GHG emissions reduced by 12.57% year-on-year in the reporting period, Water consumption reduced by 4% year-on-year in the reporting period. probably due to lower heat consumption. For more details see the Our Environment section of this Report For more details see the Our Environment section of this Report

B.1.3: Water stress Water consumption in 2019: • Groundwater (artesian water) — 119.64 thousand cu m (5.2%) • Water from public utilities (mainly surface water with a minor share of В.4 Chemicals, including pesticides B.4.1: Chemicals, including The Group does not use ozone-depleting substances groundwater) — 2,162.48 thousand cu m (94.8%) and ozone-depleting substances pesticides and ozone-depleting • Rainwater and wastewater are not used. substances The Group does not operate in regions with water scarcity. For more details see the Our Environment section of this Report

1 The sum of OPEX featured in lines 1–2 and 11–17 of the table Rostelecom Group’s total environmental expenditures and investment in 2016–2019, RUB thousand. 2 The Russian legislation currently has no definition of hazardous waste. Waste can be categorised into 5 environmental and 4 human health Hazard Classes. The data For more details see the Key Performance Indicators Appendix to this Report. includes waste of environmental Hazard Class 1–4; no records are made for human health Hazard Classes.

248 249 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Area Indicators Rostelecom Group’s performance indicators in 2019 Area Indicators Rostelecom Group’s performance indicators in 2019

B.5 Energy consumption B.5.1: Renewable energy Renewable energy may include: D Institutional area • own power generation — solar panels (33 units), hybrid wind and solar power systems (82 units), micro turbines (19 units). Share in the total energy D.1 Corporate governance disclosure D.1.1: Number of board meetings In 2019, the Board of Directors held 20 meetings, including 4 meetings in person consumption — less than 0.1% and attendance rate and in absentia3 • heat generation — combustion of biomass (firewood and fuel briquettes). 16 For more details see the Corporate Governance section of PJSC Rostelecom’s Heat generation in 2019 — 18,558 thousand kWh (0.64% of the total energy Annual Report 2019 consumption) • purchasing grid electricity generated by hydropower plants. The share in the total energy consumption is unknown as suppliers do not disclose data on energy sources. According to Rosstat, hydropower accounts for 17% of power : Number and percentage of There are no women members on PJSC Rostelecom’s Board of Directors; in generation in Russia, hence the Group’s hydropower consumption can be D.1.2 women board members subsidiaries and affiliates, the share of women board members is21 % estimated at 226,269 thousand kWh (16.95% of the total power and 8.17% of the total energy consumption). For more details see the Our Environment section of this Report D.1.3: . Board members by age Members of PJSC Rostelecom’s Board of Directors by age range: B.5.2: Energy efficiency In 2019, total energy consumption amounted to 2,771,121 thousand kWh. range • under 30 years old — 0, Energy consumption per net value added was 16.93 thousand kWh per RUB 1 • 30 to 50 years old — 6, million of net value added. • over 50 years old — 5 For more details see the Our Environment section of this Report

C Social area D.1.4: Number of meetings of audit In 2019, PJSC Rostelecom’s Audit Committee held 4 meetings, committees and attendance rate including 1 meeting in person. For more details see PJSC Rostelecom’s Annual Report 2019 С.1 Gender equality C.1.1: Proportion of women in Proportion of women in managerial positions in 2019 — 31%. managerial positions For more details see the Our Employees section of this Report

D.1.5: Total compensation and RUB 4 million — fixed annual remuneration payable to each member of the Board of С.2 Human capital C.2.1: Average hours of training per The average amount of training received by employees in 2019 was 31.12 hours per 4 year per employee trained employee2 compensation per member Directors. Factor applied to the Chairman of the Board of Directors — 1.5. of the board of directors and RUB 440 thousand — annual remuneration payable to members of the Audit management Committee of the Board of Directors. C.2.2: Expenditure on employee Direct and indirect training costs in 2019 were RUB 5,500 per employee 3 RUB 320 thousand — annual remuneration payable to members of other training per year per employee Committees of the Board of Directors. Factor applied to the Board of Directors’ Committee Chairman — 1.25. RUB 972,602,909 — total payments to Management Board members in 2019. C.2.3: Employee wages and The Group’s payroll in 2019 amounted to RUB 74.68 billion (22.5% of the Group’s For more details see PJSC Rostelecom’s Annual Report 2019 benefits as a proportion of revenue). revenue, with breakdown by For more details see the Our Employees section of this Report employment type and gender D.2 Anti-corruption practices D.2.1: Amount of fines paid or No data available С.3 Employee health and safety C.3.1: Expenditures on employee The Group’s expenditures on occupational health and safety in 2019 amounted to payable due to settlements health and safety as a proportion RUB 772.8 million (0.23% of the Group’s revenue) of revenue D.2.2: Average hours of training on All PJSC Rostelecom’s new hires working at automated workstations undergo anti-corruption issues per year per a 45 min induction course on the principles set out in the Code of Ethics C.3.2: Frequency/incident rates of In 2019, injury frequency rate was 0.44 per 1,000 employees. occupational injuries Due to historical and legal reasons, injury frequency rate in the communications employee comprising an anti-corruption section. PJSC Rostelecom employees in positions industry is calculated as the number of incidents divided by 1,000 employees. exposed to corruption risk (11% of the total headcount) undergo additional For more details see the Ensuring Workplace Safety section of this Report advanced training on corruption prevention, either classroom (2 hours) or distance (1.5 hours), once every two years

С.4 Coverage by collective C.4.1: Percentage of employees 100 % agreements covered by collective agreements

1 Rosstat’s data for 2018 — www.gks.ru/folder/11189 2 Data for PJSC Rostelecom 3 Data for PJSC Rostelecom 4 D 1.5. covers data for PJSC Rostelecom only

250 251 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Opinion of the RSPP Board

Opinion of the RSPP Board on Non-Financial CONCLUSIONS Reporting on PJSC Rostelecom’s Sustainability Report 2019 submitted for public assurance After analysing the Report and the infor- Tele2 Russia and provider of cloud services stakeholders; a stakeholder map; information Human rights. mation publicly available on the Company’s DataLine; the Company’s business model; on the dialogue with stakeholders as part purposes The Report explores the Company’s princi- website, and holding a group discussion of key areas of business performance indica- of the Sustainability Report 2019 prepara- ples and obligations in protecting and re- results of the independent evaluation per- tors and key events in 2019; plans for the tion process and how their proposals were specting human rights and covers: risk as- The RSPP Board on Non-Financial Report- Information is deemed relevant if it reflects formed by members of the Board, the Board next reporting period; Rostelecom’s role in considered; protection of shareholder in- sessment practice in this area; declared ing (the Board), which was established by the the Company’s activities aimed at imple- confirms the following: the Digital Economy of the Russian Feder- terests; cooperation with the government compliance of the Company’s internal pol- resolution of the RSPP Bureau (Decree dat- menting the principles of responsible busi- PJSC Rostelecom’s Sustainability Report ation national programme and other federal under the Digital Economy national pro- icies and procedures with relevant Russian ed 28 June 2007), reviewed PJSC Rostele- ness practice outlined in the Social Charter 2019 contains relevant information on key technology and IT projects; implementation gramme, Rostelecom’s contribution to dig- and international laws; ban on workplace com’s Sustainability Report 2019 (the Report) of Russian Business (www.rspp.ru). areas of responsible business practice in of advanced technology in e-government, ital equality and making communications discrimination on any grounds; Rostele- submitted by PJSC Rostelecom (the Com- Information is deemed complete if the Report compliance with the principles outlined in mobile communications, cyber security, bio- accessible as well as the development of com’s inclusion in Bloomberg’s 2020 Gen- pany, Rostelecom). gives a comprehensive view of the Compa- the Social Charter of Russian Business and metrics, healthcare, education, utilities; sus- sectoral information systems; Rostelecom der-Equality Index; protection of labour The Company contacted RSPP asking the ny’s activities: values and underlying strategic discloses the Company’s sustainability per- tainable development goals and priorities; Group’s business cooperation in develop- rights, employee relationships based on Board to provide public assurance of the Re- priorities, governance systems and structures, formance with sufficient completeness. integration of UN SDGs (UN's 2030 Agenda ing 5G mobile networks in Russia; personnel social partnership principles, including col- for Sustainable Development) in the Com- headcount and structure, changes in wag- port. The Board’s task was to form an opinion stakeholder engagement, achievements, key Recommendations offered by the Board af- lective bargaining agreements; employees’ pany’s strategy, priority SDGs and targets es, social support programmes for employ- on the relevance and completeness of infor- results and KPIs. ter the public assurance of PJSC Rostele- freedom of association; human right pro- and progress on them in the reporting pe- ees, training system, approaches to its effi- mation on the Company’s performance dis- com’s Sustainability Report 2018 were re- tection principles covering suppliers as well; The public assurance procedure takes into riod; data on CAPEX; actions taken to im- ciency assessment, HR management system closed in the Report in accordance with the flected in the Report for 2019. Specifically, the Company’s role in protecting the right account the fact that the Company used in- prove service quality; corporate governance and occupational health and safety mea- principles of responsible business practice the new Report expands the scope of dis- for information and cyber security; Rostele- ternational reporting standards. However, as- framework; Risk Management System and sures; information on Rostelecom’s joining contained in the Social Charter of Russian closure, particul arly with important indica- com’s efforts in bridging the digital divide surance of the Report’s compliance with the its development in 2019; mechanisms to Vision Zero, a global campaign for zero ac- Business and compliant with the United Na- tors of economic performance (labour pro- as a contribution to the protection of hu- international reporting standards is outside promote the principles of the Company’s cidents; long-term incentive programme, tions Global Compact, as well as Russian and ductivity, CAPEX) and key intensity ratios man rights in the country. the scope of this Opinion. Code of Ethics among employees and de- under which employees can purchase the international social responsibility standards. for environmental performance, details the Responsibility for the information and state- velop the compliance system; information Company securities; results of the employ- Preservation of the environment. Company’s plans for its key business lines In the period between 18 and 29 May 2020, ments contained in the Report lies with PJSC on corruption risk assessment in 2019 and ee satisfaction survey conducted in 2019, with measurable sustainability performance The Report presents the following princi- the Board examined the Report submitted Rostelecom. Reliability of the reported data an audit that confirmed Rostelecom’s com- feedback channels; priorities in procure- indicators, provides a fuller view of the Com- ples, goals and activities related to environ- by the Company and prepared this Opin- is not subject to public assurance. pliance with the Anti-Corruption Charter of ment, integration of the SDGs into supply ion in accordance with the Public Assur- pany’s anti-corruption management efforts mental protection in the Company: update This Opinion has been prepared for PJSC the Russian Business; sustainable develop- chain management; supplier engagement, ance Procedure for non-financial corporate and social initiatives. of the environmental policy in 2019; con- Rostelecom. The Company is entitled to use ment standards adopted and initiatives im- including via hotlines for suppliers, and the firmation of the Company’s environmental reports approved by the Board. Members of The Report contains relevant information this Opinion both for internal purposes and plemented; the Company’s response to the statistics for enquiries during 2019; informa- management system conformity with GOST the Board have the necessary expertise in on the following principles of responsible for stakeholder communications, publishing COVID-19 pandemic that began after the tion on the size and structure of the cus- R ISO 14001-2016, following an external au- corporate responsibility, sustainability and business practice: it with no alterations. reporting period, the action plan to miti- tomer base; development of the Compa- dit; environmental protection investments; non-financial reporting, comply with ethical gate its negative impact in terms of pro- ny’s services; information on a customer requirements (independence and objectivi- Economic freedom and responsibility. key environmental impact indicators and tecting employees and ensuring the Com- satisfaction survey to develop new and im- their changes over time, including data on ty of assessment) and express their own ex- The Report covers such elements as: Ros- pany’s stable operation. prove existing services; measures to support GHG emissions and resource conserva- pert opinion rather than the opinion of the telecom’s market position and develop- SMEs, partnerships with local communities tion; measures to mitigate environmental organisations they represent. ment strategy as Russia’s largest provider Partnership in business. and non-commercial organisations aimed impact, the environmental operational con- The Report was evaluated based on the fol- of digital services and solutions; the Com- The Report provides the following details at implementing social initiatives; interna- trol system, environmental training of man- lowing criteria for the relevance and company’s geography and structure; informa- on its business partner relationships: prin- tional business cooperation and partner- agers and employees; assessment of envi- pleteness of the information contained in it: tion on the acquisition of mobile operator ciples and mechanisms of engaging key ships with higher educational institutions.

252 253 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

ronmental protection management system Final conclusions RECOMMENDATIONS performance, awards in this area; energy On the whole, the information contained in policy and its implementation; energy effi- the Report reflects PJSC Rostelecom’s re- While recognising the strengths of PJSC The Report expands the scope of disclosure, The Report informs on new assets in the Com- ciency performance indicators; use of responsible business practice, strategy and Rostelecom’s Sustainability Report 2019, the in particular, environmental impact indicators pany’s portfolio. It would be useful to expand newable energy sources. management approaches in the context of Board would like to draw the Company’s at- with intensity ratios, thus improving the qual- on the integration of these assets, particular- sustainable development. The Report shows Participation in local community tention to several aspects of relevance and ity of reporting. The Company should take ly in the sustainability management system. the link between the Company’s key proj- development. completeness of information that are of im- further consistent steps and disclose indi- Setting clear reporting boundaries and their ects and priority UN SDGs, its contribution portance for stakeholders and recommends cators, both absolute and specific, over at description should be also noted. The Report describes Rostelecom Group’s to national projects, comprehensively pres- taking them into account when preparing re- least three years in future reports to demon- According to the Report, the Company ap- contribution to the country’s sustainable ents key economic, environmental and so- ports in the future. strate the results of implemented initiatives proved the Strategy of the Cyber Securi- development as Russia’s largest provider cial performance indicators and plans for the The Board would like to note that the recom- in a more representative way. ty and Protection Centre of PJSC Rostele- of digital services: the social importance next reporting period and highlights stake- mendations offered after analysing the Com- To present information in a more transparent com for 2019–2022. Taking into account the of the Company’s core business related to holder engagement. communications infrastructure development, pany’s 2018 Report remain relevant and can and clear way, it is also important to provide growing number of cyber attacks and risk of The Report is prepared in compliance with including federal programmes and regional be used in future reporting practice. comments, explaining these changes and cyber security violations, the Board recom- Russian and international reporting stan- cooperation agreements; Rostelecom being The Report describes the corporate gover- factors behind them (particularly, injury rates mends to detail the implementation of the dards (GRI Standards: Core Option), which the contractor for the project to provide in- nance framework in detail. The Board recom- and some economic indicators). approved strategy and results of measures makes the information provided therein eas- ternet connectivity to social infrastructure mends expanding on the role of the Board The Report outlines measures to enhance to strengthen the cyber security of service ily comparable to the one contained in the facilities in 44 regions of the Russian Fed- of Directors in managing the Company’s sus- the Company’s service quality. It would be infrastructure and the Company’s products. reports compiled by other companies in eration under the Information Infrastructure tainable development and report on wheth- useful to add more specific information on The RSPP Board on Non-Financial Reporting Russia and abroad. It also complies with the federal project, implemented as part of the er such matters were included in the agenda such measures, for example, customer sat- expresses its positive opinion on the Report, AA1000 Stakeholder Engagement Standard Digital Economy of the Russian Federation of the Board of Directors and other govern- isfaction survey results. supporting the Company’s commitment to the (SES) and the Guidance on core indicators national programme; implementation of the ing bodies. principles of responsible business practice for entity reporting on contribution towards The Report gives information on the Compa- Bridging the Digital Divide project aimed and noting the consistency in enhancing its implementation of the Sustainable Develop- The Report contains information on supply ny’s social projects under cooperation agree- at bringing affordable telecoms services reporting practices, and confirms that PJSC ment Goals (GCI) by UNCTAD. chain management, including Rostelecom’s ments with regional authorities. The Board to people in remote areas; the Company’s expanded cooperation with SMEs, which is recommends to further detail the Compa- Rostelecom’s Sustainability Report 2019 has PJSC Rostelecom’s Sustainability Report major social projects and programmes, co- viewed as a contribution to the SDGs. The ny’s impact on social and economic devel- passed the public assurance process. 2019 is the Company’s ninth non-financial operation with partner organisations under Board recommends disclosing in future re- opment in regions. report, which reflects its consistent efforts them and their results; employees’ partic- ports the Company’s control procedures to enhance public reporting and its com- The Report discloses the approved proce- ipation in volunteer initiatives; approaches and results of auditing supply chain partici- to managing charitable activities. The 2019 mitment to transparency and openness. dure to assess social programmes, charity pants for compliance with the Code of Sup- expenses, and in this area, the Board’s rec- Report also covers the measures taken by plier Business Ethics, particularly with the the Company at the beginning of 2020 to ommendation concerning disclosure of in- requirements for environmental protection, formation on the criteria and results of per- support authorities and communities during occupational safety and protection of em- the COVID-19 pandemic. formance assessment for the most significant ployees’ rights. social projects remains relevant.

254 255 ROSTELECOM'S SUSTAINABILITY REPORT 2019 APPENDICES

Feedback Questionnaire

Dear reader! Which stakeholder group are you in? Notes: You have just read Rostelecom • • Shareholder • • Public organisation/local community Group’s Sustainability Report • • Investor representative 2019. • • Employee • • Environmental organisation representative We strive to maintain the most transparent • • Partner/contractor/supplier • • Mass media representative and honest dialogue with all stakeholders, • • Customer • • Academic/expert community representative and we would be grateful for your responses • • Government authority representative • • Other group: to the questions below to help us improve the Company’s reporting quality. 1. Have you found material information on the issues you are concerned with in the Report? • • Yes, full • • No • • Yes, partial • • I have just looked through the Report

2. Which information included in the Report was of most interest to you?

3. Which information did you find the least interesting?

4. Which topics of interest are not included in the Report?

5. Please assess this Report against the following criteria: a. General b. Completeness of the c. Accuracy and d. Clarity and ease of e. Structure and f. Layout impression information you are objectivity of understanding of convenience of and design interested in information the information information search excellent excellent excellent excellent excellent excellent • • • • • • • • • • • • good good good good good good • • • • • • • • • • • • satisfactory satisfactory satisfactory satisfactory satisfactory satisfactory • • • • • • • • • • • • unsatisfactory unsatisfactory unsatisfactory unsatisfactory unsatisfactory unsatisfactory • • • • • • • • • • • • not sure not sure not sure not sure • • not sure • • not sure • • • • • • • •

6. What would you recommend to improve the Company’s performance?

7. Other comments and recommendations on the Report:

8. If you wish to get a response Annual Report Feedback Rostelecom’s profiles to your comments, please leave 2019 Questionnaire in social media: your contact details:

Rostelecom.Official

rostelec

Rostelecom_News

Rostelecom_PhotoStream Thank you for your feedback! company.rt.ru/en

256 257