Sustainability Report for 2016-2017

SUSTAINABILITY REPORT

FOR 2016- 2017

GOOD ENERGY OF THE LIGHT COMPANY

CONTENTS 1. Address of General Director………………………………………………………………………..4 2. About the report……………………………………………………………………………………..6 2.1. Reporting system and determination of material topics………………………………………….…6 3. About the company………………………………………………………………………………….7 3.1. Key figures……………………………………………...………………………………………..…7 3.2. Geography and core activities……………………………………………...……………………….9 4. Strategic objectives and tasks in the field of sustainable development…………………………10 4.1. Priorities in the field of sustainable development……………………………………………...….10 5. Management………………………………………………………………………………………..10 5.1. Corporate governance……………………………………………...……………………………...10 5.2. Risk management……………………………………………...…………………………………..11 5.3. Procurement activities……………………………………………...…………………………..….12 5.4. Innovative activity……………………………………………...………………………………….13 5.5. Interaction with stakeholders……………………………………………...………………………17 6. Economic performance…………………………………………………………………………….19 6.1. Operating and financial results……………………………………………...……………………..19 6.2. Dividend payout……………………………………………...……………………………………22 6.3. Contribution to development of regions. Implementation of an investment programme………....23 7. Ensuring reliable and uninterrupted power supply……………………………………………...30 7.1. Elimination of failures and technological disturbances…………………………………………...30 7.2. Increase in reliability of electric grids……………………………………………...……………...33 7.3. Safety of the population, customers and information promotion of electric safet………………...35 8. System of customer service………………………………………………………………………...40 8.1. Ensuring high-quality and available services for customers……...……………………………….40 8.2. Results of interaction with customers of services and development plans ……………………….44 9. Environmental protection………………………………………………………………………….46 9.1. Preserving biodiversity and protection of land resources…………………………………………46 9.2. Protection and rational use of lands, use of environmentally safe technologies and solutions, decrease in energy consumption……………………………………………...………………………..52 9.3. Cooperation with nature protection structures and environmental organisations…………………55 9.4. Observance of the environmental legislation and normative requirements……………………….56 10. Personnel and social policy………………………………………………………………………56 10.1. Wage system and motivational programmes……………………………………………...... 56 10.2. Labour protection and safety in a workplace……………………………………………...... 61

10.3. Formation of corporate culture and creation of non-material incentives for employees………...65 10.4. Sponsorship and charity……………………………………………...…………………………..69 10.5. Cooperation with trade union and public organisations………………………………………….69 11. Anti-corruption……………………………………………………………………………………71 12. Table of correspondences of the Report to requirements of the GRI Standards……………………………………………………………………………………………...74 13. Contact information………………………………………………………………………………77 14. Glossary……………………………………………………………………………………………79 15. Annex. Extract from Minutes No. 01/18 from 7 Nov. 2018 of Public hearings on the draft of the Sustainability Report of IDGC of Center and Volga Region, PJSC for 2016-2017…………..83

Management of IDGC of Center and Volga Region, PJSC is carried out in accordance with the requirements of standards ISO 9001, OHSAS 18001, ISO 14001, ISO 50001

1. Address of General Director 102-14 103-2

Dear colleagues and friends!

On behalf of IDGC of Center and Volga Region, PJSC I present to you the Sustainability Report of the Company for 2016 - 2017. In 2017, powers of the sole executive body of IDGC of Center and Volga Region, PJSC were transferred to a managing company – IDGC of Centre, PJSC, and this Sustainability Report actually is summing up the efforts made by both Companies on implementation in practice of the principles of sustainable business. Consolidation of management of two largest grid companies of Central Russia allowed not only to increase efficiency of operating activities to the level of advanced international standards, but also to make a worthy contribution to social and economic development of regions of operations, to improve quality of life of people residing in these regions. As a socially focused company, IDGC of Center and Volga Region, PJSC as strategic priorities always defined reliability and availability of power supply, increase in customers’ confidence, social responsibility and environmental safety. Thanks to timely and high-quality execution of repair and investment programmes, and also application of comprehensive measures for elimination of causes of technological disturbances in 2016 - 2017, the Company managed to achieve essential decrease in failure rate indicators. Implementing plans for ensuring availability of power supply and advancing development of grid infrastructure, the Company, acting for the benefit of, first of all, its customers, significantly reduced terms of grid connection and continued implementation of a system of electronic customer service on the Internet. IDGC of Center and Volga Region, PJSC pays a close attention to questions of environmental protection. So, at reconstruction and construction of power grid facilities, the Company uses modern equipment with advanced technical characteristics making the minimum environmental impact: oil receivers for protection of the soil were installed, at construction of overhead power lines bird guards were mounted, compensation events for planting of trees after clearing and expansion of ROWs of power lines were everywhere held, and others. As a result, IDGC of Center and Volga Region, PJSC took the fifth place in the rating of 150 largest companies of the country with the highest indicators of technology and environmental and energy efficiency. In addition, within its corporate social policy the Company systematically conducted its course on providing safe conditions and labour protection, social security and professional growth of 4 employees, and also implementation of different social projects, including cultural, sports, patriotic and information provision. Especially, the project on prevention of electric injury rate, first of all, of children should be mentioned. So, in 2016 specialists of the Company conducted over 2 thousand lessons of electric safety for more than 61 thousand pupils, and in 2017 – already for 70 thousand children. Without being satisfied with what has already been achieved, IDGC of Center and Volga Region, PJSC, publishing the report, confirms the commitment to the principles of social responsibility and sustainable development, hopes for further constructive dialogue and interaction with all stakeholders.

General Director of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC Igor Makovskiy

2. About the report

2.1. Reporting system and determination of material topics Confirming the commitment to the principles of social responsibility and sustainable 102-1 development, IDGC of Center and Volga Region, PJSC submits the fourth Sustainability 102-46 102-47 Report (hereinafter - the Report) for 2016-2017, besides, the Report included the main 102-50 indicators for 2015. The previous report, published in July 2015, is posted on the official 102-51 102-52 website of the Company (http://www.mrsk- cp.ru/stockholder_investor/disclosure_reporting_info/sotsialnye-otchety/) and covers the period of 2013-2014. The Company is also going to adhere further to a two-year reporting cycle. Our Report is prepared according to the principles and methodology of the Guidelines of the Global Reporting Initiative (the GRI Standards version), including its customised application for the electric utility sector. While preparing the Report, the Company was guided by the Core reporting level. In the Report activity of IDGC of Center and Volga Region, PJSC in all regions of operations is provided. Within this Report information on subsidiaries is not disclosed as they do not make material impact on the Company’s results in the field of sustainable development. For determination of material topics for disclosure in the Report of IDGC of Center and Volga Region, PJSC, according to the GRI recommendations, along with questioning of stakeholders, monitoring of mass media was carried out, regarding identification of topics connected with the Company, which caused the greatest public response. As a result of the conducted research, the following most material topics of the Report were revealed: - economic performance; - ensuring reliable and high-quality power supply, including readiness for emergency situations; - customer service. Besides, according to the Company, questions of labour protection, social policy, environmental safety and fight against corruption are not less essential to the Company’s activity in the field of sustainable development and are also disclosed in this Report. In this Report data of financial and management statements of IDGC of Center and Volga Region, PJSC, and also data, which are subject to disclosure according to recommendations of the GRI Reporting Guidelines in the field of sustainable development of the GRI Standards, are used.

3. About the company

3.1. Key figures

IDGC of Center and Volga Region, PJSC is a subsidiary of the power company 102-2 PJSC ROSSETI, the largest in the Russian Federation, the main supplier of services in 102-3 102-4 electricity transmission and connection to electric grids in the Vladimir, Ivanovo, Kaluga, 102-6 Kirov, Nizhny Novgorod, Ryazan, Tula regions, in the Republic of Mari El and the 102-7 Udmurt Republic. The head office is located in the city Nizhny Novgorod – the capital of the Volga Federal District and the Volga-Vyatka Economic Region. The main objectives of the Company are ensuring reliable and high-quality power supply of the regions of operations, accessible connection of customers to electric grids.

3.2. Geography and core activities Map of regions of operations (data as of 31 December 2017)

Total Territorial Number of transformer subjects of the Share of Length of Area, Population, Population Branches of IDGC Substations capacity of Russian net supply power lines No. thous. sq. thousand density, of Center and of 35 kV Substations of Federation in in the (ROW), km persons. persons / km² Volga Region and above, 35 kV and the Company’s region, % thous. km pcs above, service area thous. MVA 1 Kirov region 120 1,300.9 10.9 Kirovenergo 67 225 2.97 39.17 Nizhny 2 Novgorod 76.6 3,300 42.21 Nizhnovenergo 69 260 5.34 61.99 region Udmurt 3 42.1 1,513.288 35.97 Udmurtenergo 42 219 3.65 26.10 Republic 4 Ryazan region 39.6 1,127 28.45 Ryazanenergo 81 153 3.48 31.55 5 Kaluga region 29.9 1,010 33.95 Kalugaenergo 80 154 3.13 29.85 Vladimir 6 29 1,389 47.89 Vladimirenergo 63 142 3.59 23:07 region 7 Tula region 25.7 1,492.018 58.10 Tulenergo 64 171 4.21 33.03 Republic of 8 23.4 684.7 29.29 Marienergo 44 86 1.12 12:56 Mari El 9 Ivanovo region 21.4 1,014.62 47.4 Ivenergo 44 140 2.61 15:43 IDGC of Center 1,550 30.08 272.75 and Volga Region

4. Strategic objectives and tasks in the field of sustainable development

4.1. Priorities in the field of sustainable development The main priorities in the field of sustainable development of the Company are determined by target reference points of functioning of the power grid complex of the country according to the Strategy of development of the power grid complex, approved by Resolution of the Government of the Russian Federation (No. 511-r of 03 April 2013).

Main aspects of influence of the Company on social, economic and environmental development of the regions of operations . ensuring reliability and safety of functioning of the power grid complex, improvement of quality of provided services; . increase in operating and investment efficiency; . increase in investment case and market capitalisation; . innovative development of assets and implementation of actions within the programme of increase in energy efficiency; . increase in availability of power grid infrastructure; . development of human capital.

5. Management

5.1. Corporate governance IDGC of Center and Volga Region, PJSC considers improvement and increase in 102-24 efficiency of corporate governance a condition necessary for sustainable development of 102-26 102-30 the Company. The Company’s management conducts regular monitoring of compliance of internal documents with the current legislation of the Russian Federation. The Company continues improvement of internal control and risk management systems, internal audit functionality. Considering the need of solution of questions of development of the Company taking into account decrease in influence on results of its activity of external and internal risks, the function of control over organisation and operation of the risk management system is assigned to the Strategy and Development Committee of the Board of Directors of the Company. The Audit Committee approved the report of the Company’s internal audit on efficiency evaluation of the internal control system, risk management system, corporate governance of the Company for 2017, and also charged to provide development and implementation of a set of actions for improvement of the internal control system, risk management system, corporate governance,

10 having provided efficiency evaluation of corporate governance, following the results of 2018, – not less than "efficient".

In 2017, the Russian Institute of Directors carried out the analysis of the Company’s corporate governance system as at 25 December 2017, and based in its results, assigned IDGC of Center and Volga Region, PJSC the rating of corporate governance of NCGR 7 - "Developed practice of corporate governance" on a scale of the National Corporate Governance Rating (NCGR®). The assessment of the Russian Institute of Directors confirms that the Company observes requirements of the Russian legislation in the field of corporate governance, follows a considerable number of recommendations of the Russian Corporate Governance Code. Risks of losses of owners connected with the quality of corporate governance are estimated as rather low. Information on the rating assignment and the report on the corporate governance practice in the Company are posted on the website at www.mrsk-cp.ru in the section "Shareholders and investors"/"Information on corporate governance assessment" (http://www.mrsk- cp.ru/stockholder_investor/informatsiya-ob-otsenke-korporativnogo-upravleniya/).

5.2. Risk management The Company has a risk management system in place, which purpose is ensuring 102-11 steady continued operation and development of the Company by timely identification, 102-15 assessment and effective management of risks. Risk management is an integral part of all organisational processes. The function of control over organisation and operation of the risk management system is assigned to the Strategy and Development Committee of the Board of Directors of the Company. The most substantial non-financial risks for the Company, capable to exert impact on social, economic and environmental development of the regions of operations, are: . tariff risks; . downside risk of volume of services in electricity transmission; . risks connected with provision of services of grid connection to applicants; . operational and technology risk (downside risk of reliability of power supply to customers);

. risks connected with possible conflicts and their manifestations, introduction of emergency state and strikes; . risks connected with geographical features of the country and region; . legal and compliance risks. The detailed analysis of financial and non-financial risks of IDGC of Center and Volga Region, PJSC is provided in the Annual Report of the Company for 2017 (section "Risk management system").

5.3. Procurement activities In the procurement activities the Company aims at the maximum transparency of 103-2 holding regulated procurement procedures, creation of clear competitive environment, use 204-1 of electronic trading platforms. Information on carrying out the regulated procurement procedures is posted on the official site of the Russian Federation for placement of information on placement of orders (www.zakupki.gov.ru), on PJSC ROSSETI’s electronic trading platform (etp.rosseti.ru), B2B- center ETP (www.b2b-center.ru), on the official sites of the Company (www.mrsk-cp.ru) and the Company’s branches.

Information on procurement

Indicator 2015 2016 2017 Total purchases, lots 2,529 2,838 3,431 Total purchases, RUB thous. 23,202,942.02 19,831,050.93 28,259,756.63

Information on holding procurement procedures on electronic trading platforms

Indicator 2011 2012 2013 2014 2015 2016 2017 Purchasing amount, carried 83.3% 95.3% 99.2% 99.8% 99.4% 99.9% 99.9% out on electronic trading platforms

Information on carrying out open purchases

Indicator 2011 2012 2013 2014 2015 2016 2017 Share of open procurement 89.7% 97.1% 98.8% 99.6% 99.6% 98.4% 97.5% procedures in the structure of purchases

Structure of purchases by methods of procurement

Indicator 2015 2016 2017 Open tenders 46.5% 44.1% 59.5% 12

Open requests for quotations 44.6% 5.3% 1.4% Open requests for proposals 8.2% 5.2% 8.6% Open auctions 0.3% 43.8% 28.0% Purchases from the single supplier 0.4% 1.6% 2.5%

In 2016, purchases were made from subjects of small and medium entrepreneurship in the amount of RUB 7,865802.56 thous. or 76.0% of the total amount of purchases in value terms. In 2017, purchases were made from subjects of small and medium entrepreneurship in the amount of RUB 15,543,080.26 thous. or 81.5% of the total amount of purchases in value terms. Share of expenses on local suppliers (contractors) 2015 2016 2017 36% 45% 62%

Significant growth in expenses on local suppliers (contractors) is connected, first of all, with actions held during 2016 - 2017, directed to improvement of organisation and carrying out of procurement activities: - quarterly procurement performance evaluation; - training in the organisation and implementation of procurement activities of representatives of purchasing subdivisions of branches; - involvement of subjects of small and medium entrepreneurship within implementation of the "Programme of partnership between IDGC of Center and Volga Region, PJSC and subjects of small and medium entrepreneurship" for the purpose of execution of Order of the Government of the Russian Federation of 29 May 2013 No. 867-r "About the approval of action plan ("road map") "Expansion of access for subjects of small and medium entrepreneurship to purchases of infrastructure monopolies and companies with the state participation". The held events allowed the Company: - in 2016 to gain economic effect following the results of holding procurement procedures in the mount of RUB 1,265,190.47 thous. or 6.0% of the planned declared value of competitive purchases; - in 2017 to gain economic effect following the results of holding procurement procedures in the mount of RUB 875,103.92 thous. or 3.0% of the planned declared value of competitive purchases.

5.4. Innovative activity Execution of complex innovative projects, implementation of key innovative EU8 technologies and selective innovative solutions at facilities of IDGC of Center and Volga (ex) Region, PJSC, allowing both to improve customer service quality, and to provide a possibility of stable growth of economy of the regions of operations, affect three main directions:

1) Transition to digital grids with a distributed smart system of automation and management. 2) Transition to comprehensive efficiency of business processes and automation of management systems. 3) Use of new technologies and materials in the electric power industry. In the direction "Transition to digital grids with a distributed smart system of automation and management" the following complex innovative projects should be noted as examples: - Project "Automation of the distribution grid section of Kirovsky Distribution Zone of Kalugaenergo Branch (10 kV overhead line No. 8 of the central power distribution station "CHLZ" and 10 kV overhead line No. 3, 8, 13 at the substation "Bolva") using smart switching devices with integrated controllers of connections in SCADA of a regional power grid dispatcher”. This project is included in the mid- term plan of the Programme of innovative development. The switching devices with integrated controllers of connections providing information transfer to SCADA "Dispatcher" in active nodes of the distribution grid of Kirovsky Distribution Zone of Production Base "Kirov Electric Grids" of Kalugaenergo Branch were installed. A GSM communication channel with deployment of ENTEK SCADA service software is applied to remotely control and exchange information, allowing to manage, view logs, measurements and alarms. Actual costs of the implementation of innovations under this project were RUB 12.74 mn. In the direction "Transition to comprehensive efficiency of business processes and automation of management systems" it is possible to give as an example the comprehensive innovative project on development of an asset management system (AMS). The purpose of this project - cost optimisation on implementation of the repair programme, the maximum decrease in risk of failures of electric equipment that exerts direct impact on SAIFI. In 2017, the following works were performed under this project: - database of the equipment of electric grid and information on fed customers was updated; - algorithms of calculation of technical condition according to an industry method of assessment of equipment health, approved by Order of the Ministry of Energy of the Russian Federation of 26 July 2017 No. 676, were finalised, automation of calculation under the new method was executed; - an electronic log of defects was automated; - filling of certificates of substations and power lines according to the AMS was automated; - calculation of scope of service in volume forming units was automated. In the direction "Use of new technologies and materials in the electric power industry" projects of reconstruction to increase power supply reliability should be noted as examples of implementation:

- 110 kV overhead line Suzdalskaya circuit 1 and 2 of Vladimirenergo Branch, on which aluminium steel core uninsulated wire was used, developed under the R&D contract (utility model patent No. 119514 "Non-insulated reinforced wire for overhead power lines"). This technical solution is used for extra critical sections of overhead lines, which require high mechanical and structural reliability, such as crossing of roads, railway lines, rivers, etc. - 110 kV overhead line Kama-RP Mostovoye circuit 1 and 2 with wire replaced by high-temperature one. Application of the high-temperature wire is associated with the operating conditions of the 110 kV Kama-RP Mostovoye overhead line having loads close to maximum allowed. This line provides power supply to a special category of customers (oil industry facilities). Efficiency of productive activity is reached not only due to implementation of new equipment with more perfect characteristics of energy consumption, reliability and durability, but also due to intellectual potential of employees, who through a system of technical improvement activity, make their contribution to increase in efficiency of the Company. In 2017, 25 proposals of authors were registered, from them 14 proposals are recognised as technical improvement and remuneration was paid to the authors for the total amount of RUB 0.27 mn, 2 proposals are under completion and the term of pilot application was prolonged for 2 of them. Generally, technical improvement thought was aimed at expansion of use of automated software, development of information technologies. Two improvement proposals - "Software "Lightning Protection 3.0", "Automated System of Recording of Results of Thermovision Inspection of Electric Equipment" (hereinafter – the ASRR TIEE) - are applied within replication in all branches of IDGC of Center and Volga Region, PJSC.

Costs for implementation of actions of the mid-term plan of the Programme of innovative development Actual costs, RUB mn No. Directions of innovative development (excluding VAT) 2016 2017 1 Transition to digital grids with a distributed smart system of 4.91 265.90 automation and management 2 Transition to comprehensive efficiency of business processes and 65.81 44.70 automation of management systems 3 Use of new technologies and materials in the electric power 296.23 60.69 industry 4 Development of a system of development and implementation of 24.17 45.52 innovative products and technologies (R&D) 5 Development of personnel potential and partnership in the field of 4.31 5.01 education 15

Actual costs, RUB mn No. Directions of innovative development (excluding VAT) 2016 2017 6. Actions in the field of environment 4.30 - Total 399.73 421.81

Executed research and development aimed at providing reliable electricity supply and stable development for 2016-2017  R&D "Development of intellectual system of power supply for express charging of electric vehicles on the basis of Li-ion battery cells at facilities with restrictions on pre-installed electric power and a category of power supply"

Work purpose: Creation of an intellectual system of power supply for express charging of electric vehicles on the basis of Li-ion battery cells and working out scenarios of its practical application. Received result: The System of reserve power supply of control office on the basis of Li-ion battery cells with a connected charging station for electric vehicles, which passed trial operation based on Ryazansky Distribution Zone of Production Base "Ryazan Electric Grids" of Ryazanenergo Branch, was created. Work result, including its social focus: The possibility of making a new innovative business direction on placement of stations of express charging for electric vehicles at facilities with restrictions on pre-installed electric power and/or a category of power supply was created. Such facilities can be: roadside infrastructure facilities, fuel stations, office and shopping centres.  R&D "Development of a suspension pole (single circuit and double circuit) from composite materials for a 35 kV high-voltage power line"

Work purpose: Development of designs, sets of working and design documentation, production of prototypes and carrying out tests of a suspension pole from composite materials for a 35 kV high-voltage power line. Received result: Working and design documentation, a method and a programme of tests of composite poles for a 35 kV high-voltage power line were developed, and also a pilot batch of single circuit and double circuit poles for performance of trial operation in Tulenergo Branch was manufactured.

Work result, including its social focus: The possibility of carrying out installation and construction works on a 35 kV high-voltage power line in the constrained conditions is provided, in the conditions of a hardly accessible area when application of facilitated modern hi-tech poles is required, allowing in an expedited manner with small costs to restore or install a new 35 kV high-voltage power line with safety of personnel at performance of works on elements of a pole. At the same time, decrease in transport weight of poles, simplicity of their assembly and installation, high specific durability and resistance to influence of climatic factors were reached.

5.5. Interaction with stakeholders Activity of IDGC of Center and Volga Region, PJSC is based on permanent 102-40 interaction with a wide range of stakeholders with which the Company supports open and 102-42 102-43 constructive dialogue. Channels of distribution of information are chosen so that to provide as free access to it as possible. At interaction with stakeholders the Company is guided by the following principles: - respect of opinion and accounting of interests of all participants; - timely informing; - interaction on a regular basis; - open productive cooperation; - mutual accomplishment of undertaken obligations.

Card of interaction with stakeholders

Interests/requirements of Interaction channels/methods with Stakeholders Stakeholders stakeholders  Price (rate) setting for regulated types of  Reliable and steady functioning of a activity power supply system  Approval of investment programmes and  Implementation of a programme of providing reporting on their execution THE STATE complex development of systems of  Working groups on development of schemes social infrastructure (state bodies, and the Programme of perspective  Implementation of long-term projects authorities of development of the electric power industry aimed at development of the electric  Agreements on interaction for development of territorial subjects power industry the electric power industry of regions of the Russian  Satisfaction of medium-term and long-  Submission of reporting to authorities and Federation), local term demand for electric energy and disclosure of information and statements of the power governments issuer according to the current legislation of  Attraction of additional investments the Russian Federation into regions and creation of new jobs  Working meetings and joint actions with  Tax deductions representatives of the regional authorities  Reliable, regular and high-quality  Customer Service Centres power supply  Joint information Centre CUSTOMERS  High quality of service  Single federal "hot line"  Transparency and availability of  Polls, questioning information on the Company’s activity  Corporate website (Internet reception) 17

 Satisfaction of needs for the  Federal and regional media Company’s services  Press conferences, thematic seminars and forums  Social programmes in regions of operations  Social and economic development of  Federal and regional media (press, television, SOCIETY regions of operations radio) (population, nature  Environmental protection  Press conferences, PR-actions, thematic protection and  Energy security and safety seminars, forums, contests public  Employment of the population  Management meetings with veterans, students organisations)  Charity and other social groups  Development of science (R&D)  Corporate website  Measures for prevention of electric injury rate  General Meeting of Shareholders  Dynamic growth and development of  Annual and sustainability reports, information the Company. brochures and booklets SHAREHOLDERS  Efficiency of activity  Regular meetings, negotiations with  Increase in the Company’s participation of the Company’s management AND INVESTORS capitalisation  Press conferences, presentations, forums  Transparency of activity and  Federal and regional media management in the Company  Corporate website  Polls of shareholders and investors  Mutually beneficial and long-term  Holding procurement procedures cooperation  Procurement procedures  Quality assurances PARTNERS  Commercial offers  Stable financial position (suppliers and  Corporate website  Profit making  Federal and regional media contractors)  Timely and exact accomplishment of  Thematic seminars and conferences, including contractual commitments meetings of the Company’s Technical Council  Fair competition  Collective bargaining agreement and internal documents within the Company’s  Worthy standard of living sustainability  High level of social security  Councils of veterans, Councils of young  Opportunities for personal and specialists professional growth STAFF  Trade-union organisations  Labour safety  Corporate means of communication  Increase in the status of the power  Work with a talent pool engineering profession  Staff training  Cultural and mass and sporting events  Availability and frequency of  Press releases, messages, comments  Press conferences MEDIA obtaining information on activity of the Company, key events,  Annual and sustainability reports development perspectives  Corporate website

6. Economic performance

"IDGC of Center and Volga Region, PJSC aims at outstanding performance of business as economic effectiveness is one of key drivers for implementation of both the Strategy of development of the power grid complex in general, and separate projects directed both to increase in sustainability of the

Company, and to development of the regions of operations."

Deputy General Director for Economy and Finance of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC – Alexander Inozemtsev

6.1. Operating and financial results 103-2 201-1 302-2 Direct economic value created and distributed EU12

Indicators, RUB mn 2015 2016 2017 Created direct economic value 72,330.3 81,250.3 99,294.4 Distributed economic value 72,330.3 79,478.2 92,829.5 operating costs 52,885.3 57,980.4 65,718.3 salary and other payments and privileges to employees 11,210.9 12,020.3 12,380.8 payments to capital suppliers 3,288.6 3,661.0 6,704.6 payments to the state 4,819.3 5,690.8 7,898.4 investments into local communities 126.2 125.7 127.5 Undistributed economic value 0.0 1,772.1 6,464.8

Volume of services in electricity transmission in comparable conditions

Change, Indicator UoM 2015 2016 2017 2017/2016 RUB mn % Revenue from electricity RUB 67,938.2 77,386.5 83,680.4 6,293.9 8.1% transmission (RAS) mn Revenue from electricity transmission (including territories RUB 67,938.2 77,386.5 86,111.1 8,724.6 11.3% of execution of functions of the mn electricity supplier of last resort)

Revenue for services in electricity transmission (RAS) shows considerable changes of growth for the period 2016-2017, which is connected with growth of the single (boiler) tariffs for services in electricity transmission, approved by the Regulator in the Company’s regions of operations and

19 starting from 01 August 2017 the exclusion from the calculation of determination of the size of revenue for services in electricity transmission of the cost of load electricity losses considered as a part of the prices (rates) in the electricity wholesale market within Order of the Government of the Russian Federation of 07 July 2017 No. 810 "About introduction of amendments to some acts of the Government of the Russian Federation concerning payment of electricity losses in the wholesale market of electric energy and power and retail markets of electric energy, and also obtaining the status of a subject of the wholesale market of electric energy and power". In 2017, the growth of revenue (including territories of execution of functions of the electricity supplier of last resort) relative to 2016 was RUB 8,724.6 mn, or 11.3%, including due to the cost reduction of load losses by RUB 1,053.3 mn.

Volume of rendered services in electricity transmission

Change, Indicator UoM 2015 2016 2017 2017/2016 million kWh %

Supply of electricity in network million kWh 53,535.3 53,963.2 54,745.2 782.0 1.4%

Net electricity supply (within borders of balance participation of the Company’s million kWh 48,675.7 49,120.5 50,374.5 1,254.2 2.6% branches)

Electricity losses million kWh 4,859.5 4,842.7 4,370.6 - 472.0 - 9.7%

Volume of rendered services in million kWh 47,900.6 48,446.3 48,308.2 - 138.0 - 0.3% electricity transmission

Following the results of 2017, the volume of services in electricity transmission decreased in comparison with 2016 by 138 million kWh, or 0.3%. The main reason of the decrease in the volume of the rendered services - the exclusion from the electricity balance of the volume of net supply of "the last mile" facilities according to paragraph 7 of Federal law of 26 March 2003 No. 35-FZ "About the electric power industry" (branches: Marienergo, Nizhnovenergo). In comparable conditions on "the last mile" the excess was 881 million kWh, and is caused by consumption growth of the largest customers of regions (482 million kWh) and the population (+399 million kWh). Following the results of work of IDGC of Center and Volga Region, PJSC in 2017, the volume of electricity supply from the grid to customers and adjacent Territorial Grid Organisations (TGOs) within the balance participation and service area was 50,374.5 million kWh, which is above the indicators of 2016 (49,120.5 million kWh) by 1,254 million kWh or 2.6%, and is caused by

20 consumption growth in regions (including: OJSC Russian Railways (+35 million kWh), PJSC Belkamneft (+57 million kWh), JSC UCC URALCHEM, GaloPolymer KCH LLC (+173 million kWh), OJSC Verkhnevolzhskiye Magistralnye Nefteprovody (+38 million kWh), the population (+399 million kWh)).

Changes of size of electricity losses

Change, Indicator UoM 2015 2016 2017 2017/2016 Losses, fact % 9.08 8.97 7.98 - 0.99 p.p. Losses, plan % 9.15 9.14 9.13 - 0.01 p.p.

Grid connection By results of 2016, the revenue of IDGC of Center and Volga Region, PJSC from services in connection of power installations to electric grids was RUB 859.5 mn excluding VAT, following the results of 2017 – RUB 733.4 mn excluding VAT. Thus, in 2017 relative to 2016 the decrease in the Company’s revenue from services in grid connection by RUB 126.1 mn was observed (or by 14.7%). The revenue reduction for 2017 in comparison with the same period of 2016 is caused by lack of revenue under especially large grid connection agreements, so in 2016 Ryazanenergo Branch closed the agreement on implementation of grid connection of a generation facility with PJSC Quadra- Generating Company (RUB 228.2 mn). The largest total revenue from services in grid connection following the results of 2016 was observed in the branches: Ryazanenergo (RUB 271.1 mn excluding VAT), Nizhnovenergo (RUB 250.0 mn excluding VAT), Kalugaenergo (RUB 205.9 mn excluding VAT), following the results of 2017 – Nizhnovenergo (RUB 238.4 mn excluding VAT), Kalugaenergo (RUB 177.3 mn excluding VAT), Vladimirenergo (RUB 144.7 mn excluding VAT).

Value-added services IDGC of Center and Volga Region, PJSC develops value-added services rendered to customers and which are not related to the core business on electricity transmission and grid connection. The value-added services have commercial character and are not subject to obligatory state regulation. The list of the value-added services rendered to customers is rather big, the following can be referred to the main ones: the service of temporary limited access to infrastructure facilities for placement of equipment of applicants, installation and replacement of metering devices, maintenance of facilities of applicants.

Changes of revenue from the sale of value-added services

450 400 382.2 350 300 250

200 154.7 150 89.3 100 50 0 Revenue, RUB mn

2015 2016 2017

The revenue amount under agreements of value-added services in 2017 increased in relation to the previous reporting period by 2.5 times and was RUB 382.2 mn. Since 2017, new services are provided to customers of IDGC of Center and Volga Region, PJSC: "Performance of work within the competence of customers at implementation of the grid connection procedure", "Removal of restrictions on use of a land plot".

6.2. Dividend payout The dividend policy of IDGC of Center and Volga Region is aimed at the maximum 102-35 observance of the rights of all shareholders of the Company, creation of necessary 102-36 conditions for increase in the Company’s capitalisation and investment case, and also 102-38 achievement of effective balance between distribution of net profit to dividend payout and development of the Company. The text of the Regulation on the dividend policy is posted on the website of the Company (www.mrsk-cp.ru) in the section "Shareholders and investors"/"Internal documents of the Company" (http://www.mrsk-cp.ru/stockholder_investor/disclosure_reporting_info/vnutrennie-dokumenty- obshchestva-/).

Information on dividend payout on the Company’s shares

Amount of Reporting period Amount of Decision date Share of dividend Amount of paid for which accrued Share of paid about dividend dividends in payout per 1 dividends*, dividends were dividends, dividends*, % payout net profit, % share, RUB thous. accrued and paid RUB thous. RUB 2014 16.06.2015 349,363 25.4 0.0031 345,296.21 98.84 2015 09.06.2016 942,560 100.0 0.008363605 932,084.44 98.89 2016 05.06.2017 1,329,045 42.9 0.011793 1,313,841.21 98.86 * As at 31 December 2017. The deviation from 100% of payment of the accrued dividends is connected with the fact that information about bank and post details of some shareholders is absent or unreliable in the system of maintaining the shareholders’ register for transfer of the income. 22

6.3. Contribution to development of regions. Implementation of an investment programme IDGC of Center and Volga Region, PJSC is a fair and responsible taxpayer respecting all tax laws of the Russian Federation. IDGC of Center and Volga Region, PJSC is the budget forming enterprise in nine regions of operations. According to the Tax laws of the Russian Federation the Company pays the value added tax, the income tax, the property tax, the land tax, other taxes, and also contributions to off-budget funds of the Russian Federation.

Tax contributions of the Company (RUB mn)

2017/2016 2017/2016 Budget levels 2015 2016 2017 (absolute (relative change) change) % Federal budget 4,005.3 4,600.4 6,378.4 1,778.0 38.65 Consolidated budget of the 2,698.2 3,605.7 4,823.2 1,217.5 33.76 Russian Federation Off-budget funds of the 2,980.3 3,262.5 3,527.7 265.2 8.13 Russian Federation Total 9,683.8 11,468.6 14,729.3 3,260.7 28.43 In total in 2017, RUB 14,729.30 mn were transferred as taxes and contributions, which is 28.43% more than in 2016. The change in the tax load of the Company is caused by increase in the volume of rendered services and rates in electricity transmission.

The result of implementation of the investment programme for 2016-2017 was increase in reliability of power supply of customers and decrease in wear of fixed assets. Conditions for connection of new capacities and development of regions in the service area of IDGC of Center and Volga Region, PJSC were created. Regarding investing activities, the Company implemented construction projects of new and reconstruction of existing power grid infrastructure facilities. In total in 2016, RUB 8.7 bn were invested, from them on financing of new construction – RUB 1.8 bn (104%), on modernisation and reconstruction – RUB 6.9 bn (99%). In 2017, RUB 11.1 bn were invested, from them on financing of new construction – RUB 1.7 bn (100%), on modernisation and reconstruction – RUB 9.4 bn (98%). The investment programme of 2016-2017 was executed in full.

Most significant and priority investment projects put into operation in 2016-2017 Year of Branch Investment project commissioning Construction of SS-110/10/10 kV "Vorsha" with taps of a 110 kV overhead line was implemented for increase in reliability of power 2016 Vladimirenergo supply and ensuring the need for grid connection of customers of Sobinsky District of the Vladimir region. Capacity commissioned was 126 MVA and 1.6 km of power lines. Within implementation of grid connection of new customers of the residential micro-district "Pravgorod" in the city of Kaluga, construction of SS 110 kV "Verkhovye" (mobile SS) with reconstruction of the double circuit 110 kV overhead line "Kaluga 2016 Kalugaenergo CHP-1-Orbita" with taps to SS 110 kV "Kvan" and SS 110 kV "Mayak", the 110 kV overhead line "Orbita-Zheleznyaki" with a tap to SS 110 kV "Verkhovye" was performed (stage 1). 25 MVA transformer capacity and 7.2 km of power lines were commissioned. For the purpose of providing power supply to infrastructure facilities for holding the 2018 FIFA World Cup in Nizhny Novgorod, construction of a new 10 kV distribution transformer substation, 2016 Nizhnovenergo laying of two 10 kV lines from SS 110 kV "Strelka" was perfromed, laying of a 10 kV line from SS 110 kV "Mescherskaya" to the new 10 kV distribution transformer substation. 12.4 km of power lines were commissioned. Project implementation of reconstruction of SS 110 kV "Mescherskaya" allowed to provide power supply to infrastructure 2016 Nizhnovenergo facilities for holding the 2018 FIFA World Cup in Nizhny Novgorod. 25 MVA transformer capacity was commissioned.

For ensuring reliable power supply and grid connection of customers in the Obninsk power node of the Kaluga region, the 3rd stage 2017 Kalugaenergo construction of SS 220/110/10 kV "Constellation" was performed (stage 3.1 of the construction was commissioned in 2017).

With the purpose to increase reliability of power supply of customers of Aleksandrovsky District of the Vladimir region, 2017 Vladimirenergo construction of the 35 kV overhead line "Krasnoye-Plamya – Lobkovo" is performed. 16.9 km of power lines were commissioned.

For ensuring power supply of infrastructure facilities for holding the 2018 FIFA World Cup in Nizhny Novgorod (a training field), construction of a 0.4 kV cable line was performed (0.99km). 0.99 2017 Nizhnovenergo km of power lines were commissioned. Transformer substation-3355 f. 5,16. Sormovsky Distribution Zone of Production Base "Central Electric Grids". Reconstruction of the 110 kV overhead line "Plavsk-Schekino" with a tap to SS 110/35/6 kV "Smychka"-1, the 110 kV overhead line "Plavsk-Lazarevo" with a tap to SS 110/35/6 kV "Smychka"-2, the 2017 Tulenergo 110 kV overhead line "Lazarevo-Schekino" allowed to provide reliability of power supply of current customers in Schekinsky District of the Tula region. 26.5 km of power lines were commissioned.

For accomplishment of substituting actions in connection with decommissioning of generation facilities at Cherepetskaya GRES, including 110 kV Switchgear, providing reliable power supply of several districts of the Tula and Kaluga regions, reconstruction of a 2017 Tulenergo 110 kV overhead line with meshed lines and modernisation of communication equipment, remote control and relay protection and automation (The actions were performed while decommissioning the 110 kV Switchgear of Cherepetskaya GRES). 1.4 km of power lines were commissioned. Within increase in reliability of power supply of oil production enterprises of OJSC Udmurtneft, PJSC Belkamneft, industrial enterprises and the household sector of Sarapulsky District of the 2017 Udmurtenergo Udmurt Republic. The 110 kV overhead line "Kama-RP Mostovoye" circuit 1,2 spans of poles No. 25-96, 101-127. Reconstruction with replacement of wire with high-temperature one was implemented. 26.4 km of power lines were commissioned.

Further, at execution of the Investment Programme of IDGC of Center and Volga Region, PJSC for 2018-2022, implementation of investment projects directed to increase in reliability of power supply of customers in the Company’s regions of operations is provided.

In 2016-2017, IDGC of Center and Volga Region, PJSC connected a number of enterprises and production sites to electric grids, which are of great importance for social and economic development of the Company’s regions of operations. Among the large customers connected to the Company’s grids are: - in the Vladimir region: industrial manufacture of products on the basis of heat-insulating foamglass of the NEOPORM brand of CJSC STES-VLADIMIR (5.9 MW), JSC Danon Rossiya enterprise (2 MW), production of rolled galvanised steel coating with polymer compounds of United Company RusTekhnologii LLC in the city of Murom (6 MW); - in the Kaluga region: a brick-making plant of Transstrominvest LLC (3.5 MW), broilers fattening sites and a grain processing shop of JSC PRODO Kaluzhskaya Poultry Factory (5.6 MW); - in the Kirov region: production of glued bars of Holts House LLC (2 MW); - in the Nizhny Novgorod region: a pig breeding facility of NNPP LLC (2.24 MW), the building of the Nizhny Novgorod Regional Court (1.78 MW); a modern solid municipal waste sorting facility in the city of Dzerzhinsk of MAG Group LLC (1 MW); the Government House of the Nizhny Novgorod Region (2.1 MW); - in the Ryazan region: a nonwoven cloth production facility of LLC Rusvata (3 MW), SS 110/10 kV for power supply of MPS "Shilovo-3" of JSC Transneft-Upper Volga (4 MW), Ryazan Pipe Plant LLC (10.6 MW); - in the Tula region: a woodworking plant of LLC ForestGrant (3 MW), Tula Plant of Concrete Goods LLC (1 MW), Pipe Plant Plavstal LLC (0.63 MW);

- in the Udmurt Republic: a suction dredger for extraction of sand-gravel mix of JSC River Port Sarapul (2 MW), Arlanskoye oil field of PJSC Belkamneft (10 MW), Plant of Oil and Gas Equipment Tekhnovek LLC (2.5 MW), SS 110/10 kV in the load centre of Karsovaysky oil field in Balezinsky District of the Udmurt Republic of JSC Udmurtneft (mineral extraction – 545 thous. tonnes of oil a year) (5.8 MW), JSC Izhevsk Electromechanical Plant Kupol (2 MW). Besides, large projects of housing construction, social and utility infrastructure facilities were connected to electric grids of IDGC of Center and Volga Region, PJSC.

Training in corporate training centres of the Company of employees of third parties IDGC of Center and Volga Region, PJSC operates its corporate network of training consisting of 7 training centres, which were founded by the Company. Branches of the corporate training centres are located in all regions of operations of the Company. Annually, based on the training centres of the corporate network, more than 6,000 workers of third parties are trained. The most demanded in 2016-2017 were the following directions of training: labour protection and safety, precertification training on industrial and energy safety, fire safety basics, electrical engineering and heat engineering specialties.

Number of trained employees of third parties, persons 8000 7707 6739 7000 6356 6000 5000 2015 2016 2017

Annually, the training centres of the corporate network updates and extends the list of educational programmes. In 3 training centres of the corporate network there are hostels (living rooms for 1-3 persons with TVs and new furniture), where trainees can live during training. All necessary living conditions are created for living.

Electricity supply of social facilities Fulfilling in full the obligations for timely connection to grids of large industrial, residential and social facilities, small and medium businesses, IDGC of Center and Volga Region, PJSC promotes creation in the regions of operations of new jobs, implementation of effective housing policy, making thus a powerful contribution to ensuring social and economic stability in subjects of the Russian Federation.

The established tariff decisions on payment for grid connection allow to approach individually each applicant, who requested implementation of grid connection, and to minimise a fee for grid connection. Providing privileges on grid connection creates favourable conditions for development of small and medium businesses in regions, makes an available service for individual housing construction. IDGC of Center and Volga Region, PJSC, being one of the largest companies, does not forget about the social responsibility and actively participates in life of the regions of operations, thus also making the contribution to their development (more details about it in sections 10.4 and 10.5).

90 percent of new clients of IDGC of Center and Volga Region, PJSC’s branch - Kalugaenergo - customers of "subsidised" categories.

Among the connected facilities, except apartment houses, country cooperatives, large-scale production plants and small businesses, such important social facilities as an innovative cultural centre, a new school, and one of the biggest in Russia, in the residential micro-district "Koshelev-project" in Kaluga, 2 kindergartens and 2 medical institutions in different districts of the Kaluga region. The largest facilities in terms of connected capacity were a brick-making plant of Transstrominvest LLC, a greenhouse complex of Agro-Produkt LLC and a plant for production of gas concrete of Sibirsky element-Renta-K LLC. The Kaluga region has been for more than 10 years one of the most dynamically developing subjects of the Russian Federation: here new industrial production facilities, modern agricultural enterprises, social and cultural facilities appear intensively, active housing construction is under way. Therefore, in the region there is still great demand for power grid connection services. During 2016, Kalugaenergo Branch performed work on grid connection under 7,879 agreements for a total of 150 MW, at the same time, it should be noted that 90 percent of new clients - customers of "subsidised" categories for which the service cost is RUB 550.

IDGC of Center and Volga Region, PJSC’s branch - Nizhnovenergo in 2017 performed grid connection of 40 new facilities of the hardware and software "Safe City".

Specialists of Nizhnovenergo performed grid connection of 40 new facilities of the hardware and software "Safe City", which is intended for increase in the level of public safety and the life environment due to creation of a comprehensive information system providing forecasting, monitoring and prevention of possible threats, and also control of elimination of effects of emergency situations and offenses. Besides, actions for grid connection of 49 apartment houses, including constructed according to regional target programmes of resettlement from shabby and hazardous dwelling and support of young specialists, were executed.

7. Ensuring reliable and uninterrupted power supply

"In the conditions of fair increase in quality requirements of power supply by electricity customers, the accelerated creation and implementation of a set of actions aimed at prevention of technological disturbances as ensuring safe and reliable functioning of the power grid complex is one of the most socially important activities both for the Company, and in general for the state, becomes an extremely important task for the Company."

First Deputy General Director - Chief Engineer of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC – Alexander Pilyugin

7.1. Elimination of failures and technological disturbances Power engineers constantly work on reduction of time of elimination of failures and technological disturbances. The Company created a clear response system at emergencies, antiemergency trainings, drills and competitions, including in field conditions, are constantly held. Steady decrease is observed regarding the failure rate indicators for 2017 in comparison with previous periods. Failure rate indicators 2015 2016 2017 Number of technological disturbances (failures), 17,424 16,960 16,793 pcs Specific failure rate, failures per 1,000 c.u. 11.42 10.96 10.70 SAIDI, hour 3.61 3.68 2.75

In the reporting period, in connection with passing of dangerous meteophenomena (thunder- storms, heavy rain, hail, heavy snow, sleet, squally wind more than 20 m/s) there were mass outages in all branches of IDGC of Center and Volga Region, PJSC. Emergency recovery operations (hereinafter - the ERO) were carried out within the shortest possible time, breaks of power supply of customers did not exceed contractual conditions. The main causes of the emergency outages: - falling onto wires of power lines of branches and trees from the main forest area; - aging of insulation and material of equipment. For the ERO organisation 76 mobile units were created (467 people and 163 vehicles) in the Company’s branches. Time of crews’ availability for movement to an area of the ERO within Production Base (Distribution Zone) is 2 hours. Time of beginning of movement of mobile units to an 30 appointed area from the moment of receiving a decision of the Crisis Management Centre does not exceed 4 hours in working hours and 8 hours after office hours, 2 and 4 hours, respectively, when branches are functioning on high alert or have a special mode of operation. All units have qualified staff, off-road vehicles, means of communication, reserve sources of power supply, necessary tools and devices, overalls, a stock of financial resources and food dry rations. The Company has 8 mobile trailers (3 - "Den" for 8 berths and 5 - car hostels for 4 berths). Also, in case of emergency the system of immediate financing works. For ensuring back-up power supply of socially important customers, the branches use reserve sources of power supply, the Company purchased a total of 948 back-up power supply sources with total capacity of 29.8 MW, completed with fuel and lubricants and means of connection. Delivery means and an order of mobilisation of back-up power supply sources at mass outages are defined. Personnel training was provided. Lists of all back-up power supply sources are placed in control rooms of all levels. Mobile back-up power supply sources are as close as possible to places of possible use (placed in Distribution Zones and Production Bases). Stationary back-up power supply sources are installed at the most important socially important facilities. The back-up power supply sources are in permanent readiness for use. Also, there are mobile modular substations of 110/10 (6) kV at 25 MVA (5 pieces), mobile Package outdoor switchgear of 6-10 kV (2 pieces), light towers (35 pieces) and petrol-generators with searchlights (73 pieces). The Company created the Crisis Management Centres, which are provided with dedicated off- road cars for work in the autonomous mode on site of production of the main ERO. The dedicated cars are equipped with necessary equipment, means of communication, information materials sufficient for effective work of the Crisis Management Centre, synchronous work of the Crisis Management Centres of all levels is organised. Structures of the Crisis Management Centre of the Company included representatives of branches of PJSC FGC UES - MES/PMES, Branch of the Technical Inspection Centre of Center and Volga of PJSC ROSSETI. For the purpose of organisation of interaction for prevention and elimination of failures and emergencies, minimisation of time of emergency recovery operations, IDGC of Center and Volga Region, PJSC developed and signed 337 agreements, from them: 3 with PJSC FGC UES - (MES of Center, Volga, Urals); 8 with IDGCs (Urals, Volga, North-West, Centre, South, Tyumenenergo, MOESK and Kubanenergo); 9 with General Directorates of the EMERCOM; 9 with the State institutions on hydrometeorology and monitoring of the environment in territories of presence of the Company’s branches; 259 with administrations of cities (districts) and subdivisions of the EMERCOM of Russia; 17 with other subjects of the power industry; 31 with contract organisations; 1 with airlines.

For immediate exchange of information there is video conferencing of the informant on duty of the Operational and Situational Centre of IDGC of Center and Volga Region, PJSC with operators on duty of services of the Central Regional Centre (Moscow). The Company operates a system of automatic notification at emergency situations and immediate automatic SMS informing. In the Operational and Situational Centre of IDGC of Center and Volga Region, PJSC there are alternative channels of communication with the Situational and Analytical Centre of PJSC ROSSETI. There is an agreement with mobile operators on interaction during emergency situations allowing to use cell phones in the network of any operator regardless of the SIM card. "Hot line" phones of IDGC of Center and Volga Region, PJSC and its branches function concerning power supply of customers, which are posted on the Company’s website, and also in mass media. For informing the population about technological disturbances and the ERO progress, executive authorities and local governments have contacts of corresponding heads and operating personnel of the Company. The Company regularly held antiemergency (fire-prevention) trainings and command-staff exercises: in 2017 a total of 7,017 antiemergency trainings (exercises) (6,913) were carried out, from them, trainings on introduction of schedules of emergency restriction of the mode of consumption of electric energy - 233 (231), joint with the EMERCOM of Russia and executive authorities of local governments - 245 (230), with Russian Railways - 45 (45), in the conditions of low temperatures - 1,296 (1,291), with TGOs and other subjects - 127 (123). 39 joint exercises were also held (30 - for special periods (a flood, a thunder-storm, fire-hazardous period, autumn-winter period) and 9 extraordinary exercises within preparation of the power grid complex for reliable work during the autumn and winter period). During the trainings and joint exercises they worked out interaction of the Crisis Management Centre with territorial authorities, the EMERCOM, other subjects of the power industry (TGOs, PMES, Transmission Control Centre); minimisation of time for movement of necessary forces and means, connection of back-up power supply sources; installation of a pre-fabricated pole; holding meetings in a format of audio and video conferencing; gathering, notification and work of the Crisis Management Centre; deployment of a dedicated car in field conditions with check of operability of means of communication and telecommunications; checks of operability of satellite means of communication; start of movement of mobile crews for carrying out the ERO, etc. Resources of IDGC of Center and Volga Region, PJSC were also involved for assistance at mitigation of consequences of technological disturbances in the power grid complex of PJSC ROSSETI’s Group of Companies:

- in 2016, according to the signed agreements - 65 crews, 341 people, 77 vehicles, 50 back-up power supply sources gave help in mitigation of consequences of technological disturbances in the power grid complex of MOESK (November) and IDGC of South (December); - in 2017, according to the signed agreements - 94 crews, 488 people, 104 vehicles, 13 back-up power supply sources gave help in mitigation of consequences of technological disturbances in the power grid complex of MOESK (May), IDGC of Urals (June), IDGC of Volga (July), IDGC of Centre (August, December). During 2016-2017, the Company provided both reliable power supply of customers, and the minimum period of time for elimination of technological disturbances. (the SAIDI was 2.75 h).

7.2. Increase in reliability of electric grids The main activities of the Company are increase in reliability of power supply EU28 of customers, the level of operation of electrical equipment and steady work of EU29 electric grids. Stable operation of power equipment and grids is under constant control of specialists of the power company and especially in the period of low temperatures, natural cataclysms and raised loads in grids.

For the purpose of increase in the level of operation and reliability of electric grids in 2017 the Company performed the following most significant actions:

Name of the action, performed Result of accomplishment of the action scope The level of reliability of power supply of customers was Replacement of 79,525 insulators increased. The number of faulty insulators on 10 kV overhead of 10 kV overhead power lines power lines, in comparison with last year, decreased by 45% (from 2,242 pcs to 1,234 pcs) The level of reliability of power supply of customers is Replacement of 36,171 insulators increased. was increased. The number of faulty insulators on of 110 kV overhead power lines 110 kV overhead power lines, in comparison with last year, decreased by 56% (from 727 pcs to 322 pcs) The level of reliability of power supply of customers was Replacement of 10,553 poles of 10 increased. The number of faulty poles of 10 kV overhead power kV overhead power lines lines, in comparison with last year, decreased by 29% (from 565 pcs to 400 pcs) Replacement of lightning protectors of 10-110 kV by surge At high intensity of storm fronts the number of technological arrestor in the number of 3,040 pcs disturbances because of influence of lightning overvoltage, in Replacement of 101 km of ground comparison with last year, decreased by 24% wire on 35-110 kV overhead power lines

Efficiency evaluation of the implemented actions by the actual outages for 2017 at facilities, which were included in the scope of work, performed in 2016 Number of emergencies, urgent outages at Name of the action for increase in reliability, implemented in facilities, at which the actions were 2016, linked to facilities (overhead power lines, substation) performed in 2016 2015 2017 Changes, % Expansion and clearing of ROWs along: 929 1290 39 overhead power lines of 6, 10 kV – 436 pcs. 177 35 - 80 overhead power lines of 35 kV – 123 pcs. overhead power lines of 110 kV– 146 pcs. 125 109 - 13 Replacement of uninsulated wire on overhead power lines of 6-10 kV by self-supporting insulated wire SIW-3 623 217 - 65 – 146 pcs. Replacement of insulators on overhead power lines of 6- 553 225 - 59 10 kV – 167 pcs. Replacement of insulators on overhead power lines of 35- 53 15 - 72 110 kV – 17 pcs. Replacement of defective poles of overhead power lines 2,046 1,854 - 9 of 6-10 kV – 883 pcs. Replacement of defective poles of overhead power lines 52 35 - 33 of 35-110 kV – 49 pcs. Replacement of ground wire on 35-110 kV overhead 35 21 - 40 power lines – 36 pcs.

Total failure rate for 2015-2017

5.92 4.75 3.61 3.68 3.47 2.75 2015 2016 1.74 1.46 2017 1.23

CAIDI in 6 kV grid and above, hour SAIDI, hour SAIFI, numbers

7.3. Safety of the population, customers and information promotion of electric safet

Number of injured third parties

13 12

1 4 minor

7 severe 1 11 9 fatal 6

2015 2016 2017

Analysis of injury rate of third parties of IDGC of Center and Volga Region, PJSC

In 2016, there were 7 accidents at power facilities of IDGC of Center and Volga Region, PJSC, from them 6 fatalities, 1 minor injury. In 2017 - 12 accidents, from them 11 fatalities, 1 severe injury.

The main types of injury of third parties for the period 2016-2017 are: – suicide; – unauthorised work in the security zone of an overhead power line; – unauthorised connection; – theft. For the purpose of decrease in injury risk of third parties, IDGC of Center and Volga Region, PJSC developed and implemented the Comprehensive Programme for decrease in risks of injury of staff and third parties at facilities of the power grid complex for 2014-2017, including organisational and technical actions, outreach and training, directed to decrease in electric injury risk and warning of the population of danger of impact of electric current.

Organisational and technical actions in 2016/2017: 1. Placement of 16,322/51,291 additional information signs and posters, including on water body banks near overhead power lines warning the population about danger of electric shock. 2. Removal of overhead power lines with uninsulated wires from premises of sports facilities, schools, technical schools, preschool institutions, orphanages, children’s playgrounds, and also from territories of children’s recreation camps. 3. Accomplishment 58/90 raised (not less than 10 m) dimensions in places of transitions of 0.4- 10 kV overhead power lines over rivers and other water bodies, where fishing is possible. 4. Replacement of 28/3 km of uninsulated wires for insulated in spans of poles, where there are transitions of 0.4-10 kV overhead power lines over rivers and other water bodies, where fishing is possible. 5. Replacement of 925/370 doors of 0.4 kV switchgear and 10 kV switchgear of closed transformer substations in settlements for metal ones, and also 855/6345 padlocks of closed transformer substations for locks of increased durability with an original key, or locks of internal installation. 6. Within maintenance of electric equipment, warning signs and posters on poles of power lines and other equipment, which are absent and difficult to read, and condition of entrance doors, locking devices and barriers are checked and restored.

Outreach on electric safety

Considering the increased danger of all power facilities, IDGC of Center and Volga Region, PJSC at implementation of the Comprehensive Programme for decrease in risks of injury of third

36 parties at power facilities, pays special attention to work with minors. Throughout the year (in school hours and during holidays) the Company’s task is not only to provide technically serviceable condition of barriers of power installations and locking devices, but also to draw attention of children, teenagers, teachers and parents to a real-life problem of electric injury rate. So, during the 2016 - 2017 school years, more than 61 thousand children participated in 2,000 advisories and in 200 tours to power grid facilities. During summer holidays work with children was conducted on sites of children’s school and country camps, having covered more than 3,000 holiday makers. More than 300 power engineers were involved in actions for prevention of children’s electric injury.

Lessons traditionally are held according to the proven plan: viewing of the training movie "When electricity is dangerous", answers of pupils to questions of an "electric safety quiz", joint discussion of potentially dangerous situations. Power engineers in details explain why it is impossible to fish, set up the camp, to burn down fires near a power line, what danger is with electric devices if to use them with abuse of electric safety regulations. During a lesson they practice skills of safe exit from a zone of "step voltage". Training in skills of rendering the first pre-medical aid is provided in a practical part for pupils of middle and high school. Children are demonstrated the main resuscitation procedures. For memory of lessons all pupils receive colourful souvenirs and visual aids on electric safety. In March 2016, power engineers of IDGC of Center and Volga Region, PJSC started the social and educational project on electric safety "Elektropatrol", which became a part of the Company’s

37 continuous large-scale work on prevention of children’s and teenage injury at power grid facilities. The project started with a website – the educational group "Elektropatrol" on the social network "VKontakte" (https://vk.com/elektropatrul). The group with content on electric safety for a wide range of users contains didactic materials, video, animation and audio files for organisation of lessons with children and for personal viewing. Among participants of the group there are children, teachers and parents ready to exchange opinions and useful information on electric safety. Representatives of teaching staff and parent committees began actively joining the educational initiative of the power engineers. On the website of the Company (http://www.mrsk-cp.ru/) or on the social and educational public page "Elektropatrol" on the social network "VKontakte" it is possible to submit a request for carrying out a free lesson of electric safety in any classroom, any educational institution of the Company’s regions of operations. Power engineers expanded audience of training. Two pilot events in Nizhny Novgorod kindergartens showed that senior preschool children are ready to perceive information and rules concerning electric safety if they are presented in the form of "not dull lessons" with games, quizes, riddles and puzzles. In total, more than 1,500 people participated in the events. During the reporting period information exchange with representatives of target audience reached a new level. Along with traditional resources of distribution of information through TV channels, radio stations, street monitors and at offices of customer service, they began using commercial monitors of shopping centres and video screens in educational institutions, an official channel of the power company on Youtube, the social and educational project "Elektropatrol" on the social network "VKontakte" numbering about 1,800 active participants including children, parents and teachers. Commercial structures also joined the prevention of electric injury providing their sites for carrying out holiday events of electric safety. The "Day off with the Elektropatrol team" passed twice in the premises of the Nizhny Novgorod shopping centre, where more than 200 young and adult visitors showed knowledge of rules, participated in an electric safe flashmob and tried on overalls of a power engineer. In 2017, along with such traditional projects as the information campaign in public transport, broadcast of video content on the OKSION monitors, seminars for teachers, "Not dull lessons with the Elektropatrol team for preschool children and all-school events "Live without tension", new projects were also implemented: the joint project of the Nizhny Novgorod power engineers and the museum of entertaining sciences the "Festival of electricity and electric safety "Elektric shift in the museum Quarks", joint projects of power engineers and members of students’ energy crews of regions "Electrical safety holidays" in children’s country camps, competitions on knowledge of rules of

38 electric safety "Good Energy" in the Vladimir region, lessons based on classrooms of Fundamentals of Health and Safety in Kaluga. Following the results of joint actions the Company’s branches and educational institutions of the regions established the partnership assuming continuation of cooperation within further work in a school year and in the period of summer school camps, and also organisation of tours to power facilities. In 2017, more than 65,000 pupils from the Vladimir, Ivanovo, Kaluga, Kirov, Nizhny Novgorod, Ryazan and Tula regions, and also from the Republic of Mari El and the Udmurt Republic took part in 2,138 lessons of electric safety. More than 3,000 children from regions of the service area of IDGC of Center and Volga Region, PJSC became participants of interregional Internet contests on knowledge of rules of electric safety. On the official channel in Youtube in 2017 videos on electric safety were seen 23,500 times that made 50 days of continuous viewing. More than 85,000 printing copies and souvenirs found addressees within large-scale work of the branches of IDGC of Center and Volga Region on electric injury prevention. Besides, in 2017 the Company’s power engineers presented the thematic handbook collection on electric safety "A notebook of electric knowledge", created in a co-authorship with participants of the Internet contests "Electric knowledge and Prize mania". The unique collection, consisting of drawings, riddles, quizzes, verses and crossword puzzles, sent by children from the Vladimir, Ivanovo, Kaluga, Kirov, Nizhny Novgorod, Ryazan and Tula regions, and also the Republic of Mari El and the Udmurt Republic appeared within implementation of the large-scale programme of IDGC of Center and Volga Region, PJSC for electric injury prevention. The handbook is intended for children of different ages, it will help spend time with advantage and better remember important rules of electric safety. The idea of the power engineers was highly appreciated by the general public as the rules presented in an interesting form and clear words are better perceived by children. Further, the Company is going to distribute the handbook "A notebook of electroknowledge" at lessons of electric safety and events for prevention of electric injury, organised by the power company. The power engineers are convinced that in the field of electric injury prevention only joint activity of all stakeholders (staff of the power company, teachers and parents) can give effect and help create at children and teenagers skills and culture of electric safe behaviour, therefore, the complex work of IDGC of Center and Volga Region, PJSC in this direction will be continued. The Company’s work in the field of prevention of electric injury was highly appreciated by the jury of the All-Russian Award MediaTEK, held under patronage of the Ministry of Energy of the Russian Federation, where in 2017 IDGC of Center and Volga Region, PJSC won the first place in the nomination "Safe Energy".

8. System of customer service

"Fulfilling the obligations for timely and high-quality connection to grids of large industrial, residential and social facilities, small and medium businesses, the Company promotes creation in regions of the Central and Volga Federal Districts of new jobs, implementation of effective housing policy, making, thus, a powerful contribution to ensuring social and economic stability in the regions of operations."

Deputy General Director for Sale and Development of Services of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC – Konstantin Petukhov

8.1. Ensuring high-quality and available services for customers IDGC of Center and Volga Region, PJSC constantly EU23 32 Customer improves business processes directed to creation of comfort (ex) Service Centres and representation of complete service to customers. For convenience of the

population 32 offices of customer service function in the Company’s branches and production bases. Customers of services are given an opportunity of free choice of any of three types of channels of information exchange - internal, correspondence and interactive - depending on individual possibilities and preferences of the customer of services.

For implementation of the system of correspondence customer service the toll-free telephone number of the Call Centre at 8800100-33-00 works throughout the service area of IDGC of Center and Volga Region, PJSC. Calls are received from customers by: . the Call Centre’s operators at the level of the executive office of IDGC of Center and Volga Region, PJSC (they operate round the clock without days off) at the "hot line" federal number. . the Call Centre’s operators at the level of the Company’s branches (they operate according to the working schedule of customer service centres) – calls are received by 18 operators of the "hot line" of nine branches concerning the Company’s activity: outages and quality of electricity, grid connection, electricity transmission, electricity metering devices, value-added services. For expansion of capability of the correspondence service and efficiency of providing information on requests of customers, staff of 32 offices of customer service consult customers via additional numbers of local telephone communication lines.

For interactive service the section "Customers" (http://www.mrsk-cp.ru/for_customers/) is on the corporate website of IDGC of Center and Volga Region, PJSC. In the section the customer can obtain all necessary information on rendered services: grid connection to electric grids, commercial accounting and service in electricity transmission, value- added services rendered by the Company. Convenient interactive services are provided for customers of services: The "Internet reception" and "Personal account" providing to customers an opportunity to get remote access to the Company’s services. In 2017, an opportunity to sign the offer of the agreement of grid connection with use of the electronic and digital signature in the "Personal account" on the corporate website of IDGC of Center and Volga Region, PJSC was provided for customers of services. Additional channels of interaction with customers through the WhatsApp and Viber messengers on a case of emergency situations in the power grid complex were set up.

Energy saving and increase in energy efficiency

Today the Company sees the mission in promotion of standards of energy efficiency 302-4 and energy saving applicable to the whole distribution power grid complex of regions of operations, including grids of territorial grid organisations and customers. On 23 November 2009, Federal law of the Russian Federation No. 261-FZ "About energy saving and increase in energy efficiency and about modification of separate legal acts of the Russian Federation" was adopted. Federal law No. 261-FZ of 23 November 2009 covers the activity connected with use of energy resources. The provisions of this Federal law, established to the organisations 42 performing regulated types of activity, are applied to the regulated types of activity performed by these organisations. IDGC of Center and Volga Region, PJSC is a state regulated natural monopoly, therefore, refers to organisations performing the regulated types of activity. The state regulation in the field of energy saving and increase in energy efficiency is performed by establishment of: - obligations for billing of used energy resources using metering devices; - requirements of energy efficiency of buildings, structures, constructions; - duties of carrying out obligatory power inspection; - requirements to a power certificate; - requirements to programmes in the field of energy saving and increase in energy efficiency of organisations with participation of the state or municipality and organisations performing regulated types of activity; - bases of functioning of the state information system in the field of energy saving and increase in energy efficiency. In 2011, the International Organisation for Standardisation (the ISO) issued the international standard ISO 50001:2011 "Energy management systems – Requirements with guidance for use". ISO 50001 was developed by a specially created technical committee ISO/TC 242 "Energy management" for the purpose of a possibility of creation of systems and processes necessary for improvement of power parameters, including energy saving, energy consumption, energy use, and increase in energy efficiency of an organisation’s activity. ISO 50001 is applicable to all organisation types irrespective of their size and industry, and does not contain established (universal) criteria of energy efficiency. The organisations should define criteria of energy efficiency independently. Like standards of other systems of management (ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007) according to the organisation’s decision the ISO 50001 standard can be applicable for holding certification procedures. The system of energy management of IDGC of Center and Volga Region, PJSC was certified on compliance to requirements of the international standard ISO 50001:2011 in 2012 in the Executive Office, in branches of IDGC of Center and Volga Region, PJSC - in December 2014. This system was implemented for the purpose of achievement of coordination of actions of IDGC of Center and Volga Region, PJSC directed to organisation of systematic activities for energy saving and energy efficiency according to requirements of Federal law No. 261-FZ of 23 November 2009 and to effective functioning of a system of energy management according to requirements of ISO 50001.

In pursuance of the requirements of Federal Law No. 261 and ISO 50001, IDGC of Center and Volga Region, PJSC developed and implements the programme of energy saving and increase in energy efficiency. At the moment, the programme was created for 2017 with perspective till 2022. The main objectives of the Programme of energy saving are: - cost reduction, identification and elimination of non-productive expenses (decrease in electricity losses, expense reduction of resources for utility needs); - effective management of activity in the field of energy saving and increase in energy efficiency according to the best world practices. The Programme implementation of energy saving is aimed at: - decrease in electricity losses at transmission and distribution; - reduction in electricity use for utility needs; - decrease in consumption of other fuel and energy resources; - optimisation and development internal business processes, regarding organisation and control of work on management of consumption of energy resources (energy management). The actually reached effect of implementation of actions of the programme of energy saving and increase in energy efficiency of IDGC of Center and Volga Region, PJSC aimed directly at reduction of electricity losses in 2016 was 12.44 million kWh, in 2017 – 21.05 million kWh. The effect of implementation of actions for reduction in electricity use for utility needs was 46.9 tonnes of oil equivalent in 2016 and 125.8 tonnes of oil equivalent in 2017. Thus, fulfillment of requirements on energy saving and increase in energy efficiency is directed to increase in reliability of power supply of electricity customers, implementation of investment projects of the Company, connection of subsidised electricity customer groups and safety of workers and third parties, and, respectively, has positive impact on the Company’s goodwill and image. On the website of IDGC of Center and Volga Region, PJSC at the address: https://www.mrsk- cp.ru/for_customers/energy_efficiency_and_conservation/energy_efficient_house/, all necessary information concerning energy saving and increase in energy efficiency is widely provided.

8.2. Results of interaction with customers of services and development plans The customer-focused approach, based on systematic interaction with customers of services, tracking and analysis of their requirements, implementation of individual approach to the customer, creation of the information space providing the maximum knowledge of customers in questions of relations with IDGC of Center and Volga Region, PJSC, showed efficient work in 2016 - 2017, which is confirmed by:  positive reviews from customers of services;  the high level of quality evaluation of customer care and provided services while internal and interactive questioning; 44

 reduction of the quantity of claims (complaints), which came to the address of the company and which after consideration were recognised lawful, including considerable reduction of well-ground claims on grid connection;  improvement of the indicator of the quality level of the performed grid connection;  development of services rendered to customers through the interactive service "Personal account";  accomplishment of approved target values of the indicator of the quality level of rendered services;  active development of value-added services rendered to customers. IDGC of Center and Volga Region, PJSC within execution of the action plan on the "Increase in availability of power infrastructure" approved by Order of the Government of the Russian Federation of 30 June 2012 No. 1144-r:  implemented the possibility of signing of the offer of the grid connection agreement with use of the electronic and digital signature in the "Personal account" on the corporate website of IDGC of Center and Volga Region, PJSC;  performs several obligations of the grid company by own staff for the purpose of reduction of completion dates of activities for agreements on implementation of grid connection;  held 36 public meetings with customers and potential applicants concerning informing on the procedure of access to power grid infrastructure in each region;  posted on the website of the Company information on the quality of the rendered services for the reporting period;  continued work on improvement of earlier developed maps of capacities on which the level of loading of 35-110 kV substations with their geographical binding is displayed for the purpose of forming of a uniform approach to the solution of questions of perspective development, territorial planning and implementation of investment projects of subjects of small and medium business, branches of IDGC of Center and Volga Region, PJSC;  updated cards of grid connection services.

IDGC of Center and Volga Region, PJSC defined the main objectives for future periods:  further development of a complex management system of relationship with customers, increase in efficiency of the straight line and feedback of the company and customers of services with an active use of the functionality of the CRM system;  improvement of the customer service quality due to increase in employees’ competence, by training of staff of offices of customer service;  development of a system of informing customers of services via additional channels of interaction with customers with use of the messengers WhatsApp, Viber, etc.;  expansion of the functionality of web services and optimisation of interactive customer service;  organisation of training of specialists of the unit of rendering of services working with customers, in Tulenergo Branch in the direction of value-added services;  development of sales of value-added services on the Internet, increase in efficiency due to implementation of a system of operational management of the company’s activity (hereinafter – the Document Management and Workflow System) "Synergy Center";

 updating of organisational and administrative documents on interaction with customers of services, value-added services.

9. Environmental protection 103-2

"IDGC of Center and Volga Region, PJSC considers activities for environmental protection as an integral part of its production process, constantly aiming to minimise negative impact on the environment, and, therefore, to perform transition to excluding from the technology process the use of environmentally hazardous equipment, as much as possible to keep a biodiversity in the territory of presence, both by improvement of developments directed to maintenance of environmental balance, and taking part in holding events for gardening and improvement of public spaces, traditional for the Company."

First Deputy General Director - Chief Engineer of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC – Alexander Pilyugin

9.1. Preserving biodiversity and protection of land resources The Company carries out work on protection of items of fauna at implementation of G4-EN12 productive activity. In the territory of activity of the Company there are National parks (ex) ("Meschora", "Ugra", "Mary Chodra", "Nechkinsky"), federal wildlife areas and reserves ("Nurgush", "Klyazma", "Murom", "Tarusa", etc.), and also especially protected natural territories of local value. For ensuring preserving biodiversity, the Company performs all work on maintenance of power lines, which pass through protected natural territories, in strict compliance with the established requirements: - prevention of clearing of ROWs along power lines using herbicides; - prevention of clearing of ROWs under power lines during reproduction of animals; - equipment of power lines with bird guards. Control of cable inputs, intercell-like cable ducts and observation ports of high-voltage compartments in cells of distributing devices regarding a possibility of penetration of animals is constantly exercised, small rodent repellent devices are installed.

The conducted technical measures within reconstruction and modernisation of the power grid complex, such as, application of SIW, also lead to decrease in risks of death of items of fauna at operation of power facilities. In 2017, the extent of power lines of 0.4 - 35 kV with installed SIW increased by 3.72 thousand km, which allowed to increase reliability, to lower a ROW area of cutting down, and also to completely exclude death of birds on power lines. IDGC of Center and Volga Region, PJSC equips power lines with special bird guards. In 2016, 8,918 bird guards were purchased for power lines of 6-110 kV. For 2017, 13,049 bird guards for power lines of 6-110 kV (including 10,496 pieces - for power lines of 6 - 10 kV) were purchased and installed, which allowed to save birds and to reduce risk of emergency outages with participation of birds on more than 300 km of power lines. In 2016, the share of emergency outages with participation of birds was 7.6%, in 2017 - 7.4%. IDGC of Center and Volga Region, PJSC pays much attention to questions of environmental protection and renewal of forest richness of the regions of operations. Within environmental actions the Company’s power engineers took an active part in events directed to recovery of natural balance: planting of trees, improvement and gardening of cities and villages, beautification of premises and others. In 2017, recultivation of lands was not carried out. For the purpose of compliance with criteria of the quality of atmospheric air and regulation of emissions of pollutants into atmospheric air for all production facilities of the Company, where there are stationary sources of emissions (boiler houses, engineering workshops, welding points, forge sites, etc.), targets of maximum permissible emissions (MPE) were developed and corresponding permissions were received. Within carrying out production environmental control, observance of the established standards of maximum permissible emissions with involvement of accredited laboratories is regularly checked. Following the results of measurements, which were carried out in 2015-2017, excesses of the established standards was not registered. 47

For the purpose of observance of the established standards of emissions of pollutants, the Company takes a set of measures, including: - regular instrumental control of emissions of pollutants with involvement of accredited laboratories; - conducting regular checks of vehicles on compliance with technical standards of emissions; - efficiency evaluation of work of dust and gas treatment installations. Changes of gross emissions of harmful substances into the atmosphere

140.0 120.0 100.0 80.0 126.4 60.0 105.2 109.4 40.0 20.0 0.0 2015 2016 2017

Gross emissions of harmful substances into the atmosphere, total

The total amount of emissions in 2017 slightly exceeded indicators of the previous year (by 4.2%) in connection with increase in the quantity of sources of emissions (a welding point) and registration of new permissions to emissions of pollutants at several facilities.

Protection and rational use of water resources

For ensuring household and drinking and production needs the Company performs supply of water from municipal organisations and other water supply systems, and also from 11 underground sources which are on the Company’s balance. Licenses for subsurface use were issued for all available wells. Accomplishment of subsoil license conditions is provided by plans of nature protection actions.

Changes of total quantity of water withdrawal in 2015-2017

240.0

220.0

200.0 220.2 207.9 180.0 186.8

160.0 2015 2016 2017

Water withdrawal and production, total

By results of accomplishment of nature protection and energy saving actions (including installation of new equipment, repair and replacement of water supply systems) in 2017, in relation to indicators of 2016, there was a reduction of volumes of water consumption by 10%.

Breakdown of the taken-away water on sources for 2017

12.5

groundwater thous. m3

municipal and other water systems thous. m3 174.2

The main volume of withdrawn water (97%) is used for providing household and utility needs of the Company. Determination of the amount of water taken in (removed) is performed by commercial metering.

Production and consumption waste

Changes of volumes of generation of production and consumption waste in 2015-2017

8000.0 7900.0 7800.0 7997.7 7700.0 7909.9 7600.0 7606.5 7500.0 7400.0 2015 2016 2017

Waste generated per year, tonnes

Following the results of accomplishment of nature protection actions in 2017, in relation to indicators of 2015, there was a reduction of volumes of generation of waste by 4% as a result of decrease in generation of wood waste from clearing of ROWs, and also scrap metal. By content of the waste, which was formed in the course of productive and business activities of IDGC of Center and Volga Region, PJSC, the greatest part is made by waste of hazard categories IV (49%) and V (51%). The specific weight of waste of hazard categories I-III is rather small and is 1%. Content of waste by hazard categories (2017)

49% 50%

category 1-3 category 4 category 5

Practically all waste (more than 99%) generated from productive and business activities of the Company is transferred to third parties for subsequent use, neutralisation, dumping according to signed agreements. In 2017, the Company used 1.6 tonnes of waste of hazard category V.

Waste at It is transferred to others the organisation Waste at the Generation the end Year beginning of waste per Used For For Total For use of the of the year neutralisation dumping year year 2015 100.1 7,909.9 4.9 7,978.8 1,130.2 692.8 6,155.8 26.3 2016 26.3 7,997.7 1.7 7,937.2 2,046.2 1,476.0 4,415.0 85.1 2017 85.1 7,606.5 1.6 7,235.8 1,990 901.1 4,344.7 454.2 50

Impact on the environment of the waste, which is temporarily stored in the territory of industrial sites of the Company, is minimum because: • the hazard category to the environment is established for all generated waste, defining methods of its treatment; • in territories of industrial sites of the Company places for temporary accumulation of waste according to sanitary and hygienic and nature protection requirements are equipped; • officials responsible for treatment with hazardous production waste are designated; • waste generated in the course of productive and business activities is transferred to third parties having corresponding licenses. In the Company, according to the Order of providing immediate information, collection of data on cases of oil spills is organised. Cases of an essential spill of substances doing harm to the environment, including oil products, were not recorded. IDGC of Center and Volga Region, PJSC implements advanced, innovative resources and materials on ensuring environmental safety, such as, for example, an environmentally safe neutralising tank of oil products for prevention of pollution of soils. As a result of replacement of oil-containing equipment in 2017 for vacuum and gas-insulated ones, the volume of used oil decreased by 194 tonnes (0.4% of the total amount of used oil), in 2016 - by 68 tonnes, which leads to reduction of risks of pollution of soils, besides, this equipment possesses high degree of reliability, is fireproof. The number of vacuum and gas-insulated equipment is 37% of the total quantity at the end of 2017. For the purpose of solution of tasks of the Environmental policy of the power grid complex, accomplishment of obligations of the Stockholm Convention on Persistent Organic Pollutants, regarding decommissioning of 100% of equipment containing polychlorinated biphenyls (hereinafter - the PCB equipment) with its subsequent transfer for destruction, IDGC of Center and Volga Region, PJSC performs planned decommissioning of the PCB equipment.

Changes of decommissioning and transfer to neutralisation of the PCB equipment in 2014-2024

2648 2636 2624 3000

2500 1742 1630 2000 1300 1219 1219 1500 1219

1000 516

500 0 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Amount of equipment containing PCB (pcs)

The Company has no waste disposal sites on the balance. Practically all production and consumption waste is transferred for further use, neutralisation, dumping at landfill areas to third parties having corresponding licenses.

9.2. Protection and rational use of lands, use of environmentally safe technologies and solutions, decrease in energy consumption The Company pays much attention to decrease in negative impact on the environment with staff travels and delivery of material resources by implementation of the following events: - for the purpose of decrease in consumption of fuel and lubricants at work planning logistics of trips and optimisation of routes is studied; - inspections of motor vehicles on compliance with technical standards of emissions of harmful (contaminating) substances in atmospheric air are regularly carried out. - operation of transport and other mobile vehicles, which content of pollutants in emissions exceeds the established technical standards of emissions, is not allowed. By Order of the Government of the Russian Federation of 13 November 2009 N1715-r "About the Energy Strategy of Russia for the period till 2030", the Strategy of development for the energy sector was approved, in which the main objectives and problems of long-term development of energy are defined. According to the specified Strategy, one of the main priorities of perspective development of the fuel and energy complex of the country is use of renewables (RES) for generation of electric and thermal energy.

List of organisations connected to grids of IDGC of Center and Volga Region, PJSC, which sell electricity produced at qualified generating facilities, functioning on the basis of use of renewables

Name of Volume of supply of electricity to IDGC of the grid of the branch (thous. Center and Name of the kWh) RES facility Volga organisation Region’s 2015 2016 2017 Branch OJSC Ichkalovskay Ichkalovskay Nizhnovenergo Hydroelectric Power hydroelectric 319.0 179.9 0 Station power station Total 319.0 179.9 0

IDGC of Center and Volga Region’s Branch - Nizhnovenergo signed from 01.07.2015 till 31.12.2016 an agreement for purchase and sale of electric energy for compensation of losses in electric grids of the grid company with OJSC Ichkalovskay Hydroelectric Power Station, performing the sales activity of electric energy produced at qualified generating facilities, functioning on the basis of use of renewables.

Actual resource consumption for production and utility needs

Indicator UoM 2015 2016 2017 fuel and energy, including: thous. tonne of oil 40.4 39.7 40.0 equivalent electric energy million kWh 101.5 102.5 100.5 thermal energy Gcal 39 029.07 39 339.3 37 389.4 gas thous. m³ 3 307.68 3 444.4 3 291.4 Motor fuel thous. tonne of oil 18.3 18.3 18.1 equivalent hot water supply thous. m³ 2.7 2.4 3.3 cold water supply thous. m³ 195.3 190.8 179.5

Reached effect of implementation of actions of the Programme of energy saving, mn kWh

2015 2016 2017 Total effect, 6.5 12.4 21.1 including: Target actions for decrease in losses 0 0.7 1.3 Programme of development of metering systems 6.1 11.0 18.7 Programme of modernisation and reconstruction 0.4 0.7 1.1

Cost changes on environmental protection for 2015 - 2017 (RUB mn)

22.0

21.0

20.0

19.0 21.6

18.0 18.4 18.5 17.0

16.0 2015 2016 2017

Cost of environmental protection, total

Current costs on environmental protection in 2017 grew in relation to 2016 by 17%, which relates to increase in transport costs of neutralisation of PCB containing capacitors within accomplishment of obligations of the Stockholm Convention on Persistent Organic Pollutants. In total in 2017, RUB 2.037 mn were spent for these purposes (in 2016 – RUB 0.035 mn).

Cost breakdown in 2017 by directions (RUB mn)

Cost of water resources 5.0 protection

Cost of atmospheric air protection 13.2 3.5 Cost of environmental protection from production and consumption waste

Payment for negative impact on the environment in 2015-2017 (RUB mn)

5.0 4.5 4.0 3.5 3.0 2.5 4.5 2.0 3.7 1.5 2.0 1.0 0.5 0.0 2015 2016 2017

Payment for negative impact on the environment, RUB mn

Decrease in payment for negative impact on the environment was the result of making amendments to the nature protection legislation.

9.3. Cooperation with nature protection structures and environmental organisations The Company’s activity is open for dialogue and cooperation with the public and all stakeholders. In the course of the activity the Company robustly cooperates both with representatives of regional environmental organisations (Nizhny Novgorod environmental centre "Dront", Ivanovo branch of the Union of protection of birds of Russia, etc.), and with the government nature protection institutions. During 2015-2017, scheduled inspections of nature protection activity of the Company were carried out.

In June 2016, the Department on protection, control and regulation of use of items of fauna of the Ministry of Forestry and Hunting of the Republic of Mari El carried out a scheduled inspection of Marienergo Branch regarding observance of nature protection requirements. By results of the check the instruction was issued to install bird guards on power lines, which is followed within the established deadlines. The Department of Rospotrebnadzor for the Kirov region in June 2016 carried out an unscheduled inspection of Kirovenergo Branch regarding observance of health regulations and hygienic standards. The actions for making measurements in the sanitary protection zone, instructed to be accomplished following the results of the performed inspection, were executed.

9.4. Observance of the environmental legislation and normative requirements The Company is open for addresses of all stakeholders. Complaints and offers are accepted both via the single "hot line" number, and through mailings to the address of the Company. During the reporting time, complaints, connected with environmental effects from business activities of the Company, were not recorded.

10. Personnel and social policy

"The Company’s staff is a united team of like-minded persons - professionals, who are guided in the work by such principles as professional competence, responsibility, mutual respect and honesty. The

Company values the employees and aims to create favourable conditions of work, the atmosphere of trust and cooperation, understanding that results of daily work, and the Company’s success in many respects depend on it."

Deputy General Director for HR Management and Organisational Design of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC – Inna Gromova

10.1. Wage system and motivational programmes The policy of IDGC of Center and Volga Region, PJSC in the field of compensation 102-41 and motivation of personnel is directed to creation of the conditions providing both an 401-2 increase in labour productivity, involvement, and stimulation of workers to professional growth. At implementation of the policy in the field of motivation of personnel the Company is guided by regulations of the Russian and international legislation prohibiting any forms of forced labour and discrimination and aims to create favourable conditions for work, the atmosphere of cooperation for all employees, grants to all employees equal rights and opportunities for professional development and career growth irrespective of their gender, age, nationality, religious and political views and beliefs. The Company recognises the right of the workers to worthy working conditions, protection against professional risks, association in trade unions and pursuit of their interests by collective bargaining. The wage system is constructed on principles of uniformity and transparency, an equal pay for work of the equal value determined by a skill level of each worker, complexity of performed work, quantity and quality of spent labour.

The salary of all employees of the Company consists of the fixed part including an official pay rate (tariff rate), surcharges and allowances and also a bonus part. The policy in the field of motivation of personnel is implemented, on the one hand, taking into account the need of recruitment and retention of highly-skilled employees, stimulation of workers to work performance improvement, and on the other hand - taking into account the current economic situation in the country, interests of the Company and customers assuming cost reduction on personnel by means of increase in overall performance.

Data on the average monthly salary

Changes of the average monthly salary

The annual gain of the average salary is provided with wages indexation to production personnel every half a year at a size of the actual customer price index in the Russian Federation.

In addition to the stable salary, a complete package of social privileges and guarantees, provided by the Collective Bargaining Agreement between workers and the employer is granted to workers, different social and health improving, sporting and other cultural events uniting personnel of all the Company are held. An efficient tool of moral incentive of labour collectives and certain workers is recommendation of the best employees to the state awards, awards of the Ministry of Energy of the Russian Federation, awards of the All-Russian industry association, and also to corporate awards of PJSC ROSSETI and IDGC of Center and Volga Region, PJSC.

Number of employees of IDGC of Center and Volga Region, PJSC awarded in 2016-2017

3000 2752 2802

2500

2000

1500 2016 1000 2017

500 92 140 158 3 3 89 24 46 0 State awards Awards of the Awards of RaEl Awards of PJSC Awards of IDGC of Ministry of Energy of Association ROSSETI Center and Volga the Russian Region, PJSC Federation

Employee training and development The key element of the HR and social policy of the Company is the system of 103-2 personnel development, which is under construction on the principles of continuity, 404-1 404-2 expediency and justification. Personnel training in the Company is performed throughout all labour activity of the worker for consecutive expansion and increasing knowledge and competences, increase in professional skills according to requirements of development of the Company. The system of life-long professional education creates equal opportunities for all workers regardless of their gender, religion and age. The training, which is performed for the budget account of the Company and is free for workers, involves all employee categories – from the management of the Company to blue-collar workers.

Annual average number of hours of training off-the-job per one employee of the Company by gender and categories over time for 2015-2017

Average annual number of training hours per Average annual number of training hours per employee by gender, hours employee by category, hours

99 93 Blue-collar workers 69

62 74 Male Specialists and office 49 workers Female 57 59 50 Managers 78 54 50 36 44 45

2015 2016 2017 2015 2016 2017

The structure of trained employees of the Company by categories and gender is caused by specifics of activity of enterprises of the distribution grid complex. In addition to traditional forms at the organisation of training, remote and visiting forms of education are used, training efficiency evaluation, regular monitoring of providers of educational services and adaptation of programmes to the current and perspective demands of the Company are carried out. From among the workers, who were trained in educational institutions, more than a half (in 2016 – 64%, in 2017 – 57%) annually undergo compulsory education in the own corporate network of training centres, which includes seven organisations. The main share of the trained based on the corporate training centres also includes production personnel: in 2016 – 96.8%, in 2017 – 98.6%. The corporate network of training centres successfully solves a problem of forming of uniform educational space for employees, improvements of standards and quality of training, and also cost optimisation on advanced training of personnel. Detailed information on activity of the training centres of the corporate network is posted on the official site of the Company at: https://www.mrsk- cp.ru/about/ñorporate-training-system/

Additional social benefits and guarantees

Social responsibility is implemented through development of a system of social partnership and is under construction according to the Industry tariff agreement in the electric power industry of the Russian Federation for 2013-2015 prolonged for the period of 2016-2018, on the basis of which the Collective Bargaining Agreement between workers and the employer was in operation in 2016-2017.

Costs for implementation of social programmes per 1 employee, RUB thous.

2015 2016 2017 41.74 46.26 47.32

* The text of the Collective Bargaining Agreement between workers and the employer IDGC of Center and Volga Region, PJSC for 2016-2018 is posted on the official site of the Company on the Internet at: http://www.mrsk-cp.ru/?id=86334.

Programme of insurance coverage

Within the Regulation on insurance coverage of IDGC of Center and Volga Region, PJSC and the Programme of insurance coverage of the Company, the voluntary medical insurance (VMI) and accident and disease insurance for all employees of the Company, workers on the terms of full employment, except for workers in combination and those who are on a probation period, is provided.

Support in difficult life situations

For the solution of questions on protection of the social rights and interests of workers and retirees staying on the registry in the Company, in 2016-2017 the Commission on social problems operated at IDGC of Center and Volga Region, PJSC, within which activity the Company gave one- time financial support in difficult life situations, including in connection with a serious illness.

Non-state pension provision

Throughout a long time IDGC of Center and Volga Region, PJSC has been implementing the Programme of non-state pension provision (the NSPP). Structure of the NSPP: . The Parity plan (the worker and the Company finance provision of pension of the worker collectively, in a certain proportion and by certain rules); . The Corporate plan (the Company finances additional non-state pension provision of its workers by own means); . The Joint financing programme (the worker, the Company and the state co-finance provision of pension of the worker according to Federal law of the Russian Federation of 30 April 2008 No. 56-FZ "About additional insurance premiums for funded pension and the state support of forming of pension accruals").

10.2. Labour protection and safety in the workplace In 2016 - 2017, the following priority objectives of work on labour protection 103-2 were defined: 403-2 403-3  reduction of risks of occupational injury and professional incidence; 403-4  increase in labour safety and social protection of workers, preserving of their life and health in the course of their labour activity;  providing a safe condition of equipment;  injury prevention of third parties. Results of the work on labour protection, which was carried out in 2016 - 2017, were: decrease in fatalities and the total number of cases of occupational injury with personnel of the Company, no occupational diseases, decrease in the number of workers working in harmful or dangerous working conditions, work performance improvement, increase in the level of social and legal security.

Number of injured at production, persons

1 minor

severe 1 1 2

1 1 fatal

2015 2016 2017

In 2016, there were 2 accidents, from them 1 in a group with a fatality (Kalugaenergo Branch), 1 minor injury (Kirovenergo Branch). 3 persons were injured, from them 2 died. In 2017, there was 1 accident with severe injury (Nizhnovenergo Branch), 1 person suffered. All cases of occupational injury for the period of 2016-2017 were the result of road accidents. Cases of electric injury of personnel, and also cases of occupational injury of personnel of contractors at power facilities of IDGC of Center and Volga Region, PJSC were not recorded in 2016-2017. Each accident is carefully investigated, causes and guilty persons are identified, measures for their prevention are taken.

The Company has the Regulation on the procedure of investigation and analysis of incidents, which defines a uniform order of informing in IDGC of Center and Volga Region, PJSC on incidents at production including without effects (or demanding rendering only first aid) and internal (office) investigation of their causes. The purpose of internal investigation of incidents is prevention of their repetition in the future by identification and remedial action in the system of production management. Positive results on decrease in cases of occupational injury in 2017 were achieved thanks to accomplishment of the Comprehensive Programme of IDGC of Center and Volga Region, PJSC on decrease in risks of injury of personnel and third parties at facilities of the power grid complex for 2014 - 2017. This Programme of actions was developed on the basis of results of external and internal audits, notes and offers from representatives for labour protection, analysis of reviews of injury rate and includes the following sections:  equipment of personnel and jobs with new, modern protective gear and devices;  holding actions for accident prevention;  accomplishment of sanitary actions for prevention of diseases;  accomplishment of actions for general improvement of working conditions. Requirements for safety are imposed not only on personnel of the Company, but also contract organisations, which perform work at power facilities of the Company or providing services (including transport), which are obligatory and recorded in agreements signed with these organisations. Monitoring and accounting of cases of violation of safety requirements and occupational health is performed within a system of internal technical control (complex, target and thematic checks, checks of permanent and temporary jobs, mutual control at work performance, production supervision at hazardous production facilities, production supervision of observance of sanitary and epidemiologic standards), and also when holding preventive actions such as the Safety Day, Fire Safety Day, Operator’s Day, Crew’s Day, etc. The Company also developed and follows local regulating documents defining requirements to organisation and carrying out work with personnel, choice and a method of operation by workers of individual protection equipment, selection of partners and working procedures by contractors at power facilities of the Company.

Organisation of health protection and increase in labour safety

Along with the main goal of all efforts of the Company – preservation of life and health of its employees, the Company solves problems of improvement of working conditions, decrease in quantity of jobs with adverse conditions of work, promotion of a healthy lifestyle. The Comprehensive Programme on decrease in risks of injury of personnel and third parties at facilities of the power grid 62 complex for 2014 - 2017 provides active cooperation of the Company regarding labour protection with regional authorities, will allow to implement the priority directions of the state policy on labour protection and social partnership of IDGC of Center and Volga Region, PJSC. The Collective Bargaining Agreement between workers and the employer, approved by the Board of Directors of the Company on 28 December 2015, determined fundamental obligations of the employer and trade union by ensuring fulfillment of requirements in the field of labour protection and safety and preservation of health of personnel:  the list and regulations of free provision to workers of special clothes, special footwear and other individual protection gear over standard regulations, regulations of free provision to workers of washing-away and neutralising means are established;  the list of works and occupations granting the right to milk or other equivalent products in connection with harmful working conditions is established;  the provision on organisation of work of a safety authorised representative, and also a procedure of holding a review competition for the title "the best safety authorised representative" and an order of stimulation (establishment of surcharges) for high-quality work was approved;  the order of participation of trade union representatives in actions for production safety (checks, Safety Days, an examination of workers, etc.), and also in investigation of violations, including those that led to accidents, is defined. IDGC of Center and Volga Region, PJSC created committees on safety with participation of representatives of the management and trade union at which meetings results of work on safety of different divisions are reported, offers on improvement of working conditions and prevention of injury are analysed, additional actions for work safety issues are developed. IDGC of Center and Volga Region, PJSC supports and voluntarily takes part in international, state, industry, regional and municipal programmes and actions for safety, such as the World Day for Safety and Health at Work, the Children’s Day (from the point of view of safety of power installations for children), the All-Russian meetings and exhibitions on labour protection and industrial safety, regional and district contests on safety, educational programmes for electric safety, thematic drawing contests and some other actions.

Providing personnel with protective gear, tools and devices

For the purpose of protection against action of dangerous and harmful factors and ensuring effective work, the personnel are provided with overalls, protective equipment, tools and devices for safe work performance. Today the Company provides workers with all necessary protective gear according to the established regulations.

The priority direction of providing personnel with individual protection equipment in 2017 was acquisition of means, essentially new in a design, for protection against falling from height, and also special sets for protection against induced voltage during works on overhead power lines and measuring instruments of induced voltage. RUB 26.5 mn were spent for these purposes that is 6.4% of total costs for actions for labour protection and safety and 8.2% of total costs for providing workers with individual protection equipment.

Specific costs for labour protection and safety per one worker, RUB thous./ person

18.5 18.1 18 16.3 Other safety 16 4.2 4.1 measures 14 3.5 12 Provision of 10 workers with 8 individual 13.9 14.4 protection 6 12.8 equipement 4 2 0 2015 2016 2017

At the choice of protection equipment, not only protective properties from a dangerous factor (for example, electric current), but also convenience in operation are considered. So, use of indicators of induced voltage allows not only to determine the value of induced voltage before performance of work, but also to speed up, simplify preparation of the workplace.

Special assessment of working conditions

In 2016-2017, the procedure of special assessment of working conditions (the SAWC) with identification and measurement of a level of harmful production factors in workplaces of employees was carried out. In general, in IDGC of Center and Volga Region, PJSC the quantity of jobs, which are subject to the SAWC, is 17,463. By results of the special assessment of working conditions 869 jobs corresponding to categories of working conditions 3.1 – 3.2 were revealed. Jobs with categories of working conditions 3.3., 3.4., 4 were not revealed. By results of the performed SAWC actions for improvement of working conditions were planned. In 2017, all the planned activities were executed.

Categories of working conditions according to the results of the special assessment of working conditions optimal and acceptable, category 1, 2 95.02%

harmful, harmful, category 3.2 category 3.1 0.06% 4.92%

10.3. Formation of corporate culture and creation of non-material incentives for employees

Corporate culture in the Company 102-16 Values and provisions of the existing corporate culture are fixed in the Code of Corporate Ethics and Official Behaviour of Employees of IDGC of Center and Volga Region, PJSC. The Code governs the relations between employees, describes rules of business etiquette, defines rules of conduct at interaction with business partners, promoting creation in the Company of the atmosphere of cooperation, establishing effective interaction of all subdivisions, guarantees to our partners high ethics of business making. The Company constantly operates and improves the system of internal communications providing timely and objective informing workers on questions connected with the Company’s activity. The regional tab of IDGC of Center and Volga Region, PJSC is published in the corporate newspaper "ROSSETI". In each of releases the Company’s management tells about the directions of development, answers questions which mostly concern workers, covers the production progress of certain workers and events which take place in the Company. An important role in formation of the corporate culture is played also by other corporate media. Materials about results of productive activity, news about events happening in the Company, about decisions taken in the electric power industry are regularly placed on the corporate website of the Company and at information stands. For the purpose of timely identification of problems and decrease in social risks, work with calls of employees is carried out in the Company that allows to establish open and constructive dialogue between workers and the management. This practice allows to reach bigger transparency of

65 information, and also stimulates personnel initiatives of introduction of offers, which concern improvement of social and labour conditions in the Company.

Healthy lifestyle The Company annually holds sporting events of different formats and scales: regional competitions, corporate competitions, etc. Power engineers strive not only to keep good physical shape, but also to achieve high sports results. Several dozens of employees of IDGC of Center and Volga Region, PJSC passed GTO (Ready for Labour and Defense) standards.

Tourist gatherings, which became traditional in different branches of the Company, are held annually with assistance of primary trade-union organisations and the Youth Council of IDGC of Center and Volga Region, PJSC for the purpose of promoting a healthy lifestyle, active recreation and strengthening of friendly relations in the team. During such informal meetings it is possible to real-life communication. Holding similar actions not only promotes improvement of relationship in teams, but also employees’ engagement in sports activities.

Youth policy Recruitment and retention of young specialists is one of priority tasks of the HR and social policy of IDGC of Center and Volga Region, PJSC. The solution of this task is impossible without implementation of the youth policy, which covers young specialists – employees of the Company, schoolchildren and students. The main areas of work with the youth are:

 career guidance of schoolchildren and students (selection of graduates for target education in specialised higher educational institutions and secondary specialised educational institutions and so forth);  interaction with educational organisations for ensuring practice-focused training of students of higher and secondary vocational educational institutions;  stimulation of development of competences of young specialists (formation of a youth personnel reserve and work with it, participation in youth projects, including innovative contests, regional and industry youth forums). IDGC of Center and Volga Region, PJSC cooperates with 42 higher educational institutions and 46 secondary specialised educational institutions among which Federal State Budgetary Educational Institution of Higher Education "National Research University "MPEI" and its branches, Federal State Budgetary Educational Institution of Higher Education "Ivanovo State Power Engineering University named after V.I. Lenin", etc. Regularly the Company’s branches conduct Open Doors Days and tours for students of higher educational institutions, secondary specialised educational institutions and schoolchildren, meetings of students with the management and specialists of the branches within which young people are given an opportunity to visit power facilities, to communicate to experienced power engineers that helps them decide on their future profession. The number of students studying at target places in higher and secondary vocational educational institutions granted by IDGC of Center and Volga Region, PJSC as of 31 December 2017 was 236 people. For the purpose of consolidating theoretical knowledge in practice students of higher educational institutions and secondary specialised educational institutions pass in the Company’s subdivisions training, production and pre-degree practices. Students studying in specialised directions of education for the power grid complex are preferentially accepted for practice. In 2017, 1,006 students of higher educational institutions and secondary specialised educational institutions had their practical training in the Company.

Number of students of higher and secondary vocational education who passed their practice- focused training based on the Company in progress for 2015-2017, persons

1006 686 852

2015 2016 2017

Among events, which took place in 2016-2017 with active participation of the Council of young specialists – a donor campaign "Energy of Life", sports events and trips, assistance and organisation of events for children from sponsored orphanages, participation in actions devoted to the International Children’s Day, community work days, etc. In 2017, events timed to coincide with the Year of Ecology were held (planting of trees and so forth). In 2016-2017, perspective young specialists of the Company participated in large industry forums: the International Youth Forum within the St. Petersburg International Economic Forum, the International Forum of Young Power Engineers and Industrialists "Forsage", the Youth Championship "Investing in the Future" within Power-Gen Russia, the North Caucasian Youth Forum "Mashuk", the International Electric Power Forum Rugrids-Electro, Federal Shift "Energy" of the Youth Forum "Territory of Initiative Youth "Biryusa", the Youth Day within the International Forum on Energy Efficiency and Development of Energy "Russian Energy Week", the XIX World Festival of Youth and Students.

10.4. Sponsorship and charity Charity is performed within the Regulation on the procedure of formation and use of fund of sponsorship and charity of IDGC of Center and Volga Region, PJSC defining objectives, tasks, an order and financing sources of charity and sponsorship. Within the traditional charity event "Brightest New Year’s Tree" timed to coincide the Power Engineers’ Day, employees of the Company organised New Year’s holidays purchased and gifts for pupils of orphanages, large and needy families in the regions of operations. Staff of Nizhnovenergo Branch within another city charity event "Who, if not We" devoted to the Children’s Day took part in collecting and transfer of humanitarian means for children who are in social and rehabilitation centres of Nizhny Novgorod. Employees of Ryazanenergo Branch took part in a TV-radio marathon "Low Bow to You, Veterans", having transferred the funds raised from the salary of workers to the Ryazan Regional Department of the Russian Public Charity Foundation of Veterans (Retirees) of War, Labour and Armed Forces. In 2017, Kirovenergo Branch completed the event started in 2015 "To Heroes of the Great Patriotic War – Imperishable Memory" which purpose is perpetuation of memory of Heroes of the Soviet Union – participants of the Great Patriotic War, who were born on the Vyatka land. The event was carried out with assistance of administrations of municipal districts of the Kirov region. Memorial plates were made on donations of the Company’s employees, which were placed on "personalised" streets of district centres of the Kirov region. In total for the project implementation period (2015- 2017), 46 memorial plates were installed in 22 districts of the Kirov region. The Company’s employees also gave target assistance to employees and retirees of the Company, who appeared in difficult life situations. Annually, implementing charitable projects in different spheres IDGC of Center and Volga Region, PJSC renders thereby assistance to spiritual and social and economic development of territories of the Company’s service area. The total amount of the given charitable assistance in 2016- 2017 was more than RUB 253 mn.

10.5. Cooperation with trade union and public organisations

When developing the HR and social policy, strategy and work plans with personnel, 102-12 interests of workers are represented by an elected trade-union body performing representation and protection of the collective and individual social and labour rights, and interests of workers. Primary trade-union organisations operating in branches and in the executive office of IDGC of Center and Volga Region, PJSC are included into the structure of the All-Russian Power Engineers’

Trade Union. Their activity is coordinated by the Council of representatives of primary trade-union organisations of the Company. Interaction of the Company and the trade-union organisation is based on the principles of equality, respect and accounting of the rights and legitimate interests of the parties of social partnership. The trade-union organisations take part in formation and implementation of social programmes providing the worthy standard of living and favourable conditions of work and life of employees of the Company and also control observance of the labour law, the Industry tariff agreement and the existing Collective Bargaining Agreement. The Council of representatives of primary trade-union organisations systematically informs the Company’s management on attitude of the labour collective to new initiatives, projects of development of the enterprise. If necessary, the trade-union organisation provides to employees of the Company consulting assistance with questions of work and the labour law, employment, professional training and settlement of employment disputes. According to the existing Collective Bargaining Agreement the Company transfers to the trade- union organisation funds of not less than 0.3% of the salary fund on organisation of cultural and mass and sports and health improving events. In close cooperation with the trade union the Company performs cultural and mass and sports and health improving work: sports contests and tourist gatherings, events aimed to support veterans and retirees, visits to theaters and concerts, drawing contests, excursions and very much more. Work with veterans Part of the Company’s corporate social policy is constant support of former employees - retirees of the Company who in the majority receive monthly non-state pension from the Company. The Collective Bargaining Agreement of the Company provides rendering financial aid to participants of the Great Patriotic War and to home front workers, which is annually paid for the Victory Day. Besides, one-time financial aid is provided to retirees on the record in the Company, who appeared in difficult life situations, including in connection with a serious illness. In 2016-2017, the Coordination Council of Veterans of the Company, supervising activity of nine Councils of Veterans of branches, continued its work, which unite 5,450 working and 4,346 retired veterans of the electric power industry, including: 275 veterans of the Great Patriotic War, home front workers, prisoners of concentration camps, residents of besieged Leningrad (as of 31 December 2017). Each of the veterans worked in the electric power industry for more than 20 years. The Coordination Council of Veterans and Councils of Veterans of the Company’s branches in 2016-2017 organised, among other things, actions for participation in preparation and celebration of the Victory Day in the Great Patriotic War; carrying out together with the management of branches meetings with veterans within the celebration of the Victory Day; the Day of Remembrance and Grief;

70 the Day for the Elderly and the Power Engineers’ Day. Besides, for the purpose of patriotic education of the youth there were meetings with veterans, beatification of places of burials of heroes of the Second World War, installation of memorial plates, and also visits to homes of retired veterans on memorable and anniversary dates with delivery of gifts, work was continued to provide museums of branches with military and labour exhibits, fill in archives information of the unique project devoted to the 70th anniversary of the Great Victory – the electronic almanac consisting of archives documents, photos and memoirs of veterans of the Great Patriotic War and the power industry, in post-war time working in the power systems of nine regions, which now are in the service area of IDGC of Center and Volga Region, PJSC. The book "Keep Eternally" is posted on the corporate website of the power company in the section "Light of the Great Victory": http://www.mrsk- cp.ru/upload/iblock/441/87060.pdf; Work continues to maintain updated the online museum of the electric power industry – "Live History", located on the corporate website of the Company at http://www.mrsk- cp.ru/press/special_projects/zhivaya-istoriya/. The project of IDGC of Center and Volga Region, PJSC "Live History" is recognised one of the best among the competitive works designed to popularise professions of the fuel and energy complex.

11. Anti-corruption

"Sustainable activity of the Company is based on honesty and trust with all stakeholders that is incompatible with any manifestation of forms of corruption. The Company makes objectively all possible efforts for settlement of a conflict of interests and prevention of corruption crimes".

Deputy General Director for Security of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC – Vladimir Ozhkalo

One of directions of the Anti-corruption policy of IDGC of Center and Volga 102-16 Region, PJSC is management of a conflict of interest according to which the Company 102-25 103-2 declares taking measures to comply with regulations of business integrity (determined by 205-2 the Code of Corporate Ethics), standards of corporate conduct and settlement of a conflict 205-3 of interests, created and operates the Commission for compliance with regulations of business integrity and settlement of a conflict of interests. The Regulation "About settlement of a conflict of interests of IDGC of Center and Volga Region, PJSC" determined the principles of regulation of a conflict of interest, origin of a conflict of interest, prevention, identification and settlement of a conflict of interests. Measures are taken to prevent origin of a conflict of interest, which are aimed at exclusion of a possibility of receiving personally or through an intermediary of material and (or) personal benefit owing to availability at employees of the Company, either members of their families, or persons who are closely related or property connected (parents, spouses, children, brothers, sisters, and also brothers, sisters, parents, children of spouses and spouses of children), of the rights giving such an opportunity as a result of use of an official position by them. The Company aims at prevention and timely resolution of preconflict situations among workers, establishes measures of corporate influence (responsibility) to workers for losses caused owing to their wrongful acts in conditions of a conflict of interest. Different types of disclosure of a conflict of interest are established for workers: at employment, at annual declaration, at appointment to a new position, in process of emergence of situations of a conflict of interest. At conclusion of agreements with partners, where the Company acts as a party, there is an implemented practice of signing of the anti-corruption clause which is the explicit indicator of the Company’s position concerning corruption deals. Besides, such clause allows to draw the attention of partners to anti-corruption issues, and confirms the consent of partners that they are acquainted, and understand the contents of anti-corruption laws, and undertake to observe their provisions. IDGC of Center and Volga Region, PJSC not only independently implements measures for prevention and combat of corruption, but also takes part in collective anti-corruption initiatives: - inclusion in the form of a joint agreement of the standard anti-corruption clause; - prohibition on conclusion of any agreements with legal entities without disclosure by partners of information concerning the entire chain of their owners, including beneficiaries, including final ones; - interaction with the state bodies performing control and supervising functions.

The Company aims to do the business with partners supporting the Anti-corruption Policy of the Company, and declaring corruption rejection, carries out explanatory work with supervisors of agreements and partners at refusal of signature of anti-corruption clauses. Special attention is paid to questions of interaction of workers with the state bodies performing control and supervising functions in view of arising high corruption risks. Duties of workers to abstain from any offers, which adoption can put the public servant in a situation of a conflict of interest, are established. An important indicator of the real commitment of IDGC of Center and Volga Region, PJSC to the declared anti-corruption standards of behaviour is cooperation with law enforcement agencies, according to which the Company takes the public obligation: - to report to relevant law enforcement agencies about cases of making corruption and other offenses of which the Company knew; - to abstain from any sanctions against workers, who reported to law enforcement agencies during performance of labour (official) duties information on preparation or commission of a corruption and other offense, which became known for them; - not to allow illegal intervention of employees of the Company in activity of law enforcement agencies when holding anti-corruption actions; - to give support in identification and investigation of corruption facts by law enforcement agencies; - to undertake necessary measures to preserve and transfer to law enforcement agencies documents and information containing data on corruption offenses. According to the Anti-corruption Policy of PJSC ROSSETI and IDGC of Center and Volga Region, PJSC accepted in the Company, all employees of the Company signed the Agreement on observance of requirements of the Anti-corruption Policy, according to which the personnel undertake to observe the requirements established by the Anti-corruption Policy. Business partners of the Company are informed on the anti-corruption policy and methods, which are available at the Company by signing the Anti-corruption obligations. Cases of confirmation of corruption manifestations in IDGC of Center and Volga Region, PJSC were not identified.

12. Table of correspondences of the Report to requirements of the GRI Standards 102-55 General Disclosures

INDEX GRI INDICATOR LOCATION OF DISCLOSURE NOTE/EXTERNAL ASSURANCE 1. Organisational Profile 102-1 Name of the organisation 2.1. Reporting system and determination of material topics, p. 6 102-2 Activities, brands, products, and/or services 3.2. Geography and core activities, p. 9 102-3 Location of headquarters 3.2. Geography and core activities, p. 9 102-4 Location of operations 3.2. Geography and core activities, p. 9 The Company performs its activity only in the territory of the Russian Federation 102-5 Ownership and legal form Ownership: share Legal form: public joint stock company 102-6 Markets served 3.2. Geography and core activities, p. 9 Disclosed in the Annual Report for 2017, 1.1. Summary of the Company. History of the Company. Structure of the Company, p. 6, 4.1.1. Position in the industry and types of activity, p. 32 102-7 Scale of the organisation 3.2. Geography and core activities, p. 9 102-8 Information on employees and other workers Disclosed in the Annual Report for 2017, 7.1.1. Number and structure of personnel, p. 178 102-9 Supply chain Disclosed in the Annual Report for 2017, 4.1.1. Position in the industry and types of activity, p. 31 102-10 Significant changes to the organisation and its supply chain In September 2017, functions of the sole executive body were transferred to a management company (IDGC of Centre, PJSC). No significant changes in the supply chain of IDGC of Center and Volga Region, PJSC 102-11 Precautionary Principle or approach 5.2. Risk management, p. 11 102-12 External initiatives 10.5. Cooperation with trade union and public organisations, p. 69 102-13 Membership of associations Disclosed in the Annual Report for 2017, 4.2.4. Asset management, p. 104. 2. Strategy 102-14 Statement from senior decision-maker 1. Address of General Director, p. 4 102-15 Key impacts, risks, and opportunities 5.2. Risk management, p. 11 3. Ethics and integrity 102-16 Values, principles, standards, and norms of behaviour 10.3. Formation of corporate culture and creation of non-material incentives for employees. Corporate culture in the company, p. 65 102-17 Mechanisms for advice and concerns about ethics 11. Anti-corruption, p. 71 4. Governance 102-18 Governance structure Disclosed in the Annual Report for 2017, 5.1. Structure and principles of corporate governance, p. 110 102-19 Delegating authority Disclosed in the Annual Report for 2017, 5.1. Structure and principles of corporate governance, p. 110 102-22 Composition of the highest governance body and its committees Disclosed in the Annual Report for 2017, 5.2.2. Board of Directors, p. 115 102-23 Chair of the highest governance body Chair of the Board of Directors of IDGC of Center and Volga Region, PJSC is not Executive Director of the Company 102-24 Nominating and selecting the highest governance body 5.1. Corporate governance, p. 10 102-25 Conflicts of interest 11. Anti-corruption, p. 71 Information on no conflict of interest of members of the Board of Directors is disclosed in the Annual Report for 2017, 5.2.2. Board of Directors, p. 114 102-26 Role of the highest governance body in setting purpose, values and 5.1. Corporate governance, p. 10 strategy 102-27 Collective knowledge of highest governance body Education and experience of members of the Board of Directors are disclosed in the Annual Report for 2017, 5.2.2. Board of Directors, p. 116 102-28 Evaluating the highest governance body’s performance Disclosed in the Annual Report for 2016, 2.3.3. The Report of the Board of Directors on results of development in priority activities, p. 31, in the Annual Report for 2017, 3.3. Report of the Board of Directors on priority activities, p. 24 102-30 Effectiveness of risk management processes 5.1. Corporate governance, p. 10 102-34 Nature and total number of critical concerns Disclosed in the Annual Report for 2017, 5.2.2. Board of Directors, p. 114 102-35 Remuneration policies 6.2. Dividend payout, p. 22 102-36 Process for determining remuneration 6.2. Dividend payout, p. 22 Procedure of determination of amount of remuneration of members of the Board of Directors is disclosed in the 74

Annual Report for 2016, p. 185, in the Annual Report for 2017, p. 126 102-37 Stakeholders’ involvement in remuneration According to the decision of General Meeting of Shareholders of 09 June 2016 the net profit of the Company for 2015 (RUB 942,560 thous.) was distributed for: - RUB 942,560 thous. - dividends. According to the decision of General Meeting of Shareholders of 05 June 2017 the net profit of the Company for 2016 (RUB 3,101,137 thous.) was distributed for: - RUB 1,772,092 thous. - development, - RUB 1,329,045 thous. - dividends. 102-38 Annual total compensation ratio 6.2. Dividend payout, p. 22 Amount of remuneration of members of the Board of Directors is disclosed in the Annual Report for 2016, p. 186, in the Annual Report for 2017, p. 126 5. Stakeholder Engagement 102-40 List of stakeholder groups 5.5. Interaction with stakeholders, p. 17 102-41 Collective bargaining agreements 10.1. Wage system and motivational programmes, p. 58 102-42 Identifying and selecting stakeholders 5.5. Interaction with stakeholders, p. 17 102-43 Approach to stakeholder engagement 5.5. Interaction with stakeholders, p. 17 6. Reporting Practice 102-45 Entities included in consolidated financial statements Consolidated financial statements included statements of IDGC of Center and Volga Region, PJSC and statements of its subsidiaries and affiliates 102-46 Defining report content and topic Boundaries 2.1. Reporting system and determination of material topics, p. 6 102-47 List of the material topics 2.1. Reporting system and determination of material topics, p. 6 102-48 Restatements of information No such restatements 102-49 Changes in the reporting No such changes 102-50 Reporting period 2.1. Reporting system and determination of material topics, p. 6 102-51 Date of the most recent report 2.1. Reporting system and determination of material topics, p. 6 102-52 Reporting cycle 2.1. Reporting system and determination of material topics, p. 6 102-53 Contact point for questions regarding the report Head of the Shareholder and Investor Relations Division of Corporate Governance and Interaction with Shareholders Department Natalia Gennadievna Kiseleva, Phone: +7 (831) 431-74-46, e-mail: [email protected] 102-54 Claims of reporting in accordance with the GRI Standards 102-55 GRI content index Table of correspondences of the Report to requirements of the GRI Standards, p. 74 102-56 External assurance Topic-Specific Disclosures

INDEX GRI INDICATOR LOCATION OF DISCLOSURE NOTE/EXTERNAL ASSURANCE ECONOMIC TOPICS 201 Economic Performance 103-1 Explanation of the material topic and its Boundary 103-2 Management approach and its components 1. Address of General Director, p. 4 6.1. Operating and financial results, p. 19 103-3 Evaluation of the management approach 201-1 Direct economic value generated and distributed 6.1. Operating and financial results, p. 19 201-4 Financial assistance received from government In the reporting year IDGC of Center and Volga Region, PJSC did not receive assistance from government, including in the form of subsidies 204 Procurement Practices 103-1 Explanation of the material topic and its Boundary 103-2 Management approach and its components 5.3. Procurement activities, p. 12 204-1 Proportion of spending on local suppliers 5.3. Procurement activities, p. 12 205 Anti-Corruption 103-2 Management approach and its components 11. Anti-corruption, p. 71 205-1 Operations assessed for risks related to corruption During 2016-2017, the Company in a planned order performed control events to check their compliance with organisational and administrative documents of PJSC ROSSETI and IDGC of Center and Volga Region, PJSC, including in the field of anti- corruption, disclosure of information on a chain of owners of partners, availability in agreements of the section on anti-corruption activity 205-2 Communication and training about anti-corruption policies and 11. Anti-corruption, p. 71 procedures 205-3 Confirmed incidents of corruption and actions taken 11. Anti-corruption, p. 71 ENVIRONMENTAL TOPICS 302 Energy 302-2 Energy consumption outside the organisation 6.1. Operating and financial results, p. 19 75

302-4 Reduction of energy consumption 8.1. Ensuring high-quality and available services for customers. Energy saving and increase in energy efficiency, p. 42 307 Environmental Compliance 103-2 Management approach and its components 9. Environmental protection, p. 46 307-1 Non-compliance with environmental laws and regulations During the reporting period no complaints to environmental problems from business activities of the Company were recorded SOCIAL TOPICS 401 Employment 401-1 New employee hires and employee turnover Active employee turnover in 2017 was 0.6% 401-2 Benefits provided to full-time employees that are not provided to 10.1. Wage system and motivational temporary or part-time employees programmes, p. 58 403 Occupational Health and Safety 103-2 Management approach and its components 10.2. Labour protection and safety in a workplace, p. 61 103-3 Evaluation of the management approach 403-2 Types of injury and rates of injury, occupational diseases, lost days, 10.2. Labour protection and safety in a and absenteeism, and number of work-related fatalities workplace, p. 61 403-3 Workers with high incidence or high risk of diseases related to their 10.2. Labour protection and safety in a occupation workplace, p. 61 403-4 Health and safety topics covered in formal agreements with trade 10.2. Labour protection and safety in a unions workplace, p. 61 404 Training and Education 103-2 Management approach and its components 10.1. Wage system and motivational programmes. Employee training and development, p. 58 404-1 Average hours of training per year per employee 10.1. Wage system and motivational programmes. Employee training and development, p. 58 404-2 Programmes for upgrading employee skills and transition assistance 10.1. Wage system and motivational programmes programmes. Employee training and development, p. 58 419 Socioeconomic Compliance 419-1 Non-compliance with laws and regulations in the social and Amounts of imposed administrative penalties economic area for antitrust violation in the field of rendering services in electricity transmission (according to decisions of the last periods disputed in accordance with the established procedure and according to the decisions passed in the reporting period): 2016 – RUB 100 thous., 2017 – RUB 100 thous. Sector Disclosures

INDEX GRI INDICATOR LOCATION OF DISCLOSURE NOTE/EXTERNAL ASSURANCE ECONOMIC SECTION Research and Development EU8 (ех) Research and development activity and expenditure aimed at 5.4. Innovative activity, p. 14 providing reliable electricity and promoting sustainable development System Efficiency EU12 Transmission and distribution losses as a percentage of total energy 6.1. Operating and financial results, p. 19 ENVIRONMENTAL SECTION Biodiversity G4-EN12 Significant impacts of activities, products, and services 9.1. Preserving biodiversity and protection on biodiversity of land resources, p. 46 SOCIAL SECTION Subsection: Product Responsibility Electricity Access EU28 Power outage frequency 7.2. Increase in reliability of electric grids, p. 33 EU29 Average power outage duration 7.2. Increase in reliability of electric grids, p. 33 Provision of Information EU23 (ех) Programmes, including those in partnership with government, to 8.1. Ensuring high-quality and available improve or maintain access to electricity and customer support services for customers, p. 40 services

13. Contact information Full (abbreviated) name Interregional Distribution Grid Company of Center and Volga Region, Public Joint Stock Company (IDGC of Center and Volga Region, PJSC) Primary state registration number 1075260020043 Number and date of issue of the Series 52 No.003273906 of 28 June 2007 certificate on state registration as a legal entity TIN/CRR TIN 5260200603 CRR 997650001 Bank details Branch of Gazprombank (Joint Stock Company) "Volga Region" in Nizhny Novgorod Settlement account 40702810500010001930 BIC 042202764 Correspondent account 30101810700000000764 Location and postal address 603950, 33, Rozhdestvenskaya Street, Nizhny Novgorod, Russia Subject of the Russian Federation in Nizhny Novgorod Region the territory of which the Company is registered E-mail [email protected] Website www.mrsk-cp.ru Head General Director of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC Igor Vladimirovich Makovskiy Interaction with shareholders and E-mail of IR Division: [email protected]

investors Kharchenko Olga Alexandrovna, Director of Corporate Governance - Head of the Corporate Governance and Interaction with Shareholders Department of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC Phone: +7 (495) 747-92-92 (ext. 31-81) E-mail: [email protected]

Kiseleva Natalia Gennadievna, Head of the Shareholder and Investor Relations Division of Corporate Governance and Interaction with Shareholders Department Phone: +7 (831) 431-74-46 E-mail: [email protected] Corporate secretary Guseva Yulia Stanislavovna, Head of the Corporate Relations Section of the Corporate Governance and Interaction with Shareholders Department Phone: +7 (831) 431-74-30 E-mail: [email protected] Press centre Scherbakova Angelica Vladimirovna, Head of the press centre of the Public Relations Department Phone: +7 (831) 431-74-00 (ext. 35-27) E-mail: [email protected] Contacts for feedback from Phone: +7 (831) 431-74-46 stakeholders E-mail: [email protected] 77

Phone of Call Centre for customers 8-800-100-33-00 (toll-free call from any point of Russia) The Internet reception address for https://utp.mrsk-cp.ru/Pages/default.aspx customers

Information on branches Vladimirenergo 600016, 106, Bolshaya Nizhegorodskaya Street, Vladimir Phone: +7 (4922) 47-00-59, fax: +7 (4922) 47-05-40 Ivenergo 153000, 8/2, Krutitskaya Street, Ivanovo Phone: +7 (4932) 38-63-71, fax: +7 (4932) 33-99-17 Kalugaenergo 248009, 9/2, Krasnaya Gora Street, Kaluga Phone: +7 (4842) 71-63-59, fax: +7 (4842) 56-56-11 Kirovenergo 610000, 51, Spasskaya Street, Kirov Phone: +7 (8332) 64-76-50, fax: +7 (8332) 69-13-71 Marienergo 424006, 39a, Panfilova Street, Yoshkar-Ola, Mariy El Republic Phone: +7 (8362) 42-52-92, fax: +7 (8362) 41-28-80 Nizhnovenergo 603950, 33, Rozhdestvenskaya Street, Nizhny Novgorod Phone: +7 (831) 431-93-59, fax: +7 (831) 431-93-81 Ryazanenergo 390013, 12, MOGES Street, Ryazan Phone: +7 (4912) 20-45-11, fax: +7 (4912) 20-44-30, 20- 45-08 Tulenergo 300012, 99, Timiryazeva Street, Tula Phone: +7 (4872) 32-77-69, 73-03-59, fax: +7 (4872) 32- 71-14 Udmurtenergo 426004, 30, Sovetskaya Street, Izhevsk, Republic of Udmurtia Phone: +7 (3412) 66-15-66, fax: +7 (3412) 66-15-22

Information on the Auditor Full (abbreviated) name Ernst & Young Limited Liability Company (Ernst & Young LLC) PSRN 1027739707203 Location Sadovnicheskaya nab. 77, bld. 1, 115035 Moscow, Russia Postal address Sadovnicheskaya nab. 77, bld. 1, 115035 Moscow, Russia Phone +7 (495) 755-97-00 Fax +7 (495) 755-97-01 Website http://www.ey.com Authorisation to carry out activities a member of the Self-Regulatory Organization of Auditors "Russian Union of Auditors" (SRO RSA), a member of the non-profit partnership "Audit Chamber of Russia"

Information on the Registrar Full (abbreviated) name Joint stock company VTB Registrar (JSC VTB Registrar) Location 127015, Moscow, Pravdy St., 23 Postal address 127137, Moscow, p/o box 54

Phone +7 (495) 787-44-83 Website www.vtbreg.ru E-mail [email protected] Authorisation to carry out activities License of the Federal Service for Financial Markets for activities for maintaining register No. 045-13970-000001 of 21 February 2008 without restriction of the validity period General Director Konstantin Sergeyevich Petrov

14. Glossary ABBREVIATIONS GSM (Global System for Mobile Communications) — a global standard of digital mobile cellular communication with separation of channels on the time. IR – (Investor Relations) – Interaction with shareholders and investors. ISO – International Organisation for Standardisation (International Standards Organisation). SAIDI (System Average Interruption Duration Index) – average duration of outage – characterises on average duration of one outage in the system a year. SAIFI (System Average Interruption Frequency Index) – the average frequency of emergence of failures in the system – characterises an average number of times a year when customers were de- energised. SIM card (Subscriber Identification Module) — the module of identification of the subscriber. ERO – emergency recovery operations. ASUR TOE - an automated system of accounting of results of thermovision inspection of electric equipment. RES – renewable sources of electric energy. VL – an overhead power line. Second World War – Great Patriotic War. Fuel and lubricants – fuels and lubricants. subsidiaries and affiliates – affiliated and dependent companies VHI – voluntary health insurance. Investment Programme – an investment programme. CJSC – closed joint stock company. ZTP – indoor transformer substation. CL – a cable line. KRUN – outdoor switchgear and control gear. Electricity transmission line – a power line. IDGC – interregional distribution grid company.

EMERCOM, Emercom of Russia – Ministry of Emergency Situations. MES – transmission power grids. VAT – value added tax. Research and Development – research, design and experimental, developmental and technology works. NCGR – National Corporate Governance Rating. NPP – non-state pension provision. OJSC – open joint stock company. Fundamentals of Health and Safety – basics of life safety. AWP – autumn and winter period. OIC – operational and information complexes. ROC – developmental and technology works. LLC – limited liability company. OSW – outdoor switchgear. OSC – operational and situational centre. PJSC – public joint stock company. IDGC of Centre, PJSC – Interregional Distribution Grid Company of Centre, Public Joint Stock Company. IDGC of Center and Volga Region, PJSC – Interregional Distribution Grid Company of Center and Volga Region, Public Joint Stock Company. PJSC ROSSETI – Public Joint Stock Company Russian Grids. PJSC FGC UES – Public Joint Stock Company Federal Grid Company of Unified Energy System. MPE – maximum permissible emission. bg – bird guard. EAD – engineering and design work. PMES – transmission grid company. PD – production department. SS – substation. PCB – polychlorinated biphenyls. RZA – relay protection and automation equipment. back-up power supply sources – a reserve source of electricity supply. RDU – regional dispatching office. DS – distribution substation. RAS – Russian Accounting Standards. DTS – distribution transformer substation.

Distribution Zone – an area of electric grids. SAC – situational-analytical centre. SIW – self-supporting insulated wire. Media – mass media. SMS (Short message service) – a short-message service. SAWC – procedure of special assessment of working conditions. AMS – complex innovative project on development of an asset management system. TM – telemetry. TS – transformer substation. TGO – territorial (local) grid organisation. Energy industry – fuel and energy complex. CHPP – combined heat and power plant. FZ – federal law. WC – FIFA World Cup (football). Emergency – emergency situation. ETP – electronic trading platform.

UNITS OF MEASUREMENT kV (Kilovolt) – a unit of measure of voltage. W, kW, MW (Watt, Kilowatt, Megawatt) – a unit of measure of active electric power. kWh (Kilowatt-hour) – unit of measure of active electric energy. VA, kVA, MVA (Voltampere, Kilovoltampere, Megavoltampere) – a unit of measure of apparent electric power. Gcal (Gigacalorie) – a unit of measure of thermal energy. TFOE (tonnes of fuel oil equivalent) – a unit of measure of energy.

TERMS Dividend – part of net profit of the Company distributed between shareholders. Affiliated and dependent companies – legal entities in which the Company has more than 20% of voting shares, or owing to the prevailing participation in authorised capital, or according to a signed agreement, or otherwise has an opportunity to determine decisions made by such legal entities. Capitalisation – market value of the company. It is calculated as the product of the stock price and their total quantity. Company – IDGC of Center and Volga Region, PJSC. Power line – a power installation consisting of wires, cables, isolating elements and bearing structures, intended for electricity transmission between two points of a power supply system with possible intermediate outtake. 81

Interregional Distribution Grid Company, IDGC – open joint stock company created by the territorial principle. Net (productive) supply – quantity of electric energy delivered to end customers of electric energy connected to grids of a grid company. "The last mile" – a method of reduction of a rate for electric energy for the population at the expense of electricity value addition for end customers of electric energy connected to the unified national power grid. Customer/client – a subject receiving results of a business process (products, a service). The customer can be: internal – inside the organisation and during the activity using results (outcome) of the previous business process; external – outside the organisation and using or consuming result of activity (outcome) of the organisation. Electric power industry – an industry of economy of the Russian Federation including a complex of economic relations arising in a process of production (including in the mode of combined generation of electric and thermal energy), transmission of electric energy, supervisory control in the electric power industry, sale and consumption of electric energy with use of production and other property facilities (including entering the Unified Energy System of Russia) belonging on the property right or on other basis provided by federal laws to subjects of the electric power industry or other entities. The electric power industry is a basis of functioning of economy and life support.

15. Annex