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Relazione finanziaria annuale 2019 ANNUAL REPORT 2019 WE FUTURE FOR ABRIGHTER OPEN PO EMP O WER SUS WER T A I NABLE P ROGRESS ANNUAL REPORT 2019 To improve the operational efficiency of the power plants PJSC Enel Russia is introducing modern digital technologies. One of the projects of this kind is predictive analytics which detects negative dynamics in the operation of equipment at the early stages and, therefore, reduces CCGT operational risks. All power plants are equipped with e-Planner tool which enables additional control of the preparation process to maintenance campaign and provides a visual representation of key milestones. EtaPRO System was successfully introduced as part of the Heat Rate Management digital project. Every unit of gas power plant main equipment now can be monitored using an individual model which allows to keep a record of reasons of heat rate deviations in the real-time mode, to analyze reasons of losses and to develop a more detailed maintenance program as well as to control the quality of the works performed after the maintenance is completed.
Health, Safety, Environment and Quality remains one of the main priorities of the company. We successfully implemented the SHE 365 project (Safety, Health, Environment 365 days) aimed to ensure everyday industrial safety and to incentivize employees to develop initiatives in operation, maintenance and interaction with contractors. A number of health and environment improvement plans have been implemented as part of the project. As far as the environment is concerned, the company focused mainly on decarbonization, reporting Address to shareholders 102-14 digitalization, water consumption optimization. Another important aspect of the company’s activity is the sustainable development strategy and non-financial disclosure. In 2019, a new Strategic Committee was established within the Board of Directors, one of its key functions is to coordinate the relevant strategy. We have reviewed our risk assessment approach making focus Dear shareholders! also on ESG risks (environmental, social and corporate governance). In January 2019, the company received With great pleasure we are presenting Annual Report 2019 of PJSC Enel Russia. its first ever ESG Risk Rating — assessment of ESG risks management — from Sustainalytics, independent Effective managerial decisions and favorable market prices allowed the company to outperform the financial goals agency. Follow-up assessment which took place at the end of the year demonstrated improved results. We set for 2019. continue the implementation of the projects aimed to support and develop areas of presence, including new regions — Rostov and Murmansk regions. Sustainable development principles (circular economy, efficient use of Net ordinary income in 2019 is 7.5 billion RUB and EBITDA reached the level of 15.3 billion RUB which is above resources, improved reliability and longer service life of equipment) and sustainable construction site principles the forecasted value. during implementation of new wind farm construction projects underpin all our business processes. Anticipating the period of strategic repositioning and earnings volatility in the medium term, the company The company also disclosed its non-financial results for the first time in its Annual Report according to the introduces a fixed dividend to assure a guaranteed return for its shareholders. Upon 2019–2021 the company is International GRI Standards providing a deeper understanding of its ESG performance. The report was recognized targeting to distribute 3 billion RUB per year. as the best in the Debut nomination of the XXII Annual Report Contest yearly organized by the Moscow In 2019, the company kept pursuing its energy transition and sustainability strategy, which includes transformation Exchange. The company not only maintained, but further on improved the high level of compliance with the and modernization of the asset portfolio, decarbonization and introduction of digital technologies. We keep paying Corporate Governance Code guidelines: as per December 31, 2019, PJSC Enel Russia complied with 77 out of 79 special attention to cooperation with local communities and creation of shared value. We apply the best practices recommendations vs 74 compliances in 2018. of Enel Group for the implementation of our strategy, including, the sector of renewables. It is worth mentioning that in 2019 PJSC Enel Russia demonstrated solid results regardless of complicated The deal between PJSC Enel Russia and JSC Kuzbassenergo concerning disposal of the largest national coal macroeconomic conditions. We have reached planned financial goals and on top of that we are actively developing power plant — Reftinskaya GRES — was one of the most important strategic decisions. As per the results of the new projects related to green power, thermal assets modernization and innovation. Sustainable development transition period, the total amount of the deal should amount to 20.7 billion RUB excluding VAT. Proceeds of the strategies help us to strike the balance between growth, financial stability of the business, local communities’ deal enable us to follow the energy transformation strategy while developing windfarms construction projects and interests and shareholders’ remuneration. gas power plants modernization projects.
In 2019, two Groundbreaking Ceremonies took place: one in the Rostov region for 90 MW Azov WPP and another in Murmansk region for 201 MW Kola WPP. At the same time, the Governmental tender for the selection of Carlo Palasciano Villamagna Stephane Zweguintzow renewable energy projects resulted in awarding the company construction of a new 71 MW wind generation General Director of PJSC Enel Russia Charmain of the Board of Directors of PJSC Enel Russia facility in the Stavropol region.
We are also active participants of the power plant equipment modernization program launched by the Government of the Russian Federation. Four of PJSC Enel Russia projects were selected in 2019: two projects of Sredneuralskaya GRES and two projects of Nevinnomysskaya GRES. Modernization should help us to increase the reliability of heat and electricity supply to the customers, to boost efficiency of the equipment and to decrease emissions to the atmosphere while ensuring positive economic implications for the company.
2 Annual Report 2019 PJSC Enel Russia 3 Annual Report 2019 PJSC Enel Russia
01. 02. 03. 04. 05. 06.
About the Report Company Financial Sustainability Risk Annexes Overview and Performance and Corporate Indicators Governance
Limitations of the Report 8 Events Calendar 16 Analysis of Performance Sustainability Management 64 Risk Governance Annex 1. Dynamics as Compared and Internal Control System 150 GRI content index 200 Definition of Material Company Overview 18 to the Plan and Previous Period 52 Stakeholder Engagement 70 Topics 9 Internal Control System 152 Annex 2. Geography of Assets 19 Main Production Indicators 54 Integrated Management Financial statements Material Topics of the Report 10 System 76 Organization Units and auditor's report 210 Mission and Values 20 Sales 56 and Corporate Bodies Related Changes in Materiality Occupational Health Organizational Structure 22 to Risk Governance System 153 Evaluation Matrix 10 Heat Power 57 and Safety 78 of the auditor’s reports 234 Business Model 24 Description of Main Risk Factors Materiality Topics Boundaries 12 Investment Activities 58 Responsible Attitude Associated with the Company's Annex 3. to the Environment 90 Reporting Principles 13 Company Regulations Activity 154 Structure of generation in the Industry 26 Business and Management 105 facilities and structure Feedback 13 Corporate Governance of fuel consumption 235 Competition 28 Our Employees 115 System 157 Annex 4. Fuel Factor 29 Engaging Local Communities 130 Management Bodies Information about observance of the Company 160 of the Corporate Governance Grid Limitations and Human Rights 141 Code recommendations UES Modes 29 Remuneration 177 by the company 237 Sustainable Supply Internal Audit Commission 184 Chain 143 Annex 5. Company Strategy Auditor 185 Information about the most material transactions and related Strategic Plan for 2020–2022 32 Information about the party transactions closed Internal Audit 186 by the Company in 2019 260 Sustainability Plan for 2020–2022 38 Securities of the Company Annex 6. and Interaction with Shareholders Numerical and statistical Transition to Renewable and Investors 188 information 266 Energy Sources 43 Controlled Companies Glossary 294 and Participation in Other Organizations 196 Contacts 298 1. About the Report Definition of Material Topics About the Report
The Materiality Matrix helps identifying and evaluating and accountability. The Global Sustainability Unit of Enel the needs and expectations of stakeholders, matching Group coordinates the process and provides methodological 102-54 About the Report them with the priorities of the company and its business support for the annual update of the matrix of materiality that is strategy, checking their consistency and identifying areas for performed by the Sustainability Unit of PJSC Enel Russia with improvement. The material topics of the annual report of the the participation of the company’s managers and managers company are defined on its basis. who interact with one or another category of stakeholders in
their daily activities. The results received at the country level Company Overview To provide the stakeholders with regular and quality information, we prepare an annual integrated report Collection, aggregation and processing of data are carried are consolidated by Enel Group to prepare a Group Materiality representing the strategic plans of the company, priorities and goals of development as well as the results out through a special information system of Enel Group. This Matrix and matrices of the countries. of activities for 2019. system is improved every year to ensure greater transparency
The company report is prepared in accordance with the following documents and standards: > Corporate Governance Code recommended by the Bank of Russia > Regulation of the Bank of Russia No. 454-P dated 30.12.2014 “On Disclosure of Information About the Issuer of Equity Securities”
> International financial reporting standards Process for preparation of the Materiality Matrix indicators > GRI Standards (level of disclosure — “Core”)
> Regulation on Information Policy of PJSC Enel Russia. Financial and performance process result
Identification of topics and groups of Update of data by the > List of stakeholders stakeholders, their hierarchical classification, Sustainability Unit > List of potential material topics from general to individual of Enel Russia
102-45 102-46 102-49 Sustainability Assigning priority to stakeholders based Limitations of the Report 102-50 102-51 102-52 Interview with managers on their importance to the company in terms Stakeholders map of functions of dependency, influence, and tension
The annual report contains information about the results Due to the purchase and sale transaction of Reftinskaya GRES Analysis of the results of involvement Determination of the position Self-assessment survey of financial and economic activity as well as sustainable to JSС Kuzbassenergo, all indicators for this power plant are of stakeholders, evaluation of the priority of topics along horizontal axis (x) or interview with stakeholders development indicators for 2019. The report is issued on an given for 9 months of 2019. An exception is indicators related of potential material topics for stakeholders of the Materiality Matrix annual basis. A report for the previous period was published to personnel of PJSC Enel Russia operating at Reftinskaya on June 20, 2019. GRES, accidents involving personnel of PJSC Enel Russia and/ Governance
Determination of the position Risk and Corporate or contractors of PJSC Enel Russia, and as well as fines not Analysis of the strategic position of the Interview The operating and financial indicators are represented on a of topics along vertical axis (y) included in the expenses of PJSC Enel Russia under the company on potential material topics with management consolidated basis and include the results of financial and of the Materiality Matrix lease agreement which are given for 2019. The details on the economic activity of PJSC Enel Russia and its subsidiaries. sale of the property of the Reftinskaya GRES are contained In the rest of the sections the data are presented only for in the section “Exit from Coal Generation”. Consolidation of data PJSC Enel Russia or an additional comment has been left on Data aggregation Preliminary Materiality Matrix by the Enel Group the approach used. Annexes
Analysis of the results and changes that Update by the Verified Materiality Matrix have occurred with regard to the results Sustainability Unit of the Materiality Matrix for the previous year
Sustainability plan and reporting
8 Annual Report 2019 PJSC Enel Russia 9 Material Topics of the Report 102-47 Materiality matrix 2019 About the Report
HIGH In 2019, the following material topics were identified by the The horizontal axis of the Matrix reflects the priorities of evaluation results: stakeholders, properly weighted based on their materiality. > Occupational Health and Safety The right side of the Matrix contains topics the stakeholders > Economic and Financial Value Creation come up with a request on them to strengthen existing > Environmental Management practices, management systems, formalize commitments > Sound Governance and Fair Corporate Conduct and create clearer regulatory documents. The vertical axis I > Engaging the Local Communities shows the topics the company plans to focus its efforts on Company Overview > Employees Management, Development & Motivation regarding planned investments, liabilities, potential risks and B C > Decarbonization of the Energy Mix opportunities as well as aspects included in the company's
> Customer Engagement Strategic Plan. The top of the Matrix shows the issues with H > Innovation and Digital Transformation a high level of commitment for the coming years assumed at L > Sustainable Supply Chain the level of the company's strategy. > Ecosystems and Platforms A N G M > Energy Distribution1 D indicators
E Financial and performance Business strategy priorities 5 102-49 Changes in Materiality Matrix F 3
Comparing to 2018, the Materiality Matrix 2019 looks more faced in 2019 (see the section “Employees Management, 1 3 5 balanced in terms of company priorities and stakeholders. Development & Motivation”). The significance of the Sustainability topic “Sustainable Supply Chain” increased in view of the The topic “Environmental Management” became forthcoming transformation of procurement and inclusion fundamental for stakeholders. We consider this change to into the process of evaluation of social factors. Increased LOW Priorities assigned by stakeholders HIGH be logical since the environmental agenda in 2019 gained attention is paid to the issue of decarbonization of the energy significance in public discourse and received more extended mix. It represents the company’s decision to exit from coal media coverage. Occupational Health and Safety issues as generation and developing renewable energy sources. The well as issues of engagement of the local communities are growing significance of decarbonization represents also the BUSINESS AND GOVERNANCE ISSUES SOCIAL ISSUES still in the limelight of stakeholders. The importance of sound A Decarbonization of the energy mix G Engaging the local communities international environmental agenda — the climate crisis and Governance governance and human capital development increased too.
ever-growing attention of investors to response measures of Risk and Corporate This is confirmed by the feedback we received from the B Sound governance and fair corporate H Employees management, development & motivation businesses. A material topic of the previous reporting period, conduct stakeholders during the year. (see the section “Stakeholder I Occupational health and safety “Operational Efficiency”, was not included in the priority list, C Economic and financial value creation Engagement”). L Sustainable supply chain however, the management approach to this topic was fully D Ecosystems and platforms1 Three key priorities in the company strategy, namely disclosed in the annual report. E Energy distribution ENVIRONMENTAL ISSUES “Occupational Health and Safety”, “Economic and Financial In 2019, a new topic appeared — “Ecosystems and Platforms”. F Customer engagement A Decarbonization of the energy mix Value Creation” and “Sound Governance and Fair Corporate Since 2019, “New Technologies and Solutions” has been re- N Innovation and digital transformation M Environmental management
Conduct” remained unchanged. The significance of Annexes positioned in “Innovations and Digital Transformation” (see management, development and motivation of employees the section “Materiality Topics Boundaries”). increased, which meets the challenges that the company
Global power generation Retail
Global Infrastructure & Network Enel X
1 Includes the following issues: «New tecnologies and solutions for houses and condominiums»; «New tecnologies and solutions for cities»; «New technologies and solutions for industries»; «Electric mobility» 1 This material topic is not applicable since in Russia the company does not carry out electricity distribution activities.
10 Annual Report 2019 PJSC Enel Russia 11 Materiality Topics Boundaries Reporting Principles 102-46 About the Report
Material topics Materiality topics boundaries* Impact type* We applied the following principles according to GRI standard to determine the report content. We share the vision of Enel Group and understand the importance of climate change, thus we intend to develop renewable energy sources. Decarbonization of the energy mix is a comprehensive topic relating to the reduction of the environmental impact of our business, development of RES and modernization Stakeholder Sustainability Decarbonization of the Energy Mix of conventional generation to increase operational efficiency Direct Materiality Completeness inclusiveness context Company Overview
We rely on the local communities we work for. We build long-term and comprehensive relations with them, support and contribute to their social Engaging the Local Communities and economic development Direct We bring the stakeholders The company priority The content of the report The topics covered in to dialogue regarding development areas was determined in accordance the report reflect the impact We understand that our success depends on the people we work with. preparation of this report and objectives are related with is defined by essential of company's activities We make every effort to ensure a safe working environment and favorable (collecting feedback, to the global agenda for topics. on the economy, Employees Management, working conditions. We train and develop personnel, maintain diversity participation in surveys Sustainable Development. environment and society Development & Motivation and prohibit any form of discrimination Direct for formation of a Materiality See the section during the reporting period Matrix). See the section “List of Material Topics”
“Sustainability Plan for indicators We create long-term shareholder value and opportunities for economic growth See the section “Stakeholder 2020–2022” Economic and Financial Value Creation in the regions where we operate Direct Engagement” Financial and performance
The occupational health and safety of power plant personnel and contractors’ employees is our key priority. We make every effort to ensure a safe and comfortable working environment and are committed to achieving the Occupational Health & Safety "Zero Accidents” goal Direct To ensure quality disclosure of indicators we applied the following principles 102-46 of report quality assurance:
Sound Governance We meet high standards of corporate governance and comply with the and Fair Corporate Conduct requirements for information disclosure stipulated by the Russian laws Direct
The report contains information on both positive (implementation of plans, achievement of goals) Sustainability Balance and negative (for example, penalties) performance results We monitor regularly our impact on the environment, manage this impact, improve continuously the environmental performance, apply the principles The results of operational and financial activity (except for information about dividend payments), Compatibility Environmental Management of environmental safety and rational and sustainable use of natural resources Direct non-financial indicators over three years including the reporting period
The report was subject to internal verification for accuracy of quantitative indicators. If the indicators We develop and implement new solutions that allow us to increase the operational Accuracy are calculated using a methodology other than that proposed by GRI Standard, a corresponding comment efficiency of our business and expand the range of low-carbon technologies and is left in the text of the report Innovation and Digital Transformation services. We want to use our resources rationally and optimize business processes The text of the report is written in easy to understand language with proper explanations (previously — New Technologies through the application of new technologies and digitalization. We are committed Clarity of professional terms. Detailed specification of quantitative data is in the section “Additional Information” and Solutions) to maximizing operational efficiency during operation Direct Governance
All information given in the report passed internal verification. The company has necessary documents confirming Risk and Corporate Reliability its accuracy We undertake to guarantee the relevant quality standards of the products and services offered, to maintain them at the established level, as well as to carry Customer Focus out periodic monitoring of this area Indirect Timeliness The report includes information about the activities of PJSC Enel Russia for 2019
Our procurement procedures and contractual relationships are focused on transparency, responsibility and cooperation for more successful adaptation and effective management of the social, environmental and economic context Sustainable Supply Chain and the associated risks and opportunities Direct Feedback Annexes We lead the transformation of the energy sector and use modern technologies to transform energy into new opportunities that will contribute to progress around the world. For this material topic, a management approach has not yet been Ecosystems and Platforms developed. We plan to disclose it in the next reporting periods Indirect Starting in 2019, we launched an online survey for our stakeholders to obtain
feedback on the company's annual report. We plan to use the survey results to Enel Russia improve the quality and completeness of the annual report in future periods. Annual Report 2019 feedback * Impact area of all the listed material topics — PJSC Enel Russia. The type of impact means the type of impact from the company activities that it renders within a particular material topic.
12 Annual Report 2019 PJSC Enel Russia 13 2. COMPANY OVERVIEW 07.06.2019 Within the scope of the St. Petersburg International Economic Forum PJSC Enel Russia About the Report signed a Memorandum of Understanding with VEB Ventures intended to development of innovations
Company overview 07.06.2019 The project of PJSC Enel Russia for equipment modernization at Nevinnomysskaya GRES was chosen by the government within the scope of the program for modernization of the thermal power plants
102-10 102-12 Events Calendar 11.06.2019 The project of PJSC Enel Russia for construction of 71 MW wind farm in the Stavropol Territory Company Overview won the tender for renewable energy sources
18.06.2019 Annual General Shareholders’ Meeting of PJSC Enel Russia
20.06.2019 PJSC Enel Russia and Kuzbassenergo JSC signed an agreement for sales of Reftinskaya GRES
02.07.2019 Supplier’s Day in the Murmansk region indicators 29.01.2019 Publication of operating results for 2018
22.07.2019 The extraordinary General Shareholders' Meeting of PJSC Enel Russia approved the sale of Financial and performance 06.02.2019 Publication of the Strategic Plan for 2019–2021: focus on renewable energy sources and efficiency Reftinskaya GRES to meet the market challenges
31.07.2019 Publication of financial results with audit review for the first half of 2019 in accordance with 05.03.2019 PJSC Enel Russia and Sberbank completed signing of documentation on financing of the project financial reporting standards for 201 MW wind farm construction in the Murmansk region
08.08.2020 Moody’s international rating agency removed the company rating from revision and confirmed 18.03.2019 Publication of audited consolidated financial statements for 2018 in accordance with the
it to be at Ва3 level with stable outlook Sustainability International Financial Reporting Standards
19.09.2019 Commencement of construction of 201 MW Kolskaya WPS, a major renewable energy project 26.03.2019 PJSC Enel Russia, System Operator of Unified Energy System Joint Stock Company and beyond the Polar Circle in Russia Moscow School of Management SKOLKOVO signed Memorandum of Understanding intended to performance of joint research in price-promoted Demand Response in Russia 01.10.2019 PJSC Enel Russia completed transfer of property of Reftinskaya GRES to Kuzbassenergo JSC
Within the scope of the Tatarstan International Forum of Energy Efficiency and Ecology, 10.04.2019 Publication of unaudited financial results for the first 9 months of 2019 in accordance with the PJSC Enel Russia and the Ministry of Industry and Trade of Tatarstan signed a renewable 30.10.2019
International Financial Reporting Standards Governance energy agreement Risk and Corporate 04.11.2019 The General Director of Enel Group Francesco Starace was awarded the Order of Friendship, 25.04.2019 Publication of unaudited consolidated financial statements by PJSC Enel Russia for the first quarter personally presented to him by the President of the Russian Federation Vladimir Putin of 2019 in accordance with the International Financial Reporting Standards
Within the scope of the Murmansk International Business Week, PJSC Enel Russia received 23.05.2019 Commencement of construction of Azovskaya WPS with installed capacity of 90 MW in the 11–15.11.2019 an award for holding social campaign events to promote energy conservation and supporting Rostov region. Azovskaya wind farm became not just the first renewable energy project of Enel the Russian national festival Group in Russia but the first RES facility for its construction to be initiated in the region Annexes
PJSC Enel Russia received the Certificate of readiness to operate for 2019–2020 autumn and 06.06.2019 At the St. Petersburg International Economic Forum PJSC Enel Russia signed two agreements: 20.11.2019 winter period one in the sector of renewable energy source with AB InBev Efes, one of the key players at the Russian brewing market being a subsidiary of AB InBev, major brewing company in the world, Fitch international rating agency removed the rating of PJSC Enel Russia from revision and another in the sector of innovations — with Russian Venture Company JSC 06.12.2019 confirmed it to be at BB+ level with stable outlook
16 Annual Report 2019 PJSC Enel Russia 17 е т тч е Об о About the Report Company Overview 102-1 102-2 102-3 Geography of Assets 102-4 102-5 102-7 Kolskaya Wpp (in operation 2022)
Name Full company name: Public Joint-Stock Company Enel Russia
Abbreviated company name: PJSC Enel Russia омпании О к
Data on state It was registered on October 27, 2004 by the Inspectorate of the Ministry of Taxation of Company Overview registration Russia for Leninsky District, Yekaterinburg, Sverdlovsk Region under principal state registration number 1046604013257
Brief History The company was established based on Executive Order of Board of directors ли е
of OJSC RAO UES of Russia No. 113р dated October 25, 2004. During reformation of the Konakovskaya GRES т
Russian electric power industry, the company was reorganized in the form of a merger аз а of OJSC Konakovskaya GRES, OJSC Nevinnomysskaya GRES OJSC (2006), and OJSC OGK-5 Holding (2007). In 2007, Enel Investment Holding B.V. that is part of Enel S.p.A group becomes 2,520 MW one of the company shareholders and since 2018 Enel S.p.A. is the company’s controlling entity holding 56.43% of the shares. твенные по к One of the largest wholesale generation companies in the Russian Federation. indicators д с Финансовые
Main activities > Electric power and heat generation Financial and performance > Activities on supply (sale) of electric and heat power > Activities for acquisition (purchase) of electric power and heat from the и произв о wholesale electricity (capacity) market
Regions Russian Federation, First price zone of the WEM of activity Azovskaya Wpp Reftinskaya GRES2
Structure > Headquarters (Moscow) (in operation 2021) (branches) > Konakovskaya GRES (Tver Region) 3,800 MW > Nevinnomysskaya GRES (Stavropol Territory) 2
> Reftinskaya GRES (Sverdlovsk Region) Sustainability ойчивое развитие > Sredneuralskaya GRES (Sverdlovsk Region) т У с
Rodnikovskaya Wpp Sredneuralskaya GRES Key indicators (in operation 2024) 1,578.5 MW
Indicator 2018 2019 тивное Installed electrical capacity 9.4 GW 5.6 GW
n° employees 2,496 pers. 2,404 pers.3 Nevinnomysskaya GRES орпор а Governance управление Power output 39.2 TWh 32.4 TWh Risk and Corporate
Revenues 73.3 billion rubles 65.8 billion rubles 1,530 MW Риски и к EBITDA 17.2 billion rubles 15.3 billion rubles Net profit 7.7 billion rubles 7.5 billion rubles Dividend per share 0.141 RUB/share 0.085 RUB/share
Credit ratings
Rating agency Rating Outlook Annexes Enel Russia installed capacity 2019 Прил ож ения Fitch Ratings BB+ "Stable" as of Dec/19 (total) 0.8 Moody’s Ba3 "Stable" RA Expert ruAA "Stable" CCGT 4.8 Gas open cycle Coal 5.6 GW Wind Farm 2 In 2019, a sales transaction was completed for the property comprising Reftinskaya GRES. See details in the section “Exit from Coal Generation”. (construction in progress) 3 With regard to personnel data of Record keeping for 12 months of 2019. See details in the section “Exit from Coal Generation”.
1828 AnnualГодовой Report отчет 20192019 PJSCПАО « EnelЭне лRussia Россия» 2919 Transparency
Mission and Values About the Report is the key component 102-16 of our development strategy
Values Company Overview Responsibility Innovation Trust Proactivity Philosophy of Enel Grouper ow indicators Open P Financial and performance
Responsibility Vision Each of us, at any level, is responsible Open Power for the Group's success. to help address We devote our energy to serving people's some of the world’s needs, improving life and making it more Sustainability biggest challenges sustainable. Innovation We live and work with curiosity, we strive to go beyond our customs, and we overcome
our fears, in order to open energy to new uses, Governance Mission 2025 technologies and people, learning from each Risk and Corporate • Open energy to more people. other and taking to heart our failures as well • Open energy to new technologies. as our successes. • Open up new ways of managing energy for people. • Open up energy to new uses. • Open up to more partnerships. Proactivity Annexes Trust We feel personally responsible for our work. We always act in a competent, honest We continuously interpret global scenarios and transparent manner, in order to gain and challenges in order to anticipate change, the trust of our colleagues, customers resetting our priorities if the context requires it. and partners, enhancing our personal differences. We return their trust through our confidence in their ability to create value that we can share.
20 Annual Report 2019 PJSC Enel Russia 21 Organizational Structure 102-18 102-19 102-20 About the Report
ENEL RUSSIA In order to implement the business goals and objectives set transparency of management model, the organizational for the company, continuous sustainable development and structure of the company is formed in functional areas efficient assurance of its viability in the environment including distinguished by three activities:
ADMINISTRATION, Company Overview PEOPLE FINANCE COMMUNICATIONS INTERNAL AUDIT Business Functions Staff Functions Global Service Functions AND ORGANIZATION AND CONTROL
> Energy Management > Security > Procurement > Thermal Generation > Internal Audit > Digital Solutions > Renewable Generation > Innovation Hub > Communications > People and Organization > Legal and Corporate Affairs REGULATORY LEGAL > Project Office indicators SERVICES AND INSTITUTIONAL SECURITY AND CORPORATE > Regulatory and Institutional Affairs AFFAIRS AFFAIRS > Services
> Sustainability Financial and performance > Administration, Finance and Control
RENEWABLE PROCUREMENT DIGITAL SOLUTIONS SUSTAINABILITY GENERATION Sustainability These functional areas relate to the first line of reporting to The following organizational changes were implemented the General Director and report directly to him. during 2019: > Project Office and Renewable Generation were created The functional areas that ensure the safety, efficiency and > New organizational structures of the Communications, continuity of the production process belong to the first Thermal Operation and Maintenance, Operation and ENERGY reporting line of the Deputy General Director — Head of THERMAL GENERATION PROJECT OFFICE INNOVATION HUB Maintenance Improvement, new unified structures for the MANAGEMENT Thermal Generation. These functional areas are: process units of gas power plants were approved. > Thermal Operation and Maintenance
> Health, Safety, Environment and Quality Within the framework of its core activities and competencies, Governance
> Operation and Maintenance Improvement each of the units contributes to formation of the agenda, Risk and Corporate > Project Management and Execution decision-making and implementation of the programs on > Technical Support economic, environmental and social issues. TECHNICAL SUPPORT > Business Development Gas Generation. HEALTH, SAFETY, ENVIRONMENT AND QUALITY The first reporting line of the Head of Thermal Operation and Maintenance includes the following power plants: OPERATION AND MAINTENANCE > Konakovskaya GRES
IMPROVEMENT Annexes > Nevinnomysskaya GRES BUSINESS DEVELOPMENT GAS GENERATION > Reftinskaya GRES KONAKOVSKAYA GRES > Sredneuralskaya GRES. PROJECT MANAGEMENT AND EXECUTION NEVINNOMYSSKAYA GRES
REFTINSKAYA GRES THERMAL O&M SREDNEURALSKAYA GRES
* Schematic representation as of 31.12.2019.
22 Annual Report 2019 PJSC Enel Russia 23 Business Model About the Report
our capital
industrial natural financial human Social and relationship intellectual
> Thermal power plants > Gas > Credit financing > Highly-qualified & trained technical > Reputation as responsible long-term > Advanced technical knowledge-base > Wind power plants in construction > Coal (until the 1st of October 2019) > Own funds workforce foreign investor > Access to Enel Group expertise
> Wide supply chain > Wind power (from 2021) > Qualified & experienced management > Trustworthy partner for business > Sustainability advocacy Company Overview (vendor rating & qualification) > Digital competences & innovations & authorities > Enel innovation community promotion > Reliable partner to local community
our business activities
power generation heat generation ancillary services indicators
Thermal Renewables Financial and performance
electricity & capacity supply heat supply primary frequency regulation
Wholesale electricity market Capacity market Readiness to provide primary > Day-ahead market > Competitive capacity auction Regulated tariffs frequency regulation service through > Balancing markets > Capacity supply contracts regulated tariffs > Regulated contracts > Regulated contracts Sustainability
network companies
electricity supply companies heat supply companies
end-users of electricity & heat system operator Governance Risk and Corporate
our value created
industrial natural financial human Social and relationship intellectual
> Stable supply of energy, capacity > Fuel consumption reduction > Stable financial results > Fair employer > Taxes > Scouting Russian startups to solve & heat > Responsible use & recycling > Dividends paid > Attractive & competitive > Social investments & community global Enel technological, business > Investments in renewables of resources compensation development & sustainability challenges Annexes & equipment modernization > Continuous training & education > Energy afficiency & supply reliability > Localization of renewables components' production
Development stage Outside of company's influence When developing a business model, we took into account the recommendations of the International
24 Annual Report 2019 PJSC Enel Russia 25 on investments into construction during 10 years for thermal 102-2 102-4 102-6 Capacity Company Regulations generation facilities, 15 years for RES facilities and 20 years About the Report in the Industry Starting from 2011, only capacity in the volumes, necessary for for NPP/HPP facilities. supply to the households and consumer categories regarded Calculation of the cost of supplied capacity shall be carried out as households is delivered under regulated contracts. taking into account “capacity quality”. This market mechanism Trade in liberalized, “free capacity” will be effected through permits to stimulate suppliers to ensure availability of mechanisms of competitive capacity take-off, execution of generating equipment. The company conducts its business operations at the wholesale power (capacity) market (WPCM) in the free contracts (directly with the purchaser) and via exchange Since September 2018, the capacity auctions have been First price zone including the European part of the Russian Federation and the Urals. of power and capacity. performed for 6 years ahead. In 2019, the first sessions were held for selection of the projects for modernization of The major wholesale power market players — are the following: Newly built generation facilities capacity is sold by means Company Overview generation facilities of thermal power plants for 2022–2025. > wholesale generating and territorial generating companies formed as a result of the power industry of Capacity Sales Agreements (CSA) and ensure the return reform, RusHydro PJSC, Rosenergoatom Concern JSC > utility companies with the status of guaranteeing suppliers, large utility companies formed as a result of the power industry reform, as well as independent suppliers. Heat Sales EU1 indicators Heat sales are carried out at the regional market, at the place > Nevinnomysskaya GRES power plant (Stavropol Territory, of power plant location, according to the tariffs, approved Nevinnomyssk)
Main Markets where the Company Financial and performance by the relevant regional power commissions of the Russian > Reftinskaya GRES power plant (Sverdlovsk Region, Carries out its Activity Federation. Reftinskiy settlement) > Sredneuralskaya GRES power plant (Sverdlovsk Region, Total installed heat capacity of the company amounts to 2,770 Yekaterinburg, Verkhnyaya Pyshma, Sredneuralsk). MW. Enel Russia carries out its power and capacity sales activities Day ahead market (DAM) in the following wholesale market segments: The heat is supplied to: At the “day ahead market”, the volumes of power exceeding > Konakovskaya GRES power plant (Tver Region, Konakovo)
Regulated contracts (RC) the RC volume are traded at free (marginal) prices obtained as Sustainability a result of a competitive tender of price bids from participants Since 2011, regulated contracts have been signed to cover of the wholesale market for purchase/sale of power. Trade the volumes of electricity and capacity only intended for the at the DAM (day-ahead market) is organized and held by the supplies to residents equated to residents of the consumer Joint Stock Company Trade System Administrator of the groups, as well as guaranteeing suppliers. Prices (tariffs) Wholesale Electricity Market (JSC ATS). for power and capacity supplies under regulated contracts are calculated by prices indexation formulae determined by Balancing Market (BM) the federal executive body of Russia in the area of public Governance Risk and Corporate tariff regulation (Federal Antimonopoly Service). Scopes of Trade in deviations of the actual production schedule from the power and capacity supply under RC are determined within scheduled one is exercised at the balancing market at prices the framework of the forecast summary balance of power formed based on a competitive tender upon the marginal generation and supply developed so that RC supplies would principle of bids of participants of the balancing market not exceed 35% of planned power (capacity) supply to the (suppliers and consumers with regulated load). wholesale market, defined in the balance decision for the relevant regulation period for a power and capacity generator included into the summary balance. Annexes
26 Annual Report 2019 PJSC Enel Russia 27 Competition Fuel Factor About the Report
Since the power plants of PJSC Enel Russia together with Hydropower plants and nuclear power plants have lower The main type of fuel used at Konakovskaya GRES, Natural gas is acquired at the prices, fixed in gas supply other power plants are incorporated into the Unified Energy power production costs as compared to thermal power Nevinnomysskaya GRES and Sredneuralskaya GRES power contracts concluded with independent contractors. System of Russia (UES of Russia) with unified networks, plants. Due to particularities of operation of their generating plants is natural gas, while the backup fuel is fuel oil. The The main factors, influencing the loading of power plants are processes of generation and consumption of power, we can equipment (safety, environmental protection measures, use structure of fuel consumption at these plants is as follows: both the existence of demand for power and the cost of fuel say that competitors are all thermal generating companies as of natural resources, modes of operation), these types of up to 99.9% falls on natural gas and 0.3 % falls on fuel oil. used for power generation. well as Rosenergoatom and RusHydro that are participants plants are more competitive at the power market. Company Overview of the wholesale power market. However, while performing Thermal power plants using gas, fuel oil and coal as fuels are a more detailed analysis of the competition, it is necessary to in equal conditions from the point of view of competition. note that the power plants of PJSC Enel Russia conduct their business operations at the wholesale power (capacity) market The main competitive advantages of the company are as (WPCM) in the First price zone that includes the European follows: Grid Limitations and UES Modes part of Russia and the Urals. It is important to consider the > a leading position in the area of power sales distance between the energy supplier and the centers of > plants’ location demand. The influence of every competitor on the pricing in > diversification of assets by technology The volumes of power production and sale by Company’s power hub, the ODU of the South plans to provide increased indicators the region is also to be assessed. > a high degree of personnel’s knowledge and skills. power plants are influenced by operation modes being set in load of generation capacities of Nevinnomysskaya GRES,
the Unified Energy System, namely: except for: Financial and performance > maintenance of grid equipment of electric power > operation of the power grid in maintenance schemes when substations and outgoing overhead power transmission limitation of load of the power plant is necessary Information about the company competitors lines > the flood period when limitation of the power plant’s load Power Plant Location of the competitors Competitors > maintenance, start-ups, shut downs and modes of is caused by increased output of capacity from HPPs of
KGRES UES of Centre Kostromskaya GRES — 3,600 MW (OJSC INTER RAO — Electrogeneratsiya) operation of generating equipment of power plants. the UES of South “locking” Nevinnomysskaya GRES due (Central Federal District CHP No. 16, CHP No. 20, CHP No. 21, CHP No. 26, CHP No. 27 — 6,433 MW to grid peculiarities. of the Russian Federation), (Mosenergo PJSC) Konakovskaya GRES Sustainability UES of North-West The advantage of Nevinnomysskaya GRES is its location in Smolenskaya NPP — 3,000 MW (Rosenergoatom Concern JSC) the power grid of South that ensures load and high coefficient Taking into account the last tendencies for power demand Kalininskaya NPP — 4,000 MW (Rosenergoatom Concern JSC) of utilization of installed capacity, and the new high-efficient in the UES of Centre, influence of generation capacities Leningradskaya NPP — 4,200 MW (Rosenergoatom Concern JSC) CCGT that due to low fuel consumption is always in demand. of competing companies on the mode of operation of Kurskaya NPP — 4,000 MW (Rosenergoatom Concern JSC) Konakovskaya GRES is more significant during the heating Zagorskaya GAES — 1,200 MW (RusHydro PJSC) Reftinskaya GRES period and is associated with the increase of operation of the NGRES UES of South Stavropolskaya GRES — 2,423 MW (PJSC OGK-2) and Sredneuralskaya GRES combined heat and power plants, as well as with putting into Novocherkasskaya GRES — 2,258 MW (PJSC OGK-2)
operation of new CCGTs and NPP. Governance Loading of capacities of Reftinskaya GRES is conditioned
Rostovskaya NPP — 4,030 MW (Rosenergoatom Concern JSC) Risk and Corporate These are the main transmission lines and substations that by total power intensity of the Urals Region and relatively Hydro plants of the UES of South (RusHydro PJSC) impact on the operation of Konakovskaya GRES when they low power generation cost and, as a consequence, by high RGRES and SUGRES UES of Ural Beloyarskaya NPP — 1,480 MW (Rosenergoatom Concern JSC) are maintained: Kalininskaya NPP HV line — Opytnaya, competitiveness. Loading of capacities of Sredneuralskaya Yuzhnouralskaya GRES-2 — 845 MW (OJSC INTER RAO — Electrogeneratsiya) Kalininskaya NPP HV line — Vladimir, Konakovskaya GRES HV GRES, given the low production cost in cogeneration mode, Nyaganskaya GRES — 1,345 MW (Fortum PJSC) line — Cherepovets, Kalininskaya NPP HV line — Belozerskaya, is conditioned not only by the power demand of the UES of Nizhnevartovskaya GRES — 2,031 MW (CJSC Nizhnevartovskaya GRES) Kalininskaya NPP HV line — Gribovo, Konakovskaya GRES HV Urals, but also by the heat power demand by the following Permskaya GRES — 3,363 MW (OJSC INTER RAO — Electrogeneratsiya) line — Trubino, Konakovskaya GRES HV line — Bely Rast, cities: Yekaterinburg, Verkhnyaya Pyshma, Sredneuralsk. Annexes Surgutskaya GRES-1 — 3,333 MW (PJSC OGK-2) Opytnaya HV line — Bely Rast and Belozerskaya substation,
Surgutskaya GRES-2 — 5 MW (Unipro PJSC) Opytnaya substation, Vladimir substation, Gribovo substation. Nevinnomysskaya GRES
The main factors that have a negative impact on the production > possible fuel related limitations Nevinnomysskaya GRES is situated in a complicated power and, respectively, sales of power, are as follows: > grid limitations and UES modes. hub of the UES of South. To ensure operation reliability of this
28 Annual Report 2019 PJSC Enel Russia 29 Change in shares of Generation of Power Plants of PJSC Enel Russia in 2018 and 2019
Power plant 2017 2018 2019 Change About the Report
KGRES share in UES of Centre 3.0% 2.9% 2.5% –0.4%
NGRES share in UES of South 8.1% 7.6% 6.9% –0.7%
RGRES share and SUGRES in UES of Ural4 10.2% 10.1% 8.0% –2.1%
Enel Russia share in PZ I5 5.2% 5.0% 4.1% –0.9%
Regulatory authorities in the electric power industry Company Overview
Regulatory authority Functions
Government of the Russian Federation, Ministry of Economic They define the main areas for the development of the power sector Development of Russia, Ministry of Industry and Trade of the Russian of the Russian Federation Federation, MINISTRY OF ENERGY OF THE RUSSIAN FEDERATION
Regulation and control of access to the electric grids and services
Federal Antimonopoly Service (FAS of Russia) for power transmission. Approval of tariffs and scope of purchase/ indicators sales of power and the capacity Financial and performance Public Joint-Stock Company "Federal Grid Company of Unified Energy It provides the services for power transmission through the unified System” (“FGC UES”, PJSC) national power grid to the WPCM entities
It implements a complex of measures aimed at centralized control System Operator of Unified Energy System Joint Stock Company of operating modes of power industry facilities and power receiving (SO UES JSC) installations of consumers
Organization of wholesale power trade, verification of cross- Sustainability Joint Stock Company Trade System Administrator obligations set-off between the trade market participants; organization of the Wholesale Electricity Market (JSC ATS) of warranty and settlement system at the wholesale market, market regulations compliance control
Provision of the WPCM commercial infrastructure functioning, Non-profit Partnership "Market Council for Organization of Efficient provision of effective interconnection between the wholesale and System for Wholesale and Retail Trade in Electric Energy and Capacity" retail markets, competitiveness in the wholesale and retail market, (Association NP Market Council) maintenance of the balance of interests of power and capacity generators and purchasers Governance Risk and Corporate Annexes
4 Data on the share of Reftinskaya GRES are provided for 9 months. 2019. See details on the sale of the property of Reftinskaya GRES in the section “Exit from Coal Generation”. 5 PZ I* — the First Price Zone of the Wholesale Power (Capacity) Market (WPCM), including the European part of Russia and the Urals.
30 Annual Report 2019 PJSC Enel Russia 31 Company Strategy About the Report
Strategic Plan for 2020–2022 SDG 7, SDG 13 Diversification of technology profile Company Overview The Key Areas of the Company Activities, 103-1 103-2 103-3
Prospects for Company Development Focus on efficiency of gas power plants
Operational efficiency
Our main objective is to create long-term value for The main documents regulating creation
shareholders, employees, partners and other stakeholders. of economic and financial value include: Debt structure optimization indicators The company's approach is to ensure balance between growth
and development, solid financial position and remuneration to Financial and performance shareholders. Shareholder remuneration
The financial strategy is approved by the Board of Directors of the company while responsibility for implementation of financial strategy is within the General Director, as well as line directors in the relevant unit (see details in the section Corporate Report on strategic pillars in 2019 “Organizational Structure”). Governance Code recommended by the Central Dividend Policy Sustainability The company publishes annually its key operational and Bank of the Russian Federation Pillar Achieved result in 2019 for use by joint-stock companies Regulation financial objectives for the next three years, approved by the whose securities are admitted of PJSC Enel Russia to on-exchange trading Diversification of technology profile > Completion of the key stage of the coal power plant sale Board of Directors, as well as the results of the year for key During several years, the company has been gradually moving towards (see details in the section “Exit from Coal Generation”) modification of the technology and financial profile in favor of cleaner > The company obtained the right to construction strategic pillars. The company discloses quarterly the financial energy sources, as well as reduction of the dependence of financial of the third wind farm with the capacity of 71 MW results for the past period with management comments and results on market volatility by the tender results in 2019 answers to questions from the financial community. See > Commencement of construction of Azovskaya WPS and Kolskaya WPS (see details in the section “Development of Renewable details in the section “Interaction with the Shareholders and Energy Sources”) Investors”. The key elements of our strategy — “Diversification of Focus on efficiency of gas power plants > Four projects of the company for a total capacity of 370 MW were Governance The company's financial strategy is inextricably related to technology profile” towards reduction of the carbon footprint, Along with construction of new RES facilities, the company improves selected based on the results of two project selections Risk and Corporate implementation of the strategic plan. The company's strategic as well as “Focus on efficiency of gas power plants” are continuously the available thermal facilities to increase the period and (for 2022–2024 and 2025) as part of TPP modernization program efficiency of their operation. One of the promising development areas (see details in the section “Investment Activities”) plan for 2020–2022 confirms key strategic pillars: aimed at achieving the UN sustainable development goals indicated in the previous strategic plan for 2019–2021 was participation > Diversification of technology profile (SDGs): SDG 7 (Affordable and Clean Energy) and SDG 13 in the modernization program with commencement of project selection in 2019, that was confirmed in strategic plan for 2020–2022 > Focus on efficiency of gas power plants (Climate Action). PJSC Enel Russia confirms its commitment > Operational efficiency to other SDGs too by promoting a sustainable business model Operational efficiency > Reduction of fixed costs as compared to 2018 > Debt structure optimization and applying sustainable development practices. See details The company has established historically a goal of continuous (2019 exclusive of Reftinskaya GRES) comprehensive optimization of costs that ensures additional support > Shareholder remuneration. in the section “Our Contribution to SDGs”. during transformation of the company's business profile Annexes
Debt structure optimization > Refinancing of the last euro-denominated loan into rubles Along with control of production costs, the company strives for constant > RUB 12 billion from proceeds from the sale of Reftinskaya GRES \ optimization of the structure and cost of borrowed capital, as well as was used for debt redemption maintenance of strong relations with financial partners
Shareholder remuneration > Dividend pay-out ratio was increased with 60% to 65% following The result of assumed strategy is envisioned by the company in creation results of 2018 of long-term value for the company shareholders including in the form > The dividend policy is updated in accordance with the stage of considerable dividends by the operating results of transformation of the company's business profile
32 Annual Report 2019 PJSC Enel Russia 33 Other Results in 2019
Structure of net power output by the technology (TWh) About the Report In 2019, Moody’s and Fitch international credit rating agencies average level, the company received 24.5 out of 100 points confirmed the company rating at Ba3/Stable outlook and (the lower the better). Risk management is estimated at 66.4 5% BB+/Stable outlook, respectively. These rating actions were out of 100 points (the higher the better); this indicates a high 0% preceded by putting the company's rating for revision in June quality of management. 2019 due to convening an Extraordinary General Shareholders’ Then, the long-term incentive program for the top 19.0 19.9 Meeting regarding the sale of Reftinskaya GRES. 17.9 Renewable management with 60% depending on the share price was 0.3 1.1 Conventional gas 6 In addition, in 2019 international agency Sustainalytics extended in 2019 for the next three years planned period . CCGT 12.7 12.9 performed annual update of the rating of ESG risk management This program demonstrates the company’s commitment to 12.8 % Renewables / Total Company Overview (risks in the environmental, social and corporate governance the increase of its shareholders wealth and creation of long- 6.0 5.9 areas, ESG Risk Rating) at the company having improved its term economic and financial value. 5.1 indicators as compared to 2018. ESG-risk is estimated at an 2020 2021 2022 indicators
ESG Risk Rating Management score
Forecast of Financial Results Financial and performance
The lower, the better The higher, the better The company follows mainly the scenario conditions increase in electric power demand, containment of tariffs of previous plan, against the background of current and fluctuations of electric power prices in some regions of macroeconomic and market trends, such as moderate presence. 58.2 66.4
28.3 24.5 Sustainability
2017 2018 2017 2018 Forecasts of financial results of the company up to 2022
EBITDA, billion rubles Net ordinary income, billion rubles
Forecast of Operating Results 43% Governance Risk and Corporate 0% The key changes in terms of installed capacity represented > As regards renewable energy sources, 291 MW facilities in the Plan for 2020–2022 include: will be commissioned as two wind farms are gradually > As regards heat generation, 3.8 GW of coal generation commissioned. Another 71 MW project will be launched were disposed from October 1, 2019 after the transfer of beyond the horizon of the planning period. 13.8 Reftinskaya GRES assets. All other generation facilities 11.2 During 2020–2022 the stable production results of gas 9.5 were selected either as part of capacity auction for 6.2
units with some fluctuations in accordance with the annual 4.5 Annexes 2020–2022 or modernization program. The selected 3.6 investment plans as well as generation of the first megawatt modernization projects provide for a slight increase in hours from renewable energy sources from 2021 will ensure 2020 2021 2022 2020 2021 2022 installed capacity, but beyond the horizon of the planning moderately positive trend of electric power supply. period % of EBITDA from Renewables
6 More details and conditions about KPIs of top managers used for their motivation are described in Annex 6 to this report.
34 Annual Report 2019 PJSC Enel Russia 35 EBITDA dynamics in 2020 in relation to 2019 is explained of RUB 15.3 billion in 2019. On a comparable basis or by At the same time, as the wind power projects are gradually times in 2022, compared to 0.3 calculated in 2019, which is by the sale of Reftinskaya GRES in 2019. While decrease in deducting Reftinskaya GRES in 2019, EBITDA is 10% higher commissioned, the company expects to overcome the peak a low base due to repayment of RUB 12 billion debt from the 2021 is stipulated by the end of the ten-year period for return than the figure of RUB 10.4 billion in 2019, the company debt load (in 2021) with Net Debt/EBITDA ratio reaching 2.4 proceeds from the sale of Reftinskaya GRES. About the Report on investments in CCGT, at the same time the company will follows the line of step changes in the structure of gross start receiving RES CSA for 90 MW wind farm in the Rostov profit and EBITDA towards a more stable technology profile region. EBITDA is restored starting from 2022 as the second and risk reduction, which should generate higher value when wind farm is put into operation in the Murmansk region with assessed by the market. capacity of 201 MW. Creating Value for Shareholders
EBITDA of the company is expected to achieve RUB 13.8 billion in 2022, which is 3%7 lower than the actual figure The plan of PJSC Enel Russia provides for a balance of introduces a fixed dividend to ensure a guaranteed return for
growth opportunities, financial sustainability of business its shareholders. Company Overview and predictable remuneration for shareholders. Given the By the results of 2019–2021, the company intends to distribute period of change in the strategic positioning of the company RUB 3 billion every year. and volatility of profit over the medium term, the company
EBITDA forecast by technologies
2019 Coal Gas 2022 Renewables Gas Dividend policy, billion rubles Dividend per share (RUB/share) indicators Financial and performance 32% 43%
3 3 3 0.085 0.085 0.085 15.3 13.8 billion rubles billion rubles 2019Е 2020 2021 2019Е 2020 2021 Sustainability
68% 57%
Net ordinary income is explained by EBITDA trend, and will Governance 2020 achieve RUB 4.5 billion in 2022 compared to RUB 7.5 billion 23.7 2.1 Risk and Corporate in 2019. On a comparable basis or by deducting Reftinskaya GRES in 2019, the net profit in 2022 will be approximately at the level of 2019 of RUB 4.6 billion, the dynamics will be 2021 31.8 3.4 affected negatively by increase of financial costs since 2021 after putting into operation of projects based on renewable 2022 energy sources. 33.5 2.4
Net debt is expected to grow to approximately RUB 33.5 billion Annexes
at the end of 2022 compared to RUB 4.2 billion calculated Net debt change forecast, billion rubles as at the end of 2019, which is mainly due to increase in Net debt / EBITDA investments to ensure transformation of the business profile.
7 In this section of the report compound annual growth rate is used when comparing financial data 2022 versus 2019.
36 Annual Report 2019 PJSC Enel Russia 37 The Sustainability Plan was updated significantly to provide the principle of comparability, for new goals, where possible, Sustainability Plan for 2020–2022 102-16 a visual representation of our business the transformation. we indicated the results of the previous reporting period and The Plan covers the majority of priority areas of activities, actual data for the current year. About the Report highlighted as material topics of this report. To comply with
In the new Sustainability Plan for 2020–2022, Enel Russia practices. Sustainability is inextricably related to the company Sustainability Plan: confirms the underlying principles of its strategy and focuses strategic business plan. See more information in the section results8 of 2019 and planned indicators for 2022 on environmental and social impact and management “Sustainability Management”.
Pillars Actual for 2019 2022 Progress Company Overview People Focus: Engaging People We Work With
People Development
contribution strategic pillars key priorities to the sdgs 70 New
Digital skills training 28 (% of involved) 28 70 > Fair employer 20
Engaging people > Talent retention indicators we work with > People development > Diversity & inclusion 2018 2019 2022 Financial and performance
30
Engaging > UN SDG-related community support programs Cross functional development > Corporate volunteering 10 30 10 local communities (% high-potential young people) 8
2018 2019 2022 Sustainability
> Exit from coal generation 80 Decarbonization > Renewable energy assets development 50 Multiskilling 45 (% of operations & maintenance 50 80 personnel)
2018 2019 2022 Sustainable > Foster "Made in Russia" supply chain > Sustainability criteria in major purchases Governance
49 Risk and Corporate 48 48
Training hours (per employee/year) 48 49 Environmental > Gas units modernization sustainability > Circular economy practices 2018 2019 2022 > Single-use plastics phase-out
38 Annexes Economic & financial Occupational New technologies Governance & ethics value creation health & safety & solutions Internal mentors among managers (% of involved) 8 38 8
2018 2019 2022
backbones
8 All actual indicators for 2019 include data inclusive of RGRES until September 30, 2019.
38 Annual Report 2019 PJSC Enel Russia 39 Diversity & Inclusion Engaging the Local Communities About the Report 86.8 41 85 38 30 SDG-linked community support and 63.7 Women recruitment development projects (thousand 86.811 85 (% in recruitment processes) 38 41 beneficiaries)
2018 2019 2022 2018 2019 2022
18 Company Overview 21 New 17 17 11 11.5 Employees involved in corporate Women in top management 12 volunteering (%) 11.5 18 (%) 17 21
2018 2019 2022 2018 2019 2022
Talent Retention 50 New indicators Sustainability knowledge 100 100 dissemination (hours/year) — 50 Financial and performance
Climate survey 100 100 2018 2019 2022 (% of involved and % of participants) — — 96 96
Decarbonization 2018 2019 2022
291 100 100 100
Installed renewable capacity Sustainability 0 291 Performance appraisal 100 100 (MW) (% of involved and % of appraised) — — 0 0 99 99 2018 2019 2022 2018 2019 2022
655 616 New 399.1 35 New Direct СО (g/kWh) 13
2 616 399.1 Governance High-potential employees in training 12 Risk and Corporate programs (%)9 12 35 10 2018 2019 2022 2018 2019 2022
Sustainable Supply Chain
10 New New Environmental
3-year individual career path for high Annexes Introduction of sustainability Product potential employees (%)10 — 10 criteria in tenders14 — Declaration (PED) 2018 2019 2022
11 77.9 thousand beneficiaries without RGRES. 12 16% without RGRES. 9 Of the total number of participants of training programs. 13 420 g/kWh without RGRES. 10 Of the total number of high-potential employees. 14 By 2022, an assessment of key suppliers based on key sustainability indicators.
40 Annual Report 2019 PJSC Enel Russia 41 Transition to Renewable Energy Sources
40 About the Report New
Other Works sustainability criteria (% of tenders)15 — 40 Decarbonization of the Energy Mix 103-1 103-2 103-3 2018 2019 2022
Global macroeconomic trends, such as decarbonization, the company supports the goal of the Enel Group to achieve Environmental Sustainability transform the world of electric power industry into a new a zero-carbon balance by 2050. ecosystem that transforms gradually the conventional Decarbonization provides for the development of renewable business model of utility companies. Company Overview 13.2 energy, equipment modernization and implementation of 8.93 Enel Russia follows the strategy of Enel Group that low-carbon technologies. Decarbonization of the fuel mix is Waste water volume reduction 16 4.59 mainstreamed the development of environmentally friendly a relatively new topic so a management approach for it has (million m3/year) 8.93 4.59 energy sources and recognizes the importance of climate not been fully developed yet. At this stage, responsibility for 2018 2019 2022 change and the need to take urgent measures to combat managing, achieving goals and evaluating performance in 2018 — the goal is set only for RGRES, since 2019 it is set for all power plants. the climate crisis. According to the Integrated Policy in terms of this material topic is assigned to: General Director, quality, health, safety, environment and energy efficiency, Head of Generation, Head of Renewable Energy.
327 indicators 320.98 296.6
Fuel consumption reduction Financial and performance 17 Development areas and key events of 2019 (g/kWh) 320.98 296.6
Exit from coal generation Transfer of property of the largest coal power plant in Russia — Reftinskaya GRES — 2018 2019 2022 to Kuzbassenergo JSC on October 1, 2019 (see details in the section “Exit from Coal Generation”)
Construction of wind energy Detailed information about current status of projects is given in the section “Transition to Renewable facilities Energy Sources” 6 Further business development Enel Russia obtained the right to the construction of a new wind generation facility for a total installed
Reuse & processing projects 3 in wind energy capacity of over 71 WM within the scope of the tender for selection of the projects in renewable energy Sustainability (projects / year) 3 6 2 sources. Rodnikovsky wind farm will be located in the Stavropol Territory. Concerning the Rodnikovsky wind farm, the installed capacity of the company's wind generation facilities selected during the tenders will be 362 MW. This tender winning underline once again our aim at diversification of the structure of 2018 2019 2022 generation facilities due to growth in RES
Modernization of the equipment The projects of Enel Russia aimed at equipment modernization were selected by the System Operator in the competitive procedure for the projects as per equipment modernization program 2018 2019 2022 (see details in the section “Main Investment Projects”) New
Reduction of disposable plastic Governance use (%)18 –50 –75 Risk and Corporate –50 –75 Exit from Coal Generation 102-10
Until October 2019, PJSC Enel Russia owned the largest an exit from coal generation. The basic motives prompting coal power plant in Russia — Reftinskaya GRES. Reftinskaya PJSC Enel Russia to perform such analysis were: GRES, with an installed capacity of 3.800 MW, is located > absence of synergy with other components of the value
in the Reftinsky settlement, Sverdlovsk region. The power chain Annexes plant consists of six 300 MW power units and four 500 > potential to reduce the company's negative environmental MW power units; the installed heat capacity is 350 Gcal/h. impact and, as a result, the possibility of increasing the Reftinskaya GRES is able to ensure a supply of about 40% investment attractiveness of the company among ESG of the entire Sverdlovsk region. investors > release of funds for reinvestment in more stable and From 2016 onwards Enel Russia has been performing 15 Procurement of services, auxiliary goods, purchases for small amounts. dynamically developing segments of the Russian electric 16 7.3 million m3/year without RGRES. a strategic analysis of the role of each power plant in the 17 power industry. 299.3 g/kWh without RGRES. company’s portfolio and actively examining the possibility of 18 In 2019–2020, the focus is on reduction of disposable plastic use at the offices. Starting from 2021, reduction of plastic use at the power plants and in procurement.
42 Annual Report 2019 PJSC Enel Russia 43 Sale Timeline for additional payments for the total amount of up to RUB Project for the sale of Reftinskaya GRES
3 billion within five years after closure of the transaction if About the Report In 2016 and 2017–2018 the company completed two certain conditions are met. marketing rounds for Reftinskaya GRES among qualified During the transition period, in order to ensure the continuity participants in the energy sector in Russia and abroad to of the operational activities of Reftinskaya GRES, PJSC Enel Marketing of Reftinskaya Sale of Reftinskaya GRES determine the market value of coal asset. Russia will continue operating the power plant under a lease GRES and determination As a result of the competitive process, Kuzbassenergo agreement for up to one year. of market value for 2016, 2017–2018 JSC was selected as the buyer (a subsidiary of Siberian STAGE 1 STAGE 2 STAGE 3 June–July 2019 August–October 2019 October 2019 — till present Generating Company LLC), one of the largest private Plant Personnel
operators of thermal power plants in the Siberian Federal Company Overview > Agreement signing > Inventory of the power TRaNSITION PERIOD District. Most of the employees of Reftinskaya GRES remain plant property jointly with Receipt of binding > Approval of the terms employed by PJSC Enel Russia for the entire transition of the transaction by Kuzbassenergo JSC > Leaseback of the power On April 5, 2019, PJSC Enel Russia received a binding offer plant period in order to fulfil the obligations of PJSC Enel Russia April 2019 shareholders of PJSC Enel > State registration of offer from Kuzbassenergo JSC to purchase the property of Russia at the Extraordinary transfer of title to real > Obtaining of licenses related to operation of the power plant. A limited number Reftinskaya GRES. General Shareholders' estate of Reftinskaya and permits by of employees of Reftinskaya GRES were transferred to Meeting, on July 22, 2019 GRES from PJSC Enel Kuzbassenergo for In order to determine whether the remuneration payable Kuzbassenergo JSC or employed at Kuzbassenergo JSC > Authorization of the Russia in favor of independent operation Kuzbassenergo JSC of the power plant to PJSC Enel Russia under the terms of the contemplated on a part-time basis to provide Kuzbassenergo JSC with transaction by the Federal Assessment of fairness Antimonopoly Service of transaction is fair from a financial point of view, the Board indicators personnel having qualifications required to obtain licenses of transaction terms the Russian Federation, of Directors of PJSC Enel Russia instructed to involve an and permits in relation to Reftinskaya GRES. April 2019 July 31, 2019 independent consultant for assessment of the fairness of Financial and performance The Parties to the Agreement foresaw the preservation of the terms of the transaction. the terms and conditions of employment agreements with Furthermore, under the requirements of Federal Law No. 208- the power plant employees during the Transition Period, TRANSITION PERIOD: Enel Russia operates the power plant under lease agreement October 2019 — till present FZ dated December 26, 1995 On Joint-Stock Companies, as well as absence of possibilities to organize transfer of Sales agreement adoption of the decision by the corporate governance employees of Reftinskaya GRES to other power plants of signing June 2019 bodies of a public joint-stock company on approval of a PJSC Enel Russia. Commencement of independent operation of the power plant by Kuzbassenergo Upon major transaction, whose subject is the sales of assets, shall completion of the transition period, but no later than October 1, 2020 PJSC Enel Russia and Kuzbassenergo JSC will make be taken with due account for fair value of such assets. In Sustainability reasonable efforts to ensure the entry of Reftinskaya GRES order to comply with specified requirements, PJSC Enel personnel into labor relations with Kuzbassenergo JSC by Russia engaged an independent qualified appraiser for an Completed processes Processes ongoing after 31.12.2019 the end of the Transitional Period by means of replacing independent appraisal of Reftinskaya GRES property. the employer in the employment agreements with RGRES On June 20, 2019 PJSC Enel Russia and Kuzbassenergo JSC personnel in accordance with Article 75 of the Labor Code of (a subsidiary of Siberian Generating Company LLC) signed a the Russian Federation. Kuzbassenergo JSC undertakes to sale and purchase agreement in relation to the property of ensure the work of Reftinskaya GRES personnel under the Reftinskaya GRES. The agreement took effect on July 31, same conditions. Governance
2019 after two conditions were met: Risk and Corporate At the same time, Kuzbassenergo JSC undertakes not to Sverdlovsk Region on termination of Agreement No. 191 community support projects and further development of the authorization of the transaction by the Federal Antimonopoly terminate employment agreements with the personnel of dated 14.07.2011 “On interaction in the field of environmental territory by the new owner — Kuzbassenergo JSC, a large Service and approval of the terms of the transaction by Reftinskaya GRES within 18 months after the transaction protection between the Government of Sverdlovsk Region contribution to implementing which was made by PJSC Enel shareholders of PJSC Enel Russia at the Extraordinary completion date, unless such termination occurs upon and PJSC Enel Russia” as the Agreement concerned Russia during its presence in the territory. General Shareholders' Meeting (held on July 22, 2019). request of the employee or upon Kuzbassenergo JSC’s exclusively the activities of Reftinskaya GRES. The total amount of the transaction by the transition period initiative of as a result of breach of relevant provisions of Supply Chain results should amount to RUB 20.7 billion exclusive of the Labor Code of the Russian Federation by the employee. Local Community Annexes VAT. Moreover, in addition to the above transaction price, October–December 2019, PJSC Enel Russia re-assigned additional payments should be received as a result of Environmental Impact Enel Russia is in close dialogue with new owner of Reftinskaya to Kuzbassenergo JSC the contracts required for overhauls purchase of certain categories of reserves at Reftinskaya GRES, not only on the issues of power plant operation. and medium maintenance at Reftinskaya GRES, while the GRES by JSC “Kuzbassenergo”, including reserves of Due to the sale of Reftinskaya GRES and transfer of title For its part, the company makes every possible effort to agreements related to current maintenance and operation of coal, fuel oil, chemicals and spare parts at the end of the to the power plant’s property to another organization, PJSC transfer expertise, knowledge and experience in interacting the power plant are retained by PJSC Enel Russia until the transition period. In addition, the transaction provides also Enel Russia submitted a notification to the Government of with the local community, in order to ensure continuity of end of the transition period.
44 Annual Report 2019 PJSC Enel Russia 45 Development of Renewable 103-1 103-2 103-3
Energy Sources About the Report
Enel Russia follows the strategy of Enel Group that Russia decided to invest into the projects for construction of mainstreamed the development of environmentally friendly renewable energy generation facilities. energy sources and recognizes the importance of the climate Being an active member of major business and trade change and the need to take urgent measures to combat associations in the country PJSC Enel Russia elaborates climate crisis (see details in the section “Decarbonization of proposals for improving regulatory acts regulating functioning the Fuel Mix”). PJSC Enel Russia increases the share of use of green generation as well as further encouragement of long- of renewable energy sources and supports environmental Company Overview term development of RES generation. and social goals set by the Group while using sustainable development as an important vector during selection of We are developing own portfolio of RES projects and investments and production strategies. constructing wind farms in different regions of Russia. Enel Russia is considering to participate in the upcoming renewable In 2013 the Government of the Russian Federation launched tenders for next years and strongly focuses on developing its a program for incentivize the development of energy assets RES project pipeline. based on RES and adopted the required regulatory legal
acts. Due to this favorable regulatory frame PJSC Enel indicators Financial and performance
Renewable energy projects of Enel Russia
Generation/ Commencement Date entered 362 MW — total Title Capacity year Location of construction into service Investments Project status installed capacity 1.3 TWh — Azovskaya Rostov December During electric power WPP 90 MW 320 GWh Region May 2019 2020 132 million EUR construction generation per year Sustainability
Kolskaya Murmansk December During 1040 kilotons — WPP 201 MW 750 GWh Region September 2019 2021 273 million EUR construction reduction of the volume of CO2 The information emissions will be given in per year Rodnikovsky Stavropol the next reporting Under WPP 71 MW 220 GWh Territory period H1 2024 90 million EUR development Governance Risk and Corporate We implement the projects in the sector of renewable energy sources in full compliance with internal procedures and policies adopted at PJSC Enel Russia namely: Annexes
Integrated Policy Charter Code of Ethics Zero Tolerance Global Compliance for Quality, Health, of PJSC Enel Russia to Corruption Plan Program on corporate Safety, Environment Regulation criminal liability and Energy Efficiency
46 AnnualAnnual Report Report 2019 2019 PJSC Enel Russia 47 The team working on the projects for development of and safety, digital solutions. Not only Russian specialists project, construction of 110 kV power transmission line is Regarding current practices, we make uncompromising renewable energy sources consists of ~50 persons participate in it but colleagues from Enel Group throughout started with the length of ~50 km; for Kola project, 150 kV requirements for health and safety at the construction sites, About the Report that coming from engineering & construction, business the world too, which allows establishing continuous sharing power transmission line with the length of ~70 km is currently applied equally to both company employees and employees development, procurement, finance, legal service, health of expertise and best practices. at the preliminary construction phase. Construction of high- of contractors and subcontractors. The wheel washing voltage power transmission lines along with wind farms will stations with 100% closed cycle of water usage are installed increase the flow of electricity within and outside the regions, at our construction sites. We adhere to the principle of “zero Structure of wind generation development management ensuring high reliability of power supply for the consumers. ground balance” — this means that the ground left from excavation of foundation is used for construction of internal Sustainable Construction Site roads and other construction purposes within the territory of the construction site. We arranged separate waste collection
PJSC Enel Russia EPCM Contractor* of PJSC Enel Russia Company Overview At the stage of construction of generation facilities all at the construction site of Azovskaya WPP. processes are strictly regulated also by global procedures of We involve actively the local authorities and local community in the company included in Enel Group — Enel Green Power. Head of Renewable Energy LLC Enel Green Power Rus projects for improvements and development of the territories PJSC Enel Russia organizes the work at the construction site of our presence (see details in the sections “Engaging the
Development of projects based on renewable energy sources at Management of construction with regard to the principles of sustainable construction site. Local Community” and “Calendar of Events”). the region of presence level and operation of RES portfolio indicators Principles of sustainable construction site Financial and performance
LLC Enel LLC Enel Rus LLC Enel Rus Rus Wind Wind Azov Wind Kola MINIMIZATION OF NEGATIVE IMPACT Generation
Implementation of investment for construction of projects Resources Our people on wind farms Sustainability
> Efficient use of water, power and other resources > Improvement of infrastructure > Recruitment and training of local workforce Azovskaya WPP Kolskaya WPP Rodnikovsky WPP > Creation of infrastructure and services for workforce at site
100% subsidiaries
Waste Local community * EPCM (Engineering, Procurement, Construction, Management) — engineering services, procurement, construction, project management. Governance Risk and Corporate
> Use of sustainable materials > Control of noisy and dusry works > Maximum reuse of solid waste, including soil and stones > Control over cleanliness of vehicle leaving the site Infrastructure Development For delivery of every WTG to its position on the construction > Reuse and transfer of equipment > Transfer of equipment and materials to local community site, the internal roads must be constructed. For Azov > Separate collection of waste and transfer of the maximum > Partnership and long-term cooperation possible volume for recycling Azovskaya WPP consists of 26 wind generators (WTG), and project the length of the internal roads is 16 km, for Kola Kolskaya WPP consists of 57 WTGs. project — 60 km. in addition with regards to Azov project
we reconstruct the external access road with the length of Annexes The supplier of WTGs for both projects is LLC Siemens about 5 km from the wind farm territory to the boundary Gamesa Renewable Energy. The percentage of localization of with Krasnodar Territory. Upon completion of construction equipment and works must be at least 65% for each project. this road will be used by the local community. It means that more than a half of the wind turbine equipment and works related to wind plants construction should be For grid connection of both projects to the Unified Energy produced in the territory of the Russian Federation by local System of Russian Federation, Enel Russia is going to factories and specialized companies. construct high-voltage power transmission lines: for Azov
48 Annual Report 2019 PJSC Enel Russia 49 3. FINANCIAL AND PERFORMANCE INDICATORS About the Report Revenues, billion rubles EBITDA, billion rubles
74.4 73.3 Financial and Performance 65.8 target
–10% 6% 15.1 Indicators 17.7 17.2 28% 15.3
–11% Company Overview
23.8% 23.5% 23.3% 102-7 Analysis of Performance 66% Dynamics as Compared to the Plan and Previous Period 2017 2018 2019 2017 2018 2019 Heat, other Capacity Electric power EBITDA margin indicators Financial and performance
In 2019, despite the absence of financial result of Reftinskaya Ordinary EBIT, or net of Reftinskaya GRES sale related effects, GRES from October 1, 2019, the company achieved annual decreased by 12% mainly reflecting lower EBITDA. Lower Ordinary EBIT, billion rubles Net ordinary income, billion rubles financial targets, namely: EBITDA amounted to RUB 15.3 amount of depreciation due to its elimination for Reftinskaya billion (versus planned RUB 15.1 billion), net ordinary income GRES starting from July 1st, 2019, as well as lower accruals amounted to RUB 7.5 billion (versus planned RUB 7.4 billion). for bad debts partially offset the abovementioned negative
This was due to favorable pricing conditions at the electricity effect. target 14.0 7.4 Sustainability market in some regions, as well as greater savings in fixed 12.5 Net ordinary income, or net of Reftinskaya GRES sale related 11.0 costs. 8.5 effects, decreased by 3% as compared to 2018 in line with 7.7 7.5 In 2019, revenue decreased by 10% vs 2018, on lower ordinary EBIT, however, supported by around a 36% decrease –12% –3% power and capacity sales due to Reftinskaya power plant exit in net financial charges which was mainly attributable to starting from 4Q 2019, and the decline in conventional gas managerial action, that resulted in the optimization of debt units’ production that was mostly driven by lower loading by currency and cost structure, as well as to lower average level 2017 2018 2019 2017 2018 2019 the System Operator due to overcapacity in the system, as of debt due to its partial repayment from Reftinskaya sale
well as lower electricity demand in European Russia and Urals proceeds. Governance
due to higher average temperatures in 2019 versus 2018. Risk and Corporate Net debt of the company by the end of 2019 decreased Net debt, billion rubles Dividend per share, rubles In 2019, EBITDA decreased by 11% vs 2018 mainly following considerably as compared to the end of 2018, mainly the revenues. It offset a positive effect coming from a 13% reflecting the receipt of Reftinskaya sale proceeds that were fixed cost decline that was mainly attributable to lower used afterwards for partial debt repayment. non-manageable operation and maintenance costs due to 19.4 Upon 2019 result, the company plans a dividend per share 17.9 elimination of property tax on movable assets from 2019, of RUB 0.085 per share, which is lower than the value for and lower manageable operation and maintenance costs and
2018 and reflects an updated dividend approach according Annexes personnel costs on the change in assets perimeter. to which the company plans to distribute fixed amount of 0.14 0.14 Personnel costs additionally benefited from personnel 3 billion rubles per year upon 2019–2021 results. 4.2 0.085 liabilities recalculation related to Reftinskaya GRES, as well as lower headcount more than offsetting the impact on salaries –78% –39% of the Consumer Price Index (CPI). 2017 2018 2019 2017 2018 2019
52 Annual Report 2019 PJSC Enel Russia 53 19 Net power output by company’s power plants in 2017–2019 EU2 Main Production Indicators EU1 In 2019, PJSC Enel Russia generated 32,433 thousand MWh of net power output, About the Report 17.2% less than in 2018.
Installed heat and electric capacity of the company power plants Unit of Power Plant Type of capacity, unit of measurement 2019 2018 Power plant measurement 2017 2018 2019 2019 vs 2018 Reasons of changes 2019 vs 2018
Electrical, MW 2,520 2,520 Less load of equipment Konakovskaya GRES Heat, Gcal/hour (MW) 120 (140) 120 (140) from the System Operator due to excess capacity in the Electrical, MW 1,530.2 1,530.2 Konakovskaya GRES GWh 6,950 6,462 5,698 –11.8% UES of Center
Nevinnomysskaya GRES Company Overview Heat, Gcal/hour (MW) 585 (680) 585 (680) Reduction of generation of As on 30.09.2019 3,800 conventional gas units due to more Electrical, MW 3,800 loading of NPP in the south of As on 31.12.2019 0 Reftinskaya GRES Russia was not compensated As on 30.09.2019 350 (407) Nevinnomysskaya GRES GWh 7,741 7,534 6,750 –10.4% by the stable results of CCGT Heat, Gcal/hour (MW) 350 (407) As on 31.12.2019 0 Transfer of property Electrical, MW 1,578.5 1,578.5 Reftinskaya GRES GWh 18,565 18,572 13,333 –28.2% to the new owner from October 1 Sredneuralskaya GRES Heat, Gcal/hour (MW) 1,327 (1,543) 1,327 (1,543) Minor growth due to higher As on 30.09.2019 9,428.7 generation of CCGT. This growth indicators Electrical, MW 9,428.7 compensated lower generation As on 31.12.2019 5,628.7 Total for Enel Russia of conventional gas units caused
As on 30.09.2019 2,382 (2,770) mainly by capacity surplus Financial and performance Heat, Gcal/hour (MW) 2,382 (2,770) Sredneuralskaya GRES GWh 6,575 6,614 6,652 0.6% in the system As on 31.12.2019 2,032 (2,363)
Total for Enel Russia GWh 39,830 39,182 32,433 –17.2%
The structure of installed capacity The structure of installed capacity
of Enel Russia by type of fuel of Enel Russia by type of fuel Sustainability The structure of net power output The structure of net power output as on 01.10.2019* as on 31.12.2019* of Enel Russia power plants in 2019 of Enel Russia by type of fuel in 2019
17.6% 60% 100% 20.5% 59% Governance Risk and Corporate 20.8%
40% 41%
Gas Coal KGRES 41.1% Annexes * Despite the fact that fuel oil is also included in the structure of the fuel types used, it is not indicated in the structure NGRES of installed capacity for two reasons: RGRES Gas - its current share is up to 0.3% of the total volume of consumed fuel; - fuel oil is used as a starting fuel that is not used for the generation of electricity or heat. SUGRES Coal
19 Within the scope of this section, data on Reftinskaya GRES, unless otherwise specified, are given for 9 months of 2019. See details on the sale of the property of Reftinskaya GRES in the section “Exit from Coal Generation”.
54 Annual Report 2019 PJSC Enel Russia 55 Heat Power About the Report Dynamics of net power output, GWh In 2019, heat output by the power plants of PJSC Enel Russia was 4,599 thousand Gcal or 5,349 MW, which is 6.2% less than 2017 2018 2019 in 2018, mainly due to the sale of Reftinskaya GRES as well as reduction of heat generation at all power plants due to higher
45,000 mean air temperature as compared to 2018.
40,000
35,000 Net heat output by the company power plants in 2017–2019 30,000
25,000 Power plant Unit of measurement 2017 2018 2019 2019 vs 2018 Company Overview 20,000 Konakovskaya GRES thousand Gcal / MW 195/227 187/218 174/203 –6.6% 15,000 Nevinnomysskaya GRES thousand Gcal / MW 1637/1904 1504/1749 1440/1674 –4.3% 10,000 Reftinskaya GRES thousand Gcal / MW 459/534 489/569 305/355 –37.7% 5,000
0 Sredneuralskaya GRES thousand Gcal / MW 2 913/3 388 2 722/3 166 2 680/3 117 –1.5%
KGRES NGRES RGRES SUGRES Enel Russia Total for Enel Russia thousand Gcal / MW 5 204/6 053 4 903/5 702 4 599/5 349 –6.2% indicators Financial and performance Dynamics of net electric power output, thousand Gcal
2017 2018 2019 102-7 Sales 6,000
5,000
4,000
Power sales by the company in 2017–2019 3,000
2,000 Sustainability Sales Unit of measurement 2017 2018 2019 2019 vs 2018 1,000 Regulated GWh 8,395 9,218 7,725 –16.2% 0 Non-regulated GWh 37,180 35,854 29,560 –17.6% KGRES NGRES RGRES SUGRES Enel Russia Total GWh 45,575 45,072 37,285 –17.3% Governance Capacity sales by the company in 2017–2019 Risk and Corporate The structure of heat output by Enel Russia power plants in 2019 Reduction in the volume of capacity sales by the power plants of PJSC Enel Russia in 2019 is related mainly to the sale of the property of Reftinskaya GRES (see details in the section “Exit from Coal Generation”). The data on Reftinskaya GRES are given 3.8% for 9 months of 2019.
KGRES Sales Unit of measurement 2017 2018 2019 2019 vs 2018 58.3% 31.3% NGRES
Regulated GW 30,369 30,500 27,956 –8.3% Annexes RGRES
Non-regulated GW 74,026 72,534 64,351 –11.3% SUGRES Including CSA GW 9,267 9,196 9,185 –0.1%
Total GW 104,395 103,034 92,307 –10.4%
6.6%
56 Annual Report 2019 PJSC Enel Russia 57 Investment Activities Capex (billion rubles)20 The total CAPEX for 2020–2022 amount to RUB 39.4 billion,
which is 2% higher compared to the previous plan (38.7 billion About the Report rubles for 2019–2021 exclusive of Reftinskaya GRES). 2019–2021 The Strategic Plan for 2020–2022 is based on the projects with 8.5 30.3 6.6 45.3 guaranteed return on investment, the growth is stipulated mainly due to new modernization and renewable energy 2020–2022 projects selected in 2019 and allows using the attractive 7.1 32.3 39.4 investment opportunities that are available at the market. Company Overview Asset management Reftinskaya GRES
Asset development
Capex by categories indicators
Asset development capex, billion rubles Asset management capex, billion rubles Financial and performance
79% 59%
12% Sustainability 32.3 7.1 billion rubles billion rubles
21% 29% Areas of investment projects Governance Risk and Corporate
Asset development Asset management 25.6 billion rubles 4.2 billion rubles Renewables Operational improvements
After FX hedging addressed RUB >90% EUR <10% 2.1 billion rubles Implementation of construction projects Maintenance of the proper condition Safety and other for wind generation facilities of the current gas generation fleet Annexes Implementation of thermal generation 6.8 billion rubles 0.8 billion rubles modernization program Modernization and other Environment
20 Capital expenditures for construction by accrual method; Growth is indicated as compared to the old plan exclusive of Reftinskaya GRES.
58 Annual Report 2019 PJSC Enel Russia 59 Main Investment Projects Digitalization projects Other projects
The company will keep on implementing various digitalization Other investment projects of the company for 2020–2022 About the Report initiatives both in health and safety, training of employees and include stage-by-stage replacement of the outdoor switch Sredneuralskaya GRES Program for Modernization for improvement of the quality of planning and performance gear obsolete circuit breakers at Sredneuralskaya GRES as of Thermal Generation The first modernization project provides for replacement of maintenance. (see details in the section “Innovation and well as technical refurbishment and service life extension of of 100 MW turbine No. 7 with a new 120 MW turbine. Digital Transformation”). the main equipment of gas power plants. During 2019, four investment projects at Sredneuralskaya Commencement of operation of modernized unit is planned GRES and Nevinnomysskaya GRES were selected to for quarter one of 2025. The capital expenditures approved for participate in the first (putting into operation of projects in the project amounted to RUB 9,254.9 per kW. 2022–2024) and second (putting into operation of projects in Structure of capital investments by areas in 201921
The second project includes replacement of 100 MW turbine Company Overview 2025) stages of TPP modernization program. No. 6 with a new 120 MW turbine, as well as refurbishment of Operational New construction and The mechanism for return on investments into the projects is boiler No. 9 with the capacity of 480 t/h. Putting into operation million RUB improvements Modernization Environment Safety and other business development Total an analogue of CSA mechanism, the payment for which takes after modernization is planned for quarter four of 2025. The Konakovskaya GRES 461 4 465 place within 16 years after putting into operation and provides capital expenditures approved for the project amounted to Nevinnomysskaya GRES 567 268 0.2 3 838 for a base rate of return of 14% with a base value of return on RUB 11,661.7 per kW. Reftinskaya GRES 1,717 290 2,007 government bonds of 8.5%. Sredneuralskaya GRES 1,550 480 81 2,111 Headquarters 274 274 After implementation of modernization projects, increase in Other Projects of Thermal Generation
New construction and indicators reliability of heat supply and power supply, as well as increase business development 4,076 4,076 in equipment efficiency is expected. Besides, reduction of Modernization of CCGT of Nevinnomysskaya GRES Total 4,569 268 770 88 4,076 9,771 Financial and performance emissions into the atmosphere is assumed. The upcoming Project implementation in 2019–2020 will increase reliability works will also provide new jobs for citizens. of operation of the combined-cycle gas turbine, improve performance and reduce specific fuel consumption. As a result, increase is expected in economic efficiency of equipment operation due to growth of revenues from the electricity market, reduction is expected in fuel expenses and Structure of capital investments by areas in 2019 costs for planned inspections in the medium and long term. Sustainability
Technical refurbishment of the industrial discharge 41% treatment system at Sredneuralskaya GRES Operational improvements
Implementation of this project will allow significant reduction Modernization
of discharge of pollutants into the environment in accordance Environment with established environmental requirements, improve the Nevinnomysskaya GRES Safety and other ecological state of the Isetsk reservoir, as well as reduce 47% 1% New construction The first modernization project includes modernization of penalties for negative environmental impact. and business development Governance boiler No. 5 with the capacity of 480 t/h that is technologically 3% Besides, project implementation will allow reducing Risk and Corporate connected to turbine No. 4 with the capacity of 50 MW. consumption and disposal of water used for technical needs of 8% Putting into operation after modernization is planned for Sredneuralskaya GRES, ensure disposal of wastes generated quarter one of 2022. The capital expenditures for the project during water treatment and waste water treatment, as well approved by the commission will amount to RUB 13,023.7 as save on operating expenditures due to the use of more per kW. efficient equipment. The second modernization project includes replacement of boiler No. 4 with the capacity of 480 t/h that is technologically Annexes connected to turbine No. 3 with the capacity of 80 MW. Putting into operation after modernization is planned for quarter one of 2025. The capital expenditures approved for the project amounted to RUB 17,790.4 per kW.
21 On financing.
60 Annual Report 2019 PJSC Enel Russia 61 4. SUSTAINABILITY Structure of management of sustainability issues About the Report
Sustainability Board of Directors
Strategy Committee Sustainability Management 102-16 Company Overview STRATEGIC LE V EL STRATEGIC
For us, sustainability of the company is first of all ensuring the quality growth of our business and creation of long-term value for all stakeholders. We envision the key objectives in implementation of the sustainability principles in the core of all our business processes, formation of the sustainability culture both among internal and external stakeholders. General Director / Executive Board indicators We build a management system in such a way as to ensure integration of the sustainability principles in decision-making and
planning of all business functions at all levels. Financial and performance
Head Head of Head Head of Head of Head of Head of of HSEQ People and of Legal Sustainability* Procurement Internal Audit Operational Organization and Corporate Performance Affairs Optimization
Structure of Management of Sustainability Aspects MA N AGERIAL LE V EL
Commitment of senior management to sustainability of Directors in evaluation and decision-making on strategic Sustainability principles is our advantage on the way towards sustainable issues. business. Thus, the sustainable development issues are At the managerial level, the directors of functional areas set addressed at the strategic level directly by the Board sustainability goals for their organization units and support of Directors and the Strategy Committee. The Strategy implementation of the best practices of responsible business. Committee was established in mid-2019 and the first Health, People and Legal Sustainability Procurement Internal Audit Operational meeting was held in November of the same year to consider The employees of units are responsible for achievement Safety, Organization and Corporate Unit Performance the company's approach to management of environmental of target indicators. Their competencies, professionalism Environment Affairs Optimization and Quality and social aspects and development priorities. The range and proactive stance comprise the basis for formation of Governance Risk and Corporate of committee’s authorities includes also assisting the Board sustainability culture at our company. N AL LE V EL OPERATIO
*The functions of Sustainability Manager in the reporting period were fulfilled by the Deputy General Director — Head of People and Organization. Annexes
The key performance indicators that define the variable part sustainability indicators. (see Appendix 6. Numerical and of the annual remuneration of key company directors include statistical information, Key performance indicators).
64 Annual Report 2019 PJSC Enel Russia 65 The system of sustainability Our Contribution to SDGs
The company has adopted a number of internal documents that refer to the aspects of sustainable development and regulate About the Report As representatives of large business, we are responsible a measurable contribution to which achievement we are business processes on material topics. for our duties in social and economic development of the already making and which volume we plan to increase. territories of our presence and in fulfilling environmental We recognize the importance to consider the needs of obligations. This is how our contribution to achievement of Sound Governance > Code of Ethics* stakeholders in the territories of our company presence. and Fair Corporate > Regulation of Dividend Policy* UN Sustainable Development Goals (SDGs) is manifested. Conduct > Zero Tolerance to Corruption Plan* For that reason, within the scope of the “Program for Social > Human Rights Policy on global criminal liability* While being aware of the scale of global challenges, with the Support and Development of Local Communities” we do not > Regulation on Corporate Secretary* SDGs targeted at their resolution, we recognize the need for confine ourselves to only three confirmed goals but analyze > Global Compliance Program on *
> Regulation on the Board of Directors’ Committees* cooperation for the welfare of the entire world community. the potential contribution to the achievement of all SDGs (see Company Overview In 2019, we identified key SDGs that are in line with our the section “Development of Local Communities”). business strategy. We intend to focus on the chosen goals, > Integrated Quality, Occupational Health & Safety and Environment Policy* Occupational Health > Stop Work Policy and Safety > Procedure for Interaction with Contractors in Health, Safety, Environment and Quality Commitment to SDGs > Policy on use of asbestos > Policy of Zero Tolerance to Consumption of Alcohol, Drugs or Other Intoxicants and Limitations of Environmental Strategic Sustainability Management Smoking at Workplace Key SDGs Global Challenge Our Commitment > Safe works in the Confined Space plan plan
> Operating instruction on safe performance of works on chimney stacks indicators > Operating instruction on safe performance of works at height > Regulation on Industrial Safety Management System We are at the origins of the Russian RES market and
> Operating instruction on the alcohol testing system SDG 7. Ensure access intend to actively develop in this direction, transforming our Financial and performance > Operating instruction on the personal protection equipment management to affordable, reliable, business and inspiring other market players to change. We > LOTO Lockout/Tagout System Operating Instruction sustainable and modern are implementing projects to build wind farms in various > Provision "On application of permit to work system at the power plants energy for all regions of Russia and intend to increase the share of > Regulation on risk assessment in the field of Health and Safety for employees during the performance renewable energy sources in our technological profile. of works > Policy on the prevention of stress and promotion of well-being in the workplace > Regulation on the organization of inspections in the field of Occupational Heath & Safety, Ensuring the highest level of occupational safety and fair and decent working conditions for our employees form Environment and Quality SDG 8. Promote inclusive the basis of our business. We intend to develop and train > Policy on “Critical Event Management” and sustainable economic not only our people, but the contractors' employees too growth, employment Sustainability while forming a shared culture of sustainability. We are also and decent work for all focused on development of sustainable practices in the supply chain. Employees Management, > Policy for remuneration and reimbursement of expenses (compensation) of the members of Development executive bodies and other key executives & Motivation > Provision for rewards and incentives to the employees of PJSC Enel Russia associated with The efficiency of our business depends on how we use holidays and anniversaries resources for electric power generation. That refers > Collective agreements of the company’s branches SDG 12. Ensure sustainable especially to the use of natural resources against the > Trade union policy consumption and production background of risks associated with their depletion. As > Regulation "On Types of Personnel Education and Training, as well as Responsibility for Their patterns a responsible business, we strive for the rational use of Arrangement" natural resources to reduce the negative impact on the Governance environment. Risk and Corporate
Engaging the local Being a company generating electric and heat energy, we > Operating Instruction "On charitable assistance and implementation of social events" communities are aware of our environmental impact and the need to > Operating Instruction “University Relations” SDG 13. Take urgent actions adapt our business in response to the climate crisis. We > Procedure “CSV Process Definition and Management” to comnat climate change and are at the onset of the Russian market of renewable energy its impacts sources and intend to develop actively in this direction while transforming our business and inspiring other market players to change.
Sustainable > Procedure “Vendor Rating” Annexes Supply Chain > Procedure “Supplier Qualification” Additional contribution to the SDGs > Procedure "Tender management" > Policy "Purchase Request Management" > Policy “Procurement Planning” SDG 3. Good health and well-being > Operating Instruction "Procurement planning" SDG 4. Quality education > Contractual Work Policy SDG 5. Gender equality > Policy "Authorization of procurement of advisory services" SDG 6. Clean water and sanitation > Operating Instruction “Delegated procurement” SDG 10. Reduced inequalities SDG 11. Sustainable cities and communities
* The documents are published at the company web site; www.enelrussia.ru.
66 Annual Report 2019 PJSC Enel Russia 67 Key Business Areas Development of Sustainability Plan About the Report
To determine the growth path for our business, we rely on We are aware that external factors and changing expectations Achievement of success in sustainable development, just years in public (see the section “Sustainability Plan for 2020– our internal expertise, opinion of stakeholders and take into of stakeholders may influence the approved line, therefore we as in operational activities, depends on setting specific 2022”). Planning for a 5-year horizon is used by the companies account global trends. Based on the materiality analysis aim to analyze the selected strategic areas on annual basis and measurable goals. The company approves annually a for internal planning and determination of the development results for 2019, we identified strategic pillars of development and adjust them in accordance with the context. sustainable development plan and sets targets for the short pathway for sustainable development areas. and identified key priorities as well as our backbones. and long term. We disclose the target indicators for three
The identified strategic pillars and key priorities comprise the basis for planning our activities for the next five years. Company Overview Development of sustainability plan
The strategic areas in the field of sustainable development Authorization Presentation Internal analysis Evaluation and approval of Update of of sustainability and discussion of potential the plan by the Setting KPI sustainability plan on the of key priorities contribution General Director plan Capital Markets with units’ heads and Strategy contribution to the SDGs strategic pillars key priorities Day to the sdgs Committee indicators
> Fair employer Engaging people > Talent retention Financial and performance we work with > People development Risks Associated with Sustainable Development > Diversity & inclusion
In the reporting year, the Risk Management Team and work associated with assessment and development of Sustainability unit integrated ESG risks (environmental, social mitigating measures in the next reporting period. Engaging > UN SDG-related community support programs risks and corporate governance risks) into the risk map of Enel local communities > Corporate volunteering The risk owners are responsible for risk management. A Russia. Taking into account the specifics of the company’s
complete map of the company's risks and more detailed Sustainability industry and territory of activity, we identified and assessed information about risks in the field of sustainability is given in the key risks, identified their owners. We plan to continue the section “Risk Management”.
> Exit from coal generation Decarbonization > Renewable energy assets development
Risk category Sustainable development risks
Project / Investment > Land use Governance
Sustainable > Foster "Made in Russia" Risk and Corporate supply chain > Sustainability criteria in major purchases Technical, industrial > Resources use and waste management and environmental
> License to operate Regulatory > Localization requirements Environmental > Gas units modernization sustainability > Circular economy practices > Single-use plastics phase-out > Human rights Annexes New category of risks: > Stakeholder engagement with a focus on local community Social > External impacts from operating activities for local community > Compliance with sustainability principles in supply chain>
Economic & financial Occupational New technologies Governance & ethics value creation health & safety & solutions New category of risks: > Economic risks associated with climate crisis Climate > Regulatory risks associated with climate crisis > Risk of disinvestment associated with climate crisis
backbones
68 Annual Report 2019 PJSC Enel Russia 69 102-40 102-42
Stakeholder Engagement 102-43 102-44 About the Report
We maintain continuous and open dialogue with the Policy. In the next reporting period, we plan to develop a stakeholders. By a stakeholder we mean the persons or a separate policy for engaging with stakeholders. group of persons, organizations that are subject to company Enel Russia has successfully established and maintains a impact and can in turn influence the company activities. constructive, open dialogue with the federal and regional
Engaging stakeholders helps to identify the key priorities and authorities, regulatory authorities and key business and Company Overview expectations, track the level of their satisfaction, determine industry associations in order to monitor and improve the the key risks and therefore adjust the sustainability strategy. regulatory framework of the Russian electric power industry. The representatives of PJSC Enel Russia management acted The annual procedure takes place at the company for as principal speakers on the issues of market regulation at assessment of stakeholders and their significance for various the following key conferences and exhibitions: Russian business functions. The Sustainability Unit and managers Investment Forum Tatarstan International Forum for Energy of relevant units that carry out interaction with a particular Resource Efficiency, St. Petersburg International Economic category of stakeholders is responsible for it. Forum, Russian Energy Week. indicators By the assessment results, we update the Stakeholder We aim at being open in terms of information, following the Engagement Plan and evaluate the set of communication Financial and performance summons in media field, interact actively with mass media channels that are activated when engaging with a particular representatives. The company press service is open to stakeholder (see table “Stakeholder Engagement”). Based media inquiries and provide the most accurate and unbiased Results for 2019 on evaluation results we form the matrix of material topics information in a prompt manner. Besides, the company is (see the section “About the Report). represented in social media where we post news related to In the reporting period we held an online survey of stakeholders compensation package. The rightsizing issue was recognized When engaging with stakeholders we are guided by such business and life of our company. within the scope of annual materiality assessment (see the as paramount and deserving individual attention in terms of internal documents as Code of Ethics and Human Rights section “About the Report”) for improvement of quality, workload distribution. The proposals were also articulated for Sustainability objectivity and transparency of the analysis. changing the mentoring system in the technical unit.
The anonymous survey was carried out on independent We are determined to continue developing this initiative for it online platform. Over 950 representatives of all groups of to become a regular and highly effective tool for stakeholders’ stakeholders participated in it. The respondents rendered engagement. The process of annual assessment of stakeholders full support to the company on its way of decarbonization We invite readers of the annual report to take a survey to of generation mix and development of renewable energy identify material topics for a future reporting period. The sources. In the field of environment, the respondents Annual update of the list of all major categories of stakeholders survey will take no more than 7–9 minutes. recommended paying attention to improvement of the waste Governance management system. Risk and Corporate Assessment of stakeholders by three factors: The survey participants expect great efforts from the
Dependence Impact Tension company in development and involvement of local Importance of relations Importance of relations Risk in relations communities. The respondents commented on the priority for the stakeholder for the company with a stakeholder areas of the community development program. According to them, the list of three main priorities includes access Preparation Stakeholders Map based on the assessment results to medical care, support to education, and assistance to Annexes economic development of local communities. In addition, they appealed for greater awareness of the company's initiatives in Preparation of the Stakeholder Engagement Plan development of local communities.
The employees raised the need to strengthen the corporate Interaction with the stakeholder through activation Materiality of a particular communication channel incentive system. They draw attention to the need for Assessment of PJSC Enel Russia preventive measures to avoid any cases of potential social in 2020 inequality between company employees in terms of the
70 Annual Report 2019 PJSC Enel Russia 71 Stakeholder Engagement 102-43
The main groups of stakeholders and their expectations, our approach to interaction and relevant communication channels About the Report are listed in the table below. The relevance of most categories of stakeholders in 2019 remained unchanged.
Main channels of communication
Additional channels Responsible Company Overview Expectations of stakeholders Our approach of communication for interaction Detailed information Electronic and printed newsletters Individual and general meetings Direct contacts by email and phone Industry-related events Presentations and teleconferences Surveys and questionnaires Corporate reporting Official website Publication in mass media Social networks Grievance mechanisms
> Ensuring stable and predictable economic > Annual General > Investor Relations Group > Economic and Financial > Growth of remuneration for shareholders results Shareholders' Meeting > Corporate Affairs Group Value Creation SHAREHOLDERS in the long term in the form of growth in > Timely and complete information > Capital Markets Day > Investment Activities AND INVESTORS capitalization and dividend payment > Taking into account the interests of · · · · · · · · · · · > Road show > Stable and predictable financial results shareholders in making decisions > Dividend payment > Stable and predictable financial results > Capital Markets Day > Administration, Finance > Economic and Financial > Ensuring stable and predictable economic
FINANCIAL > Transparency and accessibility of financial and Control Value Creation indicators results COMMUNITY and non-financial information about > Timely and complete information · · · · · · · · · · · the company Financial and performance > Openness to dialogue and cooperation > Energy Management > Company Strategy > Willingness to cooperation BUSINESS > Participation in industry development > Business and Management > Ensuring quality disclosure of financial and COMMUNITY (industry initiatives > Responsible Attitude to The non-financial information representatives, potential > Transparency and accessibility of financial Environment > Participation in work groups related to · · · · · · · · · · · partners) and non-financial information about > Social Impact industry development the company > Cooperation and supply and contractor > Willingness to cooperate > Tenders > Procurement > Sustainable Supply Chain agreements > Responsible fulfillment of all contractual > Contractual relationship SUPPLIERS > Responsible fulfillment of financial obligations obligations > Measures for suppliers AND CONTRACTORS > Ensuring safe working conditions for the > Highest ethical standards > Official portal for suppliers · · · · · · · · · · · Sustainability contractors’ personnel > Priority of health and safety for the globalprocurement.enel.com > Information security and confidentiality contractors as for own employees > Measurement and Management of company > Public hearings > Sustainability Unit > Social Impact environmental impact > General public activities > Communications > Transparent informing about company > Timely and complete information ("Open Plant") activities > Accounting of the needs and priorities of local LOCAL > Existing and potential environmental impact community COMMUNITY > Creation of workplaces > Status of major employer in the regions of · · · · · · · > Development of social infrastructure, support presence to healthcare and education > Program “Social Support and Development
of Local Communities” and other social Governance
initiatives Risk and Corporate > Ensuring comfort working conditions > Corporate newsletters > People and Organization > Employees Management, > Stable employment > Health and safety priority > Intranet > Communications Development & Motivation > Fair working conditions > Openness and willingness to maintain > Video terminals > Sustainability Unit > Occupational Health & Safety > Fair salary, benefits and extended social EMPLOYEES dialogue > Meetings with package > Training and human resource development · · · · · · · management > Safe working conditions > Social initiatives and volunteering projects > Corporate sports and > Growth and development opportunities > Diversity and inclusion policy cultural events > Strict legal compliance > Work groups > Regulatory and > Company Strategy > Compliance with law
> Program “Social Support and Development Institutional Affairs > Business and Management Annexes > Social activities PUBLIC of Local Communities” and socio-economic > Responsible Attitude to The > Environmental compliance and voluntary AUTHORITIES partnership agreements Environment environmental projects · · · · · · · · · · > Status of major taxpayer in the regions of > Social Impact > Fair payment of taxes presence > Transparency and accessibility of financial > Press release > Communications > Company Strategy and non-financial information about > Timely and complete information > Media events > Business and Management the company > Openness to dialogue > Responsible Attitude to The MEDIA > Exclusive information > Ensuring quality disclosure of financial and · · · · · · · · · · Environment > The range of topics covering the interests non-financial information > Social Impact of all stakeholders
72 Annual Report 2019 PJSC Enel Russia 73 Direct Economic Value Generated 201-1 Membership in Associations and Awards 102-13 and Distributed About the Report We are open to interaction and active cooperation with > Non-profit Partnership "Association of European Businesses" industry and non-profit organizations as one of the > Association of Italian Enterprises in Russia “GIM- Enel Russia strives for open and transparent informing of 2018 is associated with the sale of the Reftinskaya GRES (for representatives of our main stakeholders. Enel Russia is a Unimpresa” shareholders, employees, partners and other stakeholders more details, see the section “Exit from Coal Generation”). member of the following non-profit organizations: > Non-profit partnership "Russian Heat Supply" about the process and results of economic value creation. We used part of the proceeds from the sale of RGRES to pay > All-Russia Trade Association of Employers in the Power > Non-profit Partnership “Renewable Energy Development Disclosure of this indicator allows us to show to our off debt obligations in 2019. We plan to use the other part to Industry “Energy Sector Employer Association of Russia” Association”. stakeholders how companies create and distribute the created > Non-profit Partnership “Market Council for Organization of finance capital expenditures in future periods. In 2019, Stephane Zweguintzow, Chairman of the Board value for the reporting period. Efficient System for Wholesale and Retail Trade in Electric of Directors of the company, became a member of the Company Overview Energy and Capacity” Retained economic value in 2019 amounted to 24.9 billion Expert Council on Sustainability of the Ministry of Economic > Non-profit Partnership “Council of Energy Producers and rubles. A significant increase in this indicator compared to Development of Russia. Power Industry Strategic Investors” > Russian Association of Employers “The Russian Union of In the reporting year, we took part in various external events, Industrialists & Entrepreneurs” contests and ratings, and our employees were awarded with > Foreign Investment Advisory Council professional awards and badges of honor. Direct economic value Revenue that we generate from the company core activities is the sale of electric power and heat, income from investments in financial instruments generated and sale of assets indicators Results of participation in ratings and contests in 2019 Financial and performance Organizers Contest/rating Our result Our main cost and payment items that are related to our main stakeholders: employees, Economic value distributed investors, shareholders and creditors, representatives of banks and contractors, public Moscow Exchange The 22nd Annual Contest of Annual Reports Winner in the “Best Debut” nomination authorities, local community An independent survey of international investors The second place in the nomination of the Moscow Exchange on the results of operation of the Russian companies “Best IR practice in a small-cap company” and Institutional Investor magazine in the field of investor relations among the Russian companies Winner in the nomination of the Most Economic value retained Difference between created and distributed value that we allocate Honored Company to further business development Third place in the nomination "Best Investor
Relations Program" Sustainability
Institutional Investor Research 2019 annual survey of The company employees received the Institutional Investor magazine emerging markets in Europe, Middle East and Africa following awards in the energy sector category: (Emerging EMEA) Carlo Palasciano — “The Best General Our direct economic value generated and distributed*, thousand rubles Director” Yulia Matyushova — “The Best Chief Stakeholders 2017 2018 2019 Financial Officer” Ekaterina Dubovitskaya — third place in the Direct economic value generated 75 283 359 74 201 171 84 193 994 investor relations rating Revenue from core business activities 74 399 944 73 264 973 65 834 843 Rating of transparency in the environmental responsibility WWF Russia
Other operating income 489 635 603 598 379 400 of fuel electric and heat generating companies in Russia Third place Governance Broad group of stakeholders Revenue from financial investments 393 780 332 600 1 279 720 RAEX rating agency “Russian Business Leaders in Environmental Spending” 10th place Risk and Corporate Proceeds from the sale of assets – – 16 700 031 Russian regional network Corporate transparency rating among the largest Russian th Economic value distributed (63 020 041) (64 683 039) (59 283 794) for integrated reporting companies 40 place
th Operating expenses Suppliers and contractors (50 335 772) (50 017 556) (45 257 967) RBC Media Holding “500 largest foreign companies in Russia” 180 place th Wages and other payments to employees Our employees (4 257 000) (3 789 029) (3 448 630) Forbes magazine “500 largest companies in Russia” 34 place Payments to providers of capital (4 856 731) (7 260 279) (7 213 425) Expert rating agency “600 largest companies in Russia” 192th place Shareholders and investors, payments to shareholders (2 413 071) (5 126 449) (5 004 098) Awarded Carlo Palasciano, financial community All-Russian electrical trade union Badge of honor “For Development of Social Partnership”
General Director of the company Annexes payments to creditors (2 443 660) (2 133 830) (2 209 327) Tax payments, fines and penalties** (3 527 038) (3 572 675) (3 320 272) Territorial contest “An efficient collective agreement Nevinnomysskaya GRES — first place Public authorities Government of Stavropol Territory is the basis for alignment of interests of the Social in the nomination of the “Efficient Collective including income tax (974 498) (987 585) (1 516 942) Partnership parties” Agreement” Local community investments*** Local community (43 500) (43 500) (43 500) Centre for Development Contest of the best communication practices Grand prix for Dynasty project deployed of Communications of the Fuel Economic value retained 12 263 318 9 518 132 24 910 200 of energy companies “KonTEKst” in social media and Energy Complex (FEC) The Ministry of Energy CASE-IN International Engineering Championship of the Russian Federation as part of #TogetherBrighter Youth Day at the Russian *In accordance with GRI recommendations for disclosure of indicator 201-1, the company used only the data from the audited IFRS financial statements. th **Excluding VAT. and Moscow Government Energy Week International Forum 13 place ***Include only investments in the program “Social support and development of local communities”.
74 Annual Report 2019 PJSC Enel Russia 75 > Communication and reporting on significant events in > Conducting Health, Safety, Environment and Quality Days Integrated Management health, safety, environment, quality and energy efficiency at the power plants with participation of employees of System > Management of risks and opportunities for improvement PJSC Enel Russia and contractors. About the Report
Key components of integrated management system INTEGRATED MANAGEMENT SYSTEM
Quality Management > Development and continuous improvement of the integrated Company Overview System management system, process approach. Methodological support of company organization units ISO 9001:2015 > Ensuring quality control during overhauls and medium maintenance at the Quality Health and Safety Environmental Energy Corruption power plants Management management management control > Conducting qualification inspections at the production sites of the OHSAS 18001:2007 companies involved in the procurement procedures of the company to ISO 9001:2015 (ISO 45001:2018) ISO 14001:2015 ISO 50001:2018 ISO 37001:2016 reduce risks
> Adjustment of the management system for transition to ISO 45001:2018 indicators Occupational Health standard. Risk assessment. Conducting inspections of compliance with and Safety management occupational health, fire and industrial safety requirements Projects initiated in 2019 system > Preparation of statistical reports on dangerous occurrences and Financial and performance OHSAS 18001:2007 workplace accidents (ISO 45001:2018) > Development and implementation of measures/projects aimed at improving health and safety indicators at the company The company undertakes additional obligations to comply “Energy Management System”. Konakovskaya GRES > Development and implementation of measures/projects aimed at improving health and safety indicators at the company with internationally recognized standards and practices, along was certified in 2019 according to 2011 standard version, with strict compliance with legal requirements of the Russian certification of Nevinnomysskaya and Sredneuralskaya GRES Federation in health, safety, environment, quality and energy is planned for 2020 and 2021 correspondently, it will be carried Environmental > Management of the environmental issues efficiency. out according to the new version of ISO 50 001 standard. Management System > Obtaining the required permitting documentation Sustainability ISO 14001:2015 > Management of environmental aspects and risks Since 2011, PJSC Enel Russia started implementation and In 2020, certification is planned for all power plants of PJSC certification of HSE Integrated Management System. The Enel Russia according to the international standard ISO system efficiency is proven annually. A certified quality 37001: 2016 “Antibribery management system”. See details Energy management system > Management of optimization and monitoring of Company equipment management system was included in the perimeter of the on the company’s anti-corruption approaches in the section performance for improvement of efficiency in resource use (fuel, water, ISO 50001:2018 integrated management system in 2017, and an energy “Anti-Corruption Policy and Business Ethics”. electric power) for balance-of-plant needs management system was included in 2019. > Application of new technologies and equipment for reduction of The integrated processes at the company include the production losses > Implementation of new digital projects and solutions for improvement of
The main benefits of integrated management approach are: following: Governance indicators > systematization and streamlining the internal processes of > Development of common policies*, regulations and other > Shift to risk-based approach Risk and Corporate the company system-forming procedures in health, safety, environment, > achieving transparency and uniformity of problem-solving quality and energy efficiency methods > Planning and conducting internal audits of integrated > Implementation of anti-corruption management system Anti-bribery management > Risk-based approach > improving and increasing the manageability of processes management system, managing identified non- system > Raising awareness of all Company personnel about current procedures within the company. conformities, corrective and preventive actions ISO 37001:2016 for management of risks of corruption and bribery, as well as about > Formulation of uniform format of requirements in health common channel for informing about opportunity of such cases Such an approach allows ensuring compliance with appearing at the company and safety, environment, quality and energy efficiency, Annexes stakeholders' requirements and all applicable regulatory imposed on contractors and suppliers during performance requirements and best practices. of works, provision of services and making deliveries to the Projects initiated in 2019 In 2019, we launched the process of certification of power power plants of PJSC Enel Russia** plants according to the international standard ISO 50 001
* Integrated Policy on Quality, Health, Safety, Environment and Energy Efficiency (see details in the section “Occupational Health, Safety, Environment and Quality” on the official website of Enel Russia). ** Operational Procedure of PJSC Enel Russia No. 522 dated 19.04.2018 “Interaction with suppliers and contractors in HSEQ” (see details in the section “Occupational Health, Safety, Environment and Quality” on the official website of Enel Russia).
76 Annual Report 2019 PJSC Enel Russia 77 Occupational Health 103-1 103-2 403-1 The company has implemented and employs the following documents that apply to employees and all contractors: About the Report and Safety > Policy of zero tolerance to consumption of alcohol, drugs or other intoxicants and limitations of smoking at workplace > Procedure for Interaction with Contractors and Suppliers in
Health, Safety, Environment and Quality Integrated Policy Stop Work Policy Enel Russia is aware of its responsibility to ensure safe voluntarily additional obligations in the field of occupational > Policy on use of asbestos on Quality, Health, Safety, Environment working conditions for all participants in the production health and safety under the international standard OHSAS > Safe works in the Confined Space and Energy Efficiency activities — both our employees and contractors that we 18001, which is invariably confirmed by the accredited > Operating instruction on safe performance of works on involve to carry out maintenance of equipment, buildings, and international certification agencies during certification and chimney stacks facilities of the power plants. Safety is of our highest priority, supervisory audits. > Operating instruction on safe performance of works at Company Overview so we suspend any work that can jeopardize the health and height The company raises awareness of occupational risks, safety of employees and contractors. > Regulation on Industrial Safety Management System encourages and supports responsible and safe behavior. > Operating instruction on the alcohol testing system The company complies with all mandatory regulatory Preservation of life and health, care for the psycho- > Operating instruction on the personal protection equipment requirements in the field of health and safety following the physiological state during working and non-working hours management Organizational article 211 “State health and safety regulatory requirements” comprise our health and safety activities. procedure of interaction > LOTO Lockout/Tagout System Operating Instruction of the Labor Code of the Russian Federation and assumes also with suppliers and > Provision "On application of permit to work system at the contractors indicators power plants of PJSC Enel Russia > Procedure for risk assessment in the field of health and Financial and performance safety for employees during the performance of works
103-2 103-3 > Policy on the prevention of stress and promotion of well- Health and Safety Management being at the workplace 403-1 403-8 > Procedure for the organization of inspections in the field of Health, Safety, Environment and Quality in PJSC Enel Russia. The health and safety management system cover all activities of PJSC Enel Russia and is aimed at continuous reduction of meeting of the director, a meeting of the Board of Directors or of the company, all branches and all employees of the the risk of injuries and accidents. Enel Russia has a single vertically integrated health and safety general shareholders' meeting. Also, the occupational health Sustainability company and contractors. It is based on the Integrated policy The policy establishes the following fundamental principles: management system that provides a single strategic approach indicators of Enel Russia comprise the key performance on Health, Safety, Environment, Quality and Energy Efficiency and control at all levels. indicators of managers and employees of the company.
Although specialists in occupational safety are placed in a Evaluation of management approach in health and safety single function, all company employees, regardless of their is performed within the scope of the annual meeting of position, pay special attention to occupational health issues management on the analysis of HSEQ Integrated Management Health and safety principles and maintain the company principles. Health and safety issues System. Evaluation of the results for 2019 is planned for are of priority for each manager and are always number one March 2020. We expect the management approach in health
on the agenda of each meeting, whether it is a weekly action and safety to be recognized as effective. Governance Compliance with Compliance with Annual certification Risk assessment Striving for "Zero Risk and Corporate the requirements the health and under the standard Accidents" goal of injuries and of health and safety safety requirements OHSAS 18001 through control, accidents at laws of the Russian of Enel Group and maintenance root causes analysis work and use of Federation of the health and of all injury cases systematic approach safety integrated and significant near to reduce and management misses eliminate their Health and safety management system probability in full
Deputy General Director — Annexes Head of HSEQ Health and Safety Control of Involvement of Using the best Maintenance Integration Head of Generation knowledge, employees and available technology and development of all processes for improvement of contractors in and practices of an open dialogue increased efficiency General competence and health, safety and in combination with stakeholders and creation of Director constant education environment issues with operational in the field of added value processes update health, safety and Head of Operation Health and safety services and optimization environment Power Plant Manager and Maintenance at the power plants
78 Annual Report 2019 PJSC Enel Russia 79 Health and Safety Risk Assessment 403-2
Procedure for application of control measures during risk identification About the Report
Systematic identification of the sources of hazards, risk > GOST 12.0.003-2015 "Interstate standard. Occupational assessment, and adoption of relevant measures for their safety standards system. Dangerous and hazardous 1. Eliminate the risk by addressing the hazard prevention and reduction allows us to reduce significantly production factors (put into effect by Order of the Federal the likelihood of industrial accidents, occupational illnesses, Agency on Technical Regulating and Metrology No.602-ст accidents and other incidents. dated 09.06.2016) 2. Risk mitigation as a result of replacement of a process, activity or substance with a less hazardous > Procedure of PJSC Enel Russia "HSEQ Integrated Risk assessment is carried out following the Procedure Management System Manual" 3. Isolate employees from hazard through efficient control measures, such as: isolation of hazard, removal No. 665 “Assessment of health and safety risks during of the employee from hazardous area or reduction of time spent in the hazardous area
> Operating Instruction of PJSC Enel Russia "HSEQ event Company Overview the performance of works” and is based on the following management". documents: 4. Install protective devices; fences, emergency switches, breakers, etc. > Labor Code of the Russian Federation The risk assessment is carried out at the power plants > Order of the Ministry of Labor and Social Protection of of PJSC Enel Russia, including with the involvement of Implement work permits, special rules and procedures for close monitoring of hazards the Russian Federation dated 19.08.2016 No. 438н “On contractors. 5. approval of model provision on the health and safety The risk assessment contains a register of all operations management system” 6. Ensure proper supervision supplemented by training, instruction and relevant information performed at the plant, information about hazardous factors > GOST R 54934-2012/OHSAS 18001:2007 "Russian National
and hazards inherent to each type of work, risk matrix and indicators Standard measures to eliminate or reduce the hazardous factors. The 7. Ensure availability of personal protection equipment only as a “last resort” and in addition to the above control measures > Occupational health and safety management system.
latter may include technical measures for elimination of Financial and performance Requirements" (approved and enacted by Order of hazardous factors, requirements for the use of collective and Rosstandart (Federal Agency on Technical Regulating and individual protection equipment, preparation of workplace and Metrology) No. 154-ст dated 06.07.2012 implementation of production control, information, training, > GOST R 51898-2002 “State standard of the Russian delivery of inductions and training sessions. Federation. Safety aspects. Guidelines for their inclusion in After hazard identification, the risk assessment team must having experience in conducting such assessments or directly standards" (adopted and enacted by Decree of the State The process of risk assessment includes hazard identification, determine standard management measures for each work responsible for organization and performance of evaluated Committee of the Russian Federation for Standardization risk management and assessment, and consists of the and relevant hazards and, if necessary, develop additional work. The results of risk assessment are authorized obligatory and Metrology No. 228-ст dated 05.06.2002) following stages: Sustainability risk management measures that improve the safety and thus with the health and safety unit. reduce the risk level to “low” or “average”. The company has a Stop Work Policy, according to it any Each time when issuing a production assignment for the employee of PJSC Enel Russia or contractor’s employee, performance of works, the manager issuing the assignment regardless of his position, status or role has the right and Determination of the Initial analysis Identification of standard scope and type (types) (collection of information Hazards identification risk management must check for risk assessment for that work and its veracity. must demand termination of any work that, in their opinion, measures of work about work) The results of risk assessment must be revised periodically poses threat to their life and safety and/or other people, and by the risk assessment team for compliance with current also create a risk of damage to the environment, or to the
conditions. If the conditions change, previously conducted risk country's archaeological or cultural heritage, while notifying Governance assessments must be verified for accuracy and applicability to the detected violation of health and safety requirements to a Risk and Corporate Determination of the Determination of the Determination of risk Identification of additional severity of consequences ensure their sufficiency. The risk assessment must be carried responsible person authorized to terminate the works. probability of an event level risk management of an event measures out before the changes are introduced. If it is found that the All health and safety policies are translated into English. Risk executed results of risk assessment do not correspond to the assessment for employees with disabilities includes their working conditions prevailing at that moment, then the risk specific features. assessment must be revised. Authorization and Determination Determination approval of risk Documentation Our company revises risk assessments once every five years of residual risk level of risk level acceptance Annexes assessment results or as may be necessary, for example, in case of accidents or other events that may affect the level of risk. Risk assessment is carried out in organization units by the specially created team that consists of employees who have sufficient knowledge Communication Checking of the relevance in the performance of work, which the assessment will be and sharing experience of risk assessment carried out for, the risk assessment team is headed by a leader
80 Annual Report 2019 PJSC Enel Russia 81 Work accidents Results for 2019 403-2 403-9 Type Description Employees/Contractors About the Report Minor Injury related to handling of tools (angle grinder) Contractor We aim at constant improvement of the frequency and Minor Injury related to handling of tools (disc saw) Contractor severity indices - main statistical indicator for the evaluation Minor Slipping on ice Employee of the efficiency of the company management approach Minor Falling on a flat surface Employee in occupational health but our main goal is to achieve "Zero Minor Injury related to handling of tools (angle grinder) Contractor accidents” among our employees and contractors. Minor Fall in an unclosed hatch Employee These combined indices correspond to common indices Minor Injury related to cylinder operation Employee of frequency and severity. In the calculation of the indices, accidents involving both employees of the company and Company Overview employees of contractors performing work in the territory of power plants are taken into account. Health Care of Employees 403-3 403-10 Compared to 2018, the company's indicators in the reporting increased to 0.57, however the combined severity rate is still period in the field of Health and Safety have decreased to 0. For comparison, in 2017, the indices were 0.51 and 0.09, some extent. Thus, the combined frequency rate in 2019 respectively. (based on 1,000,000 man-hours). The combined According to Order of the Ministry of Health and Social frequency rate in 2018 was 0.15, and the combined severity Development of the Russian Federation dated 12.04.2011
rate dropped to 0. No. 302н, medical examinations of personnel are conducted indicators Frequency and severity of the accidents* In 2019 seven work accidents occurred including three with regularly to monitor the health of employees. Financial and performance contractors and four with employees of Enel Russia. For It should be clarified that there is no separate statistics comparison, there were two work industrial accidents with 0.51 0.57 on the occurrence of occupational diseases among the contractors in 2018, and in 2017, six injured people were representatives of contracting organizations, hence the recorded, including cases with contractors. impossibility to determine for certain whether a certain 0.15 All accidents are referred to “minor” category under the disease was caused precisely by the influence of factors at 0.09 uniform classification of Enel Group. All injured company the company's production branches, or was a combination 0 employees and contractor employees received qualified of all factors as a result of the works of the contractor’s Sustainability medical care under the direct supervision of Enel Russia. representative at various production sites. Representatives 0 an ambulance crew is called to the power plant, its arrival time The accidents were duly investigated; according to the root of contractors did not notify the company about any cases 2017 2018 2019 under the state regulations is 20 minutes. cause analysis of accidents of incidents, the relevant remedial of occupational diseases of their employees caused by the influence of production factors of Enel Russia. All company employees are provided with voluntary medical Frequency rate Severity rate actions were formed and then implemented or acquired the and accident insurance. status of projects aimed at preventing similar situations in If necessary, each employee of the company and contractor has * Frequency index calculation formula: The number of all accidents with future. an opportunity to contact the around-the-clock medical center In case of near-miss or any violation of health and safety employees and contractors associated with production) * 1,000,000 / the number of hours worked by employees and contractors. The investigation of occupational hazard incidents is carried organized at each power plant for qualified medical assistance rules, each employee or worker of the contractor is required Severity rate calculation formula: number of severe and fatality accidents; for the employees and contractors. If the employees of the to report thereon to the “hotline” (call, SMS, mail), where (employees and contractors) . out following the operating instructions: “HSEQ Event Governance
* 1,000,000 / The number of hours worked by the employees and management” and “HSEQ Reporting”. medical center deem it necessary to perform an additional they will be given feedback and reported on the measures Risk and Corporate contractors. examination, they will send the person who has applied for a taken. All employees and contractors are aware of this action Depending on the severity and type of event, the incident consultation to a hospital or in-patient facility. In emergencies, procedure. investigation may differ. The Analysis Team (AT) is created Number of accidents that analyses each significant event that has occurred. The operating instruction defines the period for creation of AT and its composition. AT analyses the causes of the incident and 2019 4 3 generates a report with remedial actions to prevent similar Additional Support in Matters of Health & Safety Annexes incidents in future. According to the analysis results, an action During Maintenance Activities 2018 2 plan is created with responsible persons and deadlines and communicated to all power plants. To support the organization and control of the safe, involvement of a large number of maintenance personnel, 2017 2 4 To prevent the recurrence of accidents, the company performs environmentally friendly and high-quality performance of local additional support teams (SMP) are used as an additional continuous monitoring of dangerous situations and other works during overhauls, lengthy secondary, current and measure. These local teams were organized at all power plants hazardous situations that could result into an accident. Employees Contractors emergency maintenance, special projects related to the within the scope of the Safety Moving Pool global project.
82 Annual Report 2019 PJSC Enel Russia 83 The main task of SMP is to stimulate professional growth environmental issues. In 2019, about 6,500 inspections Selected Projects in occupational health and safety, fire safety, environment, were conducted including 4,500 with favorable opinions quality and improvement of the safety culture among the and about 2,000 with unfavorable opinions, as violations About the Report employees of Enel Russia and the personnel of contractors and deviations from the legislative and local requirements of the health and safety system of the contractors. The project performing maintenance operations at the power plants of Enel of Enel Russia were identified. These violations were either SHE2019: Evaluation of the essence consists of sharing own H&S model with partner Russia. SMP provides additional consultations and performs quickly eliminated directly at the site of the violation, or SMP Contractor's Health and Safety System companies. Within the scope of the project, the main efforts regular monitoring of compliance with legislative and local employees stopped working until the identified weaknesses are aimed at increasing involvement and responsibility of requirements during the performance of maintenance and were eliminated, thereby improving the overall safety culture In the previous reporting period, we implemented successfully contractors, application of preventive measures for mitigation other special projects that were determined by the company’s at the maintenance sites. the SHE 365 project (Safety, Health, Environment) — a global of health and safety risks. management. initiative of Enel Group focused on employees’ health care, In 2019, about 300 workshops were held with contractors, health, safety and environment. Within the scope of this Enel Russia developed indicators used to evaluate the In 2019, more than 50 employees of PJSC Enel Russia where the results of the work of SMP were presented. The Company Overview project, the company's managers and employees held a contractors’ H&S system. were involved with periodic rotation in order to increase the positive aspects and system violations during maintenance series of meetings where they discussed ideas and formed a This tool provides a visible effect in the improvement of safety involvement of personnel of the operations and maintenance operations were indicated. list of measures for improvement of existing practices at the standards at the partner companies therefore in 2020 we will units in occupational health and safety, fire safety and company and implementation of new ones. In continuation of keep on developing the project. this project and for implementation of the planned activities, in 2019 we introduced a project for evaluation and improvement indicators Information and Training in Health&Safety 403-4 403-5 Financial and performance Evaluation of Health&Safety system for the contractors The company organizes obligatory training and examines the system is implemented for the work of the commissions of health and safety knowledge under article 225 of the Labor knowledge examination at the power plants. The obligatory Code of the Russian Federation. In 2019 the number of hours training using the system is delivered in occupational health for health and safety training amounted to 57,996.9. and safety, fire safety, civil defense and emergency situations Development Evaluation Identification Communication of improvement plans for both working personnel and office personnel. The new of processes of weaknesses of evaluation results The scope and sequence of training depends on the position by contractors software product allows delivering personalized training as per and functions fulfilled by the employee. The scope of training Sustainability available training courses, as well as creating own courses. includes regular consideration of such issues as basics of The available training courses are updated on a regular basis. > Training occupational health, fire safety or industrial safety, works In 2019: The employees receive self-training, pass exams in the form > Planning at height, works in closed space, etc. The entire training of testing, by its results the commission decides on the exam > Internal audits is delivered in a language that is understandable for all > Analysis of remedial actions need. The self-training for exams can be carried out not only 24 assessments 13 plans employees. If training is conducted in a foreign language > Information sharing about accidents using a personal computer but also using mobile devices and > Management of subcontractors’ activities of the health and safety of improvement (English or Italian), an interpreter is invited. Training is > Fulfillment of instructions by personnel mobile application that makes the process of preparing for system conducted either by a certified internal trainer or employees > Management of subcontractors’ activities exams more convenient, affordable and up-to-date. who are trained at an external accredited organization, for Governance example, in Rostekhnadzor. Training can be also extramural, Using new software allows controlling the training process, Risk and Corporate using software, followed by knowledge assessment. There managing the schedules of knowledge examination for each are special commissions for the examination of knowledge employee. The plans for 2020 include the creation of special at the plants to issue a confirming certificate by the results. courses for the employees of vocational professions and The efficiency of training is assessed using feedback form further implementation in the commissions of organization Peer Review Project joint work of all our employees at all power plants, as well as filled out by the employees. Compulsory education is free for units of PJSC Enel Russia. the cross-checks and cross-audits that we conduct annually, employees. We use all existing internal communication channels to In 2019 within the scope of Enel Group implementation of there are always the best practices that one power plant can Annexes The company involves contractors for training sessions and inform about the importance of compliance with health and Safety Peer Review project started in all countries — health adopt from another. During the cross-visit of employees of training on additional topics that can lead to a reduction in the safety requirements (see details in the section “Stakeholder and safety verification by the colleagues. The project provides Sredneuralskaya GRES to Reftinskaya GRES (the first stage number of injuries and industrial incidents (root cause analysis Engagement”). for cross-visits to the power plants by the top management of the project) and Konakovskaya GRES to Nevinnomysskaya of accidents, use of personal protection equipment, proper of the company represented by the power plant director, chief GRES and vice versa (the second stage of the project), about use and assembly of scaffolding). engineer and head of health and safety service. During the 15 best practices were identified that colleagues decided to This year, we keep on our way to digitalization and optimization visits, safety walks and inspections are conducted focusing on implement at the power plants. The next stage in the project of the process of internal training of employees. A special IT health and safety issues. Despite close interconnection and development will be cross-visits to our new renewable energy
84 Annual Report 2019 PJSC Enel Russia 85 According to the requirements of Federal Law of the Russian defines approaches to emergencies. The document regulates projects, sharing practices between business lines, as well as quality was initiated. The new software allows automating Federation dated 21.12.1994 No. 68-FZ On Population the processes and procedures for efficient crisis management, between other countries of Enel Group. the management of industrial safety, as well as the processes and Territories Protection against Natural and Man-caused defines existing impact matrix as well as reports and plans that About the Report of occupational health, environment and quality. The system Emergency Situations, Decree of the Government of the ensure training, education, drills, coordinated communication Industrial Safety Management allows taking into account such aspects as event and audit Russian Federation dated 30.12.2003 No. 794 “On the unified and interaction with local stakeholders. planning, infrastructure and personnel management, technical Automation state system for prevention and elimination of emergencies”, In accordance with this policy, the company has a Group audit management by checklists and compliance orders. The the commissions were set up at the power plants to prevent created to control critical events. Its task is to collect data In 2019, the implementation of an automated cloud system facilitates monitoring of deadlines, as well as the emergencies and ensure fire safety, they are part of the facility that help to identify the events that could potentially develop management system for health, safety, environment and process of reports generation. of the unified state system for prevention and elimination of into a crisis situation. If the Critical Events Control Group emergencies. identifies the problem based on the information collected,
A critical event is an event of a natural, accidental or criminal its status is assessed with regard to potential impact as well Company Overview nature that may have an actual or potential negative impact as the possible consequences of its publicity in the media Policies, Management and Measures EU21 on the safety of people, continuity of work, the reputation of and likelihood of pre-crisis situation, in accordance with the the company, interests of stakeholders. The nature of these recommendations of the Communication Planning Group, in Case of Emergencies events may vary; therefore, the company takes into account real-time response and performance maintenance. various opportunities and available resources in the process According to the policy the degree of impact is classified to prevent such events or eliminate their consequences. Approach of the Company > Federal Law of the Russian Federation No.116-FZ On using special codes, while the assigned status codes depend Industrial Safety of Hazardous Production Facilities dated to Emergency Management In 2019 we localized the global policy of Enel Group “Critical on estimated impact and severity of emergency: indicators and Response Measures 21.07.1997 Event Management”. This is the main internal document that > Federal law No. 68-FZ On Population and Territories Financial and performance We are aware that the operation of power plants, like any Protection against Natural and Man-Caused Emergency production facility, is at risk of emergencies. To ensure Situations dated 21.12.1994 Code color Level Description readiness for such situations, the company implemented a > Federal Law of the Russian Federation No. 117-FZ On Safety of Hydraulic Structures dated 21.07.1997. critical event management system. It is based on unconditional Green Code Regional A critical event that has a slight impact on PJSC Enel Russia and can be eliminated using compliance with emergency management laws and the At the managerial level, responsibility for managing issues specially pre-scheduled actions (according to the Procedure/Operating Instructions of the line/ supporting organization unit) implementation of the best international practices. related to critical events lies with the General Director and
crisis management and crisis evaluation committees. At Sustainability Emergency management activities, as well as development Yellow code Regional Critical event that has an average degree of impact on PJSC Enel Russia and can be eliminated and application of prompt response measures, are conducted the operational level — Critical Events Control Group At at the company level using special action plans in crisis situations based on the following laws: the power plant level, the referents are identified who are available around-the-clock to help informing, preventing and > Federal Law of Russian Federation No. 256-FZ On Safety Red code Regional Critical event that can affect PJSC Enel Russia significantly and that requires development of of Fuel and Energy Complex Enterprises dated 21.07.2011 eliminating emergencies. special strategy at the level of the company Governance
Management of emergencies The assignment of code is carried out based on the impact Accident Management Approach Risk and Corporate matrix. A decision is made by the Crisis Evaluation Committee and approved by the General Director. Since our power plants are classified as hazardous production General Director A notification of pre-crisis situation is carried out through an facilities, according to Decree of the Government of the informational message sent to: Russian Federation No. 730 dated 26.08.2013. Crisis Management Committee > General Director PJSC Enel Russia has to develop an accident localization > Crisis Evaluation Committee and management plan (ALMP) to ensure the readiness of Annexes > Territorial Referents and Referents from the business line Crisis Evaluation Committee organizations to the actions for localization and elimination of of the company on crisis management. the consequences of accidents. The plans developed by the The procedure and plan for responding to critical events or company are authorized by professional emergency rescue Territorial referents (responsible Critical Events Control Group Referents from business lines emergencies are communicated regularly to the employees teams the company has agreements with for the maintenance (responsible persons available 24/7) persons available 24/7 of the power plants and contractors’ employees during the of hazardous production facilities. ALMP is subject to revision delivery of scheduled classes, briefings and drills. in the following cases:
86 Annual Report 2019 PJSC Enel Russia 87 the National Standardization Program as part of activities of of volumes of capacity actually supplied to the wholesale the Subcommittee SC 1 “Electric Power Systems” of the capacity market No. 13). Technical Committee for Standardization TC 016”. About the Report Procedure for revision of ALMP Local and federal executive authorities are involved (by GOST R 58085 2018 establishes the basic principles, agreement) in preparation and conduct of drills. norms and rules regulating organization and procedure for prevention of development and elimination of violations of the Ensuring readiness of power plants At least 15 calendar days prior In accordance with technical investigation normal mode of the electrical part of the UES of Russia and to expiration of the previous action plan report on accident causes at the facility during heating season technologically isolated territorial electric power systems as well as process disturbances in operation of electric mains and On November 15, 2019 the company received the Certificate electric power facilities. In addition, the document regulates of readiness to operate during 2019 - 2020 heating season. Under an order from a federal executive Company Overview No later than one month after the procedure for dispatching and operating personnel to authority in the area of industrial safety We performed comprehensive assessment of the power the following events: prevent the development and eliminate violations of the or of its territorial unit plants of the company in accordance with the new Procedure normal mode of the electrical part of the power systems. for calculation of the Index of readiness of power plants for Inclusion in the network and restoration of power supply is operation during heating season, approved by the Ministry
> Reconstruction, technical refurbishment of the facility > If there are inconsistencies between information in the carried out within the shortest possible period as agreed with of Energy of the Russian Federation. According to this or introduction of changes in production technology action plan and information obtained during federal state “System Operator of Unified Energy System”. Minimization Procedure, each power plant of PJSC Enel Russia was subject supervision in industrial safety > Introduction of amendments in methods of of time spent for emergency maintenance due to the need to evaluation based on the company’s data within the scope measurement or types of measuring instruments > If new risk factors are found following technical of industry reporting, as well as data provided by the System to reduce the losses incurred by the company in the capacity indicators used during production control over compliance with investigations of the reasons of accidents at similar industrial safety requirements at the facility facilities payment (according to the Procedure for determination Operator and Rostekhnadzor.
> Introduction of amendments in the process control Financial and performance systems at the facility
> Introduction of new or closing abandoned mine workings, introducing amendments to ventilation schemes for them as well as after changing the exit Components for preparation of the power plants for the heating season ways of workers in case of accident
Inspection Planning Sustainability Implementation Ensuring system Ensuring Checking of technical of accident of maintenance and operating readiness of fuel condition prevention program reliability of personnel reserves of equipment activities
In accordance with order of Rostekhnadzor dated December Training and orientation of the company employees as well as 26.12.2012 No. 781 “On Approval of Recommendations for representatives of contractors and subcontractors takes place development of the plans for localization and response to during crisis management drills. The procedure for organizing accidents at explosive and chemically hazardous production preparation and conduct of drills is set out in Operating The company's power plants developed and implemented fire safety. In the course of special emergency training with facilities” during the year, it is planned to conduct training Instruction No. 0188-OI-SEC dated 28.07.2015 "Organization a package of measures aimed at ensuring system reliability involvement of EMERCOM specialists and medical personnel Governance sessions in the organization units for possible accidents of drills at the power plants". and process safety during peak loads and at low outdoor the actions for correct response in emergency situations and Risk and Corporate mentioned in ALMP. temperatures. Scheduled maintenance, maintenance of at low temperatures were practiced on a quarterly basis. In case of emergency situations that entail a complete buildings and structures are performed, the package of works Provision of personnel with special clothing, special footwear At the power plants of the company in accordance with termination of generation of electric power and heat power, on check and adjustment of heating systems of buildings, and required personal protection equipment was checked at Decree of the Government of the Russian Federation No. 613 the power plants of Enel Russia being the facilities of the insulation and repair of glazing is performed, the reserve of all power plants. dated 21.08.2000 to prevent and eliminate the consequences operating and dispatch control management of the grid act on main, backup and ignition fuel is formed, the emergency of oil spills and to protect population and environment from the principles of the standard GOST R 58085-2018 "Unified reserve of spare parts and materials is completed. their harmful effects, the oil spill response plan (OSRP) are power system and isolated power systems. Operating and developed. They are developed in accordance with applicable dispatch control Rules for Preventing the Development and During preparation for the heating season we delivered Annexes regulatory legal acts with regard to the maximum possible Elimination of Violations in the Normal Mode of the Electrical additional training and performed examination of knowledge amount of spilled oil and petrochemicals, authorized by Part at Power Systems. Regulations and requirements". in terms of compliance with occupational health, safety and Rostekhnadzor and approved by the territorial body of The new standard was approved by Order of Rosstandart EMERCOM of Russia. (Federal Agency on Technical Regulating and Metrology) No. In order to work out OSRP, comprehensive training or drills are 129 dated 13.03.2018. This document was developed by held at the federal and regional levels at least every 2 years. the “System Operator of the Unified Energy System” under
88 Annual Report 2019 PJSC Enel Russia 89 Responsible Attitude About the Report to the Environment The area of responsibility of the Environmental Safety Group includes preparation of corporate and state environmental reports, consulting support during revision of environmental permitting documentation, participation in improvement Environmental Strategy and Environmental 103-1 103-2 103-3 of integrated management system and implementation of projects for key environmental areas. The Environmental Management Integrated Policy Safety Group maintains comprehensive cooperation on Quality, Health, Safety, Environment with all organization units of the company as well as and Energy Efficiency Company Overview professional organizations and associations to mitigate the The Managers of power plants are responsible for Corporate Environmental Strategy negative environmental impacts, ensure compliance with implementation of the environmental strategy and environmental legal requirements and maintain a culture of environmental management. Monitoring and ensuring Ensuring compliance with environmental regulations and environmental safety. requirements of laws, environmental protection, taking compliance with environmental standards is within the Evaluation of management approach in environment is urgent actions in response to climate crisis comprise the responsibility of the Environmental Safety Group and performed within the scope of annual meeting of management most important priorities of Enel Russia. We strive to reduce Environmental Groups of power plants. The head of the Environmental Safety Group defines the action plan of the on the analysis of integrated management system in health, our negative impact on environment and on biological Stop Work Policy safety, environment, quality and energy efficiency. Evaluation indicators diversity and to rationally use natural resources. The proper Environmental Safety Group and the Environmental Groups of of the results for 2019 is planned for March 2020. We expect level of compliance with environmental regulations and power plants are responsible for achieving environmental goals. the management approach in environmental protection will Financial and performance responsible environmental management allow reducing Head of HSEQ is responsible for the following key areas: be recognized efficient. the risks and maximizing operational efficiency. We invest > compliance with environmental laws in new technologies, cooperate with start-ups and look for > greenhouse gas emissions We adhere to the Integrated Policy on Quality, Health, innovative solutions to improve environmental sustainability > control of air and water quality Safety, Environment and Energy Efficiency. It establishes our and safety. > waste management commitments to continuous improvement of environmental > biodiversity preservation. performance, mitigation of negative environmental impact and compliance with the requirements of Russian and
international standards. Organizational Sustainability procedure of interaction with suppliers and The main documents regulating the environmental strategy contractors and environmental management are: Environmental management > HSEQ Integrated Management System Manual that describes the main elements of integrated management system including environmental management Strategy Committee at the Board of Directors of the company > Operating Instruction “Environmental aspects, assessment of impact and risks” Governance
> Operating Instruction "Waste management" Risk and Corporate > Operating Instruction “Monitoring and maintenance of water temperature in the control locations of water bodies” Deputy General Environmental Safety General Director Director — Head of HSEQ > Operating Instruction “Control of atmospheric emissions Group Enel Russia strives for maintaining positive and constructive Head of Generation during the period of adverse meteorological conditions”. relations with stakeholders: with government agencies, At the end of 2019, we updated our environmental policy relevant organizations and members of public. Written and to expand the range of topics that it covers, as well as verbal complaints from stakeholders regarding environmental represent the company's attention to climate crisis. Besides, issues are subject to registration and internal investigation. Annexes Power Plant Manager Environmental Group we developed a policy to reduce the use of disposable For each complaint, feedback is provided mandatory to the plastic. We plan to approve and publish both policies in the person that lodged complaint. In 2019, no complaints were first half of 2020. received from stakeholders.
90 Annual Report 2019 PJSC Enel Russia 91 Environmental costs for 2019, million RUB Environmental KPIs Compliance with the Environmental Laws 307-1 About the Report Cost of environmental projects The company environmental strategy is closely related to the and Environmental Reporting Sustainability Plan and business strategy of the company. 729.63 In 2019, the operating expenditures and expenditures for We perform evaluation of compliance with environmental we calculate and aggregate emission data using it for each environmental projects amounted to RUB 922.17 million. The standards and legal requirements in the field of environment unit, power plant. In 2020, we plan to digitalize calculation of Operational costs main volume of costs for environmental projects falls within annually, as well as whenever new legislative requirements pollutant emissions from Konakovskaya and Sredneuralskaya 192.53 construction of wastewater collection and treatment system come into force. The following tools are used for acquisition GRES. The platform capabilities allow also consolidating and of Sredneuralskaya GRES. of input data: checklists, data collected during regular internal analysis of data on waste generation, water consumption, audits, results of inspections by government agencies, external water disposal and others. and internal environmental audits. Periodic inspections for Company Overview Goals of environmental strategy compliance with environmental laws are carried out by the Conducting of environmental audits Internal Audit Department of the company. The analysis of Objectives Indicator Actual values Target indicators Projects current situation and elaboration of solutions for the issues The company is subject to annual internal and external audits
See the section requiring improvements are conducted on weekly basis at of the environmental management system, environmental KGRES, NGRES, SUGRES: Reduction KGRES — 129.09 The target indicators Specific water “Optimization of Water of the volume of water consumption/ NGRES — 67.42 will be developed teleconferences of environmental group of power plants and audits conducted by the Internal Audit Department, consumption (m3/MWh) Consumption and Water water disposal (%) SUGRES — 70.54 in 2020 Disposal” Environmental Safety Group. inspections performed by the Environmental Safety Group of Headquarters. Besides, regular inspections are conducted at
The company pays special attention to timely preparation and indicators Circular economy projects: Volume of industrial 9,149.14 t* By 2022 See the section the company as part of environmental supervisory activities of increased volume of industrial waste sent to recycling submission of state and corporate environmental reports. In * Including data on RGRES for reduction by: 6% “Resource Use” waste sent to reuse (%) and to processing (t) 9 months of 2019. the state authorities. Thus, in 2019, six scheduled inspections 2019, we prepared more than 70 obligatory environmental Financial and performance were performed by the representatives of state bodies. See See the section reports. All reports were submitted in full and on time. detailed information in the Annex, the section “Environmental Waste water volume reduction* (million m3/year) 8.93* “Optimization of Water * Including data on RGRES for 4.59 * Partially clean water (without purification). Consumption and Water In 2019, an initiative was started for digitization of Indicators”. 9 months of 2019. Disposal” environmental reporting. For the preparation of corporate In order to comply with the requirements of environmental reporting, a special global platform was developed that See the section Reduction of disposable plastic use (%) –50 –75 laws and organization of rational use of natural resources, we “Resource Use” allows consolidating environmental performance information update the list of priority projects for implementation at the and generating reports. Besides, using another IT platform, power plants, monitor progress on them and adjust goals on we automated the calculation of pollutant emissions at Sustainability annual basis. Reftinskaya and Nevinnomysskaya GRES. Every month,
Breakdown of operating Breakdown of costs for environmental expenditures by power plants projects by power plants Projects for improvement of compliance with environmental laws 413-1
Power Plant Project Terms Progress in 2019 Plans for future periods Governance
10% 12% Risk and Corporate 7% Konakovskaya Sludge pond 2019–2020 The documents for state expert review Implementation of the first stage GRES liquidation of design documentation are prepared of the schedule for sludge pond 2% and submitted. A favorable opinion is liquidation obtained from Glavgosexpertiza. 12% Bidding was held for performance of works, the contractor was determined 18% Monitoring of water Continuously, Temperature monitoring at discharge. Performance of regular monitoring temperature in the during summer The temperature of discharge waters of water temperature in accordance
control location of the season during the reporting period conformed with Operating Instruction Annexes discharge canal to the standard “Guidelines for monitoring and maintenance of water temperature KGRES KGRES in the control location of the discharge canal” 60% NGRES 80% NGRES RGRES RGRES Monitoring of 2019 Comprehensive survey Monitoring according to schedule cases of oil products of oil emergency drain tanks of industrial site safety walks SUGRES SUGRES ingress in the soil from transformers was performed and groundwater
92 Annual Report 2019 PJSC Enel Russia 93 Power Plant Project Terms Progress in 2019 Plans for future periods Power Plant Project Terms Progress in 2019 Plans for future periods About the Report Konakovskaya Technical 2019–2021 Design documentation for the Adjustment of the project due Reftinskaya Liquidation 2019 The Technical Specification was Since October 2019 — outside the GRES refurbishment of restoration of receiving tanks to identified defects as a result GRES of wash water pit developed for provision of project perimeter of PJSC Enel Russia. the fuel oil facility: No. 1 and No. 2 was developed and of inspection of tank No. 1. adjustment services and negotiations Plans for transfer of the power plant monitoring of cases submitted for industrial safety expert Continuation of works and procurement procedures were to a new owner. See details in the of fuel oil spill in the review. conducted section “Exit from Coal Generation” territory of fuel oil The works for dismantling of the valve handling facilities chamber, floor slabs and cleaning of tank No. 1 were performed Reduction of 2019 The maintenance works were irretrievable filtration performed on filtrate water catchment losses of ash lagoon Monitoring of daily 2019–2020 Replacement of industrial water Road building from reinforced pump stations No. 2, 3, 4, due to No. 2 which regular collection of the filtration
abstraction volume of conduits No. 1, 2 concrete slabs to artesian wells Company Overview potable underground water and their transfer to ash lagoon water is performed. The non-commercial water metering instruments are installed. A Plan was prepared and is Nevinnomysskaya Implementation of 2019–2021 Tender is being held Development and authorization being implemented to maintain the GRES fish protection facility of the project with a government operational condition of equipment at water intake agency, performance of construction of the filtrate water catchment pump and installation works stations
Installation of 2019–2020 Design documentation is authorized. Installation of silencers silencers on exhaust Installation of silencers is performed on boiler 5A Establishment 2020–2021 Completed. Decision of pipelines of gas on boilers 4.5 of the sanitary Rospotrebnadzor (The Russian indicators condensate heater protection zone Federal Service for Surveillance on (GCH) of boiler Consumer Rights Protection and Financial and performance ТГМ-96 Human Wellbeing) No. 85 РСЗЗ dated 23.04.2019
Monitoring of water Continuously, Redistribution of water along discharge Performance of daily monitoring of Update of the 2019 The standards for permissible temperature in the during summer canals of the power plant, increase water temperature in accordance standards for discharges of outlet No. 7 are control location of season in the cooling water flow through the with Operating Instruction permissible developed and under authorization the discharge canal condensers of equipment in operation, “Guidelines for monitoring and discharges of during summer to the maximum level, passage of maintenance of water temperature in pollutants water through the equipment in the control location of the discharge reserve canal” Obtaining of 2019 The deadline was extended
integrated Sustainability Technical 2019 Complete replacement of the header The project is completed environmental permit refurbishment of by rehabilitation method (laying of storm sewer plastic pipe inside the header)
Sredneuralskaya Construction of 2019–2022 Supply of equipment, hydrogeological Performance of works GRES wastewater collection surveys were carried out, construction for construction of treatment and treatment and installation works were performed facilities systems to eliminate water discharge into the Control of Air and Water Quality Isetsky reservoir, excavations were completed, installation of pumping
stations and equipment are in We are aware that our production activities have direct of voluntary public disclosure of information about GHG Governance
progress, electrical equipment was impact on the quality of air and water resources in the emissions resulting from the company's operating activities, Risk and Corporate installed territory of presence of power plants. In order to manage due to increased attention of stakeholders to this topic. our impact and mitigate adverse factors, impact on the air Monitoring of 2019–2020 Noise level monitoring at the boundary Continuation of monitoring Total volume of GHG emissions (scope 1) amounted in 2019 standard value of of the designed sanitary protection and water is regularly controlled at all power plants of Enel to 23.27 million tons of СО -equivalent. Compared to 2018, equivalent sound zone of the power plant by an Russia, data on accounting of greenhouse gases, emissions 2 level at the boundary accredited laboratory. No excess of the direct GHG emissions in the reporting year decreased by 21% and discharges of pollutants are collected and processed on of sanitary protection standards in the daytime and at night (6,19 million tons СО -equivalent). zone at control point were identified a regular basis. 2 No. 3 In 2019 we have included the indicator of greenhouse gases Annexes specific emissions to the Sustainability plan. The indicator of Monitoring of water Continuously, Two cases of standard excess were Performance of daily monitoring of Greenhouse Gas 305-1 305-4 temperature in the during summer registered. The remedial actions were water temperature in accordance Emissions greenhouse gases specific emissions is being calculated as control location of season performed with Operating Instruction volume of greenhouse gases divided by cumulative electricity the discharge canal “Guidelines for monitoring and during summer maintenance of water temperature We perform regular collection of data on greenhouse gas and heat net generation, as equivalent of electrical energy. For in the control location of the (GHG) emissions for monitoring and planning of measures the purposes of planning we use the internal methodology discharge canal” for reduction of these emissions. We realize the importance of Enel Group for calculation of greenhouse gases volume
94 Annual Report 2019 PJSC Enel Russia 95 (for details see Annex, Environmental indicators). During the In 2019 the indicator of greenhouse gases specific emissions into the atmosphere are made based on methods provided Pollutant Emissions into 305-7 calculation of planned indicator of specific emissions, we was amounted to 616 grams of СО -equivalent/kWh. We for in the relevant draft standards of maximum permissible 2 the Atmosphere took into account the planned electricity output from wind are intended on staged decreasing of this indicator and on emissions developed for each power plant in accordance with About the Report generation. reaching of 399,9 g СО -equivalent/kWh by 2022. legislative requirements. The calculations are based on the 2 We carry out regular air quality monitoring and air pollution emissions control to gradually reduce them. standard RD34.02.305-98 "Estimating gross emissions of pollutants into the atmosphere by the boiler installations of In 2019 compared to 2018, gross emissions, total gross thermal power plants”. Nevinnomysskaya GRES has installed emissions of pollutants into the atmosphere throughout the systems for online monitoring of emissions on the equipment company, including but not limited to NOx, SOx, persistent of units 6, 7, 8 and 410 MW CCGT. The gross emissions for organic pollutants (POPs), volatile organic compounds such sources are calculated based on online monitoring data Direct emissions of greenhouse gases (scope 1)*, million tons СО2-equivalent (VOCs), hazardous atmospheric pollutants, particulate matter
in terms of pollutant concentration and volume of flue gases. Company Overview (PM), carbon oxide decreased by 25%. The detailed data on emissions of pollutants by type and 30.16 There was no excess of established standards by maximum 29.45 by power plants are given in the Annex (see the section permissible emissions at all power plants for the reporting 23.27 “Environmental Indicators"). period. The calculations of gross emissions of pollutants
18.64 18.37
13.14
4.16 3.97 indicators 3.72 3.64 3.49 3.62 3.04 3.49 3.60
Emissions of pollutants by power plants, thousand tons Financial and performance 2017 2018 2019
* Direct emissions of greenhouse gases are calculated based on Enel Group methodology. The following types of GPG is included to calculation: CO2. 284.67 KGRES NGRES RGRES SUGRES Total 270.49 305.45 251.18 202.08 184.50 Sustainability
Intensity of GHG emissions*, g СО2-equivalent/kW·h 7.05 8.68 5.06 6.02 8.62 4.67 5.33 7.72 4.54
975.70 959.55 951.91 2017 2018 2019
KGRES NGRES RGRES SUGRES Total 657.43 656.17 615.72 Governance 519.07 523.14 514.69 Risk and Corporate 431.48 427.68 414.35 365.66 370.14 368.37 Emissions of pollutants by type, thousand tons
2017 2018 2019 Gross emissions, including: 305.45 270.49 202.08 NOx 91.76 89.95 67.33 2017 2018 2019 SOx 141.62 133.34 99.37 Annexes Organic pollutants (POP) 0.00 0.00 0.00
* Indicator of greenhouse gases specific emissions is calculated based on Enel Group methodology. The following types of GPG is included to Volatile organic compounds (VOC) 0.06 0.07 0.06 calculation: CO . 2 Hazardous air pollutants* 0.0003 0.0003 0.0002 KGRES NGRES RGRES SUGRES Total Particulate matters (PM) 66.72 41.60 30.53 Carbon oxide 4.17 4.43 3.93 Other pollutants 1.13 1.11 0.86
* Manganese, mercury, gasoline.
96 Annual Report 2019 PJSC Enel Russia 97 Responsible 303-1 303-3 In the reporting year, the total volume of water taken Total volume of wastewaters broken by treatment method, million m3 decreased by 13.9%. This is due to decrease in electric use of water resources 303-5 2017 2018 2019 About the Report power generation and with regard to data on RGRES for only Partially clean water (without purification) 1,631.40 1,424.63 1,207.55 9 months of 2019. Enel Russia adheres to the principle of rational water use and Polluted insufficiently treated water 12.45 8.48 4.39 pays close attention to responsible compliance with water First of all, attention of the company is focused on not Waters treated to standard quality (mechanical and physical-chemical use conditions and control of impact on water resources. exceeding the water consumption rates established in the treatment) 4.36 4.80 4.59 relevant permitting documents of the power plants. We Disinfection 0.003 0.002 0.002 Water Consumption perform regular monitoring at all water intake points for the Total 1,648.22 1,437.91 1,216.54 volume of water consumption and comparison of actual water Due to the vast territory in terms of fresh water reserves, consumption with established limits. Most water intakes are
The main volume of water discharged by the power plants drivers to ensure reliable operation of equipment and Company Overview Russia is among the top ten countries in the world. Despite equipped with commercial meters of water resources. At the is considered clean according to the standard (99.3%). rational use of water (see also the section “Increase in this, there are seven regions in the country where local water intake points that are not equipped with water meters, Wastewaters to be treated is purified by mechanical and Operating Efficiency”). Owing to Sovetchik program the water shortages are recorded22. Such regions include water consumption volumes are determined by calculation physicochemical methods before discharge. Used water is machine operators of power units can determine whether Sverdlovsk Region and Stavropol Territory, where two power based on water consumption standards. carried through the discharge channels into the water bodies. correct fuel-water ratio was used to generate electric power. plants of the company are located — Nevinnomysskaya and The water consumption in the reporting period at all power Sanitary wastewaters are sent for treatment to external Thus, they can adjust the operating mode of equipment with Sredneuralskaya GRES. plants of the company was within the established limits. organizations, mainly to water-pumping enterprises. minimum deviation of actual vacuum in the steam turbine The main type of water intake for the process of electric condenser from optimum vacuum, which maintenance Complete description of the methods of water intake, a list of power generation is water intake from surface water bodies. is a prerequisite for ensuring the operating efficiency of indicators water intake points, types of water consumption and methods The company carries out also water intake from underground equipment. A pilot project was implemented successfully at for waste water discharge as well as quantitative data on the sources. Nevinnomysskaya GRES at Power unit No. 7. The project Financial and performance total water intake for the company needs are given in Annex will be extended in the next reporting period to other units (see the section “Environmental Indicators"). of Nevinnomysskaya GRES and launched at units No. 1 and The Selected Projects and Initiatives No. 8 of Konakovskaya GRES. The irretrievable water consumption, million m3 of PJSC Enel Russia in Water Consumption and Discharge Water Reuse 1735.22 1648.22 A project for water reuse was implemented at 1523.10 In 2019, we began implementation of large-scale projects Nevinnomysskaya GRES (unit No. 9). We use discharge Sustainability 1437.91 1311.36 1216.54 for optimization of water consumption and water discharge. waters from the drain of condensers to cool down auxiliary The project is intended to reduce the fresh water flow for the mechanisms (pumps, gas coolers, etc.). The pilot project is process needs of power plants and, as a result, reduce the planned in the next reporting period at Konakovskaya GRES. volume of polluted wastewaters. Installation of a commercial metering unit for recirculated 87.01 85.19 94.82 We formed the work groups at each power plant to update water is planned at Konakovskaya GRES, which will allow the balance flow-sheets for process water supply, domestic metering reused water. The units for advanced treatment of 2017 2018 2019 water supply and fire water lines. Based on the analysis, plans technical water of 300 MW and 500 MW units at Reftinskaya Governance
Total irrevocable water consumption Total water dischange Total water withdrawal were developed to eliminate defects in the equipment for GRES were repaired, additional pipelines were installed, Risk and Corporate process and domestic water supply. In addition, the installation which made it possible to carry out hydro cleaning of the sites were identified for additional water meters in order fuel transport and chemical shops with reuse of washed off to switch from indirect to direct method of water metering clarified water (returned from the ash lagoon). within internal cycle of the power plants. A communication Water Discharge 303-2 303-4 306-1 > Order of the Ministry of Agriculture of Russia No. 552 dated campaign was also launched within the project scope to raise Renovation of Water Conduit from the Volchikhinskoye 13.12.2016 “On approval of standards of quality water staff awareness of the need for rational use of process and Reservoir for the water bodies of commercial fishing importance
drinking water. Annexes The power plants of the company discharge waste waters including the standards of maximum permissible In 2019, the works continued on renovating the source water in accordance with applicable laws and timely obtained concentrations in the waters of water bodies of commercial conduit from the Volchikhinskoye reservoir of Sredneuralskaya Implementation of Sovetchik Program permitting documentation. We use currently only state fishing importance” GRES. The design capacity of the source water conduit and standards and regulations of the Russian Federation regarding > SanPiN 2.1.5.980-00 "Hygienic Requirements to Surface Sovetchik is a special program that is designed to provide water treatment plant is 6000 t/h. The water conduit supplies the quality of waste water discharge: Water Protection". information support to machine operators of power unit the source water to the power plant for preparation of
22 To determine whether there is a shortage of water resources in the region, we used both local sources and international tool recommended GRI “Aqueduct Water Risk Atlas” (https://www.wri.org/aqueduct).
98 Annual Report 2019 PJSC Enel Russia 99 make-up water used for heating and hot water supply in the At the end of 2019, commissioning of wastewater collection Energy Consumption, 302-3 In 2019, implementation of a number of initiatives was cities of Yekaterinburg, Verkhnyaya Pyshma, Berezovsk and system was carried out. In addition, seven outlets were Energy Efficiency Indicators continued to reduce balance-of-plant needs for each power Sredneuralsk. Owing to implementation of the above work combined into one. According to further project activities plant, namely this is an initiative for technical refurbishment About the Report package, it became possible to provide more reliable and the treatment facilities will be installed under the project The specific consumption of fuel equivalent (SCFE) for electric of the lighting system that involves a partial replacement uninterrupted supply of heat and hot potable quality water to with the subsequent supply of treated wastewater to the power generation amounted in 2019 to 321.7 g/kWh. When of lighting lamps with LED ones. In addition, to reduce fuel the region. recycling system for the process needs of Sredneuralskaya calculating this indicator, the generated power is taken into consumption, we implement the measures within the scope GRES The new wastewater collection and treatment system account without regard to BOP needs. of activities for improvement of operational efficiency (see Construction of Water Treatment Facilities will allow improving the quality of demineralized water for details in the section “Increase in Operating Efficiency”). feeding boilers of Sredneuralskaya GRES, will return purified A large-scale project is implemented at Sredneuralskaya water to the production cycle of the power plant and reduce GRES for construction of the system for the collection and SCFE for electric power and heat generation (non-renewable sources)
consumption of fresh water for the needs of water treatment Company Overview treatment of waste waters. In 2019, the storage vessels, plants. five sewage pumping stations, and pressure headers for Indicator Unit of measurement 2017 2018 2019 supply of industrial rainwater were built under the project. Specific fuel equivalent consumption for electric power (gas + coal) g/kWh 329.93 326.97 320.98
Specific fuel equivalent consumption for heat power (gas + coal) kg/Gcal 160.34 161.48 159.4
Resource Use * We recalculated the quantitative indicators for SCFE in the reporting period. For that reason, we updated the data for previous reporting periods. indicators
23
production cost amounting to 3.4 . The costs for natural gas Financial and performance Energy Margin Information 302-1 The volumes of electrical power and heat power of BOP consumption and coal — 39.1% and 15.5% respectively, fuel oil — 0.4%. Indicator Unit of measurement 2017* 2018* 2019 The structure of fuel consumption of each power plant is given In 2019, the volume of diesel fuel used by the company in the Annex “Structure of generation facilities and structure amounted to 2,268.3 thousand liters (or 1882.7 tons), The volume of electric power for BOP needs for the production of electrical and thermal energy, of fuel consumption”. automobile gasoline — 23.1 thousand liters, cost value was in % of the total volume of electrical energy % 5.2 5.0 5.2 0.09% and 0.002%, respectively. In 2019, the volume of electric power consumed by the Electric power for BOP needs billion Kwh 2.201 2.122 1.766 company for BOP needs amounted to 1,766.4 GWh, Heat power for BOP needs thousand Gcal 10.5 11.0 8.2 Sustainability
* We recalculated the quantitative indicators for consumption of electric power and heat in the reporting period. For that reason, we updated the data for previous reporting Fuel consumption structure of the company periods.
Type of fuel, unit of measurement 2017 2018 2019 2019 vs 2018
Gas, thousand m3 6,233,664 5,982,214 5,496,685 –8% Initiatives for reduction of energy consumption in 2019 302-4
Coal, tons 11,586,811 11,475,102 8,217,757 –28% Consumption reduction Description of initiative Energy type Power Plant in tons of fuel equivalent Fuel oil, tons 31,692 26,582 20,912 –21% Governance
Konakovskaya GRES 37.0 Risk and Corporate
* The share of fuel oil in the fuel mix for the period of 2018–2019 decreased from 0.267% to 0.264%. Nevinnomysskaya GRES 65.2 ** Reftinskaya GRES for 9 months. Reconstruction of the lighting network of the power plant with replacement of lamps with LED ones Electric power Reftinskaya GRES 179.3
Insulation and setting works of boilers 5,5А,10. Overhaul of power units No. 6.9, replacement of fabric expansion Change of fuel volume burned in 2019 vs. 2018 joints, spirals of HP-6,7,8 HP preheaters, tube bundle of LP-3,4 LP preheaters, and replacement of TO-6 Gas Nevinnomysskaya GRES 1,876.0 Power Plant Change of fuel volume burned (fuel type)
Overhaul of turbines of power units No. 2,3,6 to eliminate capacity Annexes Konakovskaya GRES –13.3% (gas) losses, maintenance of the vacuum system, replacement of heating Nevinnomysskaya GRES –10.2% (gas) surfaces and elimination of inflows in boiler units of No. 2, 3, 6 Coal, fuel oil Reftinskaya GRES 6,959.0
Reftinskaya GRES –28.4% (coal) The condenser and built-in bundles were cleaned on turbine unit No. 6, БГ-1,2 and HP preheater, LP preheater were repaired. Sredneuralskaya GRES –0.9% (gas) Condenser, БГ-1, БВ-1,2 were repaired on turbine unit No. 7. ПНД-4 LP preheater was replaced, DH system was repaired, and the condenser was cleaned on power unit No. 11 Gas Sredneuralskaya GRES 619.0
Total amount of energy saved 9,735.5 23 According to RAS results (Russian Accounting Standards).
100 Annual Report 2019 PJSC Enel Russia 101 Secondary Resources Consumption of consumables in 2019 compared to 2018 increase the portion of waste transferred for recycling (reuse) waste generation. We plan to phase out plastic consumption 301-1 Consumption decreased by 15% with regard to data on Reftinskaya GRES and disposal by 2% on annual basis. for administrative and production needs (see details in the for 9 months. section “Sustainability Plan for 2020–2022”). About the Report In view of this, we perform regular monitoring of the register At different levels of production process, we consume Detailed information about auxiliary resources consumed of facilities of the main process equipment for waste Radioactive Waste Management secondary resources. A significant portion of such resources in 2019 is given in the Annex, the section “Environmental management on the portal of the Unified State Information consists of chemicals necessary both for demineralized water Indicators”. System for Accounting for Waste from the Use of Goods. We improve our non-financial statements and aim at greater treatment for make-up of boilers and heating systems, and for Such an approach allows expanding the list of third parties, transparency. For that purpose, we disclosed the management operation of auxiliary equipment. third-party enterprises with relevant licenses that the approach and quantitative information regarding radioactive company transfers its waste for reuse. waste (RAW) in the current reporting period. With the support of Enel Group, we implement a new digital Secondary resources consumption RAW is generated at the company during treatment Company Overview accounting system for generation, storage and transfer of (purification) of artesian water at Konakovskaya GRES. Natural Power Plant Comment waste. Such a system will allow ensuring both their accurate radionuclides contained in artesian water, namely radium-226 accounting and monitoring of their accumulation sites. The Reduction of consumption of chemicals for water treatment due to improvement of the quality of the source and its daughter products, accumulate on the filter material. Konakovskaya GRES natural water system is currently under testing and personnel training for platform operations is in progress. PJSC Enel Russia has a license to operate a radiation source, Reduction in consumption of such materials as quick lime, trivalent sodium phosphate, ammonia and sodium complies with radiation safety requirements and submits hypochlorite We consider that the portion of waste sent for disposal and reports on radioactive waste to regulatory authorities on recycling will increase due to the project for digitalization of
regular basis. Radioactive waste management is carried out indicators Consumption of sulphuric acid increased by 30%. Sulphuric acid was used to restore filtration properties on waste management and careful cooperation with equipment Nevinnomysskaya GRES water treatment device on a contractual basis with the organizations licensed to suppliers intended to decrease in the scope of containers
provide radioactive waste management services. Financial and performance Reduction of consumption of chemicals for water treatment due to improvement of the quality of the source supplied with equipment and switching to the containers natural water from natural easy-to-process materials.
20–40% increase in consumption of such materials as trivalent sodium phosphate, resins, ammonia and In addition, we launched a project in 2019 to abandon sodium hypochlorite. That is related to the maintenance operations on several acid storage tanks, as well disposable plastic, which will also lead to a decrease in as unsatisfactory water chemistry mode at some generation facilities of the power plant during spring and summer period
9% decrease in consumption of caustic soda, which is associated with improvement in the quality
of Isetskoye water in terms of average total value of anions RAW generation and disposal Sustainability
Increase in consumption of sulphuric and hydrochloric acids by 13% is stipulated by increase in consumption Year RAW generated and disposed Initiatives of chlorine dioxide in the disinfection circuit of make-up water in the heating system. Increase in consumption 2017 23.0 m3 (21.17 current maintenance) Replacement of sulfonated carbon on mechanical and ion-exchange of sulphuric acid is also associated with increase in the volume of demineralized water treatment. filters Sredneuralskaya GRES Its production in 2019 increased by 3% compared to 2018 2018 12.5 m3 (12.11 current maintenance) Replacement of filter material on ion-exchange filters Deviations in consumables at Reftinskaya GRES cannot be detected due to difference in the compared periods 2019 14.5 m3 (15.79 current maintenance) Replacement of filter material on ion-exchange filters Reftinskaya GRES (2018 — 12 months, 2019 — 9 months, see the section “Exit from Coal Generation”) Governance Risk and Corporate
Waste Management 306-2 hazardous waste. This decrease is associated with a decrease in the scope of maintenance operations, works for dismantling Biodiversity and Natural Heritage 304-1 304-3 304-4 of decommissioned equipment completed in 2018. Due to We take care of waste management. Internal accounting in the overall decrease in waste generation in 2019, the portion of Preservation field of waste management is conducted in accordance with waste transfer to disposal and recycling decreased by 20% the classification system of waste coming from production too. See detailed information about wastes in the Annex, the Preservation of ecosystems and protection of biodiversity on animal and plant species. We are open to dialogue and
and consumption, and valid in the Russian Federation. This Annexes section “Environmental Indicators”. are key principles for sustainable development. We take cooperation with local communities and environmental system provides for the separate waste collection divided into measures to prevent negative impact on biodiversity and associations in biodiversity conservation. 5 hazard classes depending on the degree of negative impact Initiatives in Waste Management compensate consequences of negative impact. We are on the environment. Hazardous waste includes hazard class The power plants of PJSC Enel Russia are not located in the committed to considering the peculiarities of the biodiversity 1–4 waste; fifth class waste is almost non-hazardous. protected natural area and territory with appreciated value Much attention is paid in the field of production waste of our territories during design, construction, operation and of biodiversity that is outside the boundaries of protected In 2019, 34% less non-hazardous waste was generated at management to increasing the portion of generated waste maintenance phases. For each new project, we conduct a natural territories. The production site of Sredneuralskaya the power plants of our company than in 2018, and 50% less sent for recycling and disposal. The company has a goal set to study of potential environmental impact as well as impact GRES power plant is located near the specially protected
102 Annual Report 2019 PJSC Enel Russia 103 natural area “Isetskoye Lake with the surrounding forests”. The main goals and objectives of the company in conservation The size of the production site is 0.73 km2. Sredneuralskaya of biodiversity in the near future: Business and Management GRES is located near the Isetskoye reservoir of lake type > Determination of the value of biological diversity and the About the Report in Verkhnepyshminsky district northwards of the city risk for biological diversity on a scale of the entire company. of Yekaterinburg. In order to preserve the picturesque > Compliance with hierarchy impact minimization. It refers natural reservoir, a typical landscape for the southern to the sequence of actions for forecasting and preventing Operational Efficiency: taiga Transurals, Decree of the Government of Sverdlovsk impact on biological diversity and ecosystem in those cases Region No. 41-ПП dated 17.01.2001 the Isetskoye lake with when such impact cannot be prevented: development of New Technologies and Solutions surrounding forests was declared a landscape reserve. The measures for minimization of such impact – reclamation, area of specially protected natural territory is 4738 ha. Since recovery, and in the cases with significant residual impact operation. At the operational level, the unit is responsible for 1936, during construction of Sredneuralskaya GRES on the — compensation. Management of Generation Company Overview bank of the Isetskoye reservoir, it became a cooling reservoir > Performance of chronological analysis for collection of Equipment Fleet operation of generation equipment at the power plants and for Sredneuralskaya GRES. The Isetskoye reservoir is fishy; information about all environmental legal proceedings its maintenance in technically sound condition and timely perch, rudd, bream, tench, ruff, perch and pike are found here. or fines, all activities for protection of biological diversity The Thermal Generation Unit is responsible at Enel Russia for maintenance of equipment in accordance with production Fish species such as grass carp, white silver carp and mirror that were completed before or are currently under management of generation equipment fleet. It is responsible plans, policies and health, safety and environment rules and carp are naturalized. implementation. at the managerial level for coordination of operation and improvement of operational efficiency. maintenance of equipment as well as for optimization of its At the plants of PJSC Enel Russia, water intakes are equipped Thus, the company implements initiatives aimed at restoring with effective fish protection facilities (FPF) that allows a natural landmark of regional significance “Karacharovo preserving biodiversity of surface water bodies. From 2013 to Park” (the Tver Region). Even though the activities of PJSC indicators 2017, fish stocking at the Isetskoye reservoir was carried out Enel Russia do not have a negative impact on the territory, Financial and performance within the scope of compensatory measures to replenish the we have been implementing an annual environmental task biological balance of the reservoir during the construction and force in this park for four years while involving local people, operation of the cooling water intake facility of 410 MW CCGT employees of Konakovskaya GRES and the Headquarters Organizational structure of the Thermal Generation Unit of Sredneuralskaya GRES. The company stocked young grass for participation in it. This project is being implemented carp and silver carp to the Isetskoye reservoir for five years. with the support of the Ministry of Natural Resources and ADMINISTRATIVE LEVEL Water intake from the Isetskoye reservoir for the production Environment of Tver Region. needs of the plant is carried out by three water intake facilities and all of them are equipped with fish protection facilities Deputy General Director — Head of Generation Sustainability that are designed to reduce the impact of the power plant production cycle on the reservoir ichthyofauna by preventing water bioresources from entering the water intake of Head of Operational Sredneuralskaya GRES. Head of Operation Head of Project Head of HSEQ Performance and Maintenance Execution Optimization It must be recognized that there is a potential habitat for species included in the IUCN red list and types put onto the National List of Protected Species (Red Book of the Russian Governance
Federation) in the area affected by the company activities, Business Development Risk and Corporate Technical Support Manager since the habitats of such species may coincide with the regions where our power plants are located.
The company recognizes that no qualitative assessment of biological diversity in the territory under the influence of its activities was carried out until 2019. For that purpose, Enel OPERATIONAL LEVEL Russia develops an action plan for the period of 2020–2024, Annexes it is the basis for management of this area with outline of the Power Plant Manager main principles and procedures that are currently recognized as the best practices for management of impact of activities on biological diversity.
104 Annual Report 2019 PJSC Enel Russia 105 Functions of the directorate comprising the Thermal Generation Unit The main documents we use to manage operational efficiency: Due to mathematical model of the power unit that we created About the Report > “Management of specific fuel consumption” — regulates and that underlays the system, we optimized equipment load, It facilitates to identification of medium- and long-term strategies for management of generation assets Business Development activity for analysis of actual fuel consumption indicators, improved technical and economic indicators and managed to in terms of potential modernization projects and new construction initiatives formation of control actions, development of an action identify defects affecting fuel consumption at the power unit It ensures development of new construction, modernization and technical refurbishment projects, Engineering and Construction plan for reduction of consumption during operation and in timely manner. The results of this analysis are used both while managing all engineering activities at the stage of preliminary development of the project maintenance of equipment operating personnel for optimum maintenance of operation It deals with coordination of civil engineering and design activities during implementation of new > “Informing and analyzing equipment unavailability events” mode and by Performance Control Group and Maintenance Project Execution Department construction projects, modernization and technical refurbishment — determines the measures that the units and the center Planning Service for maintenance activities. of monitoring and diagnostics must take to analyze and It coordinates the operation process and ensures planning of maintenance and operational needs In 2019 we performed analysis of the action plan to improve
Operation & Maintenance of the equipment. It evaluates also the efficiency of performed works. It develops a plan for improvement verify the actual efficiency of the decision taken after the Company Overview efficiency of equipment operation implemented in the previous of equipment operation efficiency unavailability event on generation equipment reporting period. An improvement in key performance It is responsible for analysis of material technical issues and faults of equipment and provides > “Energy planning and audit” — it regulates analysis and Technical Support indicators of the equipment was recorded. It evidences of the recommendations for their correction planning activities for improvement of energy efficiency of efficiency of the approach. power plants. It analyses the Operation and Maintenance indicators, defines the measures for improvement Operation & Maintenance In 2019, we launched also a project for visualization of key of equipment operation efficiency (availability, specific fuel consumption and load factor). Improvement Deputy General Director — Head of Generation is responsible See details in the section “Operational Efficiency” performance indicators for operation and maintenance for operational efficiency. There are several main roles in processes, as well as visualization of key indicators to reduce Health, Safety, Environment It is responsible for achievement of health, safety, environment and quality goals. generation — they all collaborate to improve processes, cooling water flow. The water indicators will be available on indicators and Quality See details in the section “Occupational Health & Safety” increase operational efficiency and mandatory compliance the monitors of operating personnel along with performance with health, safety, environment and quality standards (see They are responsible for operation and maintenance of generation equipment in accordance indicators. They will help in real time monitoring and optimum Financial and performance Power plants with production plans, health, safety and environment requirements while increasing the production the section “Management of Generation Equipment Fleet”). efficiency to the maximum extent reduction of water consumption with regard to the cost of One of the key indicators of operational efficiency — specific fuel. Completion of this project is planned for 2020. consumption of fuel equivalent. Our objective is to reduce In 2019, an external audit was conducted at Konakovskaya consumption in 2020 to 301.4 g/kWh and bring it to 296.6 g/ GRES for compliance with the requirements of the international Since 2018, on the initiative of Enel Group, the company is updated annually to meet the company's business plan. kWh in 2022 (see the section “Sustainability Plan for 2020– standard ISO 50001 “Energy Management Systems”. Based approved an official strategic asset management plan. Such There are also official annual plans for major maintenance 2022”). on the results of this audit, Konakovskaya GRES received a factors as the macroeconomic context, electricity market operations for each electric power plant that are formed by certificate of conformity. In 2020, an external audit is planned Sustainability trends, and legislative changes are considered for analysis and the Head of Generation and approved by the Head of Energy Increase in Operating Efficiency at Nevinnomysskaya GRES. development of potential areas for asset development. The Management. The final versions of plans are submitted to the planning horizons for strategic plan of facility development System Operator. Another tool for planning of electric power Since 2016, the integrated excellence system has been applied are 2025 and 2030. Until 2025, the plan includes detailed generation and asset management is long-term plan of major at the company. It allows any employee to submit a proposal information about development of Enel Russia generation maintenance operations that is formed for each power plant for improvement of the power plant operation and optimization assets with detailed analysis for each power unit. of the company for 10 years. of the processes. For evaluation and selection of proposals,
This plan was developed by Enel Russia and approved by a cross-functional technical committee has been formed at the General Director. The strategic asset management plan each power plant. It includes experts in equipment operation, Governance
maintenance, health and safety, information technology, etc. Risk and Corporate Due to high involvement of staff (55%), about 550 ideas for were collected in 2019 for improvements and about 35% of them were implemented. The best proposals were submitted Operational Efficiency 103-1 103-2 103-3 to the annual competition of Enel Group — Gxcellence. We created a database of best practices and encourage experience sharing among employees of the power plants.
We develop energy business in Russia using the best The operational efficiency combines the aspects related Annexes international practices. We want to use our resources to the efficient use of the company's internal resources. We implement state-of-the-art methods for processing large rationally and optimize business processes through We increase availability of generation equipment, reduce array of information, industrial machine learning technology. application of new technologies and digitalization. We specific fuel consumption for supply of electric power and For example, the main stage of implementation of information are committed to maximize operational efficiency during heat, decrease the cooling water flow, increase compliance system “Management of specific fuel consumption” was operation, capital construction and technical refurbishment with health, safety, environment and quality requirements. completed. The purpose of this system is to automate on- of assets. going analysis of equipment operation mode.
106 Annual Report 2019 PJSC Enel Russia 107 Innovation and Digital Transformation The work of Digital Solutions is regulated by the following > Operating Instruction “Control of access to critical documents: information infrastructure facilities (CII)”. > IT technical policy About the Report In 2019, the company monitored regularly compliance with > Procedure “On user support during provision of IT Innovation Approach 103-1 103-2 change of IT platforms and cloud solutions to increase legislative requirements according to Federal Law on Personal performance and efficiency, and ensure information security. services” in Technologies 103-3 Data No. 152-ФЗ, Federal Law on Security of Critical Russian > Procedure “Ensuring information security” and policy “On Our commitment to open innovations (see details in the Federation Information Infrastructure No. 187-ФЗ, fulfillment ensuring security of information” One of success factors of the companies consists currently in section “Mission and Values”) is based on the integration of of the requirements of internal controls. To ensure efficient > Operating Instruction "IT systems logical access development of innovations and establishment of innovative business processes and technologies that help us creating operation and modernization of the systems, platforms and management" culture. Such an approach allows flexible modification of sustainable long-term value. services, the best practices are used, internal and external > Procedure “Monitoring and control of personal data business model under impact of external and internal factors. The company develops actively the process architecture based audits are performed. An action plan is prepared by their
processing at PJSC Enel Russia” Company Overview results. Modification of the company's business processes is on micro services and application programming interfaces based on the use of digital technologies and data-driven (API), testing and implementation of innovative process management. Under the conditions of the technology profile designs using Big Data technologies, the Internet of Things diversification, we continue to focus on digitalization and and Virtual Reality (Big Data, IoT, VR). The opportunities strengthen our position as a data-driven company. We are associated with company assets and employees encourage us Areas for implementation of new solutions and digitization changing following the changes in our business strategy to creating and developing a network of ecosystem technologies maintain our competitive advantage and meet the challenges that must be open, dynamic and accessible in real time.
of the modern world. Implementation of digital technologies Implementation of the digital strategy program and digital indicators complies also with the principles of the Digital Transformation technologies at PJSC Enel Russia is responsibility of the Company assets Employees Platforms Cloud solutions Cybersecurity vision of the Fuel and Energy Complex within the scope of the Digital Solutions, headed by the Head of Digital Solutions. Financial and performance national project “Digital Economy of the Russian Federation”. The following goals were set and achieved by the company The need for digital support for the company’s areas of to the Digital Solutions for 2019: ensuring cyber security of activity begins with the basic foundations of automation and critical information infrastructure, development of systems is supplemented by the use of modern digital technologies, and applications. Key activities in 2019
Unit Activities Sustainability
Trading Digital Hub A solution has been developed and implemented that ensures continuous monitoring of the quality indicators of the participation of power units in normalized primary regulation of frequency. The solution for monitoring Management of implementation of new solutions and digitization of indicators allowed ensuring timely response to emerging disturbances in the power system and minimizing possible losses
A digital process was developed for preparation and filing of applications for selection of composition of generating equipment in operation. The solution allows the trading group not to depend on the hardware platform, the client part is available from mobile devices and on web resources
General Director Finance Digital Hub SAP WISE corporate system has timely changes that were made in terms of the set VAT rate of 20%, settings that were made for correct representation and issue of primary documents Governance
On April 1, 2019, the commercial operation of updated financial electronic documents circulation system Risk and Corporate began, being integrated with the system of Legally Important Document Management System. A part of Head of Digital Solutions primary financial documents with counterparties are signed by electronic digital signature and transmitted electronically through a specialized system
Generation Digital Hub24 Within the scope of the Digital Plant project, predictive diagnostic systems of CCGT were implemented, which will allow reducing production risks at Nevinnomysskaya GRES and Sredneuralskaya GRES Trading Finance Information IT Operation IT Development At all power plants, the functionality of the Collaborative Planning solution (e-Planner) was implemented, Digital Hub Digital Hub Security Incidents Group and Management Response Teams Unit thus, the opportunities appeared through information visualization for additional control of preparation for commencement of maintenance campaign Annexes Within the scope of “Heat Rate Management” digital project, a special solution was implemented that improves efficiency of specific fuel consumption control by visualizing the causes of deviations in real time.
The development of global solutions for improvement of operational efficiency and reporting continued. Such projects include implementation of the systems integrated with local and global platforms and providing support for operation of the main equipment, as well as a comprehensive reporting system using artificial intelligence algorithms and voice control. The systems will be implemented in 2020
24 Reorganized at the end of 2019.
108 Annual Report 2019 PJSC Enel Russia 109 in order to test the solution within a short period of time The company pays attention to development of innovation The practical results were produced for the digital project of using IoT (Internet of Things) on the basis of a data collection and transfer system from remote and inaccessible facilities. and scale as may be necessary. Main search areas: artificial culture among employees, both at the power plants and at the The scaling of pilot solutions allowed distribution of pilot projects at minimal cost. The use of the solution intelligence, machine training, energy efficiency, new coatings headquarters. The employees pass sessions on development About the Report contributes to better equipment management, minimizes the risks associated with health, safety and and materials, big data, robotics, etc. In 2019, video analytics of creativity, search for solutions to sophisticated problems. In environmental aspects, allows obtaining the process measurements, collecting data from remote facilities that were impossible to obtain before technologies came also to focus to increase production safety 2019, the company launched a global project for development and reduce risks for our personnel. The Enel Innovation Centre of internal entrepreneurship for the employees of the entire Digital projects of HR Hub25 Creation of a single ecosystem with various platforms and services for employees continued with the goal of performed selection of startups focused on video analytics, Enel Group, where any employee can submit an idea to increasing transparency and efficiency, improving the quality of work and services provided using digital tools jointly with energy-efficient Skolkovo cluster. 10 startups were improve the existing process or an idea for a new business In 2019, within the scope of implementation of the national project of “Digital Economy of the Russian evaluated by the experts from Enel, Global Digital Solutions of the company. Federation”, the company applied for participation in the experiment under the auspices of the Ministry of unit. Testing of the technology of one of the selected startups Labor and Social Protection of the Russian Federation for the use of electronic signatures in labor relations
is planned for 2020 at Konakovskaya GRES. Company Overview Infrastructure Technologies At the beginning of 2019, switching to a new operating system were held. It was the basis to mitigate Group the risks in the field of information security and ensure availability of new functions
The services are implemented for the possibility of joint work of users, possibility to work on various mobile devices and platforms. 103-1 103-2 103-3 102-43 Along with classic MS Office 365 applications, cloud services were launched, including: service Customer Focus for fast creation of tests and surveys, a collaboration tool for remote and dispersed teamwork, a platform for online broadcasting, etc Main Approaches to Customer are the Energy Management headed by the Head of Energy Relations Management and Head of Back Office. indicators Customer focus is manifested also in the intention to consider Financial and performance At this stage, customer focus for PJSC Enel Russia consists the expectations and requests of customers and other Cyber Security Innovation Hub primarily in ensuring safe, uninterrupted and trouble-free stakeholders. In response to them, we explore new ways of The company has adopted the Open Innovation and operation of their electric power plants to meet the demand for engagement, develop new processes that meet the needs of In accordance with the requirements of Federal Law dated Sustainability approach. Enel Innovation Centre cooperates electrical power from consumers. In addition, it is manifested stakeholders. PJSC Enel Russia sees in the implementation 26.07.2017 No. 187-ФЗ “On Security of Critical Russian actively with all participants of the Russian Innovation in proper fulfillment of obligations by us to entities of electric of new solutions and digitalization of business processes a Federation Information Infrastructure”, PJSC Enel Russia Ecosystem, startups, small and medium enterprises, power industry, namely, in compliance with the rules of the potential for further development and improvement of the works actively to comply with the requirements of laws universities, corporations, accelerators, venture funds, Wholesale Electricity and Capacity Market (WECM). customer-oriented approach. on protection of critical information infrastructure (CII) and Sustainability technology parks, scientists, talented and creative people. It PJSC Enel Russia operates at the wholesale electricity and interaction with the state regulator. PJSC Enel Russia seeks to establish customer relationships offers experience and expertise, piloting sites and resources capacity market and interacts with electric power suppliers based on mutual respect showing competence and During 2019, the work was performed to design a security required for quick development of the best solutions. (generation companies) and electric power consumers professionalism and client-oriented approach. In all its system for CII facilities and develop documentation to ensure Enel Innovation Centre has existed in Russia since 2017. It is (utility organizations, large consumers of electric power, business practices, PJSC Enel Russia complies with the the required level of information protection. In accordance a part of the international network of Enel Innovation Centers guaranteeing suppliers) who received the status of wholesale Code of Ethics and the Zero Tolerance to Corruption Plan. with new documentation, the company defines new roles (Italy, Europe, Russia, Israel, Boston, Silicon Valley, Brazil, market entities, WECM infrastructure organizations and other Communication with customers must be transparent, and duties of participants of the process of operation and Chile) aimed at finding opportunities for cooperation with organizations. accurate and comprehensive, and comply with applicable maintenance of CII facilities. specialists in the best innovative ecosystems. The center is This is governed by the following public documents: laws. Governance
Implementation of the technical action plan will be carried located in the Skolkovo technopark and contributes to active Risk and Corporate > Federal Law No. 35-FZ dated 26.03.2003 On Power PJSC Enel Russia undertakes to always consider proposals and out during 2020–2021 and be authorized with plans for promotion of innovative technologies of the Russian startups Industry respond to complaints from consumers or their associations maintenance of main equipment. and small and medium enterprises in the electric power > Decree of the Government of the Russian Federation dated through an appropriate operational communication system industry of Russia, as well as the further export of the Russian In 2019, under the conditions of special attention to ensuring 27.12.2010 No. 1172 “On approval of the Rules of the (e.g. direct contacts, phone and e-mail). In customer innovations to the countries of presence of Enel. The Centre cyber security of systems, services and data, the projects were WECM and on introduction of amendments into some acts interactions, the company guarantees a high level of personal is engaged in the search for new technologies, assistance completed at the company for protection of web applications, of the Government of the Russian Federation regarding data security. The company timely informs about its activities in testing and implementation of technologies in business a project was performed for update of personal data segment, organization of the WECM functioning” by publishing information on its official website. The company processes both at the local level and at the Group level. The Annexes a new password lifecycle management software product was > The agreement on joining the trading system of the promptly informs the customers about any changes regarding Enel Innovation Centre brings together talented people, ideas, implemented, etc. In 2019, within the scope of monitoring wholesale market in accordance with the standard form the implementation of agreements by sending formal letters experience, technology and resources to create the energy of the Enel Global Compliance Program (see details in the posted on the official website of the Association NP Market in electronic form and by mail. of future. section “Anti-Corruption Policy and Business Ethics”), the Council. controls of IT-procedures were tested to prevent violations The Enel Innovation Centre looks for startups and small/ Responsible authorities during the process of interaction with such as cybercrime and copyright infringement. medium enterprises with high level of technology development the customers at the wholesale electricity and power market
25 It is a part of People and Organization.
110 Annual Report 2019 PJSC Enel Russia 111 Anti-Corruption Policy 103-1 103-2 205-1 The number of employees trained in 2019 is significantly About the Report 205-2 205-3 lower than in 2018. This is explained by the fact that in 2018 and Business Ethics we launched a mass repeated review of the anti-corruption policy for employees whose work experience at the company is more than 3 years. We decided to conduct the review once The company pays great attention to the issues of ethics in > conflicts of interest, including purchasing and sales every three years, for this reason, the figure for 2019 is lower. Code of Ethics Zero Tolerance relation to internal and external stakeholders. The Internal schemes and other conflicts of interest to Corruption Plan Regulation Audit Department controls compliance of the Code of Ethics, > bribery, including bid rigging and other nonfinancial benefits The Members of the Board of Directors of PJSC Enel Russia a basic document containing description of ethical standards > illegal gratuities are not employees, therefore information sessions in ethics and responsibility of employees. It is obligatory for review > economic extortion. and anti-corruption are not provided for them. However, once Company Overview and compliance by all employees of the company. The core a year, the Head of Internal Audit reports to the Board of Based on the results of annual risk assessment, an audit plan values are given in the Code of Ethics. Directors on the results of audits conducted during the year to for the next year is formed, and processes that require special comply with the requirements of the Enel Global Compliance PJSC Enel Russia rejects all forms of corruption and to the attention during continuous monitoring are determined. Program, the global program of Enel Group that includes satisfaction of legal requirements, as well as constructive compliance with all anti-corruption policies and methods. obligations, conducts active development and implementation Training and Informing Global Compliance Regulation of anti-corruption measures related to all business relations Program on corporate of Internal Audit criminal liability Department with external and internal stakeholders. The company has the following ways to inform employees indicators The requirement when carrying out activities to follow the about the basic principles of countering corruption: main documents is a prerequisite for all agreements with > mandatory introductory induction for all newly hired Financial and performance business partners of the company. Since 2019, the “Anti- employees. In 2019, 100% of newly hired employees Corruption Policy” has been added to the list of documents. went through this induction (101 pers., or 4.12% of the Anti-Corruption Policy is the basis for implementation and total number of employees) improvement of the company’s anti-corruption management > opportunity for repeated review of principles, using the Number of employees trained in anti-corruption principles system. The company’s internal audit department is corporate electronic document management system and e-Ducation corporate educational platform. In 2019, 405 2017 2018 2019 responsible for maintenance of internal control system to 898 824 identify corruption. employees (17.78% of the total number of employees)
reviewed the principles Sustainability Risk Assessment > a quarterly internal communication campaign to raise awareness of ethical business issues and channels for 462 Corruption risk assessment is conducted annually for all communication on ethical concerns company divisions. These risks are monitored by planning and > periodic informational meetings with employees of the 192 112 conducting internal audits. During the risk analysis process, Internal Audit Department that were attended in 2019 by 100 65 29 3 1 16 1 the following risk categories are evaluated: about 300 persons.
Workers Specialists Middle managers Top managers Governance Risk and Corporate
Our ethical values > Objectivity > Shareholders relations > Integrity > Transparency and completeness > Proper behavior in case of conflict of information of interests > Proper and fair conduct > Confidentiality > Quality of services and goods > Value of human resources > Fair competition
> Equal opportunities > Social responsibility Annexes > Personal immunity > Environmental protection > Attention and accuracy during > Correct and fair conduct in any performance of tasks and renegotiation of contracts fulfillment of contracts > Equitable exercise of authority
112 Annual Report 2019 PJSC Enel Russia 113 Communication Channels 102-17 Results for 2019 Our Employees 103-1 103-2 103-3 About the Report The company has established and is constantly operating In 2019, we implemented a large-scale project for improvement communication channels, through which any person, either of anti-corruption management. The company initiated the Approach to Employees Management, an employee or a representative of other stakeholders, can process of certification according to International Standard send complaints about violations or alleged violations of the ISO 37001:2016 “Antibribery management system”. An Anti- Development & Motivation Code of Ethics to the Internal Audit Group of Enel Russia. Corruption Committee was created consisting of the heads of Health, Safety, Environment and Quality, Internal Audit Human resources are the main and most valuable asset of the to the rate of remuneration in the industry and exceeding Department, Legal & Corporate and Security. company. We ensure equal conditions in employment for all, significantly the average values in the regions of the presence we are committed to attracting the most talented specialists of the company’s power plants (see Annex, the section We issued the Anti-Corruption Policy and Guidelines for Anti- Company Overview and motivating them to grow and develop in their personal “Social Indicators”). We comply with labor laws, principles of Corruption Management System. According to ISO 37001 and professional perspectives. corporate and professional ethics. standard, approximately 300 employees of the company An efficient personnel training system was built at Enel Responsibility for management, development and motivation were trained and information sessions for contractors and Russia, its main objective is the professional development of employees is on the Deputy General Director — Head of subsidiary companies were held. The company conducted of employees, increasing the level of their expertise, as well People and Organization. People and Organization includes internal audits at the power plants and at the headquarters. as further promotion at the company. We offer a competitive the following organization units: Based on the audit results, the ways were identified to In accordance with the Regulation on Internal Audit compensation package to our employees that is comparable improve the anti-corruption process and corrective actions indicators Department its employees are authorized to provide internal were planned. An external audit to obtain a certificate is ethical counseling services to the company’s employees as planned for 2020. Financial and performance well as carry out investigations into alleged violations of the Code of Ethics. All addresses are considered in due manner. Political Contributions 415-1 People and Organization structure The Internal Audit Department investigates possible violations, takes measures to ensure that reporting persons In accordance with cl. 3.26 of Chapter IV of the current Code are not subjected to any acts of retaliation, i.e. actions that of Ethics, PJSC Enel Russia does not finance political parties, may entail even suspicion of discrimination or punishment (in their candidates or representatives either in Russia or abroad, Head of People and Organization case of suppliers, e.g., termination of business relationships and also does not sponsor events or holidays held only for Sustainability or, in case of employees, impossibility of promotion, etc.). the purpose of political propaganda. PJSC Enel Russia refrains In addition, the person sending the appeal is guaranteed from exerting any direct or indirect pressure on politicians. Planning Change confidentiality unless otherwise required by law. People People People Business and Organization Management and Operations Development Partner Group Products Adoption During the reporting year, no complaints of any ethical violations were recorded. Governance Risk and Corporate
The main documents regulating management, development Anniversaries” establishes a system of rewards and Investigation of the cases of alleged violation of the Code of Ethics and motivation of employees are: incentives for the employees who made a great personal > Collective agreements of the company’s branches; contribution to development of the industry and the > Trade Union policy; company — to improving production efficiency, to > Regulation "On Types of Personnel Education and Training, mastering advanced technologies, resolving social and Annexes Performance as well as Responsibility for Their Arrangement"; economic development issues. Notification of investigation Preparation > Global Policy “On Diversity and Inclusion” establishes of the violation Identification of the report on One of our main principles underlying People and Organization of the Code of facts the investigation guidelines for equal opportunities, inclusion and non- of Ethics Informing stakeholders results is non-discrimination in any of its manifestations. All forms discrimination. We follow the principles of policy and plan and taking necessary measures of political, religious, national, ethical, racial, linguistic, to localize the policy in the near future; gender and age discrimination are prohibited, as are all > The provision “Rewards and Incentives to the Employees forms of discrimination in all procedures and practices: from of PJSC Enel Russia Associated with Holidays and recruiting to assessment and promotion procedures. All
114 Annual Report 2019 PJSC Enel Russia 115 Personnel Structure 102-8
Our key areas in human resources About the Report The number of personnel at the end of 2019 considering work at the headquarters of the company. Most of the Reftinskaya GRES amounted to 2,404 persons, excluding employees are employed under a permanent employment Reftinskaya GRES — 1,419 persons. Most of the personnel agreement (99%). Development of decent Involvement and Formation of favorable Promotion of diversity incentive and retention of talented are employees of Reftinskaya GRES (41%), 11% of employees internal climate and inclusion remuneration system employees
Rendering Personnel training Ensuring continuity Engaging employees Company Overview comprehensive and in relevant knowledge of talent management in corporate culture reliable social support and skills process Employees by power plants Employees by power plants (including Reftinskaya GRES) (without Reftinskaya GRES)
15% 26% our employees are considered exclusively in terms of their 16% 17%
18% indicators abilities and professional skills for all decisions that affect labor relationships. Financial and performance The objectives for the management and development of 28% personnel are set out in the Sustainability Plan (see details in 11% the section “Sustainability Plan for 2020–2022”). Code of Ethics Human Rights Policy To improve the management efficiency the employees of People and Organization participate in internal and external Konakovskaya GRES 41% information and training sessions, professional conferences Nevinnomysskaya GRES 28% Konakovskaya GRES Reftinskaya GRES Nevinnomysskaya GRES while acquiring additional skills and adopting the best practices. Sustainability Sredneuralskaya GRES Sredneuralskaya GRES The efficiency of People and Organization processes is also Headquarters Headquarters analyzed by internal audit.
Policy on Remuneration Employees by categories Employees by categories and Reimbursement of Expenses (including Reftinskaya GRES) (without Reftinskaya GRES) (Compensations) of the members of the Governance Executive Bodies and Other Key Managers Risk and Corporate of Public Joint Stock 1% Company Enel Russia 2% 45% 36% 17% 18% Annexes
Managers Managers Heads 44% Heads 36% Specialists Specialists Workers Workers
116 Annual Report 2019 PJSC Enel Russia 117 Turnover 401-1 Incentive and Remuneration 202-1 401-2 About the Report
The headcount of PJSC Enel Russia decreased by 3.7% in the in the section “Exit from Coal Generation”). The decrease in Building and constantly improving the incentive and and regions where the company's power plants operate. We reporting year. This is mainly due to the sale of Reftinskaya headcount is associated also with the transfer of employees remuneration system for our employees is one of the key pay a competitive salary that is indexed by changes in the GRES. We paid special attention to the management of of PJSC Enel Russia to work at our subsidiaries (see the areas in the field of People and Organization. The remuneration consumer price index (CPI) and perform an annual revision the issues related to the transfer of our employees to a section “Development of Renewable Energy Sources”). rate, as well as the proposed compensation package, remain of salary based on reviews of the remuneration rate in the company that will be the new owner of RGRES (see details among the most attractive ones for many years in the industry industry and general trends on the labor market. Company Overview Headcount dynamics, pers. Turnover dynamics
Ratio of the company average salary to the salary in the regions of presence
2,552 2,496 2,404 8.8% Konakovskaya GRES Nevinnomysskaya GRES 8.2% 8.5% indicators
Company Company
92.28 82.50 Financial and performance
2017 2018 2019 2017 2018 2019 Region* 2.84 Region* 2.67
32.53 30.86 Sustainability Involvement of People We Work with 401-1 Reftinskaya GRES Sredneuralskaya GRES
We understand the importance of the involvement of opportunities. The company guarantees that it avoids any type Company Company experienced and talented employees. When recruiting of discrimination at the selection stage. In 2019, 120 persons personnel, the company is guided by the principles of equal were hired including 23% women. 84.07 94.97
Region* 2.10 Region* 2.38 Governance 39.98 39.98 Risk and Corporate Newly hired employees by sex Newly hired employees by age
Headquarters 52% Average monthly salary, thousand rubles 23% Ratio to the average salary in the regions 40% Company of presence Annexes 229.92
* The data is given according to the report of the Federal 8% Region* 2.55 State Statistics Service "Average Monthly Nominal Accrued Salary of Employees by the Full Range of 90.09 Organizations by Subjects of the Russian Federation In 2013–2019". 78% Men Women Up to 30 years old 30–50 years old Over 50 years old
118 Annual Report 2019 PJSC Enel Russia 119 Over the past few years, the company has revised the The remuneration system is regulated by collective The Ratio of Women's Income to Men's Income 405-1 405-2 incentive and remuneration system. We aimed at making it as agreements and local regulations. Under the Code of Ethics, transparent as possible, consistent with the company policies we do not tolerate any form of discrimination based on age, About the Report Over the past few years, we pay special attention to the of remuneration, evaluation of performance and promotion and goals, as well as attractive for both current employees gender, sexual orientation, race, health, nationality, political analysis of the ratio of remuneration of women and men. of women. We are also committed to the development and and highly qualified experts on the labor market. opinion, religious belief, etc., including during determination Due to industrial specifics of the electric power industry promotion of the industry popularity among women studying of the size and composition of remuneration of employees of The remuneration rate is determined on the basis of job that requires often physical labor and night shifts, most at the educational institutions (see the section “Diversity and the company as well as benefits and social guarantees. evaluation (grading) system applicable at the company, employees are men. However, we do not tolerate any form Inclusion”). in accordance with the market data obtained as a result of of discrimination with respect to recruitment, determination reviews of the remuneration rates provided by consulting companies. Company Overview
Employee categories
System for remuneration of employees of Enel Russia
Managers Heads Specialists Workers
System for remuneration of employees indicators Fixed part of Enel Russia Gender breakdown of headcount by category for 2019 Financial and performance
18% 82% 18% 82% 39% 61% 19% 81% Variable part
Women Men Women Men Women Men Women Men
Bonus by the Bonus subject Bonus by the Additional Description of categories results of work to performance results of work bonuses for special Sustainability for a month for the year for 3 years achievements
The positions of managers in The positions of employees The positions that require The positions involved charge of the coordination of directly managing direct special knowledge, skills, directly in physical labor in assigned functions or executives for any activity work experience within the field of production functional management of (discipline) within the the scope of education or the employees within the approved organizational practical activities, company perimeter that are structure developing the options on referred to the list of the basis of information highly responsible positions they have for resolution of Level of salary of the employees of PJSC Enel Russia in 2019 in accordance with HAY individual functional issues of
Group methodology for job production or management Governance evaluation nature Indicator Value Risk and Corporate
The actual ratio of employees with a salary higher than the median to the number of employees with a salary lower than the median at PJSC Enel Russia 31% / 69% Examples Percentage of employees with the salary at the rate equal or below the minimum size of labor remuneration 0% > General Director > Deputy Director on > Specialist: chief / leading / > Senior Operator / Auxiliary Percentage of employees with the salary of above average in the territory > Deputy General Director Production — Chief Engineer by categories Operator > Head of lnternal Audit of the Power Plant > Commercial Dispatcher > Power Unit Operator of the Russian Federation (Rosstat, Federal Service for State Statistics) 71% Annexes > Head of Renewable Energy > Senior Manager / Group > Balancing Market > Boiler Operator Percentage of employees with the salary of above median > Heads of the first reporting Manager Technologist > Electrical Operator in the territory of the Russian Federation (Rosstat) 95% line of the Deputy General > Head of Department / > Discipline Inspector > Electric and gas welder Director, etc. Service / Group > Technician > Laboratory Assistant, > HR Manager, etc. > Foreman, etc. Chemical Analysis > Discipline Workman The salary inequality among employees of PJSC Enel Russia is average salary of 10% of the lowest-paid employees of PJSC > Driver, etc. 7 times, that is, the average salary of 10% of the highest-paid Enel Russia. Moreover, this indicator on average in Russia in employees of PJSC Enel Russia is 7 times higher than the various industries ranges from 7 to 29 according to Rosstat.
120 Annual Report 2019 PJSC Enel Russia 121 To calculate the ratio of women's income to men's income, of workers at the power plants (less than 0.79). This is due to we used the average annual remuneration of employees the shift schedule and degree of complexity and responsibility by category at each power plant and at the headquarters26. of the work performed. Moreover, the ratio of payment at Gender structure of personnel at managerial positions* About the Report The ratio equal to one means no difference between the managerial positions tends to one both at the power plants remuneration of men and women. The value of less than one and at the headquarters of the company (see the detailed 25% 22% means a downward deviation in the amount of remuneration graphical analysis of the ratio in dynamics and breakdown 18 20% 20 20 of women in relation to men. by power plants in the Annex “Numerical and Statistical Information”). The most significant downward deviation of women's income 5 in relation to men's income can be observed in the category 4 4 Company Overview 2017 2018 2019
* This category includes senior employees of the first line reporting to the General Director of the company. Diversity and Inclusion 102-8 405-1 Women, pers. Men, pers. Share of women at managerial positions The Diversity and Inclusion policy is an integral part of a The Group stands for diversity to rationalize, improve the life, successful socially responsible business. At the basis of the growth and development of the Group as a whole. Enel is fundamental values of Enel Russia lies respect for the diversity committed to the work-life balance and working conditions, indicators of cultures. The issues related to diversity and inclusion providing opportunities for both professional and personal Thus in 2019, we continued to implement the global Diversity for employees with disabilities, success stories of women management in all areas of the company activities are within growth. Enel is a company that employs many generations and Inclusion program that consists of a series of special managers, sharing experience between junior and senior Financial and performance the competence of employees of People and Organization. of people, committed to creating jobs where the age aspect events in key areas set out in the global policy. employees, and master classes for parents. In 2020, PJSC Deputy General Director — Head of People and Organization plays a key role in the exchange of knowledge and training. Enel Russia plans to ensure and promote diversity and equal The company has a practice of holding Diversity and is responsible for diversity and inclusion issues. Enel focuses on development and implementation of special opportunities through inclusion of women, young employees Inclusion Days that covers such important topics as support programs, which purpose is to create conditions where We are guided by the Diversity policy of Enel Group. According in succession plans. the employees are treated solely based on their abilities to Enel Group diversity means people from different countries, and professional skills in all decisions that affect working cultures, various professional experiences, different ages, relationships. Areas for support of diversity and inclusion gender, able to work anywhere in the world and to make a Sustainability contribution by having different points of view to ensure the best decisions and most efficient implementation of Gender > Enel Russia complies with the gender non-discrimination principle when determining the size of a salary innovations. > We support the international STEM program (Science, Technology, Engineering and Mathematics) > We hold meetings with pupils of secondary schools to promote technical and engineering professions among girls > We are committed to stereo rupture regarding gender > We hold information meetings with the participation of top management
Gender structure of personnel Age structure of personnel
> We develop a mentoring program, regular initiatives for exchanging experiences between employees Governance
Age Risk and Corporate of different generations > We involve young employees in development and training programs 27% 26% 26% 19% 19% 20% > Employees younger than 35 years old and over 50 years old are appointed to the internal trainers
> We consider it important to support a person’s individuality, as well as an atmosphere of respect for 72% 73% 72% Nationality 73% 74% 74% honor and dignity of the individual and culture > We deliver lectures and seminars on the history, development and characteristics of world civilizations and cultures
9% 8% 8% Annexes
2017 2018 2019 2017 2018 2019 > We create an inclusive work environment and aim at providing a comfortable environment Disability for employees with disabilities Men Women Up to 30 years old 30–50 years old Over 50 years old > We cooperate with inclusive centers > We hold information meetings for employees
> The employees can work remotely one day a week (excluding operating personnel) 26 The amount of annual remuneration consists of the following actually paid items in accordance with RAS reporting: salary, hardship-duty pay, payment of night and evening Work-life balance hours, payment for shift acceptance, overtime, payment for work on days-off and holidays, leave allowance, bonuses, financial assistance for a leave at the power plants, > Within the scope of “parenthood” program, we provide an additional possibility of remote work compensation for the vouchers to children summer camps. and flexible hours
122 Annual Report 2019 PJSC Enel Russia 123 Young Employees Training and Development of our Employees 404-1 404-2 About the Report
The development and training of personnel are aimed at by mentors, training at the workplace, amounted to half of We are committed to the development and implementation Number of interns by gender improving the level of professional and business competencies all training hours, namely 49%. Training and development of the smart, professional and creative potential of young and comprise an important part of People and Organization programs cover the entire staff of the company, the average employees. management. number of training hours per employee was 63.7 hours in To involve young professionals, the company provides an 2019 2019. (48.2 in the previous reporting period). The total number 121 50 The objective of personnel development is to create a qualified opportunity to undertake internships for the students of of hours amounted to 153,111.7. and creative pool for the development of new ideas necessary secondary specialized and higher educational institutions. for the implementation of the company’s strategy focused One of the most important priorities in the training of employees During the calendar year, more than 100 people undergo
on the introduction of innovations, application of digital for the coming period is training for digital knowledge and Company Overview internships at the company, including internships at the power 2018 92 35 technologies, prompt response to economic challenges, as technologies. By 2022, 100% of employees will receive at plants. Following the results of 2019, 171 people completed well as the development of individual employees' potentials. least one type of training in this area (see "Sustainability Plan internships at the company, including 50 girls (29.2%). The for 2020–2022"). Over the past 2 years, 55.3% of employees students who completed their internship successfully and We consider the development of internal training to be 2017 were trained on this topic at least once (this indicator was excelled can be considered as potential candidates for 113 39 a great achievement of the past year: training by company 28% in 2018). vacancies available at the company. management efforts, training by internal trainers, training
We aim to maintain the balanced gender composition of the Boys Girls energy industry. Therefore, we implement a career guidance indicators program for youth outreach. The objective of this program is to increase the motivation of girls to education and their Financial and performance Training disciplines (hours, %) further promotion in engineering occupations. The work on the program is carried out via a special digital platform where students are trained in four disciplines — STEM, Science, Technology, Engineering, and Mathematics. 0.1% Digitalization training 33.4% 0.5% 1.9% Human rights training Health & Safety training Sustainability Objectives of the youth policy in 2019 7.1% Technical training Language training Skills training 13.9% Development In 2019, we continued the implementation of “Your chance” training program for young employees Training for anti-corruption practices under the age of 35 years. 13 participants developed managerial communication skills while working Environmental training of talent pool 1.8% in the technical unit on the implementation of their qualification project. According to the results of the program that Other trainings was completed in July by the critical design review, the best participants are included in the list of 37.9% 3.5% successors for key management positions in the technical unit in the long term (five or more years). Governance Risk and Corporate
Promotion We actively attract young employees to participate in scientific and technological development, inventive activities and implementation of innovative projects. In 2019 young specialists of the of innovations company participated in the International Youth Energy Forum, as well as in Skolkovo Summer The company has a mentoring system applied to increase the Energy Camp. In the reporting year, two teams from our company took part in the League of Young Knowledge Management, Preservation expertise and competencies of employees. Mentoring is part Professional of the Case-In Engineering Championship within the scope of the youth day of the and Transfer of Experience Russian Energy Week. of our corporate culture. Mentoring is focused on specialists As before, the company pays great attention to the system and workers of power plants. Enel Russia implemented also E-Cross, the practice of cross-functional exchange. There are
of staff succession to preserve traditions, continuity of Annexes technologies, processes, corporate culture, retain the most several formats for cross-functional immersion: short and Our new tradition is to hold the Youth Day. In 2019, junior employees acted as experts and shared their Increase of the general informational meetings, interactive masterclasses level of engagement knowledge with senior colleagues. They told and demonstrated how to use various applications about talented and promising professionals. The system includes new technologies, travels, healthy nutrition, waste sorting, music, etc. for the subject-related immersion in the activities of a and incentive analysis of current staffing for key management positions, a compilation of individual short- and long-term plans for particular function. Also, we deliver internal internships that training and development. Simplifies management positions, allow studying the activity of related functions in real-time in the system provides the company with trained personnel and practice. helps to simplify the on-boarding process of employees.
124 Annual Report 2019 PJSC Enel Russia 125 Job Shadowing program became a new form of successor for improvement of the efficiency of business processes that training in the reporting year: training through observation. we try to take into account in every aspect of our business. Such a form of training implies that the successor becomes Sharing feedback is possible at PJSC Enel Russia, both About the Report The number of employees covered by the collective agreement a “shadow” of their mentor (manager) and observes their between the manager and employee, and between colleagues work for one week while learning new working tools, — regardless of hierarchy. The evaluation criteria are based on participating in all working meetings. During training, the four Open Power values: innovations, responsibility, trust and successor and their mentor exchange feedback on a regular proactivity (see details in the section “Mission and Values”). Headquarters Konakovskaya GRES Nevinnomysskaya GRES basis. Thus, the employee gets the opportunity to expand his Developing or positive feedback can be given at any time for or her professional horizons and expertise. During 2019, 11 a specific situation, when a particular behavior is manifested, 34% 77% 100% successors to key managerial positions (14%) participated in it is not pegged to a specific reporting period.
this program. Company Overview Feedback can be given on a special internal online resource or via phone application. In 2019 93%27 of employees received Open Feedback 404-3 feedback, as well as confirmed compliance with the corporate model of behavior (see details in the Annex, the section Open Feedback is the key component in development of “Social Indicators”). employees and the company. Providing structural feedback to others and helping employees to develop is a powerful tool 66% 23% indicators
Reftinskaya GRES Sredneuralskaya GRES Financial and performance Social Policy 102-41 83% 90%
Description and Approach generation power plants (KGRES, NGRES, SUGRES) and the to Social Policy headquarters and 2020 for Reftinskaya GRES. % of members of trade union % of non-members of trade union The decision was reached as a result of the discussion of Defining implementation of the principle of alignment of
detailed analysis of the current system of remuneration and Sustainability interests of employees and the employer as the strategic labor markets, comparison of the average salary at PJSC direction of social partnership development, the company Enel Russia and other enterprises of the energy industry in 17% 10% leverages the opportunities of social partnership when the regions of presence. making decisions on issues of regulation of social and labor relations. Primary trade union organizations of all five The collective agreements of PJSC Enel Russia are among branches of the company are the members of the All-Russian the best in the industry and provide a high level of salary, as Electric Trade Union (ARETU), a public organization uniting well as a comprehensive package of benefits, guarantees
about 90% of the company's employees, are the company's and compensations, as well as guarantee a further increase Governance partner. Collective agreements of power plants based on the of salary. The collective agreements apply to the employees. Risk and Corporate long-term practice of effective social partnership have been recognized as the best among branch and regional trade Well-being 401-2 402-1 initiatives are aimed at improving the quality of life of The company’s insurance policy provides 100% coverage, unions for several years. of Our Employees 401-3 employees. which allows applying the same insurance conditions not only to employees in the company’s staff but also to employees Social Partnership The company pays great attention to the well-being of its Existing Mandatory and Voluntary Social provided under outstaffing contracts (outstaffers). employees. We aim at helping our employees in maintaining Programs Annexes The year 2019 was marked by collective bargaining to sign work-life balance and reducing stress. We create a Since the level of safety and security of our employees is of collective agreements of company power plants for a new comfortable working environment, provide quality medical The company has created favorable conditions for keeping particular importance to us, we have expanded the existing term. As a result, a decision was made to extend the terms insurance, provide additional guarantees and benefits that and improving the health of employees, and the current insurance system since June 2019 to include a cancer risk of existing collective agreements for 2020–2021 for gas ensure high social security of our employees, all these insurance system is among the best in the industry. insurance program.
27 The process does not involve employees on maternity leave, parental leave, employees on long-term sick leave, or employees who have worked for less than three months during the campaign period.
126 Annual Report 2019 PJSC Enel Russia 127 above the statutory standards for maternity benefits. Also, Every year the company holds a general corporate sports we hold annually the family celebrations the employees' tournament that is very popular among employees. Thus, Employees insurance system children are invited to. over 40 applications for participation in the tournament were About the Report submitted in 2019. The event was held in the form of a The company has a program of non-state pension coverage fitness festival: race with an obstacle course. for employees, aimed at developing corporate culture and motivating employees, retaining qualified specialists and In the reporting year, we launched Enel Runs Round-the- Life and health It allows an employee or a member of their family to receive insurance attracting employees in scarce specialties. The right to World virtual team race about the countries of Enel Group’s insurance policy compensation upon occurrence of an insured event* receive a non-state corporate pension is received by those presence. The teams of employees were registered in employees who, at the time of the onset of pension bases, a special mobile application, where they recorded the have been working in the company for more than 10 years. distances covered. The progress is made up of all kilometers those team members covered. According to the recent Company Overview When establishing the variable working hours, the company’s reports, the team covered a distance equal to that from employees are provided with additional paid leave under the Moscow to Argentina, following through Europe, Canada, It allows the employees to promptly receive qualified medical assistance in Labor Code of the Russian Federation. The number of days Voluntary medical the most popular and sought-after medical institutions in the region where the and North America. insurance policy employee lives. of leave varies depending on the position but is not less than This policy covers: outpatient care, doctor home visit, planned and emergency the statutory standard. Since autumn 2019, the employees have been participating hospitalization, dental care in the Enel Group international cycling project “Enel Running and Cycling Challenge” (Enel Cycling and Running Promotion 403-6
of Healthy Lifestyle Competition). As in the Enel Runs Round-the-World project, indicators employees tracked cycle rides and running distance in a
Annual free field vaccination against FLU. Vaccination against tick-borne Within the scope of improvement of inclusion rate and mobile application: the longer the cycle ride or running Financial and performance Vaccination encephalitis to employees working in the regions that are endemic to tick-borne corporate climate level at Enel Russia, we put the focus on distance, the smaller the environmental footprint of the viral encephalitis, whose nature of work contains the risks of a tick bite the development of health and sports culture as well as the contestant is. promotion of healthy lifestyles. That is also an integral part of In the reporting year, the number of employees regularly the overall corporate culture of responsible companies that participating in marathon races and sports festivals increased care for their employees including PJSC Enel Russia too. The significantly by 44% and 47%, respectively. programs are implemented in close cooperation with People and Organization, Health, Safety, Environment and Quality, Insurance policy Provided for the entire insurance period. The employees can use it both Sustainability for those traveling and Sustainability teams. on business trips and during personal trips ees s t e m f o r in u an ce ou p loy abroad Sy
The insurance program covers the treatment of all types of cancer using all Initiatives for promotions of healthy lifestyles Oncology risk available types of treatment in the best-specialized clinics in Russia (surgery, insurance policy radiation therapy, chemo, immune, hormone therapy, including coverage of the
cost of expensive medicines). This insurance program includes organization Governance Since 2019
and cost of the flight to the place of treatment and accommodation of the sick Risk and Corporate employee and accompanying person Informing about importance Organization Assistance to participation of healthy lifestyles of sports events in external sports events
* The insured event is a primary diagnosing of critical illness in the employee (life-threatening illness), injury or disability as well as fatal accident due to industrial incident. > Regular information campaigns > Regular sports for employees > Running and cycling marathons > Thematic lectures on health and disease > Fitness сlub compensation > Sports and athletic contests of workers' prevention > Enel Runs Running Club associations Annexes > Annual corporate tournament > Industry-based tournaments
In the event of temporary disability of an employee related to All employees of our company have the right to parental leave illness, the company assumes the cost of additional financial in accordance with the laws of the Russian Federation. The support for the employee above the standards established company attaches great importance to family values and by law to minimize employee’s possible losses related to a provides substantial financial support to employees whose temporary suspension of work activities in this period. child was born or adopted. We make additional payment
128 Annual Report 2019 PJSC Enel Russia 129 Engaging Local Communities 103-1 103-2 103-3 Created Shared Value About the Report
We integrated social and environmental factors into all In 2017, the company localized procedure No. 211 “CSV business processes and apply the Creating Shared Value Process Definition and Management", thereby formalizing Management Approach (CSV) model. the obligation to implement the CSV model at both the cultural and managerial levels. The model is applied across The CSV model underlays the company's sustainability the entire value chain including business development, practices. This is an important aspect of business that We rely on the local communities we work in and recognize environmental problems, by combining efforts, developing engineering and construction as well as operation and encourages applying innovative approaches and searching responsibility for their well-being. We build long-term and new projects that contribute to the creation of shared value. maintenance. for opportunities for creating shared value for the company
comprehensive relationships with them, show our support and Company Overview PJSC Enel Russia spreads among the local communities a and its stakeholders. Thus, we can effectively combine According to the local procedure “Creating Shared Value (CSV) contribute to their social and economic development. commitment to well-being that is based on a healthy lifestyle, increased competitiveness with improved quality of life of Process Definition and Management”, the Sustainability Constant dialogue, engaging small and medium-sized development and education, environmental education, the local communities. CSV helps us to integrate the needs of team guarantees early involvement of the community through businesses, NGOs and other local organizations allows us culture of energy-saving and rational consumption. Together the local community and business objectives, to focus on special involvement initiatives (complaints mechanisms, to create projects that promote the social and economic with our partners from the public and non-profit sectors, we solving primary problems of the local community for the public hearings, formal consultations, negotiations). development of the regions of our presence. We aim at initiating form the basis for an affordable, safe, environmentally friendly benefit of all parties involved. changes, looking for new opportunities in solving social and urban environment. indicators Tasks in the development of local communities Financial and performance Identification of key factors relating to the social, economic and environmental aspects Context analysis We set the following objectives in the field of the local communities’ development: for the communities Mapping and weighting of the main stakeholders and recording their needs Identification of stakeholders (see the section “Stakeholder Engagement")
Analysis of priorities and potential Identification of priority issues for stakeholders and for the company. Identification Transparent Development of the Control of risks/ opportunities of potential risks and opportunities Maintenance Continuous social informing about projects aimed at social projects' of on-going open and environmental company activities creating shared value implementation and Definition of an action plan for the creation of shared value (CSV) dialogue impact assessment Definition of the CSV plan and plans under UN SDGs evaluation of their in line with the priority issues which emerged and the priority analyses efficiency Sustainability Implementation of actions defined in the CSV plan. If necessary, with collaboration Execution of the CSV plan of strategic partners
Monitoring, evaluation and reporting Monitoring of the process, measuring of the impacts and reporting of the key indicators
The following documents regulate the company’s activities were fulfilled in the reporting year by the Deputy General Process of the CSV principle application for the development and involvement of local communities: Director — Head of People and Organization, Chairman of Governance the Board of Directors of PJSC Enel Russia. Engineering Operation > Operating instruction "On charitable assistance and Business development Risk and Corporate and construction and maintenance implementation of social events" At the operational level, the Sustainability team is responsible
> Operating instruction "Interaction with educational for engaging the local communities, implementation and 1. Projects’ selection and preparation 1. Design 1. Implementation of the CSV plan institutions" evaluation of programs and projects, with support of regional > Preliminary analysis of the social, > Approval of the CSV plan 2. Implementation of the program of environmental and economic context of > Activation of sustainable solutions in the > Procedure “Creating Shared Value (CSV) Process Definition representatives for engaging with government authorities. social support and development of the the territory supply chain local communities and Management”. The key performance indicators of the Sustainability team > Risk and opportunity assessment 2. Preparation and construction 3. Application of circular economy > Identification of stakeholders employees include the indicators related to the implementation > Information panel for the construction site solutions Since 2019, the Strategy Committee has been operating at > Preparation of the stakeholder > Implementation of the CSV plan and evaluation of social projects. engagement plan 4. Stakeholder engagement Annexes the Board of Directors that among other things contributes to 3. Sustainable construction site > Preparation of the materiality matrix 5. Community impact management, > Managing the impact on our people formation of a strategic vision on ESG issues, including social > Identification of the potential for CSV monitoring and reporting (company employees, representatives > Preparation of the draft CSV Plan aspects (engaging the local communities). of contractors) and the local communities > Waste and resource management The Head of Sustainability is responsible for the implementation of the strategy, approval and control of the Return to the Previous stage in case of implementation of programs and initiatives, whose functions Investment Committee Handover to implementation of modernization Review Engineering and Construction and technical refurbishment projects
130 Annual Report 2019 PJSC Enel Russia 131 Circular Economy
Social investments* About the Report
We implement circular economy principles. They are aimed In 2019, we continued the project on the transfer of used IT at closing the cycle of using resources by the introduction equipment and furniture to educational and social institutions. How do contribute Where of measures that cover the entire life cycle of products The key feature of this year is that we have expanded and materials, from consumption to waste management the participation of business functions in the search for 20.54% and their reuse as secondary raw materials. The main alternative solutions for conventional disposal. Thus, in the 0.07% 1.35% challenge that the company plans to meet in the coming reporting year, with the support of the Environmental Safety 20.66% years is to reduce the consumption of disposable plastic Group of Konakovskaya GRES, we studied the ways for reuse 0.05%
for administrative and industrial needs (see the section of decommissioned personal protection equipment (overalls Company Overview “Resource Use”) through the implementation of the best and protective plastic helmets) and small wood waste. practices and most importantly through the formation of responsible consumption culture among employees and 7.16% contractors. Besides we plan to provide ways for reuse or disposal of materials already during their purchase.
96.05% 50.11% Moscow indicators Monetary investments Murmansk region Evaluation of the Company Impact 102-29 203-2 Time investments Stavropol region ln-kind giving Tver region Financial and performance on the Local Communities 413-1 413-2 Management costs Sverdlovsk region
The activity of Enel Russia as an employer, consumer of local the sanitary protection zone of Konakovskaya GRES and What is our motivation What do we support products and services, as well as a taxpayer in the respective Sredneuralskaya GRES, no excesses were recorded regions, supports local economic development. Enel Russia either. In addition, we reduce emissions of pollutants and increases directly and indirectly the standard of living of greenhouse gases into the atmosphere (see the section 0.08% 13.97% the population while creating added value. The business “Control of Air and Water Quality”). In 2019, we performed Sustainability 28.00% 1.48% principles of Enel Russia apply to all power plants throughout technical refurbishment of one power unit of Reftinskaya 14.18% Russia. The company provides regular remuneration of labor GRES by replacing the old electrostatic precipitators with 14.68% for its employees and offers a compensation package, its more modern and efficient ones. This allowed reducing level remains one of the most attractive in the industry and emissions of solid fuel ash in the reporting period in general 3.92% regions of presence. Enel Russia makes regular tax payments for Reftinskaya GRES by 14%. 1.00% in full. The indirect impact of our business is a contribution to Enel Russia implemented programs for engaging the local 0.07% the economic development of suppliers and contractors of communities in all territories of the company’s presence. the company (see details in the section “Sustainable Supply Governance
We do not focus on individual projects but are committed 18.38% Risk and Corporate Chain”). to improving the well-being of the local communities where 85.74% Our activities have an environmental impact in the we operate. In 2019, 49 projects were implemented that regions of presence. We aim at minimizing the negative covered almost 50 thousand beneficiaries within the scope Charitable donations Education Social support environmental impact as well as developing voluntary of the program of “Social Support and Development of Local Commercial initiatives with Culture Energy Efficiency social impact environmental initiatives of the company. The company Communities”. However, we are not confined to this program Entrepreneurship Sports Infrastructural community Healthcare Volunteering investments conducts continuous monitoring and reduces the existing and implement many other targeted projects and initiatives to Environment Open Power*
noise load by installing new noise-absorbing equipment engage the local communities including volunteer initiatives, Annexes at the power units. In 2019, the silencers were installed in-kind giving of equipment and materials, and others. The at Nevinnomysskaya GRES on the main safety valves on types of social investments are shown on the chart as a * The data were analyzed using the London Benchmarking Group (LBG) methodology. The charitable purposes mean one-time support in response to the needs of stakeholders or response to external events. London Benchmarking Group (LBG) considers them to be traditional charity but we mean by this category the steam gas boilers No. 4,5 (ТГМ-96). No excess noise levels percentage of the costs for all projects for engaging the program “Social Support and Development of Local Communities” and other initiatives for engaging the local communities. See details on our approach in the were recorded at the boundary of the sanitary protection local communities. Total amount of all the types of social section “Creating Shared Value”. By infrastructure social investments we mean long-term strategic participation and partnership for solving social challenges in the territory of presence. In future reporting periods, we aim at increasing the share of such projects. The social initiatives for brand promotion comprise social zone of Nevinnomysskaya GRES. At the boundaries of investments is more than 55 RUB million. events related to strengthening of the company's reputation as a reliable community partner. By “Open Power” we mean dissemination of knowledge about electric power generation and energy efficiency (see details in the section “Mission and Values”).
132 Annual Report 2019 PJSC Enel Russia 133 Program of Social Support and Development The program of “Social Support and Development of Local and directions of assistance. Also, the content of the program Communities” is the main tool for the social and economic is related to the UN Sustainable Development Goals. We of Local Communities development of the regions of the presence and involvement prioritize and identify the relevant SDGs following the About the Report of the local communities. Sustainability Plan. Preference is given to integrated and long-term cooperation and projects with potential for the The program of “Social Support and Development of development of urban ecosystems. Local Communities” is formed concerning the needs and stakeholders’ priorities as well as the company's plans for the The Energetik, corporate charity fund, that acts as a legal The process of the program implementation reporting period. The social investments are planned through intermediary between the company and social partners is dialogue and close cooperation with local administrations, responsible for the direct implementation of the program. which ensures a better understanding of the social and The analysis of project performance comprises an important economic context of the regions and develops efficient and Company Overview stage in the implementation of the program. To do this, we relevant joint projects, encouraging the development of the 1 2 3 use a special IT platform, which is common to all Enel Group local communities and creating sustainable long-term shared companies. We evaluate each completed project according to 7 Formation or update Collection and Program 4 value through a combination of efforts. of the approach for analysis of requests formation the following criteria: the reporting period Performance Approval Operating Instruction “On Charity and Social Activities” evaluation of the program 6 5 by the Board determines the principles for the formation of the program of Directors Collection of reporting documents Implementation and preparation of reports
of programs indicators Criteria for the evaluation of projects Financial and performance
Potential and actual Potential and actual Project budget Deadlines benefits for the The main directions of projects benefits for the company stakeholders
> Purchase of medical and sports equipment Number of direct Health Involved stakeholders Contribution to SDG Expected results > Refurbishment of sports infrastructure beneficiaries Sustainability
> Repair and purchase of equipment for educational For the selected projects, we use the procedure for evaluation The evaluation results are taken into account when planning Education institutions > Scholarships to the best students and teachers of the economic efficiency of social investments developed the activities on social support and development of local by Enel Group. Based on the evaluation, we can analyze the communities for the next reporting period. projects from an economic perspective within the medium- term. We calculate the total created value for the company Governance > Replacement of lighting equipment in social institutions Risk and Corporate Energy efficiency to improve energy efficiency and compliance with and local communities in monetary terms. Moreover, we international standards consider several additional factors affecting the project performance: equipment life, depreciation, administrative expenses and alternative costs, inflation, etc. In the future, we intend to expand the use of this calculation. > Promoting the inclusion of people with disabilities Economic inclusion in the workplace The final stage of the program implementation is a
documentary audit of our partners. We collect and analyze Annexes the reporting documents to ensure transparency, validity and reliability of the program results. Development of cities > Implementation of infrastructure projects in the territories and settlements of the company’s presence A regular evaluation of the program efficiency allows us to The full version monitor its compliance with the company's strategy, measure of the program its contribution to the social and economic development of for 2019 the regions and, if necessary, adjust the approach promptly.
134 Annual Report 2019 PJSC Enel Russia 135 Selected Social Projects 102-12 About the Report
Open Plant local school. The employees of Reftinskaya GRES helped Regions of presence of company power plants “So Different as We Are” again to our long-standing partner, the Integrated Social and wind generation facilities under construction Service Centre of the Reftinsky urban district. The Centre “Open Plant” is a project of Enel Group that has existed provides a wide range of social services to the population in Russia since 2008. Every summer Enel Russia power including rehabilitation of disabled people, assistance to Murmansk Region plants, Sredneuralskaya, Konakovskaya, Nevinnomysskaya poor people, psychological and pedagogical counseling, and Kolsky District and Reftinskaya GRES, are open for everyone for one day. abode. The employees of Sredneuralskaya GRES decided 40.5 ths pers. The visitors of “Open Plant” can visit educational and to help the oncology department of the Children's Regional Company Overview Kolskaya WPP entertainment events, tours about the power plant including Clinical Hospital, the power plant volunteers have been production shops and a museum, get familiar with the history visiting for a long time. Over 80 people participated in the 201 MW of the plant construction and learn how electric power and campaign in total. Under construction heat power appears. This year the topic of the event was diversity and inclusion. The motto “So Different as We Charity Fair Tver Region Konakovo Are” combines such important things as respect and love to ourselves and our family, our history and traditions as well as On New Year’s Eve, we have been organizing a charity fair 38.5 ths pers. indicators the whole multifaceted world. In 2019, the Open Plant event for five consecutive years in the Pavlovsky business center, Konakovskaya GRES Financial and performance was visited by more than twelve thousand people. where our headquarters is located. We invite our social 2,520 MW partners from Konakovo, Moscow and Ekaterinburg to 372 employees “Energy Workers Help Children!” participate in the fair. In 2019, Novaya Korcheva Children's Sverdlovsk Region and Youth Centre, Konakovo District Branch of the All- Reftinsky settlement Traditionally, on the occasion of the International Children's Russian Society of Disabled People, Aistenok interregional Rostov Region Day, celebrated on June 1, we hold a volunteer campaign to non-governmental organization as well as Krug creative Azovsky region 15.8 ths pers. collect clothes and funds “Energy Workers Help Children!”. association that joined our initiative for the first time, 97.0 ths pers. Reftinskaya GRES* Sustainability This year, Konakovskaya GRES was focused on both the participated in the fair. The goal of the event is to provide 3,800 MW general program for support and development of the territory social partners with a platform to sell their products and Azovskaya WPP 983 employees and in this project on the villages and rural settlements of receive additional income, and to provide the company 90 MW Konakovo district, therefore the power plant employees employees, residents and guests of the business center Under construction rendered support to a pre-primary training group of Pervogo with the opportunity to purchase unique products and New Maya settlement. There is no separate kindergarten in this Year's gifts for themselves, their friends and relatives. village, and children attend a specially formed group at the Stavropol Territory Sverdlovsk Region Kochubeevsky region Sredneuralsk Stavropol Territory Governance 75.5 ths pers. Nevinnomyssk 23.6 ths pers. Risk and Corporate 116.8 ths pers. Sredneuralskaya GRES Contribution to the Development of the Regions of Presence Rodnikovskaya WPP 71 MW Nevinnomysskaya GRES 1,578.5 MW Under design 1,530.2 MW 389 employees As a large employer, we have a direct impact on the economic institutions in the territory of Konakovo town and Konakovo 389 employees and social development of the regions where we operate. district. Annexes Tver Region Enel Russia has operated the power plant since 2007. During this time, establishment of strong partnerships was possible Power plants with the local administration, educational and healthcare One of the largest thermal power plants in the Central part Wind Farm institutions of the town. For example, the company has (construction in progress) of Russia — Konakovskaya GRES — is located in the Tver cooperated for more than 8 years with Konakovo Energy Region, in Konakovo town, where about 38.5 thousand * In 2019, a sales transaction was completed for the property comprising Reftinskaya GRES. College (a branch of the Moscow Power Engineering See details in the section “Exit from Coal Generation”. people live. There are 27 pre-primary, 31 general education Institute in the town of Konakovo). and 7 institutions of additional education and 2 medical
136 Annual Report 2019 PJSC Enel Russia 137 We implemented 20 projects in total in 2019 in the Tver healthy lifestyles and inclusion of people with disabilities in Stavropol Territory 18 general educational institutions, 7 additional education region. They were intended to improvement of the quality and the economic activity. The projects covered more than 19 establishments. There are 11 medical institutions in the About the Report efficiency of educational and medical services, promotion of thousand direct beneficiaries. Nevinnomysskaya GRES, a federal power plant located in territory of the urban district of the town of Nevinnomyssk. Nevinnomyssk, Stavropol Territory, North Caucasian Federal We completed 10 projects in various areas during the reporting District, has been a power plant of Enel Russia for 13 years. period including participation in the reconstruction of sports More than 116.8 thousand people live in Nevinnomyssk. facilities for children and mass sports and the purchase of Projects implemented in the Tver region The system of pre-primary, general and additional education medical equipment for healthcare institutions. About 1.7 of the town is represented by more than 50 educational thousand people became beneficiaries of the projects in the
Health SDG 3 2 projects institutions, including 32 pre-primary educational institutions, Stavropol Territory. Company Overview
Education SDG 4 13 projects
Energy efficiency SDG 7 2 projects Projects implemented on the Stavropol Territory
Economic inclusion SDG 8 1 project
Health SDG 3 5 projects
Development of cities indicators SDG 11 2 projects and settlements
Education SDG 4 3 projects Financial and performance
Development of cities SDG 11 2 projects and settlements Selected project of the Tver region in 2019
Equipment of the playground in the school, Yuryevo-Devichye village The company equipped a full-scale street sports facility with exercise equipment, volleyball court, and acquired sports equipment for table tennis in the only school of Yuryevo-Devichye village. Selected project of the Stavropol Territory in 2019 Sustainability
3D interactive simulator for Nevinnomyssk Energy College, Nevinnomyssk We purchased a virtual interactive 3D simulator “Virtual 110kV substation model” for our long-standing social partner to deliver visual, safe and effective skills training on 110kV open switchgear. Governance Risk and Corporate
Sverdlovsk Region of Reftinskaya GRES, where the power plant personnel live as well) comprises 56 pre-primary educational institutions, There are two power plants in the Sverdlovsk region near 28 general educational institutions and 11 additional Ekaterinburg: Sredneuralskaya GRES and Reftinskaya education establishments. There are more than 5 medical GRES (the property of Reftinskaya GRES was transferred institutions operating in the territory.
to Kuzbassenergo OJSC in October 2019, see details Annexes The company cooperates actively with the Government in the section “Exit from Coal Generation”). The power of the Sverdlovsk Region and administrations of urban plants generate more than half of the total electric power districts. 12 projects were completed as part of the program in the power system of the Sverdlovsk region. More than for social support and development of local communities in 38 thousand people live in the cities where our production the Sverdlovsk region. The projects covered more than 29 facilities are located. The system of pre-primary, general thousand people. and additional education of the town of Sredneuralsk, urban settlements of Reftinsky and Asbest (located in close vicinity
138 Annual Report 2019 PJSC Enel Russia 139 Human Rights 103-1 103-2 103-3
Projects implemented in the Sverdlovsk region About the Report
We recognize our responsibility for respecting human Health SDG 3 3 projects rights in all aspects of our work. One of the most important challenges for the company is to keep pace with a constantly Education SDG 4 4 projects changing world marked by profound social, economic, and cultural gaps and differences. Energy efficiency SDG 7 1 project The Deputy General Director — Head of People and Human Rights
Policy Company Overview Organizational, Head of Internal Audit and Head of Sustainability Development of cities SDG 11 4 projects and settlements is responsible for managing the human rights issues (see details in the section “Sustainability Management”).
The company’s corporate practices are based on recognized international standards in human rights, such as: Selected projects in the Sverdlovsk Region in 2019 > The Universal Declaration of Human Rights and International Covenant on Civil and Political Rights; Arrangement of the stadium of Municipal State-Owned Educational Institution General
> International Covenant on Economic, Social and Cultural indicators Secondary School No. 31, Sredneuralsk Rights Based on the school, we created a state-of-the-art sports facility with athletics tracks and exercise machines
> Main conventions of International Labor Organization Enel Group implemented the Human Rights Policy to Financial and performance for the best sports results and development of mass amateur sports as well as to engage children in sports (ILO) including conventions on the rights of indigenous integrate the UN-proposed Guiding Principles on Business and active lifestyle. and other tribal and semi-tribal populations in independent and Human Rights into the company procedures. Since Enel countries Russia shares the belief that respect for human rights is an Lighting of city skiing run, Reftinsky settlement > Declaration on fundamental principles and rights at the integral part of the sustainable business, we have localized We installed powerful lighting fixtures that allow achieving full illumination of the downslopes and ascents on work place this policy. On September 25, 2013, the fundamental the skiing run in the Reftinsky settlement for safer skiing for pupils of the Olimp Children's and Youth Sports > The United Nations Convention on the Rights of the Child document in human rights was approved by the Board of School in the dark. > The European Convention on Human Rights. Directors of PJSC Enel Russia. Sustainability Enel Russia takes into account the fundamental principles of The policy sets out the basic principles of the company in international and European agreements in the field of human the field of human rights and approaches to addressing this rights. topic. New Regions of the region. In 2019, we supported two city festivals: the Russian national festival of energy efficiency “Together The company strives for establishing strong and reliable Brighter” in Murmansk and Teriberka Fifth Arctic Festival Our human rights principles partnerships with stakeholders in the Azov district (Rostov (former name — “Teriberka. New Life”). We do not tolerate forced or involuntary labour Governance region) and the Kola district (Murmansk region). We assume We strongly oppose the use of child labour Risk and Corporate As of the end of the reporting period, we implemented a HR management effective cooperation with local authorities, local NGOs and and occupational health We shall respect cultural diversity and avoid discrimination in any form project for transfer computer equipment to the administration social institutions of the regions where Enel Russia develops We recognize the right of our employees to form and participate in organizations aimed at protecting of Murmansk region (Tumanniy Settlement). renewable energy projects. and supporting their interests, and do not affect their decisions In 2019, as a result of the tender procedure, the company We comply unconditionally with health and safety requirements In 2019, the program of “Social Support and Development obtained the right to build Rodnikovsky WPP in Stavropol We provide fair and favorable working conditions of Local Communities” was authorized with the Heads of Territory. At the stage of business development, a fundamental We take measures to protect physical and moral integrity of employees and guarantee Kugey, Margaritovo and Aleksandrovo rural settlements of them the right to the working conditions that protect the dignity of individual Annexes social, environmental and economic context analysis was Azov district that to be implemented in 2020. In the next We respect the rights of the local population, including indigenous and small peoples carried out for this territory and a preliminary CSV plan was reporting period, we plan to arrange comfortable and green We do not tolerate corruption in any form defined. We look forward to expanding effective cooperation Interaction with public spaces for the local community. local community with social partners of Stavropol Territory, where the We respect the confidentiality and privacy rights of our stakeholders and adhere to the principles of proper use of information and data provided by them In 2019, the program of “Social support and development of company implemented already many projects for support We recognize the human right to education and promote development of educational institutions local communities” was also developed for the Kola district of the local community in Nevinnomyssk, the territory of in the regions of our presence of the Murmansk region. It will focus on the partnership for Nevinnomysskaya GRES. the benefits of education and enhancement of tourism appeal
140 Annual Report 2019 PJSC Enel Russia 141 412-2 Sustainable Supply Chain 102-9 102-10 103-1 103-2 We distributed information about the importance of respecting training is required for all new employees of the company. 103-3 308-1 308-2 About the Report human rights, and we develop and promote a high level of 482 employees (or 20% of the total headcount) were legal culture and ethics among our employees. Human rights trained for the reporting period, which is 159.1 hours.
The supply chain management system of Enel Russia aims We are focused on transparency of procurement activities, to maintain a balance between the savings resulting from ensuring fair competition, fair partnership, compliance with the tendering process and guaranteed reliable level of work relevant standards and requirements for health, safety, Number of training hours on human rights quality of our selected suppliers. environment and quality by all parties. We arrange the work 2018 2019 with potential contractors by the principles of trust, openness Company Overview Our goal is to create sustainable value through reliable supply 84.8 and involvement, and support communication channels that chains. Improvement of the efficiency of work with suppliers provide continuous two-way communication. through their involvement in the procurement process as 54.1 the need arises, development of joint innovative solutions, 46.5 39.6 effective cooperation, and long-term partnerships are our 34 fundamental objectives. 21.1 23.8 15.5 15.2 7.51 indicators
KGRES NGRES RGRES SUGRES Headquarters Management Approach Financial and performance
Share of the employees in the total headcount trained on human rights
2018 2019 Structure of procurement process management
61.48% Sustainability 37.9% 30.2% Head of Procurement 28.24% 15.53% 16.13% 11.84% 10.5% 11.7% 9.13% Procurement Department
KGRES NGRES RGRES SUGRES Headquarters
Operational Support, Procurement Procurement Development Procurement of Governance of Operation of Engineering and Management Supporting and Service Risk and Corporate and Maintenance and Construction of Suppliers Functions We expect all business partners to respect human rights and The Internal Audit Department is responsible for conducting be open to cooperation and joint initiatives in this area. a relevant investigation of the cases of human rights violations while guaranteeing protection against any type The company has several communication channels (including of discrimination and confidentiality of the applicant unless anonymous ones), through them any stakeholder can apply otherwise provided by law. with information about alleged human rights violations. Enel Group performs the regular assessment of adherence The Procurement Department seeks to maximize the creation > The Procurement policy with the roles, duties and methods Annexes to human rights in the countries of presence including of business value in various forms: quality, punctuality, for management of the procurement of materials, works Russia. The assessment allows for identifying potential risks safety, capacity, risk reduction. For that purpose, we expand and services defined in it. This policy is applied in order to in respecting the human rights. Based on the assessment constantly the professional competencies of procurement ensure the transparency of procurement activities as well results, an action plan is developed for the mitigation of specialists and apply new process designs. as to achieve economically justified procurement costs risks and improvement of managerial approaches. The > The procedure “Vendor Rating” that defines the roles, performance of the assessment is planned for the next The following main internal documents regulate procurement responsibilities and criteria for Vendor Rating process in reporting period. A previous similar assessment was carried activities: out in 2017.
142 Annual Report 2019 PJSC Enel Russia 143 order to apply a uniform methodology within evaluation > The procedure “Delegated Procurement” that defines Support for Local Suppliers 204-1 of the supplier’ activities when Enel Group takes the roles and responsibilities of all organization units the required recovery measures and encourages the of the company involved in the process of delegated About the Report improvement of suppliers procurement. We are aware of the economic impact that we have directly plants was 115, which is 30.1% of the total number of > The procedure "Supplier Qualification” that defines the on the regions of the presence of power plants, by purchasing suppliers at the power plants and 26.2% of the total number Key players in the supply chain are manufacturing criteria and methods for qualifying selection of suppliers goods and services from local suppliers, thereby developing of company suppliers. The share of costs for local suppliers contractors, distributors, suppliers, retailers. Delivery of > The procedure “Procurement and Management of their business. We aim at supporting local manufacturers of the total scope of procurement of the company amounted metal products, piping details, fittings, heating surfaces is Consulting Services” and procedure “Procurement and within the scope of our procurement activities. The number to 24.8%. a priority to meet the production needs. These purchases management of consulting and professional services of local suppliers in the regions of the presence of the power account for about half of the budget. The share of Russian in relations with government agencies, business companies among our suppliers is 97%. Offices, production
development and mergers and acquisitions” that describe Company Overview sites of our contractors are located not only in the regions of authorization process for procurement of consulting and the presence of Enel Russia but also in other regions of the professional services Russian Federation. The number of local suppliers in the regions of the presence of the company’s power plants*, 2019 The process of goods, materials and services procurement
230 indicators Determination of Creation of a needs Formation of the procurement strategy Search Technical
79 73 90 Financial and performance plan Procurement Plan and preparation for contractors and commercial of procurement expertise 10 15 documentation
Tver Region Stavropol Territory Sverdlovsk Region Management Selection of the Analysis Amendments of agreement best contractor and of the participants’ to the agreement Evaluation implementation agreement signing bids Total number of suppliers Number of local suppliers Sustainability
* Tver Region — Konakovskaya GRES, Stavropol Territory — Nevinnomysskaya GRES, Sverdlovsk Region — Reftinskaya GRES, Sredneuralskaya GRES. During the year, we meet with the company’s organizational We aim at the mitigation of potential risks in procurement units and analyze new emerging needs of internal activities and try to establish long-term reliable relations customers, aggregate them, on its which we formulate and with our suppliers by the introduction of the vendor rating update the procurement plan, compile a list of priority and system within the scope of signed agreements. Share of costs on local suppliers by regions of the presence of power plants** critical procurement for Thermal Generation (see details The vendor rating system allows using a single methodology in the section “Management of Generation Equipment as well as provides the ability to obtain data on the vendor Fleet”). We pay special attention to procurement related Governance
ratings over time, based on such sustainability criteria Risk and Corporate to the involvement of the contractor’s personnel to carry 26.27% as safety, quality, timeliness, environmental and social out especially hazardous operations at our power plants, 18.13% 19.00% responsibility (including respect for human rights) as well as requiring more thorough verification and preparation of the innovation. contractor in terms of health and safety rules and compliance 4.67% 4.34% 3.76% with all requirements and standards for safe work. Based on the rating and performance of suppliers, we form 1.97% 1.28% 1.49% a pool of reliable counterparties, which affects significantly The reliability of our suppliers is an important component of the procurement process in terms of procurement timing Tver Region Stavropol Territory Sverdlovsk Region
the success and sustainability of the supply chain, therefore Annexes as well as the quality of the performed services and works, authorization of subcontractors is a mandatory procedure for with regard to the accumulated experience of interaction us aimed at strengthening of the monitoring and control of 2017 2018 2019 between our parties. the activities of our suppliers in order to improve the quality, safety and efficiency of contractual obligations and reduce ** The share of costs on local suppliers in the total procurement costs of the company. the risks of improper performance of contracts.
144 Annual Report 2019 PJSC Enel Russia 145 Selected Projects of 2019 the procurement process, allowing tenders to be conducted to its activities, and communicates the company’s Integrated
structurally and efficiently, making the process more open Policy on Quality, Health, Safety, Environment and Energy About the Report Supplier's Day especially representatives of small and medium businesses, and transparent. Efficiency that is publicly available to external stakeholders. in our projects to encourage economic growth and develop This training is delivered not only for contractors whose In 2019, 52 companies interested in cooperating in the the regions of our presence. Exit from coal generation activities can potentially have a negative environmental field of conventional and renewable generation participated impact but also for contractors involved in works/services/ The event has also a Q&A session, where participants in the Supplier’s Day in the Murmansk region. One of Exit from coal generation in the reporting period caused supplies without having a negative environmental impact. ask questions of their interest and share best practices in the fundamental principles of creating sustainable supply changes in the supply chain (see the section “Exit from Therefore, if the contractor’s activity is related to any kind of procurement. chains is to involve as many local entrepreneurs as possible, Coal Generation”). Due to the sale of Reftinskaya GRES, the environmental impact, we evaluate it and take into account at changes occurred in our portfolio of suppliers. As regards the stage of technical specification authorization and include a Company Overview the suppliers of products and related installation supervision list of our requirements in the subsequent agreement. services, then after the sale of the power plant, the business The recycling and disposal services may potentially have a will not have the need to supply the main equipment for dry negative environmental impact. Enel Russia cooperates with Key issues discussed at the Supplier’s Day ash and sludge removal system, main equipment of the fuel the companies that have specialized licenses in accordance supply system, bag filters. The scope of supplies of the parts with applicable laws of the Russian Federation for carrying of boiler units, smoke exhausters, and other elements that 1. Processes of supplier qualification and vendor rating out such activities. are subject to more intensive wear due to burned fuel will indicators be reduced significantly. As regards the contractors, most of The contractors shall inform Enel Russia about all environmental Health, Safety, Environment and Quality
2. Financial and performance them are local organizations. Cooperation of Enel Russia with incidents, emergency situations, environmental near misses them at Reftinskaya GRES will stop due to objective causes, and violations of the rules related to their activity and take 3. Ensuring compliance with the Code of Ethics and zero tolerance to corruption regulation but at the same time we remain open to work with such immediate measures for their elimination. This is an essential contractors at our other power plants. condition of the agreement. Based on the results of 2019, 4. Maximum transparency during performance of works by suppliers none of the above cases was identified. Sustainability in Procurement 5. Sustainability, including human rights Enel Russia pays special attention to the issues of occupational Sustainability health, safety, environment and quality, and requires the 6. Growth goals within the perimeter of renewable energy sources contractor and its subcontractors to ensure the highest HSEQ standards by incorporating relevant requirements 7. Certification into agreements with contractors. The key priorities of Enel Russia include health and safety of the power plant personnel and employees of our contractors. Enel Russia was certified
for compliance with the international environmental safety Governance
standard ISO 14001: 2015 and the standard of occupational Risk and Corporate health and safety OHSAS 18001: 2007. We confirm this Implementation of Track & Rate included in the vendor rating; earlier, only internal customers compliance during the supervisory and recertification audits representing various business functions were involved in the on annual basis. Thus, we involve company employees This is an innovative digital application for evaluation of vendor rating process. and contractors in the process of creating a culture of safe supplier performance. It works on the devices of any type behavior, while at the same time we aim at encouragement of (smartphone, tablet, PC) and allows recording all events (both Implementation of WeBuy Platform our suppliers to undergo the certification process too. negative and positive) associated with supply of materials Annexes and (or) provision of services by contractors to evaluate the At the end of 2019, transition started to a new platform for Enel Russia makes efforts to minimize the negative quality of work of suppliers. The information collected through tendering, collecting reports, vendor rating and qualification. environmental impact and takes constantly important steps in application is used as input data for the Supplier Performance This system is being implemented in all countries of the this area. Specifically, the company organizes the contractor’s Management process. In 2019, the Procurement was also Group and is aimed at simplifying, standardizing and unifying personnel training in significant environmental aspects related
146 Annual Report 2019 PJSC Enel Russia 147 5. Risk and corporate governance The Risk Governance processes are integrated into the > Protection level 1: Risk management process within a company's key business processes. The Risk Governance business unit that contains control procedures properly and Internal Control System provides for control actions at implement the business processes. About the Report each level of the operations and clearly defines duties and > Protection level 2: It is represented by the organization responsibilities. It avoids duplication of tasks and ensures unit for control of risks, intended to management and coordination among the key persons of Risk Governance monitoring of risks typical for the company. Risk Governance process. The system ensures necessary separation of > Protection level 3: Control of the structure and general operations and control to prevent or limit possible conflicts functionality of the system including by monitoring of of interest as much as possible, also allows distinguishing protection level 1 and 2. and then tracking the tasks of identification, assessment, In accordance with the Risk Governance and Internal Control
Risk Governance management and monitoring of risks. Such an approach Company Overview Policy, responsibility for the processes of identification, allows determining the sources of information and ensures assessment, management, monitoring and control is allocated and Internal Control System necessary communication required to complete the above as follows: tasks.
The Risk Governance and Internal Control System is divided into three protection levels: Risk Governance and Internal Control are important the main corporate risks of the company. It comprises an components of Corporate Governance and are considered as integral part of overall organizational and corporate governance
one of the important elements of strategic and operational structure adopted by the company and is based on the best indicators management. international practices including international standard ISO Allocation of responsibility in Risk Governance and Internal Control
31000 Risk Management — Guidelines and the principles of Financial and performance The Internal Control and Risk Governance System is aimed at the Corporate Governance Code recommended by the Bank Unit in charge Area of responsibility identifying, assessing, managing, monitoring and controlling of Russia. Business units > Risk identification and assessment (risk owners) > Identification, development and implementation of risk pooling strategies and risk reduction measures Risk Governance and Internal Control System Risk Control unit > Monitoring and control of key risk indicators > Proposals for the measures to reduce their impact at business units and corporate executive bodies, monitoring their implementation Sustainability > Organization of the Risk Committee whose activities are aimed at supporting and improving the Protection level 1 Protection level 2 Protection level 3 risk governance and internal control system
Internal Audit Unit > Providing a valid risk management concept > Implementing policies, activities and systems, including regular review of policies and other Risk Management organizational documents defining the roles, responsibilities, parameters, assessment methods Risk Control Risk Committee Internal Audit (Business units / Risk owners) and processes within the system
> Identification, assessment > Monitoring and control Chairman of the committee: > Control of the efficiency
and management of risks of risks, maintenance of General Director and application of the risk Governance
> Implementation of reporting, control of the management system Risk and Corporate measures for mitigation compliance with limits, > Periodic meetings for > Control of the efficiency The company systematically builds an integrated model of Corporate Risk Governance represents a set of functional authorization in case of consideration and approval of application of policies of risks and their timely Risk Governance to consolidate its functions activity as to elements and organizational mechanisms of their interaction update excess of Key Risk Indicators (KRI) and procedures as well as > Support to implementation > Proposals for mitigation > Control of the company risk governance systems key Risk Management and integrates the Risk Governance to develop, implement, monitor, analyze and continuously of the internal control and of risks and assistance in exposure to risk System into the corporate culture. The target model of the improve the Risk Governance practice at the company. risk governance system taking measures for their > Identification of measures implementation for mitigation of risks > Ensuring risk management and monitoring of their in accordance with local implementation
regulatory acts Annexes
Board of Directors of PJSC Enel Russia Audit and Corporate Governance Committee of PJSC Enel Russia
Independent from BU and RO
150 Annual Report 2019 PJSC Enel Russia 151 Internal Control System Organization Units and Corporate 102-29 102-30 Bodies Related to Risk Governance About the Report
Implementation use and maintenance of internal control The internal control system is built in accordance with the System system is an integral component of the company’s corporate model “Internal Controls: Integrated Approach” (COSO, governance. The internal control system of the company is The Committee of Sponsoring Organizations of the focused on prevention of adverse consequences due to main Treadway Commission). To ensure adequate assessment, risks of financial statements. As a result, it helps to company measurement and risk governance the internal control system In accordance with the Risk Governance and Internal Control governance measures, resource allocation, and if necessary, in achieving the goals defined by the Board of Directors. That is continuously improved and brought in compliance with Policy, the structure of risk governance and internal control take prompt corrective measures. Company Overview system at the company includes involvement of the following relates to ensuring the company assets soundness, reliability changes and updated targets of the company. The risk control unit is an independent organization unit for of financial statements, compliance with internal regulations bodies and organization units: The company uses the following main principles of internal risk control directly subordinate to the Chief Financial Officer, and procedures as well as laws of the Russian Federation. > Board of Directors control system: who coordinates the work of organization units in identifying > Audit and Corporate Governance Committee and assessing risks as well as developing measures for their > Risk Committee management, ensures update of the Risk Governance and > Managers of business units and organization units for risk Internal Control Policy, develops and fosters risk culture. management The main principles of Internal Control System Moreover, the reporting and internal communication tools, > Risk Control. educational events and change management measures are indicators The Board of Directors oversees the risk governance and used.
> The job duties are strictly regulated internal control system including making decisions and Financial and performance Strict schedule Thus, in full compliance with regulatory requirements and of processes > The business processes and internal controls are documented; when business processes providing recommendations after reviewing the list of relevant are changed, the relevant changes are made to the documentation best practices, the company considers three main pillars of risks. The Board of Directors is responsible for approval of > The procedures and policies are updated periodically. All the employees are immediately the risk governance and internal control system: informed about the changes the risk appetite level that is determined jointly with the > The effective Risk Governance and Internal Control General Director, Chief Financial Officer with assistance of Policy approved by the Board of Directors (Minutes No. the risk control unit. The Board of Directors participates in 14/18 dated 21.12.2018) for identification, measurement, consideration of the company’s map of key risks. Segregation of duties > A principle for segregation of duties is applied to mitigate the risk of errors or abuse monitoring and control of risks that the company may be of authorities The duties of the Audit and Corporate Governance Committee exposed to Sustainability > Operation and control functions are strictly divided to prevent or reduce probability includes expressing of its opinion on specific aspects regarding > A supplement to the Risk Governance and Internal Control of conflict of interest’s risks identification of the main risks, checking of the periodic Policy is a risk map, the so-called “Risk Universe”, indicating reporting documentation on assessment of risk governance the potential risks that the company may be exposed to, and internal control system. The Audit and Corporate taking mainly into account the frequency and severity of
> The processes and procedures recommended by COBIT standard are used. General Governance Committee develops recommendations for risk each risk event that affects the company's annual financial Regular external information control is periodically audited governance and internal control system as well as evaluates results. The risk universe was updated periodically based > The independent testing is performed based on the selected data. The results are and internal its results. The Audit and Corporate Governance Committee on interviews held with the managers of business units communicated to the management, Internal Audit Department as well as upon request assessment Governance from the external auditor reviews periodically the issue of the results of efficiency during 2019, in accordance with the principles set out in Risk and Corporate > The internal controls are regularly subject to assessment by the operating personnel of risk governance and internal control system in terms of the Risk Governance and Internal Control Policy and management individual risks. > Periodic reports of risk owners to the members of the Audit and Corporate Governance Committee on exchange, The Risk Committee is a collegial body established to > The information portal with regulations, policies and procedures and instructions is clear technical, industrial, environmental, social and managerial Transparent coordinate activities at the operational level. It consists of and available to the employees risks with the support of the risk control organization unit. and timely informing > The company employees are familiar with the Code of Ethics, Zero Tolerance to Corruption top managers of the company, is appointed by the General Plan Regulation Director and controls the company's exposure to risks, In December 2019, the Audit and Corporate Governance > The mechanisms of informing of possible violations and abuse and implementation of
defines the measures to mitigate risk and monitors their Committee proposed to the Board of Directors that to Annexes relevant measures on repeated violations elimination and prevention implementation. The Risk Committee is also responsible for recognize the work of the risk governance and internal control periodic approval of the limit of risks and their monitoring. system as effective for 2019. In the reporting period, the Board of Directors of the company recognized the work of The managers of business units and organization units for risk the risk governance and internal control system as effective management ensure compliance with the Risk Governance within the scope of the risk governance and internal control and Internal Control Policy by the employees of its organization system review. units, timely development and implementation of risk
152 Annual Report 2019 PJSC Enel Russia 153 Description of Main Risk Factors 102-11 102-15
7. Information > Impact of failures in the information Low Access limitation (administratively, and physically), About the Report security system on the day-to-day activities of the regular inspections. Antivirus software, detailed Associated with the Company's company investigation of unauthorized access attempts > Loss of personal and confidential data > Lack of access to the technical Activity and banking system, as well as access to common data system
Description Degree 8. Regulatory > Changes in regulations and laws of the Medium Interacts with government authorities (Ministry of of risk categories* Risk factors of impact Implemented risk governance measures industry and related industries Energy, Ministry of Economic Development, Federal Company Overview > Changes in capacity payment Antimonopoly Service), membership in NP Market 1. Country > Changes of general economic and political Medium The risk can be poorly managed but is accounted > Revocation of the license for operation Council with presentation and protection of the and regional situation in the country and its influence on during adoption of strategic decisions > Non-compliance with the equipment company's position the company localization requirements
> Changes of the conditions of activity in a Medium The majority of regional risks cannot be controlled particular region. The first price zone is the by the company. 9. Legal > Legal proceedings including default on Medium Legal protection, trial monitoring target one for the company (European part The target regions of Russia for the company are obligations by the suppliers of Russia and Ural) more economically developed as compared to the > Impact of sanctions on the company’s core
regions from the Second price zone, non-price activities indicators and isolated zones Financial and performance
2. Industry > Changes in economic state of the industry, Medium Signing long-term agreements with independent possible fluctuations of prices for energy suppliers, improvement of operating efficiency, 10. Reputational > Loss of good will and incurring losses Medium Publication of articles reflecting the company sources (gas, fuel oil) and their supply determination of best time for fuel purchase, as a result of unfavorable attitude activities media monitoring, on-going dialogue compared to planned values, lower selling diversification of supply sources, maintenance of to the company image through with representatives of local administrations and prices for products and services the equipment fleet through timely and high-quality conventional mass media and social local communities, prompt response to incoming maintenance campaigns, technical refurbishment, networks requests/complaints/suggestions minimization of unavailability fines > Interacting with local communities, including formation of negative attitude towards the company due to insufficient
information transparency, ignoring the Sustainability 3. People > Retention of talented employees Low Maintenance and development of the corporate influence of the company operating management > Personnel development program culture, monitoring of the labor market, competitive activities on the local context > Recruiting salary, implementation of personnel development programs
4. Project / > Impact on the budget Medium Monitoring of actual costs and project schedule, 11. Social > Human rights violations, rejection of Low Holding regular social events aimed at supporting Investment > Duration/terms of investment project hedging of currency component of costs company values employees, active interaction with regional > Quality of equipment and service > Relations with stakeholders (with authorities. > Land tenure and land use communities) Risk analysis at the stage of selection of suppliers, > Operating impact on the communities tendering and signing of agreements. A cl. is introduced in the agreements with suppliers Governance 5. Financial > Credit and counterparty Medium Forecast and control of (including daily) liquidity, regarding compliance with human rights, Risk and Corporate > Commodity a significant amount of open credit facilities, environmental protection, health and safety > Shortage of funds due to termination of currency risk hedging, sale of bad debt receivables external financing > Exchange rate fluctuations > Interest rate fluctuations 12. Climatic > The impact of extreme natural phenomena Low Monitoring and necessary preventive measures > Liquidity associated with climate change related to operation and maintenance of power > Over-riding of environmental compliance plants. rules leading to outflow of investors Development of climate strategy. 6. Technical, industrial > Impact of blackouts on the company's core Medium–High Examination and audit of equipment, timely > Impact of non-compliance with climate Regular monitoring of conversions, modifications, Annexes and environmental activities — electric power generation and high-quality maintenance campaigns. change laws and updates in the rules on climate change both > Non-compliance with environmental Establishment of constructive relationships with internationally and locally. Participation in climate standards and accidental pollution authorities to timely resolve the issues that may initiatives > Use of resources and waste management arise
* The key risk indicators are identified for each of the categories described. Control of these indicators allows timely identification of negative trends and taking actions to optimize the risk level of the company.
154 Annual Report 2019 PJSC Enel Russia 155 13. Health > The impact of accidents on the sustainable Medium Maintenance of weekly reports, issue of personal Corporate Governance About the Report and Safety development of the company protection equipment, workplace assessment > The effect of coronavirus infection schedule, monitoring of accidents. (COVID-19) on the sustainability of the company Implemented risk management measures are as follows: 103-1 103-2 > crisis team set up Corporate Governance > a comprehensive behavior guide for COVID-19 103-3 102-18 was developed and communicated to all System employees of the company > personal protective equipment was purchased > increased the frequency of sanitization of common areas Company Overview > additional measures have been taken to divide PJSC Enel Russia strives to comply with the best national To comply with the requirements for corporate governance staff at the power plants > different entry/exit times and different meal times practices in corporate governance. Our objective is to create set out in the Listing Rules of PJSC Moscow Exchange, the for the company's employees and contractors’ the most transparent and efficient corporate governance company took the following actions: employees’ system to increase investment attractiveness of the company. > the Board of Directors had been formed with four > set a limit on the number of people in one room independent directors (including PP control rooms) Corporate governance in PJSC Enel Russia is built in > daily monitoring of the temperature for all > The Audit and Corporate Governance Committee as well employees, including smart working personnel accordance with the requirements of the laws of the Russian as HR and Remuneration Committee were headed by > self-isolation implemented upon returning from Federation, the Listing Rules of the PJSC Moscow Exchange,
abroad independent directors indicators and also taking into account the recommendations of the > international business trips are suspended until > the company had a Corporate Secretary accountable to the further notice, domestic business trips only in Corporate Governance Code approved by the Bank of Russia.
case of absolute necessity to ensure business Board of Directors Financial and performance continuity PJSC Enel Russia is a company whose shares are admitted > the previously approved dividend policy was in effect > participation in external events is suspended to organized trading in the quotation list of the first (highest) > smart work has organized for all employees > the head of the internal audit unit was functionally of HQ and PP, including operational and level, which means compliance with strict requirements for accountable to the company’s Board of Directors, and maintenance personnel, in the absence of a need the quality of corporate governance of the company. administratively to General Director. to be presented at the workplace according to the profile of the position or business needs > rules for access of suppliers and external visitors to the territory of the company were developed
and implemented The main internal documents regulating corporate governance are: Sustainability
In 2019, some of the risks represented in the table were realized but did not have significant impact on the financial indicators of the company.
The PJSC Enel Russia’s Regulation Rules of Procedure Organizational Governance
Charter on Preparation and for Convention and Regulation Risk and Corporate Risk damage Holding of General Holding of Meetings of on Committees Shareholders’ Meeting PJSC Enel Russia Board of The Board of Directors of Directors
Medium 9 13 Medium–High 6 High Annexes Low 11 Medium 1 2 8 Medium–High
Regulation Regulation Regulation Internal Control on Executive Board on Corporate Secretary of Internal Audit and Risk Management of Open Joint-Stock Department Policy Company Low 3 Low 7 12 Medium 4 5 10 P robability
156 Annual Report 2019 PJSC Enel Russia 157 Corporate Governance system* About the Report
Audit and Corporate Governance Committee General Shareholders' Auditor Meeting HR and Remuneration Committee Enel Group The PJSC Enel Russia’s Organizational Regulation on Payment of Remuneration and Corporate Governance Charter Regulation Compensations to Members Guidelines on Committees Related Party Transactions of Board of Directors
of The Board Company Overview Corporate Secretary and Board of Directors’ Committee of Directors Committees Board of Directors
Internal Audit Department Strategy Committee
In order to assist the Board of Directors in considering issues The new version of the Regulation on Payment of of strategy definition, participation in investment projects Remuneration and Compensations to Members of Board of General Director Executive Board and sustainable development, a Strategy Committee was Directors and Committees of the Board of Directors changed
established. the amount of remuneration to members of the Board of indicators Directors, the Chairman and Senior Independent Director Instead of three separate regulations on the Committees as well as set the amount of remuneration to members and Financial and performance * The risk management and internal control system is not included into the scheme and is described in the chapter “Risk management”. of the Board of Directors, a single Organizational procedure Chairmen of Committees of the Board of Directors. of interaction with suppliers and contractors was issued. It provides for a uniform approach to organization of work of the The Board of Directors approved the The Long Term Incentive Committees. Plan at PJSC Enel Russia for 2018–2020 and for 2019–2021. Improvement of Corporate Governance Sustainability For the last years the company achieved significant results Corporate Governance Code recommendations by the for implementation of advanced standards of corporate company”. The company plans to continue maintaining the governance contained in the Corporate Governance Code: achieved level of compliance with the recommendations of Dynamics of the implementation of recommendations for the Corporate by the end of 2019, 77* of 79 possible recommendations the Corporate Governance Code. Governance Code in 2017–2019 were complied with in full, 2 more recommendations were In 2019, the company also held other corporate governance complied with in part. related events. During the year 2019, the company improved its corporate The General Shareholders’ Meeting approved a version of the 5 2 governance by the following three evaluation criteria: Governance Charter, according to which: 15 1. The Audit and Corporate Governance Committee consisted Risk and Corporate > the shareholders can participate in the General Meeting by Complied solely of independent directors. electronic voting; 2. The HR and Remuneration Committee consisted solely of Complied in part > the competence of the Board of Directors regarding 60 74 77 independent directors. Non complied approval of a number of regular transactions was adjusted. 3. A memorandum of the controlling entity was published That will reduce the workload on the Board of Directors on the company's website regarding such entity’s plans without losing control over the most significant transactions for corporate governance at the company — Enel Group for the company; Corporate Governance Guidelines. Annexes > with regard to judicial practice in the Russian Federation, 2017 2018 2019 A detailed report on compliance with the principles and a list of grounds for recognizing members of the Board of recommendations of the Corporate Governance Code is Directors as retired was adjusted; given in the section “Information about observance of the > establishment of the Audit Commission is not provided for.
* The recommendation on stock option plan in favor of the members of the Board of Directors (p. 4.2.2 of the Corporate Governance Code) are not applicable to PJSC Enel Russia but was included in 77 recommendations implemented by PJSC Enel Russia. Without this 1 recommendation PJSC Enel Russia is in compliance with 76 recommendations of the Corporate Governance Code.
158 Annual Report 2019 PJSC Enel Russia 159 proposals from the Chairman and members of the Board of Management Bodies of the Company Directors, the Internal Audit Commission, the General Director of the company, a member of the Management Board and the About the Report Auditor of the company.
The General Director reports regularly to the Board of General shareholders’ meeting 102-18 Directors on the company activities. The Board of Directors, The PJSC Enel Russia’s Rules of Procedure when overseeing the management of the company and its Charter for Convention and Holding of Meetings of activities, may instruct the management of the company PJSC Enel Russia Board The supreme Management Body of PJSC Enel Russia — of Directors on certain issues. Authorized managers of the company are General shareholders’ meeting. vested with the rights and obligations for solving economic,
The procedure for preparation and holding the General environmental and social problems with the right to delegate Company Overview Shareholders’ Meeting, its competence is defined by the authority to other employees in accordance with their Federal Law On Joint Stock Companies, by-laws of the Bank competence and function. The PJSC Enel Russia’s Regulation of Russia, by the Charter as well as by the Regulation on program was implemented for the newly elected members of Charter on Preparation and In 2019, a Strategy Committee was formed under the Board Preparation and Holding of General Shareholders’ Meeting. Holding of General the Board of Directors: Vitaly Zarkhin, Simone Mori, Giancarlo Shareholders’ Meeting of Directors, its competence also includes a preliminary Pescini, Laurent Souviron. The amendments made to the Charter of the company in consideration of sustainable development issues and ESG 2019 allow the shareholders to participate in the General strategy. One of the members of the company's Board of Composition of the Board 102-22
Shareholders' Meeting not only in person or by sending Directors was the Deputy General Director — Head of People indicators > gave consent for signing of agreements, insurance of of Directors filled out bulletins, but also by electronic voting if the Board and Organization of PJSC Enel Russia, Нead of Sustainability liability of directors and officers comprising related part
of Directors makes a relevant decision when convening the of PJSC Enel Russia. Financial and performance transactions In 2019, there were two Boards of Directors — the Board General Shareholders' Meeting. > elected the members of the Board of Directors of PJSC elected on 04.06.2018, and the Board elected on 18.06.2019. In 2019, the General Shareholders' Meeting was convened Enel Russia and approved the auditor Independent Members two times28. > elected the members of the Internal Audit Commission of the Board of Directors > adopted a decision to terminate the authorities of the The Board of Directors of PJSC Enel Russia elected on 04.06.2018 The annual General Shareholders' Meeting dated June 18, The Board of Directors elected in 2019 included 4 independent members of the Internal Audit Commission, to terminate 1. Stephane Maurice Zweguintzow 2019: directors: Andrea Guaccero, Vitaly Yurievich Zarkhin Giorgio the internal documents governing the activities of the 2. Andrea Guaccero, independent director > approved the following documents: annual report of Callegari, Andrea Palazzolo. Giorgio Callegari was elected to
Internal Audit Commission, from the date of state 3. Roberto Antonio Enzo Deambrogio Sustainability the company for 2018; annual accounting (financial) the Senior Independent Director who coordinates interaction registration of new version of the Charter. The specified 4. Rodolfo Avogadro Di Vigliano statements for 2018; New version of the Charter of PJSC between independent directors including convening of decisions are related to the fact that the new version of the 5. Maria Antonietta Giannelli Enel Russia; New version of the Regulation on payment meetings of independent directors as may be necessary Charter does not provide for establishment of the Internal 6. Giorgio Callegari, independent director of remunerations and compensations to members of and chairs such meetings. Independence of the members Audit Commission 7. Denis Mosolov the Board of Directors and Committees of the Board of of the Board of Directors is defined in accordance with the > approved participation of PJSC Enel Russia in the 8. Andrea Palazzolo, independent director Directors of PJSC Enel Russia independence criteria of Moscow Exchange (posted at Renewable Energy Development Association. 9. Tagir Alievich Sitdekov > adopted a decision on distribution of profit (including on the website https://www.moex.com). During the General 10. Alexander Arthur John Williams, independent director payment (announcement) of dividends) of PJSC Enel Extraordinary General Shareholders' Meeting that were held Shareholders' Meeting in 2019, where the Board of Directors Governance Russia by the results of financial year 2018 on July 22, 2019, approved a major transaction. 11. Marco Fragale
was elected, the shareholders were provided with evaluation Risk and Corporate of candidates as well as the opinion of the Board of Directors on the status of independence of candidates in accordance The Board of Directors of PJSC Enel Russia elected on 18.06.2019 with the independence criteria. 1. Stephane Maurice Zweguintzow 2. Andrea Guaccero, independent director Board of Directors of the Company 102-20 102-24 102-26 102-31 Initiation 3. Vitaly Yurievich Zarkhin independent director 4. Maria Antonietta Giannelli The Board of Directors of PJSC Enel Russia carries out The Board of Directors of the company consists of 11 5. Giorgio Callegari, independent director After election of new members of the Board of Directors, the Annexes general management of the company. members and is elected for the period until the next Annual Corporate Secretary sends information to the first elected 6. Simone Mori General Shareholders’ Meeting. The competence of the Board of Directors, the procedure for members of the Board of Directors regarding the company's 7. Denis Mosolov its activities, the rights and obligations of its members are Meetings of the Board of Directors are held in accordance strategy, corporate governance system, risk management 8. Andrea Palazzolo, independent director defined by the Federal Law on Joint Stock Companies, the with the approved Plan of Work of the Board of Directors, and internal control system, distribution of responsibilities 9. Giancarlo Pescini Charter, Rules of Procedure for Convention and Holding of and also as the need arises, but at least once a quarter. The between the executive bodies of the company and other 10. Tagir Alievich Sitdekov Meetings of PJSC Enel Russia Board of Directors. work plan of the Board of Directors is formed on the basis of relevant information about its activities. In 2019, the induction 11. Laurent Nicolas Souviron
28 Decisions adopted by the General Shareholders’ Meeting, materials for the General Shareholders’ Meetings and the minutes of the General Shareholders’ Meetings are posted at the company’s website https://www.enelrussia.ru/.
160 Annual Report 2019 PJSC Enel Russia 161 Corporative status Independent Director
Composition of the Board of Directors Membership He was first elected to the Board of Directors of PJSC Enel Russia in About the Report of the Board of Directors 2018, he is a member of the company’s Board of Directors currently
Born 1970 Status of Directors elected Duration of work at the Citizenship Italy Gender composition in 2019 Board of Directors Education He graduated with honors from the Law School of the University La Sapienza in Rome and holds a Ph.D. in Public Law of Economy 1 1 from the University La Sapienza in Rome 1 4 4 Work experience 2019–January 2020 — member of the Surveillance Committee in Andrea Guaccero over the last 5 years Banca Carige S.p.A. in extraordinary administration (appointment by the
Chairman of HR and Remuneration European Central Bank) Company Overview Committee 2017 — present — member of the Board of Directors of Marzotto s.p.a. Member of the Audit and Corporate Governance Committee 2007 — present — full Professor of Law in University Roma Tre, in Rome Member of Related Party Transaction Lawyer Committee He has no shares in the charter capital/ ordinary shares of Company. Ownership on shares 3 He has made no transactions with ordinary shares of Company in 2019 10 6 3
Women Independent Less than 1 year indicators Men Executive From 1 to 3 years Corporative status Independent Director Non-executive From 3 to 7 years
Membership He was first elected to the Board of Directors of PJSC Enel Russia Financial and performance More than 7 years of the Board of Directors in 2019, he is a member of the company’s Board of Directors currently
Born 1976
Citizenship Russian Federation
Education High School of Economy, Bachelor’s Degree in Economy, Master’s Degree in Management
Work experience 2019 — p.t. — member of the Board of Directors of PJSC “IDGC over the last 5 years of Centre”, of PJSC “IDGC of Centre and Volga region”, of “IDGC
Zarhin Vitaliy Yurievich Sustainability Curriculum vitae of the members 102-22 102-23 102-25 Chairman of Audit and Corporate of South” PJSC (previous name is PJSC “IDGC of South”) 29 Governance Committee 2018–2019 — member of the Board of Directors of PJSC “KTC” Member of Related Party of the Board of Directors of the company 2011–2018 — managing Director, Gazprombank (PJSC) Transaction Committee Member of Strategy Committee He has no shares in the charter capital/ ordinary shares of Company. Ownership on shares He has made no transactions with ordinary shares of Company in 2019
Corporative status Executive director
Membership He was first elected in 2007. He was a member of the company’s of the Board of Directors Board of Directors in 2007–2008, and from 2013 to the present Governance Corporative status Non-executive director
Born 1968 Risk and Corporate Membership She was first elected to the Board of Directors of PJSC Enel Russia Citizenship France of the Board of Directors in 2018, she is a member of the company’s Board of Directors currently Institut d’Etudes Politiques de Paris, Master’s Degree in International Education Born 1973 Business Citizenship Italy Work experience 2018 — present — Deputy General Director — over the last 5 years Нead of People and Organization, Нead of Sustainability Education University of Lecce, graduation in Economics and Finance Stephane Maurice in PJSC Enel Russia Zweguintzow 2014–2018 — Head of External Relations, Нead of Sustainability LUISS Guido Carli, MBA Chairman of the Board of Directors Annexes of PJSC Enel Russia Work experience 2019 — present — member of Supervisory Board of Slovenske 2010–2014 — Business Development Director in Enel France SAS Giannelli Maria Antonietta over the last 5 years Elektrarne AS Member of the Strategic He has no shares in the charter capital/ ordinary shares of Company. 2013 — present — Mergers & Acquisitions Senior Project Manager Ownership on shares Committee He has made no transactions with ordinary shares of Company in 2019 in Administration, Finance and Control Department of Enel S.p.A. She has no shares in the charter capital/ ordinary shares of Company. Ownership on shares She has made no transactions with ordinary shares of Company in 2019
29 Information as of March 2020. More details on the members of the Board of Directors are available in the quarterly issuer’s reports in Russian posted at the company’s website https://www.enelrussia.ru/. Curriculum vitae of the members of the Board of Directors elected in 2018 and valid until election of the Board of Directors in 2019 are available in the Annual Report for 2018.
162 Annual Report 2019 PJSC Enel Russia 163 Corporative status Independent director Corporative status Independent director Membership He was first elected to the Board of Directors of PJSC Enel Russia About the Report of the Board of Directors in 2018, he is a member of the company’s Board of Directors currently Membership He was first elected to the Board of Directors of PJSC Enel Russia of the Board of Directors in 2018, he is a member of the company’s Board of Directors currently Born 1959 Born 1974 Citizenship Italy Education Polytechnical Institute in Torino, Citizenship Italy Degree in Mining Engineering Education He graduated with honors from Business Law School Work experience 2018 — present — CEO and Chairman of LLC Generali Russia and CIS of the LUISS Guido Carli over the last 5 years 2013 — present — member of the Board of Directors of Ingosstrakh Work experience 2019 — present — member of the Board of Directors Sea Beach Giorgio Callegari 2018–2019 — CEO in LLC Insurance Brokers Generali Russia and CIS over the last 5 years Immobiliare Andrea Palazzolo Senior independent director 2017–2018 — member of the Board of Directors of JSC "Aeromar” 2008 — present — lawyer of Studio Legale Palazzolo
Member of Audit and Corporate Company Overview Chairman of the Related Party 2016–2018 — Council of Sita Governance Committee 2018 — present — independent consultant, member of Legality, Transaction Committee Member of HR and Remuneration Trasparence and Administrative Efficiency Committee in Sicily Region Chairman of Strategy Committee 2014–2018 — member of the Board of Directors of Pobeda Airlines Committee and Chairman Of Supervisory Body of Law 231/2001 of Happy Games Member of the HR and LLC Remuneration Committee 2011–2018 — deputy CEO Strategy and Alliances of PJSC Aeroflot 2009 — present — professor, Scientific Coordinator in the LUISS University, Rome He has no shares in the charter capital/ ordinary shares of Company. Ownership on shares 2013–2014 — independent Consultant of Sicily Region He has made no transactions with ordinary shares of Company in 2019 2013–2015 — member of the Board of Directors of Fintyre S.p.A. 2004–2016 — Trustee with power of attorney, Compliance Officer in Gruppo Maggiore indicators He has no shares in the charter capital/ ordinary shares of Company. Corporative status Non-executive Director Ownership on shares He has made no transactions with ordinary shares of Company in 2019 Membership He was first elected to the Board of Directors of PJSC Enel Russia Financial and performance of the Board of Directors in 2019, he is a member of the company’s Board of Directors currently
Born 1964
Citizenship Italy Corporative status Non-executive director
Education Parma University, degree in physics Membership He was first elected to the Board of Directors of PJSC Enel Russia LUISS Guido Carli, MBA degree of the Board of Directors in 2019, he is a member of the company’s Board of Directors currently
Work experience 2018 — present — Head of Europe and Euro-Mediterranean Affairs Born 1962 over the last 5 years in Enel S.p.A. Citizenship Italy Simone Mori Sustainability 2017 — present — member of the Board of Directors in Bruegel Deputy Chairman of the Board Education University La Sapienza in Rome, Economy and Business Management of Directors 2017 — present — member of the Board of Directors in CERRE Work experience 2015–2019 — member of Internal Audit Commission of PJSC Enel Member of the Strategy Committee 2017 — present — member of General Board in Confindustria Energia over the last 5 years Russia 2016 — present — president in Elettricita Futura 2014–2019 — Head of Unit “Group’s Participation” in Enel S.p.A. 2016 — present — member of the Energy Technical Committee, Giancarlo Pescini 2014–2019 — member of the Board of Directors of Enel Investment since 2017 — member of Europe Technical Committee in Confindustria Holding B.V. 2012–2020 — non-resident fellow of German Marshall Fund of US 2013–2014 — Head of Unit “Participated Companies, Branches and 2009–2014 — Head of Regulatory Affairs, Environment and Innovation, Powers Systems” in Enel S.p.A. Head of European Affairs in Enel S.p.A.
He has no shares in the charter capital/ ordinary shares of Company. Governance He has no shares in the charter capital/ ordinary shares of Company. Ownership on shares Ownership on shares He has made no transactions with ordinary shares of Company in 2019 Risk and Corporate He has made no transactions with ordinary shares of Company in 2019
Corporative status Non-executive director Corporative status Non-executive director Laurent Nicolas Souviron Membership He was first elected to the Board of Directors of PJSC Enel Russia Membership He was first elected to the Board of Directors of PJSC Enel Russia of the Board of Directors in 2015. He was a member of the Board of Directors in 2015–2018, of the Board of Directors in 2016, he is a member of the company’s Board of Directors currently and until now from 2019 Born 1966 Born 1981 Annexes Citizenship France Citizenship Australia Education Columbia University, bachelor's degree in operations research Education Macquarie University, Bachelor of Commerce, specializing in Actuarial Studies Columbia University, MBA
Work experience He has been with Macquarie Group since 2008, specializing Work experience 2016 — present — member of the Board of Directors in ASTIR over the last 5 years in funds management of infrastructure assets in Australia, over the last 5 years 2009 — present — Partner at AGC Equity Partners Ltd Mosolov Denis Europe and Russia 2012–2016 — member of the Board of Directors in Conformis Member of Strategy Committee He has no shares in the charter capital/ ordinary shares of Company. He has no shares in the charter capital/ ordinary shares of Company. Ownership on shares Ownership on shares He has made no transactions with ordinary shares of Company in 2019 He has made no transactions with ordinary shares of Company in 2019
164 Annual Report 2019 PJSC Enel Russia 165 Corporative status Non-executive director Report on the Work of the Board of Directors 102-22
Membership He was first elected to the Board of Directors of PJSC Enel Russia About the Report of the Board of Directors in 2012. He was a member of the Board of Directors in 2012–2014, In 2019, 16 meetings of the Board of Directors of PJSC Enel Russia were held (10 meetings in absentia-praesentia and from 2015 to present time and 6 meetings in absentia). Born 1976
Citizenship Russian Federation Participation of the members of the Board of Directors in the meetings Education Plekhanov Russian Academy of Economics, economist
University of Chicago Booth School of Business, MBA
Work experience 2012 — present — First Deputy General Director, since 2012 he is Tagir Alievich Sitdekov over the last 5 years member of the Executive Board of JSC Management Company RDIF Company Overview Date and form 2012 — present — director of Causie Investments Limited of meeting/ Full name 2012 — present — director of PFR Partners Management Limited of Board of Directors’ members 2012 — present — director of RDIF Asset Management Limited 28.01 In absentia 13.02 In praesentia/ absentia 22.02 In absentia 06.03 In absentia 15.03 In absentia 27.03 In praesentia/ absentia 17.04 In praesentia/ absentia 17.05 In praesentia/ absentia 05.06 In praesentia/ absentia 25.06 In praesentia/ absentia 24.07 In praesentia/ absentia 30.07 In absentia 19.09 In praesentia/ absentia 07.11 In praesentia/ absentia 27–29.11 In praesentia/ absentia 17–18.12 In praesentia/ absentia 2014 — present — non-executive Director and member of Audit, Risks Roberto Antonio and Internal Control Committee of Tigers Realm Coal Limited Enzo Deambrogio · · · · · · · · · 2015 — present — member of the Board of Directors in LLC Severo- Rodolfo Avogadro vostochnaya magistral, LLC Yugo-vostochnaya magistral Di Vigliano · · · · · · · · · 2016 — present — member of the Board of Directors LLC Professional Alexander Arthur logistics technologies John Williams indicators 2016 — present — member of the Board of Directors of LLC Road- investment company Marco Fragale · · · · · · · · · 2017 — present — member of the Board of Directors in JSC Terminal Financial and performance Stephane Maurice Vladivostok Zweguintzow · · · · · · · · · · · · · · · · 2017 — present — chairman of the Board of Directors of LLC Natsionalnaya sim-karta Andrea Guaccero · · · · · · · · · · · · · · · · 2018 — present — member of the Board of Directors in PJSC GTM Maria Antonietta 2018 — present — member of the Board of Directors of Desiberg Giannelli · · · · · · · · · · · · · · · · Holdngs Limited 2019 — present — member of the Board of Directors in JSC “KRSK” Giorgio Callegari · · · · · · · · · · · · · · · · 2019 — present — member of the Board of Directors of Ristango Sustainability Holding Limited Denis Mosolov · · · · · · · · · · · · · · · · 2019 — present — chairman of the Board of Directors Thalita Trading Limited Andrea Palazzolo · · · · · · · · · · · · · · · · 2020 — present — member of the Board of Directors SESH holding
2014–2015 — Member of the Board of Directors in JSC “Stolichny Tagir Alievich Sitdekov Trakt” · · · · · · · · · · · · · · · · 2014–2017 — director in Kristian Holdings Limited Laurent Nicolas Souviron · · · · · · · 2016–2016 — director in RP Asset Management
2016–2016 — director of RS Investment Advisor Vitaly Yurievich Zarkhin · · · · · · · Governance 2016–2016 — CEO in LLC “Professional logistic technologies” Risk and Corporate 2015–2016 — CEO in LLC “Infrastructure investments-2” Simone Mori · · · · · · · 2016–2017 — CEO in LLC “RDIF — Investment management-16” 2016–2016 — CEO of LLC of LLC “RS Investment management” Giancarlo Pescini · · · · · · · He has no shares in the charter capital/ ordinary shares of Company. Ownership on shares He has made no transactions with ordinary shares of Company in 2019 In the period of the meeting the person was not a member of the Board of Directors.
The most important issues considered by the Board of > on preparation and holding of the General Shareholders' Annexes Directors of PJSC Enel Russia in 2019: Meetings as well as on evaluation of independence of > on the company's business plan for 2019–2021 candidates to the Board of Directors > on approval of investment projects > on performance of self-assessment of the Board of > on approval of consolidated financial statements of PJSC Directors for 2018 Enel Russia as per IFRS > on corporate governance practices > on approval of charity program for 2019 > on The Long Term Incentive Plan at PJSC Enel Russia. > on consideration of various related party transactions
166 Annual Report 2019 PJSC Enel Russia 167 Number of meetings of the Board Structure of items considered by the Board About the Report of Directors in 2017–2019 of Directors in 2019 Audit and Corporate Governance Committee
REPORT OF THE AUDIT AND CORPORATE GOVERNANCE COMMITTEE FOR 2019
As the Chairman of the Audit and Corporate Governance Committee of the Board of Directors of PJSC Enel 6 Russia, I am pleased to present our report for 2019 to shareholders. I hope that in this report we will be able to 2 6 demonstrate our commitment, as the Audit and Corporate Governance Committee, to our duties in accordance with the Corporate Governance Code recommended for use by letter of the Bank of Russia dated April 10, 2014 Company Overview 12 No. 06-52/2463, and efficient fulfillment of these duties during 2019. 11 10 Our key objective is to facilitate the efficient fulfillment of the functions by the Board of Directors of PJSC Enel Russia in resolving issues related to control of financial and economic activities as well as development and improvement of the corporate governance system and practice at PJSC Enel Russia. To accomplish this 2017 2018 2019 objective, the Committee is granted the following functions, namely: Corporate Governance Business planning and investments Financial statements Remuneration Management of controlled In absentia-praesentia entities Transactions and agreements In the field of accounting > preliminary review, analysis of the annual financial statements of the company; indicators In absentia Reports Other (financial) statements > control of ensuring completeness, accuracy and reliability of the company's financial statements.
> monitoring the efficiency and reliability of the internal control and risk management system; Financial and performance In the field of risk > creation and ensuring efficiency of procedures in the field of risk management and internal control management and internal including consideration of policies in relation to risk management and internal control; control > creation of conditions that prevent, identify and reduce the likelihood of financial and operational The Board of Directors regularly reviewed the reports of of internal documents, namely a new version of the risks. the General Director on company activities as well as on Policy on remuneration and reimbursement of expenses > ensuring independence and objectivity of the internal audit functions; investment projects in wind energy, reports of the chairmen (compensations) of the members of the executive bodies In the field of internal > ensuring functioning of the internal audit of the company including consideration of the internal audit of the Committees of the Board of Directors. and other key managers of Public Joint Stock Company Enel audit work plan and preliminary consideration of the appointment (dismissal) of the Head of Internal Audit Department. During 2019, the Board of Directors approved a number Russia of. Sustainability
> selection of candidates for subsequent election of the external Auditor of the company and determination of the amount of remuneration for its services; In the field of external > evaluation of independence and absence of the conflict of interest of the external Auditor as well as audit assessment of the quality of audit of accounting (financial) statements; Committees of the Company’s Board of Directors 102-22 > ensuring independence and objectivity of implementation of the external audit functions as well as ensuring efficient interaction of the external Auditor with the company.
> preliminary review, analysis of the annual report of the company; The committees of the company’s Board of Directors are > ensuring company’s compliance with the legislation and stock exchange requirements, ethical advisory bodies formed on the basis of the Board of Directors standards, rules and procedures of the company, as well as best national and international practices Governance decisions that are not authorized to act on behalf of the in relation to corporate governance; Risk and Corporate > analysis of the corporate governance system of the company, evaluation of corporate governance In the field of corporate company or the Board of Directors. practices and development of recommendations for improvement of the corporate governance governance system; The committees act in accordance with the Charter of > assistance in creating conditions at the company aimed at preventing bad faith actions by the the company as well as the Organizational Regulation The PJSC Enel Russia’s Organizational employees of the company and third parties; Charter Regulation > control of special investigations on the issues related to potential fraud, unfair use of insider or on Committees of The Board of Directors defining the on Committees confidential information. of The Board objectives, functions and procedure for holding meetings of Directors of the Committees30. The quantitative composition of the Annexes Committees is defined by the Board of Directors. I chair the Committee consisting of three members, each being an independent director. The Committee in its In 2019, in order to assist the Board of Directors in Corporate Governance Committee, the HR and Remuneration current composition was elected by the Board of Directors of PJSC Enel Russia on June 25, 2019. (Minutes considering issues of strategy definition, participation in Committee, and the Related Party Transaction Committee No. 10/19 of the meeting of the Board of Directors of PJSC Enel Russia dated June 26, 2019), in the previous investment projects and sustainable development, a Strategy were formed solely from independent directors, and the composition — on June 26, 2018 (Minutes No. 8/18 of the meeting of the Board of Directors of PJSC Enel Russia Committee was established. Moreover, the Audit and Strategy Committee was headed by an independent director. dated June 27, 2018):
30 The Charter of the company and Regulation on the Committees of the Board of Directors of PJSC Enel Russia are posted at the company's website https://www.enelrussia.ru
168 Annual Report 2019 PJSC Enel Russia 169 HR and Remuneration Committee > issuing recommendations to the company Board of Directors on assessment of independence of the Composition of the Audit Committee Composition of the Audit Committee operating About the Report operating from January to June 2019 from June to December 2019 The duties of the HR and Remuneration Committee include candidates, formation of an opinion on the status of Andrea Palazzolo — Chairman, independent director Vitaly Zarkhin — Chairman, independent director support of the activities of the Board of Directors of the independence of candidates and on evaluation of Andrea Guaccero — independent director Andrea Palazzolo — independent director company in efficient and transparent personnel management candidates for the members of the Board of Directors Giorgio Callegari — Senior Independent Director Andrea Guaccero — independent director policy, continuity planning, creating efficient remuneration elected at the annual General Shareholders' Meeting of Denis Mosolov system for the members of the Board of Directors, members PJSC Enel Russia; Alexander Arthur John Williams — independent director of the Executive Board, Corporate Secretary and key > issuing recommendations to the company Board of managers of the company as well as efficient assessment of Directors on the proposal to the General Shareholders' Each of the Committee’s members gained extensive experience in their previous activities in the field of finance,
the activities of the Board of Directors and its members and Meeting of PJSC Enel Russia on the issue “On approval Company Overview audit and corporate governance, and was elected with the purpose of using a wide range of business knowledge Committees31. of new version of the Regulation on payment of to fulfil the duties assigned to the Audit and Corporate Governance Committee in accordance with the Corporate remunerations and compensations to the members of Governance Code. Composition of HR and Remuneration Committee the Board of Directors and Committees of the Board of elected on 26.06.2018: 10 meetings of the Audit and Corporate Governance Committee were held totally in 2019. Directors of PJSC Enel Russia”; 1. Andrea Guaccero, Chairman, independent director > issuing recommendations to the company Board of 2. Giorgio Callegari, Senior Independent Director Composition of meetings The number of meetings of the members of the Audit and Corporate Directors on approval of the new version of the Policy Governance Committee in 2019 with various organizational units 3. Tagir Alievich Sitdekov by the form for remuneration and reimbursement of expenses
and the company's auditor within the scope of meetings: indicators (compensation) to the members of executive bodies and
7 Composition of HR and Remuneration Committee other key managers of PJSC Enel Russia; 5 elected on 25.06.2019: Financial and performance > the issue of independence of the members of the Board of 4 4 1. Andrea Guaccero, Chairman, Independent Director 3 3 3 Directors as well as the issues of self-assessment of the 2. Giorgio Callegari, Senior Independent Director) Board of Directors of the company. 3. Andrea Palazzolo, Independent Director Related Party Transactions Committee
In praesentia In absentia Auditor Internal Corporate Risk Administration, 8 meetings of the HR and Remuneration Committee were Audit Group Affairs Group Control Group Finance
and Control held in 2019. The duties of the Related Party Transactions Committee Sustainability include assisting the Board of Directors in evaluation and Format of the meetings decision-making during consideration of related party The Committee’s work was carried out on the basis of the Work Plan approved by the Committee on July 26, In praesentia In absentia In praesentia/absentia transactions, cases of the conflict of interest and significant 2018 (Minutes No. 8/18 of the meeting of the Audit and Corporate Governance Committee of the Board of 5 3 — 32 Directors of PJSC Enel Russia dated July 26, 2018), as well as the Work Plan approved by the Committee on July corporate actions . 23, 2019 (Minutes No. 6/19 of the meeting of the Audit and Corporate Governance Committee of the Board of Directors of PJSC Enel Russia dated July 24, 2019). Members of the Related Party Transactions Committee elected on 26.06.2018: The most significant issues and main recommendations made
The Committee considered totally 41 issues in 2019, the main of them are: 1. Giorgio Callegari, Chairman, Senior Independent Director Governance by the HR and Remuneration Committee are: > recommendations to the Board of Directors regarding the candidacy of the company’s Auditor 2. Denis Mosolov Risk and Corporate > issuing recommendations to the company Board of > recommendations to the Board of Directors regarding approval of the new version of the company's Charter, 3. Andrea Palazzolo, Independent Director) annual report of the company for 2018 Directors on approval of remuneration terms, long-term bonuses as well as key performance indicators for key > recommendations to the Board of Directors regarding the annual financial statements of the company for 2018, Members of the Related Party Transactions Committee consolidated financial statements in accordance with IFRS for 2018 and distribution of profit and payment of managers of PJSC Enel Russia; elected on 25.06.2019: dividends > issuing recommendations to the company Board of 1. Giorgio Callegari, Chairman, Senior Independent Director > Committee’s evaluation of the Auditor's reports on the company's accounting (financial) statements for 2018 Directors on consideration of the self-assessment report 2. Andrea Guaccero, Independent Director
> consideration of regular reports of the Internal Audit Department, risk reports of the Board of Directors of PJSC Enel Russia for 2018; 3. Vitaly Yurievich Zarkhin, Independent Director Annexes > recommendations to the Board of Directors regarding consideration of the report on implementation of the > issuing recommendations to the company Board of Annual Audit Plan, approval of the Annual Audit Plan. Directors on the issues related to remuneration of key Seven meetings of the Related Party Transactions Committee managers; were held in 2019. Chairman of the Audit and Corporate Governance Committee of the Board of Directors of PJSC Enel Russia, independent director
V. Zarkhin 31 More details information about the functions of the Committee are available in the Regulation on the Committees of the Board of Directors of PJSC Enel Russia posted at the company's website https://www.enelrussia.ru. 32 More details information about the functions of the Committee are available in the Regulation on the Committees of the Board of Directors of PJSC Enel Russia posted at the company's website https://www.enelrussia.ru.
170 Annual Report 2019 PJSC Enel Russia 171 Format of the meetings > monitoring of the company’s performance in accordance Communication on the Board of Directors’ 102-28 In praesentia In absentia In praesentia/absentia with selected external sustainability indicators; Self-Evaluation About the Report 4 1 2 > the issues of sustainable development related to the company’s activities and dynamics in interaction of the PJSC Enel Russia conducted a self-evaluation procedure of the audit, ensuring occupational and industrial safety, ensuring The most significant issues and main recommendations made latter with stakeholders. Board of Directors for 2019 in line with the Russian Corporate accurate financial reporting and robust external audit process by the Related Party Transactions Committee are: Governance Code recommendations and Information Letter and overseeing subsidiaries. > issuing recommendations to the company Board of Members of the Strategy Committee elected on 25.06.2019: of the Bank of Russia №IN-06-28/41 On Recommendations Directors on approval of related party transactions; 1. Giorgio Callegari, Chairman, Senior Independent Director Overall, it appears that the Board of Directors devotes for organizing and conducting a Board of Directors’ self- > consideration of reports on related party transactions for 2. Vitaly Yurievich Zarkhin, Independent Director insufficient time and focus to HR matters, risk management evaluation of the its effectiveness in public companies. 3. Maria Antonietta Giannelli and some other important functions. According to the previous periods. Company Overview According to the Corporate Governance Code’s directors, the Board of Directors areas of concern are: 4. Simone Mori recommendations, the next external evaluation will take place > Planning the executive succession; Strategy Committee 102-31 5. Denis Mosolov at the end of 2020. > Setting the right strategy, monitoring its implementation and strategy’s timely revising, where needed; It was formed in June 2019. The duties of the Strategy Board of Directors’ self-evaluation is an important instrument Seven meetings of the Strategy Committee were held in > Detecting emerging business risks and opportunities; Committee include assisting the Board of Directors in for improving efficiency, which helps to identify areas of the > Monitoring major investments; 2019. Board of Directors’ improvement. evaluation and making decisions on the company's strategy > Monitoring all critical risks and ensuring putting appropriate through preparatory work for making proposals and providing The self-evaluation of the Board of Directors’ performance for risk mitigation actions in place. Format of the meetings indicators recommendations. 2019 was held through a questionnaire survey of the directors’ In praesentia In absentia In praesentia/absentia The Audit and Corporate Governance Committee’s areas of opinions, individual interviews with Board of Directors’ The Committee is provided, among other things, with the 7 — — concern are risk management, including considering the risk Financial and performance members and desktop review of company’s materials and appetite, monitoring all critical risks and ensuring, as well as functions to prepare, consider information and provide information in the following sections: the effective functioning of the corporate risk management recommendations on the following issues related to The most significant issues and main recommendations made > evaluation of the whole Board of Directors; system. sustainable development33: by the Strategy Committee are: > evaluation of each Board of Directors’ Committee; > revision of the Sustainability Plan and relevant documents > issuing recommendations to the Board of Directors of > evaluation of the Board of Directors’ Chairman; Executive/director succession planning and considering (policies, strategies) of the company including ESG PJSC Enel Russia on approval of the heat generation > evaluation of the Senior Independent Director; director succession planning and Board of Directors’ (environmental, social and corporate governance) and investment projects, modernization as well as approval of > and evaluation of each individual Board of Directors’ refreshment, as well as developing and retaining talent require relevant KPIs; the company’s business plan for 2020–2022 including the members. more focus of HR and Remuneration Committee. Sustainability > analysis of periodic management reports on sustainable company’s budget for 2020; The self-evaluation identified both strong points and areas Within the self-evaluation of the Board of Directors for 2019, development of the company; > consideration of the reports on sustainable development. of concern for the Board of Directors and its Committees in directors have indicated several business lines, which can > monitoring of compliance with GRI reporting standards 2019. improve the Board of Directors efficiency. Firstly, the Board (Global Reporting Initiative) and checking of ESG reports; of Directors should deal with strategic issues but not engage Strong points of Audit and Corporate Governance Committee in micromanagement. Secondly, the Board of Directors’ still the same as last year. These are reviewing the financial composition should be strengthened through election a reporting, monitoring the effectiveness and efficiency
director with industry-specific experience and changing the Governance Participation of the members of the Board of Directors in the meetings of the internal/external audit process and the auditor’s Chairman on non-executive / independent director. Thirdly, Risk and Corporate independence, as well as considering internal audit reports of the Committees of the Board of Directors of PJSC Enel Russia in 2019 directors suggested to decrease the work load of the Board and monitoring how major identified shortcomings are cured. of Directors through increasing the period of submission of Audit and corporate HR and remuneration Related party Directors declared as the strongest point of HR and the Board of Directors’ materials from 5 calendar days to 5 governance committee committee transactions committee Strategy Committee Remuneration Committee’s performance during 2019 — business days. Fourthly, directors pointed at necessity of Andrea Guaccero 10/10 8/8 4/4 the assessment of the executive performance, rather than additional training, which would help them for understanding Maria Antonietta Giannelli 6/7 consideration of the executive compensation system as in better the key points of the core business, power market Vitaly Yurievich Zarkhin 5/5 4/4 7/7
2018. and other issues discussed during the Board of Directors’ Annexes Giorgio Callegari 5/5 8/8 7/7 7/7 meetings. Simone Mori 6/7 Related Party Transaction Committee manages well Denis Mosolov 5/5 3/3 7/7 consideration of the related party transaction with subsidiaries. The following recommendations can be given to the Board of Andrea Palazzolo 10/10 4/4 3/3 Strategy Committee was good in analyzing modernization Directors’ Committees for further improvement: Tagir Alievich Sitdekov 4/4 issues. The areas to concern for the Audit and Corporate Governance Strong points of the Board of Directors correspond with Committee and HR and Remuneration Committee remain the same as a year ago: the risk management area and questions 33 More details information about the functions of the Committee are available in the Regulation on the Committees of the Board of Directors of PJSC Enel Russia posted at Committees’ strong points, such as ensuring effective internal the company's website https://www.enelrussia.ru.
172 Annual Report 2019 PJSC Enel Russia 173 to be considered within succession plan, talent development Adoption of the above-mentioned measures will help General Director and Executive Board and talent retaining respectively. the Board of Directors and its Committees to improve its efficiency. About the Report Related Party Transaction Committee should desirably focus on considering RPT (especially intragroup transactions). The results of self-evaluation and recommendations, aiming Management of current activities of the company is carried to improve the efficiency of the Board of Directors and its out by the sole executive body — General Director — and There are no recommendations to the Strategy Committee Committees, were considered at an in-person meeting of the collegial executive body — Executive Board. because it has been in operation for less than 1 year. Board of Directors. The General Director and Executive Board of the company report to the General Shareholders’ Meeting and the Board
of Directors of the company and act based on the Charter of The PJSC Enel Russia’s Regulation the company, the activities of the Executive Board are also Charter on Executive Board
of Open Joint-Stock Company Overview Corporate Secretary regulated by the Regulation on Executive Board34. Company Formation of the Executive Board of the company and The company’s Corporate Secretary acts in compliance with appointment for the position of the General Director of the Regulation on Corporate Secretary of PJSC Enel Russia. the company as well as early termination of powers of the members of the Executive Board and the General Director Members of the Executive Board: The main objective of the activities of the Corporate Secretary is exercised based on the decision of the Board of Directors 1. Carlo Palasciano Villamagna, Chairman is to ensure efficient interaction with the shareholders, of PJSC Enel Russia. There were no changes among the 2. Andrey Aleksandrovich Volkov coordination of the company’s measures for protection members of the Executive Board in 2019; 4 meetings of the 3. Oleg Nikolayevich Kosmenyuk indicators of rights and interests of the shareholders, support of the Regulation 4. Yulia Konstantinovna Matyushova on Corporate Secretary Executive Board were held. effective work of the company’s Board of Directors. Financial and performance
The Corporate Secretary acts as the secretary of the company
Board of Directors, the company General shareholders' 35 meeting, Committees of the company Board of Directors Information on the members of the Executive Board of the Company unless otherwise provided by the resolutions of the company Board of Directors. Born 1959 Corporate secretary is officer of the company. The Corporate the area of corporate governance and experience in executive Citizenship Italy Secretary of the company is appointed and dismissed by the positions of minimum two years. The Corporate Secretary Sustainability Education La Sapienza University, Degree in Law General Director of the company by decision of the Board of shall have knowledge, skills and experience sufficient for him/ Additional education in the sphere of finance. Directors. her to perform his/her obligations, excellent reputation and Finished postgraduate course of specialization in International Taxation. enjoy the trust of the shareholders. Member of the Chartered Accountants’ Registry The candidate for the position of the Corporate Secretary Work experience 2015 — present — General Director, Chairman of the Executive Board of the company shall have the higher education in law, Since April 2012, Zhanna Igorevna Sedova has been the over the last 5 years of PJSC Enel Russia economics or in business, shall have working experience in Corporate Secretary of the Board of Directors. 2017 — present — member of the Board of Directors, since January 2020 hi is the Chairman of the Board of Directors of LLC Rusenergosbyt 2007–2016 — member of the Board of Directors of Enel France Carlo Palasciano Villamagna
2007–2017 — member of the Board of Directors of Enel Investment Governance General Director Holding B.V. Chairman of Executive Board Risk and Corporate Born 1973 2008–2015 — member and the Chairman of the Internal Audit Citizenship Russian Federation Commission of PJSC Enel Russia 2016–2017 — Chairman of the Board of Directors Enel Rus Wind Education Higher Generation (Perm State University, major "Jurisprudence") 2015–2017 — member of the Board of Directors of Res Holdings BV Degree PhD in Legal Sciences since 2001 (Russian Academy of Public 2014–2015 — President, CEO of Enel Factor Administration under the President of the Russian Federation) 2013–2014 — member of the Board of Directors of Enel Italia SrL Work experience Has been employed in PJSC Enel Russia since August 2010, 2012–2014 — member of the Board of Directors of ENEL Finance over the last 5 years and is current Corporate Secretary, Head of Legal and Corporate Affairs International N.V.
of PJSC Enel Russia, is an assistant professor of international law 2004–2014 — Head of Tax of Enel S.p.A. Annexes at the Russian State University of Justice, since May 2019, Chairman Awards Certificate of the Ministry of Energy of Russian Federation, 2017 of the Energy Law Commission of Moscow Region; since March 2020, Badge of honor of the All-Russian Electric Trade “For the development Sedova Zhanna Igorevna member of the Scientific Advisory Council on International Law under of social partnership”, 2019 Corporate Secretary the Ministry of Justice of Russia He has no shares in the charter capital/ ordinary shares of Company. He has no shares in the charter capital/ ordinary shares of Company. Ownership on shares Ownership on shares He has made no transactions with ordinary shares of Company in 2019 He has made no transactions with ordinary shares of Company in 2019
34 The Charter and Regulation on the Executive Board of PJSC Enel Russia are posted at the company's website https://www.enelrussia.ru. 35 Information as of March 2020.
174 Annual Report 2019 PJSC Enel Russia 175 Born 1977 Remuneration 102-35 102-36 Citizenship Russian Federation About the Report Education Moscow Institute of physics and technology, engineer-physicist, and Moscow State University, mathematician
Degree Institute of safety problems of nuclear energy development of the A decision on payment of remunerations and (or) Determination of the amount, procedure and conditions for Russian Academy of Sciences, candidate of physical and mathematical Sciences compensations to the members of the Board of Directors and payment of remuneration to the member of the Executive
Work experience 2015–2020 — Head of Energy Management of PJSC Enel Russia on determination of the amount of such remuneration and (or) Board and other key managers of the company is carried out over the last 5 years 2015–2020 — member of the Executive Board in PJSC Enel Russia compensations falls within the competence of the General by decision of the company Board of Directors, subject to prior 2015 — present — member of the Board of Directors in LLC Shareholders' Meeting. A proposal on the specified agenda consideration of these issues by the HR and Remuneration Volkov Andrey Aleksandrovich "Teploprogress" Head of Energy Management 2013–2015 — Deputy General Director for Trading in LLC item of the General Shareholders' Meeting is prepared by the Committee of the Board of Directors of the company. "Rusenergosbyt" Board of Directors after preliminary consideration of the item Company Overview 2013–2015 — Deputy Head of Energy Management — Head of Department in Enel Russia PJSC (overlapping job) by the HR and Remuneration Committee. 2015–2015 — Head of Short and Real Time Management in Enel Russia PJSC
He has no shares in the charter capital/ ordinary shares of Company. Ownership on actions He has made no transactions with ordinary shares of Company in 2019 Remuneration to the Board of Directors Members
Payment of remunerations and compensations to the indicators Born 1970 members of PJSC Enel Russia Board of Directors is governed
Citizenship Russian Federation by the Regulation on payment of remunerations and Financial and performance Education Pavlodar State University, Thermal Power Engineer compensations to the members of the Board of Directors Work experience Нe has worked in the company since 2011, since 2016 he has worked and Committees of the Board of Directors (approved by the over the last 5 years as Deputy General Director — Head of Generation of PJSC Enel Russia decision of the annual General Shareholders' Meeting of 2016 — present — Deputy General Director — Head of Generation of Regulation on Payment PJSC Enel Russia PJSC Enel Russia dated 18.06.2019, minutes No. 1/19 dated of Remuneration and Compensations to Members 2013 — present — member of the Executive Board in PJSC Enel 18.06.2019), prepared with regard to recommendations of of Board of Directors Russia and Board of Directors’ the Corporate Governance Code. Committees Awards Certificate of Honor from the Ministry of Energy of the Russian Sustainability Kosmenyuk Oleg Nikolaevich Federation, 2015 The revision of the Regulation on payment to members of the Deputy General Director — Certificate of Honor of the Governor of the Sverdlovsk Region, 2015 Board of Directors and Committees of the Board of Directors Head of Generation He has no shares in the charter capital/ ordinary shares of Company. Ownership on shares dated 2019 establishes a fixed annual remuneration to the He has made no transactions with ordinary shares of Company in 2019 Chairmen and members of the Committees of the Board of Directors, its level is equal to the level of remuneration for for the members of the Board of Directors of the Russian previous corporate years. In addition, the above Regulation and foreign companies as well as an analysis of applicable
Born 1982 provides for increased level of fixed annual remuneration remuneration policies for the members of the Board of that was proposed for approval by the General Shareholders' Directors at Enel Group companies performed by Stanton
Citizenship Russian Federation Governance Meeting on the basis of analysis of the remuneration market Chase independent from the management. Education Volgograd State University, degree in Financial Management Risk and Corporate CIMA Advanced Diploma in Management Accounting
Work experience She has worked in the company since 2011, since 2017 she has over the last 5 years worked as Deputy General Director — Head of Administration, Finance The amount of fixed remuneration to the members of the Board of Directors for the year, rubles and Control of PJSC Enel Russia. 2017 — present — member of Board of Directors of "Rusenergosbyt" LLC 2016 — present — member of Executive Board of PJSC Enel Russia Matyushova Yulia Amount of fixed remuneration for the year (RUB)
Konstantinovna Annexes Deputy General Director — She has no shares in the charter capital/ ordinary shares of Company. Head of Administration, Finance Ownership on shares She has made no transactions with ordinary shares of Company in and Control 2019 Chairman of the Board Member of the Board Chairman of the Committee Member of the Committee of Directors, Senior of Directors (optional) (optional) Independent Director
6 320 000 4 460 000 860 000 570 000
176 Annual Report 2019 PJSC Enel Russia 177 The Regulation on payment of remunerations and > in their relation the federal law provides for a restriction Remuneration paid due to fulfillment of duties of the member of the Board of Directors in 2019, compensations to the members of the Board of Directors or prohibition on receiving any payments from commercial thousand rubles and Committees of the Board of Directors following the organizations; About the Report recommendations of the Corporate Governance Code > who hold concurrently paid positions in the company; Remuneration Remuneration to the Chairman of the Remuneration Remuneration provides for a fixed annual remuneration as the main form > those refused from remuneration in full or in a certain part; to the Board Board of Directors/Senior to the member to the Chairman of remuneration. In addition, the members of the Board > those not participating in more than 70% of the meetings Full name of Directors Independent Director of Committees of Committees of Directors are entitled to sign an agreement for sales of of the Board of Directors/Committee held during the Alexander Arthur John Williams shares with the company under the Stock Options Plan. The month. Roberto Antonio Enzo Deambrogio Regulation does not provide for the use of any form of short- Rodolfo Avogadro Di Vigliano The members of the Board of Directors receive reimbursement term or long-term incentives for the members of the Board of Marco Fragale of expenses due to their presence at the meetings of the Denis Mosolov 3,825.2 709.7
Directors, accrual of severance payments due to termination Company Overview Board of Directors/Committees or performance by them of powers, other types of remuneration in non-monetary form. Stephane Maurice Zweguintzow of job duties as the members of the Board of Directors/ Andrea Guaccero 3,825.2 745.6 737.7 Fixed remuneration is not paid to the members of the Board Committees. Maria Antonietta Giannelli of Directors: Simone Mori Andrea Palazzolo 3,825.2 736.9 329.9 Giancarlo Pescini 371.7 Compensation of expenses Giorgio Callegari 5,028.6 741.9 1,062.2 Vitaly Yurievich Zarkhin 2,019.4 494.0 372.7 indicators Tagir Alievich Sitdekov 3,825.2 243.3 Laurent Nicolas Souviron 2,019.4 Financial and performance Expenses Total 19,711.3 5,028.6 3,671.4 2,502.5
Daily allowance Expenses related to travel to the business trip place In 2019, the members of the Board of Directors Giancarlo In 2019, no agreements were signed with the members of the and back to the permanent place of work/residence Pescini (until 01.11.2019), Roberto Antonio Enzo Deambrogio, Board of Directors for sales of shares of the company under Rodolfo Avogadro Di Vigliano, Marco Fragale, Stephane the Stock Options Plan; members of the Board of Directors
Maurice Zweguintzow, Maria Antonietta Giannelli, Simone did not receive payments for the work at the management Sustainability Mori did not receive remuneration due to refusal from it. bodies of entities controlled by the company.
Member of the Board of Directors S. Zweguintzow, who is also The directors’ liability insurance agreements do not apply to The total amount of remunerations and compensations paid to the members Deputy General Director - Head of People and Organization the members of the Board of Directors. See details about of the Board of Directors, thousand rubles of PJSC Enel Russia, did not receive remuneration for the the terms of such agreements signed in 2019 in the Annex duties of a member of the Board of Directors, but received “Information about the most material transactions and related remuneration as an employee of the company. party transactions closed by the company in 2019”. 2019 36,165.21 6,048.46 Governance Risk and Corporate
2018 33,935.96 5,086.21 Remuneration to the Members
Remuneration 2017 18,718.22 1,503.27 of the Executive Board and Key Managers Compensations
The documents governing remuneration to the members of 2017–2019 approved by the Board of Directors of PJSC the Executive Board and key managers of PJSC Enel Russia Enel Russia (minutes No. 16/17 dated 30.11.2017); Annexes are: > The Long Term Incentive Plan at PJSC Enel Russia for > Policy on remuneration and reimbursement of expenses 2018–2020 approved by the Board of Directors of PJSC The fluctuations in the total amount of all types of remuneration meetings of the Committees for the reporting period as well (compensations) of the members of the executive bodies Enel Russia (minutes No. 1/19 dated 29.01.2019); paid to the members of the Board of Directors are associated as with changes in the provisions of documents establishing and other key managers approved by the Board of Directors > The Long Term Incentive Plan at PJSC Enel Russia for primarily with a change in the members of the Committees, the amount and conditions for payment of remuneration. of PJSC Enel Russia (minutes No. 14/19 dated 08.11.2019); 2019–2021 approved by the Board of Directors of PJSC appearance of new Committees, different frequency of the > The Long Term Incentive Plan at PJSC Enel Russia for Enel Russia (minutes No. 1/19 dated 29.01.2019).
178 Annual Report 2019 PJSC Enel Russia 179 The constituent elements of the remuneration system for key managers The Policy on remuneration and reimbursement of expenses
(compensations) of the members of the executive bodies About the Report Fixed part (base salary) It is established by the decision of the Board of Directors and is reflected in the and other key managers (hereinafter referred to as key labor agreement signed between the company and the respective key manager managers) as amended in 2019 was prepared with regard to of the company. the requirements of the Corporate Governance Code and did When defining the amount of base salary, the following is taken into account: Policy on Remuneration and > level of competence and qualification of the relevant person, his/her individual not change the approach to the system of remuneration and Reimbursement of Expenses (Compensations) of the skills and experience reimbursement of expenses for these company employees. members of the Executive > scope and area of responsibility, level of risks taken Bodies and Other Key > personal contribution into the company’s performance Managers of Public Joint Stock > current compensation practices at comparable companies for positions Company Enel Russia of similar level Company Overview Variable part Short-term element* Actual bonus amount for the results of performance over the year of the key (for the results of the manager of the company shall be calculated according to the following formula: performance over the year) ABA = BBA * ∑ (% of KPI achievement * KPI weight) * correction factor, where: Principles of the system of remuneration and reimbursement of expenses (compensation) > ABA — actual bonus amount for the results of the performance over the year; of the members of executive bodies and other key managers > BBA — base bonus amount subject to performance over the year; > % of KPI achievement — actual percent of KPI achievement calculated depending on the result achieved; > correction factor (multiplier or general denominator) unified for all the company key managers. Transparency of mechanisms Consolidation of the relationship The adequacy and proportion of the for determination of the amount between remuneration and result remuneration paid: The actual bonus amount can reach 150% of the base amount.
of remuneration, regulation of all types of the company’s work in the indicators After preliminary review by the HR and Remuneration Committee, the base bonus of payments, benefits and privileges remuneration system as well as > company goals amount of each key manager is approved by the decision of the Board of Directors as well as transparency of the personal contribution of key company > responsibility imposed on the of the company and is fixed in the labor agreement signed with the key manager of Financial and performance system of payment of remuneration leaders in achievement of this result members of executive bodies and the company. Individual key indicators for each calendar year are developed by the and reimbursement of expenses key managers of the company HR and Remuneration Committee and approved by the Board of Directors of the (compensations) > level of risks assumed by them company.
Indicators can be: financial and economic, non-financial as well as goals, their achievement is a strategic factor in success of a certain business line of the company.
The annual bonus is calculated and paid on the basis of approval of the report by The remuneration system for key managers of the company (compensations) to the members of the Executive Board the Board of Directors on implementation of annual KPIs by these persons after
preliminary consideration of this issue by the HR and Remuneration Committee Sustainability is aimed at achieving the optimal balance between the is not assumed due to the fact that the members of the interconnection of remuneration with the company’s Executive Board are key managers of the company who Long-term item* Bonus awarding for the results of the performance over a three-year period due to performance and the personal contribution of each key receive remuneration in accordance with the terms of the (bonus for the results the key managers of the company is carried out in accordance with the "Long-Term manager of the company to achieving this result. Policy on remuneration and reimbursement of expenses of the company performance Incentive Plan" approved by the Board of Directors after preliminary consideration of (compensations) of the members of the executive bodies and over a three-year period) this issue by the HR and Remuneration Committee. Remuneration for fulfillment of duties of the member of other key managers. Long Term Incentive Plan at PJSC Enel Russia for 2017-2019, the Long Term the Executive Board and reimbursement of expenses Incentive Plan at PJSC Enel Russia for 2018–2020 and the Long-Term Incentive Plan at PJSC Enel Russia for 2019–2021”. Establish dependence of actual amount of the bonus for achievement of key performance indicators and provide for accrual and payment of bonuses upon expiration of the program. Governance
Key managers of the company in 2019 Risk and Corporate The bonus is calculated and paid on the basis of the decision of the Board of Directors on approval of the results of implementation of KPIs and calculation of the General Director Carlo Palasciano Villamagna actual amounts of the bonus after preliminary consideration of this issue by the HR and Remuneration Committee Deputy General Director — Head of Generation Oleg Nikolayevich Kosmenyuk
Deputy General Director — Head of Administration, Finance and Control Yulia Konstantinovna Matyushova Other payments In special cases, by decision of the Board of Directors of the company, Deputy General Director — Head of People and Organization Stephane Zweguintzow by decision of the Board other payments to key managers of the company are possible (for example, of Directors payment of Una Tantum bonus in line with salary revision process, etc.) Head of Energy Management Andrey Vladimirovich Volkov Annexes
Head of Legal and Corporate Affairs Zhanna Igorevna Sedova * Information about KPIs of key managers comprising the conditions for using the specified incentive forms are contained in the Annex to this annual report. Head of Communications Alsu Haidyarovna Zagorskaya
Head of Procurement Anton Tarasovich Grinkov
Head of Internal Audit Shukran Alakbarov Abdullah Ogly The Board of Directors is entitled to initiate recovery of funds reporting indicators or other bad faith actions by the relevant Head of Digital Solutions Sergey Kirillovich Rozenberg (bonus payments) to the company illegally received by the persons in accordance with the provisions of labor laws of the key managers of the company as a result of manipulation of Russian Federation. Head of Regulatory and Institutional Affairs Viktor Valeryevich Naboychenko
180 Annual Report 2019 PJSC Enel Russia 181 The ratio of the parts of remuneration in determination of the basic part of remuneration The amount of payments paid to the members of the Executive Board and key managers in 2019, thousand rubles About the Report
Total remuneration to Total remuneration 50–65% fixed part of remuneration the members of the for a group of at least Total remuneration Executive Board five top-paid key managers to all key managers Fixed part (official salary) 59,376 68,101 102,256 Ratio of the parts Variable part of remuneration, including 43,141 47,694 59,523 of remuneration in determination of the basic 20–35% long-term variable part of remuneration Short-term element part of remuneration (bonus subject to performance over the year) 18,198 21,291 31,660 Long-term item (bonus for the results of the company’s activities for a three-year period) 19,101 19,101 19,101 Company Overview 15–20% short-term variable part of remuneration
In 2019, the key managers did not quit and, accordingly, the The directors’ liability insurance agreements do not apply payments related to dismissal were not made. to the General Director, members of the Executive Board and members of the Board of Directors. See details about In order to improve the efficiency and quality of fulfillment of The policy on remuneration and reimbursement of expenses In 2019, the company issued loans to the members of the the terms of such agreements signed in 2019 in the Annex the duties by the key managers, the company provides them (compensations) of the members of the executive bodies and Executive Board, their terms do not differ significantly from with additional benefits and social guarantees, their list is other key managers does not define the company's approach “Information about the most material transactions and related market conditions. indicators approved by the decision of the Board of Directors. to determination of payments related to dismissals for key party transactions closed by the company in 2019”.
managers (except for the case of payment of compensation Financial and performance The Board of Directors approved the following list of additional upon termination of the labor agreement due to recognition benefits and social guarantees: of the employee as incapable to work). In each case, the > voluntary medical insurance; approach to such payments is determined individually. > voluntary life, illness and accident insurance; > compensation in case of termination of the labor agreement The reason for the reduction in 2019 of the total amount of all due to recognition of the employee as incapable to work; types of remuneration paid to the members of the Board, is > financial assistance in case of death of close relatives; the change in the number of Board members.
> financial assistance in case of birth of a child; Sustainability The amount of compensation paid to the persons being among > fringe benefit in case of temporary disability; the members of the Executive Board: in 2019 amounted to > compensation for using a private car or taxi services; RUB 2,619.78 thousand. > additional paid leave for irregular working hours; > representation expenses; > in case of transfer to a new place of work within a company that entails relocation of a key manager from one locality (region) to another within Russia, the key manager is
covered by the “Policy on housing support and relocation Governance
benefits” approved by the General Director of the company; Risk and Corporate > the program of non-state pension coverage approved by Total amount of all types of remuneration the Board of Directors of the company and set forth in the paid to the members of the Executive Board, Regulation on non-state pension coverage for employees thousand rubles of PJSC Enel Russia is applied to the key managers of the company. The approach to determination of the post- retirement benefits of key managers does not differ from 2019 102,516.98 the approach to determination of the post-retirement Annexes benefits of other employees of the company; > the “Policy on arrangement of business trips and business 2018 115,150.16 trip expenses” approved by the General Director of the company applies to the key manager of the company; 2017 84,463.05 > the company can provide a loan to a key manager.
182 Annual Report 2019 PJSC Enel Russia 183 Internal Audit Commission About the Report
Prior to introducing changes to the Charter of the company activities of the Internal Audit Commission was defined by the in 2019, the Internal Audit Commission was elected by the Regulation on the Internal Audit Commission of the company. General Shareholders’ Meeting to control financial and The Internal Audit Commission of the company consisted of economic activities of the company. The procedure for 5 persons. Company Overview
Composition of the Internal Audit Commission elected on 04.06.2018 Share in the authorized capital Full name Position of PJSC Enel Russia, % Giancarlo Pescini Head of Group’s Participation Unit , Enel S.p.A. 0 Head of Planning and Control Infrastructure and Network Mauro Di Carlo in Enel GIN srl. 0 Marketti Mechal Ebis Kumlachev Head of Financial Strategy in Enel S.p.A. 0
Head of Group Consolidation, Enel S.p.A. and the Netherlands’ indicators Pirri Paolo Administration 0
Natalia Alexandrovna Khramova Senior Accountant at Enel Finance International B.V. 0 Financial and performance
Composition of the Internal Audit Commission elected on 18.06.2019
Share in the authorized capital Full name Position of PJSC Enel Russia, % Head of the Unit for Planning, Monitoring and Reporting for Thermal Cristiano Bussi Generation in Enel Global Thermal Generation s.r.l. 0 Sustainability Marketti Mechal Ebisa Kumlachev Head of Financial Strategy in Enel S.p.A. 0 Pirri Paolo Head of Group Consolidation, Enel S.p.A. 0 Auditor Nicoletta Pollio Head of Corporate Governance Unit, Enel S.p.A. 0 Natalia Alexandrovna Khramova Senior Accountant at Enel Finance International B.V. 0
For independent assessment of the reliability of financial The annual General Shareholders' Meeting on 18.06.2019 statements, the company involves an external auditor. After approved Ernst & Young Limited Liability Company for the
On 18.06.2019, the annual General Shareholders' Meeting Governance necessary internal procedures, the candidate for an external auditor of PJSC Enel Russia. decided to terminate the authorities of the members of the Risk and Corporate auditor is approved annually by the General Shareholders’ Internal Audit Commission from the date of state registration The amount of remuneration of the auditor is approved by the Meeting. of the new version of the Charter. The new version of the Board of Directors and is indicated in the agreement with the Charter was registered on July 23, 2019 and does not provide The company made a request for proposals on the selection auditor. The amount of the auditor's remuneration for 2019 is of an auditor for the audit of the accounting (financial) RUB 10,969,734, inclusive of VAT. In the reporting year, the for presence of the Internal Audit Commission at the company. The PJSC Enel Russia’s Charter statements. Based on the results of completed procurement auditor did not provide non-audit services to the company, In 2019, remuneration for participation in audit to the members procedures, the Board of Directors of the company, after and, accordingly, remuneration for non-audit services was not of the Internal Audit Commission of PJSC Enel Russia was preliminary consideration of the issue by the Audit and paid to them. not paid. Annexes Corporate Governance Committee, decided to propose Ernst & Young LLC to the annual General Shareholders' Meeting to be approved by as the auditor.
184 Annual Report 2019 PJSC Enel Russia 185 Main objectives and tasks: Every year, the Internal Audit Group evaluates the efficiency 103-1 103-2 103-3 Information about > support to the management and personnel of to develop and quality of its work in accordance with the internal About the Report and monitor implementation of the procedures and audit standards. There are the following types of quality the Internal Audit activities on improvement of the risk management system, assessment: internal control system, corporate governance system; > self-assessment (carried out by auditors who are the > coordination of activities with the external auditor as well members of the audit team); as those providing advisory services in risk management, > internal assessment (carried out by auditors who are not The Internal Audit Group maintains efficient management and The Internal Audit Department performs a wide range of internal control and corporate governance; the members of the audit team); work ethics at Enel Russia. It is responsible for evaluation financial, industrial and IT audits as well as provides advisory > carry out the internal audit of the controlled companies in > independent assessment (carried out by third-party of adequacy and efficiency of the internal control system, services. In order to ensure the required level of independence, accordance with the established procedure; professionals); evaluation of efficiency of risk management system, and the Internal Audit Department shall functionally report to the > prepare and submit reports on fulfillment of the annual > assessment of the audited entity (carried out by the audit Company Overview evaluation of the corporate governance. Conducting objective company’s Board of Directors and administratively to the audit plan to the Audit and Corporate Governance subject). internal audits based on risk-oriented approach, submission of General Director of the company. Committee of the Board of Directors, Board of Directors Once every five years, the activities of the Internal Audit recommendations and rendering of advisory services allows and management including those with information about Department are evaluated by an external Company for you to save and increase the value of the company. material risks, defects, results and effectiveness of the compliance with the standard” 1300 — Program for ensuring activities performed on elimination of identified defects, Internal auditors respect the value of information and and improving the quality of internal audit” developed by The results of the internal audit plan performance, results of ownership of the information and do not have the right to Institute of Internal Auditors (The IIA). In 2016, Enel Russia assessment of actual state, reliability and effectiveness of disclose it without being granted with proper authority, unless received a certificate of conformity to the standard. The next the risk management system, internal control system and indicators they are required to do so based on law or professional duty. evaluation is scheduled for 2021. corporate governance system; They exhibit a high level of professional objectivity when > check whether the members of the executive bodies, Financial and performance collecting, evaluating and transmitting information and carry management and personnel of the company observe the out a balanced evaluation of all relevant circumstances and are Regulation Enel Global Compliance on the internal control Program on Corporate provisions of the laws and internal executive documents not influenced by their own interests as well as the interests system Criminal Liability related to the insider information, corruption prevention of others. The employees of the Internal Audit Department and compliance with the requirements of the Code of of PJSC Enel Russia must adhere to the integrity principle, Ethics. thus creating a basis of trust in their judgements. The employees of Internal Audit Department improve regularly Main projects and initiatives: Sustainability their qualifications and participate in training arranged by the > annual evaluation of PJSC Enel Russia’s commitment to Institute of Internal Auditors (IIA) and Information Systems the highest ethical, legal and professional standards to Audit and Control Association (ISACA). strengthen and preserve the company's reputation within the scope “Global Compliance Program on corporate The internal audit activities are also regulated by the following Regulation criminal liability”; internal documents: of Internal Audit > investigation of violations of the “Code of Ethics”; > Procedure “Reporting and cooperation of the Internal Audit Department > continuous monitoring of the procurement of professional Group with corporate governance bodies” and advisory services, procurement process and
> Identification and settlement of cases of conflict of interest Governance agreement management process; (operating instructions No. 0002-OI-AUD) — establishes Risk and Corporate > and annual audits of operating, financial activities of the and describes actions for declaring and storing information company, IT services and information security. about declared potential conflicts of interest. In the next reporting periods, the company plans to develop At a strategic level, the vision is formed by the Internal Audit new methods and approaches in internal audit and increase Committee at the company's Board of Directors. At the gradually the number of audits with continuous monitoring. executive level, the Head of Internal Audit is responsible. Continuous monitoring will allow ensuring continuous Head reports to Board of Directors of the company, appointed review of the status of control implementation and review Annexes and dismissed by the General Director under the decision of of risks by ensuring continuous identification and monitoring the company’s Board of Directors. of possible risks.
186 Annual Report 2019 PJSC Enel Russia 187 Securities of the Company and Interaction with Shareholders About the Report and Investors
Shares Company Overview
As of 31.12.2019, the share capital of PJSC Enel Russia The company shares are included in the First level of the list amounted to 35,371,898,370 rubles and is divided into of securities (highest level) accepted for trading on PJSC 35,371,898,370 ordinary shares with par value of 1 ruble Moscow Exchange (MOEX). each. For the whole period of activity upon the company state registration on 27.10.2004 and until 31.12.2017, the company has not issued preferred shares. indicators Financial and performance
Issuing history
Principal issue Additional issue Additional issue Additional issue Additional issue Additional issue State registration issue number 1-01-50077-A 1-01-50077-A-001D 1-01-50077-A-002D 1-01-50077-A-003D 1-01-50077-A-004D 1-01-50077-A-005D Date of the issue state registration 24.12.2004 16.03.2006 16.03.2006 28.09.2006 07.08.2007 07.08.2007
Shares placed 29,407,170,459 4,105,388,231 69 5,100,000,000 600,000 400,000 Sustainability Shares actually placed 29,407,170,459 864,514,976 69 5,100,000,000 168,061 44,805
Conversion of ordinary registered Conversion of preferred registered uncertificated shares of OJSC OGK-5 Holding uncertificated shares of OJSC OGK-5 Holding into additional ordinary registered shares into additional ordinary registered shares Conversion of ordinary Conversion of ordinary registered of OJSC OGK-5. of OJSC OGK-5. registered shares of Konakovskaya shares of Nevinnomysskaya GRES The shares are placed when spinning off The shares are placed when spinning off Acquisition of shares GRES OJSC being affiliated with OJSC being affiliated with OGK-5 Holding OJSC from RAO UES OGK-5 Holding OJSC from RAO UES by the sole founder OGK-5 OJSC, into additional ordinary OGK-5 OJSC, into additional ordinary of Russia OJSC together with affiliation of Russia OJSC together with affiliation Placement method of the joint stock company shares of OGK-5 OJSC shares of OGK-5 OJSC Public subscription (IPO) of OGK-5 Holding OJSC with OGK-5 OJSC of OGK-5 Holding OJSC with OGK-5 OJSC Governance
Start date 27.10.2004 01.04.2006 01.04.2006 01.11.2006 03.09.2007 03.09.2007 Risk and Corporate End date 27.10.2004 01.04.2006 01.04.2006 10.11.2006 03.09.2007 03.09.2007 Date of state registration of the report on the results of issue / date of sending notification on the results of issue 24.12.2004 27.04.2006 27.04.2006 13.11.2006 11.10.2007 11.10.2007 Date of the additional issue individual number (code) cancellation — 22.08.2006 17.08.2006 20.02.2007 15.01.2008 15.01.2008 Annexes Name of the registering body Federal Financial Markets Service of Russia
188 Annual Report 2019 PJSC Enel Russia 189 Exchange Information About the Shares Results of stock trading in 2017–2019 of PJSC Enel Russia Year 2017 2018 2019 About the Report Minimum closing price, rubles 0,935 1,005 0,866 Maximum closing price, rubles 1,537 1,685 1,177 The company shares are included in the First level of the list of securities (highest level) accepted Market price as of 31.12., rubles 1,456 1,032 0,922 for trading on PJSC Moscow Exchange (MOEX). Capitalization, million rubles 51 501 36 486 32 595 Average daily traded volume, rubles 19 137 150 26 264 436 30 658 996
Number of ordinary shares, Pcs 35,371,898,370 Par value of the share, rubles 1 Despite absence of strong growth of oil prices in 2019 (the (+25%). This dynamic was associated with adjustment of Company Overview ISIN RU000A0F5UN3 price of Brent crude oil was in the corridor of $ 60–65/barrel), forecasts due to strengthening of ruble, positive expectations Trading platform MOEX MOEX index increased by 29% from low levels at the end of regarding the dividend policies of a number of companies Start of trading September 2005 2018. The key factors of index growth included the dividend as well as results of selection of modernization projects and Quotation list First Level yield of the Russian market against the background of strong accompanying changes in the rules and results of capacity Stock code (ticker) ENRU fundamental indicators of companies as well as favorable auctions. Bloomberg code ENRU RX macroeconomic indicators that were less dependent on the The shares of PJSC Enel Russia were traded worse than those risks of US-Chinese relations than analogues from other of competitors and market as a whole, which was explained emerging markets. The main contribution to the index growth indicators by persistence of uncertainty on strategic issues including was made by individual companies in Oil and Gas, Finance and the company profile after the sale of coal asset and allocation
The share of free float as of 31.12.2019 is 25% according to the methodology Financial and performance Metals and Mining sectors. of PJSC Moscow Exchange of funds from its sale, dividend policy for 2019 and beyond, Like other sectoral indices focused on the domestic market, further complicated by limited liquidity of shares. the electric power industry index increased over the year The shares are included in the calculation base of industry Since March 2018, the shares are included in the index FTSE index MOEX Electric Utilities (MOEXEU) with a weight of — Emerging Europe Small Cap and Emerging Europe. 3.05% as of 31.12.2019.
Shareholders Sustainability
Dynamics of the market and shares Capitalization of PJSC Enel Russia, 102-7 The number of persons filed in the register of company shareholders as of 31.12.201936 312,739 of PJSC Enel Russia in 2019, million rubles The number of persons included in the last list of persons who had the right to participate in the General % change vs 2018 346,904 Shareholders' Meeting (as of 27.06.2019)
The number of shares held by the company none Governance
The number of shares held by the legal entities controlled by the company none Risk and Corporate –10.7 2019 32,595
The company's shareholders may enter into shareholder participation. The company has no data on shareholders’ 25.0 2018 36,486 agreements including those providing for acquisition of a agreements that are relevant in 2019. degree of control by any shareholder disproportionate to their 28.6 2017 51,501 Annexes
Enel Russia MOEX Electric Utilities Index MOEX Index
36 Without disclosing information about holders of shares whose rights are accounted for by nominal holders.
190 Annual Report 2019 PJSC Enel Russia 191 The strategic plan of the company for 2020–2022 provides company introduces a fixed dividend to ensure a guaranteed for a balance of growth opportunities, financial sustainability return for its shareholders.
Changes in the composition of persons entitled to make use of at least 5% of business and predictable remuneration for shareholders. About the Report 37 By the results of 2019–2021, the company intends to distribute of the votes falling within the voting shares and companies Given the period of change in the strategic positioning of the RUB 3 billion every year. company and volatility of profit over the medium term, the As of 31.12.2017 As of 31.12.2018 As of 31.12.2019
Information on accrued and paid dividends in the period from 2015 to 2019
19.03% 8.23% 19.03% 8.23% 19.03% 7.68% From By the results accumulated By the results By the results By the results Dividend payment of financial year retained earnings of financial year of financial year of financial year By the results Company Overview 16.31% 16.31% 16.86% reporting period 2014 of previous years 2015 2016 2017 of year 2018 Date of the decision adopted by the General Shareholders’ Meeting of the company to pay dividends 17.06.2015 15.06.2017 04.06.2018 18.06.2019 17.06.2015 29.06.2016 Class, type, category registered registered registered registered The General The General of shares ordinary ordinary ordinary ordinary 56.43% 56.43% 56.43% Shareholders’ Shareholders’ Date when the persons Meeting of Meeting of
entitled to receive dividends the company the company indicators are determined decided not to 29.06.2015 decided not to 28.06.2017 22.06.2018 08.07.2019 Enel Investment Holding B.V. Enel S.p.A Enel S.p.A Total amount pay dividends on pay dividends on PFR Partners Fund I Limited PFR Partners Fund I Limited PFR Partners Fund I Limited of accrued dividends, ordinary shares ordinary shares Financial and performance Prosperity Capital Management Limited Prosperity Capital Management Limited Prosperity Capital Management Limited RUB million by the results of 2,855 by the results of 2,413 5,127 5,004 financial year 2014 financial year 2015 Other persons Other persons Other persons Total amount of dividends paid*, RUB million 2,757 2,402 5,105 4,982 Amount of dividends per one share, rubles 0.080731 0.06822 0.14493 0.141471 Date of dividends payment 03.08.2015 02.08.2017 27.07.2018 12.08.2019 According to the latest information received by the company, the share of Prosperity Capital Management Limited from Sustainability the person controlling PFR Partners Fund I Limited is PFR 31.01.2020 is 5.74% . The Company has no data on existence Partners Management Limited. of shares holdings exceeding five per cent, in addition to The reasons for the dividends being paid not in full are provided by registered persons as well as return of According to the notification received in February 2020, already disclosed. represented by lack of current details for payment not outstanding dividends by nominee shareholders.
Dividends Depositary Receipts Governance Risk and Corporate Upon authorization by the Federal Financial Markets Service of for global depositary receipts (GDR) issue for ordinary shares The decision on dividend payment is taken at the General Russia for circulation of the company ordinary shares outside of PJSC Enel Russia. The GDR program is established and Shareholders’ Meeting based on recommendations of the the Russian Federation in the amount of not more than supported according to Regulation S (Reg S). Ratio of GDR to company Board of Directors. 7,074,537,100 pieces in August 2007 a program is opened ordinary shares of the company amounts to 1:50. 38 In accordance with Dividend Policy Regulation , the Board Dividend Policy of Directors of the company advised the annual General Regulation Shareholders’ Meeting regarding the dividend payout that
Amount of depositary Circulating receipts from Foreign organizer Annexes the amount of dividends must be: by the results of 2016 — Program Depositary bank receipts circulating the authorized capital, % of trade 55%, by the results of 2017 — 60%, by the results of 2018 — Sponsored* 65% of ordinary net profit determined based on consolidated the company net profit allocated to distribution of dividends 448,829 (corresponds financial statements of the company (IFRS). The amount of complies with approved dividends policy. The Bank to 22,491,450 Company Over the counter GDR (ordinary shares) of New York Mellon ordinary shares) 0.06 securities market
37 The data are indicated in accordance with the notifications received by the company in accordance with Russian law. Prosperity Capital Management Limited is a person, together with other persons entitled to administer a certain number of votes attributable to voting shares and included in the issuer’s authorized capital. * Information as of 31.12.2019. 38 The Dividend Policy Regulation of PJSC Enel Russia are posted at the company's website https://www.enelrussia.ru.
192 Annual Report 2019 PJSC Enel Russia 193 Stock Exchange Bonds Key instruments for interaction with shareholders and investors About the Report
In 2019, the company placed the commercial papers of series The commercial papers of PJSC Enel Russia are included 001Р-02R and 001Р-03R by public subscription within the in the section “Second Level” of the List of Securities > General shareholders’ meeting > Road show Program of commercial papers with identification number accepted for trading on Moscow Exchange PJSC. > Disclosure of information including publication of results in Shareholders 4-50077-A-001P-02E dated September 2, 2015. Company excess of the amount required by law > Conference calls and investors > Feedback forms for contacting the Chairman of the Board of Directors and Senior Independent Director and answers to the most frequently asked questions on the company's portal Documentary percentage bearer non-convertible commercial papers
with obligatory collective custody Company Overview
Series 001Р-02R 001Р-03R In 2019, the company continued to work for improvement > direct meetings with investors including within the scope Identification number of the issue 4B02-02-50077-A-001P 4B02-03-50077-A-001P of transparency of the public history and attractiveness of of conferences of brokers Date of the identification number assignment 29.03.2019 29.03.2019 investments in the shares of PJSC Enel Russia including in > answers to the questions from investors and analysts. International Securities Identification Number (ISIN) RU000A100824 RU000A100840 the form of ongoing IR events: During 2019, about 50 meetings were held with Russian and > disclosure of annual and quarterly financial results Number of securities issued 2,000,000 3,000,000 foreign investors, both current and potential. > update of the strategic plan with key operational and Issue amount, RUB 2,000,000,000 3,000,000,000 financial objectives for the next three years and further The analytical coverage of the company was provided by indicators Coupon rate 8.6% 8.5% strategic vision seven experts from the leading investment banks, two of
Placement date 02.04.2019 02.04.2019 > update of the status of strategic projects them initiated and resumed coverage in 2019. Financial and performance
Circulation period, years 1352 915
Coupon period, days 169 183
Placement method public subscription public subscription
Maturity 14.12.2022 03.10.2021 Geography of meetings with investors Share price as of 31.12.2019
RUB 0.92 Sustainability 25%
Consensus forecast Interaction with the Shareholders and Investors 102-43 Russian Federation Scandinavia 17% RUB 1.15 40% Great Britain Enel Russia works actively in interaction with stock market of the mass media. Following the best national practices, Europe participants and improvement of information disclosure. The it provides for an extended list of information disclosed by Upside potential company’s representatives are in on-going dialogue with the company as well as the procedure for shareholders to analysts of investment banks and hold regular meetings with access information about entities controlled by the company. 19% +25% Governance Risk and Corporate investors. Disclosure of information is carried out on the company's website as well as in the news feed e-disclosure.ru. The regulation on information policy defines the procedure for interaction with shareholders, investors, and representatives
Key IR-activities conducted in 2019
Q1 2019 Q2 2019 Q3 2019 Q4 2019 Annexes Conference call Conference call Conference call Conference call for 2018 for Q1 2019 for 6 months of 2019 for 9 months of 2019
Update of the status VTB Capital Investment Road show Raiffeisen Bank of strategic projects Forum "Russia Calling!" Regulation Company’s website Enel Russia’s page (Scandinavia and Europe) Conference (Zurs) (Moscow) (Moscow) Calendar of events on the Information enelrussia.ru on e-disclosure.ru for investors in 2020 Raiffeisen Bank Renaissance Policy Financial Calendar (IR calendar) Conference Capital Conference (Stockholm) (Moscow)
194 Annual Report 2019 PJSC Enel Russia 195 Controlled Companies 102-13 and Participation in Other Organizations About the Report
Data on controlled companies as of 31.12.2019
Share Name Location Activity in the authorized capital, % Company Overview Energetik Stavropol Territory, Activities of sanatorium and health Sanatorium-Preventorium LLC Nevinnomyssk resort organizations 100
Rostov region, Azov district, Generation of electric power LLC Enel Rus Wind Azov village of Kagalnik from renewable energy sources 100
Generation of electric power LLC Enel Rus Wind Generation Moscow from renewable energy sources 100
Murmansk Region, Generation of electric power
LLC Enel Rus Wind Kola Murmansk from renewable energy sources 100 indicators
Sverdlovsk Region, Activities to ensure the reliability
Teploprogress JSC Sredneuralsk of the district heating grid 60 Financial and performance
Sverdlovsk Region, Generation of electric power LLC Reftinskaya GRES Reftinsky urban settlement by thermal power plants 100
From 30.10.19, LLC Enel Rus Wind Kola is controlled company for the company having significant importance. Sustainability
The company carries out management of controlled defined by the Charter39, gives recommendations to the companies through its representatives at general meetings company’s representatives regarding participation and voting of shareholders/participants as well as at the company procedure on the agenda items of general meetings of management bodies. The Board of Directors, in the cases shareholders (participants) of controlled companies. Governance Risk and Corporate Annexes
39 The Charter of PJSC Enel Russia is posted at the company's website https://www.enelrussia.ru.
196 Annual Report 2019 PJSC Enel Russia 197 About the Report Company Overview indicators Financial and performance Sustainability Governance Risk and Corporate Annexes 6. ANNEXES
198 Annual Report 2019 PJSC Enel Russia 199 Mechanisms GRI 102: 102-17 for advice and concerns p. 114 General about ethics About the Report Disclosures GOVERNANCE
102-18 Governance structure p. 23, 157–168
Annex 1. 102-19 Delegating authority p. 22–23
Executive-level responsibility 102-20 for economic, environmental p. 22–23, 160 and social topics GRI content index 102-55
Composition of the highest Company Overview 102-22 governance body and its p. 161–166, 167–172 committees
Chair of the highest 102-23 p. 162 governance body
Nominating and selecting Page number(s)/ 102-24 the highest governance p. 160 Partially disclosed GRI Standards Disclosure URL/ Direct answer Omission and explanation body
GENERAL DISCLOSURES p. 162–166.
GRI 101: All members of the Board indicators Foundation of Directors are reviewed to identify ORGANIZATIONAL PROFILE conflicts of interest. Information on the
102-25 Conflicts of interest results of the review, in particular, Financial and performance 102-1 Name of the organization Title list, p. 18 on the absence of a conflict of interest, GRI 102: is publicly available and is part of the General Activities, brands, products 102-2 p. 18 biographical background of each member Disclosures and services of the Board of Directors Location 102-3 p. 18 and headquarters Role of highest governance 102-26 body in setting purpose, values p. 160–161 102-4 Location of operations p. 18, 26 and strategy
Ownership Evaluating the highest
102-5 p. 18, 294 102-28 p. 173–174 Sustainability and legal form governance body’s performance
102-6 Markets served p. 26 Identifying and managing 102-29 economic, environmental p. 132, 153–154 102-7 Scale of the organization p. 18, 52–53, 56, 190 and social impacts Information on employees 102-8 p. 117, 122, 284 Effectiveness of risk management and other workers 102-30 p. 153–154 processes 102-9 Supply chain p. 143–147, 293 Review of economic, Significant changes 102-31 environmental and social p. 160–161, 172 topics
102-10 to the organization p. 16, 43–45, 143–147 Governance
and its supply chain Risk and Corporate The text of the Annual Report Highest governance body’s role Precautionary Principle 102-32 is approved by the Board of Directors 102-11 p. 154–156 in sustainability reporting or approach of PJSC Enel Russia
102-12 External initiatives p. 16, 136 The procedure for forming the agenda of meetings of the Board of Directors is 102-13 Membership of associations p. 75, 196 described in the “Rules of Procedure for Communicating Convention and Holding of Meetings of 102-33 STRATEGY critical concerns Board of Directors of PJSC Enel Russia.
Statement from senior The full text of is available on the official Annexes 102-14 p. 2–3 decision-maker website of the company, enelrussia.ru
Key impacts, risks p. 177–183. 102-15 p. 154–156 and opportunities The full text of “Regulation on Payment of Remuneration and Compensations ETHICS AND INTEGRITY 102-35 Remuneration policies to Members of Board of Directors of Partially disclosed the PJSC Enel Russia” is available Values, principles, standards on the official website of the company, 102-16 p. 20–21, 38, 64 and norms of behavior enelrussia.ru
200 Annual Report 2019 PJSC Enel Russia 201 GRI 102: p. 177–183, 266–269. GRI 102: External assurance of non-financial data
General The full text of “Regulation on Payment General was not conducted. The internal assurance About the Report of Remuneration and Compensations of the quality of the data provided for Disclosures Process for determining Disclosures 102-36 to Members of Board of Directors of the report was carried out by the heads remuneration the PJSC Enel Russia” is available of relevant units, Sustainability Unit, the on the official website of the company, working Group responsible for creating the enelrussia.ru report, which included representatives of 102-56 External assurance the Sustainability Unit, Corporate Relations Division, Investor Relations Group. STAKEHOLDER ENGAGEMENT We are considering the possibility 102-40 List of stakeholder groups p. 70–75 of external assurance of the non-financial part of the report in the next reporting Collective bargaining 102-41 p. 126–127 periods Company Overview agreements
Identifying and selecting 102-42 p. 70 MATERIAL TOPICS stakeholders
Approach to stakeholder ECONOMIC AND FINANCIAL VALUE CREATION 102-43 p. 70–75, 111–112, 194–195 engagement Explanation of the material topic Key topics 103-1 p. 12, 32–37 102-44 p. 70–71 and its boundary and concerns raised GRI 103: The management approach Management 103-2 p. 32–37 and its components REPORTING PRACTICES indicators Approach Evaluation of the management 103-3 p. 32–37 approach The list of legal entities Financial and performance included in the consolidated GRI 201: financial statements differs Direct economic value p. 8. Economic 201-1 p. 74 Entities included from the list of legal entities, generated and distributed The list of legal entities indicated Performance 102-45 in the consolidated financial information on which is in the section “Financial statements statements disclosed in the Annual and auditor's report” OCCUPATIONAL HEALTH AND SAFETY Report. Non-financial data of PJSC Enel Russia is Explanation of the material topic 103-1 p. 12, 78–79 disclosed in the Report and its boundary GRI 103:
The management approach Sustainability Management 103-2 p. 78–79 Defining report content and its components 102-46 p. 8–13 Approach and topic boundaries Evaluation of the management 103-3 p. 78–79 102-47 List of material topics p. 10 approach
Occupational health and safety The revision/ recalculation of data was 403-1 p. 78–79, 284 management system performed for previous reporting period in the calculation of data for CO emissions. 102-48 Restatements of information 2 Hazard identification, 403-2 risk assessment and incident p. 80–82 Partially disclosed Please see the respective comment in the investigation
section “Air and water quality control” Governance Occupational health 403-3 p. 83–84 NEW Risk and Corporate services 102-49 Changes in reporting p. 8, 10 Worker participation, 102-50 Reporting period p. 8 consultation, and communication GRI 403: 403-4 p. 84–86 NEW 102-51 Date of most recent report p. 8 on occupational health Occupational and safety 102-52 Reporting cycle p. 8 Health and Safety Worker training on occupational 403-5 p. 84–86 Contact point health and safety 102-53 for questions regarding p. 298
the report 403-6 Promotion of worker health p. 129 Annexes
Claims of reporting Workers covered by an occupational 102-54 in accordance with p. 8 403-8 health and safety management p. 78 NEW the GRI Standards system
102-55 GRI content index p. 200–209 403-9 Work-related injuries p. 82–83, 284
403-10 Work-related ill health p. 83 Partially disclosed
202 Annual Report 2019 PJSC Enel Russia 203 ENVIRONMENTAL COMPLIANCE AND MANAGEMENT 305-4 GHG emissions intensity p. 95–96, 271
Explanation of the material topic About the Report 103-1 p. 12, 90–92 In the company’s operation, and its boundary ozone-depleting substances GRI 103: are not emitted into the atmosphere The management approach Management 103-2 p. 90–92 and are not used in production activities, and its components Approach Emissions of ozone-depleting except for use in extremely limited 305-6 NEW Evaluation of the management GRI 305: substances (ODS) quantities as a reagent during chemical 103-3 p. 90–92 approach Emissions tests in laboratories, as well as for fueling and refueling of compressor equipment, GRI 301: Materials consumed by weight air conditioning units, industrial air 301-1 p. 102, 272–273 Materials or volume conditioners and fire fighting systems
Interactions with water
303-1 p. 98–100, 274–277 Company Overview as a shared resource Nitrogen oxides (NOX), sulfur 305-7 oxides (SOX), and other significant p. 97, 280–281 Management of water air emissions 303-2 p. 98–100, 274–277 discharge-related impacts GRI 303: Water Water discharge by quality 306-1 p. 98–100, 278–279 303-3 Water withdrawal p. 98–100, 276–277 and destination
303-4 Water discharge p. 98–100, 278–279 Partially disclosed Waste by type 306-2 p. 102–103, 282–283 and disposal method 303-5 Water consumption p. 98–100, 279 NEW The company's activities do not imply Operational sites owned, leased, spills of oil and oil products. indicators managed in, or adjacent to, At each production brunch of the company 304-1 protected areas and areas of high p. 103–104 306-3 Significant spills systems of prevention of spills of chemical
biodiversity value outside protected reagents and oil products are installed. Financial and performance areas In the reporting period, the company GRI 306: did not cause any significant spill Effluents According to the data available, the current and Waste Significant impacts of activities, operation of the company does not have The company does not transport 304-2 products, and services on a significant impact on the biodiversity hazardous waste. Hazardous waste refers biodiversity of the regions in which power and heat 306-4 Transport of hazardous waste to waste from I to IV hazard classes GRI 304: generating facilities are located in accordance to FCCW (Federal Biodiversity Classificatory Catalogue of Wastes)
Habitats protected Sustainability 304-3 p. 103–104 or restored In the reporting period, none of the water bodies used by the company Water bodies affected by water 306-5 in the water use cycle underwent discharges and/or runoff IUCN Red List species significant discharges, leading to and national conservation list a change in its natural water regime 304-4 p. 103–104 species with habitats in areas affected by operations GRI 307: Non-compliance Environmental 307-1 with environmental laws p. 93–95, 270–271 Compliance and regulations
Direct (Scope 1) Governance 305-1 p. 95–96, 270 GHG emissions SOUND GOVERNANCE AND FAIR CORPORATE CONDUCT Risk and Corporate
Explanation of the material topic Figure not available in the 103-1 p. 12, 112–114, 157–159, 186–187 and its boundary actual monitoring system. GRI 103: Enel Russia will consider The management approach Energy indirect (Scope 2) the possibility to review its Management 103-2 p. 112–114, 157–159, 186–187 305-2 and its components GHG emissions methodological approach to Approach collect and calculate indirect Evaluation of the management 103-3 p. 157–159, 186–187 emissions in the next approach GRI 305: reporting periods Emissions Operations assessed Annexes 205-1 p. 112–114 for risks related to corruption
Figure not available in the Communication and training GRI 205: actual monitoring system. 205-2 about anti-corruption policies p. 112–114 Anticorruption Enel Russia will consider and procedures Other indirect (Scope 3) the possibility to review its 305-3 GHG emissions methodological approach to Confirmed incidents of corruption In the reporting period there 205-3 collect and calculate indirect and actions taken were no confirmed cases emissions in the next GRI 415: reporting periods 415-1 Political contributions p. 114 Public Policy
204 Annual Report 2019 PJSC Enel Russia 205 Diversity of governance bodies ENGAGING THE LOCAL COMMUNITIES 405-1 p. 121–123, 284–286, 291 GRI 405: Diversity and employees Explanation of the material topic and Equal About the Report 103-1 p. 12, 130–135 Ratio of basic salary and its boundary Opportunity 405-2 and remuneration of women p. 121–122, 292–293 NEW The management approach to men 103-2 p. 130–135 and its components In the reporting period, the Internal Audit Department of PJSC Enel Russia We regularly conduct a self-assessment Total number of incidents GRI 406: Non did not find any cases of discrimination of the management approach to local 406-1 of discrimination during discrimination on the basis of gender, national community engagement. the reporting period GRI 103: origin and ethnicity, religion or any Evaluation of the management approach, Management other signs Approach as well as its improvement, occurs based on the results of ESG risks assessment, Evaluation of the management Company Overview 103-3 which is conducted by an external party HUMAN RIGHTS approach for the second year in a row. Explanation of the material topic 103-1 p. 12, 141–142 We also participate in various international and its boundary and local competitions and ratings to GRI 103: The management approach get a third-party view on our approach Management 103-2 p. 141–142 and its components and compare it with other businesses Approach Evaluation of the management 103-3 p. 141–142 GRI 203: approach Significant indirect Indirect Economic 203-2 p. 132 NEW economic impacts Impacts Enel Russia respects children's indicators rights and condemns all forms Operations with local community Operations and suppliers of child labor. GRI 408: Financial and performance 413-1 engagement, impact assessments, p. 93–95, 132 408-1 at significant risk for incidents These provisions are enshrined NEW Child Labor and development programs of child labor in the Human Rights Policy. There GRI 413: Local have been no cases of child labor Communities in the company or its suppliers Operations with significant actual 413-2 and potential negative impacts p. 132 on local communities Enel Russia rejects any form of forced or compulsory labor. GRI 409: Operations and suppliers EMPLOYEES MANAGEMENT, DEVELOPMENT AND MOTIVATION Forced These provisions are enshrined in the
409-1 at significant risk for incidents NEW Sustainability or Compulsory Human Rights Policy. During the reporting Explanation of the material topic of forced or compulsory labor 103-1 p. 12, 115–116 Labor period, there was not a single case and its boundary of the use of forced labor in the company GRI 103: or its suppliers The management approach Management 103-2 p. 115–116 and its components Approach Evaluation of the management All security personnel have been trained 103-3 p. 115–116 approach in human rights. The contracts with suppliers of security Ratios of standard entry services include provisions that they GRI 202: Security personnel trained 202-1 level wage by gender compared p. 119–120, 286–287 GRI 410: undertake to comply with the principles Market Presence 410-1 in human rights policies Governance to local minimum wage Security Practices of the Code of Ethics of PJSC Enel
or procedures Risk and Corporate Russia when carrying out their business New employee hires 401-1 p. 118, 288 operations and interaction with partners. and employee turnover The Code of Ethics covers human rights Benefits provided to full-time observance GRI 401: employees that are not provided Employment 401-2 p. 119–120, 126–129 to temporary or part-time employees Operations of Enel Russia do not affect indigenous and small-numbered peoples. 401-3 Parental leave p. 126–129, 289–290 NEW GRI 411: Rights In the reporting period, there was not Incidents of violations involving Annexes Average hours of training of Indigenous 411-1 a single incident of violation of the rights NEW 404-1 p. 125–126, 290 rights of indigenous peoples per year per employee Peoples of indigenous and small-numbered peoples, nor was there a single complaint Programs for upgrading employee GRI 404: regarding violation of human rights from 404-2 skills and transition assistance p. 125–126 Training these groups programs and education Percentage of employees receiving GRI 412: Employee training on human 404-3 regular performance and career p. 126, 291 Human Rights 412-2 p. 142 rights policies or procedures development reviews Assessment
206 Annual Report 2019 PJSC Enel Russia 207 OPERATIONAL EFFICIENCY GENERAL STANDARD DISCLOSURES FOR THE ELECTRIC UTILITY SECTOR
Explanation of the material topic Installed capacity, broken down About the Report 103-1 p. 12, 106–107 and its boundary EU1 by primary energy source and p. 27, 54, 235–236 GRI 103: by regulatory regime The management approach Management 103-2 p. 106–107 and its components Net energy output broken down Approach EU2 by primary energy source and p. 55–56 Evaluation of the management 103-3 p. 106–107 by regulatory regime approach Percentage of employees eligible Energy consumption within to retire in the next 5 and 10 years 302-1 p. 100, 235–236 Partially disclosed EU15 p. 293 NEW the organization broken down by job category and GRI 302: Energy by region 302-3 Energy intensity p. 101 Company Overview Former EU21 (DMA 302-4 Reduction of energy consumption p. 101 NEW Contingency planning measures, Disaster/Emergency disaster/emergency management Planning and p. 86–89 DECARBONIZATION OF ENERGY MIX plan and training programs Response) Mapped and recovery/restoration plans GRI Standards 103-2 Explanation of the material topic 103-1 p. 12, 43–45 and its boundary GRI 103: The management approach Management 103-2 p. 43–45 and its components Approach Evaluation of the management 103-3 p. 43–45 indicators approach
CUSTOMER FOCUS Financial and performance
Explanation of the material topic 103-1 p. 12, 111–112 and its boundary GRI 103: The management approach Management 103-2 p. 111–112 and its components Approach Evaluation of the management 103-3 p. 111–112 approach
INNOVATION AND DIGITAL TRANSFORMATION Sustainability
Explanation of the material topic 103-1 p. 12, 108–111 and its boundary GRI 103: The management approach Management 103-2 p. 108–111 and its components Approach Evaluation of the management 103-3 p. 108–111 approach
SUSTAINABLE SUPPLY CHAIN Governance
Explanation of the material topic Risk and Corporate 103-1 p. 12, 143–147 and its boundary GRI 103: The management approach Management 103-2 p. 143–147 and its components Approach Evaluation of the management 103-3 p. 143–147 approach
GRI 204: Proportion of spending Procurement 204-1 p. 145 on local suppliers Annexes Practices
New suppliers that were 308-1 screened using environmental p. 143–147, 293 Partially disclosed GRI 308: Supplier criteria Environmental Assessment Negative environmental 308-2 impacts in the supply chain p. 143–147, 293 and actions taken
208 Annual Report 2019 PJSC Enel Russia 209 including Annex 2. Effective portion of changes in the fair value 13501 190 243 794 217 140 of CFH About the Report Reserve capital 1360 1 768 931 1 768 931 1 687 931 Retained earnings (uncovered loss) 1370 4 844 316 22 039 347 21 717 834 Financial statements and auditor's report including Profits distributed by a decision 13701 17 035 249 16 520 545 15 316 453 of the General Meeting of Shareholders Undistributed profit 13702 (12 190 933) 5 518 802 6 401 381 Section III total 1300 49 332 088 66 770 722 66 104 169 IV. NON-CURRENT LIABILITIES
Balance sheet, RUR thousand Loans received 1410 6 666 667 15 393 522 11 088 451 Company Overview Deferred tax liabilities 1420 3 377 787 7 454 588 6 800 355 Reserves on contingencies 1430 261 710 487 749 454 216 ASSETS Code As of 31.12.2019 As of 31.12.2018 As of 31.12.2017 Other liabilities 1450 – – 270 I. NON-CURRENT ASSETS Section IV total 1400 10 306 164 23 335 859 18 343 292 Intangible assets 1110 141 161 181 V. CURRENT LIABILITIES Results of research and developments 1120 – – – Loans received 1510 1 784 731 9 447 114 13 022 747 Intangible exploration assets 1130 – – – Accounts payable 1520 9 672 986 7 326 996 10 015 203 Tangible exploration assets 1140 – – – indicators including 15201 48 568 16 614 20 651 Fixed assets 1150 44 503 670 87 068 084 88 384 475 Shareholder's payable
Interest-bearing investments into tangible assets 1160 – – – Сurrent derivative liabilities 15202 0 – – Financial and performance Financial investments 1170 620 333 653 257 466 708 Deferred income 1530 743 1 130 1 488 Deferred tax assets 1180 2 250 113 1 911 943 1 839 454 Provisions short 1540 4 436 878 3 417 720 2 608 562 Other non-current assets 1190 2 466 693 1 945 578 1 373 061 Other liabilities 1550 – – – including Section V total 1500 15 895 338 20 192 960 25 648 000 11901 – – 637 355 Long-term derivatives and hedging instruments TOTAL ASSETS 1700 75 533 590 110 299 541 110 095 461 Section I total 1100 49 840 950 91 579 023 92 063 879
II. CURRENT ASSETS Sustainability Inventories 1210 4 971 755 4 990 295 5 776 644 including 12101 280 181 168 865 120 697 Income statement, RUR thousand Deferred expenses VAT 1220 5 916 17 337 – on purchased goods Item Code For year 2019 For year 2018 Trade Receivables 1230 10 522 986 6 667 972 6 305 396 Revenue 2110 73 947 884 73 451 763 including 12301 – – – Cost of sales 2120 (62 254 788) (61 615 013) Shareholder's receivables
Gross profit (loss) 2100 11 693 096 11 836 750 Governance Financial investments 1240 – 4 7 674
Commercial expenses 2210 (1 136 471) (1 094 692) Risk and Corporate Cash 1250 10 190 641 5 678 713 5 786 782 Management expenses 2220 – – Other current assets 1260 1 342 1 366 197 155 086 Profit (loss) on sales 2200 10 556 625 10 742 058 including 12601 1 342 1 366 197 155 086 Current derivative assets Income from investments in other entities 2310 2 078 5 082 Section II total 1200 25 692 640 18 720 518 18 031 582 Interest income 2320 373 560 316 338 TOTAL ASSETS 1600 75 533 590 110 299 541 110 095 461 Interest payable 2330 (1 492 598) (1 812 959) Other income 2340 24 764 568 3 564 591
Other expenses 2350 (49 295 006) (5 727 241) Annexes Profit (loss) before taxes 2300 (15 090 773) 7 087 869 LIABILITIES Code As of 31.12.2019 As of 31.12.2018 As of 31.12.2017 Current income tax 2410 (1 516 142) (957 114) III. EQUITY AND RESERVES including fixed tax liabilities (assets) 2421 (118 240) (121 284) Share capital (joint-stock capital, authorized capital, 1310 35 371 898 35 371 898 35 371 898 contributions of partners) Change of deferred tax liabilities 2430 4 076 801 (654 233) Shares purchased 1320 – – (198 403) Change of deferred tax assets 2450 338 170 72 489 Revaluation of non-current assets 1340 – – – Other 2490 1 011 (30 209) Additional capital (without revaluation) 1350 7 346 943 7 590 546 7 524 909 Net profit (loss) 2400 (12 190 933) 5 518 802
210 Annual Report 2019 PJSC Enel Russia 211 REFERENCE reorganization of legal entity 3316 0 Decrease of capital — total 3320 (243 603) (17 195 031) (17 438 634)
Revaluation surplus from non-current assets About the Report not included into the net profit (loss) of the period 2510 – – including: Result from other operations not included loss 3321 х х х х (12 190 933) (12 190 933) into the net profit (loss) of the period 2520 (243 603) 26 653 revaluation of assets 3322 х х х Cumulative financial result of the period 2500 (12 434 536) 5 545 455 expenses related directly to decrease of capital 3323 х х (243 603) х (243 603) Basic earnings (loss) per share (RUR) 2900 (0,345) 0,156 decrease of shares par value 3324 х Diluted earnings (loss) per share 2910 – – decrease of the quantity of shares 3325 х 0 reorganization of legal entity 3326 dividends 3327 х х х х (5 004 098) (5 004 098) Company Overview Statement of changes in equity Change of additional capital 3330 х х х Change of reserve capital 3340 х х х х Capital flow, RUR thousand Capital value as of December 31, 20193 3300 35 371 898 0 7 346 943 1 768 931 4 844 316 49 332 088 Retained earnings Share Shares Additional Reserve (uncovered Item Code capital purchased capital capital loss) Total Adjustments due to change of accounting policy and correction
1 Capital value as of December 31, 2017 3100 35 371 898 (198 403) 7 524 909 1 687 931 21 717 834 66 104 169 of mistakes, RUR thousand indicators For 20182 Changes in equity for 2018
Increase of capital — total 3210 198 403 65 637 5 528 962 5 793 002 Financial and performance As of December 31, due to net profit due to other As of December 31, including: Item Code 2017 (loss) factors 2018 net profit 3211 х х х х 5 518 802 5 518 802 Capital — total revaluation of assets 3212 х х х before adjustments 3400 65 426 788 202 219 65 629 007 income related directly adjustment due to: to increase of capital 3213 х х 26 653 х 10 160 36 813 change of accounting policy 3410 677 381 464 334 1 141 715 additional shares issue 3214 198 403 38 984 х х 237 387 correction of mistakes 3420 increase of shares par value 3215 х х after adjustments 3500 66 104 169 666 553 66 770 722 reorganization of legal entity 3216 Sustainability including: retained earnings (uncovered loss): Increase of capital — total 3220 (5 126 449) (5 126 449) before adjustments 3401 21 257 593 (116 169 ) 21 141 424 including: adjustment due to: loss 3221 х х х х 0 change of accounting policy 3411 460 241 437 682 897 923 revaluation of assets 3222 х х х correction of mistakes 3421 expenses related directly after adjustments 3501 21 717 834 321 513 22 039 347 to decrease of capital 3223 х х х other capital items, decrease of shares par value 3224 х
for which the adjustments were made: Governance
decrease of the quantity of shares 3225 х 0 Additional capital Risk and Corporate reorganization of legal entity 3226 before adjustments 3402 7 307 769 38 984 7 346 753 dividends 3227 х х х х (5 126 449) (5 126 449) adjustment due to: Change of additional capital 3230 х х х change of accounting policy 3412 217 140 26 653 243 793 Change of reserve capital 3240 х х х 81 000 (81 000) х correction of mistakes 3422 after adjustments 3502 7 524 909 65 637 7 590 546 Capital value as of December 31, 20182 3200 35 371 898 0 7 590 546 1 768 931 22 039 347 66 770 722 For 20193 Annexes Increase of capital — total 3310 0 Net assets, RUR thousand including: net profit 3311 х х х х 0 Item Code As of December 31, 20193 As of December 31, 20182 As of December 31, 20171 revaluation of assets 3312 х х х Net assets 3600 49 332 831 66 771 852 66 105 657 income related directly to increase of capital 3313 х х х 0
additional shares issue 3314 х х 0 1 Specification of the year preceding the previous one. 2 increase of shares par value 3315 х х Specification of the previous year. 3 Specification of the reporting year.
212 Annual Report 2019 PJSC Enel Russia 213 Statement of cash flow, RUR thousand Cash flows fromfinancial operations About the Report Proceeds — total 4310 9 999 375 14 237 388
Item Code For year 20191 For year 20182 including:
reception of credits and loans 4311 5 000 000 14 000 000
Cash flows fromcurrent operations money contributions of the owners (members) 4312 – 237 388
Proceeds — total 4110 79 212 862 75 903 151 from issue of shares, increase of the share ownership 4313 – –
including: from issue of bonds, bills of exchange from sale of products, goods, works and services 4111 72 500 884 72 153 651 and other debt securities, etc. 4314 4 999 375 –
lease rents, license fees, royalty, commitment fees other proceeds 4319 – – Company Overview and other similar payments 4112 14 597 20 607 Payments — total 4320 (30 843 743) (19 112 183)
from resale of financial investments 4113 – – including:
other proceeds 4119 6 697 381 3 728 893 to the owners (members) due to redemption of shares (share ownership) Payments — total 4120 (64 898 807) (65 291 828) of the company with them or their cessation of membership 4321 – –
including: for payment of dividends and other payments for allocationof profit in favour of the owners (members) 4322 (5 004 321) (5 126 536) to suppliers (contractors) for raw and other materials, works, services 4121 (52 712 192) (52 693 218) due to payment (protection) of the bills of exchange and other debt due to payment of employees' labour 4122 (3 365 750) (3 168 240) securities, repayment of credits and loans 4323 (25 839 422) (13 985 647) indicators interest on debenture 4123 (1 401 746) (2 007 917) other payments 4329 – –
corporate profit tax 4124 (1 799 298) (775 558) Balance of cash flows from financial operations 4300 (20 844 368) (4 874 795) Financial and performance other payments 4129 (5 619 821) (6 646 895) Balance of cash flows for the reporting period 4400 4 522 672 (125 674)
Balance of cash flows from current operations 4100 14 314 055 10 611 323 Cash and cash equivalents at the beginning of reporting period 4450 5 678 713 5 786 782
Cash flows frominvestment operations Cash and cash equivalents at the end of reporting period 4500 10 190 641 5 678 713 Proceeds — total 4210 18 660 700 872 222 Effect of exchange rate changes 4490 (10 744) 17 605 including:
from sale of non-current assets (except for financial investments) 4211 16 714 286 22 833 Sustainability from sale of shares of other companies (share ownership) 4212 37 980 –
from repayment of loans issued, from sale of debt securities (claims of cash to other entities) 4213 1 906 357 834 311 * You may find the full version of the 2019 accounting (financial) statements of PJSC Enel Russia at: www.enelrussia.ru. dividends, interest on debt financial investments and similar proceeds from share ownership in other companies 4214 2 077 1 735
other proceeds 4219 – 13 343
Payments — total 4220 (7 607 715) (6 734 424) Governance
including: Risk and Corporate
due to acquisition, creation, modernization, reconstruction and preparation for use of non-current assets 4221 (5 205 085) (4 411 643)
due to acquisition of shares of other companies (share ownership) 4222 – (243 390)
due to acquisition of debt securities (claims of cash to other entities), issue of loans to other entities 4223 (2 402 630) (2 079 391)
interest on debenture included into the cost of investments assets 4224 – – Annexes
other payments 4229 – –
Balance of cash flows from investment operations 4200 11 052 985 (5 862 202)
1 Specify the reporting period. 2 Specify the previous year period similar to the reporting period.
214 Annual Report 2019 PJSC Enel Russia 215 About the Report Company Overview indicators Financial and performance Sustainability Governance Risk and Corporate Annexes
216 Annual Report 2019 PJSC Enel Russia 217 About the Report Company Overview indicators Financial and performance Sustainability Governance Risk and Corporate Annexes
218 Annual Report 2019 PJSC Enel Russia 219 About the Report Company Overview indicators Financial and performance Sustainability Governance Risk and Corporate Annexes
220 Annual Report 2019 PJSC Enel Russia 221 Consolidated statement of financial position Consolidated statement of comprehensive income
as at 31 December 2019, RUR thousand for the year ended 31 December 2019, RUR thousand About the Report
Assets Notes 31 December 2019 31 December 2018 For the year ended For the year ended Notes 31 December 2019 31 December 2018 Non-current assets Revenue 19 65 834 843 73 264 973 Property, plant and equipment 5 41 095 594 62 986 329 Operating expenses 20 (54 325 543) (60 583 206) Intangible assets 6 315 010 260 720 Impairment of property, plant and equipment of Reftinskaya GRES 5 (8 605 444) – Financial investments into equity shares 4 880 37 800 Allowance for expected credit losses of trade Company Overview Deferred income tax asset 12 316 936 – and other receivables, net 8 (441 162) (749 388) Other non-current assets 7 2 357 773 2 526 545 Other operating income 379 400 603 598 Total non-current assets 44 090 193 65 811 394 Operating profit 2 842 094 12 535 977 Finance income 21 1 279 720 812 850 Current assets Finance costs 21 (2 994 820) (3 480 730) Inventories 9 4 173 220 4 108 073 Profit before income tax 1 126 994 9 868 097 Trade and other receivables 8 10 595 114 6 237 928 Income tax expense 12 (231 343) (2 169 493) Current derivative asset 23 43 418 1 614 080 Profit for the year 895 651 7 698 604 Cash and cash equivalents 10 11 144 720 6 090 470 indicators Total current assets 25 956 472 18 050 551 Other comprehensive income
Total assets 70 046 665 83 861 945 Net movement on cash flow hedges 22 (2 423 138) 296 338 Financial and performance Income tax effect 12, 22 484 628 (59 268) Equity and liabilities Net other comprehensive (loss)/income Equity 11 to be reclassified to profit and loss in subsequent periods (1 938 510) 237 070 Share capital 35 371 898 35 371 898 Net change in the fair value of financial investments into Share premium 6 818 747 6 818 747 equity shares – (3 950) Fair value reserve – 20 080 Income tax effect – 790 Hedge reserve (1 528 780) 409 730
Actuarial (losses)/gains on defined benefits plans 14 (303 197) 190 972 Sustainability (Accumulated deficit) / retained earnings (2 344 626) 1 986 789 Income tax effect 12, 14 60 639 (38 194) Total equity attributable to equity holders Net other comprehensive (loss)/income of PJSC Enel Russia 38 317 239 44 607 244 not being reclassified to profit and loss Non-controlling interests (90 460) (90 950) in subsequent periods (242 558) 149 618 Total equity 38 226 779 44 516 294 Total comprehensive (loss)/income for the year (1 285 417) 8 085 292 Profit attributable to: Non-current liabilities – Owners of PJSC Enel Russia 895 161 7 706 384 Loans and borrowings 13 13 648 960 16 048 260 – Non-controlling interests 490 (7 780)
Deferred income tax liability 12 – 1 513 930 Governance Total comprehensive (loss)/income attributable to: Employee benefits 14 1 332 320 1 480 790 Risk and Corporate – Owners of PJSC Enel Russia (1 285 907) 8 093 072 Provisions 18 189 560 419 270 – Non-controlling interests 490 (7 780) Other non-current liabilities 17 359 370 – Earnings per ordinary share for profit attributable Total non-current liabilities 15 530 210 19 462 250 to the equity holders of PJSC Enel Russia — basic and diluted (in Russian roubles per share) 11 0,0253 0,2181 Current liabilities Loans and borrowings 13 1 666 670 9 417 930 Current derivative liabilities 23 379 768 – Annexes Trade and other payables 15 7 052 189 7 155 935 Current income tax payable 31 241 250 723 Other taxes payable 16 4 964 588 1 302 203 Provisions 18 2 195 220 1 756 610 Total current liabilities 16 289 676 19 883 401 Total liabilities 31 819 886 39 345 651
Total equity and liabilities 70 046 665 83 861 945
222 Annual Report 2019 PJSC Enel Russia 223 Consolidated statement of cash flows for the year ended Consolidated statement of changes in equity for the year
31 December 2019, RUR thousand ended 31 December 2019, RUR thousand About the Report
For the year ended For the year ended Notes 31 December 2019 31 December 2018 Attributable to equity holders of PJSC Enel Russia (Accumulated Cash flows from operating activities deficit) / Non- Profit before income tax 1 126 994 9 868 097 Share Share Treasury Fair value Hedge retained controlling Total Notes capital premium shares reserve reserve earnings Total interests equity Adjustments for: Depreciation and amortization 5, 6, 20 3 384 877 3 869 460
Balance at Company Overview Loss on disposal of property, 1 January 2018 35 371 898 6 818 747 (411 060) 23 240 172 660 (582 412) 41 393 073 (83 170) 41 309 903 plant and equipment 219 390 6 290
Impairment of property, plant and equipment 5 8 649 923 70 659 Profit / (loss) Finance income 21 (1 279 720) (812 850) for the year – – – – – 7 706 384 7 706 384 (7 780) 7 698 604 Finance costs 21 2 994 820 3 480 730 Other Change in allowance for expected credit losses of trade comprehensive income and other receivables, net 8 441 162 749 388 Change in other provisions 18, 20 386 300 251 411 Net movement
Changes in defined benefit obligations (360 727) (611 071) on cash flow indicators hedges, Adjustments for other non-cash transactions 12 394 18 474 net of tax 22 – – – – 237 070 – 237 070 – 237 070
15 575 413 16 890 588 Financial and performance
Increase in trade and other receivables (4 686 633) (1 187 360) Net change in fair Decrease in inventories 119 124 871 409 value of financial investments into Increase/(decrease) in trade and other payables 1 996 796 (3 477 464) equity shares, Increase/(decrease) in taxes payable, other than income tax 3 662 385 (21 297) net of tax – – – (3 160) – – (3 160) – (3 160) Net cash flows from operating activities before dividends and income tax paid 16 667 085 13 075 876 Actuarial gains Dividends paid 11 (5 004 098) (5 126 449) on defined
benefits plans, Sustainability Income tax paid (1 733 397) (610 806) net of tax – – – – – 152 778 152 778 – 152 778 Net cash flows generated from operating activities 9 929 590 7 338 621 Total other Cash flows from investing activities comprehensive Acquisition of property, plant and equipment income /(loss) – – – (3 160) 237 070 152 778 386 688 – 386 688 and other non-current assets (9 513 357) (6 409 038) Interest received 342 963 317 473 Total comprehensive Payment on derivatives (1 605 719) – income /(loss) Proceeds from disposal of financial investments for the year – – – (3 160) 237 070 7 859 162 8 093 072 (7 780) 8 085 292 Governance into equity shares 37 980 – Risk and Corporate Proceeds from disposal of property, Sale plant and equipment 5 16 700 031 – of treasury Net cash flows generated from / shares 11 – – 411 060 – – (173 672) 237 388 – 237 388 (used in) investing activities 5 961 898 (6 091 565) Distribution Cash flows from financing activities of dividends 11 – – – – – (5 126 449) (5 126 449) – (5 126 449) Proceeds from loans and borrowings 11 296 688 12 672 276 Repayment of loans and borrowings (20 839 422) (11 985 647) Unclaimed
dividends related Annexes Sale of treasury shares 11 – 237 388 to previous years – – – – – 10 160 10 160 – 10 160 Interest paid (1 711 017) (2 007 930) Proceeds from derivatives 416 513 – Balance at 31 December Payment on derivatives – (51 723) 2018 35 371 898 6 818 747 – 20 080 409 730 1 986 789 44 607 244 (90 950) 44 516 294 Net cash flows used in financing activities (10 837 238) (1 135 636) Net increase in cash and cash equivalents 5 054 250 111 420 Cash and cash equivalents at 1 January 6 090 470 5 979 050 Cash and cash equivalents at 31 December 10 11 144 720 6 090 470
224 Annual Report 2019 PJSC Enel Russia 225 Consolidated statement of changes in equity for the year ended 31 December 2019 (continued), RUR thousand About the Report
Attributable to equity holders of PJSC Enel Russia (Accumulated deficit) / Non- Share Share Treasury Fair value Hedge retained controlling Total Notes capital premium shares reserve reserve earnings Total interests equity Company Overview Balance at 1 January 2019 35 371 898 6 818 747 – 20 080 409 730 1 986 789 44 607 244 (90 950) 44 516 294
Profit / (loss) for the year – – – – – 895 161 895 161 490 895 651
Other comprehensive income
Net movement indicators on cash flow hedges, net of tax 22 – – – – (1 938 510) – (1 938 510) – (1 938 510) Financial and performance
Actuarial gains on defined benefits plans, net of tax – – – – – (242 558) (242 558) – (242 558)
Total other comprehensive
income / (loss) – – – – (1 938 510) (242 558) (2 181 068) – (2 181 068) Sustainability
Total comprehensive income / (loss) for the year – – – – (1 938 510) 652 603 (1 285 907) 490 (1 285 417)
Sale of financial investments into equity shares – – – (20 080) – 20 080 – – – Governance
Distribution Risk and Corporate of dividends 11 – – – – – (5 004 098) (5 004 098) – (5 004 098)
Balance at 31 December 2019 35 371 898 6 818 747 – – (1 528 780) (2 344 626) 38 317 239 (90 460) 38 226 779 Annexes
* You may find the full version of the 2019 consolidated financial statements of PJSC Enel Russia and its subsidiary companies at: www.enelrussia.ru.
226 Annual Report 2019 PJSC Enel Russia 227 About the Report Company Overview indicators Financial and performance Sustainability Governance Risk and Corporate Annexes
228 Annual Report 2019 PJSC Enel Russia 229 About the Report Company Overview indicators Financial and performance Sustainability Governance Risk and Corporate Annexes
230 Annual Report 2019 PJSC Enel Russia 231 About the Report Company Overview indicators Financial and performance Sustainability Governance Risk and Corporate Annexes
232 Annual Report 2019 PJSC Enel Russia 233 Evaluation of the auditor’s reports Annex 3. About the Report
Evaluation by the Audit and Corporate Structure of generation facilities 302-1 EU1 Governance Committee of the Board of Directors and structure of fuel consumption40 of PJSC Enel Russia of the auditor’s reports on financial accounting and reporting of PJSC Enel Russia prepared on the basis Konakovskaya GRES Company Overview of 2019 business activity results Structure of generating facilities Year of putting No. of the turbine Electric power, MW Turbine type Boiler type Electrical generator type into operation Steam turbine No. 1 325 К-325-240-7МР ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1964 Pursuant to p. 177 of the Code of Corporate Governance recommended by Central Bank of the Russian Steam turbine No. 2 325 К-325-240-7МР ПП-950-255-ГМ (ПК-41) ТВВ-350-2-УЗ 1965 Federation (Letter of the Central bank dd.10.04.2014 No. 06-52/2463) the Audit and Corporate Governance Steam turbine No. 3 325 К-325-240-7МР ПП-950-255-ГМ (ПК-41) ТВВ-350-2-УЗ 1965
Committee of the Board of Directors shall provide evaluation of auditor’s reports on financial accounting and Steam turbine No. 4 305 К-305-240 ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1966 indicators reporting issues in accordance with International Financial Reporting Standards (hereinafter — “IFRS”) and Steam turbine No. 5 305 К-305-240 ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1967
Russian Accounting Standards (hereinafter — “RAS”) — to be further submitted as materials to the Annual Steam turbine No. 6 305 К-305-240 ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1968 Financial and performance General Shareholders’ Meeting. Steam turbine No. 7 305 К-305-240 ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1968 Steam turbine No. 8 325 К-325-240-7МР ПП-950-255-ГМ (ПК-41) ТВВ-320-2-УЗ 1969 Ernst and Young LLC located at Sadovnicheskaya Nab., 77, bld. 1 Moscow, 115035, Russia, appointed as the auditor of PJSC Enel Russia to provide audit and issue auditor’s reports to express an opinion on accounting (financial) statement prepared in accordance with IFRS and RAS. Ernst and Young LLC is a member of the Fuel consumption structure
Self-regulated organization of auditors — Association “Sodruzhestvo”. Indicators Unit of measurement 2017 2018 2019
3 Based on the results of the audit of the financial accounting and reporting of PJSC Enel Russia for 2019 Ernst Gas thousand m 2,042,405 1,921,257.03 1,665,352.39 Sustainability Fuel oil tons 69 13 13 and Young drew up the auditor’s reports. Share of fuel oil in the fuel mix % 0.004 0.001 0.001 Upon examining the auditor’s reports issued by Ernst and Young LLC, the Audit and Corporate Governance Committee of the Board of Directors has resolved: 1. That the audit was conducted in compliance with the terms and conditions of the contract concluded by Nevinnomysskaya GRES Ernst and Young LLC and PJSC Enel Russia, in adherence to the agreed schedule and audit procedures. 2. That the auditor’s reports presented complies with the requirements of the Federal Law “On audit Structure of generating facilities
activities” No. 307-FZ dated 30.12.2008; with the International Standards of Auditing approved by the RF Year of putting Governance
No. of the turbine Electric power, MW Turbine type Boiler type Electrical generator type into operation Risk and Corporate Government Decree No. 576 dated 11.06.2015; with internal regulations (standards) of audit activities of Steam turbine No. 1 30 ПТ-30/35-90/10-5 JISALT 255 2010 the Self-regulated organization of auditors. 4 boilers, ТП-15 Steam turbine No. 2 25 ПТ-25/30-90/10 ТВС-30 1960 3. To note that the opinion of Ernst and Young LLC contains the positive notion that the accounting and Steam turbine No. 3 80 ПТ-80/100-130/13 ТЗФП-110-2 2005 3 boilers, ТГМ-96 reporting statements of PJSC Enel Russia represent fairly, in all material respects, the financial position Steam turbine No. 4 50 Р-50-130/1 ТВФ-60-2 1968 of the company as at December 31, 2019 and its financial performance and its cash flows for 2019 in Steam turbine No. 6 155 К-155-130 ТГМ-94 ТВВ-165-2 1964 accordance with the rules on preparation of financial statements in the Russian Federation as well as in Steam turbine No. 7 155 К-155-130 ТГМ-94 ТВВ-165-2 1964
compliance with the IFRS requirements. Steam turbine No. 8 155 К-155-130 ТГМ-94 ТВВ-165-2 1965 Annexes Steam turbine No. 9 155 К-155-130 ТГМ-94 ТВВ-165-2 1966 Steam turbine No. 10 155 К-155-130 ТГМ-94 ТВВ-165-2 1967 Chairman of the Audit Steam turbine No. 11 160 К-160-130 ТГМ-94 ТВВ-165-2 1970 and Corporate Governance Committee of PJSC Enel Russia Board of Directors Steam turbine No. 14 129.9 SST 700/900 DHR Vertical HRSG SGEN5-100A-2P 2011 AH-MT001 V. Zarkhin Gas turbine No. 15 280.3 V94.3A 4 (SGT5-4000F) SGEN5-100A 2011
40 Data on the share of Reftinskaya GRES are provided for 9 months 2019. See details on the sale of the property of Reftinskaya GRES in the section “Exit from Coal Generation”.
234 Annual Report 2019 PJSC Enel Russia 235 Fuel consumption structure Annex 4.
Indicators Unit of measurement 2017 2018 2019 About the Report Gas thousand m3 2,197,020 2,081,009 1,869,126.66 Fuel oil tons 6,537 3,774 5,419 Share of fuel oil in the fuel mix % 0.35 0.21 0.32 Information about observance of the Corporate Governance Code Reftinskaya GRES recommendations by the company Structure of generating facilities
Year of putting Company Overview No. of the turbine Electric power, MW Turbine type Boiler type Electrical generator type into operation Steam turbine No. 1 300 К-300-240 ПК-39-2 ТГВ-300 1970 This Report on compliance with the principles and Compliance with the corporate governance principles Steam turbine No. 2 300 К-300-240 ПК-39-2 ТГВ-300 1971 recommendations of the Corporate Governance Code was recorded in the Corporate Governance Code was assessed by Steam turbine No. 3 300 К-300-240 ПК-39-2 ТГВ-300 1971 reviewed by the Board of Directors of Public Joint Stock the company in accordance with the methods stated in Letter Steam turbine No. 4 300 К-300-240-2 ПК-39-2 ТГВ-300 1972 Company Enel Russia (hereinafter — the “Company”) at of the Bank of Russia No. ИН-06-52/8 dated 17.02.2016. Steam turbine No. 5 300 К-300-23,5-4 ПК-39-2 ТГВ-300 2014 a meeting of the Board of Directors on April 21–22, 2020, Steam turbine No. 6 300 К-300-240-2 ПК-39-2 ТГВ-300 1975 A brief description of the most significant aspects of the
minutes No.6/20 dated 22.04.2020. indicators Steam turbine No. 7 500 К-500-240-2 ПК-57-2 ТВВ-500-2М УЗ 1977 corporate governance model and practice in a joint-stock Steam turbine No. 8 500 К-500-240-2 ПК-57-2 ТВВ-500-2М УЗ 1978 The Board of Directors confirms that the data contained in company is contained in the annual report’s sections Financial and performance Steam turbine No. 9 500 К-500-240-2 ПК-57-3 ТВМ-500 У3 1979 this Report contain complete and reliable information on “Corporate Governance” and “Risk Management”. Steam turbine No. 10 500 К-500-240-2 ПК-57-3 ТВМ-500-2 1980 compliance with the principles and recommendations of the Corporate Governance Code by the company for 2019. Fuel consumption structure
Indicators Unit of measurement 2017 2018 2019* Ekibastuz coal tons 11,586,811 11,475,102 8,217,757 Corporate Appraisal criteria for compliance Status of compliance Explanations of the deviation from the
Fuel oil tons 18,851 22,638 15,358 Sustainability governance with the corporate governance with the corporate appraisal criteria for compliance with Share of fuel oil in the fuel mix % 0.4 0.5 0.43 principles principle governance principle the corporate governance principle
* Data on the share of Reftinskaya GRES are provided for 9 months 2019. See details on the sale of the property of Reftinskaya GRES in the section “Exit from Coal Generation”. 1.1. The company shall ensure equal and fair treatment of all shareholders as regards their implementation of the right to participate in the company management. Sredneuralskaya GRES 1.1.1 1. The internal document of the company Complied with Continues to be complied with. Structure of generating facilities The company creates for approved by the General Shareholders' The procedure for convocation, preparation
shareholders conditions Meeting and governing the general Governance Year of putting and holding the General Shareholders' that are as favorable as meeting procedures is available to the No. of the turbine Electric power, MW Turbine type Boiler type Electrical generator type into operation Meeting of the company is established by Risk and Corporate possible to participate in the public. the “Regulations on Preparation and Holding Steam turbine No. 6 100 Т-100-130 ТВФ-100-2 1965 3 ТГМ-96 boilers general meeting, conditions 2. The company provides an available of General Shareholders’ Meeting” and the Steam turbine No. 7 100 Т-100-130 of heating and hot ТВФ-100-2 1966 for elaborating reasonable method for communication with the Charter of the company. These documents water supply opinion on the general company, such as a "hot line", e-mail or an are posted at the company's website (https:// Steam turbine No. 8 38 Р-38-130/34 ТВФ-60-2 1966 meeting agenda issues, Internet forum, allowing shareholders to www.enelrussia.ru/en/investors/a201612-basic- Steam turbine No. 9 310 К-310-240 ТГМП-114 ТВВ-320-2 1969 coordinating their actions, express their opinion and send questions documents-.html). as well as the possibility to Steam turbine No. 10 300 Т-300-240 ТГМП-114 ТВВ-320-2 1969 relating to the agenda when preparing During holding of each General Shareholders' express their opinion on the for the general meeting. The foregoing Meeting, PJSC Enel Russia provides Steam turbine No. 11 300 Т-300-240 ТГМП-114 ТВВ-320-2 1970 issues considered. actions were taken by the company on shareholders with e-mail address and
the eve of each general meeting held in WhatsApp number at which the shareholders Annexes Steam turbine No. 12 137.8 КТ-140-13,3 Horizontal HRSG, SGEN5-100A-2P 2011 the reporting period. can express their opinions and send questions three-circuit Gas turbine No. 13 281.2 MS 9001 (FB) 330H 2011 regarding the agenda of the General Shareholders' Meeting. Fuel consumption structure
Indicators Unit of measurement 2017 2018 2019 Gas thousand m3 1,991,219 1,979,948 1,962,206 Fuel oil tons 6,172 157 122 Share of fuel oil in the fuel mix % 0.38 0.004 0.01
236 Annual Report 2019 PJSC Enel Russia 237 1.1.2 1. The notification of the General Complied with Continues to be complied with. 1.1.6 1. When General Shareholders' Meetings Complied with Continues to be complied with.
The procedure for notifying Shareholders' Meeting is placed About the Report According to the article 11.8 of the company’s The general meeting were held in the reporting period in the The Annual General Shareholders' Meeting of the general meeting and (published on the web-site at least Charter, a notice of the company’s General proceeding established by form of a meeting (shareholders' joint was held in the reporting period, in the form of providing the materials for 30 days prior to) the general meeting Shareholders' Meeting specified the meeting the company provides equal presence) enough time was provided for co-presence. The Annual General Shareholders' the general meeting provides date. venue, date and the documents required to possibility to all attendants reports on the agenda issues and time for Meeting provided for up to 20 minutes for the shareholders with an 2. The notification of the meeting access the premises should be published to express their opinion and discussing these issues. reports on each agenda issue and time for opportunity to be properly specifies the meeting venue and the at the company’s website (https://www. ask the questions they are 2. The candidates for the company discussion of such issues. prepared for participation in documents required to access the enelrussia.ru/en.html.html) not later than interested in. management and control bodies were the same. premises. 21 days prior to the date of its holding. available for answering the shareholders' The shareholders were provided with a fairly 3. The shareholders were given access Actually, the company places these notices at questions at the meetings where these large room that accommodated everyone to the information concerning the persons least 30 days before the General Shareholders' candidates were put to voting. who wanted to participate in the General Meeting date. that proposed the agenda issues and 3. When making the decisions related Shareholders' Meeting. the candidates for the Board of Directors to preparation and holding of the One part of the candidates for the company Information concerning the persons that Company Overview and the Internal Audit Commission of the General Shareholders' Meetings, the management and control bodies were available proposed the agenda issues and the candidates company. Board of Directors considered using for answering the shareholders' questions at for the Board of Directors is represented in the telecommunication means to provide the meetings where these candidates were materials to the relevant issues. shareholders with remote access for put to voting. Another part was available by participation in the general meetings in conference call. the reporting period. 1.1.3 1. In the reporting period, the Complied with Continues to be complied with. When convening the Annual General Shareholders' Meeting in the reporting When preparing and holding shareholders were allowed to ask When preparing for the Annual General period, the Board of Directors decided the general meeting, the questions to the members of the Shareholders' Meeting in 2019, shareholders to use telecommunication means to shareholders were able to executive bodies and the members of the were provided with the opportunity to receive receive the information about Board of Directors of the company on the provide shareholders with remote access
answers to their questions by sending them indicators for participation in the Annual General the meeting and materials eve and when holding the annual general to a special e-mail address (enelrussiaagsm@ Shareholders' Meeting of the company, if there for it in an easy and timely meeting. enelrussia.ru) or to WhatsApp number that are technical capabilities at the meeting venue. manner, as well as to ask 2. The stance of the Board of Directors were indicated in the meeting notification. Financial and performance questions to the executive (including dissenting opinions entered in The shareholders who participated in the bodies and the members the minutes) on each agenda issue of the meeting could set questions to the company’s of the Board of Directors, general meetings held in the reporting management and the Board of Directors’ 1.2. The shareholders are provided with an equal and fair opportunity to participate communicate with each period was included in the materials to members, who were also present at the in the company revenue by receiving dividends. other. the General Shareholders' Meeting. Annual General Shareholders' Meeting. 3. The company provided to the authorized shareholders the access to the The stance of the Board of Directors 1.2.1 1. The dividend policy is developed, Complied with Continues to be complied with. (including dissenting opinions entered in the list of persons entitled to participate in the The company developed and approved by the Board of Directors and The company’s Board of Directors approved minutes) on each agenda issue of the General general meeting, starting from the date implemented a transparent disclosed at the company. the Dividend Policy Regulation published at the
Shareholder’s Meeting was represented in the Sustainability of its receipt by the company, in all cases and clear mechanism for 2. If the company dividend policy uses company’s website (https://www.enelrussia.ru/ materials to the relevant meeting. when general meetings were held in the determining the amount of the company's reporting indicators for en/investors/a201612-basic-documents-.html ). reporting period. dividends and their payment. determining the amount of dividends, The shareholders had the right to examine a list relevant provisions contained in the of persons entitled to participate in the General Dividend Policy take into account Shareholders' Meeting. consolidated financial statements indicators.
1.1.4 1. In the reporting period, the Complied with Continues to be complied with. Implementation of the shareholders were able to enter proposals PJSC Enel Russia’s Charter p.13.1 establishes 1.2.2 1. The dividend policy of the company Complied with Continues to be complied with. shareholder's right to request to be included in the annual general the term for the shareholders to submit
The company does not make contains clear instructions concerning Governance convening of the general meeting agenda within at least 60 days proposals on the agenda issues of the Annual Dividend Policy Regulation p.2.6 established any decision on dividends financial/economic circumstances meeting, propose candidates after expiration of a relevant calendar year. General Shareholders’ Meeting — no later than a general rule that the company is obligated Risk and Corporate payment if such decision, when the company should not pay the for the management bodies 2. In the reporting period, the company 60 days after the end of the reporting year. to pay dividends declared on shares of each not violating formally the dividends. and enter proposals to be did not refuse to accept proposals for category (type), unless otherwise provided by restrictions set forth in included in the general the agenda or the candidate for the If there are significant deficiencies in the applicable of Russian legislation. Although the the laws, is economically meeting agenda was not company bodies due to misprints and shareholder’s proposal, the company shall Dividend Policy Regulation does not formally unreasonable and may lead to associated with unreasonable other insignificant deficiencies in the immediately inform the shareholder of them provide clear guidance on financial/economic the formation of false ideas difficulties. shareholder's proposal. in order to provide them with a possibility to circumstances under which dividends are not concerning the company's correct them. paid, it seems sufficient for the company that business. the restrictions are set out in art. 43 of the Federal Law “On Joint Stock Companies”. Annexes 1.1.5 1. The internal document (internal policy) Complied with Continues to be complied with. Each shareholder was able of the company contains provisions According to the p.11.21 of the company’s to implement the voting stating that each participant of the general Charter each participant of the General 1.2.3 1. In the reporting period, the company Complied with Continues to be complied with. right without any obstacles meeting may request a copy of the ballot Shareholders' Meeting may request a copy of The company does not did not take any actions leading to The company issued one type of ordinary in the easiest and the most that he/she filled in, certified by the the ballot that he/she filled in, certified by the allow for deterioration of deterioration of the current shareholders' shares. During reporting year PJSC Enel Russia convenient way for him/her. counting committee, before completion counting committee, before completion of the the current shareholders' dividend rights. did not take any actions leading to deterioration of a relevant meeting. relevant General Shareholders' Meeting. dividend rights. of the current shareholders' dividend rights.
238 Annual Report 2019 PJSC Enel Russia 239 1.2.4 1. To eliminate the shareholders' using Complied with Continues to be complied with. 2.1. The Board of Directors performs strategic management of the company, determines general principles
The company seeks to other ways for gaining profit (income) The company has created the Related Party and approaches towards organization of the risk management and internal control system at the company, About the Report eliminate the shareholders' at the company's expense, besides Transactions Committee, its objectives include controls activities of the company's executive bodies, and also implements other key functions. using other ways for gaining dividends and liquidation value, the assisting the Board of Directors in evaluation profit (income) at the internal documents of the company and decision-making during consideration of company's expense, besides establish the control mechanisms related party transactions and cases of the 2.1.1 1. The Board of Directors has the powers Complied with Continues to be complied with. dividends and liquidation ensuring timely identification and approval conflict of interest. Since June 2019, the The Board of Directors is registered in the Charter to appoint, value. procedure for the transactions with Related Party Transactions Committee consists According to the Charter of PJSC Enel Russia, responsible for making the dismiss and determine the contract persons affiliated (associated) with current of independent directors solely. the Board of Directors’ competence covers shareholders (persons entitled to make decisions on appointment and conditions in relation to the executive appointment and early termination of the dismissal for the positions bodies' members. use of the votes falling within the voting The Board of Directors adopted the General powers of the company’s General Director, at the executive bodies, shares), in the cases when the law does Principles for Approval of Related Parties 2. The Board of Directors reviewed the setting of the number, election and early including due to improper not recognize formally such transactions Transactions. This document provides for the report (reports) of the sole executive body termination of the powers of the Executive
fulfillment of their duties. Company Overview as related party transactions. need of determination of fair market-value and members of the collective executive Board ‘s members. The Board of Directors The Board of Directors appraisal of property acquired or sold in the body on compliance with the company considers regularly reports of the company’s also controls the company course of related party transactions on the strategy. General Director, which, among other things, executive bodies so that basis of tender results, analysis of market represent implementation of business plans they act in accordance with prices or engagement of an independent and implementation of the strategy of PJSC the approved development appraiser. Also, the company’s Board of Enel Russia. strategy and core businesses Directors approved the Enel Group Corporate of the company. Governance Guidelines on 27.09.2018 that sets out the general principles and procedures for fulfillment of intra-group transactions and other related party transactions. 2.1.2 1. Within the reporting period the Board Complied with Continues to be complied with. indicators The Board of Directors of Directors at its meetings considered Within the reporting period the Board of establishes main business the issues related to the strategy Directors considered the issues related to the focuses of the company for fulfillment progress and update, approval
strategy fulfillment progress and update as well Financial and performance 1.3. The system and practice of corporate management ensure equal conditions for all shareholders a long term, evaluates and of the financial and business plan (budget) owning shares of similar category (type), including minority (minor) shareholders and foreign shareholders as approval of the financial and business plan approves key performance of the company, as well as review of the (budget) of the company. and their equal treatment by the company. indicators and main business criteria and indicators (including interim objectives of the company, ones) concerning implementation of the evaluates and approves company strategy and business plans. 1.3.1 1. Within the reporting period the Complied with Continues to be complied with. the strategy and business The Company created procedures for managing potential Within the reporting period, the company plans for the company core conditions for fair treatment conflicts of interests arising among the had no conflicts registered between the activities. of each shareholder by current shareholders are efficient, and the shareholders. the management bodies Board of Directors paid due attention to Sustainability and controlling officials of the conflicts among shareholders, if any. 2.1.3 1. The Board of Directors determined Complied with Continues to be complied with. the company, including The Board of Directors principles and approaches towards The company adopted a number of internal the conditions disallowing determines principles organization of the risk management and abuse of powers by major documents defining the principles and and approaches towards internal control system at the company. organization of risk management and internal shareholders in relation to organization of the risk minority shareholders. 2. The Board of Directors assessed the control systems. management and internal risk management and internal control In 2018, the Board of Directors approved the control system at the system of the company within the Risk Management and Internal Control Policy company. reporting period. that defines the goals, objectives, principles 1.3.2 1. There are no quasi-treasury shares or Complied with Continues to be complied with. and methods of risk management at the The Company does not take they did not participate in voting within There were no quasi-treasury shares during company. Also, the company has Regulation any actions that lead or may the reporting period. 2018–2019. on the internal control system that defines Governance lead to artificial redistribution the goals and objectives of the internal control Risk and Corporate of corporate control. system and the Regulation of Internal Audit Department, its purpose is to provide the Audit and Corporate Governance Committee, the 1.4. The shareholders are provided with reliable and efficient methods for accounting the rights to shares, Board of Directors and the General Director as well as the possibility to dispose of the shares they own in a free and easy manner. with the independent evaluation of the effectiveness of the internal control system, risk management and practice of corporate governance. 1.4.1 1. Quality and reliability of the activity Complied with Continues to be complied with.
The shareholders are performed by the company Registrar to Registrar of the company — JSC IRC — During 2019, the Board of Directors considered Annexes provided with reliable keep the register of securities owners R.O.S.T. is the major registrar in Russia that the risk management and internal control and efficient methods meet the requirements of the company provides its customers with the widest range systems of PJSC Enel Russia and recognized for accounting the rights and its shareholders. of services and advanced services. them as efficient. to shares, as well as the possibility to dispose of the shares they own in a free and easy manner.
240 Annual Report 2019 PJSC Enel Russia 241 2.1.4 1. The company developed and Complied with Continues to be complied with. 2.2. The Board of Directors reports to the company shareholders.
The Board of Directors implemented the policy (policies) for The company has internal documents that About the Report determined the company remuneration and reimbursement for govern remuneration and reimbursement of 2.2.1 1. The annual report of the company Complied with Continues to be complied with. policy for remuneration and the expenses (compensations) to the expenses of the Board of Directors' members, Information about the Board for the reporting period includes the In its Annual Report (https://www.enelrussia. (or) reimbursement for the members of the Board of Directors, executive bodies of the company and other key of Directors work is disclosed information about attendance rate for ru/en.html.html), the company discloses expenses (compensations) to executive bodies and other key managers managers of the company: and submitted to the the Board of Directors and committees information about the number of the Board the members of the Board of of the company, and the policy (policies) is – Regulation on payment of remuneration shareholders. meetings by individual Directors. of Directors’ meetings and its Committees’ Directors, executive bodies approved by the Board of Directors. and compensations to members of Board 2. The annual report contains the meetings held during the reporting year with and other key managers of 2. Within the reporting period the Board of Directors and Board of Directors’ information about main results obtained indication of the form of the meeting and the company. of Directors at its meetings considered Committees of PJSC Enel Russia, approved from assessment of the Board of information about presence of the members the issues related to the foregoing policy by the General Shareholders’ Meeting of Directors work, performed in the reporting of the Board of Directors and the Board of (policies). PJSC Enel Russia; period. Directors Committees at the meetings. – Policy on remuneration and reimbursement
Also, the main self-evaluation’s results of the Company Overview of expenses (compensation) of the members Board of Directors’ performance are disclosed of executive bodies and other key managers in the Annual Report of PJSC Enel Russia. of Public Joint-Stock Company Enel Russia approved by the Board of Directors of the company (https://www.enelrussia.ru/en/ 2.2.2 1. The company has a transparent Complied with Continues to be complied with. investors/a201612-basic-documents-.html). The Chairman of the Board procedure enabling the shareholders to The company’s shareholders have an
of Directors is available for send issues and their opinion on them to opportunity to set questions to the Board of During 2019, the Board of Directors considered communication with the the Chairman of the Board of Directors. Directors’ Chairman or the Senior Independent both of the above documents. company shareholders. Director through the Corporate Secretary of the company, or through feedback forms
posted at the company’s website (https:// indicators 2.1.5 1. The Board of Directors plays a key Complied with Continues to be complied with. www.enelrussia.ru/en/investors/a201612-form- The Board of Directors plays role in prevention, identification and The regulation of the Board of Directors’ key content.htmll). a key role in prevention, settlement of the internal conflicts. role in resolving internal conflicts is included in Financial and performance identification and settlement 2. The Company created the system for the company's Charter (article 15.1) and in the of the internal conflicts identification of transactions related to Rules of Procedure for Convention and Holding 2.3. The Board of Directors is an efficient and professional management body of the company among the company bodies, the conflict of interests and the system of Meetings of Board of Directors (p. 3.8). capable of making objective independent judgments and adopting resolutions corresponding shareholders and employees. of measures aimed at such conflicts Also, the Related Party Transactions to the interests of the company and its shareholders. settlement. Committee is created and operates successfully at PJSC Enel Russia. 2.3.1 1. The procedure for assessing the Complied with Continues to be complied with. Only the persons with efficiency of the Board of Directors The Board of Directors approved and published During the self-evaluation of the Board of impeccable business and work adopted at the company includes the Enel Group Corporate Governance Directors’ performance in 2019, evaluation of personal reputation and without limitation assessment of the Guidelines setting out the general principles the competences of the Board of Directors’ Sustainability having knowledge, skills and Board of Directors members' professional and procedures for fulfillment of intra- members was performed in the following experience required to make qualification. group transactions and other related-party areas: decisions, falling within the transactions (https://www.enelrussia.ru/en/ 2. In the reporting period, the Board of – strategic planning; competence of the Board of investors/a201612-basic-documents-.htm). Directors (or its Nomination Committee) – international cooperation; Directors and required for assessed the candidates for the Board – risk management; efficient implementation of of Directors as to whether they have – industry area; its functions, shall be elected required experience, knowledge, business – finance / accounting / audit. 2.1.6 1. The Board of Directors approved the Complied with Continues to be complied with. as the members of the Board reputation, unavailability of the conflict of Based on the recommendations of the HR The Board of Directors Regulation on Information Policy. The revised Regulation on the Information of Directors. interests, etc. and Remuneration Committee, in 2019, the plays a key role in ensuring 2. The Company determined the persons Policy of PJSC Enel Russia was approved Board of Directors evaluated candidates the company transparency,
responsible for implementation of the by the Board of Directors in 2018. for the Board of Directors for compliance Governance timely and full disclosure Information Policy.
with independence criteria and in terms of Risk and Corporate of information by the The Board of Directors reserved the their necessary experience, knowledge and company, easy access to the responsibility for monitoring compliance with business reputation. company documents for the this Regulation. (p. 9.1 Regulation on the shareholders. Information Policy). 2.3.2 1. In all cases when holding the Complied with Continues to be complied with. The members of the General Shareholders' Meeting in the The curriculum vitae of candidates for the company Board of Directors reporting period, if the agenda of such Board of Directors and the Board of Directors’ 2.1.7 1. Within the reporting period the Board Complied with Continues to be complied with. are elected by a transparent meeting included the issues concerning recommendations regarding voting for The Board of Directors of Directors considered the issue The Board of Directors reviewed the report procedure, allowing the election of the Board of Directors, the candidates as well as information about controls the corporate concerning the corporate management on corporate governance practices shareholders to receive company provided the shareholders with compliance of candidates with independence Annexes management practice at the practice at the company. at PJSC Enel Russia in November 2019. the information about the biographical data of all candidates for the criteria, were included in the scope of materials company and plays a key candidates, sufficient to form members of the Board of Directors, the for the Annual General Shareholders' Meeting role in significant corporate the idea about their personal results of such candidates assessment 2019. events of the company. and professional qualities. performed by the Board of Directors (or by its Nomination Committee), as well as the information on the candidate's compliance with the independence criteria, pursuant to recommendations 102–107 of the Code, and the written consent of the candidates for election to the Board of Directors.
242 Annual Report 2019 PJSC Enel Russia 243 2.3.3 1. Within the procedure for assessing the Complied with Continues to be complied with. 2.4.2 1. In the reporting period, the Board of Complied with Continues to be complied with. Compliance of the Directors (or the Nomination Committee The composition of the Board work of the Board of Directors performed During the procedure for self-evaluation of the During 2019, the Board of Directors formed About the Report candidates for the members of the Board of Directors) formed of Directors is balanced, in the reporting period, the Board of Board of Directors’ performance in 2019, the an opinion on independence of each candidate of the Board of Directors the opinion on independence of each including as regards Directors analyzed own requirements Board of Directors analyzed own requirements for the Board of Directors' members and with independence candidate for the Board of Directors and qualifications of its members, related to professional qualification, related to professional qualification, availability presented it to the shareholders at the criteria is assessed, and provided the shareholders with relevant their experience, knowledge experience and business skills. of experience and business skills. Annual General Shareholders' Meeting. and business qualities, and also compliance of the opinion. The HR and Remuneration Committee the shareholders trust it. independent Board of 2. Within the reporting period the Board of reviewed independence of current members Directors members with Directors (or the Nomination Committee of the Board of Directors of PJSC Enel Russia independence criteria is of the Board of Directors) at least once in November 2019. regularly analyzed. During reviewed independence of the current The company developed a procedure for 2.3.4 1. Within the procedure for assessing Complied with Continues to be complied with. such assessment contents Board of Directors members, specified determination of the required actions of the The number of the company the Board of Directors performed in the During the procedure for self-evaluation of should prevail over the form. by the company in the annual report as member of the Board of Directors if he/she Board of Directors members reporting period, the Board of Directors the Board of Directors’ performance in 2019, Independent Directors. is not independent any more. (p. 3.10 Rules Company Overview enables organization of the considered the issue as to whether the Board of Directors analyzed the issue on 3. The company developed the of Procedure for Convention and Holding Board of Directors activities the number of the Board of Directors compliance of the headcount of the Board of procedures determining required actions of Meetings of PJSC Enel Russia Board of in the most efficient manner, members meets the requirements Directors with the needs of the company and of the Board of Directors member in case Directors. including the possibility to of the company and the interests of the interests of shareholders. form the Board of Directors shareholders. he/she is no longer independent, including committees, as well as the obligations to timely inform the Board enables the significant of Directors accordingly. minority shareholders of the company to elect the candidate they vote for to the 2.4.3 1. Independent Directors constitute Complied with Continues to be complied with. Board of Directors. Independent Directors at least one third of the Board The Annual General Shareholders' Meeting indicators constitute at least one third of Directors members. 2019 elected 4 independent directors to the of the elected Board of Board of Directors. According with article Directors members.
16.3 of the company’s Charter, the number Financial and performance 2.4. The Board of Directors includes an adequate number of Independent Directors. of the Board of Directors members is 11 (eleven persons), so the independent directors comprise more than one third of the Board of 2.4.1 1. Within the reporting period all Complied with Continues to be complied with. Directors’ composition. A person is recognized as an independent members of the Board of During 2019, the company’s independent Independent Director if he/ Directors met all independence criteria, members of the Board of Directors met Complied with Continues to be complied with. she is professional enough, specified in recommendations 102–107 all independence criteria, which contained 2.4.4 1. Independent Directors (having no experienced and independent of the Code, or were recognized as in the recommendations of the Corporate Independent Directors play conflict of interests) preliminary assess The Related Party Transactions Committee to form an own stance, independent following the decision Governance Code and in the Listing Rules a key role in prevention significant corporate actions related to a is responsible for assisting the Board of capable of making objective of the Board of Directors. of internal conflicts at the potential conflict of interests and provide Directors in evaluating and making decisions of Moscow Exchange. Sustainability and good faith judgments, company and performance the results of such assessment to the when considering significant corporate independent of the influence by the company of significant Board of Directors. actions (p. (5.1. of Organizational Regulation exerted by the company corporate actions. on Committees of the Board of Directors). executive bodies, individual The Related Party Transactions Committee groups of shareholders or performs preliminary (before review of the other stakeholders. In this issue by the Board of Directors) evaluation case it should be taken into of significant corporate actions and the cases account that, generally, a of the conflict of interest. candidate (elected member Since June 2019, the composition of the of the Board of Directors) Related Party Transactions Committee includes may not be considered as an the independent directors solely. Governance independent one if he/she is related to the company, Risk and Corporate its significant shareholder, 2.5. The Chairman of the Board of Directors facilitates the most efficient implementation significant counterparty or of the functions imposed on the Board of Directors. competitor of the company, or if he/she is related to the state. 2.5.1 1. The Chairman of the Board of Directors Complied with Continues to be complied with. The Chairman of the is an Independent Director, or a Senior The Board of Directors’ Chairman is not an Board of Directors is an Independent Director is determined independent director therefore the Board of Independent Director or a among Independent Directors. Directors identify the Senior Independent senior Independent Director 2. Role, rights and duties of the Chairman Director from among the independent directors Annexes determined among selected of the Board of Directors (and, if elected to the Board of Directors, according to Independent Directors, applicable, of the Senior Independent p. 4.1 of the Rules of Procedure for Convention coordinating the activities Director) are duly determined in the and Holding of Meetings of the Board of of Independent Directors internal documents of the company. Directors. The roles, rights and duties of the and cooperating with the Senior Independent Director are contained Chairman of the Board of in p. 4 of these Rules. Directors.
244 Annual Report 2019 PJSC Enel Russia 245 2.5.2 1. Efficiency of the work performed by Complied with Continues to be complied with. 2.6.3 1. Individual rate of the Board and Complied with Continues to be complied with. The Chairman of the Board the Chairman of the Board of Directors The efficiency of performance of the Board The Board of Directors committees attendance, as well as the The self-evaluation carried out by the Board About the Report of Directors ensures efficient was assessed within the procedure for of Directors’ Chairman was evaluated during members have enough time time spent on preparing for the meetings of Directors in 2019 included evaluation of the atmosphere for holding the assessing efficiency of the Board of procedure of self-evaluation of the Board of to perform their duties. participation was taken into account organization and attendance rate of the Board meetings, free discussion Directors in the reporting period. Directors’ performance in 2019. within the procedure for assessing the of Directors/Committees of the Board of the issues included in the Board of Directors in the reporting period. of Directors. meeting agenda, control over 2. In accordance with the internal fulfillment of the decisions documents of the company the members When elected to the Board of Directors, made by the Board of of the Board of Directors shall notify the candidates fill out questionnaires in which they Directors. Board of Directors of their intention to list the organizations that they are members become members of the management of the governing bodies P. 3.9. of the Rules bodies at other companies (besides of Procedure for Convention and Holding of 2.5.3 1. The obligation of the Chairman of the Complied with Continues to be complied with. controlled and associated businesses of Meetings of the company’s Board of Directors
The Chairman of the Board Board of Directors to take measures to Company Overview The obligation of the Board of Directors’ the company), as well as of such actual established a duty for the Board of Directors’ of Directors takes required timely provide the members of the Board Chairman to take measures to timely provide appointment. member to notify the Board of Directors measures to timely provide of Directors with the materials on the the members of the Board of Directors of the intent to become a member of the the members of the Board of agenda issues of the Board of Directors with the materials on the agenda issues is management bodies of other organizations Directors with the information meeting is recorded in the company's established in p. 2.4 of the Rules of Procedure as well as of the fact of such appointment required to make decisions internal documents. for Convention and Holding of Meetings of the having sent relevant notification to the Board of on the agenda issues. company’s Board of Directors. Directors’ Chairman no later than 14 days from the date of appointment.
2.6. The members of the Board of Directors act reasonably and in good faith in the interests of the company and its shareholders on the basis of adequate information with due care and diligence.
2.6.4 1. In accordance with the internal Complied with Continues to be complied with. indicators All members of the Board documents of the company the members In accordance with p. 3.3. and 3.4. of the Rules of Directors have equal of the Board of Directors are entitled of Procedure for Convention and Holding of
2.6.1 1. The internal documents of the Complied with Continues to be complied with. Financial and performance possibility to access the to obtain access to the documents and Meetings of the company’s Board of Directors, The members of the Board company set forth that the member of P. 8.10 of the Rules of Procedure for company documents and make enquiries concerning the company the Board of Directors’ members are entitled of Directors make decisions the Board of Directors shall notify the Convention and Holding of Meetings of the information. Newly elected and the businesses controlled by the to obtain access to the documents and make taking into account all Board of Directors if he/she is in conflicts company’s Board of Directors establishes members of the Board of company, and the company executive enquiries concerning the company and the available information, with of interest in relation to any issue of the duty of the director to notify the Board of Directors are provided with bodies shall provide relevant information company’s subsidiaries, and the executive no conflict of interests, the Board of Directors or the Directors Directors if he/she has a conflict of interest in sufficient information about and documents. bodies shall provide relevant information and taking into account equal Committee meeting agenda before respect to any item on the agenda of the Board the company and the work 2. The company has a formal program documents not later than 3 (three) business treatment of the company commencement of the relevant agenda of Directors meeting prior to the discussion of performed by the Board of of familiarization activities for the newly days upon receipt of relevant enquiry. shareholders within a general issue discussion. the relevant agenda item. Directors as soon as possible. elected members of the Board of entrepreneurial risk. 2. The internal documents of the company Directors. The company has a system of familiarization
provide that the member of the Board P. 8.11 of the above Rules has also established activities valid in accordance with p. 3.2. of the Sustainability of Directors shall abstain from voting on the need to abstain from voting on agenda above Rules. any issue if he/she is in the conflict of items with regard to which the Board of interests in its relation. Directors’ member has a conflict of interest. 3. The Company has the procedure The concept of “conflict of interest” is set out in the Rules of Procedure for Convention and 2.7. The meetings of the Board of Directors, preparation for these meetings and participation allowing the Board of Directors to of the Board of Directors members in the same ensure efficient functioning of the Board of Directors. receive professional advice on the issues Holding of Meetings of the Board of Directors within its competence at the company's and in the Enel Group Corporate Governance expense. Guidelines. 2.7.1 1. The Board of Directors held at least six Complied with Continues to be complied with. Also, p. 3.7 of the above Rules provides for The meetings of the Board meetings in the reporting year. In 2019, there were 16 meetings
a procedure allowing the Board of Directors Governance of Directors are held when of the Board of Directors, 11 of which were
to receive professional advice on the issues Risk and Corporate necessary taking into account held in person. within its competence at the company's the scale of activities and the expense. tasks encountered by the company in a certain period.
2.6.2 1. The Company adopted and published Complied with Continues to be complied with. The rights and obligations the internal document clearly determining The General Shareholders’ Meeting approved 2.7.2 1. The Company has approved the internal Complied with Continues to be complied with. of the Board of Directors the rights and obligations of the Board of the Rules of Procedure for Convention and The internal documents of document determining the procedure for In accordance with p. 7.6.1. of the Rules of members are clearly worded Directors members. Holding of Meetings of PJSC Enel Russia the company establish the preparing and holding the meetings of the Procedure for Convention and Holding of and recorded in the internal Board of Directors, which defines the rights procedure for preparing and Board of Directors, establishing, without Meetings of the company’s Board of Directors, Annexes documents of the company. and obligations of members of the company's holding the meetings of the limitation, that the notification of the a notice on the holding of the meeting of Board Board of Directors. Board of Directors enabling meeting shall be made, in general, at least of Directors should be sent to each Board This regulation is published on the company's the members of the Board of 5 days before its holding. of Directors’ member not later than 5 (five) website on the Internet (https://www. Directors to duly prepare for calendar days before the date of holding of the enelrussia.ru/en/investors/a201612-basic- the same. meeting of the Board of Directors (end of the documents-.html). term for acceptance of voting ballots).
246 Annual Report 2019 PJSC Enel Russia 247 2.7.3 1. The Charter or the internal document Complied with Continues to be complied with. 2. The Chairman of the Remuneration Complied with Continues to be complied with. The form for holding the of the company provides for that the This principle is set out in p. 8.12 of the Rules Committee is the Independent Director HR and Remuneration Committee’s Chairman, About the Report Board of Directors meeting most important issues (according to the of Procedure for Convention and Holding who is not the Chairman of the Board which is charged with the tasks of the is determined in view of the list given in recommendation 168 of the of Meetings of PJSC Enel Russia Board of of Directors. remuneration Committee, was an independent agenda issues importance. Code) shall be reviewed at the Board Directors. 3. The internal documents of the company director, Andrea Guaccero, throughout The most important issues meetings held in praesentia. determine the tasks of the Remuneration 2019. The tasks of the HR and remuneration are solved at meetings held Committee including, without limitation, Committee are defined in p. 3.1. of the in praesentia. the tasks set forth in recommendation Organizational Regulation on the Committees 180 of the Code. of the Board of Directors of PJSC Enel Russia. 2.7.4 1. The Charter of the company provides Complied with Continues to be complied with. The most important issues that the most important issues specified The most important issues that are decided by of the company activities in recommendation 170 of the Code, shall a qualified or absolute majority of the Board of 2.8.3 1. The Board of Directors established Complied with Continues to be complied with. are resolved by special or be resolved at the Board of Directors Directors’ members are listed in art. 18.9 of the To preliminary consider the Nomination Committee (or its tasks The objectives specified in recommendation Company Overview ordinary resolution of all meeting by a special resolution of at least company’s Charter. the issues related to HR specified in recommendation 186 of the 186 of the Corporate Governance Code of the elected Board of Directors three fourth of votes or by an ordinary planning (continuity planning), Code are implemented within another Regulation on the Committees of the Board members at the Board of resolution of all elected Board of Directors Also, article 18.6 of the company’s Charter professional headcount committee <4>), and the majority of its of Directors are referred to the objectives Directors meeting. members. contains a requirement for adoption of the and efficiency of the Board members are Independent Directors. and functions of the HR and Remuneration decisions on the issues specified: of Directors work, the 2. The internal documents of the Committee. The HR and Remuneration – in p. 15.2.35 a majority of 9 votes out of Nomination Committee company determine the tasks of the Committee consists solely of independent 11 members of the Board of Directors, (appointments, staff) Nomination Committee (or of a relevant directors since June 2019. Before this date the – unanimous vote of the members of the was established, and the committee with joint functions), including, independent directors comprised the majority Board of Directors for taking a decision on majority of its members are without limitation, the tasks contained in of its composition. the issue specified in p. 15.2.36. Independent Directors. recommendation 186 of the Code. indicators
2.8. The Board of Directors creates committees for preliminary consideration 2.8.4 1. Within the reporting period the Complied with Continues to be complied with. of the most important issues associated with the company's activities. Financial and performance Taking into account the company Board of Directors considered The Board of Directors considered the issue scale of activities and the the issue as to whether the composition on compliance of the Board of Directors’ level of risk the company of its committees meets the tasks of 2.8.1 1. The Board of Directors formed the Complied with Improvement as compared to the previous composition with tasks of the Board of Board of Directors made the Board of Directors and the company The Audit Committee Audit Committee comprising Independent period. Directors and Company’s business objectives sure that the composition of business objectives. Other committees comprising Independent Directors only. during the procedures for self-evaluation of the The Company fully complies with criterion 1 its committees fully meets were either formed or were not Directors is established for Board of Directors’ performance in 2019. of principle 2.8.1 since June 2019. The annual the company business recognized as necessary. preliminary consideration of General Shareholders’ Meeting 2019 elected objectives. Other committees the issues associated with 4 independent directors, then the Board of were either formed or control over the company Directors formed the Audit and Corporate were not recognized
financial and economic Sustainability Governance Committee only from independent as necessary. (Strategy activities. directors on June 25, 2019. Committee, Corporate Governance Committee, Ethics Committee, Risk 2. The internal documents of the Complied with Continues to be complied with. Management Committee, company determine the tasks of the Audit The objectives of the Audit and Corporate Budget Committee, Health, Committee including, without limitation, Governance Committee are defined in p. Safety and Environment the tasks set forth in recommendation 2.1. of the Organizational Regulation on the Committee, etc.). 172 of the Code. Committees of the Board of Directors of 3. At least one member of the Audit PJSC Enel Russia. The Chairman of the Audit Committee, who is an Independent and Corporate Governance Committee V.Yu. 2.8.5 1. The Committees of the Board of Complied with Continues to be complied with. Director, has experience and knowledge Zarkhin has experience and knowledge related The composition of the Directors are headed by Independent All 4 Committees of the Board of Directors are Governance related to preparation, analysis, to preparation, analysis, assessment and committees is determined Directors. headed by the Independent directors. Risk and Corporate assessment and audit of the accounting audit of the accounting (financial) statements. in such a way as to allow for 2. The internal document (policies) of the The meetings of the Committees of the Board (financial) statements. 10 meetings of the Audit and Corporate comprehensive discussion Company contain provisions stating that of Directors are attended by the members of of the preliminary considered 4. The meetings of the Audit Committee Governance Committee were held in 2019. the persons who are not the members the Committees as well as persons invited to issues taking into account were held at least once a quarter within of the Audit Committee, Committee the meeting for each of considered items. various opinions. the reporting period. for Nominations and Remuneration Committee may attend the Committees' meetings only if invited by the Chairman 2.8.2 1. The Board of Directors established the Complied with Improvement as compared to the previous of the relevant Committee. To preliminary consider Remuneration Committee comprising period. Annexes the issues associated with Independent Directors only. The Company fully complies with criterion 1 2.8.6 1. Within the reporting period the Complied with Continues to be complied with. formation of an efficient and of principle 2.8.2 since June 2019. The Annual The Chairmen of the Chairmen of the Committees regularly transparent remuneration General Shareholders’ Meeting 2019 elected In accordance with p. 1.10. of the Committees regularly inform reported on the Committees' work to the practice, the Remuneration 4 independent directors, while on June 25, Organizational Regulation on the Committees the Board of Directors and Board of Directors. Committee is established, 2019 the Board of Directors decided to form of the Board of Directors, the Committees’ its Chairman about the comprising Independent the HR and Remuneration Committee solely Chairmen should submit the reports on the work performed by their Directors and headed by the from independent directors. Committees' work to the Board of Directors for Independent Director who committees. consideration on quarterly basis. is not the Chairman of the Board of Directors.
248 Annual Report 2019 PJSC Enel Russia 249 2.9. The Board of Directors ensures that the quality of work performed by the Board of Directors, The Company believes that combining of the functions of the “Corporate Secretary”
its committees and members of the Board of Directors is assessed. About the Report and “Head of Legal Affairs” does not create a conflict of interest and does not reduce 2.9.1 1. Self-assessment or external Complied with Continues to be complied with. in general the efficiency of the Corporate Assessing the quality of assessment of the work performed by The self-evaluation of the Board of Directors’ Secretary of the company. Also, the Board of the work performed by the Board of Directors carried out in the performance for 2019 included evaluation Directors annually evaluates the effectiveness the Board of Directors reporting period included assessment of work of the Board of Directors in general of the Corporate Secretary, during the process is aimed at determining of the work performed by Committees, and evaluation of each particular Committee. of its performance evaluation. During the the level of efficiency for individual members of the Board of The results of self-evaluation of the Board of external evaluation of the Board of Directors’ the work performed by Directors and the Board of Directors in Directors for 2019 will be considered at the efficiency for 2017, external advisor noted, the Board of Directors, general. meeting of the Board of Directors considered that “Corporate Secretary is highly competent committees and members 2. The results of self-assessment or the the self-evaluation’s results during meeting and devotes much time and focus to of the Board of Directors, fulfilling her role.” The Board of Directors’
external assessment of the Board of held in-praesentia a in March 2020, according Company Overview their work compliance with Directors performed within the reporting to the Methodology for self-evaluation of PJSC members always highly rated the Corporate the company development period were considered at the Board of Enel Russia Board of Directors’ performance Secretary’s performance: at 4.1 points (out needs, activating the work Directors meeting held in praesentia. for 2019. of 5 points possible), during the procedure of of the Board of Directors external evaluation of the Board of Directors’ and identifying the areas for performance, and within the scope of self- improvement. evaluation procedure they evaluated Corporate Secretary’s performance at 4.6 points for 2018 and 2019 (out of 5 points possible). Currently, 2.9.2 1. An external company (advisor) was Complied with Continues to be complied with. the company doesn’t plan to appoint another Assessment of the work involved by the company for independent The external organization — person as a Corporate Secretary. performed by the Board assessment of the work quality for the PricewaterhouseCoopers Consulting indicators of Directors, Committees Board of Directors at least once within the Limited Liability Company was involved for and members of the Board last three reporting periods. external evaluation of the Board of Directors’ 4.1. The level of remuneration payable by the company is sufficient for involvement, motivation of Directors is performed and retention of the persons having the competence and qualification required by the company. performance in 2017. Financial and performance regularly at least once a Remuneration to the members of the Board of Directors, executive bodies and other key managers year. An external company of the company is paid in accordance with the Remuneration Policy adopted at the company. (advisor) is involved for independent assessment of the work quality for the Board 4.1.1 1. The Company adopted the internal Complied with Continues to be complied with. of Directors at least once in The level of remuneration document (documents) — the policy The approaches to remuneration of the three years. payable by the company to (policies) on remuneration of the Board Board of Directors’/Committees’ of the the members of the Board of of Directors members, executive Board of Directors members are defined in Directors, executive bodies bodies and other key managers, clearly 3.1. The Company Corporate Secretary performs efficient current interaction with the shareholders, the Regulation on payment of remuneration and other key managers determining approaches towards and compensations to the member of coordination of the company activities to protect the shareholders' rights and interests, supports efficient creates adequate motivation remuneration for the foregoing persons. Sustainability work performed by the Board of Directors. the Board of Directors and the Board of for their efficient work Directors’ Committees of PJSC Enel Russia. allowing the company to The remuneration to the key managers is involve and retain competent 3.1.1 1. The following internal document is Complied with Continues to be complied with. governed by the Policy on remuneration and and qualified specialists. The The Corporate Secretary has adopted and disclosed at the company - reimbursement of expenses (compensations) The Regulation on Corporate Secretary of Company avoids the level knowledge, experience and Regulation on Corporate Secretary. of the members of the executive bodies and PJSC Enel Russia is disclosed at the of remuneration greater qualification adequate to other key managers of PJSC Enel Russia. 2. The Company web-site and the annual company’s website. (https://www.enelrussia. than required, as well as perform the duties imposed Both documents are posted at the company's report contain the biographical information ru/en/investors/a201612-basic-documents-. unreasonably high discrepancy on him/her, has impeccable website. (https://www.enelrussia.ru/en/ about the Corporate Secretary with the html). The Corporate Secretary’s biographical between the remuneration business reputation, and investors/a201612-basic-documents-.html). same details as for the members of the data are disclosed in the company’s Annual level of the foregoing persons shareholders trust him/her. Governance Board of Directors and the company report. and the company employees.
executive management. Risk and Corporate
4.1.2 1. Within the reporting period the Complied with Continues to be complied with. 3.1.2 1. The Board of Directors approves Complied The Company comply with principle 3.1.2 of The Company Remuneration Remuneration Committee reviewed the The Corporate Secretary is appointment, dismissal and additional with in part corporate governance at the same extent. The HR and Remuneration Committee Policy is developed Remuneration Policy (Policies) and the considered in 2019 the Regulation on independent enough of the remuneration for the Corporate Secretary. The Head of Legal and Corporate Affairs has by the Remuneration practice of its (their) implementation, and payment of remuneration and compensations company executive bodies been a Corporate Secretary of the company for Committee and approved provided relevant recommendations to to the members of the Board of Directors and has required powers and more than 5 years. The Corporate Secretary by the company Board of the Board of Directors, if required. and Committees of the Board of Directors’ resources to perform the reports in their activities directly to the Board Directors. The Board of Committees of PJSC Enel Russia and tasks assigned to him/her. of Directors, appointed to the position and Directors supported by the recommended to the company's Board of dismissed by the decision of the Board of Annexes Remuneration Committee Directors to adopt a decision on submission of Directors in accordance with the Rules of ensures control over this Regulation to the Annual General Meeting Procedure for Convention and Holding of implementation of the of the company 2019 for approval. Also, in Meetings of Company’s Board of Directors. Remuneration Policy at the 2019 The HR and Remuneration Committee According to p. 2.2. of the Regulation on company, and if required recommended to the company's Board of Corporate Secretary, the Corporate Secretary — reviews and adjusts the Directors to approve new version of the shall perform the functions of the secretary same. Policy on remuneration and reimbursement of of the company’s Board of Directors, the expenses (compensations) of the members of company’s General Shareholders’ Meeting, the executive bodies and other key managers and the company’s Committees of the Board of PJSC Enel Russia. of Directors.
250 Annual Report 2019 PJSC Enel Russia 251 4.1.3 1. The company Remuneration Policy Complied with Continues to be complied with. 4.2.3 1. The company does not provide for any Complied with Continues to be complied with. The company Remuneration (Policies) contains (contain) transparent Such internal documents of PJSC Enel Russia The company does not additional payments or compensations in The additional compensations or severance About the Report Policy contains transparent mechanisms for determining the amount as the Regulation on payment of remuneration provide for any additional case or early terminating the powers of payments to the Board of Directors’ members mechanisms for determining of remuneration to the Board of Directors and compensations to members of the Board payments or compensations the Board of Directors members due to in case of early termination of their powers due the amount of remuneration members, executive bodies and other of Directors and Committees of the Board in case or early terminating transfer of control over the company or to transfer of company control or through other to the Board of Directors key managers of the company, and also of Directors of PJSC Enel Russia and Policy the powers of the Board of due to other circumstances. circumstances are not assumed. members, executive bodies governs (govern) all types of payments, on remuneration and reimbursement of Directors members due to and other key managers benefits and privileges provided to the expenses (compensations) of the members transfer of control over the of the company, and foregoing persons. of the executive bodies and other key company or due to other also governs all types of managers contain transparent mechanisms for circumstances. payments, benefits and determination of the amount of remuneration privileges provided to the to the Board of Director’s members, executive foregoing persons. bodies and other key managers of the company 4.3. The system for remunerating the executive bodies’ members and other key managers as well as establish all types of payments, Company Overview of the company provides for dependence of remuneration on the result of the company work benefits and privileges that they are provided and their personal contribution to this result achievement. with.
4.1.4 1. The Remuneration Policy (Policies) or Complied with Continues to be complied with. 4.3.1 1. Within the reporting period, the annual Complied with Continues to be complied with. The company determines the other internal documents of the company The Regulation on payment of remuneration Remuneration to the performance indicators approved by The company has short-term and long-term Policy on Reimbursement for determine the rules for reimbursement and compensations to members of the Board executive bodies’ members the Board of Directors were used when incentive program valid for the members of Expenses (Compensations) for the expenses of the Board of Directors of Directors and Committees of the Board of and other key managers of determining the amount of variable executive bodies and other key managers, who specifying the list of members, executive bodies and other key Directors of PJSC Enel Russia and Policy on the company is determined remuneration to the executive bodies’ are approved by the Board of Directors. The HR expenses to be reimbursed managers of the company. remuneration and reimbursement of expenses so as to ensure reasonable members and other key managers of the and Remuneration Committee develops key for, and the level of service indicators (compensations) of the members of the and substantiated ratio of the company. performance indicator for each key manager that can be claimed by the executive bodies and other key managers fixed remuneration part and 2. During the last undertaken assessment for a calendar year and the Board of Directors Board of Directors members, establish the rules for reimbursement of variable remuneration part, of the system of remunerations of the approve the key performance indicators as the executive bodies and Financial and performance expenses to the members of the Board of dependent on the company members of executive bodies and other basic element of remuneration system. other key managers of the Directors/Committees, executive bodies and work results and personal key managers of the company, the Board The Board of Directors analyzed remunerations company. This Policy may be other key managers of PJSC Enel Russia. (individual) contribution of the of Directors (Remuneration Committee) of the members of executive bodies and other a component of the company The lists of such expenses are set out in the employee to the final result. made sure that the company applied key managers and made sure that the company Remuneration Policy. above internal documents of the company. efficient ratio of fixed and variable parts of applied efficient ratio of fixed and variable parts remuneration. of remuneration. 3. The company provides for the 4.2. The system of remuneration to the members of the Board of Directors ensures convergence procedure ensuring return to the company The results within the scope of short-term of the Directors' financial interests and long-term financial interests of shareholders. of bonus payments wrongfully received incentive program are assessed by the annual by the members of the executive bodies work, and the results within the scope of long- Sustainability and other key managers of the company. term program are assessed for achievement 4.2.1 1. Fixed annual remuneration was the Complied with Continues to be complied with. of goals for a three-year period. P. 4.6.5 and The company pays fixed only monetary form of remuneration In accordance with p. 4.1. of the Regulation on 4.6.6 of the Policy on remuneration and annual remuneration to the to the Board of Directors members for payment of remuneration and compensations reimbursement of expenses (compensations) Board of Directors members. working at the Board of Directors within to members of the Board of Directors and of the members of the executive bodies and The company does not pay the reporting period. of the Board of Directors’ Committees of other key managers of PJSC Enel Russia remuneration for participation PJSC Enel Russia, the Board of Directors’/ provide for a procedure ensuring return to in individual meetings of Committees’ members receive fixed the company of bonus payments wrongfully the Board or the Board of remuneration. received by the members of the executive Directors Committees. bodies and other key managers of the The company does not apply company. short-term motivation and Governance
additional financial incentives Risk and Corporate in relation to the Board of Directors members. 4.3.2 1. The company implemented the Complied with Continues to be complied with. The company implemented program for long-term incentives for the In November 2017, the company adopted the program for long-term members of the executive bodies and the long-term incentive program for the 4.2.2 1. If the internal document (documents) Not applicable Continues to remain inapplicable. incentives for the members other key managers of the company using members of the executive bodies and other of the executive bodies the company shares (financial instruments Long-term ownership of the — the company Remuneration Policy The company did not approve implementation key managers that is premised on the financial and other key managers based on the company shares). company shares facilitates (Policies) provide for provision of the of the Stock Option Plan for provision of shares instruments based on the company shares. of the company using the convergence of the Board of company shares to the Board of Directors to the Board of Directors members. 2. The program for long-term incentives This program is designed for 3 years. Directors' members financial members, clear rules for share owning company shares (options for the members of the executive bodies interests with long-term by the Board of Directors members shall or other derivatives should and other key managers of the company Annexes interests of the shareholders be provided for and disclosed aimed at the company shares be the provides that the right to sell the shares to the maximum extent. encouraging long-term ownership of such underlying asset for them). and other financial instruments used The company does not make shares. in this program arises not earlier than the rights to sell shares in three years upon their provision. contingent upon achievement Moreover, the right to sell them is of certain performance conditional on achievement of certain indicators, and the Board company performance indicators. of Directors members do not participate in option programs.
252 Annual Report 2019 PJSC Enel Russia 253 4.3.3 1. The amount of compensation (golden Complied with Continues to be complied with. 5.1.4 1. Within the reporting period the Board of Complied with Continues to be complied with.
The amount of compensation parachute) payable by the company in The Policy on remuneration and reimbursement The company Board of Directors or the Board of Directors' Audit During 2019, the Board of Directors considered About the Report (golden parachute) payable by case of early terminating the powers of of expenses (compensations) of the members Directors takes required Committee assessed the efficiency of the the risk governance and internal control the company in case of early the executive bodies members or other of the executive bodies and other key measures to ensure that the company's risk management and internal systems of PJSC Enel Russia and recognized terminating the powers of the key managers on the company's initiative managers of PJSC Enel Russia does not risk management and internal control system. The information about them as efficient. The information about the executive bodies members or and if no bad faith actions are performed provide for compensation in case of early control system effective at the main results of such assessment are main results of such assessment are included other key managers on the by them did not exceed the double termination of their powers on the company’s the company complies with included in the company's annual report. in the company's Annual Report for 2019. company's initiative and amount of the annual remuneration fixed initiative. the principles and approaches if no bad faith actions are part in the reporting period. towards its organization, performed by them does not determined by the Board exceed the double amount of of Directors, and that it is the annual remuneration fixed efficiently functioning. part. Company Overview
5.2. Internal audit performance is organized for systematic independent assessment of the risks 5.1. The company established an efficiently functioning system of risk management management and internal control system reliability and efficiency and the company corporate and internal control aimed at ensuring reasonable confidence in achieving the objectives set management practice. for the company.
5.2.1 1. The company established a separate Complied with Continues to be complied with. 5.1.1 1. The functions of various management Complied with Continues to be complied with. The company established a internal audit organization unit functionally The Internal Audit Department is established at The company Board of bodies and the company units in the risk The company has valid Internal Control and separate organization unit reporting to the Board of Directors or PJSC Enel Russia operating on the basis of the Directors determined management and internal control system Risk Governance Policy approved by the or involved an independent the Audit Committee or involved an Regulation on Internal Audit Department. principles and approaches are clearly determined in the internal Board of Directors that defines clearly the risk external company for internal independent external company under the indicators towards organization of documents / relevant Company's policy management system as well as the functions audit. same accountability principle. The Department reports functionally to the the risk management and approved by the Board of Directors. of the company’s organization units and its The functional and Board of Directors and administratively to the Financial and performance internal control system at the management bodies in risk management administrative accountability General Director. Internal Audit Director shall company. system. of the internal audit unit are be appointed and dismissed by the General divided. The internal audit Director under the decision of the company’s functional unit reports to the Board of Directors. Board of Directors. 5.1.2 1. The company executive bodies Complied with Continues to be complied with. The company executive ensured distribution of functions and To manage risks, a three-stage system is bodies ensure establishment powers in relation to risk management established. It includes organization units of and support of the efficient and internal control among the managers the company, Risk Control Group within the 5.2.2 1. Within the reporting period, the internal Complied with Continues to be complied with. system for risk management (heads) of units and departments that Administration, Finance and Control, Risk The internal audit unit control and risk management system The Internal Audit Department completed a and internal control report to them. Committee at the General Director and the assesses the efficiency efficiency was assessed within the scope number of audits during current year including Sustainability functioning at the company. Internal Audit Department. of the internal control of the internal audit. audit of efficiency of internal control and risk system, efficiency of the 2. The company employs generally management system. The Risk Control Group coordinates the work of risk management system, accepted internal control and risk organization units in identifying and assessing as well as of the corporate management principles. The Internal Audit Department of PJSC risks as well as developing measures for their management system. The Enel Russia adheres to the rules related to management, ensures update of the Internal company employs generally occupation of internal auditor defined by the Control and Risk Governance Policy, develops accepted business principles Russian Institute of Internal Auditors that and fosters risk culture. in the internal audit sphere. ensure a common approach to audits. Governance 5.1.3 1. The company approved the Zero Complied with Continues to be complied with. 6.1. The company and its activities are transparent for shareholders, Risk and Corporate The risk management and Tolerance to Corruption Policy. PJSC Enel Russia implemented the antibribery investors and other stakeholders. internal control system 2. The company organized an easy management system according to the at the company ensures method for reporting to the Board of requirements of international standard objective, fair and clear Directors or the Board of Directors' Audit ISO 37001. 6.1.1 1. The company Board of Directors Complied with Continues to be complied with. idea about the company's Committee on actual violations of the The company developed and approved the company Information current state and prospects, The Board of Directors approved a Regulation laws, internal procedures, the company's The company approved a number of internal implemented the information Policy developed taking into account the integrity and transparency on the Information Policy of the PJSC Code of Ethics. anti-corruption documents: Corruption policy ensuring efficient recommendations of the Code. of the company's reports, Enel Russia in 2018 that complies with Prevention Policy, Code of Ethics, Zero information interaction reasonableness and 2. The Board of Directors (or one of the recommendations of the Corporate Tolerance Corruption Plan. The Anti-Corruption among the company, acceptability of the risks its committees) considered the issues Governance Code.
Committee is established and operates at the Annexes shareholders, investors and related to compliance by the company In November 2019, the Board of Directors taken by the company. company on a continuous basis. other stakeholders. with its Information Policy at least once considered information about compliance All employees of the company were informed within the reporting period. of PJSC Enel Russia with own Regulation about possible ways of notification of the on the Information Policy. violations of law and internal procedures.
254 Annual Report 2019 PJSC Enel Russia 255 6.1.2 1. The company discloses the information Complied with Continues to be complied with. 6.2.3 1. The company's annual report contains Complied with Continues to be complied with. The company discloses about the company's corporate PJSC Enel Russia discloses the information The annual report being one the information about key aspects of the PJSC Enel Russia discloses main information in About the Report the information about the management system and general about the system and principles of corporate of the most important tools company's operational activities and its its Annual Report based on recommendations corporate management corporate management principles used at governance at its website (https://www. for information cooperation financial results of the Corporate Governance Code. system and practice the company including on the company's enelrussia.ru/en/investors/a201612-governance- with shareholders and other 2. The company's annual report contains including detailed information website. system-0.html). stakeholders contains the the information about environmental and about compliance with 2. The company discloses the information Also, the company discloses information information allowing for social aspects of the company's activities. the Code principles and on the composition of the executive about management bodies and their assessment of the company's recommendations. bodies and the Board of Directors, composition including brief biographical data business results for a year. independence of the Board members of the members of the management bodies and their membership in the Board of within the scope of Quarterly and Annual 6.3. The company provides the information and documents at the shareholders' requests Directors Committees (in accordance with reports. in accordance with the principles of equal and easy access. the definitions of the Code).
6.3.1 1. The company's information policy Complied with Continues to be complied with. Company Overview 3. If there is an entity controlling the Complied with The company complies with criterion 3 The company provides determines an easy procedure for The company is governed by applicable laws company, the company publishes the of principle 6.1.2. upon posting the Enel information and documents provision of shareholders with access when providing the shareholders with access memo of the controlling entity regarding Group Corporate Governance Guidelines at request of shareholders in to the information including on the legal to its documents and information as well as the plans of such entity concerning the on September 20, 2019 at its website accordance with equal and entities controlled by the company at the strives for not creating needless complexities company's corporate governance. (https://www.enelrussia.ru/content/dam/ easy access principles. shareholders’ request. for them. Also, p. 7 of the Regulation on enel-ru/documents/en/basic/Corporate%20 the Information policy of PJSC Enel Russia Governance%20Guidelines%20ENG.pdf). provides for a procedure for provision of The company considers the above document information about subsidiaries. as the controlling entity’s memo stipulated by the Corporate Governance Code with respect
to own plans related to corporate governance 6.3.2 1. Within the reporting period the Complied with Continues to be complied with. indicators within the company. When the company company did not refuse to satisfy the The shareholders are warned about confidential provides the information requests of the shareholders for provision nature of information and gain access to it to shareholders, it ensures of the information or such refusals were after signing a Non-Disclosure Agreement Financial and performance 6.2. The company timely discloses complete, updated and reliable company information reasonable balance between reasoned. (confidentiality agreement) with the company to allow for reasonable decisions to be taken by the company shareholders and investors. the interests of certain 2. In the cases determined in the that is posted at the website of PJSC Enel shareholders and the company's Information Policy, the Russia: (https://www.enelrussia.ru/en/ interests of the company 6.2.1 1. The company's Information Policy Complied with Continues to be complied with. shareholders are warned of the investors/a201612-basic-documents-.html). itself interested in keeping The company discloses the determines the approaches and criteria information confidential nature and P. 3.5.20 of the Regulation on the Information in confidence the important information in accordance for defining the information capable of they assume the obligation to keep policy of PJSC Enel Russia defines criteria commercial information that with the principles of significantly affecting the company's it in confidence. to be used by the company to recognize may significantly affect is frequency, sequence, assessment and the cost of its securities information as having significant impact on the competitiveness. efficiency, as well as and procedures ensuring timely disclosure cost its securities. Sustainability availability, reliability, of such information. The securities of PJSC Enel Russia are traded completeness and the 2. If the company's securities are only at the Moscow Exchange. The company 7.1. Actions significantly affecting or that may affect the structure of the stock capital and the company's possibility to compare the circulated at the foreign regulated discloses information at its portal not only financial state and, therefore, the shareholders' state (significant corporate actions) are performed disclosed data. markets, the significant information in Russian but in English since a significant on equitable conditions ensuring observance of the shareholders and other stakeholders' is disclosed in a simultaneous and number of shares of PJSC Enel Russia are held rights and interests. equivalent manner in the Russian by foreign shareholders. Federation and at such markets within 7.1.1 1. The company's Charter determine the Complied with Continues to be complied with. the reporting year. The following actions are list of transactions or other actions that The company’s Charter defines criteria and 3. If foreign shareholders own a recognized as significant are significant corporate actions and the list of transactions comprising the significant significant number of the company's corporate actions: the criteria for their determination. corporate actions. (Art. 24).
shares, the information was disclosed Governance company reorganization, Decisions making in relation to significant The Board of Directors decides on significant
not only in Russian, but also in one Risk and Corporate procurement of 30 and corporate actions falls within the corporate actions. When performance of of the most common languages within more per cent of the competence of the Board of Directors. these corporate actions directly falls within the the reporting period. company's voting shares When performance of these corporate General Shareholders' Meeting competence, (acquisition), major actions directly falls within the General the Board of Directors provides shareholders transactions consummation Shareholders' Meeting competence with relevant recommendations. 6.2.2 1. Within the reporting period the Complied with Continues to be complied with. by the company, increase under the laws, the Board of Directors The company avoids a company disclosed the annual and Based on the Regulation on the Information or reduction in the company provides shareholders with relevant perfunctory approach during semi-annual financial statements drawn policy of PJSC Enel Russia the company authorized capital, the recommendations. the information disclosure up according to the IFRS standards. The assume an obligation to disclose information company shares listing or 2. The Charter of the company describes and discloses significant company's annual report for the reporting about its activities voluntarily, in addition to delisting, as well as other at least the following actions as significant information about its activities period includes the annual financial Annexes disclosure of information stipulated by law. In actions that may lead to corporate actions: reorganization of even if such information statements drawn up according to the accordance with p. 3.5.6. of the Regulation on significant changes in the the company, procurement of 30 and disclosure is not provided for IFRS standards with the auditor's opinion. the Information policy of PJSC Enel Russia, the rights of shareholders or more per cent of the company's voting in the laws. 2. The company discloses complete company disclosed the annual and semi-annual violation of their interests. The shares (acquisition), major transactions information about the company's financial statements drawn up according to the company's Charter determine consummation by the company, increase capital structure in accordance with IFRS standards. (https://www.enelrussia.ru/en/ the list (criteria) of transactions or reduction in the company authorized Recommendation 290 of the Code in investors/a201612-financial-reporting-0.htmll). and other actions, constituting capital, the company shares listing or the annual report and at the company’s The company discloses also information about significant corporate actions, delisting. website. the structure of its stock capital in the Annual whose review falls within the Report and at its own website (https://www. competence of the company enelrussia.ru/en/investors.html). Board of Directors.
256 Annual Report 2019 PJSC Enel Russia 257 7.1.2 1. The company provides for the Complied with Continues to be complied with. The internal document regulating the procedure for engagement of an independent The Board of Directors procedure setting forth that the appraiser for determination of the value of property acquired or disposed in the The significant corporate actions are About the Report plays a key role in decision Independent Directors shall announce considered within the scope of the Related course of a major transaction has not been developed since the company has no making or elaborating their stance on significant corporate Party Transactions Committee’s performance, practice of effecting major transactions not related to the normal course of business the recommendations actions before their approval. that consists fully of independent directors for a long time. In 2019, the company completed major transaction on the sale of in relation to significant since June 2019. property comprising Reftinskaya GRES. The Independent Appraiser was selected on corporate actions, the Board the basis of tender procedure among qualified participants of assessment market. of Directors relies on the The candidate for independent appraiser was approved by the Board of Directors in position of the company accordance with the requirements of laws of the Russian Federation and company’s Independent Directors. Charter. A report of the independent appraiser was provided for examination to the shareholders as part of the extraordinary General Shareholders' Meeting’s materials and it is available at the company’s website. Moreover, completion of such transaction 7.1.3 1. Taking into account specific business Complied with Continues to be complied with. comprises an extraordinary event for PJSC Enel Russia since major transactions When significant corporate features, the company's Charter establish The Board of Directors considers all significant for fuel purchase and exchange bonds placement transactions are related to the Company Overview actions are performed minimum criteria for referring the corporate issues in accordance with the company’s normal course of business In 2020, the company does not plan to approve affecting the rights and company's actions to significant corporate procedure that is approved by the internal the internal document regulating procedures for involvement of an independent legitimate interests of actions that are lower than that set forth documents of the company. appraiser to determine the value of property acquired or disposed in a major the shareholders, equal in the laws. The company’s Charter provides for the transaction while the company does not eliminate a possibility for development and conditions for all the company 2. Within the reporting period, all thresholds lower than stipulated by law for implementation of such document in future. shareholders are ensured, significant corporate actions were submission of a number of transactions to the and if there are not enough subjected to the approval procedure Board of Directors for consideration. mechanisms aimed at before their consummation. During 2019, all actions referred by the 2. The company internal Complied Criterion 2 of principle 7.2.2. is complied with to the same extent. protecting the shareholders' Corporate Governance Code to significant documents provide for the with in part The company’s internal documents do not stipulate the procedure for engagement rights provided for in the corporate actions were preliminary approved by procedure for involving of an independent appraiser to estimate the cost of acquisition and buyout of own laws, additional measures are and independent appraiser the Board of Directors before their completion. shares since the company has no regular of acquiring and buying out of the shares, indicators ensured protecting the rights to assess the cost of the except for the fact of the company’s acquiring a 0.4% treasury shares from the and legitimate interests of company shares procurement subsidiary LLC OGK-5 Finance at market exchange value in 2017. the company shareholders. and buyout. During 2018–2019, such transactions were not carried out. Considering the fact that Financial and performance The company relies not the company’s shares are listed at the stock exchange and have sufficient liquidity, only on compliance with the company always has reliable information about the value of own shares, therefore formal legal requirements, there is no need to involve an independent appraiser. Moreover, the company does but also on the corporate not exclude a possibility for development and implementation of such document in management principles set future. forth in the Code.
3. The internal documents of Not complied with Criterion 3 of principle 7.2.2. continues not to be complied with. 7.2. The company ensures such procedure for the corporate actions performance that allows the company provide for an In its operations, the company is guided by the provisions of article 83 of the Federal timely obtain complete information on such actions, ensures the possibility for the shareholders to influence expanded list of grounds for Law “On Joint Stock Companies” that contains an exhaustive list grounds that Sustainability such actions and guarantees compliance and adequate level of their rights protection in the course the members of the company recognize members of the company’s Board of Directors as stakeholders in respect of such actions. Board of Directors and other of the company’s transactions and cannot participate in the voting to approve persons provided for in the such transactions. The internal documents of the company doesn’t provide for an laws to be recognized as expanded list of grounds on which the company’s Board of Directors’ members and 7.2.1 1. Within the reporting period the Complied with Continues to be complied with. interested in the company other persons provided for in the laws are recognized as interested in the company The information about company disclosed the information about PJSC Enel Russia being a public company transactions. transactions. The company concludes related party transactions with the companies consummation of significant the company significant corporate actions discloses the most complete information about of the controlling shareholder group nominating the majority of the Board of Directors' corporate actions is in a timely and detailed manner, including all corporate actions including the grounds and dependent members, who have the right to vote for the approval of such transactions disclosed explaining the the grounds and terms for such actions terms for performance of such actions. in line with article 83 of the Federal Law “On Joint Stock Companies”. P. 8.10 of the reasons, conditions and performance. Rules of Procedure for Convention and Holding of Meetings of the company’s Board consequences of such of Directors establishes the duty of the director to notify the Board of Directors if he/ Governance actions consummation.
she has a conflict of interest in respect to any agenda issue of the Board of Directors Risk and Corporate meeting prior to the discussion of the relevant agenda item, as well as p. 8.11 of 7.2.2 1. The company internal documents Complied Criterion 1 of principle 7.2.2. is complied with the above Rules has established the need to abstain from voting on agenda items The rules and procedures provide for the procedure for involving with in part to the same extent. with regard to which the Board of Directors’ member has a conflict of interest. The related to significant and independent appraiser to determine On April 5, 2012 the company’s Board of concept of “conflict of interest” is set out in the Rules of Procedure for Convention corporate actions the cost of the property disposed of or Directors adopted the General Principles and Holding of Meetings of Board of Directors and in the Enel Group Corporate performance by the company procured under a major transaction or a for Approval of Related Party Transactions, Governance Guidelines, which is approved by the company’s Board of Directors. are registered in the company related-party transaction. establishing an obligatory procedure of PJSC Enel Russia relies on fair corporate conduct and objectivity of each the Board internal documents. determination of fair market-value appraisal of Directors’ member in the issues of approval of related party transactions and of property acquired or sold in the course reserves adoption of the decisions on these issues within the scope of their personal of related party transactions on the basis of responsibility. Furthermore, according to the requirements of the Federal Law “On Annexes tender results, analysis of market prices or Joint Stock Companies”, PJSC Enel Russia provides obligatorily all persons who are engagement of an independent appraiser. entitled to participate in the General Shareholders' Meeting with a report on related The Board of Directors of the company party transactions concluded in the reporting year, based on which the shareholders approved also the Enel Group Corporate can drive at conclusions on the amounts and terms of conclusion of transactions. Governance Guidelines. Extension of the list of grounds for recognition of the members of the Board of These Guidelines set out the general principles Directors or other persons interested in the transactions of the company, is not and procedures for intragroup transactions and assumed feasible by PJSC Enel Russia within short-term, although the company does related party transactions. not exclude the possibility for extension of the list of grounds in future.
258 Annual Report 2019 PJSC Enel Russia 259 Annex 5. Suretyship Agreement Significant terms and conditions Parties to Suretyship Agreement: Public Joint Stock Company Sberbank of Russia (Lender) About the Report and PJSC Enel Russia — the Suretyship Provider, Beneficiary LLC Enel Rus Wind Kola — the Borrower. Subject of Suretyship Agreement: The issuance of Suretyship by the Suretyship Provider to secure due performance all obligations of the Borrower under the Credit Contract with a credit line limit in the amount of Information about the most material 22,500,000,000 RUB, concluded between the Borrower and the Lender. The Suretyship Provider undertakes to be jointly and severally liable to the Lender for the Borrower's performance of its obligations under the Credit Contract. transactions and related party transactions The Credit Contract shall be entered between the Borrower and Lender for the purposes of financing costs related to the project for construction of renewable generating facility (wind farm) with estimated capacity of about 201 MW in Murmansk region and/or to refinance the costs incurre: closed by the Company in 2019 Shall not exceed 27.000.000.000,00 RUB. Tenor of the Suretyship: February 26, 2036.
Interest on the Suretyship: The Suretyship Provider shall provide Suretyship free of charge. Company Overview
Person interested in the performed transaction: Enel S.p.A.
The basis (grounds) on which (according to which) a person is recognized as a related party in the transaction: Enel S.p.A. is the controlling person of legal entities that are parties to the transaction: PJSC Enel Russia and LLC Enel Rus Wind Kola. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of PJSC Enel Russia: 56.43%. Special-purpose loan Significant terms and conditions Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of Public Joint Agreement Parties to the Agreement: PJSC Enel Russia — the Lender, LLC Enel Rus Wind Kola — the Borrower. Stock Company Sberbank of Russia 0%.
Subject of the Agreement: Provision of loans (tranches) by the Lender to the Borrower. indicators Related party's interest in the authorized (joint-stock) capital of LLC Enel Rus Wind Kola: 0%, the share of Special purpose loan: Loans are provided to finance payments, which are necessary for due performance of PJSC Enel Russia in the authorized capital of LLC Enel Rus Wind Kola 100%. agreements and activities related to the the project for construction of renewable generating facility (wind
farm) with designed capacity of 200.97 MW in Murmansk region, as well as for operational and financial Financial and performance Management body of the company, to adopt the approval decision thereof; No. and date of drawing expenses of the Borrower. up the Minutes: Annual General Shareholders’ Meeting, Minutes № 1/18, dd 04.06.2018. Max Loan Amount: the Lender undeertakes to provide the Borrower with interest-free targeted loans in a total amount not exceeding three billion eight hundred and eighty-one million (3,881,000,000.00) RUB. Rate: 0%. Maturity: Final maturity of each separate tranche will not exceed 20 years from the date of signing of each Addendum Significant terms and conditions drawdown notice. to the special-purpose Parties to the Addendum: Lender — PJSC Enel Russia, Borrower — LLC Enel Rus Wind Kola. Other terms and conditions: Amount, final maturity, repayment schedule and other terms and conditions loan Agreement Special purpose loan under the Addendum: Loan is provided for financing the development of the project for to be defined in each specific drawdown notice within the above limits. the construction of a wind generating facility with an estimated capacity of 200,97 MW in Murmansk Region. Loan Amount under the Addendum: Shall not exeed eighty four million (84 000 000) RUB.
Person interested in the performed transaction: Enel S.p.A. Max Loan Amount under the Special purpose loan agreement, including this Addendum: Shall not exceed one Sustainability billion six hundred nineteen million (1 619 000 000) RUB. The basis (grounds) on which (according to which) a person is recognized as a related party in the transaction: Enel S.p.A. is the controlling person of legal entities that are parties to the transaction: PJSC Enel Russia and Person interested in the performed transaction: Enel S.p.A. LLC Enel Rus Wind Kola. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) Management body of the company, to adopt the approval decision thereof; No. and date of drawing of PJSC Enel Russia: 56.43%. up the Minutes: Board of Directors of PJSC Enel Russia № 13/18 dd. 30.11.2018. Related party's interest in the authorized (joint-stock) capital of LLC Enel Rus Wind Kola: 0%, the share of PJSC Enel Russia in the authorized capital of LLC Enel Rus Wind Kola 100%.
Management body of the company, to adopt the approval decision thereof; No. and date of drawing Paid services agreement Significant terms and conditions Parties to the Agreement: PJSC Enel Russia and Enel Global Thermal Generation S.r.l.
up the Minutes: Annual General Shareholders’ Meeting, Minutes № 1/18, dd 04.06.2018. Governance Subject of the Agreement: Enel Global Thermal Generation S.r.l. based on its own experience and tangible assets, technical means and human resources, shall continuatively perform in favour and for the benefit of Risk and Corporate PJSC Enel Russia the provision the following type of services: Health, Safety, Environment and Quality, Technical Support, Operations & Maintenance, Human Resources Addendum Significant terms and conditions and Organization, Planning and Control, Business Development, Legal Affairs, Innovation, to the special-purpose Parties to the Addendum: Lender — PJSC Enel Russia, Borrower — LLC Enel Rus Wind Azov. and PJSC Enel Russia shall undertake to pay Enel Global Thermal Generation S.r.l. for the above mentioned loan Agreement Special purpose loan under the Addendum: Loan is provided for financing the development of the project for services in line with the agreement. the construction of a wind generating facility with an estimated capacity of 90,09 MW in Azov district, Rostov Period of services: January 1, 2019 — December 31, 2019. Region. The agreement price: The price shall not exceed EUR 5,600,000.00 VAT excluded. Loan Amount under the Addendum: No more than one billion five hundred ten million (1 510 000 000) RUB. A 10% of flexibility in the price estimation is considered in case there is a documented evidence of additional Max Loan Amount under the Special purpose loan agreement, including this Addendum: Shall not exceed services needed by PJSC Enel Russia. Annexes two billion one hundred million (2 100 000 000) RUB. Duration of the Agreement: The agreement shall come into force after its signature and shall be valid until Maturity: Final maturity of each separate tranche will not exceed 15 years from the date of signing of each full performance of the Parties’ obligations. The agreement will be enforced with respect to Parties’ relations drawdown notice. arising since 01.01.2019.
Person interested in the performed transaction: Enel S.p.A. Person interested in the performed transaction: Enel S.p.A.
Management body of the company, to adopt the approval decision thereof; No. and date of drawing Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Board of Directors of PJSC Enel Russia, Minutes № 14/18, dd 21.12.2018. up the Minutes: Board of Directors of PJSC Enel Russia № 9/18 dd 27.07.2018.
260 Annual Report 2019 PJSC Enel Russia 261 Agreement on the transfer Significant terms and conditions
of the seller's rights and Parties to the agreement: PJSC Enel Russia, LLC Enel Rus Wind Kola, JSC Trading System Administrator Sublease Agreement Significant terms and conditions About the Report obligations under contracts of Wholesale Electricity Market Transactions. for non-residential premises Parties to the Agreement: PJSC Enel Russia — Sublessor; LLC Enel Rus Wind Generation — Sublessee. for the provision of capacity Subject of the agreement: Transfer by the PJSC Enel Russia of all rights and obligations under the under Leasable area: shall not exceed 5,9 square meters. for qualified generating contracts for the provision of capacity for qualified generating facilities (DPM) operating on the basis of Subject of the Agreement: The Sublessor shall sublease in favour of the Sublessee the non-residential facilities operating on the renewable energy sources (RES) to the LLC Enel Rus Wind Kola. Entering into this Agreement is connected premises located at: Moscow, Pavlovskaya street, 7, build 1, 9th floor, which shall be used as premises for basis of renewable energy with the project execution for the construction of a wind generating facility (wind farm) with an estimated the office of the Sublessee in Moscow. sources capacity of about 201 MW in the Murmansk region. Lease payment: The monthly lease rate per square meter of the subleased area is 5 954,01 RUB, net of VAT. Aggregated value of the assigned rights and obligations under DPM contracts is equal to the maximum A monthly lease payment: shall not exceed 35 128,66 RUB, net of VAT. cost of capacity of the renewable generating facility during the delivery period and exceeds 10 BRUB, Total price of the Agreement: shall not exceed 386 415,26 RUB, net of VAT. VAT excluded. Term of sublease: from June 1, 2019 to April 30, 2020. Price of the agreement: Free of charge. The Agreement duration: From the moment of signing the Agreement until full execution of the obligations by the Parties. The Agreement shall apply to the Parties’ relations arising since June 1, 2019.
Person interested in the performed transaction: Enel S.p.A. Company Overview Person interested in the performed transaction: Enel S.p.A. The basis (grounds) on which (according to which) a person is recognized as a related party in the transaction: Enel S.p.A. is the controlling person of legal entities that are parties to the transaction: PJSC Enel Russia and Management body of the company, to adopt the approval decision thereof; No. and date of drawing LLC Enel Rus Wind Kola. up the Minutes: Board of Directors of PJSC Enel Russia № 13/19 dd 20.09.2019. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of PJSC Enel Russia: 56.43%. Related party's interest in the authorized (joint-stock) capital of LLC Enel Rus Wind Kola: 0%, the share of PJSC Enel Russia in the authorized capital of LLC Enel Rus Wind Kola 100%. Related party's interest in the authorized (joint-stock) capital (shares held by the related party) of JSC Trading Addemdum Significant terms and conditions System Administrator of Wholesale Electricity Market Transactions 0%. to ICT service ageement Parties to the Addendum: Enel Italia S.r.l. (“Provider”), PJSC Enel Russia (“Client”). indicators Management body of the company, to adopt the approval decision thereof; No. and date of drawing Subject of the Addendum: up the Minutes: Annual General Shareholders’ Meeting, Minutes 1/18 dd 04.06.2018. The Provider shall render following ICT services for the Client during the year 2019: > OSI Soft (PI) Software License Agreement; Financial and performance > Implementation of additional functionality and operation services for P-WAY system; > Infrastructure and Technology services from Italy Data Center to Moscow; Agreement Significant terms and conditions > Implementation of additional functionality and operation services of CKS (SharePoint); for use of trademarks Parties to the Agreement: Enel S.p.A. (the “Licensor”), PJSC Enel Russia (the “Licensee”). > Implementation of additional functionality and operation services for SAP WISE ERP system; Subject of the Agreement: The Licensor grants to the Licensee the non-exclusive license to use the > Implementation of additional functionality and operation services for SAP HR Global system; trademarks of the Licensor in the territory of the Russian Federation (the “license”). > Implementation of additional functionality and operation services for Electronic Financial Document Price of the Agreement: Given the current arrangement and conditions of the target markets in which the Management System (EfDMS); Licensee carries out its activities, the Licenses are granted to the Licensee free of charge. > Service Now system Platform Evolution; Period of license: The license is provided by the Licensor for the period of Agreement Term. > Digital Enabler services; Term of the Agreement: The Agreement shall remain in effect for a term of one (1) year from the date of > Operation services for Global Material Catalog Definition (TAM); Sustainability signing. The Agreement shall tacitly and automatically renew and the term shall be extended for an additional > Flexera licences; period equal to the initial term (Renewal Term) upon the same terms and conditions, until and unless either > Cyber Security services for the Enel’s Global Information systems; Party provides the other Party with one hundred eighty (180) days prior written notice to the end of the Initial > Global support of Internet and Intranet corporate applications; Term or the Renewal Term. > Operation services for Allegro system; > Development and operation of Digital Plant Digital Report; Person interested in the performed transaction: Enel S.p.A. > Implementation of additional functionality of Global Operational System; > Development and operation of Digital Plant IT Infrastructure; Management body of the company, to adopt the approval decision thereof; No. and date of drawing > Development and operation of Digital Working Transformation; up the Minutes: Board of Directors of PJSC Enel Russia № 11/18 dd 28.09.2018. > Development and operation of Digital Waste Management; > Development of Digital Change Management;
> Global Governance support. Governance
Sale purchase agreement Significant terms and conditions Risk and Corporate Parties to the sale purchase agreement; PJSC Enel Russia — the Seller, JSC Kuzbassenergo — Value cap of the Addendum: will not exceed 3 248 090 Euro excluding VAT. the Purchaser. Period of the Addendum: 01.01.2019–31.12.2019. Subject of the sale purchase agreement: The Seller shall sell, and the Purchaser shall purchase the assets Term of the Addendum: The Addendum will enter into force on signing by the Parties and shall be valid until constituting Reftinskaya GRES, a thermal power plant located in Reftinskiy, Sverdlovsk region, including complete performance of the Parties’ obligations. It shall be applicable to the relations of the Parties starting movable and immovable assets, as well as the stocks of coal, raw materials and spare parts. from 01.01.2019. Price of the sale purchase agreement: No less than twenty one (21) BRUR (net of VAT RF) subject to price adjustments (by up to 5%). Person interested in the performed transaction: Enel S.p.A. Timeline for Transfer of Title to Reftinskaya GRES property to the Purchaser: Within 18 months from signing and taking effect of the sale purchase agreement. Management body of the company, to adopt the approval decision thereof; No. and date of drawing
up the Minutes: Board of Directors of PJSC Enel Russia, Minutes № 8/19 dd 20.05.2019. Annexes Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Extraordinary General Shareholders’ Meeting, Minutes 2/19 dd 23.07.2019.
In order to fulfill the sale purchase agreement of the Reftinskaya GRES property and on the basis of the instructions of JSC Kuzbassenergo, a contract was signed for the supply of coal with JSC SUEK, the cost of which will not exceed 15.5 BRUB.
262 Annual Report 2019 PJSC Enel Russia 263 Framework contract Significant terms and conditions Directors’ and Officers’ Significant terms and conditions for the provision of Contract type: Framework contract. liability insurance Parties to the Contracts: Policyholder — PJSC Enel Russia, Insurer — JSC “AIG”. About the Report project management Parties to the contract: Client — PJSC Enel Russia, Contractor — Enel Produzione S.p.A. Contract Subject Matter: In case of an insured event, Insurer shall pay the insurance indemnity according to the terms and technical support Subject of the contract: Project management services and technical support services for execution of the Project and conditions of the contracts and applicable law of the Russian Federation. services for the on refurbishment of the Waste Water Treatment System at Sredneuralskaya GRES. Insurance Object: Insured Party’s and/or insured individuals’ property interests in connection with the liability implementation of the Price of the contract: Shall not exceed 496.416,00 EUR net of VAT. according to the applicable law to compensate losses of third parties in case of an insured event. project on refurbishment Actual price shall be defined in the specific service order to the framework agreement; such price will be All Coverages: of the Waste Water calculated based on the actual number of man hours worked and unitary rates agreed in the framework contract. Cover A (Side A) Treatment System at Estimated number of man hours under the contract: shall not exceed 4.330 man hours in general. Insured Person Liability Sredneuralskaya GRES Duration of services: From 01.08.2019 till 31.12.2022. The insurer shall pay the loss of each insured person resulting from a claim against the insured person except for Actual services duration shall be defined in the specific service order to the framework agreement. and to the extent that the company has indemnified the insured person. Contract validity: The contract shall be valid upon signature and expire upon performance by the Parties of their Cover B (Side B) respective obligations under the contract. Company Reimbursement The insurer shall pay the loss of the company resulting from a claim against the insured person but only when and Company Overview Person interested in the performed transaction: Enel S.p.A. to the extent that the company has indemnified the insured person for the loss. Cover C — Global program Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Subsidiaries Directors Liability Minutes: Board of Directors of PJSC Enel Russia, Minutes № 11/19 dd 25.07.2019. The insurer shall pay the loss of the subsidiaries directors resulting from a claim against the director. Cover D — Global program Representation at Investigations and Examinations Directors’ and Officers’ Significant terms and conditions The insurer shall pay the investigations costs. liability insurance Parties to the Contracts: Policyholder — PJSC Enel Russia, Insurer — JSC SK " Alliance". Cover E — Global program Contract Subject Matter: In case of an insured event, Insurer shall pay the insurance indemnity according to the terms and Special Excess Protection for Non-Executive Directors conditions of the contracts and applicable law of the Russian Federation. The insurer shall pay the loss of each non-executive director resulting from a claim against the non-executive Insurance Object: Insured Party’s and/or insured individuals’ property interests in connection with the liability director. indicators according to the applicable law to compensate losses of third parties in case of an insured event. Cover F (Side C) Company Liability for Securities Claims
All Coverages: The insurer shall pay the loss of the company resulting from a claim against the company for any wrongful act Financial and performance Cover A (Side A) committed by such company arising from a securities claims. Insured Person Liability Insured Persons (Beneficiaries): The insurer shall pay the loss of each insured person resulting from a claim against the insured person except for Including but not limited to: and to the extent that the company has indemnified the insured person. > members of board of directors, members of executive board, general director, of the Policyholder and its Cover B (Side B) subsidiaries; Company Reimbursement > executive directors, heads of departments (functional directors) of the Policyholder and its subsidiaries; The insurer shall pay the loss of the company resulting from a claim against the insured person but only when and > statutory auditor, General Counsel or Risk Manager (or equivalent position) of the Policyholder and its to the extent that the company has indemnified the insured person for the loss. subsidiaries. Cover C — Global program Full list of insured persons is as per schedule and policy conditions of Directors & Officers Liability Insurance Policy. Subsidiaries Directors Liability Insurance Premium: EUR 42,500.00. Sustainability The insurer shall pay the loss of the subsidiaries directors resulting from a claim against the director. Limit of Liability: EUR 30,000000.00. Cover D — Global program Validity period: 10.11.2019–09.11.2020. Representation at Investigations and Examinations Person interested in the performed transaction: members of the Board of Directors of PJSC Enel Russia, The insurer shall pay the investigations costs. members of the Executive Board of PJSC Enel Russia, CEO of PJSC Enel Russia Cover E — Global program Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Special Excess Protection for Non-Executive Directors Minutes: Annual General Shareholders’ Meeting, Minutes № 1/19 dd 18.06.2019. The insurer shall pay the loss of each non-executive director resulting from a claim against the non-executive director. Cover F (Side C) Agency agreement Significant terms and conditions Company Liability for Securities Claims Parties to the agreement: Principal — PJSC Enel Russia, Agent — Enel Italia S.r.l. The insurer shall pay the loss of the company resulting from a claim against the company for any wrongful act Subject of the agreement: The services are rendered in respect of the personnel of the Principal which temporarily Governance committed by such company arising from a securities claims. resides in Italy under secondment Agreements and personnel of the Principal which has Italian citizenship and Risk and Corporate Insured Persons (Beneficiaries): resides in the Russian Federation and works for the Principal. The Agent acts on the territory of Italy at the expense and on behalf of the Principal for the provision of the Including but not limited to: following services in accordance with the current Italian law: > members of board of directors, members of executive board, general director of the Policyholder and its > assistance in payment of mandatory social insurance to the government authorities of Italy (INPS — National subsidiaries; Institution of Social Insurance and INAIL — National Institution of Industrial Accidents Insurance) in accordance > executive directors, heads of departments (functional directors) of the Policyholder and its subsidiaries; with the laws of Italy; > statutory auditor, General Counsel or Risk Manager (or equivalent position) of the Policyholder and its > assistance in maintaining accounts and submission of reports on mandatory social insurance; subsidiaries. > advisory services and services on preparation of reports on income tax. Full list of insured persons is as per schedule and policy conditions of Directors & Officers Liability Insurance Amount of the agreement: The amount shall not exceed 490,000 EUR (VAT excluding).
Policy. Terms of services: From January 1, 2017 to December 31, 2019. Annexes Annual insurance Premium: Shall not exceed EUR 20,000.00. Duration of the agreement: The Agreement shall come onto force upon its signature and shall remain in valid till Compensation limit: during the period from 10.11.2018 to 17.06.2019, the liability limit is EUR 7,034,197.07 in December 31, 2019, but in terms of settlement will be valid until the Parties fulfill their obligations. The Agreement aggregate, during the period from 18.06.2019 to 9.11.2019, the liability limit is EUR 15,000,000.00 in aggregate. shall apply to relations between the Parties starting from January 1, 2017. Validity period: 10.11.2018–09.11.2019. Person interested in the performed transaction: Enel S.p.A. Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Person interested in the performed transaction: members of the Board of Directors of PJSC Enel Russia, Minutes: Board of Directors of PJSC Enel Russia, Minutes № 14/18 dd 21.12.2018. members of the Executive Board of PJSC Enel Russia, CEO of PJSC Enel Russia.
Management body of the company, to adopt the approval decision thereof; No. and date of drawing up the Minutes: Annual General Shareholders’ Meeting, Minutes № 1/19 dd 18.06.2019. LLC Enel Rus Wind Kola has not entered into any other transactions than the above major transactions after recognition as a controlled company, being of significant importance until 31.12.2019.
264 Annual Report 2019 PJSC Enel Russia 265 Annex 6. About the Report
Key performance indicators for the position of the Deputy General Director — Numerical and statistical information Head of People Human Resource and Organization
Objective Description Weight 1. Ordinary Net income Enel Russia 20% Key Performance Indicators 102-36 2. Average Personnel Cost Enel Russia 20% Company Overview Business objective 3. 20% Determined on the basis of tasks assigned to the key manager Key performance indicators for the position of the General Director 4. Safety Enel Russia 15%
Objective Description Weight 5. Safety Fatal Enel Russia 5% 1. Ordinary Net income Enel Russia 25% 6. Sustainability — Russia activities 20% 2. Opex Enel Russia 20% Total: 100% FFO Enel Russia 3. (change in Net debt before dividends paid, extraordinary items, 15% Gross Capex, cash impact of Capex` hedging and FX on Net debt) indicators Business objective 4. 20% Key performance indicators for the position of the Head of Energy Management Determined on the basis of tasks assigned to the key manager Financial and performance 5. Safety Enel Russia 15% Objective Description Weight 6. Safety Fatal Enel Russia 5% 1. Gross Margin Enel Russia 25% Total: 100% Business objective 2. 20% Determined on the basis of tasks assigned to the key manager FFO Enel Russia 3. (change in Net debt before dividends paid, extraordinary items, 15% Key performance indicators for the position of the Deputy General Director — Gross Capex, cash impact of Capex` hedging and FX on Net debt) Business objective Head of Generation 4. 20% Determined on the basis of tasks assigned to the key manager Sustainability
Objective Description Weight 5. Safety Enel Russia 15% 1. EBIT Thermal generation Enel Russia 25% 6. Safety Fatal Enel Russia 5% 2. OPEX Thermal generation Enel Russia 20% Total: 100% FFO Enel Russia 3. (change in Net debt before dividends paid, extraordinary items, 15% Gross Capex, cash impact of Capex` hedging and FX on Net debt) Business objective 4. 20% Key performance indicators for the position of the Head of Internal Audit Determined on the basis of tasks assigned to the key manager
5. Safety TGx RUSSIA 15% Governance Objective Description Weight 6. Safety Fatal TGx RUSSIA 5% Risk and Corporate 1. Audit Plan Russia 50% Total: 100% 2. Timing Audit Plan Russia 50% Total: 100%
Key performance indicators for the position of the Deputy General Director — Head of Administration, Finance and Control Key performance indicators for the position of the Head of Digital Solutions Annexes Objective Description Weight Objective Description Weight 1. Ordinary Net income Enel Russia 30% 1. Ordinary Net income Enel Russia 30% 2. Opex Enel Russia 25% 2. ICT Cash Cost Enel Russia 20% FFO Enel Russia Business objective 3. (change in Net debt before dividends paid, extraordinary items, 25% 3. 25% Gross Capex, cash impact of Capex` hedging and FX on Net debt) Determined on the basis of tasks assigned to the key manager Business objective Business objective 4. 20% 4. 25% Determined on the basis of tasks assigned to the key manager Determined on the basis of tasks assigned to the key manager Total: 100% Total: 100%
266 Annual Report 2019 PJSC Enel Russia 267 Key performance indicators for the position of the Head of Legal Data on key performance indicators of key managers for 2019 related and Corporate Affairs to sustainable development About the Report
Objective Description Weight Indicator / Head 1 2 3 4 5 6 7 8 9 10 11 Total 1. Ordinary Net income Enel Russia 30% Health&Safety 20% 20% 20% 20% 20% 5 pers. 2. Opex Enel Russia 20% Energy efficiency 6% 1 pers. Business objective 3. 25% Wind Generation Development 6% 6% 8% 3 pers. Determined on the basis of tasks assigned to the key manager Sustainability 20% 1 pers. Business objective 4. 25% Corporate governance 25% 1 pers. Determined on the basis of tasks assigned to the key manager Total 26% 26% 0% 40% 26% 0% 0% 25% 20% 8% 0% 6 pers. Total: 100% Company Overview
Key performance indicators for the position of the Head of Procurement Key performance indicators established by the Long-Term Incentive Programs at PJSC Enel Russia for 2017–2019, for 2018–2020, for 2019–2021 Objective Description Weight 1. EBIT Thermal generation Enel Russia 30% Business objective № Key performance indicator (KPI) Indicator weight 2. 25% Determined on the basis of tasks assigned to the key manager 1. Total shareholder return (TSR*) of PJSC Enel Russia compared to the benchmarking group 60% Business objective 2. Annual average margin of PJSC Enel Russia by EBITDA for the period of Program duration 40% 3. 25% indicators Determined on the basis of tasks assigned to the key manager Total: 100% 4. Safety Enel Russia 15%
5. Safety Fatal Enel Russia 5% Financial and performance Total: 100% * Indicator “Total shareholders return” calculated as:
Share price end of the period – Share price start of the period + Dividends = Key performance indicators for the position of the Head of Regulatory Share price start of the period and Institutional Affairs
Objective Description Weight Sustainability 1. Opex Enel Russia 30% FFO Enel Russia 2. (change in Net debt before dividends paid, extraordinary items, 20% Gross Capex, cash impact of Capex` hedging and FX on Net debt) Business objective 3. 25% Determined on the basis of tasks assigned to the key manager Business objective 4. 25% Determined on the basis of tasks assigned to the key manager
Total: 100% Governance Risk and Corporate
Key performance indicators for the position of the Head of Communications
Objective Description Weight 1. Opex Enel Russia 30% FFO Enel Russia 2. (change in Net debt before dividends paid, extraordinary items, 25% Annexes Gross Capex, cash impact of Capex` hedging and FX on Net debt) Business objective 3. 25% Determined on the basis of tasks assigned to the key manager Business objective 4. 20% Determined on the basis of tasks assigned to the key manager Total: 100%
268 Annual Report 2019 PJSC Enel Russia 269 Environmental indicators 307-1 About the Report Inspections by state authorities for compliance with environmental laws at the power plants in 2019
Power plant Organizer of audit Goal of inspection Result
Reftinskaya GRES Department of the Federal Supervisory Unscheduled documentary audit for identification of the fact It was found during the audit that this compliance order was complied with. Also, failure to comply with Natural Resources Management Service of previously issued compliance order dated 20.07.2018 No. 332-5 the requirements of laws on the mandatory performance of state environmental impact assessment when in the Ural Federal District on compliance with the conditions of a special permit for emission decommissioning the waste disposal facility "Borrow pit for backwash waters". (Rosprirodnadzor) of pollutants into the atmospheric air In this connection, an administrative penalty (fine) was imposed in the amount of RUB 50 thousand. Company Overview
An unscheduled documentary audit in order to identify the fact A new compliance order No. 619-1 was received with a deadline on 30.08.2021 on the need for state of fulfillment of previously issued compliance order No. 332-8 dated environmental expert review when decommissioning the waste disposal facility "Borrow pit for 20.07.2018, its deadline expired on 18.11.2019 backwash waters".
Konakovskaya GRES Federal Environmental, Industrial Scheduled field inspection in radiation safety The inspection revealed a violation of the mandatory requirements of federal rules and regulations and Nuclear Supervision Service in nuclear power use “Requirements for quality assurance programs for nuclear facilities” (Rostekhnadzor) (НП-090-11). In addition, a nonconformity was identified to the requirements for the content of sections of quality assurance programs for nuclear facilities (section IV, НП-090-11). The compliance order was fulfilled on time 30.09.2019. indicators Nevinnomysskaya GRES Azov-Black Sea Territorial Administration Scheduled field inspection Based on the results of the inspection, Compliance Order No. 130 dated 28.10.2019 was received on the following of the Federal Fishery Agency activities with a deadline on 30.04.2020. The Company shall calculate the damage to water biological resources from operation of the buildings of the Barsuchkovsky water intake and cooling water intake facility (CWIF). To authorize Financial and performance performance of economic activities within the boundaries of water protection zones with Azov-Black Sea Territorial Administration of the Federal Fishery Agency. A reserve should be created in the amount of RUB 1.160 million. Install fish protection facility at water intake of CWIF. The agreement shall be signed for design of fish protection facility. Rulings were received on payment of fines No. 641/14 dated 08.11.2019 for the amount of RUB 100 thousand and No. 639/14 dated 06.12.2019 for the amount of RUB 200 thousand. The rulings are appealed in court.
Konakovskaya GRES Rospotrebnadzor Scheduled documentary field inspection in sanitary and Based on the inspection results, a Compliance order was received on carrying out activities epidemiological welfare of population, laws in technical with a deadline on 15.01.2020 including analysis of water from water well No. 9 regulation during for radiological indicators. Sustainability Moscow-Oka Territorial Administration Konakovskaya GRES Scheduled field inspection No violations were revealed by the inspection results. of the Federal Fishery Agency
Control of air and water quality GHG emissions intensity with a breakdown by power plants, 305-4 g СО2-equivalent/kW·h Governance Direct GHG emissions (scope 1) with a breakdown by power plants*, 305-1 Risk and Corporate Russian methodology** Enel Group methodology*** million tons СО2-equivalent 2017 2018 2019 2017 2018 2019
Russian methodology** Enel Group methodology*** Konakovskaya GRES 529,92 531,32 530,24 519,07 523,14 514,69
2017 2018 2019 2017 2018 2019 Nevinnomysskaya GRES 434,46 430,89 423,30 431,48 427,68 414,35
Konakovskaya GRES 3,80 3,55 3,13 3,72 3,49 3,04 Reftinskaya GRES 947,39 953,37 962,82 975,70 959,55 951,91 Sredneuralskaya GRES 365,71 366,62 362,08 365,66 370,14 368,37
Nevinnomysskaya GRES 4,19 4,00 3,57 4,16 3,97 3,49 Annexes
Reftinskaya GRES 18,09 18,25 13,24 18,64 18,37 13,14 Total 647,98 654,65 619,63 657,43 656,17 615,72
Sredneuralskaya GRES 3,64 3,59 3,54 3,64 3,62 3,60
Total 29,73 29,38 23,47 30,16 29,45 23,27 ** For calculation of greenhouse gases volume, the “Guidelines and manual for quantifying greenhouse gas emissions by organizations engaged in economic and other activities in the Russian Federation, approved by order of the Ministry of Natural Resources of Russia dated 30.06.2015 No. 300” were used. Company submits the data
on quantity of greenhouse gases emissions to relevant regulatory authorities of Russian Federation. The following types of GPG is included to calculation: CO2.
*** In order to ensure consistency of greenhouse gases data in Sustainability plan and during preparation of non-financial part of the Annual report the Enel Group
* In the report for 2018 СО2 indicators were incorrectly displayed due to technical error appeared during typography process. Corrected data for 2017–2018 represented methodology is used. Nonsignificant difference relates to the volume of the burned fuel, based on which the emissions volume is being calculated. The following types in the table. Since 2019, the company has been calculating greenhouse gas emissions from the total amount of fuel burned, including fuel for commissioning after a of GPG is included to calculation: CO2. scheduled overhaul.
270 Annual Report 2019 PJSC Enel Russia 271 Resource use About the Report
The volume of non-renewable materials used by 301-1 business unit and type, tons Company Overview
Material type Quick lime Trivalent sodium phosphate Resins Ammonia Sodium hydroxide Sulfuric and soldering acid
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 0.00 0.00 0.00 0.00 0.00 0.00 130.08 142.58 126.48 6.37 4.25 3.92 335.41 336.07 281.27 726.60 719.82 681.62
Nevinnomysskaya GRES 38.50 4.00 3.00 4.45 4.24 3.53 16.20 0.00 0.00 3.94 0.47 0.32 165.68 122.75 134.91 147.12 96.69 139.60
Reftinskaya GRES 424.06 416.66 403.32 0.00 0.00 0.00 74.60 79.42 55.00 2.42 2.41 1.80 721.32 602.00 361.60 829.80 824.56 546.30 indicators
Sredneuralskaya GRES 0.00 0.00 0.00 2.58 2.66 3.79 3.79 8.50 33.29 2.78 5.78 10.12 581.24 482.01 435.12 628.87 565.27 648.49 Financial and performance
Headquarters 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 462.56 420.66 406.32 7.03 6.90 7.31 224.67 230.50 214.77 15.51 12.91 16.16 1,803.64 1,542.83 1,212.90 2,332.39 2,206.33 2,016.01 Sustainability
Material type Sodium hypochlorite Chlorine dioxide Ferrous sulphate (II) Lube Oil Dielectric oil Other* Total for the company
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 23.39 69.10 31.88 13.00 77.29 147.00 228.60 216.64 205.21 1,463.45 1,565.74 1,477.36
Nevinnomysskaya GRES 7.55 7.45 4.89 0.00 0.00 0.00 0.00 0.00 0.00 39.49 44.98 21.61 20.00 0.00 0.00 90.56 145.94 152.35 533.47 426.52 460.21
Reftinskaya GRES 0.00 0.00 0.00 0.00 0.00 0.00 397.27 363.10 260.57 20.15 82.75 33.38 2.21 1.60 22.80 51.00 72.00 49.25 2,522.83 2,444.50 1,734.02 Governance Risk and Corporate
Sredneuralskaya GRES 0.00 15.10 19.90 120.08 147.67 122.25 0.00 0.00 10.00 172.00 104.82 57.70 57.70 59.85 10.35 1,325.78 1,553.86 1,222.78 2,894.82 2,945.51 2,573.79
Headquarters 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.63 0.00 0.00 3.63
Total 7.55 22.55 24.79 120.08 147.67 122.25 397.27 363.10 270.57 255.03 301.65 144.57 92.91 138.74 180.15 1,695.94 1,988.44 1,633.21 7,414.57 7,382.27 6,249.01 Annexes * “Other” material type includes: alumina (aluminum sulphate), foculant polyacrylamide, crushed anthracite, concentrate mineral halite, coagulant MF-18К, citric acid, Genesys LF scale inhibitor, Bopak coagulant, Praestol 675TR flocculant, IOMS-1 inhibitor, Nalko inhibitor calcium hypochlorite, quartz, anionite, cationite, office paper.
272 Annual Report 2019 PJSC Enel Russia 273 Detailed description of the approach to water consumption 303-1 303-2 and water discharge About the Report
Description of water intake methods List of water intake points Description of water consumption Description of waste water discharge methods
Konakovskaya GRES Surface water: Intake of surface water is carried out from the Surface water: Surface water is used for cooling of thermal equipment The waste waters are discharged via open discharge channel through Ivankovskoye reservoir (Volga river) via two water intake facilities: > Cooling water intake facility CWIF-1 and other production needs. discharge outlet No.1 into the Ivankovskoye reservoir. > Cooling water intake facility CWIF-1 > Cooling water intake facility CWIF-2 > Cooling water intake facility CWIF-2 Artesian water is used to feed the heating network and The utility fluids from production and amenity premises are sent to
Artesian water: 5 artesian wells for household needs the enterprise Municipal unitary enterprise "Waterworks” of urban Company Overview Artesian water: artesian water is taken from 5 artesian wells settlement of Konakovo town.
Nevinnomysskaya GRES Intake of surface water is carried out by two water intakes: Surface water: Surface water is used for cooling of thermal equipment Waste water is discharged through discharge canals: > Water is taken from the Bolshoi Stavropolsky Canal > Barsuchkovsky water intake (BWI) and other production needs. > Via open discharge canal No.1 through discharge outlet No.2 (Leveling water reservoir of HPP-4) by gravity through 2 water > Cooling water intake facility (CWIF) in Nevinnomyssky channel piping and is the main water intake for process water supply Water obtained from Nevinnomyssky Azot JSC is used > Via open discharge canal No.2 through discharge outlet No.3 > Water is taken from the Nevinnomyssk Canal at the cooling Domestic water is supplied through domestic for domestic general needs in Nevinnomyssky channel water intake facility (CWIF) water supply networks. > Via winter discharge canal through discharge outlet No.1
to the Kuban River. indicators Receipt of domestic water is carried out from Nevinnomyssky Azot JSC The utility fluids from production and amenity premises are sent to Vodokanal JSC. Financial and performance Industrial storm waters are diverted to the treatment facilities of Nevinnomyssky Azot JSC
Reftinskaya GRES Surface water: Intake of surface water is carried out from Surface water: Surface water: The circulation water in various systems of GRES is discharged Reftinskoye reservoir. > submerged intake > for process needs of GRES through outlet channels No. 1 and No. 2 to the Reftinskoye reservoir > supply channel > for compensation of losses in hydraulic ash removal system after cooling. The water is taken through submerged intake from the reservoir > cooling water intake facilities > for use in chemical water treatment system (CWT)
and fed through an open inlet channel to the cooling water intake (CWIF No.1, CWIF No.2, CWIF No.3) The waste (filtrate) waters of ash lagoon No. 2 enter the Reftinskoye Sustainability facilities. Underground water: reservoir along the western collecting ditch (outlet No. 3) and into the Underground water: > for drinking and domestic water supply river Reft through the river Poludenka along the eastern collecting Underground water: the water is taken from two wells. > production wells: Nos. 1/2546, 2/2549 ditch (outlet No. 7). > observation wells: 6, 7 Domestic waste waters from GRES industrial site are transferred to the third-party organization MU OP Reftinskoye for treatment
Sredneuralskaya GRES Intake of surface water is carried out from the Isetskoye Surface water: Surface water is used for cooling of thermal equipment Circulation water is discharged after cooling of turbines into open
reservoir via 3 water intake facilities. > Cooling water intake facility CWIF-1 and other production needs. discharge channel. Governance
> Cooling water intake facility CWIF-2 Risk and Corporate Intake at CWIF-1 is carried out via a gravity sewer, then water > Cooling water intake facility CWIF-3 The water received from Teplovodokanal LLC is used The waste waters from cooling mechanisms of chemical water supplied by circulation pumps for equipment cooling. for domestic general needs treatment, main building and CCGT is discharged through water Domestic water is supplied through discharge outlets No. 2, 3, 7, 10, 11 to the Isetskoye reservoir. Intake at CWIF-2 and CWIF-3 is carried out from the receiving a sewerage network chambers and supplied by circulation pumps for equipment cooling. The waste waters from cooling mechanisms of fuel oil facilities are discharged through discharge outlet No.8 to the untitled swamp near Receipt of domestic water is carried out from Teplovodokanal LLC the mouth of the river Lebyazhka.
The waste waters from RWTF and chemical water treatment as well
as drains of the main building are discharged through discharge outlet Annexes No. 9 into the untitled swamp at the base of the cape of Yelovyi.
The utility fluids from production and amenity premises are sent to Teplovodokanal LLC.
Headquarters Domestic water is supplied through Domestic water is supplied through Water consumption is carried out for domestic The utility fluids are sent to the sewerage a water main a water main general needs network
274 Annual Report 2019 PJSC Enel Russia 275 3 Total water intake by power plants and by source type*, million m 303-3 About the Report
Surface water bodies Underground water Water provided by the third parties BU total
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 1,000.69 872.85 770.22 4.41 4.39 4.08 – – – 1,005.10 877.24 774.30
Nevinnomysskaya GRES 690.16 608.77 504.86 – – – 0.09 0.08 0.08 690.25 608.85 504.94
Reftinskaya GRES 13.86 12.73 7.89 0.30 0.32 0.17 0.76 0.62 0.45 14.92 13.68 8.52 Company Overview
Sredneuralskaya GRES 24.95 23.33 23.59 – – – 0.003 0.002 0.002 24.95 23.33 23.59
Headquarters n/a n/a n/a n/a n/a n/a 0.003 0.002 0.003 0.003 0.002 0.003
Total water taken 1,729.66 1,517.68 1,306.57 4.71 4.71 4.26 0.86 0.71 0.53 1,735.22 1,523.10 1,311.36 indicators Financial and performance Total water intake in the regions with observed water shortages, by business unit and source type**, million m3
Surface water bodies Underground water Water provided by the third parties BU total
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Nevinnomysskaya GRES 690.16 608.77 504.86 – – – 0.09 0.08 0.08 690.25 608.85 504.94 Sustainability
Reftinskaya GRES 13.86 12.73 7.89 0.30 0.32 0.17 0.76 0.62 0.45 14.92 13.68 8.52
Sredneuralskaya GRES 23.59 23.33 23.59 – – – – – – 24.95 23.3 23.59
Total water taken 728.97 644.83 536.35 0.30 0.32 0.17 0.85 0.71 0.53 730.12 645.86 537.05 Governance Risk and Corporate Standards and regulations related to waste water quality *Data collection and recording was carried out using various methods based on actual measurements. In the cases where actual measurements were not assumed, 303-2 the computational methods for data collection and recording were used. The calculations of 2019 are based on the Guidelines for completion of federal statistical observation form 2TP-water services as being revised by order of the Federal Service for State Statistics (Rosstat) No. 815 dated 27.12.2019. In 2019, we revised the methodology for breakdown of the volume of water intake by source type. Corresponding adjustments were made in the category “water provided by the third State and/or municipal standards Power plant the standard/regulation parties” to the data for 2017–2018 to ensure comparability with the reporting year. Surface water intake data of KGRES for 2018 and underground water intake data of KGRES for 2017 and 2018 were corrected due to technical error in the previous reporting period. and regulations used is applicable to **To determine whether there is a shortage of water resources in the region, we used both local sources and international tool recommended GRI “Aqueduct Water Order of the Ministry of Agriculture of Russia No. 552 dated 13.12.2016 Konakovskaya GRES, Nevinnomysskaya GRES, Reftinskaya GRES, Risk Atlas” (https://www.wri.org/aqueduct) “On approval of standards of quality water for the water bodies of Sredneuralskaya GRES Annexes commercial fishing importance including the standards of maximum permissible concentrations in the waters of water bodies of commercial fishing importance”
SanPiN 2.1.5.980-00 "Hygienic Requirements Konakovskaya GRES, Nevinnomysskaya GRES, Reftinskaya GRES, to Surface Water Protection Sredneuralskaya GRES
276 Annual Report 2019 PJSC Enel Russia 277 Total volume of wastewater discharged into surface waters* 303-4 306-1 by treatment method *, million m3 About the Report
Waters treated to standard quality Partially clean water (without purification) Polluted insufficiently treated water (mechanical and physical-chemical treatment) Disinfection Amount of waste water discharge by BU
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
Konakovskaya GRES 973.71 847.24 745.70 – – – 1.11 1.10 1.36 – – – 974.81 848.34 747.06
Nevinnomysskaya GRES 657.22 576.91 461.45 – – – – – – – – – 657.22 576.91 461.45 Company Overview
Reftinskaya GRES – – – 12.45 8.48 4.39 – – – – – – 12.45 8.48 4.39
Sredneuralskaya GRES 0.47 0.48 0.40 – – – 3.26 3.71 3.23 – – – 3.72 4.18 3.63
Headquarters – – – – – – – – – 0.003 0.002 0.002 0.003 0.002 0.002
Total 1,631.40 1,424.63 1,207.55 12.45 8.48 4.39 4.36 4.80 4.59 0.003 0.002 0.002 1,648.22 1,437.91 1,216.54 indicators * Discharge of wastewater of the company at all power plants into the surface water bodies, with exception of Headquarters. The discharged water of Headquarter are being sent receiving object JSC “Mosvodokanal”. The 2019 calculations are based on the Guidelines for completion of federal statistical observation form 2TP-water services as
being revised by order of the Federal Service for State Statistics (Rosstat) No. 815 dated 27.12.2019. Financial and performance
3 Waste disposal by third party organizations* Total volume of water consumption by business unit, thousand m 303-5
Waste management standards applicable Contractor to the contractors’ activities 2017 2018 2019 Sustainability Konakovskaya GRES 1,005.10 877.24 774.30 Konakovskaya GRES Inchermet LLC, Transsnab LLC Nevinnomysskaya GRES 690.25 608.85 504.94 YuVM LLC, Chisty Gorod LLC, Nevinnomysskaya GRES Yuzhmet LLC, TARA YUG LLC, Reftinskaya GRES 14.92 13.68 8.52 Tenzor LLC Federal Law On Production and Consumption Waste Sredneuralskaya GRES 24.95 23.33 23.59 No. 89-FZ dated 24.06.1998 Industrial Waste Safety Center LLC, Headquarters 0.003 0.002 0.003 Reftinskaya GRES Chermetinvest-T LLC, Chermet-SMK LLC, Procedure of PJSC Enel Russia No.522 "Interaction MIDA LLC, TPM LLC with suppliers and contractors in HSEQ" Total water taken 1,735.22 1,523.10 1,311.36 Governance Konakovskaya GRES 974.81 848.34 747.06
Splav-Stal LLC, MIDA Yekaterinburg LLC, Risk and Corporate Chermetinvest-T LLC, Meta-Yekaterinburg LLC, Sredneuralskaya GRES Nevinnomysskaya GRES 657.22 576.91 461.45 Profmet LLC, Industrial Materials Technologies LLC Reftinskaya GRES 12.45 8.48 4.39
Sredneuralskaya GRES 3.72 4.18 3.63 Headquarters Not applicable Not applicable Headquarters 0.00 0.00 0.00
Total discharged water 1,648.21 1,437.91 1,216.53 * The company does not dispose hazardous waste independently. In order to dispose waste, we cooperate with the companies that have specialized licenses in accordance with current laws of the Russian Federation for carrying out such activities. Konakovskaya GRES 30.29 28.90 27.24 Annexes
Nevinnomysskaya GRES 33.03 31.94 43.49
Reftinskaya GRES 2.47 5.20 4.12
Sredneuralskaya GRES 21.23 19.15 19.96
Headquarters 0.003 0.002 0.003
Total water consumption 87.01 85.19 94.82
278 Annual Report 2019 PJSC Enel Russia 279 Gross emissions of pollutants into the atmosphere by significant types, tons 305-7 About the Report
Power plant Pollutant type 2017 2018 2019
NOx 6 748,02 5 671,89 5 149,81 Konakovskaya GRES SOx 2,76 0,57 0,54 Organic pollutants (POP) 0,00 0,00 0,00 Volatile organic compounds (VOC) 16,50 16,50 16,50 Hazardous air pollutants 0,00 0,00 0,00
Particulate matters (PM) 0,04 0,01 0,22 Company Overview CO — carbon oxide 282,75 327,08 159,62 Other pollutants 0,61 0,61 0,41 Total 7 050,68 6 016,66 5 327,09 NOx 5 694,87 5 539,32 4 700,45 Nevinnomysskaya GRES SOx 204,49 116,73 213,23 Organic pollutants (POP) 0,00 0,00 0,00 Volatile organic compounds (VOC) 12,67 12,78 12,72 indicators Hazardous air pollutants 0,01 0,01 0,01 Particulate matters (PM) 0,59 0,37 3,19 Financial and performance CO — carbon oxide 2 511,06 2 710,17 2 575,36 Other pollutants 258,42 244,30 213,02 Total 8 682,12 8 623,68 7 717,98 NOx 75 068,86 74 720,58 53 595,76 Reftinskaya GRES SOx 141 258,21 133 214,62 99 151,23 Organic pollutants (POP) 0,00 0,00 0,00 Volatile organic compounds (VOC) 33,87 33,87 25,40 Sustainability Hazardous air pollutants 0,30 0,30 0,23 Particulate matters (PM) 66 714,16 41 601,79 30 529,24 CO — carbon oxide 731,65 750,37 555,58 Other pollutants 857,95 857,95 643,47 Total 284 665,00 251 179,48 184 500,90 NOx 4 250,27 4 020,22 3 887,86 Sredneuralskaya GRES SOx 153,80 5,97 3,33
Organic pollutants (POP) 0,00 0,00 0,00 Governance
Volatile organic compounds (VOC) 1,90 1,90 1,90 Risk and Corporate Hazardous air pollutants 0,00 0,00 0,00 Particulate matters (PM) 1,27 0,18 0,72 CO — carbon oxide 641,28 638,07 636,21 Other pollutants 8,36 8,36 7,83 Total 5 056,87 4 674,69 4 537,84 NOx 91 762,02 89 952,02 67 333,87 Total for all Company SOx 141 619,27 133 337,88 99 368,34 Annexes Organic pollutants (POP) 0,00 0,00 0,00 Volatile organic compounds (VOC) 64,93 65,05 56,52 Hazardous air pollutants 0,31 0,31 0,24 Particulate matters (PM) 66 716,06 41 602,33 30 533,36 CO — carbon oxide 4 166,73 4 425,69 3 926,77 Other pollutants 1 125,35 1 111,23 864,72 Total 305 454,68 270 494,51 202 083,81
280 Annual Report 2019 PJSC Enel Russia 281 About the Report
Waste by hazard class* 306-2
Konakovskaya GRES Nevinnomysskaya GRES Reftinskaya GRES Sredneuralskaya GRES Total for the company
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 Company Overview
Placement in a landfill 4 283,931 3 589,727 5 271,055 1 322,934 1 122,555 1 051,889 889,560 1 055,710 2 540,537 1 649,857 1 381,168 1 743,538 8 146,282 7 149,160 10 607,019
Waste of hazard class 1 – – – – – – – – – – – – – – –
Waste of hazard class 2 – – – – – – – – – – – – – – –
Waste of hazard class 3 – – – – – – 10,060 2,590 21,467 8,567 29,610 5,478 18,627 32,200 26,945
Waste of hazard class 4 3 220,771 2 465,283 1 344,051 542,437 792,316 555,061 849,800 1 027,920 1 800,026 1 201,300 977,700 587,608 5 814,308 5 263,219 4 286,746 indicators
Waste of hazard class 5 1 063,160 1 124,444 3 927,004 780,497 330,239 496,828 29,700 25,200 719,044 439,990 373,858 1 150,452 2 313,347 1 853,741 6 293,328 Financial and performance
Disposal at operating facilities – – – 63,243 72,690 52,216 4 247 872,177 4 634 721,631 3 020 962,500 141,750 951,379 844,305 4 248 077,170 4 635 745,700 3 021 859,021
Waste of hazard class 1 – – – 0,000 0,000 – – – – 0,000 0,000 – – – –
Waste of hazard class 2 – – – 0,000 0,000 – – – – 0,000 0,000 – – – –
Waste of hazard class 3 – – – 2,623 9,700 5,356 – – – 0,128 0,123 0,120 2,751 9,823 5,476
Waste of hazard class 4 – – – 0,130 – – 10 800,400 10 631,931 4 534,200 0,000 2,356 – 10 800,530 10 634,287 4 534,200 Sustainability
Waste of hazard class 5 – – – 60,490 62,990 46,860 4 237 071,777 4 624 089,700 3 016 428,300 141,622 948,900 844,185 4 237 273,889 4 625 101,590 3 017 319,345
Transferred for recycling and disposal 160,964 1 268,682 508,741 758,678 1 596,371 1 475,119 249 184,762 5 851,365 6 092,053 607,719 1 732,694 1 071,147 250 712,123 10 449,112 9 147,059
Waste of hazard class 1 0,499 0,272 0,509 0,400 0,417 0,425 3,642 2,322 1,523 0,922 1,253 0,681 5,463 4,264 3,138
Waste of hazard class 2 – – – 0,745 0,524 0,491 0,000 0,166 – 0,000 0,039 0,035 0,745 0,729 0,526 Governance Waste of hazard class 3 69,315 959,310 220,070 161,594 600,226 17,396 336,717 256,556 22,120 17,280 29,407 57,399 584,906 1 845,499 316,985 Risk and Corporate
Waste of hazard class 4 3,800 195,200 0,013 3,118 0,384 1,750 – – 0,200 0,000 0,000 0,690 6,918 195,584 2,653
Waste of hazard class 5 87,350 113,900 288,149 592,821 994,820 1 455,057 248 844,403 5 592,321 6 068,210 589,517 1 701,995 1 012,342 250 114,091 8 403,036 8 823,758
* Since 2019, the data on the volume of waste by hazard class have been given rounded to three decimal places including data for previous reporting periods (2017–2018) This change is related to the specifics of the approach to preparation of state reporting in terms of rounding indicators. Annexes
282 Annual Report 2019 PJSC Enel Russia 283 Social disclosure
Gender breakdown of employees, pers. About the Report
Health and Safety 102-8 403-1 403-9 Men Women Employees total at BU 2017 2018 2019 2017 2018 2019 2017 2018 2019 Number of man-hours worked by employees, thousands Konakovskaya GRES 322 303 284 95 94 88 417 397 372 2017 2018 2019 Nevinnomysskaya GRES 328 317 310 105 95 88 433 412 398 Konakovskaya GRES 775,34 712,51 672,51 Reftinskaya GRES 779 804 774 226 213 211 1005 1017 985 Nevinnomysskaya GRES 794,73 746,53 713,16 Sredneuralskaya GRES 290 276 263 148 142 131 438 418 394 Reftinskaya GRES 1 825,42 1 756,37 1 713,61 Headquarters 140 136 138 119 116 117 259 252 255 Sredneuralskaya GRES 799,93 742,45 707,58 Total, employees 1859 1836 1769 693 660 635 2 552 2 496 2 404 Company Overview Headquarters 453,44 433,18 427,48 Total 4 648,85 4 391,03 4 234,33
Employees by age, pers.
Employees total Number of man-hours worked by contractors*, thousands up to 30 years old 30–50 years old Over 50 years old at BU 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 Konakovskaya GRES 763,25 749,84 743,30 Konakovskaya GRES 16 10 5 291 280 255 110 107 112 417 397 372 Nevinnomysskaya GRES 927,77 773,99 771,27
Nevinnomysskaya GRES 24 18 15 321 309 298 88 85 85 433 412 398 indicators Reftinskaya GRES 3 492,97 5 579,12 4 777,19 Reftinskaya GRES 111 121 120 728 729 695 166 167 170 1005 1017 985 Sredneuralskaya GRES 1 538,45 1 511,34 1 449,28
Sredneuralskaya GRES 51 38 31 313 310 297 74 70 66 438 418 394 Financial and performance Headquarters 63,96 45,81 44,53 Headquarters 27 24 25 193 182 183 39 46 47 259 252 255 Total 6 786,41 8 660,10 7 785,58 Total, employees 229 211 196 1846 1810 1728 477 475 480 2 552 2 496 2 404
* A significant part of works for maintenance of equipment and buildings is carried out at the company's power plants by contractors.
Total number of employees broken down by labor contract and gender, pers.
Human Resource and Social Policy 102-8 405-1 Permanent Temporary Permanent Temporary Permanent Temporary Sustainability 2017 2018 2019 Employees by position, pers. Konakovskaya GRES 415 2 396 1 371 1 Employees total Managers Heads Specialists Workers at BU women 93 2 93 1 87 1
2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 men 322 0 303 0 284 0 Konakovskaya GRES 1 1 1 67 65 61 158 155 150 191 176 160 417 397 372 Nevinnomysskaya GRES 433 0 412 0 398 0 Nevinnomysskaya GRES 1 1 1 71 68 68 167 153 146 194 190 183 433 412 398 women 105 0 95 0 88 0 Governance Reftinskaya GRES 1 1 1 160 160 158 288 279 248 556 577 578 1005 1017 985 men 328 0 317 0 310 0 Sredneuralskaya Risk and Corporate GRES 1 1 1 69 65 59 187 180 169 181 172 165 438 418 394 Reftinskaya GRES 1005 0 991 26 974 11 Headquarters 16 17 18 73 71 73 167 161 161 3 3 3 259 252 255 women 226 0 212 1 211 0
Total, employees 20 21 22 440 429 419 967 928 874 1125 1118 1089 2 552 2 496 2 404 men 779 0 779 25 763 11
Sredneuralskaya GRES 438 0 418 0 390 4
Employees by educational level, pers. women 148 0 142 0 131 0
Secondary general Primary and secondary men 290 0 276 0 259 4 Annexes education vocational education Higher education Employees total at BU Headquarters 251 8 247 5 249 6 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 Konakovskaya GRES 25 19 16 122 112 99 270 266 257 417 397 372 women 116 3 114 2 115 2
Nevinnomysskaya GRES 5 4 4 69 58 54 359 350 340 433 412 398 men 135 5 133 3 134 4 Reftinskaya GRES 97 97 97 418 422 416 490 498 472 1005 1017 985 Total 2 542 10 2 464 32 2 382 22 Sredneuralskaya GRES 28 26 26 127 113 107 283 279 261 438 418 394 women 688 5 656 4 632 3 Headquarters 2 2 2 5 5 4 252 245 249 259 252 255 Total, employees 157 148 145 741 710 680 1654 1638 1579 2 552 2 496 2 404 men 1854 5 1808 28 1750 19
284 Annual Report 2019 PJSC Enel Russia 285 84,073.00 Employees by type of employment and gender, pers. 83,856.50 80,480
Total Partially Total Partially Total Partially About the Report 39,979 2017 2018 2019 36,677 34,500 Konakovskaya GRES 416 1 396 1 371 1 Reftinskaya GRES women 94 1 93 1 87 1 Sverdlovsk region men 322 0 303 0 284 0
Nevinnomysskaya GRES 433 0 412 0 398 0 2017 2018 2019 women 105 0 95 0 88 0
men 328 0 317 0 310 0
94,970 Company Overview Reftinskaya GRES 1005 0 1017 0 985 0 93,959 92,621 women 226 0 213 0 211 0
men 779 0 804 0 774 0
Sredneuralskaya GRES 436 2 416 2 393 1 36,677 39,979 women 146 2 141 1 130 1 34,500 Sredneuralskaya GRES men 290 0 275 1 263 0 Sverdlovsk region Headquarters 258 1 250 2 254 1
women 118 1 115 1 117 0 indicators 2017 2018 2019 men 140 0 135 1 137 1 Financial and performance Total 2 548 4 2 491 5 2 401 3 229,919 women 689 4 657 3 633 2 227,737 225,802 men 1859 0 1834 2 1768 1
80,816 90,093 73,153 Ratio of average salary at the power plants of the company and in the regions of presence*, RUB 202-1 Sustainability
Headquarters Moscow 92,275 90,222 87,330 2017 2018 2019 32,528 29,802 27,384 * Due to inability to provide data on standard wages for entry-level employees, the company discloses the average salary without a breakdown by gender for each Konakovskaya GRES of the company's business units and gives its ratio to the average salary in the respective regions of presence. Calculation of the average salary does not include the Governance Tver Region salaries of employees classified as "Managers". The data on average salary in the regions of presence is given according to the report of the Federal State Statistics Service "Average monthly nominal accrued salary of employees by the full range of organizations by subjects of the Russian Federation in 2013–2019". Risk and Corporate
2017 2018 2019
82,502 81,235
78,439 Annexes
28,209 30,863 26,904 Nevinnomysskaya GRES Stavropol Territory
2017 2018 2019
286 Annual Report 2019 PJSC Enel Russia 287 Total number of new employees during the reporting period, pers. 401-1 Total number of employees taking parental leave, by gender for the reporting period, pers. 401-3
2017 2018 2019 About the Report up to 30 years old 30–50 years old Over 50 years old Employees total at BU 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 Konakovskaya GRES 5 3 3 Konakovskaya GRES 1 1 1 0 1 1 4 4 1 5 6 3 women 5 3 3 women 0 1 0 0 1 1 4 3 0 4 5 1 men – – – men 1 0 1 0 0 0 0 1 1 1 1 2 Nevinnomysskaya GRES 11 10 9 Nevinnomysskaya GRES 4 2 4 4 9 6 0 1 1 8 12 11 women 11 10 9 women 0 1 0 1 6 2 0 1 1 1 8 3 men – – – men 4 1 4 3 3 4 0 0 0 7 4 8 Reftinskaya GRES 8 8 10
Reftinskaya GRES 28 48 39 39 40 22 3 4 5 70 92 66 women 8 8 10 Company Overview women 2 3 2 12 3 3 3 2 5 17 8 10 men – – – men 26 45 37 27 37 19 0 2 0 53 84 56 Sredneuralskaya GRES 11 9 7 Sredneuralskaya GRES 9 6 9 14 15 14 0 0 2 23 21 25 women 11 8 7 women 3 3 2 5 7 2 0 0 0 8 10 4 men – 1 – men 6 3 7 9 8 12 0 0 2 15 11 21 Headquarters 19 12 7 Headquarters 9 9 9 7 14 5 0 1 1 16 24 15 women 19 12 7 men – – –
women 8 4 7 4 7 2 0 0 0 12 11 9 indicators men 1 5 2 3 7 3 0 1 1 4 13 6 Total 54 42 36 women 54 41 36 Total, employees 51 66 62 64 79 48 7 10 10 122 155 120 Financial and performance women 13 12 11 22 24 10 7 6 6 42 42 27 men – 1 – men 38 54 51 42 55 38 0 4 4 80 113 93
Total number and the turnover rate for the reporting period, by age group, gender and region*, persons Total number of employees returning to work during the reporting period after the end of parental leave, by gender, pers. Average number of employees Fired employees of the organization for the year Turnover rate 2017 2018 2019 Sustainability 2017 2018 2019 2017 2018 2019 2017 2018 2019 Konakovskaya GRES 3 2 1 Konakovskaya GRES 26 26 27 421,42 403,66 385,20 6,2% 6,4% 7,0% including women 3 2 1 women 9 7 6 92,52 89,27 89,29 9,7% 7,8% 6,7% including men – – –
men 17 19 21 328,90 314,39 295,91 5,2% 6,0% 7,1% Nevinnomysskaya GRES 3 5 2
Nevinnomysskaya GRES 20 32 24 429,72 416,30 397,29 4,7% 7,7% 6,0% including women 3 5 2
women 7 17 10 97,40 91,01 84,42 7,2% 18,7% 11,8% including men – – –
men 13 15 14 332,32 325,29 312,87 3,9% 4,6% 4,5% Reftinskaya GRES 7 4 2 Governance including women 7 4 2 Reftinskaya GRES 102 77 98 1 022,28 1 000,88 985,57 10,0% 7,7% 9,9% Risk and Corporate
women 26 20 13 227,57 213,72 203,99 11,4% 9,4% 6,4% including men – – – Sredneuralskaya GRES 1 3 1 men 76 57 85 794,71 787,16 781,58 9,6% 7,2% 10,9% including women 1 3 – Sredneuralskaya GRES 35 41 47 437,01 417,95 397,65 8,0% 9,8% 11,8% including men – – 1 women 7 16 15 138,67 135,13 128,20 5,0% 11,8% 11,7% Headquarters 4 6 9 men 28 25 32 298,34 282,82 269,45 9,4% 8,8% 11,9% including women 4 6 9 Headquarters 26 35 16 249,15 242,93 247,33 10,4% 14,4% 6,5% including men – – – Annexes women 15 15 8 102,40 102,53 108,85 14,6% 14,6% 7,3% Total 18 20 15 men 11 20 8 146,75 140,40 138,48 7,5% 14,2% 5,8% including women 18 20 14 Total, employees 209 211 212 2 559,59 2 481,72 2 413,04 8,2% 8,5% 8,8% including men – – 1 women 64 75 52 658,57 631,66 614,75 9,7% 11,9% 8,5%
men 145 136 160 1 901,02 1 850,06 1 798,29 7,6% 7,4% 8,9%
* In the reporting year, we adjusted the methodology for calculating the turnover by branches and by company. We also applied this approach to data for 2017–2018 to ensure comparability.
288 Annual Report 2019 PJSC Enel Russia 289 Total number of employees returning to work after the end of the parental leave who still Share of employees receiving regular feedback on the results of work as to career development 404-3 worked 12 months after their return to work, by gender, persons during the reporting period, by position* About the Report 2017 2018 2019 Managers Heads Specialists Workers Total at BU 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 Konakovskaya GRES – 3 2 Konakovskaya GRES – 100% 100% – 100% 100% – 94% 100% – 93% 100% – 94% 100% including women – 3 2 Nevinnomysskaya GRES – 100% 100% – 100% 100% – 93% 98% – 93% 89% – 94% 94% including men – – – Reftinskaya GRES – 100% 100% – 98% 94% – 94% 100% – 93% 77% – 94% 86% Nevinnomysskaya GRES – 3 3 Sredneuralskaya GRES – 100% 100% – 100% 100% – 94% 99% – 93% 99% – 94% 99% including women – 3 3 Headquarters – 100% 100% – 100% 100% – 94% 100% – 100% 100% – 96% 100% including men – – – Total share Reftinskaya GRES – 7 4 of employees – 100% 100% – 99% 98% – 94% 100% – 93% 86% – 95% 93% Company Overview including women – 7 4 including men – – – Share of employees receiving regular feedback on the results of work as to career development Sredneuralskaya GRES – 1 2 during the reporting period, by gender* including women – 1 2 Women Men Employees total at BU including men – – – 2017 2018 2019 2017 2018 2019 2017 2018 2019 Headquarters – 2 5 Konakovskaya GRES – 91% 100% – 95% 100% – 94% 100% including women – 2 5 Nevinnomysskaya GRES – 92% 93% – 95% 95% – 94% 94% indicators including men – – – Reftinskaya GRES – 92% 82% – 95% 87% – 94% 86% Total – 16 16 Sredneuralskaya GRES – 92% 98% – 96% 100% – 94% 99% Financial and performance including women – 16 16 Headquarters – 91% 100% – 100% 100% – 96% 100% including men – – – Total share of employees – 92% 93% – 96% 93% – 95% 93%
* The process does not involve employees on maternity leave, maternity leave, employees on long-term sick leave, or employees who have worked for less than three months during the campaign period. The number of employees who participated in the process of receiving feedback during the year was brought in line with the number Annual average number of staff training hours by job 404-1 of employees at the end of the year. The data for 2018 is adjusted due to a technical error made in the report of 2018, the difference is no more than 1%.
Total training
Managers Heads Specialists Workers hours at BU Sustainability Executive staff by gender and age*, pers. 405-1 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 30–50 years old Over 50 years old Total executives at BU Konakovskaya GRES 216,0 855,0 69,0 61,6 25,9 48,9 23,6 23,1 35,2 12,1 26,9 56,4 24,9 27,3 46,6 2017 2018 2019 2017 2018 2019 2017 2018 2019 Nevinnomysskaya GRES 80,0 127,0 92,7 60,1 44,8 88,2 35,6 41,6 95,8 194,6 86,2 133,7 111,0 62,9 111,9 Konakovskaya GRES 1 1 1 – – – 1 1 1 Reftinskaya GRES 167,0 121,0 111,0 31,0 24,0 54,9 23,8 24,7 40,9 24,5 42,0 57,3 25,5 34,5 52,9 women – – – – – – – – – Sredneuralskaya men 1 1 1 – – – 1 1 1 GRES 209,0 259,0 100,0 69,1 88,9 90,9 33,3 49,1 46,4 57,1 107,7 81,8 49,2 79,9 68,0 Nevinnomysskaya GRES 1 1 1 – – – 1 1 1 Headquarters 65,8 133,4 108,6 54,4 73,3 59,3 45,3 49,0 37,6 5,3 – – 48,7 60,9 48,4 women – – – – – – – – – Governance Average annual men 1 1 1 – – – 1 1 1 Risk and Corporate number of training hours 86,3 172,9 105,8 50,2 45,6 65,3 31,4 36,2 49,5 56,9 57,1 73,6 46,3 48,3 63,7 Reftinskaya GRES 1 1 1 – – – 1 1 1 women – – – – – – – – – men 1 1 1 – – – 1 1 1 Sredneuralskaya GRES 1 1 1 – – – 1 1 1 Annual average number of training hours, hours per employee by gender women – – – – – – – – – men 1 1 1 – – – – – – Women Men Total training hours at BU
Headquarters 15 17 17 3 3 4 18 20 21 Annexes 2017 2018 2019 2017 2018 2019 2017 2018 2019 women 3 4 5 1 – – 4 4 5 Konakovskaya GRES 9,06 8,64 16,23 78,58 87,49 144,78 24,90 27,31 46,64 men 12 13 12 2 3 4 14 16 16 Nevinnomysskaya GRES 22,36 32,51 27,94 387,69 164,28 407,72 110,95 62,89 111,91 Total number of executives 19 21 21 3 3 4 22 24 25 Reftinskaya GRES 5,17 8,40 11,90 95,47 133,05 203,18 25,48 34,51 52,87 women 3 4 5 1 – – 4 4 5 Sredneuralskaya GRES 21,96 34,38 35,53 102,52 168,32 133,28 49,18 79,89 68,03 men 16 17 16 2 3 4 18 20 20 Headquarters 29,63 83,06 45,05 71,08 34,98 52,32 48,67 60,93 48,38 Average annual number of training hours 13,34 22,04 21,50 134,75 121,41 181,21 46,31 48,31 63,69 * This category includes senior employees of the first line reporting to the General Director of the company. As of 2017–2019, the company had no employees in senior positions in the age group under 30.
290 Annual Report 2019 PJSC Enel Russia 291 The ratio of women's income to men's income, by categories and company power plants 405-2 1.08 1.00 0.97 0.87 0.86 Headquarters About the Report 0.79 0.78 Reduction of the salary gap between 0.88 0.91 0.75 0.87 Konakovskaya GRES women and men 0.86 0.86 0.85 0.73 Increase of the salary gap between Reduction of the salary gap between 0.76 women and men 0.75 women and men 0.73 Increase of the salary gap between women and men 2017 2018 2019
Workers Specialists Heads
2017 2018 2019 Company Overview
Workers Specialists Heads Percentage of employees of the total headcount eligible for retirement over EU15 the next 5 years as of 2019
0.93 0.93 Managers Heads Specialists Workers Total 0.90 0.85 Nevinnomysskaya GRES Konakovskaya GRES – 5% 6% 3% 4% 0.82 0.81 Nevinnomysskaya GRES – 9% 3% 9% 7% 0.78 0.77 Reduction of the salary gap between indicators women and men Reftinskaya GRES – 5% 6% 3% 4% 0.72 Sredneuralskaya GRES – 2% 5% 2% 3% Increase of the salary gap between Financial and performance women and men Headquarters 6% 4% 4% – 4% Total 5% 5% 5% 4% 4%
2017 2018 2019
Workers Specialists Heads Percentage of employees of the total headcount eligible for retirement over the next 10 years as of 2019
Managers Heads Specialists Workers Total
0.95 Sustainability 0.93 Konakovskaya GRES – 7% 14% 7% 10% 0.89 Nevinnomysskaya GRES – 16% 12% 15% 14% 0.83 Reftinskaya GRES 0.80 0.80 Reftinskaya GRES – 7% 12% 4% 6% 0.79 0.79 Reduction of the salary gap between 0.78 Sredneuralskaya GRES – 5% 9% 6% 7% women and men Headquarters 6% 7% 9% – 8% Increase of the salary gap between Total 5% 8% 11% 7% 9% women and men Governance 2017 2018 2019 Risk and Corporate Workers Specialists Heads Sustainable supply chain 102-9 308-1 308-2
The number of suppliers Existing actual and potential The number of suppliers that have a significant actual negative environmental impacts, evaluated in terms and potential negative environmental impact consequences 0.89 0.85 of environmental impact environmental impact identified in the supply chain 0.83 0.84 0.84 0.84 Sredneuralskaya GRES
2018 2019 2018 2019 2018 2019 Annexes Reduction of the salary gap between 0.74 Konakovskaya GRES 32 25 1 2 Not identified Not identified 0.73 women and men Nevinnomysskaya GRES 25 26 2 1 Not identified Not identified 0.69 Increase of the salary gap between women and men Reftinskaya GRES 50 35 2 0 Not identified Not identified Sredneuralskaya GRES 41 38 3 2 Not identified Not identified Headquarters 12 0 0 0 Not identified Not identified 2017 2018 2019 Total suppliers 160 124 8 5 Workers Specialists Heads
292 Annual Report 2019 PJSC Enel Russia 293 Glossary 102-5 Regulation on payment of remunerations Regulation on payment of remunerations and compensations to the
and compensations to the members members of the Board of Directors and Committees of the Board About the Report of the Board of Directors and Committees of Directors approved by the annual General Shareholders’ Meeting of the Board of Directors of PJSC Enel Russia, minutes No. 1/19 dated 18.06.2019 OGK-5 JSC, OJSC Enel OGK-5, Public Joint-Stock Company Enel Russia OJSC Enel Russia, PJSC Enel Russia, The policy for remuneration and Policy on remuneration and reimbursement of expenses (compensations) company, Issuer reimbursement of expenses (compensation) of the members of the executive bodies and other key managers of the members of executive bodies of Public Joint Stock Company Enel Russia approved by the Board Headquarters (HQ) Headquarters, PJSC Enel Russia and other key executives of Directors of PJSC Enel Russia, minutes No. 14/19 dated 18.11.19 Company Overview Konakovskaya GRES (KGRES) Konakovskaya GRES power plant of PJSC Enel Russia Regulation on Dividend Policy Regulation on Dividend Policy approved by the decision of the Board of Directors of PJSC Enel Russia. minutes No. 6/17 dated 04.05.17 Nevinnomysskaya GRES (NGRES) Nevinnomysskaya GRES power plant of PJSC Enel Russia Regulation on the Information Policy Regulation on information policy of PJSC Enel Russia approved Reftinskaya GRES (RGRES) Depending on the context, Reftinskaya GRES power plant of PJSC Enel by the decision of the Board of Directors, minutes No. 13/18 dated Russia, or the property constituting Reftinskaya GRES, in its respect 30.11.18 the sales transaction was completed ALMP Accident localization and management plan indicators Sredneuralskaya GRES (SUGRES) Sredneuralskaya GRES power plant of PJSC Enel Russia API Application programming interfaces Financial and performance Charter Charter of PJSC Enel Russia, approved by decision of the annual General Shareholders Meeting, minutes No. 1/19 dated 18.06.19 ARETU All-Russian electrical trade union (unless otherwise specified in the context of this report) BM Balancing market Regulation on the order of preparation Regulation on the order of preparation and holding the General and holding the General Shareholders' Meeting Shareholders' Meeting of OJSC Enel OGK-5, approved by decision of the CCGT Combined cycle gas turbine unit annual General Shareholders Meeting, minutes No. 1/12 dated 20.06.12 CD Civil Defense Sustainability Regulation on the procedure for convening Regulation on the procedure for convening and holding of meetings and holding of meetings of the company's Board of the company's Board of Directors, approved by decision of the annual CHPP Combined heat and power plant of Directors General Shareholders Meeting of PJSC Enel Russia, minutes No. 1/18 dated 04.06.2018 CII Critical Information Infrastructure
Regulation on the Committees of the Board Regulation on the Committees of the Board of Directors of Corporate Governance Code The Corporate Governance Code recommended for application by letter of Directors PJSC Enel Russia, approved by decision of the Board of Directors, of the Bank of Russia No. 06-52/2463 dated April 10, 2014 Governance minutes No. 10/19 dated 26.06.19 Risk and Corporate COSO The Committee of Sponsoring Organizations of the Treadway Commission Regulation on Corporate Secretary Regulation on Corporate Secretary of PJSC Enel Russia, approved by decision of the Board of Directors, minutes No. 8/16 dated 29.09.2016 CSA Capacity Supply Agreements
Regulation on the Executive Board Regulation on the Executive Board of OGK-5 JSC, approved by decision CSV Creating shared value of the General Shareholders Meeting of OJSC OGK-5, minutes No. 1 dated 04.06.2007 DAM Day ahead market Annexes
Internal Control and Risk Management Policy Internal Control and Risk Management Policy, approved by decision E Emergency of the Board of Directors of PJSC Enel Russia, minutes No. 14/18 dated 21.12.18 EGSM Extraordinary General Shareholders’ Meeting
Regulation on Internal Audit Department Regulation on the Internal Audit Department of PJSC Enel Russia, Efficiency Efficiency factor approved by decision of the Board of Directors of PJSC Enel Russia, minutes No. 8/16 dated 29.09.16 EPD Environmental Product Declaration
294 Annual Report 2019 PJSC Enel Russia 295 ESG Ecology, Social Responsibility and Corporate Governance Financial indicators:
FPF Fish protection facilities About the Report
FZ Federal law EBITDA Analytical indicator calculated as “Operating profit” plus “Depreciation and amortisation of property, plant and equipment and intangible GRES State regional power plant assets”, “Allowance for expected credit losses of trade and other receivables” (all data taken from audited IFRS financial statements) GRI Global Reporting Initiative Ordinary EBIT Analytical indicator calculated as “Operating profit” adjusted for
HPP Hydro-electric power plant operations that are considered as not ordinary for the company Company Overview in the period. In this report, for 2019 operating profit the following HV line High voltage power transmission line adjustments were used: Impairment of property, plant and equipment of Reftinskaya GRES, as well as recalculation of various provisions H&S Health and Safety related to this power plant, due to its disposal
HSEQ Health, Safety, Environment and Quality Ordinary net income Analytical indicator calculated as “Profit for the year” adjusted for operations that are considered as not ordinary for the company
IFRS International financial reporting standards in the period. In this report, for the profit for 2019 the following indicators adjustments were used: Impairment of property, plant and equipment
IoТ Internet of Things of Reftinskaya GRES, recalculation of various provisions related to this Financial and performance power plant, as well as related deferred tax, due to its disposal IPS Interconnected Power System
KPI Key performance indicators Measurement Units:
LC RF Labor Code of the Russian Federation Sustainability Media Mass media kWh (kilowatt·hour), MWh (megawatt·hour), Generated power measurement unit GWh (gigawatt·hour), TWh (terawatt·hour) OSRP Oil spill response plan kW (kilowatt), MW (megawatt), Capacity measurement unit NPP Nuclear power plant GW (gigawatt)
RC Regulated contracts Gcal (gigacalorie) Heat measurement unit Governance
RES Renewable energy sources Gcal/h (gigacalorie/hour) Heat output measurement unit Risk and Corporate
RF Russian Federation, Russia
SDG Sustainable Development Goals
SMP Safety Moving Pool Annexes UES Unified Energy System
UN United Nations
WT Wind turbine
WECM Wholesale electricity and capacity market
296 Annual Report 2019 PJSC Enel Russia 297 Contacts 102-53 About the Report
Discipline Focalpoints
Corporate governance Oksana Ryabchinskaya, Legal Advisor [email protected]
Investor relations Ekaterina Dubovitskaya, IR manager [email protected] Company Overview Maria Shipitsyna, Senior Manager Sustainability Sofya Krasnoyarova, Chief Specialist [email protected] Natalya Zherebyatyeva, Lead Specialist
Press Office Nikolay Shchennikov, Press Office [email protected]
Company Depositary bank indicators Full name: Title: The bank of New York Mellon
Public Joint-Stock Company Enel Russia Location: One Wall Street, New York, New York 10286, USA Financial and performance Short name: PJSC Enel Russia Web site: www.bnymellon.com Previous names: Open Joint-stock Company Fifth Generation Company Registrar of the Wholesale Electricity Market (OJSC OGK-5); Before February 5, 2019: Open Joint-Stock Company Enel OGK-5 (OJSC Enel OGK-5); Full name: Open Joint Stock Company Enel Russia (OJSC Enel Russia) Joint Stock Company Independent Registrar Company
Location of the company: Yekaterinburg Short name: JSC Independent Registrar Company Sustainability Company address: Location: 18 Stromynka Street, building 5B, Moscow 107076, Russia 10 Khokhryakova Str., Yekaterinburg 620014, Sverdlovsk Region, Phone: +7 (495) 926-81-60 Russian Federation Fax: +7 (495) 926-81-78 Postal address: Web site: http://www.ncreg.ru/ 7 Pavlovskaya Str., bldg. 1, Moscow 115093, Russia Phone: +7 (495) 539-31-31 After February 5, 2019: Fax: +7 (495) 539-31-48 Full name:
E-mail address: [email protected] Joint Stock Company Independent Registrar Company R.O.S.T. Governance
Web site (web-sites) where information about the company Short name: JSC IRC-R.O.S.T. Risk and Corporate is presented: https://www.enelrussia.ru Location: 18 Stromynka Street, building 5B, premises IX, Moscow 107076, Russia Power plants of PJSC Enel Russia Phone: +7 (495) 989-76-50, +7 (495) 780-73-63 > Headquarters, 7 Pavlovskaya Street, bldg 1, Moscow, 115093, Web site: http://rrost.ru/ Russian Federation > Konakovskaya GRES power plant, 12 Promyshlennaya Street, Auditor
Konakovo 171252, Tver region, Russian Federation Full company name: Ernst and Young Limited Liability Company Annexes > Nevinnomysskaya GRES power plant, 2 Energetikov Str., Abbreviated company name: Ernst and Young LLC Nevinnomyssk 357107, Stavropol Territory, Russian Federation Location: 77 Sadovnicheskaya naberezhnaya, building 1, Moscow > Reftinskaya GRES power plant, Reftinskiy settlement 624285, 115035, Russia Asbest town, Sverdlovsk region, Russian Federation Phone: +7 (495) 755-97-00 > Sredneuralskaya GRES power plant, 2 Lenina Street, Sredneuralsk Fax: +7 (495) 755-97-01 624070, Sverdlovsk Region, Russian Federation Web site: http://www.ey.com/russia
298 Annual Report 2019 PJSC Enel Russia 299 enelrussia.ru
Relazione finanziaria annuale 2019 ГОДОВОЙ ОТЧЕТ20 WE FUTURE FOR ABRIGHTER OPEN PO EMP O WER SUS 1 WER 9 T A I NABLE P ROGRESS